>> wall street hit the highest in a month as the dollar advances while treasuries pullback. >> earnings season will divert attention from tariffs. traders seem increasingly comfortable with the u.s. economy. >> theresa may fights for her political life as tories quit her government. -- premier ligue talks trade in berlin.

>> hello from sydney. it is two hours from the open of ages -- asia's major market. over the next hour, we will be the action on wall street will play into your asia-pacific trading day. war?uestion is, trade what trade war? taking a look at where the markets ended, near highs over the past month. you wouldn't expect there was any tension between the u.s. and china, but the focus is now shifting from trade to one of earnings, looking ahead to the end of the week. we get the start of bank earnings and there is a lot of hope. donald trump is headed to europe, so there is investor hope that maybe he will be watching what is happening in the pacific while he is focused

on the atlantic side of the world. that is prettyek live on the day, we have a lot to contend with as asia wakes up. scotusave the appointment. the president says it will be an exceptional person. we will have special coverage of that. we are looking ahead at chinese inflation today. it feels like investors are ready to get in and buy. the turmoil across the pond didn't disrupt the sentiment. that board.show this is the u.s. close. taking a look at the dow, 1.3%, its biggest jump in over a month, punching through key technicals, the 50 and 100 day moving average. the s&p's biggest jump in a month, 0.88% as well as the nasdaq. flipping to currencies, it is a

mixed or. the bloomberg dollar spot right now, seeing a little bit of a rebound. it had been lower for most of the day monday. euro-dollar, pretty much flat. fundamentals are solid although there is protectionism rising. the british pound, it had been falling by a quarter of a percent and had been down as much as 0.7% but the good news to there is not enough votes pull no-confidence vote on theresa may. we are looking at the turkish lira. this is back in the news because appointed his son-in-law as the country's economic chief so there are concerns of nepotism at the highest echelons of his government. taking a look at the set up in asia, another positive day after what was a horrible

previous week for asian markets. thes seen across asia-pacific index. taking a look at the setup, kiwi stocks trading a 10th of 1% higher. the kiwi dollar, 68.39. the aussie dollar seeing resurgence against the u.s. as it was a mixed picture for the index. it may get a lot worse for the aussie before things get better. analysts are looking forward to 70 within six months. sydney futures looking positive going into the open. here is first word news. : theresa may fighting for her political life after the resignation of her foreign secretary and increasing attacks from conservative lawmakers. to euan to stay close rule is the only solution, but she could face a leadership challenge from boris johnson and other hardline tories who need

just 48 signatures to force a vote of confidence. >> it is a proposal that will take back control of our borders, our money and our laws. but it will do so in a way to protect jobs -- that protects jobs. and it keeps our people safe and our union together. erdogan hassident in sworn in. he promised a new executive system with the country moving forward. plunged the most since 2016 as erdogan nominated his son-in-law as treasury. -- as the treasurer. harvey weinstein has been released on bail. this is after denying accusations of sexual harassment. heindictment alleges

performed a forcible sex act on a woman in 2006. the additional charges include two counts of predatory sexual assault which. maximum sentence of life in prison -- which carry a maximum sentence of life in prison. thai divers have brought for more boys out of the caves. that leaves just four boys and their coach trapped. are recuperating in the hospital. authorities are trying to bring the last group out, as monsoon rains threaten to push underground water levels higher. ,lobal news 24 hours per day powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. let's take a closer look at the u.s. market close. investors appear to be shifting attention to earnings, where analysts are predicting 20% gains.

let's bring in su keenan. stocks and the dollar are advancing, oil and bonds drifting. su: analysts say stellar attornment's -- returns ahead. it is easy to pull attention away from trade concerns. the dollar, advancing. you have the bonds moving the opposite direction, and look at the dow, coming and strung with a better than 1% gain. stocks at the highest enormous a month. -- the highest in almost a month. if we go into stocks moving, you see the size of some of the moves. tech is doing well. macron is interesting. there was a red -- a negative ruling in china courts on a patent issue, but it was only a preliminary ruling. credit suisse points out the chinese courts move quickly. the fact that they are delaying a decision could be a sign they are constrained for fear of escalation.

