industries, citing national security issues. and erdogan for the win. the really rally for lira fades and abroad em gets crashed with warnings from analysts. what happened with opec? confused the markets as to how much oil will really be added to the markets. david: welcome to "bloomberg daybreak." i'm david westin with alix steel. harley davidson, as we know there was a retaliation against harley davidson specifically. 6% tothe tariffs went to 31% for those being imported to the european union. it looks like they will take a hit. david: but the symbolism is important. a quintessential american brand. and one of the effects will be

shifting production, so that is not good. alix: it does not mean good things for jobs in a country where donald trump wanted to bring them back. we are waiting for the morning tweets. david: we will see. they were targeting ryan because he is from wisconsin. alix: not helping the risk off sentiment that is percolating through the markets. take a look at s&p futures, down 17 points. over 200 for the dow. is where you go for safety. and a little bit of buying in the long year, 10 year, up a little bit. and i am trying to understand what opec did in the last 48 hours. can you tell me? david: if you do not know, i am sure i do not know. alix: we will work it out. david: time for the morning brief. at 10 of clock a.m., we will get -- 10:00 a.m., we will get may be the last supreme court decision of this term. alix steel covering it all.

core numbers -- numbers on friday. and over the course of the entire week, the u.s. treasury will be auctioning $100 billion in fixed-rate notes. now for the first take. we are joined by marty schenker. and romaine bostick. welcome. we will start with what we anticipate for the end of the week, what kind of restrictions we are putting on china. we are taking a look at what we are expecting. and you see the review for china, maybe a two track system, really targeting electric vehicles, robotics, aerospace, going to the heart of china 2025. and 25% chinese ownership. up in thele we get trade wars, there is a serious issue involved, that is the transfer of intellectual

property across borders. it is a very serious issue that transcends donald trump and in rest of his trade policies. .t is about the future of a.i and who is going to be leading the world in these fields. and it is of great strategic importance. david: something we could agree on what the europeans, and mexicans and canadians, if we were not fighting with them. marty: that is absolutely true. there are probably some democrats in congress who absolutely believe this is an important thing to do. alix: over the weekend, you wind up having china release reserves, really about 700 billion, so why? >> trying to keep the inflows coming, and stem the tide, but they say with a weakness in the want -- yuan -- alix: it is a trade issue. >> everybody in the market knows

it is a trade issue. it is also an issue because it is another signal that this is something that will not be resolved. where are the negotiations right now? we know there are none on the u.s. side and there does not appear to be any on the chinese side, and what they did with the reserve ratio is a signal they are digging in their heels on this as well. david: goes back to the issues of president trump, when he was campaigning, he said we were worried, but i got to office and said it was all fixed. >> this is the leverage china has, they have control over their economy in a way that we do not have in the u.s., and they will use that to leverage something out of this. whether it works, we will see. but it has already taken a toll on chinese stocks. and in the hong kong markets. we will see if the pain continues. david: the turkish election over the weekend, erdogan with a resounding success in his reelection. you can see how there was a

relief rally, as the turkish lira jumped up 4% - -- alix: it has reversed now. david: i am behind the times. [laughter] alix: it is interesting, because i do not think of it is a broader e.m. issue, but more of a you won, now what? >> it was pretty light going into this, that is why you saw some volatility. but you saw some reversal on the benchmark. last time i checked, they had he raced all of their games -- had erased all of their gains. david: has he said where they are heading? or is it just news settling in? >> i think it is just news settling in. i think erdogan will be more emphatic about controlling the economy and the central bank, and that is causing some pause, because he did solidify his power and now he has made very

populist comments about how he wants to take control of the economy. we will see if he follows through. alix: i brought up the broader issue of the emerging markets. you can see we have the lira, the peso getting hit, but the white line is em fx index and we're looking at a record low. it did not look dramatic when you normalize it, but it is on a constant basis and i cannot keep track of how many downgrade we have gotten. >> we will get relief with turkey out of the mix, but when you look long term, we have not spoken to anybody this morning who thinks this will be a long-term relief. the pain we have seen over the last few weeks, nothing really to counter it. when you consider the tensions that continue to rise with regards to trade, the pressure it is putting on, the upward pressure on the dollar, which affects a lot of the e.m. currencies, there is no end in sight to that. if you are trying to position what is happening right now, you will have to guard to the

downside. alix: and it will be impacted by the oil prices. the question is, opec, what did they actually do in the last 48 hours? i tried to compile a screen for you. 100% compliance, which should mean a one million barrel a day collective increase, that could be a real increase of the saudi and russian government really pumping. how did you understand the price action? >> i think it was telling you nobody really takes it seriously. you saw the spreads narrow. we were above 10 at the start of last week, this morning under six. that gives you a sense that there are some bets the saudis will make good, but the issue is control. do they really have the control to do that, to get to one million that they say they'll get to, particularly when you think about the constraints on the u.s. side and north american side with regards to transportation and output. i do not know if the math adds up to a point.

alix: they do not even know. david: can donald trump claim some credit? he has been lobbying them to get the price down. >> he will try to take credit for this. goldman came out with a note today about an outage that could have more impact than opec. that is not being factored in the market this morning. so it remains that it is an uncertain situation. i do not think anybody believes these numbers. we will have to see what the market tells you in the days and weeks ahead. alix: what is interesting, regardless of the saudi russia cooperation, it means a range for oil and not a lot of price spikes, and that will be a different market than we are used to. david: they seem to be joined at the hip right now. a.m., withht at 5:00 opec. alix: but i am skeptical.

marty schenker and romaine bostick, thank you. tune in tomorrow as i sit down with -- ceo. and we also have the nuclear threat initiative ceo and former secretary of energy, as the world gas conference is kicking off in washington dc. david: the real deal. we want to remind you of the announcement from harley davidson, saying they will start to produce hogs outside of the united states. i will say as a look at the bloomberg, it appears that their stock is down a little bit, a little over 2%, in response to the europeans that of increased tariffs on motorcycles, specifically harley davidson, which was targeted. they said, we will go to motorcycles and kentucky bourbon. alix: coming up, more on the latest entry developments and their impact on the markets.

robert sinche. this is bloomberg. ♪

>> this is "bloomberg daybreak." greystone has a great to acquire -- has agreed to acquire edr. greg stohr will pay $41 and $.61 a share -- 4010-60 incense a share. and the firm said in a joint statement today. the deal was unanimously approved by the board of

directors at edr it is expected to close in the second have a 2018. jack ma raising blockchain technology well morning of bitcoin -- while warning of bitcoin. his committee has launched transfers between philippines and hong kong today. he said blockchain could change our world while bitcoin could be a bubble. bigger find needed for financial crimes. he says the government will issue a proposal for tebow -- a tougher penalties to parliament, following a big scandal which showed that funds were laundered. that is your bloomberg business flash. david: on friday, steve mnuchin is due to release new restrictions on chinese investments in the united states. reports are it will focus on investments in the tech industry, including robotics and aerospace. this will go to the by china 2025 program, which is so important to president xi.

