♪ >> wall street reverses early losses to shrug off trade tensions. the focus on tech. >> commodities saw their biggest tumble since 2016 led by the weakness in metals. silver fell almost 2%. turns up thefire heat again, saying the wto treats america unfairly and must change. >> the race to $1 trillion.

amazon has the equivalent of walmart step up its challenge to apple. "daybreak: us trillion" and we are to hours away from open europe. >> is just past 6:00 p.m. in new york. good morning, paul. we will be looking at how the action right here in wall street will play into your asia-pacific trading day. it was an interesting session on wall street because we started at session lows and strangely ended at session highs, a kind ofpull and push, the weight the long-term trade and tariff tensions overshadowed, at least temporarily, by a bump in tech stocks, specifically with the fangs -- the faangs. paul: interesting perhaps one of here, and itwords was the back kind of interesting in asia yesterday, and it's

going to be a weird kind of interesting in australia later. let's look at how u.s. stocks ended. ramy: let's show everyone how we ended the day here. at session highs, guys. look at that -- the s&p 500 up .3%. it had been down as low as .7%, but again, clawing back all this in large part because of what was happening with technology shares, but you know one other thing here is the currencies because that also shows some of the tensions that we are seeing. bloomberg dollar up by about .5% here. the knock on effect, of course, with the other currencies as we've been talking about the past few weeks, has been one of negativity for others. looking at the euro right now, 1.16 is where that is. the mexican peso, after what happened with the leftist candidate actually winning, we're looking at that nearing the 20 mark. 19.9 two the u.s. dollar. it had been as high as 20.2

intraday, and also bringing in the brazilian real, ever so .9%,r to the for mark, up the continuing trend, emerging market currencies falling as the dollar rises, especially as we are seeing those tensions really claw in in terms of that growing trade war between the u.s. and china. , well, it's just going on 10:00 in new zealand, trading has been underway for a couple of minutes in the index already up about .4%. the kiwi dollar weakening, as is .he dollar -- the aussie dollar we may see the aussie dollar move again or not later on this afternoon when the reserve bank of us trail you has one of its least anticipated cash rate decisions. asx futures in the meantime also higher by point -- 5.75%. i mentioned the bad kind of .nteresting about asia before

-- asx futures in the meantime also higher by .75%. a list of etf's for chinese shares in the u.s. offares off 4%, large caps 2%. china perhaps faring the best of a pretty bad batch, off .8%, so let's see how things shape up in asia as the sun breaks on tuesday. ramy: meantime, let's look at how u.s. markets closed in detail. as i mentioned, reversing earlier losses as investors once again look past trade concerns, at least for a little bit. sarah, with the start of a wasday week, trading lighter than usual. walk us through the motions here. sarah: yes, it was. the fourth of july week in the u.s., canadian markets also closed for canada day, and on top of that, traders still might be a little sidetracked because

they are watching the world cup. if you look at trading volume today, composite volume for the , you will see that composite volume on the s&p 500 down its lower by 19% five-year average, and it was not just on the s&p 500. we also saw it on the nasdaq, on the dow for both of those indices, the volume was about 20% lower, more than 20% lower than its 30-day average. we are thinner trading volumes today really playing out because of the holiday. lot: sector plays looks a like it did in 2017. tech at the top of the rankings and energy at the bottom. sarah: exactly. whatar picture to exactly we saw last year, but if you dig in and look at which names were really adding to the s&p 500 gains today, you will see at the top of the list microsoft.

apple, amazon, google, facebook, and david foster at goldman sachs had an interesting note today, showing that almost all the gains from the first half came from only 10 names. in netflix names, at on top of it, and those were also really good industries today as well as visa and microsoft. if you change it up and look at energy names, energy was where we were really hit today. look at the biggest the tractors from the s&p 500, it was eggs on, mobile, and chevron -- chevron.bil, the president tweeted over the weekend putting pressure on saudi arabia. paul: thank you for that.

