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 makers maintain a gradual pace of rate hikes.

ivanka, the fed minutes or so interesting because they are definitely seeing strengthen the economy to continue the gradual hikes. it looks like trade tensions are getting worse. we are seeing more reports about business is getting more concerned. i just wonder, if they were meeting today if we might see more concern and a little more about heading towards a total of four rate hikes but we will see. is still hee gorilla in the room as some economists have said. are they thinking it all differently right now? markets shrugging off tariff announcements just hours away. they are more focused on the jobs report and earnings coming through. athleen: maybe there is still

little hope that it will not turn into full-blown trade war. somebody will bring something to the table. let's go to the boards to look at the closing stocks as it was decently done here today. three quarters of a percent, nasdaq led the way of rebounding ship makers -- chip makers. you can see, futures pointing to a mixed open on the dow jones and the s&p 500. a little lower, but the nasdaq after a strong performance pointing higher. taking a look at the bloomberg dollar index, up marginally. at least it did not begin. u.s. closing unchanged, not too much reaction to the fed minutes. commodities weaker. that's of concern to the likes those saying this is a global slowdown. it seems like we are

holding tight right now but the get five hours, could interesting. let's take a look of how equities are faring. equity futures are quite positive following the traction that we saw on wall street overnight. down about 1/10 of 1%. city futures up close to one half of a percent. and cost inn tokyo futures down one third of a percent. currencies, not a lot of movement in dollar-yen. the aussie pretty much flat and the kiwi close to six years sensory now. revenue ise interesting. follow in stocks in china. we tend to see this consolidation, tends to be losing a little momentum. we did weaken overnight. fix ofe watching the course.

meanwhile, first word news from new york. the fed intends to maintain gradual rate hikes based on a strong u.s. economy. that is according to the latest fomc minutes. employment gradually pushing wages higher with inflation remaining nearly 2% target. the minutes note escalated trade risks and of volatility. the trump administration has launched best -- lost another leading figure. scott pruitt, former head of the epa was facing charges of abuse of power. at least 170 democrats and four republicans had called for his resignation. saudi arabia has cut pricing for most of its oil. assureed reduction to customers there is sufficient

supply. oil extended losses after him go aramco.r president trump renewed his attack on opec, saying the cartel is keeping oil prices high. saying the president's tweets on oil have backfired. added to the have price of the barrel and it will continue if trump keeps tweeting. more seriously, the u.s. navy says it will protect oil after iran moves to block the street. -- the strait. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. yvonne: u.s. stocks returned from the holiday break with a

strong advance. by sir upon check. -- we are joined by sarah. markets said bring on the countdown. we do not care right now because we saw the dow and nasdaq higher. a strong day in markets because the question going forward is, looking at tariffs, are they going to come to the table? will he negotiate, get a deal or will it spiral into more tit for tat tariffs. did also get those fed minutes today. the take away that the fed is marching along with rate hikes. the economy looks good but they are acknowledging the trade risk. seeing that go forward, when we got those minutes, we did see a bit of a downdraft in the market

right after that, it bounced back up and we saw optimism the rest of the day. we're seeing a reversal from yesterday, after the statement from macron. theechnology was best-performing sector today in the s&p 500. at which names contributed the most the gains i point basis, it was the big names, higher market capitalization but names like facebook, alphabet, google, microsoft. a semi conductors side a lot of strength as well. they were the best-performing industry group today and as we dive into the library, we will take a look at a chart of the philadelphia semiconductor index. we had been discussing the importance of that 200 day moving average. it did hold, we got a bounce. rebound, micron

helping there. we got a statement saying, yes china is banning chip sales but it will hurt them much. micron saying revenue was hurt by about 1%. across asset reporter joining us from new york. president trump has confirmed the u.s. will impose tariffs on chinese goods just after midnight. that is the first shot in a trade war between the world's two biggest economies. but into our congress editor joining us from d.c. with the latest. once the trigger is pulled on his tariffs, who will get hit? we interviewed said the initial bite of these will not be huge. it will take a little while to ripple through the economy. but, there are a lot of

industries in the u.s. that are bracing for the worst. in the case that there is a retaliation, china comes back and puts tariffs on u.s. goods, perhaps restricts u.s. gminesses such as walmart or from expanding in china. it could get ugly fast, with the escalating possibilities. i am just so excited to hear about this. is there any chance anyway will pull back? donald trump clearly will not pullback. we heard him talking to his base tonight and it is a good deal. could china pullback? joe: they could pull back although they have interest in keeping up the pressure. set out publicly any clear criteria of what they -- out ofl china

china. we know they want intellectual property rights and protecting u.s. industries that want to operate in china as well as cutting back the trade deficit with china but, there is some room to go. it is not likely that either side will back down immediately until we see more of what the impact will be as it rolls along. yvonne: thank you so much for joining us. joining us from washington today. ahead, samsung reporting second-quarter earnings later this hour. we'll get a reaction from susquehanna financial group. a lot at stake. sayskristina hooper protectionism is wiping out upward bias. which i was her next. this is bloomberg. ♪

kathleen: this is "bloomberg daybreak: asia." 34nne: u.s. tariffs on billion dollars in u.s. imports are set to go into effect in less than five hours. a key question for markets, will this trigger fresh volatility? hooper, a is kristina chief global market strategist joining us in hong kong. we are seeing markets pretty percent after the overnight session. is this baked into the price already? certainly some of it is as markets have come to accept that this is not just rhetoric but it is more and more becoming reality. i am taking a look at stocks here, they have been hit quite hard. if you look at the yen, not doing a whole lot. old not giving a whole lot. treasury not catching eight huge

bid. -- a huge bid. kristina: there is some level of complacency the market. i could see a move towards more safe haven assets but at this point i think markets are taking a wait and see approach. this is just the tip of the iceberg in terms of threat and premises we have seen along the lines of trade wars. may see a slow erosion in confidence and a slow increase in concern. the federal reserve expressed that uncertainty is theyer and a more -- and are more concerned that it is affecting businesses. i have a chart from our bloomberg library to show our audience and basically, this trade policy uncertainty measure is not at the very high but it is pretty near it right now. investors are shrugging that

off, are they waiting for it to get worse? kristina: this chart is far more important in terms of understanding capital spending. i am happy your underscoring this. the real issue here is economic policy uncertainty. what we know about a historically is that as a strong negative correlation with capital spending. beings a we are seeing talked about in the fed minutes that came out. what the fed presidents are hearing from their districts are that they are not only worried about trade wars, but some of them are forgoing capital spending or slowing it as a result. that is the big issue. yvonne: when you look ahead to the -- kathleen: when you look ahead to the jobs report, -- tohleen: when you look ahead