correspondent.ia we do not know exactly what it will be, but we have a hint, and if it goes in that direction how will they react? >> it goes to the core of china's future industrial strategy. they want to create a world-class leading economy based in technology with a little help from the state. the problem with china is, they still rely on the u.s. for so much of that technology and know-how, that is why they often try to buy u.s. technology companies and the like. so i think if the u.s. government gets stricter, it will only reinforce or deep in the divide between the u.s. and china, because china has made clear they are willing to buy more goods, but they are not willing to gorge on their own future industrial strategy. david: this is a complex situation. with a trade issues pending, we tend to interpret everything

that happens as being related to trade. is this related to the $108 billion they have taken out of the reserve, is that related to trade or something else? >> i think it is not explicitly trade. the dow have to go to china on this one. the smallest size companies have higher borrowing costs, and they are trying to restructure debt in the economy, and at the same time that has been moderation of growth in china. so it is a fairly targeted measure by the central bank to ensure companies that need the money most get the money. but to be fair, it is hard to know where the broader backdrop is, which is trade tensions will not be good for the economy, certainly not good for the world's biggest exporter. david: always great to have you. we appreciate it. alix: the effect of that is really seen in the currency. breakingollar yuan

above the 200 day moving average. they may not be about trade, but it certainly looks that way. joining us as robert sinche, how did you interpret that? robert: last week at was reading, we expected that the chinese might be the one central bank to ease, but last week there was talk that they might follow the fed rate hike. i was surprised to hear that discussion, instead they are going their own way. now, if you look at the chinese currency, it has weakened significantly in the last week or two. it lagged a bit. when the dollar was rallying, we would have expected the dollar yuan to move up quickly, but it didn't going into the north korean summit and into the other negotiations on trade. once those things passed and we hit more tariff issues, suddenly

dollar china has been allowed to move up substantially, they did not hike interest rates. they have cut the reserve requirement ratio, which i think is justified by the way, given what is happening today equity prices and the economy. they are doing their own thing when it comes the monetary policy. and that probably spells further weakness in the yuan. david: so this could be a weapon in their arsenal if we go toward a trade war. how effective is that weapon and can they afford to let it go too long? last time this happened, they had capital flight issues. robert: yes, but in this environment i think you may not see as much capital flight out of china into the united states, given the other tensions that are there. and look, this is china, i think they were playing nicely going into the summits and discussions. they have decided they need to conduct policy and if it results in a weaker yuan and annoy the

president at some point, i think they are fine with that. alix: what is interesting is the s&p versus the shanghai, 12 months any basis. u.s. stocks much more diverse of. ive. and emerging markets down, versus up in the u.s. does that say that they are ok with trade wars with the u.s.? robert: it is much more dependent on exports, compared to the chinese market, to a large degree. they are comfortable with with the economic situation is in the u.s., but maybe getting complacent, because as we have say,today -- we used to one bad decision leads to another. so you get these tariffs, then you have counterterrorist, and then u.s. companies are moving out of the country. there are a lot of things going on and these are complex. my concern is the administration

throws out a decision without thinking through the second or third order effects of those. and i think effects are showing up. david: when you talk about what a bad decision leading to another, how far away was donald trump on the currency issue? if this continues to weaken, how far away are we from that? robert: i think now that we have seen the chart, we could see response. i am surprised we have not heard a response yet, i just do not think it has reached his radar screen. i think he is focused on trade issues, trade deficits, but i think at some point in the not-too-distant future someone will bring to his attention the fact that the chinese currency has weekend significantly and i think -- weakened significantly and i think we will hear from that. alix: coming up, erdogan declaring victory and the lira's initial rally fading fast as the country goes toward an era of

one man rolled -- rule. this is bloomberg. ♪

david: news breaking right now, be succeededy will by stephenson. the stock in the market has trimmed some of the losses as a result of this. stephenson replacing mckay. and now we turn back to turkey. erdogan scoring a resounding victory yesterday and he called a listen for the world. -- lesson for the world. >> the winner of this election is democracy. our nation. the winners are everyone over 81 million citizens. david: we welcome now from is istanbul, -- from

yousef. give us a sense of this election come how big of a victory was it for erdogan? yousef: it is significant. it has been a long night and two things have become clear. one, on the presidential side of this vote, he was able to seal the deal in the first round. the expectation was it would go to a second round. on the parliamentary side, the expedition was the ruling party with ms. some majority -- would lose some majority, which they did, and now they will have to form a coalition. that raises a lot of questions about economic policy and where the country is going to go from here. david: thank you. that was yousef in turkey. alix: here is how they are stacking up against other currencies, the lira. the pace of is the yellow line -- peso is the yellow line.

and this at a record low, even though we have normalized the basis, it does not look as bad. how much more downside do you feel there is for em fx. robert: probably more upside for the dollar. and we should point out that is the argentine peso. i think there is further downside to go during the dollar rally and continued tightening by the fed, but again what we have seen here is while there is a push down in currencies, the girly emerging-market currencies, this has been a very specific. very currency specific. and policies are really being punished heavily in those countries during this environment. alix: do you get a feeling that the dollar upside is driven by u.s. outperformance, or is it driven by a safe haven, because that will dictate how you handle the yuan. robert: it is being driven by

interest rate outperformance. the fed is ahead of the rest of the world when it comes to tightening monetary policy. slipped of england has behind and the ecb further behind. but i think a lot of this is general dollar strength. and certainly in an environment where global growth concerns are starting to increase, then a lot of these emerging-market countries, there will be greater uncertainty about their part. david: global growth is more a question then it was before, but want it effect the fed's decision, isn't there a feedback loop? robert: there could be. it depends on the order of magnitude decision here, but keep in mind we are looking at a strong first half for the u.s. probably index is of 30% during the first half of the year. the fiscal stimulus is still committed in terms of the investment side. and i think the big wildcard is, do the trade and international

tensions overshadow the tax cuts when it comes to investment? i think business investment will be a key factor going forward, companies need to buy capital equipment, they need to increase productivity, that bodes well for investment, but the question is if the company will say, there is too much uncertainty in which you put on the brakes. that is something the fed should be watching. alix: or leave altogether, like harley davidson. oil falling after saudi arabia pledges to boost supply, but by how much? this is bloomberg. ♪ retail.