let's get first word news now. jessica: a judge has ordered pricewaterhousecoopers to pay moment for aeposit $5 million for negligence. case relates to a bankrate collapsed during the financial crisis and the six largest bank failure in u.s. history. pwc blames colonial employees, but the judge said the accounting firm did not designed its audit to detect fraud. saudi arabia raised oil output by the most in five years last month, but that was only enough to keep overall production steady. the kingdom raise output by 330,000 barrels a day to 10.3 million barrels, the biggest monthly jump since july 2013. however, disruption in libya plus ongoing supply losses in venezuela and angola meant overall output from the cartel rose but only slightly.

losses as angela merkel defused a political feud with her allies. it is moving against allowing china mobile to enter the u.s. telecoms market on grounds of national security. officials at the commerce department say the sec should deny the company's application in the latest spat over china's growing influence. promised to respond. onbal news 24 hours a day air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more

than 120 countries. i'm jessica summers. this is bloomberg. all: thanks very much, jessica. national security hawks in the u.s. want trumps the fire to force chinese company is out of business. attempts to push back against the administration's trade policies seem to be fizzing out, don't they? >> yes, a lot of traditional lobbying powerhouses in washingtonfound that has turned a deaf ear to their steel and aluminum and lawmakers in congress seem to be unwilling to go to the mat with the president on these issues. there has been a number of attempts that have just been shut down, and it looks as though the penalties on the te that were prominent in the senate defense bill likely are

prettyo get watered down much to the white house liking by the time that all comes congress sometime later this summer. ramy: trumps afire is also turning his attention to the world trade organization saying things have to change. quest of regio has treated the united states very badly, and i ways.hey change their that is why we are at a big disadvantage with the wto, and we are not planning anything do not treat us properly, we will have to do something. ramy: the education that we will quit the wto. how real is this? been a long-standing complaint that the devonshire treats the u.s. unfairly, although he has not really identified how that would change to his liking, so it cannot be

dismissed as mere hyperbole. he has followed through on these where he says we will see. we will move along, and the white house has denied a report that there have been legislative attempts drawn up at least that low-level discussions at the white house, but we have seen that as well before, before aings finally emerge with proposal. however, there might be a bit of a tough time getting any sort of legislation through congress. really has republicans on the ropes on a lot of things, but when it comes to actually getting them to do something, that may be a little bit more difficult than merely decreeing .t paul: another thorny issue, north korea. what is the reaction to claims that north korea is ramping up production of missiles in nuclear fuel? >> a little while ago, white

house spokeswoman sarah sanders said they refuse to comment on any kind of intelligence reports. some of these are coming from intelligence reports that monitor north korea. she points out that the u.s. envoy to the north korea talks met with north korean officials stateday and secretary of mike pompeo is headed there the end of the week for additional talks. they continue to insist that despite the fact that kim jong-un has not made any public promise to cut weapons , theytion or disarm continue to insist they can get their program dismantled by the end of the year. paul: thanks very much for joining us with that update. plenty more to come here on "bloomberg daybreak." no change expected now or perhaps well into next year. where already into a record.

word of the rba sitting on its hands. we will get a little more analysis later on. a trade wart, as looms, how investors can protect themselves. this is bloomberg.

paul: we have sydney harbour on a crisp and clear winters day as we count down to the citi open. futures pointing higher by about .3%. i'm paul allen in sydney. ramy: you are watching "daybreak: australia." u.s. investors may be shrugging off trade tensions for now. our next guest is finding opportunities in the sea of red when it comes to the yen. zook.bring in christopher thank you for joining us. reaction get your

because we ended in the proverbial sea of red, but we .ctually ended at session highs to what degree was this a surprise to you? a it was a little bit of surprise. we started off pretty negative this morning with not a lot of great news over the weekend, but throughout the day, what we saw was more and more liquidity coming in through some of those popular names. when you have a less liquid market, it doesn't take much to rally and when you have names f like thea -- names like the faang stocks, people want to own them and they tend to do better. bey: the s&p 500 would negative for the year if you take out those names, so it shows how important those tech stocks are. let's bring this back to the trade tension in the trade war we're talking about because we are hurtling index really

