♪ >> stocks rose and treasuries fell as investors put trade fears aside and turned to earnings. banks fell ahead of friday's results. is the s&p 500 advancing for a fourth day in a row, the longest winning streak since the beginning of june. paul: the yen climbs on reports that president trump will hit china with more tariffs, could be worth $200 billion.

>> tesla might build. >> cars in shanghai as the first wholly owned foreign automaker in the country. but analysts are questioning its funding plans. hello, from sydney come over it is just past 8 a.m., i am paul allen, and this is "daybreak australia." paul.d morning, it is just past 6 p.m. here in new york, i am a rain ramy inocencio. paul, it is not just what happened on wall street during the trading session, but also afterwards. after the close, we got the headlines that donald trump will finally release the additional list of $200 billion in tariffs on chinese products, targeted from the u.s. to china. this is clearly an escalation. he saw markets close higher earlier, and we will look at

features to see what is percolating there. a couple hours before this, i could have just said hey, it was a great day. paul: yes, you could have, but there was always a spanner in the works toward the end of their. it is is expected as early as today, but certainly sometime this week, so that is something to watch out for. certainly never a dull moment , who issident trump also on his way to europe. we will be an that later in the show. ramy: in the meantime, that is get a quick reminder of how the stoxx ended in the u.s.. all indices were up for the past four days, the dow up the highest in the past three weeks, same for the nasdaq. the s&p 500 saw its highest since february 1. let us take a look at what is arena.ng in the futures we can see as expected, at least for the dow and s&p 500, they

are down by about half a percentage. the nasdaq is still seeing a positivity, but again, just a bit. again, all of this happening on the word of the additional $200 billion in tariffs, which sent us futures falling. paul: yes, let us see how we are looking at asia. trading is just getting underway, it has been going about three minutes now, almost flat, but it is early at the moment. the kiwi dollar weakening against the u.s. dollar, sydney futures higher by about .25%, and in the benny dollar hanging on. let us get the first word use, here is jessica summers. jessica: thanks, paul. the eu says the united kingdom divorce settlement is 80% complete but warns about the irish border will remain the biggest stumbling block. the negotiator says much progress has been made, while floating ideas about how

financial services will interact after brexit. some projections include protection for eu citizens living in the block and also british citizens living in a you. president trump has arrived in europe ahead of a nato meeting and a one-on-one him it was president putin. he says those talks might be the easiest leg of his trip, and also repeated demanding that nato members -- demands that nato members more into their share. said of president putin, that he is a competitor, not a rival. veteran fund manager bill gross fired a warning shot at the fed commerce thing that he expects not more than two rate hikes this year. in a tweet, he says he agrees tightening, but much depends on inflation and the fed's willingness to tolerate it. 12 boys and their

soccer coach have been rescued thailand. the navy says that the remaining four players and their coach were brought out safely and are all.ecuperating in half at the team went missing june 23 when exploring the cave after soccer practice. the governor says it was something that we thought possible. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. ♪ remy: jess, thank you very much. let us take a look at the latest u.s. close, this is after the talk of more tariffs. earnings optimism helping to propel the s&p 500 to gains, and the dollar reversed gains. and werel as well, joined by su keenan right now to talk about this. companies like pepsico kept the bulls on the run here. the market did not seem to

need much of an excuse, we were told that some of these stocks would come in strong. we saw the s&p posting its fourth straight gain, the dollar giving back some of its earlier gains, and the bond yields rising as bonds fell. let us take a look at pepsico, this was really a star story for bulls. you saw pepsico up as much as 5% on the day's biggest gain since 2011. you know that u.s. consumers have been cutting back on sugar, that has really put the soft drink industry in a bad place, but apparently, they have not cut back on stock amount because frito-lay food's next really what powered the earnings. some of the big movers, pepsico is up a stop, but you also see wynn resorts getting an upgrade due to the way performance from macau. this stock is another one that got an upgrade from morgan stanley -- a downgrade, which

has investors concerned -- autonation. lots of ridesharing apps are reducing the urge of our consumers to purchase cars, so it was a notable downgrading and --ir stock fell by a result as a result. also, pg&e dealing with a multibillion-dollar liability is issue, regarding the power losses in california. meanwhile, looking ahead to friday and jpmorgan, citigroup, other major banks -- let us go to the bloomberg gtb to this chart, this is a story about how jp morgan chase in the yellow, has outperformed all its peers after acquiring bear stearns. there is a view that their earnings per share are a lot stronger in valuation than a a lot of the others. it will we will be waiting to see how they perform on the , the earnings per share

