>> wall street returns from the independence day break with a strong advance by tech with the nasdaq rising over 1%. >> the dollar fell as traders look ahead to a dramatic day. u.s. payrolls and tariffs on china. confidence in the economy with policymakers maintaining the gradual pace. iran trolls president trump saying that his tweets are keeping the oil price hike and threatens to block.

>> we're just past 8 a.m.. two hours out from the first major market is happy friday, kathleen. kathleen: it is just past 6 p.m. in new york. we look at how the action on wall street place to the asia-pacific trading day. and the trade clock is ticking. set to be imposed. president trump saying 16 billion more are coming. war to really get started in full force. we keep the gradual path of rate hikes. progressased with the of the economy even though a trade war may start rising. with noss investment sign that they are ready to change their mind about rate hikes. is hard for policymakers to make decisions to set monetary policy and let it remain flexible enough to deal with the uncertainties that they

don't yet know about. this first round of tariffs will kick in and the retaliatory tariffs will kick in. certainly, they will be responding if they want to. good point.a very three weeks ago, we hadn't seen china's stock turn into a bear market. , resumingifference trading out the independence day holiday break. wereajor market plans .75%. saying theicron and chips may be unfair but it won't hurt their earnings. that is a big plus for stocks today. kathleen: and this will be a quick look at the futures.

we see the dow and the s&p pointing a little bit lower. the bloomberg dollar index pointing lower for now. fit ofcertainly a caution as you would expect. we can await the rollout of these tariffs and a pretty thin kind of volley. not really strongly. trading in new zealand is just getting underway. this is how we are tracking for kiwi stocks. we have the bloomberg dollar falling to the lowest in almost more than three weeks. futures looking very positive given that we do have the bump up in oil prices. it will offset the weakness we are seeing.

the rollout of these tariffs when it comes to these. we trading pre-much flat at the moment and is a bit of gold there. move in thisreal market, slumping by the most. as we touched on the top of the show, iran and the message on to president trump, stop tweeting. you're sending prices higher. seeing widespread weakness but in particular, some of these contract. trading in singapore, falling. quite a bit of headwinds. >> bank of england governor mark carney says signs of a growing

strength in the u.k. support a move toward higher interest rate. creasing confidence for the winter weather and not the economic climate. we do the door open to a hike as early as the banks next meeting on august 2. u.k. prime minister theresa may is fighting cabinet results. close to eu trade rules after brexit. senior figures discussing compromise, and the negotiator is already said to have rejected it. ministers met foreign secretary doris johnson on thursday night and later made their concerns to downing street. china has confirmed that support the iran nuclear deal saying the states involved have an obligation to keep it in place. speaking ahead of resident parties indiana, the minister said they had an international

treaty and the collapse what her chances of these in the middle east. and damage the credibility of the world order. the u.s. pulled out of the deal in may. the deal is a multinational treaty. that is why states are obligated to ensure its arrival. if this treaty can't be of help, it doesn't hurt the interest of iran but would be damaging to peace in the middle east. >> president trump has lost another leading figure. scott pruitt quit the environmental protection agency after revelations about overs ending. at least 170 democrats and four republicans have called for his resignation. over frequent travel to his homes they. day onnews 24 hours a air and on twitter. our by more than 2700

journalists and in more than 120 countries. this is bloomberg. returnn: u.s. stocks from the holiday break with a strong advance led by tech shares. even as traders break for friday jobs report and the implication of trade tariffs. we are joined by bloomberg cross reporters hereupon check. we will keep hiking rates if we are nervous about trade. how do they respond to this? >> optimism really reigned over the day. but the major averages with the nasdaq higher, the s&p 500 higher and trade really taking a backseat. no surprise.es as everyone knows july 6 was the deadline. there is really no shock here. when we saw the make knowledge and the risks regarding trade were intensifying and they are a little bit worried that this could curb business sentiment

and curb investment spending. p.m., after that, they kick right back up. optimism. haidi: and tech we saw particularly when it comes to semiconductors stocks led the market higher today. why did we see that reversal? bit of a different story than what we discussed on tuesday. tech was the best performing sector. if you look at which names really contributed to that, you look at names like facebook, amazon, apple, microsoft, google. we really saw a lot of strength today. if we head on into the library, we will take a look at the philadelphia semiconductor. really worrying about if it