towards friday. $34 billion in terms of tariffs from the u.s. to china. we cannot forget that that really is the expect her, the elephant, the big dragon in the room. >> it really is. heretofore, we've been of the opinion there would be more talk than actual action. we've been surprised by how aggressive the president has been and how aggressive the u.s. stance to some of these countries has been. as that becomes more of a reality to other players on the market, we expect that potentially to create a lot of negativeion, potential news, potential retaliation which could also create maybe a little bit of a problem for this economy as we look forward to the second half of the year. ramy: let's talk about opportunities because there is so much fear or at least concern . where are you seeing most easiest opportunity after >> to do places we would focus on now, one is the relative

valuation, primarily small-cap stocks. when we look at the valuations of where they are, they have blown out compared to historical norms and we think there's a really good risk/reward that investors can have by the end long em andeing short the russell 2000. way that isin a basically beta neutral. they gives us less concern about where the direction is, more opportunity. to be able to actually sell premium in the markets to take it vantage of those elevated volatility levels and those elevated premiums in the market that are out there today. em, ishen it comes to there anything in particular you like?

>> it's really hard to get to country specific. china is harder because it's at the forefront of what some would all an attack by the u.s. other areas have been drugged down with that overall weakness in em, so this more pockets of opportunity in some of the other spaces. india is an example in brazil and some of these other countries, but that's why we take a broad-based approach with bee of the etf, and it will a more commonly good opportunity for investors instead of try to pick one winner or loser. you get broad-based exposure to em currency as opposed to picking one or the other. paul: i'm wondering if anywhere play.cious metals

why are we not catching more of a bid? >> it is really just counter to the dollar. when the dollar when it gets strength, the metals are weak. that is a correlation we're all familiar with. platinum broke its lows in a pretty significant way. silver was off sharply. speculate it's because people are using crypto or other things, but we think at the core of it is the dollar strength and the perception that the dollar is going to continue to be strong along with potential less demand because of weakness that these trade war's could cause in china. that ultimately is a combination of not really a safe haven and not really a good supply/demand picture right now. we actually think that is going to reverse and we are a buyer of precious metals and the weakness, but we know it is going to be volatile for a while.

paul: forecasting the next recession has become a bit of an armchair sport at the moment. will we see one in 2020 particularly, but you are looking for one thing a particular, watching that yield curve version, right? >> absolutely. if you look at history, there has been one really good indicator about potential recessions coming, and that is an inverse of the yield curve where short-term rates are higher than long-term rates. there's lots of reasons why that happens, but most of the time, it is in anticipation of a slowing economy. that right now is getting close. thee not there yet, but if federal reserve does continue to raise rates like they have said we are going to, we expect in a inverted yield curve i the end of the year unless we see a very sharp rise in the 10-year treasury and the 30-year treasury, which could happen as a result of the economic recovery, but the trade war's

are throwing that into a little bit of a? , and that's why if we see inverted yield curves, the joke around our office right now is you don't walk to the exits, you run to the exits because it's really going to get dicey. ramy: definitely. we're calling it the fault of of war.he fog a lot of people don't know what is happening. how donext 30 seconds, you benefit from the trade volatility? >> if you want protection, we think the best way to do it is via put spread's were you can benefit from what is called skew as well as the higher volatility . the second way is to have a systematic approach to selling premium that takes advantage of these elevated prices for options we see right now because of this uncertainty. there's some really good yields we can get by following that approach. ramy: great stuff.

leave it there. thank you very much. you can get a roundup of the stories you need to know to get trading going in today's edition of "daybreak." this is bloomberg.