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. alix: this is "bloomberg daybreak." here is where we stand. features off by 15, chip a digits for the dow. hardest hit in europe. no surprise is the dax,

particularly as china with a tit-for-tat continues, now harley davidson pulling production out of the u.s. because of e.u. tariffs. and a strong dollar story and other asset classes, with the exception of dollar yuan. 10 year yield, little buying on the backend as you have yields come down by one basis point. vix is moving higher, crude moving lower. and opec, we are still try to figure out what we are looking at going forward. david: you can figure it out. alix: i think javier blas will help us. david: in the meantime, we are turning to emma chandra with first word news. emma: president trump has ratcheted up his demands of immigration policy, saying people who enter the u.s. should be deported immediately without court hearings or other judicial processes. 'we cannot allow all of these people to invade our country. when somebody comes in we must

immediately bring them back to where they came from. our system is a mockery to good immigration policy and law and order." top banking regulators in the european union say that banks must not rely on government action for brexit. the authority says the u.k. exit without trading arrangements is an adequate. eba says financial institutions need to be aware of how they interact and must ensure continuity. u.k. regulators have called in the european commission and british government to settle the issue of contract continuity. german business confidence continues to slide. ifo institute has fallen. and the german economy is facing pressure as a president trump threatens more trade tariffs, as well as internal political upheaval. angela merkel struggling with the coalition over immigration. germany is europe's largest economy.

global news, 24 hours a day on air and on tictoc, powered by over 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. thank you. opec plus has a deal, but countries do not agree on what the deal means. >> we would be adding a run with only a barrels a day for extra production -- one million barrels a day for extra production. >> the target is 100%. >> some companies will increase to allow the overall 24 countries to reach the target and not to basically squeeze the market. confirm and to emphasize under the last resolution that we had in 2016. recommend to the opec member countries to strive to adhere to 100% compliance.

,lix: joining us is javier blas chief energy correspondent, who is on the ground in vienna. help me understand what went down and how much oil will be added to the market. javier: it depends on which minister you are listening to. it will be between 500,000 on the low side to one million on the high side. hasmessage is how this affected the market. saudi arabia says it will do whatever it takes to keep the market balanced. and ministers have said that the final increase will probably be closer to one million barrels a ,ay, more than to 600,000 a day but i think whatever you look at, the most important thing is this is an indication that saudi arabia is prepared to produce as much oil as needed. alix: where and how quickly, at

least mario draghi can release a bazooka pretty fast, but how fast can these countries get online? javier: is very difficult from mario draghi. they can increase quite a lot and the saudi minister said a bit more, he disclosed that they have already started the process of producing more, so we will see higher production in june. saudi arabia is loading more oil takers this month. and we will see higher production from russia, we will see allies of both countries, like uae, producing more. beyond that, not much more to add. certainly he is no mario draghi and there is a limit on how much he can do to keep the market balance. alix: great point. good to see you. for more on opec, we are joined

by michael wittner and we still have robert sinche with us. good to see you. i have the spread in my terminal. all of a sudden it is five dollars versus $11, why? mike: there is probably movement there of investor flows, because really the fundamentals, we do not think ever supported $11 a barrel. $5, which can be volatile. alix: the in relation to more oil coming online from russia and saudi arabia? mike: i do not think so. robert: i think there could have been a little bit of an impact, maybe markets not expecting this big of an agreement, maybe not expecting saudi arabia to move as aggressively. when you have a market as stretched as this one and you get a little bit of information turn in the opposite way, you

can see a lot of the price movement in the last couple weeks has probably been spread trading, rather than outright trading. that is where the big move has been, in the spread trades, that is where you see short-term investors involved. david: as you sort through what opec up the great -- what opec agreed to, who are the winners and losers? mike: if you look at production and market share, the big winner would be saudi arabia and kuwait and the arab east. the loser would be iran. the range of production scenarios that he talked about, that is absolutely right. and we think we will be toward the higher end, because the key difference between what happened on friday and saturday was he clarified that really it is a the countryap, but by country targets are going to look like they will be ignored, so that means more crude.

david: is there a limit on the price? mike: i think shale producers will be fine. particularly in the premium. -- permian. bucks willink a few make a difference to them. alix: nothing wrong with a chunk with no volatility, that is helpful. and it is interesting if you come aside the bloomberg, this is the difference between oil prices today versus six months ago. the difference i want to highlight is the re-rating and prices higher from 2019 all the way to 2022. is that an ipo offering curve jump? robert: it would not be bad for them to add that kind of movement in prices and its impact on profitability going forward. but i think it is probably for right now more of a demand function. the fact that oil demand has

been continuing to grow. and you know, as you look at the demand curve going out, you still have a fair amount of demand growth coming in and they have been upping the estimates of demand growth going forward. i think that is what has been pushing the longer-term price expectations higher. alix: with the re-rating, if we wind up having a saudi-russia put, where they said they would be making up loss of production, shouldn't that lower the curve? mike: i do not think so, because in addition to demand think the playing on tha ist prices is production cost. somewhere, like if you months ago, we were at 55, now i-65, that makes sense -- now at 65, that makes sense because of the deep offshore and more expensive

crude, i think the market is making the right call. alix: markets making sense, what? good to see you both. tune in tomorrow as i said down with the chairman -- the pioneer of exports, and the nuclear initiative ceo, the one guest conference kicking off in washington dc. david: he is a really smart guy. he is a really smart guy. coming up, saudi women finally start their engines. more on the $90 billion reason to allow women to drive. that is next. and as you commute, turn on the radio and listen to tom keene and jonathan ferro. it can be heard all across the net states on sirius xm radio -- the united states on sirius xm radio. this is bloomberg. ♪

the viceing up, salina --f the paulson is the tip. shares of harley davidson falling premarket after the company says tariffs on motorcycles have risen to 31% from 6%. they extended tariffs, which came in response to u.s. tariffs on steel and aluminum, took effect on june 22.

harley davidson will shift production overseas. and revealing huge losses in addition to strong growth when it found for a hong kong ipo. the company looking to raise $6 billion in funds to better compete in finance and travel. filing, some say, is a rise of technology strength in hong kong, in contention with the u.s. south africa planning a switch to digital tv by the end of 2019. the committee cases minister says the 20 year broadcasting policy will be formatted -- submitted to the parliament. they are looking for ways to include small operations in the market. south africa will also introduce digital radio this year. david: thank you. after a roller coaster ride, the pound trading at roughly the same level the day after the brexit vote, but the night

itself some made huge profits, hiring polling companies who sold them critically advance information that was not available to the public. that is the subject of an investigation. and we welcome now from london, cam simpson. congratulations, i know this story took about seven months. cam: it did. david: tell us exactly about what we know about what happened. cam: gosh. david: in short compass. cam: in the days leading up to the vote, and on the day of the vote, the pollsters were working for hedge funds. and it is not a surprise that they want the data about what the mood was, but what we didn't know is that people were trading on the swings that were driving the markets, and hedge funds were getting information before it went to the public. and on the day of the vote, they hired posters to do secret private exit polls.