the jobs report, how important is that to stocks and bonds? kristina: it is confirming the base case for the fed. i would argue that chances are increasing at the fed does not have a fourth rate hike this year. trade inry concern is that situation deteriorating but we're also seeing a number of the participants worried about an inverted yield curve. i want to talk about earnings because it seems like investors are focused on that. this chart shows the earnings estimates across the board. 500ontinue to see the s&p estimate trench higher. europe is in a doldrums here. i have to mention that this is the eps price in dollar terms, to the dip is due to the currency that we have seen. what are we looking out for in earnings, is a more about the

tariffs?vated due to kristina: i expect global earnings to be good. i am most focused on is guidance from the ceo. how the trade concerns that they are experiencing are impacting capital spending but just in general, what are their hiring plans and whether visibility is on profit margins. that we couldise see, particularly in the u.s., .ome increase in wage growth what kind of impact will have on earnings? companies have enjoyed for years of relatively low costs when it comes to wages and that could change quickly. does that mean the u.s. is still the best place to be at the moment? kristina: i would argue that diversification is critical. i can't argue that there is one area where i have a high conviction but what i do have a high conviction in his we are

likely to see rotations in market leadership. when will be periods different regions will be outperforming others, certainly driven in part by macro factors such as central-bank action. this is an environment where we want to be well diversified and to an extent, tactically moving. kathleen: it is interesting, people are talking about increased volatility but we have riod of lowe volatility. are you expecting more? moreina: i do expect volatility. i think it is a natural function of normalizing monetary policy. if we think about the last 10 years, we have lived through extremely experimental monetary policy. that has altered risk and reward profiles, it has lowered volatility significantly, and driven up correlations. with an unwind of that monetary policy, we are likely to see the opposite.

at least a semi-normalization of capital markets, particularly in the u.s. and so i would expect to see volatility go up and correlations come down. kathleen: what about banks in the u.s.? we have a debate here because a , othersng yield curve say they are hedging these positions well. -- what is your view? kristina: a flattening curve does hurt banks but on a line enough time, this is an attractive opportunity. kathleen: is there an area of technology you like? kristina: i like most of technology. i am of the opinion that while you could argue that the trade wars have extended to the tech sector, much of it is relatively and a use that word cautiously. much of it is relatively invulnerable with strong growth

drivers, so my expectation is that the tech sector will continue to perform well. yvonne: are you seeing opportunities here? take a look at the dollar. some of these speculators are so long dollar in the looks extreme. do you think we have seen the worst? kristina: i am surprised to see such a focus on the dollar, because of we look at its performance over the last couple years, what has driven it is expectations about fed moves. kid --ds futures have a this as they have in the past. my concern is that the fed we not be as hawkish as had been i do think a long dollar position may be a mistake in the shorter term. have you.eat to kristina hooper, chief global market strategist joining us in

hong kong. back into some live pictures out of montana. let's listen in. it is easier to negotiate when you have support. you do not have some senator that was forced out of office because he did not like me saying bad things like we should not be doing that against china. we should not be doing that. we are in such a great position. other countries are calling us. do you know that if we knock down the trade to visit -- the -- if we dot by 25% that, we pick up one point in gdp. and 10 $3 trillion million jobs. we pick up one point. speaking of gdp, remember when i said it will go to 3% and all of

this? now the atlanta fed just predicted 4.8%. now who knows. who knows. who knows. i can only tell you this, it will be a lot better than you had with obama and if these people got elected, you would have gone down like you have never seen. the would not have taken regulations off. you would have had an economy that was going to crash and burn. now we have got something that is a rocket ship and every time i need a leader of another country, they always start by saying, i would like to congratulate you on the incredible job you have done with the united states economy. korea, every time they say i would like to congratulate you. they are actually studying what we have done.

we have to greatest people in the world and we are doing good. those beautiful, beautiful hats make america great again. soon to be changed to keep america great. right. right. soon to be changed. they said why did you do it the first time? it is called keep america great is what we are doing is incredible. it is incredible. we have created -- think of this, we have created $7 trillion. with the fastest-growing nation on an economy basis, maybe some big nations, but i heard nation.

we are the fastest growing economically nation in the world. iwe are the fastest growing economically nation in the world. at the big and, because they are probably back. whatever it is, we're doing well. i think we're the fastest-growing and we're certainly growing our military and growing our power. we are taking care of our vets more than anybody has ever taken care of them. thanks to republican leadership, america is winning again. remember i tell you the story. america is being respected again, all over the world. somebody said, could you tell the winning story? i said they have heard it but, a great senator comes up to me and

sir, the and he says, people of montana are tired, sir, of all this winning. they can't take it anymore. they can't take it. we have got to slow it down, sir. i say, steve, go back to the people. go back to the people and say, i am sorry, i cannot honor that request. we are going to win and win more. we are going to win likely have never won before. like have never won. because we are finally putting america first. yvonne: we have been listening to president trump speaking at a make america great again rally in montana. the u.s. has all the cards on trade.

they're going to leave that but bloomberg subscribers can continue watching it live. you will find diary entries coming up later today and this week, as well as events you have missed earlier. do a quick check of the headlines. credit suisse has agreed to pay $77 million to settle bribery accusations. regulators say the banks hong kong unit intended to win new business by offering jobs to friends and family of chinese officials. princessesso-called was paid more than $1 million although colleagues say she was rude and unprofessional and often did not come to work. we're told the gray 10%et is seeing bids at discounted price. to sellcrapped shares shares on the mainland. zte has named a 20 year

veteran as its new leader. he was recently in charge of the company's network. ofaging the company as part dropping the shale ban, the company has lost value in hong kong since resuming trading last month. we are counting down to the openings in korea and japan. looking positive when it comes to equities. we saw that wall street session where tech lead the rebound, especially with semi conductors. it gave a little bit of momentum. 8/10 of a a loss of percent but we could see a rise of 150 points for the opening of the mckay and the -- of the nikkei and the japanese yen strong. ahead here, as the trade war starts, two divergent systems

and to market a different world views clash. next, look at how it may play out. this is bloomberg. ♪

yvonne: we are about 30 minutes away from the asian markets opened. in about four and a half hours, we will see announcements from the u.s. about terse on chinese goods. samsung earnings just coming through. let's take a look at what we're seeing. second-quarter operating profit coming in at 14.8 trillion won. what analysts of were looking for of a 15.3 chile and. miss of what for, 15.3ere looking