report, since the financial crisis, since it has been the highest. paul: we did see some weakness in shanghai, particularly biotech. what was the story there? su: well, there were reports on some trust such as this areeimer's drug, analysts water on some of these big alzheimer'sry in drugs, saying that the results were kind of ambiguous. a lot of the tech companies share, you see ebay, if we moved to the tech shares, ebay got hit heavily with concerned that the image might be hit by the taxation change. apple was in the spotlight, saying that an engineer was arrested over the weekend and charges filed on monday, as he ordered a flight to china from san jose, california. he was found -- charged with

having downloaded trade secrets to his wife's laptop, and admitted that to the fbi. more on that will follow. paul: thank you very much, su keenan, for that date. president trump as we have been is considering an additional $200 billion on chinese products in tariffs. greg sullivan is joining us now, greg. what is happening now? that theare told administration is preparing a list of $200 billion in chinese : we are hearing that the administration is preparing a list of $200 billion in chinese goods. it will be a public comment period and hearings, and this imposition of tariffs will follow last week's imposition of $34 billion in tariffs on chinese goods.

china of course, retaliating in kind. the trump administration is also considering tariffs on $16 billion in additional goods from china as well. there were is already a hearing coming on that. so additional terrorists are attention in the works. -- earlier, president trump also suggested that the final total could reach $500 million, so not out of the blue. ramy: greg, markets work breathing a sigh of relief over the past couple of days, but they are clearly getting hit. what is the signal ahead as we move into the trade war? is anclearly, it escalation, but again, not out of the blue. it was suggested by president trump earlier that it could reach $500 billion, and we have seen the administration's posture on trade with countries

are china and u.s. allies, which has been rather aggressive. the move comes with the chinese tariffs, but also steel and aluminum tariffs on most nations, including our u.s. allies like canada and europe. trumpy, the administration is taking a more aggressive approach. . a negotiatings tactic, or trillion escalation of the trade war, it is hard to know at this point. but remember, trump has said that trade wars are good, and easy to. ramy: win, before. ramy: and is there any possibility that congress could push back? greg: an excellent question. the additional tariffs would put members of congress in an awkward position. members of both parties would like to see a tougher line on china. they have agreed that china has a -- has participated in abuses of trade norms, but on all out

trade war has members very nervous, including republicans. some of which are from state that supported the president but are heavily reliant on agriculture exports, with china targeting them. so, we will have to see whether they have any ability to actually come forward and impose some sort of limit on the trump administration. ramy: ride, and of course, we are four months away from the midterms here. bloomberg washington reporter greg sullivan there, thank you very much. moving to the tech space now, tesla has signed a groundbreaking deal with the shanghai government to build a factory that will eventually produce -- 500,000 cars each year. our china correspondent tom mackenzie joins us from beijing. tom, big news, but apparently they left out the price tag? tom: yes, just a minor detail there --[laughter] but it is still a considerable

deal since they have been working on this for more than a year, to try to send a deal with that china government. ofk, it is just a memorandum understanding, but if it comes to fruition, it will give them a . fully owned production facility they say that they could be up and running in about two years, reaching the 500,000 target in terms of units per year in the next three years after the two-year build out. tesla. according to it is a significant deal for them, but yes, you point out something crucial, which is how much it will cost how much of the investment is. because at the end of the first quarter, the only had about $2.7 left in cash. they are burning through the cash, so that was a question raised by one of the analysts. we got a son soundbite from one of them pointing out this detail. >> the biggest question right

now for investors, bulls and bears alike, is how they will pay for it. i think you will see something similar to what they did in partners such as panasonic, now saying that they will be a partner, but you will see somebody step in, and i think those details will be announced within the next 1, 2 or three months. tom: so we are at a stage were they will look to get permits and approvals before they start to build out this site. the pressure already has ratcheted up in the past two days, because the trade war has meant tariffs being imposed on imports of has less cars, meaning that they have had to raise the cost of their vehicles dollars.t 30,000 u.s. so there is certainly an incentive to start producing their vehicles in china to avoid his terrorist. critical, is that the reason for investing in china? you mentioned a minute ago, they