morgan chase reporting earnings later this week. twitter taking a hit, plunging as they suspend 70 million accounts in may and june. they are considered to be fake accounts, but analysts say the stock is up 94% this year to put it in perspective. groupon soaring as it looks for a buyer. let's go to the bloomberg gtb's, where you can find our charts. this one is earnings growth and it is visually displaying the big gain. earnings probably grew 20% in the second quarter after rising 14% in the first quarter. that is a big game, possibly the biggest since 2011 if you cross out the first quarter. that is creating, for the moment, investor optimism. isn't that the case that some tech companies most exposed to a trade war rely on chinese plants to manufacture chips? they may show the greatest

gains. su: what the analysts say is that when you have 30% gains in the tech sector, it causes one to put trade concerns on the backseat. the big profits are probably going to overcompensate for any perceived losses here. what you are looking at, this video of tech companies, tech earnings, while general earnings are expected to rise, tech earnings are expected to rise by 31% on average. materials companies are expected to have a 33% gain and energy companies, well over a doubling in terms of profit gain. that explains why you have a disconnect for now, why trade concerns were so big a couple days ago and not now. the focus, let's get positive earnings on these gains. you are looking at a combination of the energy material and tech companies posting strong gains

in this latest session. it is a compelling case. ramy: i am looking at commodities. oil did fade in its rally. what happened? su: new york trade oil is different than the other oil. let's take a look at the chart. we were off to the races. we pulled back a bit. -- an outage in canada that is expected to come back online. we are getting wednesday data on supply, that shows maybe a declining of demand. those things together putting the brakes on what has been a dramatic rally. to the big picture, you can see oil is focused on what is going to happen with iran. haidi: thank you so much. lots of action overnight. our top story, u.k. prime minister theresa may is writing -- is fighting.

andor ministers resigned there is increasing opposition from hard-line conservatives. let's take a look at the implications for the u.k. assets, particularly the pound. great to have you here. i want to throw out a chart on pound volatility, which has been directional essentially since brexit. you can see the range bound movement when it comes to volatility in the pound. given that, with the exit over the past 24 hours, you have gotten rid of the most challenging members of theresa may's cabinet. immediates no leadership challenge, could this be a positive for the currency? >> that remains to be seen. on the spot market, there has been volatility especially overnight with the pound falling . if you look at implied volatility, definitely it doesn't budge much.

rates,look at interest what is being priced in, the bank of england, there is no real change in what is being priced in as far as interest rates are concerned. the market is pretty unfazed i what has been happening -- by what has been happening. it is expected that there would be opposition and as long as there is no revolt, which the brits are known to do, at some point there is backstabbing. but the market is taking it in stride. one can interpret any scenario into this as one would like. my base case scenario has been that brexit overall will be expensive and overtime, deficits will increase. but the market has been comfortable with brexit, and the proof is in the pudding. the negotiations are ongoing. the prediction markets have increased the odds of theresa may leaving office, but nobody knows. we have to take it a day at a time and realize that this is a

process. she seems to begin an office for the time being, continuing with her plan to have a soft brexit. friday,s we know from these things can change quickly. if we assume these are messy negotiations, perhaps it has of adened those in favor hard brexit, doesn't move the needle as to what the bank of england does? or at least the vigilance they take when it comes to setting policy? axel: the bank of england really has no clue. we are just reading the crystal ball. the bank of england has to worry about the financial stability, so they have been pointing out, you have to have some sort of methodology, a system for financial institutions, and if we have a hard brexit, that poses a risk of financial stability.