remy: welcome back. i'm ramy inocencio in new york. paul: you are watching "daybreak: australia." dell technologies going public again, five years after a buyout. the world's largest private tech company will return to the markets by acquiring its trading stock, d bmg --dbmt. michael dell took his company private in 2013. remy: u.s. listed casinos with interest in macau had a bad day

as revenue fell short of estimates for a second month in a row. wynn resorts, las vegas sands, and in gm tumbled as the territories gross gaming revenue rose just 12.5% in june. that's well below expectations of 18%. kittitas have been betting heavily on macau, but china's on the allow gambling island of hainan is hurting expansion plans. the firstrace to be trillion dollar company has to the front runners. apple came within $50 billion of the magic number in early june, but amazon is coming up on the rail. at the beginning of the year, its market value was 50% less than apple's. this year alone, amazon has ofed the equivalent walmart's total value. remy: a push by the distributor jim beam to persuade more indians to drakensberg and has left the company with a hangover in the u.s. the company has agreed to pay

was an $8 million to settle claims that broad indian officials for years. made illicit payments to win licenses in the highly regulated sector to secure prominent placements on store shelves. paul: bloomberg sources say a unit of a straley us quite a group is close to a deal to buy a majority stake. were told an agreement with macquarie capital could be announced as soon as this week. the requires approval from the committee on foreign investment in the u.s. key elementahead, a in ev batteries is facing a supply hurdle. we will dig in why nobody wants to fund lithium production next. this is bloomberg. retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

paul: it is eight: 30 a.m. here in sydney, a very crisp and clear winter's morning. nine degrees outside so you surely know you're alive when you're walking in the office. markets opening up, futures currently pointing higher by about .3%. i'm paul allen in sydney. 6:30 in new york, it is p.m. and you are watching "daybreak: australia." word news.o first jessica: the trump administration says it is premature to discuss leaving the wto, although the president has repeated his warnings about that treatment. commerce secretary wilbur ross says it is more important to

impose reforms than to simply walk away. over the weekend, reports the white house has drafted a bill that would require the president ignore fundamental wto rules. >> the pto has treated the united states very badly, and i hope they change their ways. they have been treating us very badly for many years, and that's why we were at a big disadvantage with the wto, and we're not planning anything now, but if they don't treat us properly, we will be doing something. to bea: tesla said positing model three production just days after reaching its output target of 5000 cars a week. were told the lines will resume operations on thursday and the break will allow the company to carry out basic maintenance work. shares closed down in new york and some analysts question if tesla would be able to sustain higher production rates. facebook says it faces a tough time regaining user trust after the cambridge analytic a data scandal. the company told eu lawmakers it has been hard to convince angry

users and that it has been problematic." mark zuckerberg faced in the's in may but was criticized for dodging questions. facebook says it is doubling the number of staff working on user safety and security. 12 boyseams have found and their soccer coach a live in a flooded cave in northern thailand more than a week after they went missing. the governor of the province says they are being brought out the warns the danger is not over. the team into the cave on june 23 but were trapped by rising water after heavy rain. rescuers rom australia, china, the u.s., and great britain .elped with the search what are the greatest tennis partnerships is coming to an end. roger federer has quit nike in a deal reportedly worth $300 million over 10 years with uniq lo. federer will continue to wear nike shoes as uniqlo does not

make footwear. global news twitter four hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 100 20 countries. i'm jessica summers. this is bloomberg. hall: thanks very much, jessica. let's get a quick update on the markets now. trading in new zealand underway for about 30 minutes. currently higher by close to .4%. the kiwi weakening against the greenback. futures in australia also pointing higher by about .3%, but also weakening against the greenback. story of greenback strength continues. the 10-year still hovering just below three. the s&p 500 ending the day after a rather rocky ride, up .3%.