so that is, it was being streamed to them all day long on the day of the vote, how people were voting, with the trends were. they will able to take positions and that information is not only nonpublic critical market moving information, but in this country it is a crime, or it would've been a crime for them to provide it to the public must that is defined as nonpublic information. you cannot publish an exit poll while people are still voting. and the definition of publish, is to provide to the public or any section of the public, so that is where things are going to get tricky for the hedge funds. david: there are two issues. the hedge funds have information in advance, pretty clearly they did. and they of information about what would be said publicly about the exit polls, so some of what would go on, for example, with a sky news. cam: a trade up and a trade down.

pomegranate,ration usually there is a broadcaster's exit poll, it is a very formal thing. they did not do it for this. that created a void in a critical time slot at 10:00 p.m. when expected to see what the vote will be. a polling firm, which is very prominent, gave a free poll the sky news, they would be the only ones on the air in that window. what they didn't say when they went on was that earlier they had told an exit poll to a hedge fund that had the same results. so the hedge fund was able to

know what was coming. and it also allowed them to play the way down throughout the night. david: we cannot do justice to this story on tv, so you need to go read the article. fascinating. great piece of work. we will turn now to wall street beat, where we cover three things wall street is buzzing about. saudi women take the wheel. bani arabia lifting the could add $90 million -- 90 million bill and dollars to the economy -- $90 million to the economy. and looking at reducing wasteful standing by limiting the middle man. the forces with the fans, wealth is the at odds with the star wars fans. not good. alix: no. joining us is alex webb. start with saudi women being able to drive, what it will do with economic growth is a staggering. alex: i think people did not factor in the economic factor, because everybody is still caught up in the fact of weight, women cannot drive? it is literally the last place where women were not allowed to

drive. jason: the consequences are massive. you mentioned $90 billion. part of it is limit can get to work a lot more easily. in a lot of cases, they were having to hire private cars just to go to and from work. and sometimes they would not get a job for that reason. gasoline consumption goes up. this is that a time, both of you know this, where saudi arabia is in a much broader economic overhaul, in a lot of ways. so there is a need for a different sort of labor force. ipohave the aramco sitting out there, led by the crown prince. so so much we will see will trickle through the economy. david: we have not often seen a country move this forward, this fast. jason: we will see how well it goes. there are critics within the

country and is skeptics outside of the country, as to how well this will go, but this is a major move forward. david: second story, health care. we have a ceo of the new joint venture between amazon and berkshire hathaway and jpmorgan, and he is the come out in aspen. he said, this is what we will target. jason: when this was first announced, you know, when jeff bezos and warren buffett and jeff dimon said together, we will take a look at that health care system, but we are really just concerned with our own employees. everybody was like, they are not as concerned with their own employees. now, we are getting a sense of how this could play through. david: we have one million,, they said, within their group. so they have said when they find something that works, they will make it available to everybody else. alix: i understand taking out the middleman is a catchphrase, but what does that mean? jason: what we do know is there

is a huge amount of waste within the american health care system. that is hard to argue with. and there are a lot of people who are kind of taking a piece all along the way. david: and maybe they will do with u.s. government does not do, negotiate better prices. they will have a seat at the bargaining table, to say, we will take some of the cost down. jason: it is a big system and again, one million people in the grand scheme of things is not a huge amount, but if what this company is ultimately doing is asking for a different way of health care to be delivered, and ultimately changing the people in the middle, that has a real effect on the broader sense of things. alix: talk about the real effect of the world in terms of disney and star wars. forget saudi women, whatever health care, let's get to solo. [laughter]

this is for real. they literally said the studio may have to write off $50 million for "solo" because it tanked so bad and there has been a revolt from the fans. it is a big deal for disney. jason: a very big deal. i think this is something that very feweople anticipated, especially after the last few years were that initial movies were critically and publicly acclaimed. jedi, force awakens, even rogue one was a big success as well. they were in a rhythm, but i think that they went too soon. alix: do you want to tell me that solo is worse than jar jar binks. jason: this just got real. david: this is a religious cold. -- cult. alix: they are really trying to get a remake of "the last jedi"?

jason: the comparison to fatigue -- that is harsh to compare the star wars franchise to -- david: many thanks. coming up, more trade war.. harley davidson planted a shift production out of the united states -- planning on shifting production out of the united states. more on that, next. this is bloomberg. ♪

david: president trump's trade war rippling back to american companies. harley davidson and nothing they will be moving production out of the united states in response to your opinion tariffs. -- your opinion tariffs. is this really because of the tariffs being opposed by the e.u.? >> the tariffs have gone up from 6% to 31%. harley davidson saying it will at a cost of $2200 per bike.

so they are taking this seriously. they are talking about reassigning production to locations outside of the u.s.. so they are taking it seriously. where would it -- david: where would it be outside of the united states? chris: they do not have any production in the european union, but they have some in australia and thailand. so they could disperse production in one of those locations. alternatively, that means less production happening in the u.s., which is sort of a boomerang effect from what donald trump is actually going for with this, to boost american jobs. alix: and it is a win for e.u. retaliation, so do we expect more? chris: you might, it is a symbolic gesture. it is harley davidson, very american and iconic, and if a company like this is responding in this way and presents

reassigned production, they said it will take about 18 months to do that, this is a significant gesture. it shows they are taking this seriously. that it will not begun in the next week or so. they are sending a strong signal to the administration, to officials in the u.s. and in the and try toe amends get this situation sorted out. alix: chris, thank you very much. coming up, tensions rising between the u.s. and the china over trade. we will break it down with the paulson institute vice-chairman. this is bloomberg. ♪

to limit. plans

chinese investment in sensitive u.s. industries like tech citing national security industry -- issues. no one claims victory in turkish assets that reversed earlier gains. multiple warnings from analysts. what happened with opec? just howre confused as much oil will be added to the markets. david: welcome to bloomberg daybreak. i get all nervous every time you say you're not quite sure what opec did. -- thericacies intricacies for me is how does that mean how much russia will add or the saudis will add. that is what is really opaque right now. david: they do not seem to know what they agreed to. alix: s&p futures are off by 13 points. it is a strong dollar story

