yvonne: it is 7:00 a.m. in hong kong. i am yvonne man. ."lcome to "daybreak asia the top story this wednesday, u.s. stocks bounce from session lows despite the threat of a trade war, which struck a blow to chinese equities. six straight losses. treasuries rose with the dollar as traitors hedge risk. ramy: from bloomberg's global headquarters, i'm remy and inocencio -- i am ramy inocencio. also ahead, oil under pressure. potential opec output compromise ahead of friday's meeting in vienna.

calls china an mix of opportunity and frustration. here is our interview with the goldman sachs ceo and chairman. a very good morning to you, yvonne. a very good morning to all of our viewers across the asia-pacific. it was not a very good day when you look at the markets because of course the big headline that dropped over the course of these past 24 hours was donald trump pulling the trigger for another $200 billion for tariffs on chinese goods at the rate of 10%. not only that, of course, if china decided to retaliate, they decided markets and investors -- yvonne: it was interesting, the market reaction we saw on wall street.

if we will see enough inflicted pain in the markets and that would lead president trump to blink in these negotiations and the trade spat. 4% down on the share market versus what we saw on wall street. ramy: when you take a look at the numbers, $250 billion is a lot. but in the face of it, china cannot actually come to terms with that and fight back that much. a whole slew of things. the s&p 500 down .4%. the nasdaq down by .3%. because of what is happening and the dollar strength we are seeing, we are seeing the negative reaction as we have been seeing him emerging-market

currencies. let's flip up the board here and take you through what is happening with the peso riel, the rand, as well as the turkish lira. you can see the mexican peso up above the 20 mark. always gaining a little bit of a headwind if anything happens with trade in the united states. , 3.7.azilian riel some are expecting it to go up to 3.8 or so. that had weakened as much as 2%, but you can see that pulling the a bit and looking at turkish lira that we can do as much as 1.5%, but that had fallen in the past trading day. yvonne: in asia, we are ugly one a bit of the

we saw yesterday with the shanghai composite. that is one to watch when china markets open. take a look at how new zealand is looking. the australian market bucking the meltdown and how it is heavily weighted. , modest losses as well according to chicago nikkei futures and seoul, a slight upside, .1%. take a look at currencies. the haven buying into dollar-yen. at 73.83. .6898.wi at we have seen weakness engine closer to 6.48. we are watching when it comes to the u.s. 10 year yield, buying into treasuries. yields taking it

lower. much flat at $65 right now, but it has been the soft commodities that are feeling the brunt of this trade fight. down 1.7%. we saw it much lower when it comes to soybeans overnight as well. let's get you caught up with the first word news. jessica summers joining us from new york. hasica: you run has -- iran rejected a potential problem rise at opec. it is a sign the cartels gathering in vienna could end in major disarray for the first time since 2011. the iranian oil minister says he does not think agreement can be reached. >> he has difficulty for the market.

imposed sanctions against the two important members of opec, two important producers. to change something for the better. it's not fair. statea: chinese television says kim jong-un promised to update rise to a new level. cctv confirmed the leader met with xi jinping on tuesday, his third visit to china in three months. pledged to keep supporting north korea. it is a sign of chinese leverage with the u.s.. the trump administration has withdrawn from the un's human rights council, a body that has of anti-israeled

bias. the council is drawing criticism of trump's policies of separating undocumented immigrant at the mexican border. business leaders, republican, and democrat lawmakers have voiced opposition to removing children from their parents. pres. trump: what i am asking congress to do is give us a third option, which we have been requesting since last year. the legal authority to detain and probably remove families together as a unit. we have to be able to do this. this is the only solution to the border crisis. angela merkel and emmanuel macron have agreed on a plan to strengthen the euro area. its two biggest economies agreed to the for the european stability mechanism. they are seeking to fortify europe against financial crises and strengthen its influence. they still need to get other governments on board. global news, 24 hours a day, on

air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ramy: taking a closer look at the u.s. market closed, stocks declined across the board. the dow is now on its longest losing streak ever since march of 2017. trade tensions also of course having investors piling into bonds. it's more detail on all of this with su keenan. tariffs, the tension, the back and forth. one multi-asset class strategist said it is "were some." it led to a -- "worrisome." bonds rose, yields fell. have not seen that for more than a year. a record showing small caps are in favor. let's go to the stocks in the

crosshairs of this battle between the titans of the u.s. and china. these are some of the companies that analysts and professional investors say are very much exposed. apple gets its revenue from china and is arguably the most successful tech firm and want to expand. general motors and tesla planning a big expansion in china, targeting customers. they closed off their lows. alphabet, the parent company of google, with some exposure. a lot of the other fangs, netflix,t the facebook, not quite as exposed. let's go to the big map is because there were some big news indeed. netflix hitting the $400 mark. $490.ld go to another one came in and said it could go to $500. that appears to be igniting a buying frenzy. cely.t

there is a lot of positive outlook. therapeutics is a gene therapy an astonishingly positive result on its latest treatment. its rival also among for the ride higher. let's go into the bloomberg because we are going to revisit this russell 2000 record story. finds where you can these charts because these stocks, which started a rise and had a peak after the election went on the wild ride the rest of the markets have been on. back at a record as the focus is on the international companies in the crosshairs. most of the smaller cap companies are u.s. companies only less likely to be hurt by the trade war's and rallying as a result. yvonne: we actually did see the small caps eek out a small gain. we saw u.s. china tensions take a toll on oil prices as well.

there is a concern that this spot will hurt the man. su: we are on the eve of the latest inventory data. there is concern about demand majorhe china -- it's a consumer. also the discord going into the opec meeting. take a look at the chart. we were below 66. it's been a bumpy ride, but we are trending lower with this headline risk, and the top which out of the meeting at first was there might be a compromise, but that it shifted anyran, planning to block talk of an increase. opec goes by unanimous vote only so anyone who might oppose could put a fly in the ointment. major contention at the opec meeting and no agreement with russia homicide pushing for 1.5 million barrels per day. on the side pushing

for 1.5 million barrels per day. shots: now to the opening of the potential trade were between the world's top two economies. president is maintaining his hard-line, signaling skepticism that talks with china would work. ,et's go to just object -- joe joining us from washington. is the administration willing to take this all the way to a trade war? :loyd: it's pretty clear -- joe it's pretty clear that the does predicted that the trade war would be on hold. they have been somewhat silenced in this debate, and trump came out very aggressively, promising more tariffs and retaliation, tit-for-tat retaliation, and he expressed some skepticism about whether or not negotiations with china could be successful. it looks like they are in for the long hall, although trump is noted for opening up negotiations with a pretty strong hand, and then backing