you don't fix that with high or low interest rates. that is an issue that needs to be taken seriously. everybody hopes it will be taken care of. but it remains to be seen. there is some back pacing and errors in this unraveling. that does not appear to be the case. tois johnson is trying distance himself from the government so you as a political future, because if he didn't, he would be part of the soft brexit solution, which is not his brand. he wants to reserve his firing power so if there is an opportunity for him to step in, he will. ultimately, he owns the problem. the question is, what will happen? a hard brexit is simply not an attractive option for anybody and if you are in power at the moment, you have to deal with the consequences. it is more difficult to govern, which theresa may is having to do. in terms of beneficiaries

to the turmoil, who might those be? blackrock chose paris over london for it alternative investment services. what do you see? it has been accelerating a trend to decentralize offices. when i travel to europe, everybody says our real estate market is booming because folks from britain are relocating. that will be paris, berlin, .unich, amsterdam many cities are benefiting and , it is possible, you don't have to have never but he on site anymore. everybody in continental europe is benefiting and people need contingency plans. that has been helping the real estate market. i don't see anything changing. these companies need a long lead time. they need to have a plan b in place. ramy: very quickly, what are the chances that theresa may lasts through the end of the year? axel: the prediction markets

,ave been hovering between 50% above or below. the markets are not terribly liquid, and they tend to overemphasize the main news. the current of turmoil, any political leader in the u.k., i wouldn't give more than 50% of them staying until the end of any year because u.k. politics, this happens. somebody comes from the stabs the prime minister and the bacteria that is no different than it has always been. the question if you want to own the problem, i would rather have theresa may there then get rid of her. and then, tell her but he to make the best of it. ramy: we will leave it there. to us from sanng francisco, thank you. we have an exclusive interview about trade and tariffs with a former treasury secretary at

1:00 sydney time, 11:00 a.m. if you are watching from hong kong. don't miss it. ahead, we are counting down to the announcement of president trump's supreme court pick. we will take a look at the contenders later this hour. ramy: emerging-market assets drove u.s. stocks in the latest session. are investors over trade and brexit risks? pose a rescue joins the conversation in just a moment. this is bloomberg. ♪

haidi: looking at a live shot of london, it is coming up to 11:20 p.m. in the evening and it has been a tumultuous day at westminster. we had three government ministers exit in the span of 24 hours. boris johnson, the latest,

having penned a letter that could be seen as tantamount to a vicious attack on theresa may's record, saying there has been needless self-doubt and it is been suffocating the brexit process, criticizing her for not for theg sufficiently exit. it looks like given a little a littlety -- stability, looks like the threat of an imminent leadership battle is staved off for now at least. we know how quickly things change in politics. a breaku are watching australia. let's get back to the markets, where we saw u.s. stocks rising to the highest level in almost a month as emerging-market assets climbed. are investors simply shrugging risks, including trade and brexit turmoil? or maybe for now? in a chief

investment strategist. u.s. equities taking a breather. the s&p up three days. it is confounding because the trade tensions still haven't gone away. is on,ink the focus now what is the other side of the equation? rather than focus on the negativity, people are saying if earnings are going to be up 20% in the u.s. in the second quarter, which is the consensus number we see, if you see the in asia.ory, it is one of the key stats, if you look at chinese exports to the u.s., in 2006, that was 7.2% of their gdp. 7% of their gdp was exports. last year, it was down to 3.6%. cut in half. sectors arether growing abundantly. if you look at per capita gdp, in the same timeframe, quadrupled. by 2020, they will be in the high income level status most developed countries are in.

there's a lot going on in china, not just exports to the u.s. going on.nitely a lot looking ahead, you mentioned the earnings season. winners and the losers? we talk about technology and commodities have been up 50%. for oil year on year. jose: we like technology clearly. it has been a leader of the business cycle. we are not even singing the national anthem in terms of this new revolution. we like financials. even though we don't think we are going to see a steepening, we think that improvement in growth should be positive. energy, we have seen a turnaround in oil prices pretty much to where we thought they would go. we got lucky. we have seen a turnaround there. the question continues to be --

haidi: well sheltered from the trade war. would you be able to stomach going back into emerging markets selectively? jose: we have been stomach thing while.aching it for a we like the quality of earnings and stability of growth in the u.s. and in addition, buying the potential for growth and valuable opportunities. if you look at the chinese market, we are not interested in buying the supply chain in the u.s. we are not interested in investing in companies and countries at risk for trade wars, but if you look at the domestic demand, that is where it is at. not just in china and asia, but in the u.s. as well, where we are's innings all business you well. -- we are seeing small business do well. haidi: these are entire echoes systems when you look at tencent