except when it comes to dollar yen with the yen climbing higher, .3%. yields moving lower by one basis points. hit, more supply coming online or positioning unwinding from that meeting. david: at 10:00 this morning eastern time we may get the last supreme court decision for the term. tomorrow, it is a world gas conference in washington. alix will be on the scene to cover it all. on friday we will get core pce numbers and how the u.s. government plans to restrict chinese investment in the united states and the u.s. treasury will be launching $100 billion in fixed-rate notes. on the top of the list are u.s. trade relationship with china. they remain at the center of the news. with those investment restrictions coming in the on $50ion of tariffs

billion of chinese goods coming week after that. we welcome deborah lehr, false and -- paulson institute vice-chairman. she also served as a chief negotiator with china. deborah, thank you so much for being here. deborah: it is great to be back. what wee will put up expect on friday from secretary mnuchin about the possible curtailment of investment by the chinese. it focuses principally on high-tech, a lecture vehicles, robotics, aerospace. it seems to be directed at the china 2025 initiative. how will this be received in beijing? deborah: it is part of a bigger view by the chinese of the u.s. trying to contain its growth and development. the fact that they have targeted particular sectors that china sees as its future, high-tech industry, the chinese will definitely take action. the flip side is the chinese

have come to realize how much they are dependent on the united states and others for many of the components that go into these things. they will be looking to develop their own domestic capabilities. david: are their active negotiations going on between the sides? deborah: there are still negotiations at the staff level, yes. about i'm curious something you've talk to us repeatedly about. china opening up financial institutions. is this putting that at risk? deborah: it is putting it at risk for american firms. the chinese have committed to opening the financial services market and we hear about additional services the chinese will open. president xi made a big speech about further sectors that will open. as the sanctions continue from the u.s. side, the chinese start to carve out u.s. firms where they stop approving applications by u.s. firms to enter the market. the fact have covered

that if it is just tariffs on goods, we import a lot more on china than they import from us. have talked about qualitative as well as quantitative sanctions. what are the things in their toolbox they could retaliate against united states with? deborah: they have a range of different things, starting with, they can stop approving market entry into what is still the fastest growing market in the world in terms of opportunities for u.s. firms. difficultake it very for u.s. technology firms doing business in china like ibm and they can make it difficult for the auto companies in terms of the sales of u.s. autos in china. alix: over the weekend, when the pboc cut its rrr requirement, how did you take that? was that in response to trade or something different. deborah: i think it was in response to trade.

they want a cushion on the impact on small and medium firms. alix: do you think it was a threat? if you come after us with trade, we do have these tools that could destabilize the market? they're goingnk to be very careful about how they use those kinds of tools because they can have an impact on their own economy. we all know china is the largest holder of u.s. treasuries and they do have a range of different things they can use in terms of ways they retaliate against the u.s. they have been very strategic in what they have done so far. they have looked at where president trump space is and gone after those companies. david: do believe the chinese have a clear view on what united states once, what they're willing to give if they get a deal? on one hand we are talking about manufactured good in terms, on the other we are talking about intellectual property. there is a larger

issue. it is not all about the tariffs. thee is concern about restrictions that could be put on their investment into the united states, they are concerned about additional export controls, i do think they have a high level sense of what the united states is looking for. i do not think the negotiations are at the stage -- even though you could see what the framework of the deal could be -- that they know precisely what is enough to be successful in the mind of the president. alix: if i am a u.s. company and i get supplies from china, or i am a company in china and i call you, what do you tell me to do? questionthat is a hard for american firms that have to plan ahead. i think they have to proceed as business as usual, that be mindful of having a backup plan. david: do you have a sense within the administration of where the power is?

president,the ultimately, but we hear conflicting reports that secretary mnuchin is not entirely approving of what is being done. do you have a sense that is overblown or is there some dissension? deborah: we see weeks in washington that are describing different parties of who is on what side. what they have done, if you look at when they all took a trip to china, there was a consensus leadership. you had four cabinet secretaries who went to china, each with a portion of it. , he is inary mnuchin charge of financial services and the investment coming into the u.s.. secretary ross was responsible for promoting exports and is responsible for getting the chinese to make the kinds of purchases that president trump has been looking for to reduce the trade deficit. ambassador light heiser has been focusing on the market access issues. david: deborah lehr, thank you

so much for being with us. always good to have you alix: the trade battle between the u.s. and china might be far from over. if you ask the equity markets, who will win. here is a potential answer. -- it is china versus the ecw why index. that is that pink line. you can see the underperformance of china. terms,base it in dollar which is the white line, the outperformance of the return of the index. joining us is brian nick. is the market saying the u.s. is ok with this? brian: it is very much against the narrative that we and other investors expected. it felt like everyone else was catching up the u.s. has knocked the rest of the world back a bit, strengthen the dollar.

a lot of those outperformance numbers are coming from the fact that the dollar is strengthening against almost every other currency. the yen is one exception. a lot of the performance of the u.s. vis-a-vis europe and china is coming because the currency is swinging returns in our direction. the trade you want to sell fall or shortfall. outlook weur midyear are saying still risk on for now. it has gotten softer. ways toooking for become intelligently defensive in certain areas of the portfolio, not just in response to the trade news but in general the ongoing u.s. expansion. it seems like it is wrapping up in the next couple of years with interest rates moving up. certainly the trade noises adding volatility. it is not driving your investment outlook. david: what is it mean to be softer? you own more of or less of an order to get softer? spoke around our

investment table, people all across the firm in terms of sensements, there was a we were talking more about how the u.s. expansion was going to wrap up. not a risk for this year next year, but becoming more wary of 2020 and beyond, what happens when interest rates are up and the stimulus runs out in the next few years. there are already signs of cracks in the expansion. we have seen credit spreads move up in the fixed income market, a lack ofen despite economic deterioration, less of a willingness of investors to own a fixed income market. also looking for quality in our real estate holdings versus two or three years ago. alix: the bullseye to corporate credit is it is an issuance thing. you seem to think it is more fundamental and equities will lead the credit market lower? brian: there is also an issue of

who wants to own corporate credit. media market has not participated as much. we are not seeing as much of that flight out of the lower rated credit as we are on the u.s. corporate side. that could be foreign investors. we say i'm getting a good deal to own u.s. credit, i do not need to take that incremental risk in corporate bonds. alix: brian nick will be sticking with us. brent is dropping oil to $35 and i'll -- a barrel after saudi is going to boost supply. tchilinguirian -- this is bloomberg. ♪

emma: this is bloomberg daybreak. raycom has agreed to a $3.6 billion merger. of the deal, pray will do best television stations in nine markets. operate stations in the south, southwest and midwest and is the largest independent operator of the cbs network. concerns about a rival bidders stock buying. company has agreed to a $3.8 billion acquisition by blackstone. rejected bid now values lasalle shares a higher price than blackstone. --illionaire is embracing

while warning of bitcoin. blockchain could change our world while bitcoin could be a bubble. denmark's new business ministers says bigger fines are needed for financial crimes. issue arnment will tougher proposal for tougher penalties for the danish parliament this fall. scandallows the bank which showed an estonian unit of used to launder billions dollars in illicit funds. that is your bloomberg business flash. alix: oil prices under pressure today. opec says they will raise prices to get back to 100% compliance. they were at 150% compliance, that might look like one million barrels a day increase. maybe russia can give 220,000 barrels a day.