down later. this is something -- these are long-held beliefs by the president. is there any chance that congress could step in? joe: it does not look like it. there was an attempt a while back that few republican senators tried to push back on trump's tariffs on steel and aluminum. that was pretty well shot down by party leaders. there is much greater sentiment for punishing china was among republicans as well as democrats. chinese sanctions are actually fairly -- if not popular, they at least get a fair amount of support in congress and the u.s., so it does not look like there will be any check on trump for this. ramy: shifting to the politics of what is happening between the u.s., china, and north korea, kim jong-nam now in beijing briefing xi jinping. how will this impact north

korean negotiations? joe: i think it shows at this point that president xi is going to demand a place at the table and this was something of an illustration of what he has to bring to the table, including a great deal of influence over north korea and whether or not continue to sanctions, the maximum pressure that the trump administration wants to bring, until there is an agreement, whether that could be sustained. china has a great deal of flex ability, if you will, to allow more imports, allow things across the border. trump has even complained a bit about that is that there's been some loosening of china's tight grip lately. wellcould be a factor as in part of china's response to the tariffs. ramy: joe sobczyk in washington with the latest on what's happening in the trade front as well as with north korea. ubsl ahead, find out why

wealth management says a potential output boost from opec will not be enough to offset supply concerns. yvonne: plus, how long will trade war uncertainty weigh on markets? we have the global chief investment manager, next. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am remy innocence you in the two-day session, but they ended up as traitors wait up trade risks. joining us now is kirk hartman, wells fargo asset management global chief investment officer. kirk, good to speak with you. it seems like many investors still are not convinced the show is exactly over.

>> the year of contradictions continue. the market sold off early this morning and then came back, and actually, i looked at it. it's pretty orderly. we have come a long way since may. since may 1, the market was up 6% to 8%. a bit of a selloff is to be expected. ramy: one interesting thing we have been talking about here was one index we don't really talk about too much internationally is the russell 2000, which eked out a record high. library.he gtv we can see exactly where the russell 2000 is. highest ever since the postelection surge. is this a safe haven play that investors need to know about? kirk: you have to remember that small caps trailed large caps by something like 800 basis points to getting a reversion. a small dollar helps small caps which paid higher tax rates. the tax stimulus bill

significantly helps small caps, so i think a lot of people are looking to small caps as a place to be, and again, they trailed the large cap indices, so it is a good place to be. yvonne: it seems like every asset class is impacted by trade tensions, not when it comes to global stocks, but also decent moves in the bond markets as well my a flight to safety into treasuries. is it long bonds, short equities , still the safest way to play a trade war? kirk: the other thing you want the highto short volatility sectors and go along the low volatility sectors. what is interesting institutionally is we have a lot of investors looking at non-correlated strategy. rather than take a bet on the exact direction of the markets, they are saying that i don't want to bet on the direction and i want to play volatility. yvonne: you know, what else do you think -- i am wondering, because it seems like when you're talking about $200

billion of tariffs on chinese goods, this basically puts tariffs on almost every type of chinese good that is sent to the u.s. or i should say -- it's quite remarkable. people are starting to feel it is more real. you don't think we are still underpricing the risk of all of this? kirk: i think you have to worry about the dollar, and obviously, the strong dollar hurts the emerging markets, so that is something to pay attention to. i think this is a bit overdone. in other words, i think that a lot of this is rhetoric. i think it will tend to calm down over time. certainly, i would hope so. we will just have to see how this plays out. the other point i would make is careful what you wish for because i think the tax cuts were very stimulatory and helped the u.s. markets, and obviously, if this continues on to long, it will turn around and be a significant negative effect to the positive tax cuts. bring ink, i want to

some sound we had from the indonesian finance minister earlier today. she basically said she thought that emerging-market companies cannot i just. concern that many countries, especially emerging and developing countries, cannot with thisl enough kind of environment that they are facing, and that can create an environment for the global economy to have a downside risk. the indonesian finance minister. in terms of asian emerging markets, which have resiliency, that's what you are looking at. i like southeast asia. what you have to do is look through in terms of a time horizon. i talked about this on your show before. thailand,tnam, because those economies are growing faster than the rest of the world. you also have to remember that

china has a lot of u.s. dollar reserves, so i think there is this thought out there that all the emerging-market economies, because the dollar stronger, cannot pay back the dollar liabilities. i think it is more nuanced than that. thailand is the poster child for that, having five times the amount of dollars versus their liabilities. china is something like 2.5 times of dollar reserves versus their liability. theink it is nuance, but to spokesperson just made, clearly, this is going to create turmoil in the emerging markets. ramy: we are also seeing that in terms of the currencies, too. hop back into the bloomberg because i want to show you the wcrs function. over the past day, this is set to emerging markets mexican peso. as you can see, the biggest loser against the u.s. dollar. the rand and lira also falling.

when do you think we can stop this blood loss, especially through the lens of fed hikes expected to rise? especially with deafness on the ecb, there is a timeline as well. on the ecb,ishness there is a timeline as well. kirk: how long is this dollar go?y going to i have thought for a long time, given the interest rate differentials between the u.s. and europe and the rest of the world, that the dollar had to get stronger. i am not surprised by the dollar strength. obviously, you put in the interest rate differentials and throw on that the potential for trade wars, and guess what? you got a very strong dollar. yvonne: you talk about this next trend to potential tariffs. this hits u.s. consumers, so perhaps it could raise prices as well. that the fed into a corner -- that backed the fed into a corner? kirk: that's a difficult one.

the fed will be conscious of the world economy. i know it is not explicitly in their mandate. but you are right. at some point, it will impact u.s. consumers because the cost of goods are going to go up, and that will impact u.s. consumers, and that may be something that at the end of the day breaks the tide, but we will have to see. yvonne: appreciate your insights, kirk hartman from wells fargo asset management, joining us from l.a. inund the budget stores today's edition of daybreak for bloomberg subscribers. go to dayb on the terminals and your mobile and the bloomberg anywhere app. we are focusing on the u.s.-china trade frictions here this morning. this is bloomberg. ♪

check of's do a quick the latest business flash headlines.

it is the most valuable company on the exchanges. shares closed 77% above tuesday's post ipo opening price , valuing the app at $6.5 billion. as the immediate excitement settles, investors will be key in to see if the founder can execute an ambitious overseas expansion plan. yvonne: the long-running joke about a starbucks at every corner may be fading. the coffee behemoth plans to close 150 u.s. stores next fiscal year after a forecast failed to rise 1% globally in the current quarter, the worst growth in nine years. business is booming overseas, and kevin johnson says china is a bright spot. ramy: jefferies group's two major businesses are moving away from each other, highlighting the transformation into a dealmaking shop. fixed income trading revenue fell 23% from a year earlier.

security sales increase for the seventh time in a row. jefferies has been building up its advisory and underwriting businesses. coming up, the commodities route deepens among with the trade standoff between washington and beijing. soybeans leading the slump. ♪ retail.