are barely hitting those targets in the u.s.. why china, why now? is it the tariffs question? tom: tariffs are certainly a catalyst, but i think elon musk is looking ahead to the future and i think quite frankly, china is the future. when you look at the stats, this is a country that is expecting to sell about one million units of electric vehicles in 2018, over all. china has a target in 2025 of seeing 7 million units of electric vehicles. china has 17% of its revenues coming from china in 2017, the tesla.largest market for and doesn't sound like a lot, but it is a 50% increase from 2016. they want to get in here, clearly because of the size of the market, and the opportunity. but there is also growing competition, they want to get in marketfore you see that

-- that competition get more mature. there are other companies who have no fear about taking on to has led. the other potential opportunity is to reduce their costs around sourcing, materials. local production is certainly something they're looking at with their shanghai partners. we are hoping to get more details. elon musk is expected to be in beijing later today. paul: all right, our china correspondent, tom mackenzie, joining us from beijing. still ahead, the 22 billion dollar aussie pension fund is giving hope to external investment managers with big outsourcing plans. ramy: plus, president trump is turning up the heat on chinese tariffs. again we get the investor outlook with a memory price financial. this is bloomberg. ♪ ial. this is bloomberg. ♪

♪ paul: let us take a look at the futures in the u.s., they did move after we had the

announcement from president trump a short while ago, that a new list of $200 billion of tariffs on china goods will be announced this week. .7 5%, nasdaq futures are also just hanging on their in the green territory. i am paul allen in sydney. ramy: and i am remy innocence you in new york, you are watching "daybreak australia." in new york,ncio you are watching "daybreak australia." in ameriprise financial global market .trategist anthony a couple of hours ago as i was talking to paul, the markets worked fine, they were up four focus isfour, but the turned back to trade tensions -- $200 billion. a lot of folks were hoping that this would not happen.

anthony: yes, markets have been dealing with trade tensions for the last couple of months, and it seems that the escalation had calmed down, which made markets move higher. the announcement of this evening , at a think it really changes the situation much. from our perspective, we expected that the global trade tensions would rise, and tariffs would probably get worse before they got better. , or at the nice part least the balance for investors is that earnings in the economy in the states are growing and accelerating. that has anchored markets right now. has been thehat prevailing sentiment the last few days as we head toward the second quarter. it would be good for 2018, but looking into 2019, not so much, possibly coming off. looking ahead, 20% for the s&p is what is expected let us. go into a deep dive here. what are you looking for is a

stand out against the backdrop of what is happening with the trade tensions? anthony: like you said, the earnings story has been the bright spot for markets. in the first quarter, we had eps companiesm s&p 500 about 5%, but it hasn't really moved a lot due to the trade tensions. if you look to second-quarter earnings starting on friday with the financials, we are expecting another 20% like you mentioned. companies tend to outperform earnings expectations, so we could see 23%-20 4% on i growth. when you look at sectors like technology, consumer discretionary, energy and materials, they have the most earnings growth. we think that is where the opportunities are. being procyclical still makes sense in this environment. ramy: i would like to show you as well as our viewers the

positivity, the bullishness in terms of earnings confidence. you can find this in the gtb library, this is the upward guidance and the ratio against the downward guidance. we can see that it is really at 2000, atst since least. gtv library. anthony: prices tend to track earnings growth, and we have seen an acceleration in earnings growth, across the globe. it keeping it in the united states, the u.s. has less to lose from a trade war, at least initially. with china, exporting $500 billion last year to the u.s. but on the importing $100 billion, the u.s. has a bit more leverage to negotiate and put more pressure on china. i think as we get further out

and see the $200 billion in tariffs announced actually get to theplace, the risk global economy increases. you can see global growth slowed, global supply chains start to react negatively, and you can see earnings start to decelerate. i think that is the risk for the market, which is why i think you are seeing equity markets kind of trade along as we face these trade wars. aul: anthony, we have only bit of time remaining, but i wanted to get your thoughts on brexit. that is becoming more difficult by the day. may canhink theresa survive this? anthony: i think jamie dimon said it best, there is a lot of uncertainty for brexit, and for the economy and the markets. when you look at the u.k. and of the eu, they have the most to lose. united kingdom trades 50% with the eu, so brexit and having a