joining us from london is harry to chilling guardian -- is harry tchilinguirian and brian nick. help me out harry. what was your biggest take away indiana -- take away from vienna? harry: the takeaway is that opec reached an agreement. we are seeing a lack of detail allowed the allocation of who will reach what. to get to this deal we cannot have any detailed to get venezuela and iran on board. ater that, the consensus is 300,000 barrel a day increase over the next few months. a lot of that from saudi, russia, the uae, and kuwait. alix: how do you think the markets are interpreting it? is it fundamental or is it an unwinding. this morning the reaction on brent in particular was a knee-jerk reaction.

opec said it would increase output nominally by one million barrels a day. people thought it would be effectively 600,000 a day. that million turned into a 600,000. on the weekend when we had a meeting with opec, the agreement was expanding to include russia and the rest of these non-opec countries helping opec. in essence, russia will be able to contribute one million barrels a day increase so the market corrected. when you do the barrel math and you look at the supply risk, clearly the situation right now the oil market is very constructive for oil prices. david: as you look at what happened over the weekend, did saudi arabia step up and say we will be the guarantor that the price does not go too high? harry: in opec language, they are committed to market stability. the question is stability at what price? i think there been concerns from the u.s. and india in terms of

high oil prices. saudi arabia may have responded by engineering this increase in output. when you look at the situation we face possible loss of iranian oil supplies as well as a wildcard, libya has seen its supply shuttered as a result of attacks on storage facilities. all of these things combined to produce a constructive oil price outlook. been tryingmay have to address concerns, the other factors around opec conspire to constructive outlook. alix: does that translate to equities? you see the underperformance of oil equities versus prices. now the spike in volatility is something it seems like russia and the saudi's will not allow. how does that relate to finding value in oil? brian: i'm interested in the spread between wti and brent. you have this hot u.s. economy,

energy was a big outperforming in the second quarter. there is still the sense there is a lot of money out there to be earned by not only global oil companies but especially here in the united states with the price having been so much higher. we think that will be one of the leading sources of earnings growth over 2018, not just because oil prices have gone up but you still have that tax cut copies are getting in the u.s. that did not happen outside the u.s. we are constructive on energy in the u.s. within the s&p 500. alix: this is the curve you were talking about, brent-wti. you feel like that is opec coming onto the market more than we thought or is that a supplies are tight in the u.s. because of outage in canada? harry: i think you have it right. .t takes two to tango on the brent side, we see the reaction this morning to the

opec announcement. there are supply outages in canada restricting supply foes into the u.s.. stocks are pushing -- wti has been declining and what we're looking at in the u.s. is the supply growth coming out of shale is probably going to be limited as a result of bottlenecks in pipeline infrastructure. all of these things are supportive for wti and that is the spread between the two. david: my question is why was it ever that high? why was it ever at $11? what are the markets telling us about iran? brian: there are restrictions we were not getting clarity on. you had restrictions on supply outside the u.s. and uncertain where the ceiling was on how much supply could come online in the united states. maybe there is a sense those things are crossing or there is not as much of an advantage to being a u.s. company and being

able to increase your capacity to produce into an economy that wants to buy the oil. jumped as well, which should have nothing to do with opec, but maybe it is the market saying the takeaway capacity might not be as bad today as we might have thought. what kind of stocks do you like? if you're looking at u.s. oil equities? e&p's for sure, not as high on mlps. we are valuing growth at this point. it is becoming more of a rarity around the world, seeing extremely high levels of earnings growth. we are looking at places that have secular growth at extremely high levels. alix: harry tchilinguirian, great to see you. brian nick will be sticking with us. tune in tomorrow, i will speak with a petroleum ceo who basically wound up sounding exports.

all of the world gas conference in d.c.. more downsizing could be underway for ge, but could it be enough to turn the stock around? this is bloomberg. ♪

david: as it prepares to exit the dow, ge continues the process of downsizing, with reports that it is to sell its factory power generation business. of --come brooke sullivan brooke sutherland of bloomberg opinion. tell us what we know about this deal. it is not done yet. the process ofn selling something called its distributed power unit. this has been in the process for a while. details have been emerging. right now it looks like advent international, a private equity firm is in the lead. commons has been in the mix, kkr

has been in the mix, polar -- kohler has been in the mix for this effort. it is not over until it is over. right now ge is making progress. david: how to they decide what they're going to sell and what they are not going to sell? the things that have the highest price are the things you want to keep his or the most valuable and the things you want to sell, you get low prices. brooke: that is the dilemma for the ceo and he is trying to balance the interest of investors, who would like to participate for some of these businesses that are in a cyclical downturn and creditors looking for cash to, in the door in order to justify ge's current credit rating. we are trying to counterbalance interests here. ge,: that is the micro for but the macro is it is hard for industrials with potential trade risks. brian: it is the sector i am

most interested to see what these companies say about what is happening in the u.s. economy and also what is happening globally, what is happening as we erect barriers to trade with not just china but a lot of other countries. i am also most interested in are we getting a capital spending boom in the united states and how is that rebounding to the benefit of the industrial sector? alix: brooke sutherland of bloomberg opinion, thank you. brian will be sticking with us. the european union remains divided on migration and that is affecting angela merkel's governing coalition. more on that is next. this is bloomberg. ♪ retail.