let's get more on what we should be watching us trading gets underway in asia. sentiment in china looking .retty shaky any signs of all of this letting up today. glaxo's kind of the characteristic trade at the end of the quarter with china getting hammered on the currency market side and the equity market side and people thought signs ofe stabilization at the back end of last week. and we came in on monday morning and stocks got sold off again, and the currency was down on the order .5% as well. the fact that ing are cutting their forecast, the second time

in a week they have cut their yuan-dollar forecast, clearly characterizes the worries that are in the market with sentiment in china at the moment, and in the equities space, they continue to get heavily sold off. this a great chart on bloomberg tv. this is chinese equities relative to the performance of u.s. equities over the last few months and you can see that huge divergence now carrying. of course, a lot of domestic problems backing up. we had that manufacturing report over the weekend. that was a little weak. that comes on the back of a number of domestic indicators that have also been weak. the question now is where have valuations got to in the mainland market. have they got to the level where you think you want to kind of if your toes back in cap where the investors who has come to that view is societe generale -- one of the investors who has come to that view. you do want to basically start to think about getting in at this point. ,ery limited downside he sees and, really, the argument is about what current prices are showing about earnings. by his estimates, prices are

already discounting a 5% decline in earnings when the consensus is for about a 15% growth in earnings over the next 12 months, so if you believe those earnings numbers and believe that earnings recovery can be sustained, you certainly want to be going back into some pockets of chinese stocks at this point. remy: we know emerging-market shares are not doing really well at all. they are seeing their worst quarter since 2015, but there still is opportunity there. value opportunities are presenting themselves. jpmorgan asset management came out saying that as well. where are they seeing the places to buy now? >> of course when you have an asset like the emerging-market complex or fixed income, you are , and to see value come out i think that is what we're hearing from the number of investors we are speaking to over the last week or so. ' diana romo are is one of those. we're coming off the back of

this terrible quarter and first half of the year for em assets. have been completely demolished of late, so she is starting to see pockets of value emerging in european high-yield debt and those kind of places where she is looking to get back into, and the point about the flattening yield curve that we have talked extensively about in the u.s. bond market between tito year and 10-year debt and what that says about signaling or impending recession in the u.s., she says it is normal at this point in the cycle. it does not worry her, and is not a time to be fleeing these higher risk emerging-market assets and maybe tilled a little bit of more money back into those. remy: interesting still to hear some folks that are not concerned about that when we have other people saying exactly the opposite. bloomberg's markets editor, adam haigh.

right, well, electric car production could face a roadblock in years to come the supply of a key element in batteries does not keep up. that is lithium demand, and it 2030, to grow fivefold i outstripping planned supply by 120,000 tons. the banks still seem reluctant to finance this lithium mining. for more on this, let's go to dave stringer in melbourne for the details. the top line information that we need to know on this -- tell me the top line information when need to know on this. >> the booming demand has really transformed the lithium market. anre are indications that as industry, lithium supplies need to invest about $12 billion through 2025, which is many times more than these companies, many of them who are smaller companies -- it is many times more than they have raised so

a hugedate, so it is task. the likes of goldman sox tell us that lithium needs a once in a generation supply response. it sees supply needing to quadruple inside 10 years, very unusual inside commodity markets. the issue is potentially very difficult to get the funds to do that. traditional banks, the kind of banks that would lend to iron ore or gold or coal projects, they simply struggled when it comes to lithium. they are not familiar with it, and they have a couple of key concerns. chiefly among them, it is a very opaque market. they don't have a clear read on prices and volumes, and they do not have an ability to hedge. some otherlike battery metals -- cobalt, which we have talked about a lot because it is not traded on the metal exchange, they have not got the same ability to hedge the risk. banks remain pretty cautious, and this is in the context that banks are cautious on mining anyway. they are still wary of a

pullback in commodity prices. it means they are being selected and it means lithium developers are finding it difficult to get funding from banks. paul: so banks are cautious. if you are a lithium minor, where do you go to in funding and what is the impact of your decision? >> you look high and low. there are alternative sources out there. some of them are hedge funds offering for the higher cost debt products. we are seeing some groupings of private equity to lend specifically to projects. those tend to be more expensive. we are also seeing customers come in and fill the gap, people who actually need the lithium in their batteries, if it's intermediaries of the supply chain to even carmakers themselves. they are stepping in. the issue is they are more expensive and i also take more time, and time is kind of a factor that is critical here. people really want to be getting that money in the ground,