is this a function of what we are seeing across the board? do you think the valuation is looking pretty challenging? jose: what some sectors, sick there's -- sectors have been bit up more than others. tech is one of them. if you look at the growth for the balance of the year, china and india leading the way, india but -- india the fastest economy. side, west of good think the diffusion of technology is going to help improve productivity and profitability. we like tech but we are more focused on other things like consumer durables and other sectors as well as financial. we think the growth story in asia works. haidi: going into the upcoming earnings season, analysts increasingly forecast asian

companies. is that a function kerley of the isrency effect and aps -- the a function purely of currency effect and aps? have we seen the maximum affect from the tax benefits? trying to top the first quarter won't be easy but if you look at the balance of the year, as long as we are getting steady growth in earnings, which i think we will, spothey will be a little deer and more selective in emerging markets. we think we will see good earnings in emerging markets and the value opportunity is compelling in certain emerging markets. given the inflow of capital we have seen into e.m. in the past few years, they are more stable and they were 10 or 20 years ago. talking about emerging markets, we have to talk about what is happening with the fed s.d rate hike you raised what you were

expecting for this year and next year. jose: when the teacher gives you today -- the answer to the quiz, it is easy to get it right. the fed says they move more aggressively and assertively. the chief economist thinks that is what we are going to do. pace,s at a very moderate because don't forget, you still have a lot of slack in the .conomy on the employment side as we see the economy perform well, we saw the unemployment rate rise 2/10 of a percentage point last month. that was a sign of strength. people were entering the labor force. you don't reenter it with a job, that is the problem. ramy: thank you so much for your analysis.

the washington post says twitter's rate of suspensions has doubled since october and it suspended over 70 million accounts of may -- in may and june. it cites biggest decline in three months before the loss later in the session. nissan admitted falsifying data about exhausted missions -- emissions and fuel economy. they were discovered during an internal check on employees in japan conducting vehicle inspections. nissan says the revelations will not lead to recalls as the cars meet general specifications for economy and emissions. the world'sg opened largest mobilephone factory in england. the south three and president -- south korean president joined prime minister modi. the company will produce units from its flagship model to low-end

phones. india's market grew last year, and is the second-largest market after china. the aussie pension fund plans to double its staff over the next few years. we will have details in just a moment. this is bloomberg. ♪ 2, down. back up.

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inmarkets open for trading just about 90 minutes time. another session of gains here. asian features looking pretty positive. sydney futures looking at an upside of .6% going into the open. a beautiful looking shot of the sydney opera house, but a chilly eight degrees. i am haidi lun. ramy: i am ramy inocencio in new and where it is 6:30 p.m., you are watching "daybreak australia." the opec president told bloomberg that the cartel is doing what it can to offset a shortage of supply in response to criticism from president

trump. he says producers are trying to balance the market without breaking supply to the excessive level. it called on opec to cut prices urgently. chinese premier called for free trade as he met with counselor merkel in berlin. both countries are experiencing tensions with the u.s. the pair are seen as prominent supporters of globalization. they go on to meet a big european leaders at the annual business summit in brussels. rescue teams in southwestern japan have found more bodies after record rain. at least 100 are known to have died. 80 more unaccounted for, and thousands have sought shelter. rain warnings. shinzo abe canceled a trip to europe to oversee the cleanup.

musk is said to be in shanghai for talks opening production plan. sources say he is continuing negotiations that already dragged on for more than a gear. tesla's desire to build a plant in china has taken on more urgency in the escalating trade war. prices in china jumped as much as $30,000 after beijing imposed tariffs on american belt cars. news, 24 hours a day, and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. haidi: let's get your quick update on your markets. trading in new zealand is getting underway as angelic set. gains.seeing the rest of asia looking pretty positive as we head into the open. the kiwi dollar. dollar. u.s.

sydney futures looking at an upside of .6% at the open. the aussie dollar holding above $.74. things could get worse before we see proper rebound. let's look around the region. the biggest gainer against the dollar in the overnight session. all eyes on sterling. paring some of those earlier. leading gains. -- fleeting gains. boris johnson, the foreign three resignations within 24 hours, and a lot of doubt over the strategy going forward. a reminder of how things ended up on wall street, pretty risk on. two point 86, and a move of four basis points. u.s. stocks rising the highest in almost a month. a third day of gains for the s&p 500 to the tune of 1%. let's get more on what we should be watching as trading it underway in asia. we have adam haigh.