trillion. this could be a big miss getting the fact that a lot of these analysts were worried that the economy, what this could mean for south korea. chip prices are starting to decline right now. have we reached a peak? also slower than expected, galaxy s nine smart phone sales. goldman sachs showed that asian chip exports are vulnerable during periods of reserve tightening and manned may slowdown. the a lot of people are tired of paying for pricey mobile phones. it is heading apple, samsung, it is a lot of things hitting them at once and a lot of them are big macro forces that they cannot control internally. one analyst says stock

could hit hundred 50,000 by the end of the year. we will his take in a couple minutes time. president trump has confirmed the u.s. will impose tariffs on chinese imports as st midnight.cks pac duties will be imposed on $34 billion worth of products and another $16 billion will come in two weeks. some say the idea that china presents u.s. security shows the u.s. is cold war mindset. china has confirmed its support for the iran nuclear deal, saying there's an obligation to speak it -- to keep it in place. the minister said the accord was an international treaty and its collapse would hurt the chances

of peace in the middle east. the u.s. pulled out the deal in may. >> the deal is an international treaty. that is why all treaty states are obligated to ensure its survival. upheld,treaty cannot be it does not just for the interests of iran, it damages peace in the middle east and the credibility of the international world order. jenna: u.k. prime minister theresa may is fighting a cabinet revolt over her plan to tie the country close to eu trade rules after brexit. senior figures meet later to discuss her compromise for customs rule but her top negotiator is already said to have rejected it. metn pre-brexit ministers the foreign secretary on thursday night, raising concerns with downing street. bank of england governor mark carney says signs of growing strength in the u.k. economy support a move towards higher interest rates. date i him

increasing confidence. the first quarter was largely weather.nter his upbeat remarks leave the door open to a hike as early as the bank's meeting on august 2. global news 24 hours a day on air and @tictoc powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. we are counting down to the major market opens. latest with sophie, u.s. tariffs on chinese goods in a few hours, we saw a relief rally overnight. maybe: it looks like that off in asia as well. we are preparing for a new world order. a couple things possibly could help maintain stamina. optimism.he fed's also the overnight rally in tech

shares, that illustrates that investors may be focusing on upcoming earnings. even u.s. chip stocks were the industry has not caught up to u.s. china spats. expectedweaker than earnings in the pulmonary results from samsung, the back cap of the year is expected to be better. while casualties are expected, the ceo of bonobo reportedly said the company did not expect a trade war. the ceo did note that companies are in the same boat. putting a pretty brave face on it so far. asian earnings may disappoint estimates. japan is a canary in the

coal mine on that front. 66 companies that have reported have missed estimates and so july has ra been a brutal month for japanese equities. see, those losses may ofe pushed nearly a quarter the top members into oversold territory. that is the most since the selloff we saw in february. we have to wonder if this is not compelling enough for buyers to dip their toes back in, but with the earnings potentially disappointing, they could be pockets of opportunity in the region. morgan stanley seeing strong profits for indian banks, goldman sachs betting on hong kong lenders. singapore and new zealand maybe beacons of hope. kathleen: a complicated picture but obviously some rays of hope.

line --es fell to their their lowest in three weeks. at the same time, saudi arabia lowered august pricing in the u.s. just a day after president trump called on opec to bring prices down. our energy editor joins us from san francisco. what was opec's response and how much crude can we expect saudi to pump to lower the prices? >> thanks for having me. part of their response was the fact that they have cut prices for all of their crude types to the u.s. on top of that, they have cut crude prices for most of their grades going to asia and europe. separately, we have reported that the country is said to a boosted its oil production by happen million barrels a day in june. all signs point to an increase in production that may lead to a potential excess in the oil market in the coming months. that important to note

this is not necessarily in direct response to trumps calls for opec to raise production and bring prices down. opec members and its allies have for a while pledged to increase production to counter higher oil prices so, the market has by the expected that there would be a wrap up. kathleen: iran not to take any of this lying down. they threatened to block oil experts. what would blocking the strait do? lynn: a threat like that should carry some heavyweight. pants down, that waterway is the most important waterway to the global trade of oil. i want to say that about 18 million, almost 18 million barrels a day is traveling through that waterway. being hauled by tankers and that is equal to about 40% of all oil traded internationally.

if something like that happened, it would test the international oil market. that being said, it is not exactly clear whether they can actually shut all oil traffic , the u.s.e waterway and its allies and other military forces may be able to keep it open. if there was some kind of disruption, you may see it shut for a few weeks at the most. yvonne: what does this mean for prices? we have been talking about this is by disruptions possibly being bigger than expected. i we heading closer to 80 or 75 -- are we heading closer to 80 or 75? lynn: i wish i could tell you. i can tell you how they reacted today and it was. irish market today. the decline was the biggest in almost three weeks.

there were a lot of moving parts to that. the main one, you are you mentioned the fact that the u.s. oil inventories rose whereas exports fell and that painted a bearish picture. the saudi arabia boost in production on the stands to further exacerbate that. if they continue to raise production like the market is expecting, we could see oil prices fall despite all of the news on the waterway. it remains to be seen what the market does. thank you, our energy editor joining us from san francisco. with the politics surrounding oil, we have more coming up. samsung second quarter earnings fell. we havelook at why and your latest on trade out of beijing. this is bloomberg.

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yvonne: this is "bloomberg daybreak: asia." i have yvonne man in hong kong. with --: weaker demand weaker demand for cell phones. the world's biggest chip maker dominates. the company struggled with weaker than projected sales of .ts galaxy s nine smartphone let's bring in a senior analyst joining us from the san francisco bureau. they missed estimates but it seems to certain extent, the problems they are facing, these headwinds were expected. we reduced our estimates a couple weeks ago, citing .eakness in smartphones to a large extent, this miss was

anticipated. kathleen: if people don't want to buy as many smart phones, if the markets are shifting in a way that is adverse for them, do they just ride this out? some of the problems they are facing are the same that the software industry is facing. there will be a whole lot of new features and in that context, what samsung needs to do is ofedite the availability their flexible or bendable displays. unlike apple, samsung has full control of their manufacturing ecosystem. it is all in-house in they have been working on a new display technology and i think they have to cut corners and introduce something new to

be offered. the full double funds that are expected to come out will have a margin impact for samsung. margins are probably going to be less than average and this is why it has taken us -- has taken such a large time to come to the market. i think the sluggishness, they have no choice but to introduce it and see if that would help. yvonne: you mentioned the weakness in smartphones and displays but what about chips? that seems to be resilient but when it comes to the overall industry, do you think we have reached a peak for prices? i think in the semi conductor business, obviously they are doing well, north of 60% operating margin.

