>> it is 7:00 a.m. in hong kong and we are in bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." asian futures point to a weaker open after tech the retreat in new york. the nasdaq saw its biggest loss since march. netflix really leading the way as the mega cap stumbled 3%. the groups lost 9% since facebook reported. bloomberg's global

headquarters, i am ramy inocencio in new york. global bond yields rise as markets await the bank of japan. policymakers will adjust their language. oil jumps the most in a month on worries about global supplies. west texas broke that through $70. yvonne: watching a lot of key data as well. numbers forff with the month of june. slightly better than expected when it comes to the month on month members, but we are in contraction mode, down .6%. this is off of the 1.1% print we saw in may, but those have been revised rightly higher. we are actually missing the mark, down .4%. economists were expecting something more towards the positive side. we have seen some resilience when it comes to exports this month.

we saw a bit of a rebound. really, front and center is going to be the boj. ramy: that is one of the team in stories we have been covering. areerday into today, we waiting to see if there is any possible policy tweaks. before we go further, let's get a reminder of where we ended the u.s. trading session on this monday here. pretty much down. the nasdaq down one point 4%. that really is in large part because of the faangs. that was the worst three-day fall in the past month and it was not just technology shares but also industrials. consumers discretionary. let's flip up the board then show you what's been happening in terms of commodities. spot, 11.70g dollar two. it was down by .2% today. today's down in a row. -- two days down in a row.

brent crudewhere did close in the u.s. trading session, iran. yvonne: not -- yvonne. yvonne: not the best setup for asia. let's see how equities are playing out. we are seeing weakness in wellington, down .1% today, but futures are lackluster at the start. we are holding our horses until we see some movement throughout the session and what the boj does decide. currencies, dollar-yen this.ating around we have seen short positions increased when it comes to the speculators for yen. aussie as well as the kiwi, pretty much flat right now, and we continue to watch the six .82 asnminbi at well. yields of course will be the big story of the day. we continue to see yields picking up higher in the bond

market in anticipation of some type of tweaks to the boj. can we flip the boards? we see the u.s. 10 year yield up. yieldapanese 10 year jgb at 10 basis points after once again the boj stepped in with its operation to put a cap on that yield movement. of course, that leads to more speculation that they are not that interested at this moment in really raising the tenure target. ramy: we will see ahead to that. let's take a look at what happened further in detail in the u.s. market because this has continued into this new week. analysts are saying it may be time to short the fang stocks -- faang stocks. has this run its course? >> the big story for the u.s. side has been the selloff in

these tech stocks. keep in mind the new york nyse 10%. index down basically, the shares getting sold off and several analysts starting to pile on. bank of america merrill lynch saying short these names. facebook, apple, amazon, netflix, and health about as well. i also want to turn your attention to the the etf -- the it. the etf that tracks we saw $1.4 billion in net outflows. keep in mind that was during the overall equity etf thought net inflows, so definitely a big change in sentiment with a lot of folks deciding that maybe they want to be out of the tech names for now given some of the issues that have popped up. omaine, right, and r

i will jump in. caterpillar delivering a fairly bullish earnings guidance. thereis high watermark -- is the morning sign. -- warning sign. was that premature? romaine: the high watermark comment they made was when they reported earnings of $2.82 per share. the most recent quarter, to -- the shares rallied but started afternoon because of concerns about the cost related to the tariffs around palatal are saying $200 coston in additional -- related to the tariffs. caterpillar is saying $200 in additional spending. so event today as well, though they are still doing well both on the top line and bottom goin there is concern going forward.

-- going forward. waste: it has been a tiny management company. romaine: the name is avalon holdings. if you have been on finance order, it has been all of the talk. this stock was trading at two dollars per share and how to market cap of less than $10 million, and last week, it mysteriously began rising and we got a filing late friday. a company called mint broecker international took a 60% stake in the companies shares. the company responded to this late on monday and basically said it has no idea who the investor is and that nothing material has changed about the companies business that would warrant this type of share move. the shares. at $20 per share on friday and they are back down to six dollars today. though, triple where they were before all of this happened. there is no real comment on what

the value of this company should certainly made for entertaining conversation over the past couple of days. ramy: all right. romaine bostick, thank you very much. we have something to alert you now crossing the bloomberg terminal. north korea is working on new missiles according to spy agencies and being reported by the washington post. , it says usersry agencies are seeing signs that newh korea's constructing missiles at a factory on the outskirts of pyongyang according to evidence including satellite photos taken in just the past few weeks. one or twopossibly liquid fueled icbm's at a large research facility. this is just weeks after president donald trump said that pyongyang and north korea is no longer a nuclear threat, but apparently, according to this report, it implies otherwise.