would fall through that level. going forward, really contribute into that, contribute in was micron. saying they would dan micron chip sales. was kind of overblown and doesn't seem like it's going to hurt them too much. haidi: the u.s. will impose tariffs on china just after midnight eastern time. congress editor joins us now from washington. at thistdown is almost point. once the trigger is good, who will get hit? this is going to be fairly

small. but industries are bracing for the worst. there is a possibility of tit-for-tat escalation. you have companies like walmart and 3m -- gm. they could find their attempts to do so slow down by the chinese government and you have these in the conductor chemical and electronics industries. other companies like ge, there will be chinese made industrial parts and machinery that are subject to the tariffs imposed by the u.s.. back at thisurning point as trump told reporters a little while ago, they will go forward. >> i keep betting on the chinese. at stake as much well. how far is this going to go? mi the optimist thinking it could be pulled back?

it couldis the chance be pulled back if there is negotiations that go on. the administration from what we understand is not really made a clear set of criteria for the chinese at this point, at least not publicly. administration does have more in the pipeline. , goods to beroute hit by tariffs. i believe it is $16 billion worth that is coming in two weeks. a list of $200 billion worth of goods that might be subject to tariffs later on. the u.s. at least is giving the indication that they are to create some sort of opening for both sides to back away.

>> scott pruitt is out. >> the president said there is no "final straw and insisted that it was his decision and didn't want to become a distraction to the administration. a behavior in office and expenditures, things like having aids run personal errands for him and he had been losing support about that ittive republicans was no longer tenable for him to stay in. congress editor in washington. it will be a busy few hours. still ahead, we will be talking about china's reaction to the trade war escalation that is a strategic and international

study from scott kennedy in half an hour's time. us monitor forlp signs of recession and exports for the economy. this is bloomberg. ♪

haidi: i'm haidi lun in sydney. kathleen: you are watching daybreak australia. to getar threats about real with president trump turning the first round of tariffs coming into force on friday at 2 p.m. sydney time. let's bring in the cofounder in chief operations officer at ecr i. economists are watching politics as much i think as economics right now. how big a threat to the u.s. and global economy is this trade war road we are going down? >> coming at it from the cycle point of view. a lot of that risk is where we

are in the cycle. it doesn't really knock us over and we are not there yet. there is a recessionary shock at this movement. no recession risk from this. it just shows trade policy uncertainty on the monitor there, surging. ofnowledged in the middle june, do you think that they met today, they would be a little more concerned about emerging markets? the global slowdown,

when you look abroad, you see the slow down much more clearly. and in emerging markets, you see it. we are tied more to the global industrial cycle. and that is cycling down here. i think they would probably be a bit more hesitant. haidi: i'm going to throughout this chart that is in our library. this is just one way of looking at the state of play before even president trump ratcheted up these tensions. it was the weakest in 2016. pretty sharply.

part of theing up cycle anyway. does the flash of red their resonate wish you -- with you? >> i have been swimming about this for quarters now so i'm totally on the same page with you. that is the slowdown that people do not seem -- see coming. the same way we didn't have a recession back there in 2014 or 2015, we don't necessarily have to have one with a result of the flash of red. global trade is pulling back. that is for sure. but we are just not that window of vulnerability. we are glad those charts are showing up on the screen now for people to see.

develop the nation and see a little bit more of a moderating pace of growth. this is not going to be the case. >> i'm not playing this down at all. image of what we had last year. and it's centered in industrial growth. it is one of the big exports. they are cycling down quite quickly. it is at a 26 month low.

they have some supply shock and pop up a little bit. but the broad basket is heading down, confirming that a slowdown, a real slow down has happened. kathleen: and you think that it could turn out to be a head fake because the economy is strong. don't worry about commodities in a trade war. what is your view? >> you saw what it did in 1415. if you are betting for them going higher, you're going to be surprise. they are part of the industrial process and you see they are in a very clear downtrend. there a few supply shocks are manipulated by opec.

or something happening with the coppermine or terrace. they plunged. what to going on? that is exactly what is going on. kathleen: research sitting around for decades. what is the specific signal you're getting from your index on the u.s.. >> part in the u.s. and park the spike in oil prices, it really goosed our -- we are big energy producers now. a bigger part of the economy than it used to be. all of that stuff slipping behind us now. and also, it's a double-edged sword. that is a cyclical commodity.