it has already and out into expectations. is, -- the question of where we are in the cycle has more to do with how long they can sustain these margins. samsung has already reduced investment plans. we talked about a $2 billion cut to spending, intended to sustain peak margins. if they do that, it would help the overall earning power but keep in mind, we are assuming that memory will remain where it is. what they need to fix is the other parts of the company if they need to innovate and be able to help reinvigorate their mobile group. we have seen tech caught in the crossfire between the u.s. and china tensions. overnight, someone said this injunction is unfair but it will not hurt earnings too much.

do you think that will be a big disruption for supply chains, especially in this part of the chain -- this part of the world? mehdi: no. tencent, these are all chinese service providers that are adding capacity. they cannot make chips. they need dram and they only have a few suppliers. war,ear about the trade about collusion. i think they are all noise. this is the way china tries to push back. at the end of the day, china needs samsung and micron. i am going to put up a chart that shows chip stocks below the broad market. not by that much. in the big picture of trade war, when you look at a company like , how bad canon this get?

just quickly, that chart reflects the fear of cycle peaking. i just talked about the peak margin and they have been there for three quarters. they have contracted because people fear the cycle will run over. i don't fake it has anything to do with china. if there is a trade war, micron would suffer more than korean companies. have a good relationship with china. escalateds a more trade war between china and the u.s., that is actually going to benefit koreans at the expense which generates 50% of their revenue from china. any escalation would benefit micron. these: would you say

countries are a haven during the trade war? mehdi: they are but going back to your chart, i think the bigger fear is cycle peaking and margins eroding. i think china becomes the secondary but if we can over peakthe debate earning or peak margins, especially in the memory sector, then you are right, china could if therehelp samsung is a trade war. thank you. appreciate your analysis. those samsung earnings missing estimates. we will see how the stock trades when korean markets open. to nhkg news according in japan, the country has executed the cult leader asahara for the 1995 sarin attack.

the sentence dates back as far and ayears, where asahara dozen followers were sentenced for the crimes in the subway attack. we will continue to follow these lines. nhk says japan has executed the cult leader. the looming trade war could be just the start of a broader fight for global dominance. correspondent is watching all these events unfolded right now. we're just getting to the final countdown of this announcement. what is at stake? will -- we are laser focused on what is expected happen around midday china time. we are expecting swift retaliation from the chinese the there's the question of dominance that the u.s. has in technology and military that china is starting to challenge. china has spent a long time

restructuring its military, building a facilities in the south china sea. on the economy, they have laid out a clear, broad plan to develop the economy, to make it a manufacturing and technology powerhouse. 2021 to this plan by double per capita gdp from 2010 levels. they have the meeting china 2025 plan, which would see sectors like electric vehicles, robotics and chips, with china having dominance. not just on the national stage for globally as well. beyond that, you have the ai plan. strategy thatoad is being laid out. argue, u.s.omewhat lawmakers are waking up to this threat and you have got this consensus around one of the few issues with bipartisan consensus.

pushsay now is the time to back on china, even if they are not in agreement on how they do that. you have the likes of the democratic leader saying that if china is not take old at this stage, -- is not tackled at this stage, it could be crippling to the u.s. economy. there is a long-term challenge between the u.s. and china, particularly around technology and national security. yvonne: thank you. tom mackenzie joining us from beijing. we have more news coming through , pricing shares in hong kong at $17. reports that it is not off to a great start, given some of the institutional investors. not a whole lot of demand and the gray market, we see thin trading. atcing hong kong ipo shares $17. countdown not just to the tariffs but to the ipo on monday. more ahead on daybreak asia.

this is bloomberg. ♪

kathleen: now for a look at trending stories. the bird subscribers are reading bolsteringgan, operations in some locations. climate change is getting a hit with the related news about a zero emissions gas plant and a tiny country that is eating the odds. stories about high income americans being the most upbeat on record. check out stories trending on the bloomberg terminal or online. now for a quick check on the latest headlines. competition watchdog is threatening to force lower prices and revamping businesses. the regular found its acquisition of uber's southeast asian business is cutting competition, citing complaints

from passengers and drivers. challenging amazon and walmart with a new platform that combines online and traditional shopping. he told shareholders he faces an enormous opportunity. groupse retail 'e-commerce sales may double by 2022 to $70 billion. new york's iconic positive hotel may have been bought by qatar. they are said to have acquired the property in a deal worth $600 million. however, some say there is a legal block on the deal and it is not possible that the transaction went through. counting down to the market open in japan, south korea and australia. fromthan four hours away

the tariff announcement from the u.s. on $34 billion of chinese goods. we see a positive lead in asia, after the tech rebound in asia. up 8.1%. coming up on daybreak asia, we will interview a fund manager leaving the chinese market. he joins us later for the first time in his career, he says he is not touching these chinese stocks. there is much risk when it comes to trade tensions and with a new leveraging campaign, plenty of pain coming through in china but he's is plenty of opportunities in other asian nations. also ahead, the u.s. business talk tosenior adviser us about how regional agreements can make markets more resilient as the trade war rages on. market open coming up next.

this is bloomberg. ♪ retail.

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kong.: 8:00 a.m. in hong we are live at bloomberg's asian headquarters. i'm yvonne man. welcome to "daybreak asia." asia-pacific markets said to follow wall street higher after-tax led the advance -- after-tax led the advance. second-quarter profit and sales both miss on week on and for smartphones and displays. betty: from bloomberg's global headquarters, i'm kathleen hays in new york, it is just past 8:00 p.m.. a dramatic day, the coming hours bring u.s. payroll numbers and tariffs on china. yvonne: president trump confirms the duties will happen. $34 billion and an extra $16

billion in two weeks. ♪ yvonne: these tariffs just hours away as we count down. the markets still seeing a relief rally. we are focusing on a lot of earnings. breaking news in just the last hour, samsung missing for the second quarter. that xiaomi pricing at $70 per share ahead of its ipo. that is the bottom of its targeted rating. kathleen: if you are an ipo investor, you are probably glad to see all of this doubt coming through on the xiaomi pricing before you buy at a higher price. a lot of people buy and then get burned. it is interesting to see these factors. tariffs seem like the big story,

but we knew it would happen. interesting to see companies and analysts, like our guest in the last hour, saying samsung is going to do well. a trade war may not hurt them so much. yvonne: it might be more of the smaller players. semiconductors in south korea and taiwan could weather the storm. let's get you with the market open. seeing somere optimism at the start of the session in tokyo. this is consumers and tech stocks -- this as consumers and tech stocks are leading the gains. australian stocks also on the front foot. we have u.s. futures pointing lower despite the rally we saw overnight lead by tech stocks. you haveirometer's, the dollar continuing to hold steady after the losses we saw overnight. yen trading a 110 spot, 57 against the greenback.