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leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. alix: this is "bloomberg daybreak." an interesting session developing. some say liquidity is tight. s&p futures down by about 12 points. the dax is getting hurt in

europe. every sector is in the red. trade in cyclical names really coming off today. is aher asset classes, it stronger dollar story except when you get to dollar-yen. if you want safety, you buy the yen. we have a hundred billion dollars worth of supply in 2, 5-year, and seven years. the vix slightly elevated. it is also an opec story. a real risk-off day. a hard trading day. watching the 710 spread, whether it might invert the curve. let's get an update on what is making headlines outside the business world. emma chandra is here with first word news. emma: after white house press secretary sarah sanders was told relieve of virginia restaurant,

the president tweeted his response. the restaurant should focus more on cleaning its doors and windows, badly needs a paint job, rather than refusing to serve a fine person like sarah sanders. i'll is had a role, if restaurant is dirty on the outside, it is dirty on the inside. last week, homeland security secretary christi nielsen was heckled at a homeland -- and a restaurant in washington, d.c. the month-long anti-u.s. imperialism rally is designed to strengthen unity, ending with a national holiday on july 27. north korea has softened its criticism on the u.s. and state media has been allowed to report on the june 12 summit between kim jong-un and donald trump, many times many new -- the first time a north koreans have seen the u.s. president. in turkey, the president has won a victory to govern after a double victory and president terry and parliamentary -- and

president and parliamentary elections. the country's electoral board has not published official results yet, but confirmed er doan's victory. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am emma chandra, this is bloomberg. david: let's turn to europe. it is not just united states that is wrestling with the problem of immigration. leaders met in brussels to discuss growing threats to angela merkel's leadership and growing threats to the anti-immigration league in italy. we welcome patrick donahue, bloomberg government reporter. issues about these repeatedly, but i was surprised at the serious challenge to angela merkel. patrick: it is coming to ahead and it comes up every now and again. not that there is an acute

influx of asylum-seekers into germany. it is more angela merkel's bavarian allies who are taking a hard line on migration a few months ahead of an election in bavaria in october. the big showdown is they want to send asylum-seekers back at the border and that is a solution angela merkel does not want. she has promised her csu allies that she would forge bilateral agreements with european governments. she seems far away from that after yesterday's meeting in brussels. ared: give me a sense -- those people against people moving into germany, are they aligned with the league in italy are they saying find to take them in italy, just do not send them to us? patrick: the politics get complex when you're talking about european migration. the bavarians want to send certain refugees back, not all of them, only refugees already

registered in another eu country. that would mean a bilateral agreement with italy and giving the new situation with the italian government, the league as the interior minister, he has already said it is not going to happen. here in berlin, people are wondering how this is going to work out. will there be a compromise between angela merkel and her bavarian allies by the end of the month? if not, it could spell trouble for her. david: it sounds like a lot of work needs to be done. that is bloomberg's patrick donahue reporting from berlin. alix: the dax taking a hit. two and three day. still with us is brian nick. do you like europe? brian: we like it less than we did coming into the year. a lot of economic data has been disappointing. the momentum coming into the year for europe, the

expectations have not been met. we think it is early in the cycle in europe, there are still better valuations in europe across the board than there are in the u.s.. if we are looking at three or on her years, we will be happy to hold on. alix: how can you do that when you do not know what the trade parameters will be. look at what is getting hurt in the dax. if you do not know what the u.s. tariffs will be, how do you buy? brian: a large percentage of europe is financials. if you are betting on the europe versus u.s., you are betting on value versus growth. europe does not have a large technology sector. that is part of the gambit is their economic recovery in europe and eventually rise of interest rates that helps the operating margins for banks. until we see that, i think we will continue to see it be the united states. david: does that philosophy depend on reforming the banking system, if it is financials being disproportionate.

there has to be reform whether it is consolidation or cleaning up the balance sheets. brian: growth helps. growth takes care of a lot of things. if we start to see optimism with regard to the european economy, if we start to see the european central bank raise interest rates not early but because they are confident in their recovery, that would be a good environment for banks and european stocks. alix: trade is wrecking asian markets as well. a bearalmost looking at market for the index at 1% today. buy american, by europe -- by e.m., by europe -- buy em, buy europe. brian: the currencies have gone against you in a major way. idiosyncratic factors in argentina, brazil, turkey, they have all had their own issues in terms of governance sliding back a little bit. e.m. is still a long-term

positive story for us. you get excellent valuations on the fixed income side in the equity side, i think there is that growth story that exist there that does not exist other places. david: it is picking and choosing. brian: it is an area where we think active management makes a big difference. if you can figure out what regions will be more impacted by the trade deficit or governments that have a better handle on what is going on, the community area to overweight in the portfolio. if you're just indiscriminately buying, you might get things that do poorly. alix: like what? brian: what works for asia, we can be more defensive than the index within asia. china looks intriguing. it is being added to these benchmarks. we still like latin america. the valuations have to come good at some point. we think the brazilian reality the argentinian peso got crushed, but we think those are

positives. we are less overweight in venezuela and turkey. david: what about asia that is not china, indonesia or india? brian: we are positive on india. we like the long-term secular story. looking at india long-term versus japan, india looks like a better long-term place. that is one area we are still bullish on. there could be tariffs to the u.s.. david: it is all about trade. brian nick, thank you very much for being with us. coming up, turkish assets reversing gains as early ones s wins. erdogan surveillance can be heard in new york, boston, the

bay area, washington, d.c., and all across the united states on bloomberg radio. from new york, this is bloomberg. ♪

emma: this is bloomberg daybreak. coming up later on bloomberg markets, balance of power, julian castro, former housing and urban development secretary. this is bloomberg. alix: the shanghai composite nears a bear market. there are also idiot hosting craddock risks for certain countries added on to higher u.s. rates from the dollar and trade wars. we look at those countries that have unique issues to define the

problem and opportunities. today we focus on turkey. david: president erdogan has sweeping new powers, calling it a lesson for the world and democracy. victory,on erdogan's our reporter joins us from istanbul. give us a sense of how big of a victory this was. we called a presidential, but his party did not get a majority of parliament, correct? james: his party did not get an absolute majority. he will be governing in alliance with a hard-line nationalist party. you should not underestimate what a strong victory at was for him personally. the opposition candidate had led massive rallies. there was speculation erdogan would not clear the 50% bar. he cleared it pretty easily. even the opposition to not bother maintaining their complaints about fraud and manipulation.