if and when that price begins to cycle, you're also going to feel that the other way. see that slowo down because demand cannot be controlled that easily by a cartel. that is global demand. what if you get your wish. it gets you a good big pump and oil at the time when supply is easy? you are already seeing that in the nontradable. when you add oil, copper, aluminum, rubber, and things that aren't traded. haidi: the final word on the

dollar as it is supported and other effects get sold off. is there a bit of cognitive dissonance here given that it is the u.s. starting a trade war? >> yeah. i agree. i think the basic notion there a tightening is on cap and the u.s. economy is solid. that is what you heard in the minutes. that keeps some interest in the dollar. tightening, i don't think the fed really sees the slowdown. they are tightening into a slowdown. some other banks have been hesitant around the world. we will see how this all adds up . generally speaking, you don't want to be tightening rates. that will become more apparent in the coming months as the industrial data starts to slip. haidi: thank you so much for joining us.

from ecr i cofounder and chief operations officer there. around up of the stories you need to know to get your day going in today's edition of "daybreak." the friday in addition for bloomberg subscribers can go on their terminals. the clock is ticking. counting down to the tariffs, you can customize your settings and just get the news on the industries and assets that you care about. this is bloomberg. ♪

kathleen: i'm kathleen hays in new york. haidi: and i'm haidi lun in sydney. let's get a look at the headlines. an ipo off to a bad start even before shares listed on hong kong on monday which have been at an almost 10% discount. , cutting the bottom the valuation to about half of its initial goal. scrapping plans for shares on the mainland after setting aside

chinese regulators. haidi: in charge -- kathleen: in charge of the companies upon, he will replace the head. the management shakeup is part of the price. the sock is lost half of its value in hong kong since resuming trading last month. the iconic plaza hotel may have been bought by qatar. it set to acquire 100% of the property in a deal worth $600 million. other suitor say that they have a legal block on the deal and it is impossible for the transaction to have gone through. they have been trying to offload the central park property for years. kathleen: china has seen investors are treating, but it is managing patches for some of australia's smartest people set to buy. we will take a look at their

strategy coming up next. we will also be checking in on donald trump's latest remarks in montana. this is bloomberg. ♪ retail.

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haidi: half past 8:00 in sydney where markets open in 90 minutes time, and a little bit of positivity when a comes to sydney. a beautiful day in sydney, too. that morning playing out for the sydney opera house. i'm haidi lun. hays in: i'm kathleen new york. we have had stifling heat and humidity. you are watching daybreak australia. let's get right to first word news with jenna. tona: the fed intends maintain gradual rate hikes based on its own u.s. economy according to the latest minutes. the committee sees low unemployment eventually pushing wages higher with inflation near

the 2% target in the medium-term. the escalating trade risks and emerging-market volatility have potential threats to growth. has confirmedp the u.s. will impose tariffs on chinese imports as the clock ticks past midnight on the east coast. -- duties be imposed will be imposed and more will come in two weeks. the deal that chinese goods threaten u.s. national security "cold warington's mindset." saudi arabia has cut grading for most of the oil grades. and showing customers there is a dish and supply. oil extended losses after lowering august prices for crude in asia and europe. it came after president trump renewed attacks on opec saying the cartel is keeping oil prices higher and demanding immediate action.

the oil tweets have backfired. tehran says it added 10%. the u.s. navy says it will protect oil shipments after iran threatened to block removal. it will stop them passing through the waterway. for hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. thanks for that. let's it to a quick update on the markets with trading underway on this friday's session. a bit of negativity playing out. the kiwi dollar trading at 6795 and the bloomberg dollar index at the lowest just shy of one-month overnight. sydney futures a little bit of

positivity, and really struggling this week. quite key for some of the commodities and the impact of these tariffs as the clock ticks down for implementation. we had a jump up pretty and the boe governor mark carney saying growthe pace of strong we seeing deserves higher rates. it is unchanged and we do have positivity coming through from tech and semis overnight having the volleys in the holiday. .he first shot in the trade war >> what is happening in the market as of latest people are

really shifting their positions. we are aware of some kind of slowing growth indicators in places like china and the fed. the economy overnight was interesting. with trades ,iscussions and ongoing tariff it is a tricky one. it is a goldman sachs chart. the fence history to perform as of late. people were they are in the cycle. they will have to bring out there equities position as the cycle ages. this growing bear

market goes through and ends up hitting the defensive sectors. it is still a good place to go where people want to get some of that haven space in terms of the equities. those kind of places are still looking pretty favorable. the finalis all about here and the tariffs about to come in. we may actually see a little bit of relief. we saw decent rally in the market overnight. we might see relief in asia. it has been a tough few weeks in asia. he might watch for some headlines coming out of washington and beijing. japan is known for relatively risk-averse investor behavior and we see people selling treasuries. was going on, adam? know the story very well

in japan and where we were a few years ago. right in the middle of that monetary cycle. it pushed yields down into negative territory for much of the bond market in japan. it is traditionally very risk-averse. even in the u.s., they are not looking as good as they want them to be and are going further and selling down the treasuries positions. it does represent a bit of a sea change for how investors are starting to create a risk.