good trade agreement with the eu is highly important. i think at this stage in the lose you will not see may her position, but she has a hard and difficult task in front of her. she has to balance the conservative party which wants more independence from the u.k., while also trying to come to a trade agreement and customs agreement with the eu, which is a difficult task for her. paul: all right, we will have to leave it there. thank you so much for joining us, ameriprise financial local markets strategist of error. the next do not miss interview with have with mark may be us, he will be joining bloomberg markets at 1 p.m. sydney time, 11:00 a.m. if you are watching in hong kong. this is bloomberg. ♪ ♪

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paul: that is get a quick check of the latest business flash headlines. giantestment from singapore says global threats are moderating, and they reduce.rowth to they have spent almost $100 billion over the past five years, and the value of its yearolio rose 12% in the through to march. the second straight annual record. >> the measures we have seen so far are still pretty small in terms of the actual implementation of tariffs. but what has been worrying is the escalation of the rhetoric to very large numbers, in terms of the number of products being tariffs. but also, the inclusion of other trading partners like europe and canada. that is a source of significant concern and is part of the reason for us to temper our pace in investment. ramy: blackstone is said to be nearing a close of $3 billion fund.s third energy

we are that energy partners three will start investing soon, targeting about 4.5 billion, the same as it 2015 predecessor. they reached a record $449 billion in all their assets under trading. more to come. this is bloomberg. ♪ retail.

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paul: 8:30 a.m. in sydney and eight degrees on another perfect blue sky winters day. markets opening in just 90 minutes, futures looking bright, pointing upwards .25%. i am paul allen in sydney. ramy: and i am ramy inocencio in new york, just past 6:30 p.m. let's get the first word news with jessica summers. jessica: the yen strengthened on reports that president trump is preparing tough new tariffs on china that could be worth up to $200 billion and a list of targets may be released any moment. that would ratchet up tensions

between the two biggest economies. financial markets have shrugged off the initial tariffs. u.s. stocks have been up since friday's position. tesla is to build a new factory in shanghai, its first plant outside the u.s. making it the first automaker in china. tesla says construction will begin soon. it is aiming for production of .5 million cars annually. shanghai authorities say the plant will be the biggest foreign investment in the city. >> the biggest question right now for investors, bulls and bears alike, is how they are going to pay for it. i think you will see something similar to nevada with a partner like panasonic. i am not saying panasonic will be the partner, but you will see someone. those details will be announced over the next months. jessica: two contenders have emerged in the race to succeed morgan stanley tj gorman.

candidate will become head of international operations. gorman has been shuffling senior executives to groom his successor, although he has indicated he plans to stay on for several years. france will meet either england or croatia in sunday's world cup final after defeating belgium in st. petersburg. the 1998 champions held off a fast start from the red devils to gain the upper hand. one defender had his only goal of the game in the 51st minute. tomorrow, croatia will play for a chance for their first ever world cup final as they meet in 1966 champions, england. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. thanks very much, jessica. let's get a quick update on

markets. trading in new zealand underway for half an hour, just turned a little negative. the kiwi dollar also slightly lower. futures higher by .25%. it aussie dollar looks like may be hitting $.74 again sometime soon. u.s. futures did move on the announcement a couple hours ago that president trump will be releasing a list of a further $200 billion worth of chinese goods to face tariffs. the s&p closing higher for a fourth day, the best streak since june. that looks like being broken if the futures are anything to go by. the nasdaq is hanging on in positive territory. let's get more on what we should be watching as trading gets underway in asia. we have bloomberg's global markets editor adam haigh. we did manage to avoid trade war headlines for a few days. back front and center again. what is the prognosis on asian

markets wednesday morning? adam: not a great set up. you are talking about the move in u.s. futures. the move has been quite pronounced. it is the end of the u.s. trading day, so the cash market has closed. the first reaction was in the st why etf and s&p 500. very liquid security dropped off significantly as you can see in the chart. you saw that followthrough. treasury yields came off the yen strength. a typical risk off move that you would associate with a clear stepping up of this trade war. of course, this is just a report and we need to see what is specifically in the list. it is very clear that markets are reacting in a way that suggests there will be more pain ahead. the question is how deep that gets. we have heard from a number of investors that have been diving back risks, positioning for further tension and escalation between the u.s. and china.