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it is; the 7:30 a.m. -- 30 a.m. in hong kong. we did see a pretty brutal day yesterday making below 30,000 on the hang seng. p.m. tuesday in new york, where markets closed marginally lower, .4%. they had been lower than this, but we saw losses paired a bit as investors decided that despite the $200 billion new threat on tariffs on chinese goods, that still, we have not come to the end of it. the s&p 500 paring those losses. i am ramy inocencio in new york. yvonne: i am yvonne man in hong

kong. you are watching "daybreak asia ." first word news with jessica summers. president trump signaled skepticism that trade talks with china would work but insists he is not backing down. global stocks declined after the world's biggest economies fired opening shots with a potential trade war. asian futures are pointing higher. beijing promised to retaliate if the president follows through on a new threat to target $250 billion of chinese imports. central bankes governor laid out the case for a second straight rate increase. he cited tighter u.s. monetary policy and currency slumps. the peso plunged to a 12 year low while bond yields are at year highs.high -- wednesday's policy meeting will assess ways of reining in inflation.

indonesia's finance minister says global monetary tightening is "the new normal," that is as the fed raises rates. he told bloomberg central-bank hawkishness and trade tensions are creating uncertainty. developing economies are failing to adjust quickly enough. the u.k. says rupert murdoch 21st century fox has made the remaining commitments necessary to win clearance to buy sky. fox agreed to fund sky news for 15 years and preserve the channels editorial independence. comcast made an offer for sky that is 16% higher than fox's bid. sky shares have been trading above both bids. news, 24 hours a day, on air and at to talk on twitter, -- tictoc on twitter. i am jessica summers. this is bloomberg. yvonne: let's get more on what

we should be watching as trading gets underway in asia. haigh joining us from sydney. the worst risk-off moves have parent off some -- pared off somewhat. why? interestinga super topic at the moment. in a sense, people are using the u.s. equity market as somewhat of a haven within a global environment that is particularly atcky for emerging markets the moment. we have seen emerging markets in both equities and bonds under a lot of pressure lately. china got hammered yesterday in the equities space. the u.s. equity market is providing a bit of a haven. ultimately, what it comes back to is the fundamental strengths that has driven the bull market ay back in 2009.

they had been growing in the u.s., 2019, 2020. the propensity for money managers. this chart,ee in volatility is back below the average of the bull market, which is remarkable when you think that everything has been thrown at this and able to be the case from volatility being suppressed. one other way people are playing the u.s. market at the moment is through call options and using that as a cushion to be able to , givenome upside risks that valuations on some people's stretched ontill the u.s. relative to the discounts in some of the em discounts, given

this selloff we have seen in some of the other markets. ramy: adam, the stronger dollar is one of the themes that come to the fore with these u.s.-china trade that's. there is also increasing pressure on the currency. pessimists forecast seeing the client -- forecasting declines. what are they saying? adam: it has been a huge swing in the past few months, and a lot of more people are jumping on the bandwagon of being short the australian dollar. in blackrock's instance, it is a view premised on two things. .irst, increasing tightening separately, the fact that the chinese economy was already slowing even prior to any of these latest escalations in trade. as the chart shows on the bloomberg terminal, this is about much more leverage funds stacking up the bets against the aussie. perhapsk is saying --

it could even go further than that. aussie in a very tough point. ramy: something like that was about one year ago in 2016. bloomberg's global markets editor, adam haigh. don't forget to check out our library for some of the chart you just saw adam feature on gtv on your own bloomberg terminal. says the trump administration's terror threats against beijing makes sense as a bargaining strategy and probably will not bring about a devastating trade war. he told the editor in chief what he learned from doing business in china. lloyd: the whole thing with china is a lot of frustration. sudden aggressiveness with u.s. policy. but anybody who transacted with

china appreciates the potential to have good experiences and frustrating experiences. and at various times, one or the other comes to the fore. , to be quite honest, 15 years ago almost, set up our joint venture in china. that will lead to us being able to own our own investment bank in china, which seemed imminent at the time. there have been a lot of suggestions that that was going to happen very quickly. availablet is already and often times, that gets announced at the seniormost level and gets into the ministries that have to affect these things. we found out recently that now, these many years later, that in order to own our own entity, it had to be capitalized at a level that would make it totally not sensible for us to do it. we are back at square one. that level, again, we are in

finance. we are advisors to other industries which have similar experiences. again, this would not be the course i would have done. not necessarily recommend. a lot of the people who are too publicly -- this is a very bad thing, which of course we know from taking economic courses that it is. at the end of the day, and publicly making these statements because they do business in china and you have to pay homage to your clients in china and customers in china and at the same time, when they are not in public, could be going to the u.s. government. what you are doing may not be such a bad thing, so i can understand how we get to the place we get to. >> did you see the argument that that was maybe acceptable at $50 million worth of tariffs? it has gone beyond it. the game of chicken --

lloyd: it is not my style, but if youant to show -- want to give somebody an incentive to see the world from your point of view, it does not help to remind them of your negotiating position. if we go tit-for-tat. tit-for-tat, we don't run out. if you want to make that point, you make that point. that's what you would do if you are crazy and really wanted to end free trade, and that is what you would do if it was a negotiating position and you want to remind your negotiating counterparty of how much firepower you had to bring to your negotiation. which one is it? >> do you think donald trump is a protectionist? he disliked nafta. he had this long record -- lloyd: rosencrantz and

guildenstern -- how could you play me? who am i to say what he thinks? doo not know what he would -- what i would do in his place, and i am not sure what he would do in my place, but if you ask me can i give a narrative about how this is a useful thing to do, i cannot say there is -- as makesof people do, this no sense at all. it does not make no sense to me at all. yvonne: and that was lloyd blankfein with our john at economic club of new york. do not miss our exclusive inerview with david solomon bloomberg surveillance. stephen engle is bringing that to you at 6:00 p.m. tonight, hong kong time. wednesday.

commodity and courtesy traders cannot say the same. resources resulted in hefty losses from everything to soy -- from soy to steal. let's get more now from the executive director for fx at ubs wealth management. to see you, as always. a raceare just kind of to the bottom when it comes to the commodities complex. where are you watching mostly? i think overall, this has been a confluence of negative events. iearly, chinese trade data, should say, china activity data, was a bit on the weaker side, so that started what was a softer patch in base metals, and when we go over to agriculture, whether issues around the world, not just in south america, but also in russia, china,

australia, had pushed speculators to the very long side on the agricultural commodities, particularly grains. if we look at mons in grains. whether it has started to improve a little bit in the u.s., at least in the midwest, i guess the trump trade issues, which clearly are where china has singled out agriculture, one of the things they are pretty keen to put tariffs on, that was to what we have seen for a very sharp falls, not just for soybeans, but also things like cotton. the weather events are still there. so, for commodities like corn and cotton, where fundamentals have tightened materially over the last two years, we think that they are the ones you should be picking up at the end of this downward momentum.