we will get more news on this as we get it, but according to the washington post report, u.s. spy agencies are seeing signs of north korea conducting -- constructing new missiles at a factory. yvonne: after the honeymoon period with the singapore summit, things are getting more real. we are watching the north korea side and cathay pacific. reports coming out from the south china morning post saying that internal memos -- they could be leading to more cuts in overseas jobs, according to that internal memo telling staff to ,repare for this restructuring 600we have cut about jobs in the last year or so. it is a struggling time when it comes to the airline to bring the company back into profitability. it looks to be set for as many as 100 bases outside of hong kong that will be affected as it looks to compensate for two

years of back-to-back losses. we will continue to follow the lighter cathay pacific. jessica summers joins us from new york. hey. jessica: commerce secretary wilbur ross says negotiations with mexico are going well and may be close to wrapping up. he has wasted no time appointing a new trade team before he takes office in december. president trump indicated he may pursue a bilateral deal with mexico before separate negotiations with canada. terman who popularized the new normal size the u.s. is the first economy to shrug off the postcrisis malaise. says the u.s.an is alone and finding higher growth momentum. coined the term new normal in 2009 as a way to describe them your outlook for more regulation.

departmenteasury says government borrowing in the second half will jump to the most since the financial crisis as the nation's fiscal health worsens despite a strengthening economy. it expects to issue $329 billion in net marketable debt from july to september, the fourth-largest total for that period on record. president trump he would be willing to meet iran with no preconditions in much the same way he surprised at the world with his decision to talk to north korea. he told reporters that when dealing with critical issues. there is nothing wrong with meeting. one possible opportunity would be at the annual u.n. general assembly in late september, which president rouhani offense. pres. trump: anytime they want, anytime they want. it is good for the country, good for us,, good

good for the world. no preconditions. if they want to meet, i will meet. jessica: on air 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. thank you. the bank of japan wrapped up its two-day meeting on tuesday with speculation on small but potentially significant tweaks to policy which may be in the works. let's get to kathleen hays who joins us from outside the boj in tokyo at this morning. good to see you. like all the economists we talked to say any kind of talk like this is still premature. why would governor kuroda want to make any change now? there is a number of reasons why the bank of japan could be discussing this. as we speak, right behind me, the building where they are deliberating, governor kuroda will face the press in tokyo and around the world, essentially,

to explain what they have or have not done. whatever they do to talk about the speculation that for several reasons they are ready to get what may be a technical tweaks. that is how they will want to portray this if they make the move. it will resonate in global bond markets. as july 20, the jgb, 10-year closed 0.03%. when the boj came in whe with is third operation, it was all what is.11, so this is going on. traders had been keeping it as the boj said, right over zero. weekspport started 1.5 ago. they had been testing, testing, testing around 0.10%. they don't want to get any higher than that. why would they consider it now? inflation. they will have to cut their forecast. it is running at 0.8. monetaryve to keep

stimulus aggressively in place, it has to be something you can't sustain, so if you keep buying bonds, maybe you need to tweak it a little bit. here is another important point. just over zero- at the long end, hurting regional banks. they might want to provide steepening in the curve to help the entities. they have already pulled back on the number of bonds they have been purchasing because they have not had to buy as many to keep the yields just over zero. this would be perhaps a bit of fine tuning. one thing i think everyone thinks is not premature is making the switch in etf purchases.

there's a lot of people looking forward to today. i do not know what's going on, but it seems to me they need to make sure that the policy is sustainable, and he did say that they make a technical change that would allow a bit broader trading range in the 10 year jgb yield. here is what he told us yesterday at our bloomberg headquarters in tokyo. to expand theis range on both sides. means to make -- to increase the market growth. sophie: kathleen: -- kathleen: of course, what is one of the concerns? tweaksy technical could strengthen it.

it makes it harder to boost the inflation rate. japanese 10 year jgb, the yield will not rise any higher than the boj lets it, but global bond yields, we are already seeing steeper curve and longer maturities rising lower in price. this could send a signal. it will be seen as a move that means something from the boj. ramy: kathleen hays looking ahead to that boj decision. still ahead, the outlook for real estate in china as trade tensions pose rising uncertainty. ronnie chan. yvonne: markets brace for a week decision. we talk strategy with jpmorgan asset management and what to expect out of the boj. this is bloomberg. ♪ this is bloomberg. ♪

ramy: welcome back. this is "daybreak asia." i am ramy inocencio in new york.