the question is on the back of this report, how much of that do we get through today if this list and details comes out by the close of business at midnight tonight? or does it drag out for another 12 or 24 hours? a couple of days without any trade word headlines, people were looking to get to an earnings season wrapping up at the end of the week. trade tensions are back on today, largely risk off moves, stronger yen. treasuries will perform well and equities will be under pressure. ramy: earnings season gets underway at the end of this week. there seems to be a mixed picture depending on which data you look at. what is this really telling us here? adam: this is quite fascinating. remember the u.s. earnings season is baiting a lot of strong expectations. we are looking for a 20% year on year growth in earnings. if you look at one set of information, which looks at outlooks from companies and

upgrades relative to downgrades, you see that the upward guidance is outpacing the downward guidance. so there is a sense of confidence there in the fact that companies are still able to push on those earnings numbers, given all the worries around some of the pockets of weakness in the global economy. on the other hand, in another which weanother chart can show you, this is the citigroup provisions index. this shows an opposite picture in the sense that people are downgrading their global profit forecast. it is clear there is a little dichotomy here and a lot is to do with what companies will say in their outlook sections of the statements over the next few weeks. that is going to be key for investors, to try and get a sense of how things are stacking up not just in the trade tensions side of things but in

some other pockets of the underlying economy, which might tell us something about where we are in this cycle. continue to hear from people that we are getting toward the back end of the cycle. but we don't know how long that goes. the economy in the u.s. seems pretty robust. the fed things that is robust enough to keep hiking rates at a decent pace. it is a mixed earnings picture, but we have to wait until the back end of this week before we hear from the big companies. paul: bloomberg's global markets editor, adam haigh, thanks for joining us. if you want a closer look at some of the charts, you can check them out in the gtv library on the bloomberg terminal. $22 billion australian pension fund is back in the trend of building in-house investment teams. it is choosing external investment instead. let's get more from brett foley. this move must come as good news for asset managers.

brett: yes, it does. it brought a cap in their step. they are backing the trend. they are a $30 billion pension fund -- australian dollars, so quite large. they decided to keep their investment management external, continued use external fund managers. the trend, which you alluded to earlier, is for bigger fonts. they decided to start hiring their own teams in a bit to increase the control they have over their investment and autos to reduce fees. that has been the trends in some of the bigger funds. australian super is $140 billion australian, so when it moves its investments in-house, that is a big blow to fund managers who do not get to manage those investments anymore. four host plus, they have decided they can get some of the benefits of the fee reduction by

not having to hire their own teams. they are going to continue to keep management external. that is a bit of a bright spot for fund managers who are losing some other mandates. paul: you mentioned it is a bit of a blow. how are the fund managers of australia coping with the changing playing field? brett: it is a big shift, as you say. the simple answer is concentrating on performance. they need to make sure their investment performance is solid and they can show these pension funds they can keep return five. the other thing they can do is reduce these -- fees. we are starting to see that come through. post plus said to us that have had offers of fee reductions from some fund managers who have lost mandates from some of these bigger firms who all of a sudden have capacity available, offering to charge less for their advice.

that is a bit of a trend across the industry, pressure on fees from investors and asset owners is pretty constant. you have seen that start to flow through already. those are the things they can do to keep the business and those are things they are examining. ramy: what about the pension funds themselves? any headwinds there? brett: yeah, there are. it is an interesting one for them. it is not just the investment performance of the fund managers. these big pension funds have to have high returns for their members. they are out there trying to get the best return they can. there are also some headwinds from the regulatory side. the rural commission in australia at the moment have in inquiry into the financial services system and it is about to start looking at the pension fund industry or superannuation industry. it is going to start to look at the performance of some funds that have not been doing well

and have been not returning good returns for members. you might see that start to play out over the next month as these hearings begin. you are going to start to see underperforming pension funds being put under the microscope. the investment market will watch closely. ramy: bloomberg's australian deals reporter, brett foley. thank you. let's switch gears and head into the central bank world. many asian currencies have been pounded in the wake of fed tightening. malaysia's central bank is finding calm amid the storm. bloomberg's global economic and policy editor kathleen hays is a look at what is expected from bank negara later today. expecting a dovish stance. why? sec. tillerson: a number of reasons -- kathleen: a number of reasons. they have a new central bank chief, a woman. she was the deputy governor of the malaysian central bank. the story from the bloomberg