mines andhose new bringing the supply on. for some, they still forecast the market to be relatively tight. it is a point of contention if prices will sort of stay where they are, potentially fall, but, yeah, it all hinges on the supply outlook, so there is a real need to get the money now. let'sfrom what we know, game this out. the outlook on lithium supply as well as prices. do you think price gains are going to continue from here? prices islook on pretty much the most contentious issue in the industry. there's a big conference in vegas last week were people thrashed this out. morgan stanley are the most bearish voice in the market. they see one of the lithium products, lithium carbonate, the price potentially harming through 2021, that is an incredibly contentious view. on the supply side, the company is already producing lithium. those developing the project, they absolutely reject that outlook.

the ac and underestimation of how difficult it is to bring on a new lithium project. there are plenty of people saying banks. it is a live question that is not resolved yet. clearly some quite divergent views. from the suppliers' respective, they are pretty sure that supply and demand story pulling a continuing tight market. stringeromberg's david in melbourne. thanks for updating us on that story on lithium. coming up, rate hike bids for the reserve bank of australia fading as global bids mount. we will have a preview of australia's central bank decision, expected to stay on hold for quite a long time. that's coming up next. this is bloomberg. ♪

"daybreakare watching : australia." the reserve bank of us is set to give the key rate steady, but concerns are growing over the impact of trade tensions on growth and the surge in borrowing costs could hit consumer spending. bloomberg global economics policy editor kathleen hays is here. the outlook is for no great hike until at least may 2019. kathleen: let's start by looking at where the bank of australia is now. 1.5%.ellow line is at it has been there since september 2016, expected to stay there probably until at least

the middle of next year. down fromunemployment over 6% of couple of years ago to five .6%, wages, as you can see that white line, plateaued at 2.6%. these turquoise bars running at to%, just below the rba's 2% 3% target. at the same time, we see another thing that has been happening the last tuneup or three months. funding costs are surging. rate hikes boosting dollar funding costs. this hit australian banks pretty hard. the white line is the local funding cost index. you can see how it has surged. costs meanrowing bigger costs for businesses to borrow. just one more reason the reserve bank of us trail you takes a look out over the domestic horizon and says no need to hike rates now even the gp has picked

up, and in fact, time to be cautious and hold steady again. phil the rba governor roseman pretty the but even he is starting to get a little bit more worried. >> we can start by looking at why he is confident. what you see on those green bars along the top is australian gdp running at over 3%. certainly trade is one of the big reasons. you can see the trade surplus had a deficit at the end of last year, back in a surplus over $1 billion, but when you are so dependent on exports, one of your biggest trading partners is china, you have to be concerned not just about tariffs, you are concerned about the reverberation on investors by markets. here's what he had to say. have takenl markets a relatively benign interpretation, but that could change very quickly, so we could see a lot of turbulence as people bring those event sports

to today. waiting goeslue of up, kind of people saying to , it'sdecisions in canada probably happening in china. kathleen: one more red trade flag -- china's and you factoring pmi slowed down a little bit, signaling growth, but there is concerned there already feeling a little impact from these trade concerns that could in australia as well. paul: global economics and policy editor kathleen hays, thanks very much for that analysis of the rba decision coming up later today. joining us to talk about that, the senior portfolio manager at .ntire is fixed income let's rewind back to the

beginning of what kathleen was talking about. which growth -- you hear a lot about that, but there's another factor as well. financial stability becoming an issue. >> we think financial stability is being elevated. there has been somewhat of a downplaying of the inflation target. i think also just on that score, we need to see wages rise here. there has been a key precondition for inflation to 2.5%p to that 2.5%, so -- sort of target the rba is looking for. you need to see something like teedo or three official which reports showing something like 2.5%, 3% at least to get inflation in that zone. it's hard to see that in the near term. paul: this really is a persistent problem, wages, growth, inflation cap missing in action all over