in some of the u.s. assets. it could have quite important implications for the u.s. itself if people are dining with treasuries over the long-term. increase if we see a prolonged run. haidi: global markets editor adam haigh there. just some of the charts there on gtb -- btv on the bloomberg terminal. loading up on chinese stock despite the world's second-biggest economy turning bearish. let's bring in the fx rates reporter.

i meant to ask you why. >> the pension fund, some of the smartest people. a are going for the first time ever in its history. and we have a trade war going on. we saw it happen with trump this morning and his tweet definitely going ahead. we have jittery investors. and that is definitely one of the -- >> how are they going about chinese equities? >> they are doing it in two ways. blackrock toated cut the chinese market on the path.

doing it via stock connect. the week yuan, how has that been playing out in the investment decisions? >> it has been a tailwind and another reason to get into the chinese market. we know the yuan has weakened about 3% against the dollar just in june alone. the opportunities to pick up stocks for cheap. we see this is definitely a green light. kathleen: bloomberg fx reporter joining us from sydney. coming up, we are counting down to president trump's tariff deadline with washington confirming that duties will be imposed. fort kennedy and the center strategic for international studies. this is bloomberg. ♪

kathleen: taking a look at some live pictures out of montana now where president trump is holding a make america great again rally. as we wait for the actual imposition of $34 billion of tariffs on chinese sales of the united states, and coming through on $16 billion of tariffs, quickly he has talked about them. he's talked about supreme court justices, talking about many issues that are front and center. talking about trader china. bloomberg subscribers can continue watching at live go. you can watch diary entries coming up this week as well as some of the events you may have missed earlier.

haidi: we need to watch out for what the president talks about, particularly tariffs on china which we are counting down to the rollout. speaking a little earlier. $60 billion worth of goods will have tariffs slapped on them in the next two weeks. over the last few days, we know that we have the administrative converse -- administrator of commerce briefing and we have to react. we have to retaliate. if someone hits you and you hit them right back, is this just setting up for one of the worst

case tit-for-tat scenario? >> we know that they will hit back at the u.s. and try to have the u.s. start this. washington's argument is that china has a lot of discriminatory policies already that the u.s. was fighting back they can justify going ahead with their tariffs. they will do that a second after the u.s. opposes their own. haidi: are we getting another round of negotiations or is this just a trust deficit at the moment, and it will be kind of a game of chicken to see who blinks first. >> in the immediate term, they will probably be eating chicken and having food and celebrating the fact that they have the after both the 34 and 16

billion in tariffs are implemented. before they begin to look for signs that the other may be weakening. to run to theants table because that shows the other side that they are going quickly.too and seeto poke and prod if they have a conversation worth having. out to greatck falls, montana with donald trump speaking about trade with the eu. president trump: germany pays 1%. and i said, you know, angela. i can't guarantee it. we are protecting you. it means a lot more to you because i know how much protection we get by protecting you. and then they go out and they make a gas deal. oil and gas where they pay

billions and billions of dollars. to russia. they will want to protect against russia and they pay billions of dollars to russia and we are the schnucks -- smucks paying for the whole thing. came, which is he year and a half, almost $33 billion more is going to be projected to be paid by those nato nations. but it's not enough. do they ever tell you that? no. i will tell you the secretary-general is the biggest fan. the nato nations are going like this. it went like a rocket ship. it went just like a rocket ship. so any time i suggest anything so that we've got -- it will be

a lot more money than that. he is angry at nato. yes. he loves russia. i love russia. i will say this. i'm meeting with president putin next week and getting along. let me tell you. getting along with russia and getting along with china. and getting along with other countries is a good thing. it's not a bad thing. it's a good thing. i would say, first to people or for political people, because they are not stupid. they are good at obstruction and good at resisting. the whole thing is resist, right? will time it comes up, i ask them this question. how bad has it been since trump has been in?

we just increased our military spending. $700 billion. they are exporting energy for the first time. money thatall the nato is getting now. if we did like this guy, we would have a big mistake. they would rather have crooked hillary clinton. i think they would much rather have hillary. but getting along with other countries -- trump, inpresident montana. i want to get back to the deputy chair in washington. so many people are betting in a way that china has more to do now.