david: what does this mean for the future and what are the markets pricing in right now? we saw turkish assets go up substantially and come right back down. what are they anticipating in terms of what he does next in terms of monetary policy and fiscal policy? that: the initial rally was baked into that cake like a knee-jerk relief rally that a political vacuum is not going to be created. almost as quickly as that, markets realized the same leader who has been in office for the the pastears and for five years who has led things into the ground is still there. in terms of fiscal and monetary policy, his campaign rhetoric was bold and unnerving to it was pledgesr to interfere with central-bank policy making and bring interest rates down, whether it is to

overspend and stimulate artificial growth, oath of those both of those policy markets have their fingers crossed he is not going to go to any further extremes. david: thank you so much. that is bloomberg's james reporting from istanbul. alix: it is not just what happened over the last weekend, it has been a sordid history for turkey. you can look at the lira and what has happened throughout the crisis. the bankingine is crisis in 2001 and the white line is when erdogan was elected prime minister and in the presidential election in 2014. you wound up having the snap election called, that is the purple line. you can see what has happened to the lira. david: pointing in one direction. alix: it is a deeper issue than just erdogan. joining us issue molly a con --

joining us is shamalia kahn. exposure is mexico, argentina, and turkey. alsomet matt gertz -- mehmet gerz. two perfect guests to have. let me start with you. did you look at the election is a buying opportunity or do you want to be cashing out? can bea: i think turkey a very interesting opportunity for investors. a lot of bad news has been priced in and what remains to be seen as which direction the president takes the country after the victory he has experienced yesterday. has gained erdogan additional powers, the market is going to constrain how he uses those powers. has external vulnerabilities in a challenging global environment and what we need to see from the government is a more consistent and clear

sign of prudent financial policies. certainly, that has been disappointing for investor sentiment over the past year. more recent signs have been more encouraging with the central bank being allowed to hike quite aggressively into the election pimco -- into the election period. david: why do we think president erdogan is going to be more responsive to the market? shamalia: we don't know. that is what the market will be looking for. over the past years, the president has been trying to gain an executive presidency. he has achieved what he wanted to do. that should give him the opportunity to have a change in policy. equity side, we seen equities selloff in turkey. in some measures, much much worse when it comes to global equities. you want to buy on the dip? mehmet: we have been buying

equities for some time because turkish equities have been depressed for a year or so. if you look at the 30 year history of the turkish stock market, every year you have a negative year, you are sure to get a positive water two years following that. this is a very strong emerging market. in light of this history, we been buyers of turkish equity. david: talk about what equities you are buying. we will put up a chart of how you allocate your equity fund. it shows your heavy in banks. banks is what you like. why it is that the banks were you're putting your equity investments? mehmet: the turkish stock market is dominated by the banks. of theks represent 30% index. we actually underrate the banks. the region -- the reason the banks are the biggest sector is because of the size of the

banking industry in the turkish stock market. it is fair to say we are more overweight in beverages and glass, those sectors are globally competitive. that square with what you understand about the turkish marketplace? he is saying banks are under weighted. shamalia: that is true and that is the equity market. i think in the fixed income market, it is fair to be neutral at this point in time. certainly this government has been very disappointing with respect toward policy direction. it has also pursued prudent economic policies in the past. which way turkey goes is binary at this stage. david: let's talk about those prudent economic policies. my understanding is the president wants to invest a lot of money in infrastructure, bridges and tunnels and all sorts of things. big fiscal stimulus. at the same time, he seems to

believe cutting interest rates will reduce inflation. has he changed his mind? shamalia: that is what investors will be looking at. he does not have an indication that he has changed his mind, but the market is going to severely constrain him because turkish assets will be punished if he pursues the path he has pursued in the recent months. there have been indications from his policy team there should be more structural reform going forward and there will be a change in policies. that is what investors will be looking at a for the next few weeks. the composition of the cabinet, the fiscal policy, and how independent the central bank is. alix: when you're looking at that backdrop and a value versus growth equity world, where are you going to land? mehmet: i think over the next few quarters turkey will have to slow down because interest rates and inflation have risen.

current account is a bit out of control. we are facing a slowing economy. i wish for a soft landing because if the economy manages to soft land then because the equities by the expectations ahead of times, we can see the equities market bottoming out here at these levels and then start climbing again. met matt gertz, ata asset management. thank you for being with us. coming up, the supreme court may issue its final opinion of the term. remember, bloomberg users, check out gtb go and look at all the chart we are talking about. click on it and check it out. this is bloomberg. ♪

david: not going to surprise you. i'm watching the supreme court.

we will get decisions today or tomorrow. at least one big decision. the big one business are looking at is the union case. this is a case out of illinois and a question of whether you can make people contribute union dues. the union says if we do not have everyone contributing, we will not have bargaining power. it is essential to maintaining public unions. the argument against is the first amendment, saying you're forcing me to associate with an organization i do not want to associate with. poweras the balance of shifted away from workers, which many credit to the low wage growth we have seen, it is able to shift back in any way, that be a fundamental change in inflation and wages. david: it goes state-by-state right now, there are right to work states where you do not have to pay. the difference between a right to work state in a state that says you have to pay is between 42 union -- 42% union participation and 17%.

this would be a constitutional ruling that when across the country that you do not have -- that you are right not to pay. i am watching harley davidson. they are shifting overseas. joining us is greg turtle who leads the auto coverage for bloomberg news. where will they go? >> it is unclear at this point where this production will shift. in brazil,e plants india, australia, and one coming online in thailand. several of those facilities are knocked down facilities so you take kids from elsewhere and complete them at these sites. it is hard to understand at this point exactly which facilities could handle this. it is possible that thailand may be where they try to do this. this would be a big change of plans because that thailand

asia andin southeast that is a big oncoming market for them. toid: that is were they want go. where they going to come from? where they being made now? >> they have production in wisconsin and are closing a plant in missouri and moving that production to york, pennsylvania. iny have several facilities the u.s., but that is another tidbit from their filing this morning that is unclear. they do not specify what plants are going to be affected by this. clearly there is risk. if production is being shifted out of the u.s., that could mean 260losses in addition to jobs being lost as a result of the closing of this plant in missouri. david: is there anyway to get a handle of how many jobs might be lost if they transfer production overseas? >> it would probably mean slowing down the plants or

perhaps cutting a shift in one of them. it is too soon to say. that is something that is going to be worth talking with their unions about today. the unions, already, have not been happy with the company. the company has had issues with sales and had to take production down to adjust for that. in the meantime, they are adding production overseas does not go over well with the unions here. alix: thank you very much for joining us. markets, on "bloomberg the head of institutional strategy and front and center trade. we cannot escape that. this is bloomberg. ♪

jonathan: we are 30 minutes until the start of trading. this is the countdown to the open.

coming up, the high-stakes blinking game between the two largest economies continues to weigh on things. to united states is planning heightened scrutiny on chinese investments. china is looking to support a slowing economy. we are 30 minutes away from the opening bell. futures are down one half of 1%. the euro dollar is firmer. an early bid it comes back to the market. treasuries to not change. it's another round of escalating tensions. the treasury department will curb investments and sensitive industries. wall street ways and on bloomberg. >> this could easily go wrong. the chinese currency is coming under pressure. >> taking retaliatory