yvonne: i am yvonne man in hong kong. the bank of japan wraps up its meeting on tuesday. given the widespread speculation about its plan, the biggest risk perhaps may be that it does absolutely nothing. let's bring in jpmorgan asset management global markets strategist who joins us from melbourne this morning. it seems like, according to our strategists in bloomberg that the matter what the outcome is, markets are going to move. how are you positioned ahead of this meeting? >> good morning. not to differently than normal. -- too differently than normal. one yards have already moved in the last few days to account for that. i think you would have to see something quite dramatic to see the surge above 3% meaningfully after this. it does not go away from the fact that we are seeing that shift towards tighter monetary policy around the world and this is just reinforcing it. the biggest challenge is how they communicate any change

given sustainability of the qe program. theye: the fact that conducted these fixed rate operations three times now over the last couple weeks seems to suggest they are willing to cap these yields at 0.1% at the moment. the response has been still steeper yield curves. do you think that is going -- kind of an operation that is short-lived or perhaps that we are at their value? think the boj is going to probably introduce some flexibility into their target, whether they explicitly say so or not. it is the same they have done with their bond buying program. they still say they are doing it, so they are being a little bit more behind-the-scenes in how they are doing it. biggest question is how much it could rise. we have seen the international support, keeping a cap on yields. for the biggest spread is if we see perhaps a bit more attractiveness in the market if

they are stuck with the domestic market instead of looking towards the u.s. or elsewhere. that would play through into saying we may be a bit more out of steeper yield curve in the u.s. and maybe some of the bank stocks a little more. that's not really our best case. we will see the yield curve flattening overall, some we do think about maybe some of this rotation. relatively short-lived value. ramy: one of the options here that we are talking about is the reallocation of investments from things based in the nikkei towards the topics here -- topix here. what my investors want to be aware of? kerry: i think there has been a lot of cases of looking at the governance situation in japanese companies. they introduced that we will buy the company's. have the code of conduct. been trying to change the way japanese companies operate to get more cash flowing

into the system so there is a case for looking at the corporate governance of individual companies, how they might end of it -- how they might benefit from these. the second thing to think about is correlation with the yen between the u.s. dollar and how the market behaves has broken down. if we think about which companies will be more beneficial from a weaker yen or currency movement, again, another play that way. thene: you mentioned about yen, we have a chart here that kind of shows what the short positions are when it comes to some of these leveraged firms. relativelyke, speaking, it is still a net short, the highest since february that we have seen when it comes to yen at the moment. -- youthink the kuroda mentioned the communications side of things. is he able to deliver a tweet and policy without disrupting the yen and further upside? kerry: i think it would be very difficult for him to do so

without disrupting the yen in the very near term. i think where it really matters man announced has not fired. it signals that it is not just monetary policy. you need to really kickstart the economy. you need the fiscal stimulus to come through as well. surprised to see some kind of comment around that. that goes towards seeing more growth and inflation come through that way. you see that perhaps fiscal stimulus -- i would not think about the yen going a lot higher in the near term. we still expect the currency not to surge higher. yvonne: we saw a tough day for tech stocks today. faang trade this could materialize in asia? kerry: you have seen that sort of technology company around the world from the selloff that began last week. it's also worth remembering there was only one or two

companies that triggered this thing. very high valuation. does not take much for an investor to start to move away from it if they think the earnings growth might not be delivered. it has been big debate as whether there will be rotation in growth. we have seen value outperform certain pockets, but being very short-lived. for us, it is still very good. we see growth coming back over the second half of this year and tilt towards the risk assets with growth stocks to deliver in that environment until you see that steepening in the yield curve. that is something that becomes harder to think about, especially around the banks. kerry craig, jpmorgan asset management global markets strategist, joining us there. you can get around up of the stories you need to know in today's edition of daybreak. just go to dayb on your terminals. it's also available on your

mobile to bloomberg anywhere app. make sure to check it out. this is bloomberg. ♪ ♪

yvonne: a quick check of the latest business flash headlines. reports from hong kong's a cathay pacific may cut jobs. the latest attempt to get back to profit. the morning post says the carrier is discussing the consolidation overseas sales. they have more than 7.5 thousand workers employed in about 100 locations away from hong kong. ramy: nissan says it will decide on a new plant in china as it pursues its goal of expanding sales by one million units by 2022. the ceo says the first step would be to add capacity and the sons existing operation before any decision is made. in separate, it said it plans to spend $9 billion over five years to become the biggest global maker of electric cars in china.