look at this. .oday's reactions to tariffs we are watching the aussie yen, which is not showing much now. it is likely to break the upper end of its recent trading range. considering the use that this will turn out more of a trade scrimmage, rather than a full-blown trade war. between the u.s. and china are expected to cool down. it will be key after authorities reiterated on thursday that it keeps the yuan stable. samsung's shares after the preliminary on the earnings fell short. the stock is in for a second day of losses. the company had already warned it would in due to hot in the second quarter. besides the result, the repercussions of the tariffs on korean chipmakers are on top of mind, given how exposed the

korean economy is to the global supply chain. yvonne: thank you, sophie kamaruddin. for more, let's bring in bloomberg intelligence reporter. it seems like it was due to pen sets and displays -- handsets and displays. >> it is. back to the first earnings quarter, in terms of handset operating profit, it is likely to have a sequential decline. they know the demand for a premium handset is struggling. they would spend more on marketing. apple, the iphone shipments slowed down. the demand for the high price also showed weakness. in general, it is well expected. kathleen: the high memory chip margin, sustainable? the would have to say

second half is seasonably strong. are normal following the industry trend, markets should be sustainable in the near term. as we know, there is rising , who knows iffs china would really do more to cap the prices? if they do, it's not about the industry dynamics anymore. kathleen: if it gets bad enough, people will hope they can survive. maybe they won't worry so much about the exact earnings per share. you said the uncertainty, how can you formulate a second half outlook? water analysts telling you --what are analysts telling you? >> we relate on the industry dynamics. the second half demand should be strong. also based on the contract prices, even though seasonally

, the contrary price remains resilient. there is no intervention by a new government, contract prices should continue to be strong. samsung will have more capacity for chips. that's why, based on the profits, semiconductor should increase in the second half. kathleen: we just got that xiaomi pricing, 17 hong kong dollars per share. this is the lower end of the targeted range. we were expecting this, but how troubling is that? >> sentimentwise, if you list your shares at the bottom of your price range, it shows the demand -- the interest isn't that strong. the sentimentors is not so good. also, given the fact that we are

having trade tensions and dollar strings, that could also hurt profit outlook for xiaomi, given that it is an exporter and are looking to export to u.s. markets. yvonne: not doing so well. i think it is not a good start before these shares are traded monday. our bloomberg intelligence senior technology analyst, thank you. let's get to the first word news with jenna dagmar. >> the fed maintains rental rate hikes based on a strong u.s. economy. that's according to the latest fomc minutes. the committee is low on a clinic, even chilling pushing wages higher, with inflation near 2% in the medium-term. the escalating trade risks and emerging-market volatility have a dental threats to growth. bank of england governor mark carney says signs of growing strength in the u.k. economy

supports a move to higher interest rates. the data giving increasing confidence that the first quarter softness was due to winter weather, not the economic climate. his upbeat remarks leave the door open to a hike as early as the next meeting, on august 2. u.k. prime minister theresa may is fighting a cabinet revolt. it is over her plan to tie the country close to eu trade rules after brexit. senior freezers -- senior figures meet later to compromise. her top brexit negotiator is already said to have reject did it. foreign secretary was met on thursday night and later raised their concern with downing street. china has confirmed its support for the iran nuclear deal, saying those involved have an obligation to keep it in place. speaking in a meeting in vienna, the foreign minister said the accord was an international treaty, and its collapse would

hurt chances of peace 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 an international multilateral treaty. that's why all treaty states are obligated to ensure its survival. if it cannot be upheld, it doesn't just heard the interest of iran, it damages peace in the middle east and credibility of the international world order. 24 hours a day on air and on tictoc at twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna degen heart, this is bloomberg. kathleen: the final countdown to trade tariffs is on, the asian markets seem to be taking stride. we're joined by bloomberg strategist mark cudmore. notsay trade tariffs will be the main driver of market action today. is it because they are priced in, or they don'-- people don't think they will be a big deal?

>> they are definitely a big deal. they have been a big driver of markets. there has been no new developments this week. there has been no new catalyst, nor will there be today. we knew tariffs were coming into effect today. unless there is a major change, that's the only thing that will affect markets. the biggest thing driving markets is the ongoing hangover from the chinese deleveraging drive, and how they are trying to stop negative commencement in. the story, we are in an environment that looks ripe for short-term banks and equities. they traded soggily so that is worrying. kathleen: it would seem to imply a good day for chinese markets. it seems to me you are trading a scenario where maybe not even tariffs, but you are concerned

about how the deleveraging is playing out. that is what is playing on the move and what will it chinese stocks today. verye environment is different for chinese stocks, lower dollar, lower interest rates. the valuations are very cheap. the snp moved higher overnight. believe they will go higher. i also thought they would yesterday. the deleveraging drive, even though there has been this new targeted bias, in terms of the rrr cut coming into effect, the state cancel making more positive target easing bias announcement, the advisory panel, there has been subtle shifts in how officials are reacting to deleveraging. the negative momentum is already in place. we saw that with the story last night about the $240 billion in loans backed by these falling

stocks. i've seen more pressure in this kind of deleveraging. i think chinese stocks are rising, but it is a worrying sign if they don't. it will be blamed on trade wars, because anything that happens will be set around the narrative. it is not a market story. yvonne: the only thing everyone seems to be talking about is a trade war. we have talked about the trade minutes. the message we got was there is not a lot stopping the fed form continuing on this -- from continuing on this rate hike drive. inkets are still pricing roughly 2.5 hikes over the next year. they expect the fed to stop raising rates by 2019. is that the right positioning? barring a full-blown trade war, does the market catch up with the dot clock? >> that is probably the correct pricing at the moment. we have seen the curve flattening, and that reflects the overall impact of these trade wars being likely to be

negative for the u.s., rather than inflationary. that is the correct interpretation. there is nothing new, there is no surprise. that shows the communication by powell and the press conference was fairly on part. it is worrying is minutes do shock. they did not this morning. that means we can move on and look at the labor report. i continue to be worried about chinese stocks. yvonne: mark cudmore, joining us from singapore. it will be a pretty interesting couple of hours. follow more on this story and today's trading on our markets live blog. pretty important for a day like this. you can go to the market run down in one click, there's commentary and analysis from our expert editors. you can find out what is affecting your investments. secretary of state mike pompeo is back in north korea. we look at what is on his agenda later on. fu joins up next, john