yvonne: just a board on what we're seeing year-to-date. even overnight, soybean futures plunging. steep losses when it comes to wheat and cotton as well. you think these moves are rational right now? our traders looking at how tariffs could impact exports? is this panic selling we're seeing right now? wayne: i think we are seeing that this is a grand unwind of a buildup of a very long -- very long positions in wheat, corn, soybeans, and cotton. it continues to the cheerier eight, largely in the texas panhandle of the u.s.. exporteris the biggest of cotton in the world, and stocks have come down quite a bit in china over the recent couple of years. on the corn side, we think stocks structurally are tightening on a global basis largely because area is being cut substantially over the last couple of years.

particular,t, in particularly mid protein wheat. this hardis short of wheat, particularly australia, russia. to beare likely curtailed. at the moment, we are in a downtrend. traders are unwinding. that we willones be picking up out of this route. yvonne: what about the hard commodities? you have to question about chinese demand as well. that seems to be slowing. there are reports they are using scrap metal. downside when it comes to hard commodities versus soft? wayne: i still quite like the base metals complex. the reason for that is twofold. while the fixed asset

investment in china has been a bit disappointing end has largely been driven by infrastructure and we are seeing the credit tightening, which is underway, overall, the housing data has been quite good. surprise to the upside. that gives me confidence that things like copper can find a bit of support here. the second point i would make about some of the base metals is we have seen inventories come down, particularly things like nickel. minds not seeing new built at these prices, so consequently, the supply-side can also add a little bit of support here. overall, what we need to see for the commodity market as a whole to start some pace is recovery in oil prices. ramy: i am glad you brought in oil because that was my next lesson. in terms of where this was saw wti fall from 67 to 64 on friday when the news first hit. where do you think this is expected to go, especially as we

had the second layer on ahead of opec? they could add between about 300000 and 500,000 barrels to the market coming out of this meeting. probably what shocked traders and drove the price down a little bit further has been the chatter from saudi arabia as well as russia. they would like to see him .5 see 1.5 billion barrels per day increase. let's say that is the case, clearly oil can fall another three dollars per barrel, but we largely for a up, couple of key reasons. firstly, 1.5 million barrels increased per day, given the spare capacity in most of the country's, including russia, would mean that is just paper.

russia could probably at about 300,000 barrels per day in the market, maximum. probably see 100,000 or so come out of the gulf states. rumored at 2is million barrels per day spare capacity, but we have only ever seen them produce 11 million barrels per day. we would say that with the venezuelan issues we expect another couple hundred thousand barrels to come out of venezuela. supply losses by the end of the year. when you add all of that up, the maximum opec can do is 600,000 barrels. maybe a touch more, so we would say that in this particular case, if we end up with a decision on friday at around the sort of 400,000 to 500,000 barrels per day, we will end up

with an oil price that actually starts to go north again. $85 per barrel on a three-month basis because we have to remember that demand is also stronger, so we are running demand at 1.5 million barrels per day. good for us and we would see it as a buying opportunity after the friday meeting. we are going to leave it there. wayne gordon, executive director commodities and fx at ubs. a planner believes his country needs another interest rate hike. our exclusive interview, coming up next. this is bloomberg. ♪

ramy: the philippine central bank makes its interest rate decision. the planning secretary says it should hike for the second time in two months. thatto twirled bloomberg

the philippine economy can sustain a small depreciation in the peso. it's safer to say that the is diminishinge now. next numberat the will be in june. bye if it has really peaked already. it continues to increase at a slower pace. no overheating. we are far from overheating. soacity is it he 5% average, we are nowhere near -- >> record trade deficit because of everything being brought in. the currency is the worst performer in asia. is there a level at which you become uncomfortable?

>> in terms of looking at the benefits and costs of depreciation, i think the upside benefits are greater than the downside costs. i think we can still sustain another, you know, another few, you know, a small bit of depreciation. slowing, that begin to bring down the depreciation, to slow the depreciation of the peso to normalize toward the end of the year. >> sampans, we get comments from the economic managers that they prefer rates not to be high. do you think that causes confusion? a change in rates

may be warranted is time. >> -- this time. >> a change meaning hike? my guess is there would be a hike. i think it is about time. so many businessmen have been saying it's kind of late now. >> are you confident the philippine economy can with stand higher interest rates? bsp hasi think so, but been doing well in terms of managing the monetary policy. yvonne: that was bloomberg's exclusive interview with ernesto pernia. more ahead on "daybreak asia." this is bloomberg. ♪

ramy: all right. another strong win for the world cup host. upset this in a call -- upsets in senegal and japan. you can see how your club links and our bloomberg anchors are faring in their predictions. want to get some breaking news here minutes out of the latest bank of japan meeting. according to the bloomberg terminal, most bank of japan members say it's appropriate to pursue powerful easing continuing what they are doing currently and they say most boj members as a price momentum for its cpi goal is currently maintained. they do say there is caution in the air. many members saying firms are cautious for wages and price hikes, and one boj member says they need to clearly explain an

exit and some kind of normalization. one member saying that is what they need to do. those are the latest minutes, the latest breaking news headlines coming out on the bloomberg terminal from the bank of japan's most recent policy meeting, yvonne. yvonne: interesting that they wrote this in april when in june they downgraded it. theok at the countdown to market open, less than three minutes away. we have been watching this themetry when it comes to reaction to these trade frictions. wall street, relatively speaking, quite resilient to this tit-for-tat trade we are seeing. we are seeing nikkei futures up .5%.% -- for spi futures. perhaps we could see the weaker

dollar giving a list to the exporters. jacob parker from the u.s. china business council will be joining us to talk more about what comes next. the market open, coming up. this is bloomberg. ♪

♪ iran: it is 8 a.m. hong kong, we're live from bloomberg's headquarters. the markets are poised for gains in sydney and tokyo as trade tensions ease. well. under pressure as a run rejecting the potential opec output compromise ahead of friday's meeting in vienna. ramy: and from bloomberg's global headquarters, i am ramy inocencio you in new york where it is just past 8 p.m. on a tuesday. we hear exclusively from our

next guest as he builds a case for a second straight hike in the philippines. and with kim jong-un back in beijing, we look at his wall as a bargaining chip with china's disputes against the united states. ♪ at yvonne: we have a better set up here for asia than we saw yesterday ramy, that we are seeing different market reactions. the u.s. taking the trade tensions and dried and asia particularly perhaps more exposed to the attention. we will see how things play out. but things are looking better than what we saw yesterday, for sure. ramy: there was a bit of a push of support coming from the u.s. near the end of the trading day. lowsve markets hit session before the end of the day.