team in malaysia is she has an easier road than a lot of her peers. in the emerging markets selloff, we have seen indonesia and the philippines boost rates to support currency. but the malaysian ringgit has been better. high oil prices are boosting inflows into malaysia, helping the current account surplus get stronger. they are getting rid of a consumption tax, which will also hold down inflation. everybody saying they don't need to hike rates. let's jump into the bloomberg library to look at this chart. 3.25. they raised a 25 basis points, first increase since 2014, in january. inflation has come back down. back to 1.8% year-over-year, but the target is 3% to 4%. so they can sit back and relax. a bloomberg survey of 19 economists, all 19 said they would keep the rate at 3.25%.

they will see what happens next. ramy: from southeast asia heading into north asia, the bank of korea meets tomorrow and we get south korea's unemployment report. what are we expecting? kathleen: some news expected to reassure the bank of korea, because they did have a job in inflation. let's go back to the bloomberg library. there were minimum wage hikes in south korea, which is one of the reasons we saw the jump to 4% year-over-year from 3.8% in the unemployment rate. even though moon pushed for higher minimum wages, companies say, i can't afford that. that may have heard jobs, the opposite of what president moon was thinking. as we look ahead to the meeting, there are other reasons for the bank of korea to feel like they can sit tight. they bring u.s.-china trade war. u.s. restrictions on korean imports could also hurt the labor market. caution for bank of korea as they go into the meeting, but maybe a little reassurance

because the unemployment rate is expected to fall back to 3.8%. paul: we have got a number of things to watch out of japan. ppi, core machine orders, a number of other things. what are you watching the most? kathleen: people consider them secondary indexes, but as japan tries to see if it is going to jump back from last quarter -- i am not sure. i like machine orders, but i put my money on producer prices. let's take a look at another very simple chart. what you see is japan producer prices year-over-year. they were pretty negative back in 2015-2016. have climbed out of the hole. not as important as the consumer price index, but you see an uptrend as the yen weakens against the dollar. machine orders, i am not so worried about them. if they are supposed to fall 4.2% in may but supposed to be up 9.7% year-over-year.

a lot of up and down in durable goods orders, machine orders. the trend is still strong. that is something that will reassure the bank of japan when they need at the end of the month. paul: global economics and policy editor kathleen hays, thanks for joining us. next, president trump said to be close to upping the ante in the china trade battle. the latest on his next terrorist targets, just ahead -- latest tariff targets. ♪

ramy: breaking news crossing the bloomberg terminal. the latest out of those reports initially from bloomberg talking about those $200 million in tariffs that donald trump is reportedly going to do. now confirmed according to officials. the u.s. has compiled $200 billion in china goods tariff list. one you senior u.s. official has

said china is not seriously negotiating on trade. that list of chinese goods is expected to post shortly. more breaking lines, senior u.s. officials are speaking on the condition of anonymity because they are not authorized -- they are saying that this list took into account the impact on u.s. consumers. this is according to at least one official, according to the lines dropping on the bloomberg terminal. a final u.s. decision on china tariffs is expected after the 30th of august. again, the top line here, the u.s. has released is $200 billion list of chinese products for possible tariffs. the ustr also saying trump ordered the process to oppose 10% tariffs on those $200 billion. a lot of breaking news. let's bring in bloomberg businessweek economic editor peter coy. a lot of stuff to get through.

you want to take a stab at it. it is official now. at least some officials are confirming this. your initial reaction? peter: they are confirming a list is being prepared, which is different from imposing the tariffs. it is like loading the ammunition into the gun but not necessarily pulling the trigger. to do this,reatened so we suspected it was coming. it is going to be interesting to see what goods are on the list. remember, the first goods you put tariffs on are the ones that will cause least harm to the u.s., but the more goods you add, the more inevitably you are hitting products that will affect ordinary americans, which will cause more of a backlash. the ustr is now saying the u.s. is willing to negotiate with china to remain vigilant. interesting they are trying to keep the door open, when it really is the u.s. really pushing china and china,