us to explain why he sold out of china completely. this is bloomberg. ♪

♪ this is "daybreak asia," i'm kathleen hays in new york. yvonne: i'm yvonne man in hong kong. our next guest sold out all stocks in china. as the threat of trade war grows more intense. joining us is john fu. he manages about $60 million, all focused on asian markets. thank you so much for joining us. first time in your career you are doing this, selling out of chinese stocks. what is the rationale behind this, and a full exit? been managing asian equities for 20 years. this is not a permanent

abandonment, it is a temporary avoidance. china is the largest economy in asia, and cannot be ignored. we are a fundamental equity house, and invest in stocks on a fundamental basis. we cannot invest in stocks in a vacuum. in environments where macro economics is more benign and normal, we do well in those environments. given the conditions today, we expect trade tensions to drag on and be even intensifying. it is difficult to apply a process. we are moving to look for other opportunities in asia that are less affected by this trade spat. yvonne: we will talk about those opportunities later. i'm wondering about what the pboc has been doing. they have been outspoken. the tone has shifted to supporting growth. they are talking about softening it's deleveraging campaign. is renminbi stabilizing, but

that enough as a catalyst to see a turnaround? i think it has become a political question. in our forecast, it is quite how long to understand and deep this uncertainty will become. to sitmeantime, i like on the sidelines and watch the situation. it changes every week. kathleen: if you are backing away from china, you said it is not a permanent divorce, you just want to see what happens. there are forces that are possible. some say like betting on a horse race trying to invest in stocks, . where do you turn to in asia if you are backing out of china? asia, expertise is in asia is part of em. given all that what's going on,

there are headwinds, you have stronger u.s. dollar, rising rates, current account deficit countries, for example, indonesia. that is seeing slowing growth, and decreasing inflation. you get threats of speculation. there are some bright spots in southeast asia. we see two countries that stand out, first is thailand, where you have a very strong bank of thailand. and you have strong tourist receipts, that translates into a very strong current accounts. where you have a lot of foreign direct investment coming in. you have two pillars of the mekong countries having very strong macro economic numbers due to completely different reasons. one is global tourism, the other is foreign direct investment. we are very interested in the region. it is a region of 250 million

people. thailand, cambodia, laos, vietnam. if you take it as a regional standing, it is the fifth-largest country with very young population. and the demographics. kathleen: our story on the bloomberg look that you buying vietnamese -- -- largest steel broker. when you value a company, what do you look for to say this is a company to buy? of the things in my 20 year career in stock picking, the key thing is management equality and management is very important. we are foreign investors, we do not take toward seats and we are not activists. you also want them to be -- in

an industry that is structurally growing for the next few years. you also want to be buying stocks that are reasonably valued because we are not momentum chasers. we try to look at those that have good entries and sustainable, and can grow for the next 3-5 years. kathleen: you are sticking entirely with asia. do you have interest in japan? some people feel there is a lot of opportunity there. am a japan specialist. we need to look at it, because it is an investor in asia, the largest in vietnam. we monitor the market closely. in terms of specific equities, we do not look at japan right now. yvonne: when it comes to ems, do you think we have seen the worst

of the selloffs? you talk about vietnam as a market, we see the market is still in the bear market, the currency is also a record low. at that point, we see inflation picking up in countries like the philippines. are those headwinds still quite big to you? we have been watching some of the central banks that are forcing the rate hikes, even in the face of trade tensions that can slow growth. important a very nuance that you have highlighted. especially in countries in southeast asia, i would classify them into two classes. the current account deficit countries, indonesia and the philippines, they force rate hikes to defend currencies that are weakening. and countries we are more positive on would be the current account countries -- current account surplus countries, were you have good global receipts,

in terms of tourism dollars or fdi. you need to make a distinction in the region. that's a reason why we are's focusing -- we're specifically focusing on that region. i think they have a much stronger central bank and macro economic conditions. mastec's is a trend. you have to find countries that will be least affected by it, and find companies that have good, strong potential to overcome the currency devaluation. that is really going to be the challenge for the next few months. what will get you back into the chinese market once again? see theld like to effect of the trade war subsiding, number one. number two, i would like to see more deleveraging from china.

that has always been a topic. i think the chinese authorities are taking it very seriously, which is positive. it's very difficult to continue growing through leverage it. just -- i think it is being addressed. steps in the right direction. i would like to wait and see, but clearly it is a market i have known. we are watching very closely. in the meantime, i am focused on other areas that will have better risk reward. yvonne: we appreciate your insight. we like a contrarian call. o, joining us from singapore. just want to do a check on samsung shares. we just got the miss on the second quarter preliminary earnings. shares are down more than 1%. this is the weakest we have seen for the stock. falling the most since july.

the lowest we have seen since march. we are talking about four month lows. already contributing to the 10% we have seen. a lot of worries on their oled screen displays, also slower than expected sales of its galaxy s nine smartphone. more on that stock price coming up. this is bloomberg. ♪

♪ kathleen: we want to see how things are playing out in asia. look at that, the nikkei is up 8/10 of a percent. the cost be is a fraction higher. in australia, we see the green. not a big move, but going higher. starting with the japanese yen,

it is looking weaker. the won is moving higher. andaussie dollar in the up, the new zealand dollar, as well. this is bloomberg. ♪ what's a gig of data?