is downt said, the dow six days in a row. it will be interesting to see how that plays into the asia-pacific trading day when we see more reaction from investors on whether this is something that is short-lived or something they need to take into consideration for the long-term. yvonne: yes, the china market will be key here. will see how markets are faring so far, let us get the latest from sophie kamaruddin. sophie: after two days blow from stocks, some stocks seem to be returning. the u.s. futures are pointing slightly higher. and on the agenda, we are keeping an eye on the philippines and thailand. we have great decisions coming up from those economies. as well as the malaysia. take a look at what is going on with oil. commodities have been taking a beating broadly speaking. oil has been holding of with

opec tensions rounding up, and a run stating that it will not be increasing output however modest. this index has fallen the most , engages raw materials. day.s had a tough is because of trade overshadowing concerns. we will keep an eye on this today. ramy: thank you so much, sophie kamaruddin come on the market there. asia definitely catches its breath after yesterday's trade panic induced selloff. let us bring in mark cranfield for more. can we expect a bit of a relief on china or will the selloff continue? mark: there was some focus on my

interview given yesterday, he appears to be well on top of the market situation and is fully informed of what is going on. he said that the pboc is ready with various tools to help calm the situation. he knows that there is a risk of a liquidity crunch in china, chinese companies having a lot of negative cash flow situations, so their funding needs to be met. the sentiment is coming from the bearish stock market and it is not helping a lot. the pboc will continue to do it generous reverse repos, maybe even more lending like it did yesterday. but i think what they are really hoping for as an official rate hike -- rate cuts. asia,looking elsewhere in are we seeing other signs of angst? certainly, we are looking

at the australian dollar against the japanese yen, a rate that usually reflects anxiety in the markets and could also reflect the fact that markets are very happy. we saw the rise right before the trump-kim summit. and now we have seen the reverse. it has broken into a lower trading range with the be a significant sign that investors ang aboutng really thanks t what is goings on and thinking that the situation will continue for a long timety. yvonne: and we are looking at central banks as well for clues. how will investors play that? mark: they will be looking for soothing messages from both the central banks in the philippines and thailand. that they are ready, should they need to, to help the local market come things down. in situation is not the same those come a but the philippine peso for example appears to be under a lot of pressure.

the central bank will be expected to say something to help stabilize the philippine peso. that thailand currency has also been weakening a bit. both central banks will use opportunity to tell markets will that they should help should the need arise. yvonne: mark, thank you very much. you can follow more on this story and all of the day's trading on oil markets live blog .omberg at mliv there is commentary and analysis from mark cranfield as well. we get caughte, up with a first word news was jessica summers joining us from new york. >> thanks, yvonne. the philippine central bank governor laid out the case for a second straight rate increase citing a broadening price pressures and a currency slump. the philippines peso plunged to a 12 year low this week and bond yields are at a seven-year high. he told bloomberg that

wednesday's policy meeting will assess ratings and inflation which is at 4.6% in may. >> we are seeing a deceleration in may, so from that rising afterit is our original anticipation. but there will be an increase in this case. we expected to go down back to target range men next year. >> chinese state television says kim jong-un has promised to level. beijing to a new cctv confirmed the north korean leader met with president xi jinping on tuesday, his third visit to china in three months. he pledged to keep supporting north korea. kim's president has also assigned a chinese leverage in the nuclear trade dispute in the u.s. -- the north korean assigned is also

chinese leverage in the nuclear trade dispute and the u.s.. the geneva-based u.n. human rights council has drawn criticism of trump's policy of separating immigrant families at the border. republican and democrat lawmakers have voiced opposition to removing children from their parents. >> what i'm asking congress to do is give us a third option, which we have been requesting since last year. to detainauthority and promptly remove families together as a unit. we have to be able to do this. this is the only solution to the border crisis. german chancellor angela merkel and french president mn omicron have agreed on a plan to strengthen the euro area. the two biggest economies agreed to set up a joint regional budget and rebuff the european stability mechanism, seeking to fortify europe against economic

crisis. but they still have to get other governments on board. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers, this is bloomberg. ♪ yvonne: jessica, thanks. more on the opening shots of a potential trade war between the top economies in the world. president xi jinping with a hard-line stance. we go to our chief asian economics correspondent in mark carney who joins us now -- enda curran joining us from hong kong. this seems to be hitting consumers in particular. doing have any indications that it could disrupt the global economy? >> i do feel like we are heading into a more dangerous phase, pretty close deadline there in terms of the first tariffs being

implemented. and feel that we are also talking about a multiple order basket of goods which would hit a much broader swath of the economies, in particular the u.s. there is no doubt that both sides are going to the wire on this and there was no sign of any significant breakthrough that would lead to a truce in the trade war. yvonne: the u.s. is basically targeting almost every product exports,a actually which is quite interesting because they don't really have as much a munition to do so? enda: like you mentioned, they could heighten their terrorist. they don't -- their riffs, they don't really have to stop at 25%. we have seen them do this before when they had political tensions

between korea and japan, targeting korean businesses, telling tourists not to go to korea and so forth. they could do the same thing n regulatoryheighte examinations and even outright cancel orders of u.s. goods, slow down investments as well. there are several tools that they could use. ramy: one of the quotes that we had from our bloomberg reporters, is that beijing would retaliate if the u.s. loses its senses". almost like they don't want to do this but they will have to if they are pushed. out and say u.s. preparing for bottle as we go ahead? enda: on the china's five, they have been quite consistent. language,e saying that they are willing to come to the table and negotiate and make concessions in an effort to placate trade hawks in washington.