the world. i'm starting to wonder if the phillips curve flies anymore. >> there's a lot of debate about this. clearly, i think there has been a flattening of the phillips curve, so that clearly has other applications when inflation starts rising. let's say there was a supply-side oil shock that would cause a lot of problems for quite a futures diction's, just of thehe flatness phillips curve -- that would cause a lot of problems for quite a few jurisdictions. tangling with these sickle excess capacity issues that have continued to weigh on prices, so -- such as continued competition and love disruption going on across various industries, so wages are not percolating up, and if they are not percolating up, we cannot see inflation tracking at the rba target levels.

ramy: in june, it was notable the rba removed those words that the next move was likely to be up. what are the risks, though, of a rate -- dare i say it -- cut? >> the risks have become somewhat more symmetrical. it is interesting that the market pricing seems to take the .ash out of these for a price of think is something like november 2019, or you take the index swap market as far back as february, march, 2020. clearly, the markets now really discounting the possibility of rate hikes, but we would argue, the australianth economy getting caught in the crosshairs of trade wars that the risks are becoming somewhat more symmetrical, so the risks of it cut, although tall order, very high hurdle, given the rhetoric coming from the rba,

you would not rule it out completely. >> bank of america, merrill traderecently said the brinksmanship as well as you were talking about the funding stresses, of course, making this turn in the global conditions here. what do we do, what can we try to do to try to -- or, you know, just wait this out over the next few, several months? how do you see this playing out? >> on the inflation score, this is all about operational flexibility, and this is the language the rba likes to use. it is consistent with their framework, so i think we need to get used to the idea that this is going to be quite a protracted cycle. in other words, we are not going to see hikes for quite a lengthy period-- quite a lengthy until we get confirmation the economy can stand on its own teedo feet. there are factors we need to

consider here, and the other is what is happening in terms of housing and what that means potentially from negative wealth -- potential he for negative wealth effects. the wind basis between builds and globals widening, has also its of repercussions for funding costs, and finally what is happening with our major trading partner china. that looks like the real thing in trade and protectionism and how that flows back through second round affect , through tightening financial conditions, but more importantly, through confidence. remy -- ramy: we count down, but expectations that they will stay at the more 1%. you can browse the recent charts featured right here on bloomberg

tv and catch up on the key analysis and save those charts for future reference. this is bloomberg. ♪

ramy: take a look at that -- belgium broke japanese hearts, snapping a 94th-minute victory in a five-goal thriller. they now go on to meet brazil in friday's quarterfinal after the five-time champions eliminated mexico. terminal subscribers can keep up to date on all the action. you can also check how your predictions are faring against your colleagues' and our bloomberg tv anchors'. paul: it has been an unpredictable cup so far. that is almost it for "daybreak: australia" this morning. "daybreak: asia" is up next, so let's look at what we have coming up next.

>> it's only but one story, which is about trade. coming back to asian markets, despite the rebound we saw in the u.s. overnight. our guests us at one point, this is going to pause and rate hikes in that discussion is going to start once again, given the fact implementtion and rates right now are close to target, there is little room for the fed to tighten further. as for the renminbi, he says we could be pressured to 6:80 against the dollar. we will see if we have seen the worst of the weakness yet. usuallyade tensions mean a stronger u.s. dollar, so we will see how that is impacting fx. we will dive into that in about an hour and 10 minutes' time. we will go to also be united nations, as you mentioned, as yuan, asther -- the

you mentioned, as well as other asian currencies. "daybreak: asia" is coming up next. this is bloomberg. ♪

>> at 7:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." the top stories this tuesday, asia-pacific stocks said to recoup from his office after wall street reversed earlier declines. tech strength topping the trade fears. commodities saw their biggest -- silver fell 2%. gold also down. ramy: from bloomberg's global headquarters, i am ramy inocencio in new york. president trump turns up the heat again, saying the wto treats america unfairly and must change.