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singapore,is 8:30 in we are half hour away from the open of trading. less than four hours away of the tariffs announcement of $34 billion of chinese goods from the u.s. president trump saying 1201 eastern time is when we will hear that. 12:01 for us in hong kong. i'm yvonne man. kathleen: i'm kathleen hays. president trump saying earlier that the u.s. is holding all of the cards. we shall see. yvonne: let's get to the first word news with jenna degen heart. >> president trump confirmed the u.s. it will impose tariffs on chinese imports as the clock

ticks past midnight on the east coast. duties will be imposed on about $34 billion worth of product. a next her $60 billion of tariffs will come in to it -- six -- an extra $16 billion of tariffs will come into play in the next two weeks. saudi arabia has cut pricing for most of its oil grades it. also raise production to ensure there is sufficient supply. oil extended losses after aramco lowered prices for most crude in asia and europe, and cut them in all of the u.s. it came after president trump renewed his attack on opec, saying the cartel is keeping oil prices high and, demanding immediate action. yvonne is trolling the president saying his oil tweets have backfired. 10% of the barrel, and it will continue if he keeps tweeting. the u.s. navy says it will protect oil shipments after it

was blocked. the revolutionary guard said it will stop thinkers passing through if iran are halted. nhk says japanese authorities have executed the leader of a doomsday cult that killed 12 people in a 1995 gas attack on the tokyo subway. thousands more fell ill, which shatteredm yths of a useful -- peaceful united japan. he was sentenced to hang for at least 27 murders. seven cult members have been executed today. singapore property stocks are set for declines on friday after the government unexpectedly taken curves. it is -- tightened curves. buyers will face higher stamp duty and loan to value limits. residential prices jumped 3.4% in the last quarter, building on

a 3.9% gain in the previous period. global news, 24 hours a day on air and on tictoc at twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. let's take a look at your markets. a relief rally when it comes to equities, but certainly it has been pretty terrible couple of weeks for asian stocks. good way to end friday. >> terrible couple of weeks, asian stocks looking at a fourth straight week of losses. we do see them rise as we prepare for a new world disorder. you have the yen looking steady, along with the dollar. a retreat in u.s. 10 year bonds. gold is also not doing much. japanese stocks gaining ground. the nikkei 225 up. we have investors welcoming the solid jump we saw in wages for

may. spending remains above bear. we take a look at the currency space, the kiwi gaining ground. also the aussie dollar. 11 20uth korean won is up greenback. let's get a check on the commodities. an looking steady after overnight decline. set for losses after the uptick in u.s. supplies. inn ore futures gaining singapore after a single -- fourth day stumble. it is the most recent to see a drop. let's look at stocks in the region that are on the move. i want to highlight stocks in tokyo. we have time the fun jumping as the company gets set to buy the european territories. it is said to be closed in november, up 17%.

these shares are dropping the most since july 2017 after the results. samsung is at a low since march after its second-quarter results l short of estimates. undai heavy dropping. a next check on autos, the next potential battleground for trade tariffs. we have heavyweights leading gains in seol, but tex prospects -- tech prospects -- bloomberg intelligence in a recent report highlighting sunday and kia because should they shift more productions to the u.s., that could spark a domestic labor woe at home. yvonne: we will see if they reach any kind of deal with the trump white house. confirmed hemp has will pull the trigger on chinese tariffs as the clock ticks past midnight washington time. firing the biggest shot in a

global trade war. -- his cold minded war mindset was blasted and threatened to be retaliated. 11th hour negotiation or deal. how is this going to play out in the next few hours? >> it seems incredibly unlikely. we are likely to get these u.s. 34 billionabout dollars worth of chinese goods kicking in just after midday in china. they will target things like semiconductors, plane parts. these tariffs originate from complaints in washington and an investigation into ip theft and text transfers. they said -- china will retaliate with its own set of tariffs for u.s. goods. soybeans, autos. there are carriers steaming to ports before the tariffs kick

in. trump said he is looking at additional tariffs should china retaliate. in theal he has flagged past is $450 billion worth of chinese goods, which is almost all the chinese exports into the u.s. market heard you also have moves in the u.s. to strengthen -- restrict trading in china. on the ground, there is deep concern from the u.s. corporates that their operations will be affected if these retaliatory measures continue to play out, that they will end up being victims as china takes steps to restrict their business here. kathleen: where is the potential exit ramp in all of this? >> there simply doesn't seem to be one. there are no official talks between the two sides scheduled. there is division within washington, as to what exact outcomes they are looking for. both sides seem to be digging

in. you have trump eyeing those midterm elections, apparently wanting to draw blood before them. china does not want to be bending to what they say are threats and bullying from the u.s. there has been potential andment around the deficit, whether or not china would increase its imports from the u.s., whether it would speed up market opening. those are off of the table, but they are areas china has hinted it could work on to resolve some of these issues. that key issue that seems to be an issue is china sees no sides of backing down. the bank is saying europe and china should work to push back against the trade actions coming out of the u.s. it seems both sides are digging in in the short to medium term. much,en: thank you very

our china correspondent joining us from beijing. let's get right to michael malik, his diplomatic. stand more than 30 years. he was a former u.s. ambassador in vietnam. he is now senior vice president and regional managing director of the business council. -- or did china miscalculate how strongly president trump was going to pursue this? he has been talking about this for the last 30 years. we have a large u.s. deficit. many people say china has stolen intellectual property, and nothing the u.s. has done has stopped it. >> i think you have to say that -- it is a great day in singapore, the sun is shining. at least you got a good start to the day. in terms of china and the way it approached the u.s., since the

elections i think you got it right. china doesn't understand donald trump, or how to deal with him, at least not in the beginning. they seem to be getting their sea legs, in terms of how to deal with donald trump. right now, they are doing what they have to do. if the u.s. is going to put all of the tariffs on, then china cannot just take it, because of their own position in the world, in asia, and saving face throughout the world. i think in terms of the length of this, that is where we have to take a hard look. i'm of the view that this is probably not going to be a trade war, but more like a trade skirmish. after one or 1.5 rounds of tariff escalations, there would be an exit ramp.

governments can almost always find an excuse to get together and talk about something. there are many international meetings coming up that provide venues for discussion that could lead to a breakthrough on these things. we have to wait and see exactly where and how we find the exit ramp. yvonne: let's say we are down the road, and china is sitting down with the u.s. china has agreed to many things, especially when it comes to intellectual property, nothing changes. what do you think the u.s. will, or should be very specifically saying to china that we have to see this, and in return, what can china do to find the place where they agree? >> that is a very good question. i participated in a lot of the wto negotiations and pushing china into the wto. we all thought they would be able to come into compliance

with the wto, but it has not turned out that way. what we have to do is be more diligent, in terms of the kinds of requests we make of china. we have to make sure all of the details are right. i remember when we talked with japan, there used to be things we would put in the agreements to say best efforts. we thought this had meaning. best efforts is something that often turns out not to be in the benefit of the u.s. i think we have to be very clear, very detailed in what we want to do with china. i think we have to monitor it very carefully. then we have to be ready to come back with some meaningful penalties, if china does not live up to its word. yvonne: is there still a window for the u.s. to work with its allies on pushing china to

change their unfair trade practices, or is that door pretty much closed? >> i think that is a really great question. that is one of the things we are leaving out in this discussion of the trade war. that is the fact that it it is a trade war, we are fighting a trade were on many fronts. telllobal strategist will you it is usually not a good idea to fight a war on several fronts. in this case, how our allies react, not only in terms of trying to work with china to take care of overcapacity, to improve ipr behavior, and increase transparency and a lot of other governance and trade related measures, is problematic. i think they would be willing to work with us, because these are issues that affect all of us. they are going to be very worried about doing so. they will be worried about how to interact with the trump administration going forward.