the real sticking ground is where concessions can be made in that china 2025in strategy, that goes beyond the world of tariffs. so that is where i will be more difficult for the u.s. to slow them down, because of the riffsng that terroristta will not necessarily put a hold on china's ambition. ramy: right, a lot of people could a that this is inevitable regardless. looking at the geopolitical angle on this. tosident kim jong-un travel sorry -- chairman kim jong-un traveled to china on thursday. what could this mean? enda: it is interesting, we have the meeting going on today. the thinking is that china has been a critical part in the

north korea's actions game. they have played a huge role in enforcing the u.s.-led sanctions. some people say that they played a role in bringing kim jong-un to the table with the u.s.. if china eases pressure on the trade front with north korea, it would undermine the u.s. efforts there. so it is critical that china plays the role with north korea. remember, trump himself tweeted -- where would he go hard on hen he could on north korea? so this will be critical in the border trade relationship with u.s.. yvonne: do you think things have changed since the singapore summit, perhaps president trump separating the need to fuel geopolitics with the trade war? enda: there are several different fascinating theories on this. kim is now in the u.s. orbit the orbit.e is in the china

china is still an integral part of the north korea-u.s. story, and they still need china to play a role on the sanctions front, which they need to continue to enforce them. there's is a feeling that perhaps strong is constrained -- perhaps trump will be constrained in how hard he can go a north korea. yvonne: thank you, enda curran, bloomberg's chief asian economist correspondent. still ahead, china markets shook investors yesterday with a 4% plunge in shanghai. we look at the pboc is calls for calm. ramy: and up next, how business is reacting to the trade but with jessica parker, the u.s.-china business council -- jacob parker. this is bloomberg. ♪

♪ this is daybreak asia, i am remy innocence you in new york. yvonne: and i am yvonne man in hong kong.

beijing promised to retaliate forcefully against president trump's pledge to slap duties in another $200 billion in chinese imports. we bring in. jacob parker, from the u.s.-china business council, joining us from beijing. thank you for joining us. what are you hearing on the ground at the moment? other actual negotiations to try to diffuse these trade frictions, or is it going to escalate further? jacob: when we speak to companies, they were somewhat surprised by the new threat of $200 billion in tariffs that could be lobbied against chinese products to the u.s. when we talk to our colleagues in the u.s. government and the chinese government, we understand that there are no current ongoing negotiations between the u.s. and china, no are their plan for chinese officials to travel to the u.s. at the senior level. that doesn't mean that it can change on a dime. but at the current time, there doesn't appear to be any plans for an gauge meant.

yvonne: the u.s. business they still have the president ear? jacob: industry of course still has access to the administration , whether it is ambassador light hauser, secretary mnuchin, many people involved in the current thee issues, but administration appears to be taking its own road here with the tariffs. companies are interested in how tariffs will be able to resolve .he issues such as intellectual property issues how can we make sure the companies are not forced to transfer technology to the chinese market. companies want a little bit more instruction on how tariffs are going to help fix the concerns have. yvonne: and whether the u.s. slapping another potential $200 billion on tariffs, it is getting harder for beijing to

retaliate of the were discussing before, in kind for china. it means that they could be looking for unconventional ways to hit back. with do think is the biggest threat to u.s. companies operating in china? jacob: the biggest threat that we hear from companies is some of the regulatory pressure that could be brought to bear on operations in china. whether it is the politicized nation of antitrust reviews -- of antitrustn reviews, random emissions checks, enforcement of the advertising law, we have also heard from companies saying that there has been. an increased customs review of their products. previously, there was an average.n rate of 2% some of our companies have reported 100% inspections for goods being imported to china. in the medium and longer-term, companies are also concerned about supply chains being , and for away

u. chinesent of customers to purchase goods from japanese and other countries products. heard that any potential trade was will not damage economy just yet. listen to this. >> the trade war is not likely to be large enough that it directly affects or damages the hasomy, but it -- it psychological effects in increasing uncertainty which could be very serious. we are certainly getting later in the cycle of escalation. ramy: so, at what point does it go from psychological to real along the timeline that we are looking at? sometime maybe later this year or 2019? if we talk about the $34 billion that will come into effect currently on july 6, that may not have the massive global

economic impact that would have negative it repercussions on the global economy. or 450$200 billion billion dollars of tariffs come into effect, i don't know if anybody has any good economic models to predict how that will economy.e global or what the ripple effects will be in china, the u.s. and globally. companies, when we talk about the terrorist being implemented now, and in the future, they are concerned -- when we talk about tariffs being implemented now, they are concerned about how they will continue to meet the demands of all the markets in which they operate. ramy: i would like to show you chart, in blue, this is the u.s. import of chinese goods , $500 billion worth. here is china's imports.

yesterday, we had a guest on, the deputy chief of staff of former president bill clinton, whose head that the trump administration has picked the wrong solutions to solve their problems. not that trade issues are not the good what would levers to pull to try to get to the heart of this? jacob: here's the thing. and the trump administration is clearly aware of the structural issues in the relationship. we understand that there are many stumbling blocks in the negotiations with the chinese. the trump administration has correctly identified issues to the domestic economy, state enterprise are from continues to be an irritant and their relationship. china's domestic policy of employing subsidies. we should be building a multilateral coalition of like-minded countries to bring pressure to bear on china to address some of these broadly concerning issues.

those would be the right actions to take, not unilateral tariffs against the chinese, which will be responded to and retaliated against. frankly, the group most harmed by this will be both u.s. business, u.s. consumers and also american farmers. yvonne: if i'm the ceo of a multinational company operating in china now, what is the most moment?l choice at the should i hold out and see where things go when it comes to negotiations, or should i start trying to find out a different supply chain? jacob: when we talk to our member company executives, if they are articulated in the tariff list going into effect july 6, they are making contingency plans on how they can w redistribute their supply chains. for the most part, they are waiting to see how this plays

out. whether it will be $34 billion, or where the $50 billion will be the end of it. if the $400 billion in tariffs comes into force, it creates them.nging concerns for when we stick to our members today, their primary strategy is to keep a low profile and an sure they are coming closer to their customers in the china market and. yvonne: retaining those relationships. yvonne: great to have you, jacob. from the u.s.-china business council, joining us from beijing. we have teamed up with twitter, munching tictoc by bloomberg offering hourly updated top news reports verified by us. if you are in. twitter, make sure to follow usthis is bloomberg. ♪

♪ ramy: let us do a quick check of the headlines right now. softbank's ceo has shaken up his

inner circle, elevating two group executives in one of harder. the board is set to approve the nominations as executives. boardwill also join the after a share vote. the biggest overhaul in softbank's management since 2014. yvonne: this company enters its second day of trading in tokyo. shares close 77% above tuesday's price, valuing the at $6.5 billion. investors will be key to see if the founder can execute an ambitious overseas expansion plan. running jokeg journe fading.arbuck may be there are about to close 150 stores in the u.s. after forecast of sales will rise just

1% to globally, the worst growth in about nine years. business is booming overseas and the ceo says china is a bright spot. coming up next, we talk to the eu chamber of commerce china president about her trade tensions are playing out in europe. tensions are playing out in europe.