according to analysts, trying to meet the u.s. but not go overboard. peter: that is game theory for you. china comes back instantly after the u.s. does something to send a signal, look, we are not trying to escalate, but we are also not going to back down. and trump keeps hoping they will back down. -- if theyk down don't back down, it will be bad for everyone. paul: we are seeing futures sink a little bit. the s&p is interesting. it was on a good run, but now futures are pointing lower. do you think this air of complacency which has surrounded the trade war debate may be starting to show cracks? peter: if they did go ahead with $200 billion more, that would start to be real money, especially if they went with another 200 billion after that,

which has also been talked about. it would be very close to all chinese imports into the u.s. at that point. that would really matter. it is no wonder you would see some cracks in the stock market. we have also seen cracks in the chinese stock market. paul: we are seeing the price of oil rising ahead of this latest announcement. we have the husky energy ceo rob peabody. he says the energy industry is a safe harbor from the tradewinds. of course he would say that, but does he have a point? peter: oil prices have been strong, which reflects the overall strength of the global economy. we are coming into a trade war at a time of general economic strength, which is one reason that you have not seen the markets behaving more badly. you have tailwinds and headwinds fighting each other. ramy: peter, another line dropping.

the ustr has proposed tariffs including tv components and refrigerators. the prior line is saying they are taking the u.s. consumer into account. tv components, refrigerators, clearly this is something the u.s. consumer does do. i have a chart i want to show you as well as our viewers. this is in the gtv terminal library. taking a look at the rate of change in price for u.s. laundry equipment. this hit 8.4% year on year change. he is saying he does not want to do that, talking about consumers , but clearly this is an effect. peter: washing machines and solar panels were in the first round of the verily early skirmishes of what is shaping up as a trade war. that is exactly what you are seeing, the impact of higher tariffs on the price of washing machines that americans are buying. ramy: him saying he is going to be taking consumers into account

, it will be interesting to see what is on the list once it is out. peter coy, thank you. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers can go to dayb on their terminals. also available on mobile in the bloomberg anywhere app. you can customize settings to you get news on the industries and assets you care about. this is bloomberg. ♪

enough single goal was for france to get past belgium to the world cup final. france will meet either england or croatia for sunday's deciding match. terminal subscribers can keep up with the results and check out how teams are faring against colleagues, competitors, and our anchors. ramy: let's do a quick check of

the latest business flash headlines. google is expected to be hit with a multibillion euro antitrust fine later this month after the eu accused the company of harming rival browser makers. if so, a big win for the competition commissioner, who has long campaigned against google's practices. eu regulators may also require google to amend contract terms to allow samsung, huawei, and lenovo to preinstall competing apps. paul: jetblue is making a $5 million bet on airbus, ordering 60 new a220'. they are going to replace older aircraft, which jetblue currently uses on short hops. the new planes can seat up to 60 more passengers than earlier models and airbus claims the flame burns 40% less fuel. ramy: warren buffett backed the is going to lease

electric buses. it is partnering with generate capital to supply battery-powered public transport across the country at an investment cost of $200 million. despite america's slow interest in electric vehicles, the venture has already sold buses in three states to facebook and stanford university. paul: we are almost done for daybreak australia, but you are sticking around with daybreak asia. let's have a look at what is coming up. yvonne: the latest on the trade war with the u.s., now looking at $200 billion of chinese goods to slap tariffs on. we have been talking about whether the markets are pricing this end. also coming at a time when the president just arrived in brussels for the latest nato meeting. likely to be a chilly reception given what we have been hearing. heather conley will be joining

us to talk more about that. paul: plenty of breaking news to be getting across this morning. that's it for daybreak australia. all the action coming up next. this is bloomberg. ♪

yvonne: 7:00 a.m. in hong kong. we are live from bloomberg's asia headquarters. i'm yvonne man. welcome to daybreak asia. the yen climbed as president trump prepares new tariffs on china. they involve 10% duties on $200 billion of products. beijing has already vowed to retaliate dollar for dollar. critics say the escalating trade were could threaten global growth. ramy: from bloomberg's global headquarters, i'm ramy inocencio in new york, where it is just past 7:00 p.m. singapore's investment giant is turning cautious after years of spending. thomas it sees global growth slowing down. renewed tension in nato.

washington says membersh