gains, we get these we're thinking about how investors should be hedging. jpmorgan has a return to base type of approach. adam: they have done an assessment on what you should look out for eyes to get closer to the recession scenario. they are not talking about going into recession tomorrow, but planning for the next one as and when it comes, and talking about ethics pairs you want to be looking at. the yen, the greenback, the swissie, and the singapore dollar. they are the four currencies they highlight as a good hedge and specifically at the moment, they say that yen is a particularly good hedge because it is quite cheap to hedge at the moment. resurgence ofhe the greenback already. there is a great chart on your bloomberg that shows you how resilient the dollar has already been. being the reserve currency, you would expect that in times of turmoil. the dollar always holds up

reasonably well. really, it's a scenario they are painting of wanting to sell emerging-market fx which is not a surprise what some people of a forget just how much tough place those kind of currencies get into when we get into real economic turmoil. is they are not seeing it happening tomorrow. and they are just talking about the positioning you need to get into given that things are looking very late cycle. interesting looking into the end of the start of earnings season in the u.s.. it will be tough numbers. very good numbers for us to get a run and equities. some of these currency plays could start to play out long before this starts. ramy: over in china, the stock exchange in shanghai has been boasting about how cheap stocks are. strange to hear from a stock exchange, but do they have a point? a point, buty have

it is interesting to see front-page news in china with the stock exchange, talking about the deep discount valuations in the chinese market. the point really comes down to something we have been discussing quite extensively over the last two weeks is how far does something have to fall before people want to step in? we heard from socgen, saying the pricing of the shanghai comp was basically showing that 5% earnings downgrade when consensus forecast is around 15 or 16%. what the folks over at goldman are saying as well, and it's really about the earnings report. the great chart in the gtb gtv library shows that. we are back to valuation levels. you know, you have to bear in mind that the economy is already slowing at the fastest pace since 1990. everyone is aware of the slowing

economy. that is not to say that it could not lowdown even more than people expect, some fund managers have been alluding to that possibility recently given the escalation of trade tensions and how much of a knock on effect that has on an economy already struggling with credit. if you believe the earnings numbers, you are willing to back that valuation discount at a level that for the market, it is a discount relative to itself but also relative to a lot of other markets around the world. this clearly has room for optimism. we are seeing that low into the market in the last couple of after ah civility tumultuous couple of weeks with what's going on with the currency. i will take it from there. adam haigh. you can check out some of the charts adam referred to at our gtb library on your bloomberg terminal. save it for your own reference. take a look at australia's

pension. annual growth of 12% over the past 12 years. rick larsen warns this opportunity -- $41 billion, we are talking about. they want to double their staff over the next three years. what is the plan? >> we are talking about very decent numbers here as well. they are a big fund. $41 billion. and they are looking to almost double their investment staff from 29 to 50. on the support side, from 20 to 40. as you mentioned, australia is -- has a very interesting pot of money. total population smaller than tokyo's yet we have the fourth-largest pension plot in the world, and that means they need more muscle, so to speak, to scope out new investment opportunities. ramy: they need more muscle.

what kind of staff are they looking for then? on the investment side in particular, they are looking to beef up their private market capabilities. we are talking things like infrastructure. we are talking about things like private equity and even property. interested to bulk up on the so-called traditional market side of things. fixedngs like equities, income, and bonds, to keep external money managers to do that work for them. ramy: with all the trade war tensions we have been talking about, how is some super positioning their portfolio now? ruth: they are quite bearish on china, particularly when it comes to growth. they believe growth may taper quicker than anticipated. they are hedging their portfolios by going into the armistead asset . importantly as well, they are

basically cut their exposure on australia and australia and equities. ramy: ruth carson. thank you very much. all right, right now, you are looking at a live shot of the supreme court in washington, d.c.. president donald trump into said to have decided which judge he will nominate to the bench with an announcement set for 11:00 a.m., sydney time, just a few hours away. joe subject is joining us from our d.c. euro. eau.ur >> there are four finalists all judgese same original 25 that trump put out at the beginning of his administration that he would that are for the supreme court they are pretty much cut from the same legal cloth. that tended tos