♪ 8:30 in singapore this morning, half an hour away from trading opening in the lion city. i am yvonne man in hong kong. ramy: and i am ramy: in new york . jessica: president trump has signaled skepticism that trade talks with china would work, but he says he is not backing down. beijing has promised to retaliate if the president follows through on a threat to target $253 billion of chinese imports. the pboc governor called for investors to remain calm after yesterday's selloff in mainland .quities

>> trade war is not likely to be large enough that it has direct effects damaging the economy. factt's psychological in and increasing in uncertainty could be more serious and was certainly get in later -- we are certainly getting later in the cycle of escalation. jessica: a run rejected a potential compromise of luck, saying that it will not put forth even a small increase in oil production at friday's meeting. it is a sign that the gathering in vienna could and in disarray 2011.e first time since the iranian oil minister says he doesn't believe an agreement can be reached and also said the u.s. calls for lower crude prices were unfair. >> president trump has created difficulty for the markets, the oil markets by imposing two importantnst

members of opec, two important producers. and now he asks opec and expects to change to change something a better pricing in the markets? it is not fair. jeff zucker: indonesia says global monetary tightening is a indonesia -- jessica: says global monetary tightening normal. that hawkishness and trade tensions are creating uncertainty and some developing economies are feeling to adjust quick enough. that are getting concerned many countries, especially emerging and developing countries cannot adjust well enough or fast enough with this kind of environment that they are facing. that can create an environment for the global economy to have a downside risk. uk's says a rupert

murdoch's 21st century fox made the remaining commitments necessary to win clearance to purchase sky. fox and if souter disney, agreed to preserve the channels editorial independence. comcast made an offer for sky that is 15% higher than fox's bid. sky shares have been trading above both been. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. ♪ yvonne: we have some breaking news coming through on noble group. now saying that goldilocks is to stop all claims and proceedings. we learned a couple of weeks ago that they were facing a lawsuit from goldilocks, the third-largest investor of the abu dhabi-based fund.

sorry things like now to have dropped the claim according to hearingnd we're also that the lawsuit by pinpoint asset management has also in drawn. they are saying that there was a resolution enabling a final restructuring with goldilocks. they will remain in constructive talks with their shareholders. we have also learned that they have requested to list their trading today. we will see if noble does in fact trade later this morning. in the meantime, looking at how the asian markets are shaping up so far, let us get an update with sophie kamaruddin. sophie: looking much better than yesterday, what a difference a day makes. the yen as looking study. while the nikkei 225 could be facing a two day drop, we have some miners dragging on the benchmark.

when it comes to what is going on elsewhere, the kospi could it be said for the first rise in six days, and financials and tech shares are leading gains in sydney. on the currency space, the thai baht is gaining ground due to the decision this afternoon. not too far off from the years lows. indicated how even countries with strong fundamentals like thailand are not immune from selloff elsewhere. checking out the ringgit, slipping ahead of inflation data. cpi is expected to have risen 1.8%, weakening of slightly from april. the aussie dollar has also responded a touch. bloombergn on stocks highlighted one of them, falling this morning after announcing that it is set to cut jobs -- blackrock, as it struggles with increasing competition.

arean steel companies jumping bit over their peers in japan, one steel company rising the most in over 21 years. biologics crawling back recent as hearings over its accounting issues will be held this thursday. ramy: thank you very much, sophie. as we all know, president trump has complained about china trade being unfair and reciprocal and now, he has support from european companies. a slim majority of them believed that foreign firms are treated unfairly and two thirds of them agree that european companies could have better access to china markets. we go to tom mackenzie who is standing by with details. tom? tom: i am pleased to say that i am joined by the european chamber of commerce here in china. this is their annual business sentiment survey, the eu chamber

dovish is this on an annual chamber the eu publishes this on an annual basis. can you give me a sense of what the concerns are of business more broadly here on the ground in china as a result of the tensions? and whether these fictions seem to be accelerating? mats: basically, we share the u.s. government concerns. but using tariffs as a way to deal with these problems makes us worried. we talked about this and the conference, we don't feel confident. it is distracting global supply chains, our own global supply systems. a have been working with role-based global system to deal with these issues. this is what we are engaging with on a daily basis with the chinese government.

t some other issues that the white house has been focused on, those are issues that are affecting european companies as well of course. how the madese of in china policy is changing the landscape for you members? mats: this is at industrial policy was china has that very high ambitions on. the problem with that. is that if it is not open equally to all, if it is too much of a top-down subsidy-driven policy, it risks increasing distortions in trade and capacity. we spoke out about this a year ago. maybe we are seeing some improvement. more of our member companies see that they're able to participate in the china manufacturing 2025 land. but we should see all of our company is able to participate? tom: the chinese say that they are cracking down on intellectual property violations. are you seeing any evidence of that? mats: of course, we see

improvement, but it is more on the east coast, moving inland, it is worse. china has problems with its capacity. last year we had 216,000 ip litigation cases in china. that is a 54% increase over the year before. so of course, china is suffering from lack of capacity which needs to be addressed? tom: the regulatory trade environment is expected to worsen by your members in the next few years. what are the costs of those regulatory hurdles? mats: majority of our member companies say that it is costing them business on a yearly basis. key issue tohe address for us and china, but chinaor china is self, needs to deal with the regulatory environment, which is holding back an economy that seems to be mature.

i think we need to engage with china, and i am asking my member companies to engage even more, so that we are able to participate in discussions about regulations? tom: something that jumped out for me in the survey, was the line that european companies for the first time, now see their chinese counterparts as competitive and innovative or more so. for the first time ever. how significant was that? mats: i was very sufficing for surprising for most of that. the chinese middle class is asking for solutions to a lot of problems in society and the chinese companies have become very was onset of. it means that we as western companies cannot rest in all laurels, we need to keep increasing our competitiveness. but it also means that chinese companies are becoming more competitive also on a global

level. for china to encourage that development, the pampering and protection that we are seeing with discrimination against foreign companies has to stop, in order to expose these companies to full and fair competition, so they can take the next step? tom: despite these challenges, whether it is the regulatory environment or that increasing competitiveness, european companies were doing very well on average. 66% of them. being that revenues are up in 2018. what is the standout in this? mats: pharmaceutical companies, medical devices. one of the reasons they stand out i should say, european companies are becoming more successful because they are very nimble. they are adapting to the market situation, they are capping costs. but we need to do so much more in the future in view of the increasing competitiveness in landscape?

tom: in terms of the trade war, the potential scenario is that european companies could in fact benefit, if this comes to a blow for blow fight with beijing and washington. is that going to play out at all? mats: as we are seeing with the anecdotal evidence, a few companies into have benefited. but we don't want to compete based on the advantages from a trade war. we went to an open and fair trade regime that benefits all of us. where we compete on what we are good at, selling products? tom: how do you think the trade war plays out from here? are your members taking actions to protect themselves, should things get worse? mats: yes, our member companies are having meetings on a daily basis, discussing how to risks.e the it is about rearranging supply chains, looking at our global production systems. it is also taking measures for the worst scenario. the depressing.