so much more of their goods then they buy is chinese goods and we are very large training partner. does that mean they will come to the deal and get some kind of deal? >> given china's economy is half the size of the u.s. economy and they use a lot of american technology and their supply chains, the u.s. has a lot of leverage. doesn't have a lot of leverage over the u.s. either. the chinese don't want to bid -- want a big trade war. their view is that the trump administration billfold relatively quickly or this is just about the midterm elections and they have much more staying power. if you're watching the president's speech, it doesn't -- this will be a hot

summer for both sides looking to try to be tough. >> one contrast here is that the u.s. economy seems to be picking up steam. slowing down a bit, and a big concern there. area wheree specific this is where china can compromise and get on board with donald trump. asi don't think china is people are making out. the chinese are not taking any drastic measures to slow growth, which would show that they are really worried about the economy. at wherewas looking the chinese failed a compromise, there is plenty of market access deal that they would be willing to cut. and i think you could look for some areas where they have some greater restrictions on industrial policy limiting subsidies to some extent.

reducing joint venture requirements across a larger number of sectors. you could see a deal. but right now, both sides are worried about credibility. they do not look like they are going under. i think what i would look for, the number one thing is, when does he look like he was to get interested in the u.s. china relations. aboutinese will think really moving because he will be deal me person besides president that will be negotiating a deal this time around -- president xi that will be negotiating a deal this time around. haidi: the number that trump loves to allude to despite the obvious structural differences china,s of the u.s. and the place in their historic growth cycle. in terms of tech, is that the key battleground here? is that something beijing is not stepping down on given that china 2025 is such a key pillar of xi's strategy?

china has made advancing tech goal number one. but it's the means they are using to pursue that goal, not the goal itself that the u.s. takes issue with. is, are they willing to modify some of those tools, come in the full compliance with the wto try toent in order to achieve that mission and the work that is and i do show that the more market oriented and how they pursue high-tech actually makes china more successful, not less successful. there is work to be done. that inot going to do the next few days. it fits both my sides interest. haidi: we have these rolling

out, these tariffs rolling out in a matter of hours now. think is a much for spending your time with us. let's get back to watching out at great falls, montana where president trump is holding a make america great again rally. political issues and his pick for the supreme court narrowed down to four candidates. he think people will be happy. he has spoken about what he sees as unfair trade with eu. he's obviously there ahead of the midterms to support republicans. the senate challenger there, matt rosen dale there. at great falls, montana. watching that and see if you get in a commentary on these trade tariffs. just hours.nd this is bloomberg. ♪

kathleen: i'm kathleen hays in new york. haidi: i'm haidi lun in sydney and you are watching "daybreak us truly a. australia. and we have a look at what is coming up on friday, yvonne. the tariffs and lamented on chinese goods and we talked about how semiconductors have been caught in the crossfire between u.s. and china trade friction. a little flavor of that perhaps with samsung earnings coming through in the next hour or so. have financial group senior analyst joining us to talk a little bit more about this. at least for korean brokerages have cut their second-quarter earnings estimates before this report. they're deciding how those prices are dropping slower than expected sales on the galaxy s nine smartphones. many cutting the target to the is wayo 50,000, which below consensus.

i will ask them what is driving that outlook for him. kathleen: we have such a terrific guest lined up. talking about the tariffs, and when they will mean not only for china, but the economies across asia and the u.s. as well. he is ambassador to vietnam, now at the u.s. business council. senior vice president and regional director. he has lived in japan and has been traveling to japan for the last 30 years. am interested in the politics for xi jinping as well. and we see this malaise across markets, starting to pick up overnight for u.s. markets. investor chief global market strategist kristina hooper will be joining us on daybreak as well to talk through it it's time to get opportunistic. it picking up some bargains. that's it for "daybreak

australia." president donald trump is still speaking in great falls, montana, and his make america great again event there. you can watch it online go on the bloomberg. this is bloomberg. ♪

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off, and free shipping, too. go to buyleesa.com today. you need this bed. >> it is 7:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. i have yvonne man. is pacific markets set to follow wall street higher after tech led the advance and after rising more than 1%, the dollar fell. looking ahead to a dramatic day. u.s. payroll numbers and tariffs on china. from bloomberg's had-- bloomberg's global headquarters, it is just past 7:00. $30 billion friday and another 16 billion in two weeks. growing confidence in the economy, policy