side with business over government on regulation. support drawn gun rights. most also have managed to not have to deal directly, rule thectly on roe v. wade, supreme court decision that legalized abortion across all 50 states. that will be a real flashpoint, but all of the originalist philosophy, it a close reading of the constitution and the implication is that that ruling may be under assault or up for a change in the new court as it comes in. haidi: it has been two weeks since justice kennedy announced his retirement. how quickly does a new justice come into that role? joe: the white house and republicans in the senate are moving towards hitting a confirmation, getting the just openingn time for the of the neil gorsuch and of the

first monday of october. democrats are going to do all they can to throw up some roadblocks in that, but they do not have a lot of leverage to either delay or block trump's nomination. ,hey just do not have the vote so there is no filibuster for them to block the nomination. much of it will depend on which justice, which nominee is it, because the length of the judge's record will of course influence how much research has to be gone and how long people can spend time questioning decisions or other past actions or writings on the court. indi: joe washington. a long day ahead for you. couple hours away from that announcement. we will have special coverage on bloomberg tv. coming up next, more on the u.s.-china trade wars. roger baker tells us how businesses are already getting hit. they are unlikely

to come up to the negotiating the able. this is bloomberg. ♪ is is bloomberg. ♪

ramy: i am ramy inocencio in new york. haidi: i am haidi lun in sydney. you're watching "daybreak australia." anywhere but america. that is the message china is sending to companies, urging them to boost imports from countries other than the united rates. our next guest says the trade from should means businesses are scaling back. joining us now from austin, texas is roger baker, senior vice president of a geopolitical intelligence platform and publisher. we talked about the difficulty for investors to navigate all the uncertainty. there has been changes in attitude and positions within 24 hours depending on what the president tweets and how beijing response. you are seeing a paring back when it comes to investment sentiment. about there is a concern

expanding operations, about trying to think about the this set of how trade frictions will play out and how it may have longer-term implications even if they come to some form of resolution with each other. haidi: right, and you can see the actual sort of on the macro front, the impact if you look at the latest readings. companies are pulling back in terms of export orders and investment. do you think this is still in negotiating tactic? we called friday out of the first day of the trade war. can you imagine there are behind-the-scenes negotiations going on? rodger: i think there are certainly conversations still going on. from the chinese perspective, they do want to hold out long and demonstrate to the united

rates and the rest of the world that their economy is big enough to whether this, that they cannot be pushed around. in the united they come up -- states, it is not clear that there is a crystal policy that has been worked out. there are differences in how they want to resolve this. the president certainly sees tariffs as his primary tool they are immediate and relatively quick at changing things. other parts of the administration, they want to see easing back of those tariffs, and few want to see the full five phases of new tariffs go into effect. r, i am looking at this as a case of when one door closes, another door opens. the premier is in berlin talking with angela merkel. opportunities are trying to find their ways place else might water through -- like water through stone. >> this is a very important

milestone for the chemical markets because so far until recently, it was restricted. we can elaborate this opportunity and we are very happy about this. it is a strong sign of trust. ramy: they own 100% now. just theays is this first of many other opportunities to say we are going to go to china? think that some of this is less about skipping out on the unit is the eighth and more about the concept of china opening up some of these sector through additional investment. china being a very large market for the chemical industry and will be integrated into a lot of chemical industry supply chain. it may not be as much about avoiding the united rates as it is about taking advantage of

certain aspects of china trying to open up. it may be some of the trade pressure from the united rates is convincing the chinese to try to open some of these sectors europeans and even some american companies may end up taking advantage of that. ramy: i want to switch gears because i know you have another expertise in north korea. earlier today, we saw donald trump, with yet another tweet, saying i have confidence that kim jong-un will honor the contract we signed an even more importantly, our handshake. i can let you read the rest. think? you are you confident in kim jong-un honoring this so-called contract? i think the north koreans are trying to change the dynamic of the relationship with states, the rest of the world, to break the political deadlock since they were let into the united nations. north korea wants to move forward with something that