gloom cycle is perhaps coming to an end. if it escalates, this could be the trigger that ends the boom cycle. tom: thank you very much, the of.ident the european chamber of commerce here in china talking about the challenges as well as the opportunities of the chinese market and the impact of this trade war, not just on european businesses but that business environment generally here in china. yvonne: thank you very much, tom mackenzie. ahead, after massive salus on selloffs, theve chinese central bank is a have wasted stave off the friction. this is bloomberg. ♪

♪ yvonne: the pboc has vowed to

use monetary policy comprehensively to fund of risk from trump's terrace. we are joined by our bloomberg china markets reporter from hong kong. we saw liquidity concerns, and the pb oc in a rare interview talked about how investor should stay rational right now. they have injected a bit of liquidity into the system. where do you think the main goal is at the moment? >> china's financial markets are faced with a lot of internal and a journal pressures this month. internally, chinese banks have -- we have seen a lot of corporate bond defaults since tax and also in july, season. so the liquidity condition will be tighter in the following months. externally, we are seeing the escalating trade spat with the u.s.. so of full fledged trade war with the u.s. could be coming. they are trying to inject more liquidation to ease the

pressure. secondly, they want to send a signal to the market to say that they are there to help if there are any pressures. yvonne: this is a direct quote from what he said on the website -- we will be looking, preparing policies and comprehensive reuse use all caps of monetary policy tools. stock market turbulence is mostly driven by market sentiment. now that we see the trade hitting at a time when china is trying to control leverage in the system, does this slowdown there de-leveraging campaign? tian: that is the view, analysts are saying that china may have to slow down the de-leveraging campaign because china doesn't a slower export or slower economy as well as a trade war, as well as fighting a .pike in borrowing costs

ramy: too many headwinds, as it were. what kind of messaging is the pboc putting out in mainland media? tian: in short, what china is trying to do is tell the markets that we don't want to see a market crash again. yi gong already said that china will use comprehensive monetary policy tools. we are expecting more mls cuts.ions, more rrr on tuesday, state run media also said that china's fundamentals are sound and there is no point to be bearish on china's markets. tian, thank you so much for that. tokyo where david

ingles joins us for a preview of the decisions from thailand and the philip. david, where do we start. david: we start with the philippines, that is where it is more exciting when you look at the plot for the central bank. when you look at inflation, it is true that we had seen a deceleration in the pace of increase. i guess they putting it that way shows how we are struggling to put a positive spin. the government and the central so 4%re working on that, is the top end of the target by early of next year. that being said, when we talk about today, there should be a hike.o when you look at the currency, one of the worst performing currencies, and also to send a strong signal to the market that think. a one-off, they it is an opportune time to get ahead and squash any perception out there that they might be behind the curve. listen to the central bank governor and the economy

secretary whom i spoke with yesterday. thehe challenge is that economy is growing strong and has been growing strongly. like that, there is more possibility of passing customers.osts to that is a particular risk that we are looking into, the .o-called second round effects >> might guesstimate is that there will be a hike. guesstimate. am not trying to influence the markets, but, you know. i think it is about time. so many businessmen have been saying that it is kind of late now. david: so i guess of those of two are outlining the case for a hike, which means that don't be surprised if they do later on

hike rates. -- rates intually the region are actually the lowest, if you need more convincing that there is a case. is also about timing. do they wait for another month. -- i i was speaking with will be stricken with a guest later on who also thinks that they will hike today as well as in the next meeting. play intoow does this the terrible year that investors are having in the philippines? the philippines stock exchanges down nearly 50% year to date? 1% of the beare market which could come today, when you look at the pressure equities are under, tighter monetary policy and the perception right or wrong that they are behind the curve does case.lp the plac e.m.'s are also under pressure.

we have a chart showing that the philippines is on the record run of outflows. 23 from foreign investors, very close to entering a bear market come.ila, which could i would not be surprised if it comes at the open in about 45 minutes from now. yvonne: days, we also have something to think about with baht.ghthai where are we in terms of another rate hike for thailand? : a century all economist think that it is going to be 1.5%, that is nearing a record low. they will, with an updated economy.for the whether it is on growth were also on inflation, that is something to watch, more than the rate hike self. yvonne: thank you, david. don't forget our interactive tv function, tv go where you can watch us live and catch up on

past interviews like the one that dave did with the philippines central bank governor. plus, you composite conversations and send us instant messages during our shows. this is for bloomberg subscribers only, check it out at tv . this is bloomberg. ♪

♪ yvonne: this is the market to watch in the next half an hour or so.

china markets fell off yesterday 4.5% drop on the shanghai composite. this is a whiff of what we saw in february during the pretty bad and volatile days. just to keep in mind, we are not 2907 right now, breaking of the 3000 level that we were at in 2015. belowng seng also broke 30,000, a key level for the hang seng as well. we will see if the pboc with warning thatve they are willing to use monetary policy of trade tensions intensify, if it will actually provide a boost for the markets. at the shanghai composite, we actually saw the second-biggest drop off the trade war sentiment that has been coming out.

earlier, we were talking to john creswell over at dolphin phillips investment management. you can see here on the bloomberg. terminal, 3.8%, the second-biggest ever drop since february. he has been telling us that if had shanghai composite fallen below 3000, it would be a bearish signal from moving ahead. as he just mentioned, as it turns out, 2907 is the number we are on. whether they will try to consolidate and pushback about that marker, we will have to see. yvonne: not for a look at what is coming up next, rishaad salamat is coming up. rishaad: yes, we are definitely looking at china markets. we also have a guest from j.p. morgan, he looks the chinese exports to the net is states, saying that they only account for 3% of china's gdp last year.

we should just hold on, just chill, you know? [laughter] yvonne: that is exactly what the pboc governess had, right? rishaad: yes, and we are joined brisco laterayden burres situation.ut the we will also look at some of the ratings for these countries in this part of the world as the trade frictions and the trade war depends. what does that mean, we will be joined by our guest on that as well. ramy: thank you so much, .ishaad: because it that the nikkei is because it that the nikkei is down by about .10%, but the kospi is looking positive. that is the latest from "daybreak: asia." this is bloomberg. ♪

theaad: this man in spotlight. china's stocks in the spotlight. saying thevernor bank stands ready if things get worse. shun it could squeeze u.s. companies, and that goes beyond tariffs. noble group reaching agreement with goldilocks. in hong kong, i am rishaad salamat haidi: also --i am rishaad salamat. a big day for central banks, thailand and the philippines. this is "bloomberg markets: asia." ♪