in terms of things like the sanctions on iran and north korea, we are going to have cooperation. it is going to be somewhat reluctant. it will not be as full-bodied as it otherwise presents. yvonne: what can businesses do now? given how these economies are more integrated, does that cushion the impact on regional supply chains? >> that is interesting. i just saw before coming on that there was a bite that said brazil was getting $100 million worth of soybeans. what sense does that make? it makes good sense. now that soybeans are already taking a hit, and american farmers are already feeling the pain in terms of soybeans, pork,

and other agricultural commodities, those prices are dropping on international markets. it is ideal for somebody like resilient, who has -- like brazil to buy the ones from the u.s. and reexport them to china. if you look at things like cotton, that's another product china has imported, and was going to go down because of the first round of trade wars. the anonymous is going to be benefiting from lower-cost american cotton, which they will then buy, turning to yarn, and ship to china. there are going to be winners. the fact that this cut trade overall is not going to be good for singapore, who makes a living out of being a traito -- trader. if t -- yvonne: how is this affecting

the geopolitical balance within asia? within the aussie on nations, in terms of -- leaning more towards china, leaning away from the u.s., or vice versa. if i am one of these countries, i am looking at both sides and trying to see who the winner is. determining a winner, there are no winners in a trade war. you can say that since china exports more to the u.s. than the exports -- the u.s. exports to china, they will be the loser. they will be the loser perhaps in a monetary sense for a short period of time, but the u.s., who has a lot of investment in china and supply chains there go through china, could be hurt even more. we will have to wait and see how it works out. overall, the rise of china has , they run hot and

cold on this. these days, they are taking a sophisticated view, saying china is a rising power, it will be the world's largest economy eventually, we cannot do otherwise. you have to find some kind of accommodation, a way to do business. at the same time, they are weary of china. when we talk about the belt and road initiative, everybody says great idea, but there is a trust deficit between them and the chinese. there is a lack of transparency, and an uncomfortable feeling. on the other hand, they feel comfortable with the u.s.. we have been a specific power for over 70 years. they are used to dealing with us. we have a great deal in common with those countries. they would much prefer to deal with the u.s. dealing with this administration is very difficult for most of them. the biggest issue is uncertainty. there is the new prime minister of malaysia who said how can i

deal with a guy who changes his mind overnight? many people have come to us saying you have to explain the administration to us, because we do not understand. they want to be with the u.s., they still believe the u.s. is their best for -- bet for a long-term partnership, but china is a rising power and will play a larger role in the region. kathleen: thank you so much, u.s. aussie on business council senior vice president and --idual manager and director regional managing director. secretary of state mike pompeo has to be hong kong, but this trip to be his most radical one. find out why, next. this is bloomberg. ♪

♪ kathleen: this is "daybreak asia," i'm kathleen hays in new york. yvonne: i'm yvonne man in hong kong. mike pompeo makes his third and

perhaps most critical visit to north korea. he is in pyongyang, amidst reports that north korea is upping their arsenal, instead of dismantling it. our correspondent is watching this. tell us what makes this trip ever more important. >> the north koreans and americans have to come through with their promises. it is corny to cite a robert dark and deep, but i have promises to go before i sleep. there are a lot of promises being made, but not necessarily being committed. was the easy part, now it is the hard part. if you look at the promises, there were not that many from the north koreans. the united states has agreed to scrap wargames with south korea. the americans got the prisoners of -- yvonne: prisoners, refugees.

>> yes. but what have the north koreans promised? they have no unilateral agreement on production or disarmament. they basically said they agreed to complete denuclearization, but now comes the hard part. they have to make the promises. mike pompeo is on his way to pyongyang. he says we have to fill in some details. there are quite a few details. stalling,koreans are perhaps to gain more bargaining power. how far can they stall until the u.s. loses patience? yvonne: we have seen president trump do that in the past. at a very specific issue, repatriating the remains of american war dead. is this becoming more important as it is perceived? >> it actually is. donald trump puts great importance to this. thousands of americans war dead

from the korean war, this is an emotionally charged issue, one that could win popularity back home. this,ng-un perhaps knows and has not made any commitment other than what he did sign in the joint statement on june 12, to return the remains. but as of this minute, no remains, or details of those remains, have been made public. the remains have not been handed over. perhaps that will be very high on the agenda of mr. pompeo. he will not necessarily get exact details on denuclearization. he could get the war dead returning. as of right now, he has a lot of details to fill in with north korea. that's what makes the trip quite critical. yvonne: our chief north asia correspondent talking to us about mike pompeo's to pyongyang.

you can get a roundup up of the stories you need to know to get your day going. you can do it with today's edition of daybreak. it is also available on mobile in the bloomberg anywhere app. you can also customize your settings so you get news on the industries and assets you care about. this is bloomberg. ♪

♪ yvonne: this is "--kathleen: this is "daybreak asia, i'm

kathleen hays in new york. "yvonne: i'm yvonne man in hong kong. >> some things are about to begin. just over three hours from now. lynn fisher fox used to be with the u.s. department of commerce. she is currently at arnold importers. she specializes in legal remedies, trade remedies. if you are covered by the tariffs and nothing changes, how do you navigate it? is the remedy, a temporary reprise? a lot to talk about there. kathleen: a lot to look forward to on your show. before we hand over to bloomberg markets: asia, a look at how markets are trading. we are seeing the green getting deeper in asia. the nikkei is up more than a full percentage. the cost be -- kospi. up 0.1,sx 200, this was

now we are 2/10 of a percent. things are looking good. yvonne: looking like a relief rally ahead of the tariff announcement. we are set for a fourth weekly decline of more than 1% for asian stocks. before it is just a calm the storm as we get closer to president trump's announcement. we see equity futures in singapore, as well as taiwan up. we see resilience coming through from these manufacturers. these trade frictions by malaysia seeing slack. more to come on bloomberg markets, next. retail.

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leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ lost, but now we are going to win it, because we have all the cards. david: friday shaping up as a dramatic day. china and the potentially damaging trade war. president trump confirming those duties will happen, $34 billion today, and perhaps $16 billion over the next two weeks. equation,side of the china says it does not want a trade war, but will retaliate in kind. kong, i'm david ingles. >> in sydney, i a