changes the dynamic, but they are concerned that the unit is rates is just not acting how the north koreans would say in in return for the actions the north koreans have already done. china may be exerting negative pressure. is there any evidence of this? what would be their motivation to slow this down? rodger: there was not .ecessarily direct evidence the north korean leadership has visited china several times. there have been potentially noticeable change in the rhetoric in north korea after some of these visits to china. the chinese want to be able to any change or adjustment in north korean and u.s. relations. to see northnt korea suddenly become either a country that makes too many concessions or has an internal

crisis right on the chinese border or a country that ultimately goes too far into pulling into the u.s. camp, so they want to keep this dynamic. haidi: does this conflation, which we know that president trump is very fond of linking trade benefits with the geopolitical guarantees, does that mess up the situation for north korea going forward? rodger: a little bit, but i don't think how you could get the next three and situation more messy than it already has been. haidi: thank you so much for joining us. stratford senior analysis and austin, texas. bloomberg users can interact .the chart using gtv save those charts for your future reference if you wish. this is bloomberg. ♪

haidi: i am haidi lun in sydney. ramy: i am ramy inocencio in new york, and you're watching "daybreak australia." a quick check of latest business flash headlines. bmw is boosting manufacturing capacity in china to lower its resilience on u.s. imports amid the escalating trade war. bmw and an automotive company agreed to expand their joint venture, increasing production at two chinese facilities to 520,000 cars next year, up from 450,000. they plan to spend money on batteries from china's see atl -- catl. haidi: basf is planning to spend up to $10 billion on a new production facilities in china in what would be the largest expansion project so far. built with basf owning 100% of the operation.

this would be the first time a foreign chemical company has gone alone in china. ramy: president trump attacked pfizer overt drug prices. he tweeted that the company should be ashamed for exploiting the poor and said his administration would respond. raised prices on about 100 drugs following a pattern of regular increases that it takes each and every year. pfizer said most of its prices have not changed and that some have actually fallen. haidi: that is almost it for "daybreak australia" this morning. yvonne and ramy up next for "daybreak asia." yvonne: plenty of news. we talk about the turmoil in the u.k. with prime minister theresa may losing three key ministers in her cabinet. what is next? was this proposal really about brexit in itself or just

something else? we have michael every to parse whatgh everything for us is actually noise. a decent day for stocks. we have continued to look for equity gains across the board in asia after a pretty stellar day on monday. we will continue to talk more about that and of course, about china as well. the pboc talking about how cheap stocks are today. ramy: we will continue the conversation with eurasia group asia director michael. he will talk about it in 45 minutes time. he thinks that a truce between the u.s. and china will come before the midterms. when he comes on air. this is interesting because some might think that he might wait until after to rally his base for elections. china's retaliation will say measured as well as calibrated.

haidi: we'll get another indicator of how the chinese economy will hold up. we will be joined by capital economics china economist julian he sees producer price inflation coming in a little bit higher, boosted by the feedthrough from oil prices and higher food prices as well. and also saying that given that we are looking at a progrowth stance, the implications when it comes to the structural changes that beijing is trying to put through as well. taking a look at what comes next in this trade war. there is plenty more to come from daybreak australia. it looks like asian markets will get off on the right foot again after a difficult couple of weeks. outside of .6% one we get into the sydney open. a beautiful shot of the sydney harbour bridge. lots of talk about in the next couple of hours. also, president trump set to

announce his choice for the supreme court. the candidate that to replace the retiring justice anthony jurisprudenceset in the u.s. for years to come. this is bloomberg. ♪ retail.

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yvonne: it is 7:00 a.m. here in the hong kong. i am yvonne man. welcome to "daybreak asia." the top stories this tuesday, asian-pacific stocks set to extend gains after wall street hit its highest in a month. the dollar rose while treasuries fell back. earnings season will divert attention from tariffs. bloomberg's global headquarters, i am ramy inocencio in new york, where it is past 7:00 p.m. on a monday. theresa may fights for her political life. that is while eurosceptic tories quit her government. the pound the client on fears of a confidence vote. primeira liga