just ahead, caterpillar bulldozed earnings estimates, but investors are still jittery. out how that can affect is machinery stocks ahead of the market open. this is bloomberg area ♪ -- this is bloomberg. ♪

ramy: all right. so you're looking right now at the u.s. and japanese spot yen. we are also getting breaking news on the bloomberg terminal here. taking a look at the jobless rate as well as the job applicant ratio just breaking. 2.4% is the jobless rate. this is against an estimated 2.3% against a prior to .2%. we are seeing the jobless -- prior to .2%. -- 2.2%. it is coming in higher to the consensus of 1.6 percent. slightly higher for the jobless

rate of 2.4%. let's get the first word news with jessica summers. jessica: thanks. of cryptocurrency focus galaxy digital makes its debut in toronto. the former partner says he eventually wants to list in hong kong, frankfurt, and london. it will trade virtual currencies , invest in related companies, and at as a merchant bank for the crypto communities. that therustrating equity markets here are soft and the crypto markets are softer. the job is stunningly exciting. the banking assignments that we are looking at and the companies we are talking to you are doing unbelievably creative things. yvonne: that it's galaxy -- jessica: that is the founder. of bloombergmpany news owns and operates the

crypto index and partnership with galaxy digital. talks ton fund ended invest in real estate tech startup. he started a company with his brother and a classmate. he kept mistake despite shedding other assets when he became a senior white house adviser. his role as a beneficiary with softbank posed potential conflicts of interest. nyse is said to have fired a dozen employees at the chicago exchange after acquiring business this month. the ceo was among those who have left. the shot clock go exchange tried to -- chicago exchange tried to sell itself. it was rejected by regulators. the exchange handles less than 1% of u.s. equity trading. remain a ceo will for the time being, well outside

counsel outside investigates sexual harassment. the board delayed a decision on the company veteran. several women say they were physically intimidated and their careers suffered when they refuted advances. the article goes on to describe a culture of harassment at cbs. news, 24 hours a day, on air and@tictoc tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. you.e: thank let's get more on what we should be watching as trading gets underway in asia. our bloomberg markets like strategist garfield reynolds joins us from sydney. trade fractions remain at -- frictions remain a concern. are heading for their steepest two-month slide in two years. are there any signs of a turnaround at this point? commodities are the

canary in the coal mine that nobody is listening to at the moment. some of the brighter and louder birds are overwhelming their song. they have continued to look pretty weak. i can show a chart you. they are desperately trying to form a trough at the moment, maybe see if we can get a turnaround. you can see metals have been weak. that feeds into the concerns of growth in china, tied to trade tensions. globally, the concern about trade if you are going to have fewer orders being solved. that reduces demand, so while there has not been any good news on the trade front, they're just has not been any news. all of that is still in play. -- ave also got some couple of commodities in particular that are looking week. usually getswhich

a boost this time of year. we have another chart to show you about how that is tightly tied into china. there are specific reasons there. and it'soming down mostly a demand situation. possibly a little bit distorted by one of the more bizarre things i have come across, which is reportedly stockpiled in northern chinese ports which have been spontaneously catching fire. companies are saying we need to sell this before it hurts burning. it may be once the call has been solved or has burned away, that might send a recovery for coal. the wider complex, things are not looking that great. >> that's really interesting. the bank of japan, we are waiting for its latest announcement in the policy decision. for the first time in a long time, there is a lot of buzz leading into the market. how might we expect markets to react? i mean, the bank of

japan is in the situation where it really cannot go on doing the same thing and getting the same result, which has not been inflation that meets its target. short of bonds to buy, and it is also seeing the stock market lose momentum. we have got a chart to show you on the gtv library about the growth in the bank of japan's assets and the growth in the stock market. if you concentrate tightly on the white line, for the boj's inets, that is tapering off the same thing is happening with the stock market. out of that, you have got a situation where the boj -- you cannot expand using anymore. if they doed up move, you can expect to see some yen strength and also a drop in bonds. you can definitely expect to see

some gains in japanese stocks, especially banking stocks, a burdent has become for them, what the boj has been doing. it might the of bit confusing because if they tweak their etf purchases between the nikkei and the topix, you can have some stocks falling, some stocks rising, as they look to get ahead of this change. ramy: garfield reynolds, thank you very much. don't forget of course to check our gtv library for some of the chart you saw on gtv on your bloomberg terminal. all right, the next couple hours will bring us another check on the health of china's economy with the latest official manufacturing pmi numbers. tom mackenzie is watching this in beijing. what can we expect here? broadly, the forecast is for marginal softness in these numbers, so we are looking at july of course. in terms of the manufacturing pmi, we are going to get 51 .3

from 51.5 in june. in terms of nonmanufacturing, we 54.9, just to down a smidgen from 55, the number we got in june, so just a gradual edging down in these pmi numbers. indicatorsbe early that suggested we are going to get a bit more softness in the second half of the year here in china. we have the sales managers index coming in a bit lower. for the month. major tradinge partners coming in softer. the metals prices darted relatively strong in the start of july and have softened up as well. prices and coal prices, of course. in terms of the south korean export picture, which is a bellwether, that was a surprise to the upside. that could suggest that maybe

the numbers are coming in more positive. south korean positives up my percent for the month. the economists seem to think that the deleveraging campaign took its toll on the saddle banking -- shadow banking sector. of course, it caused trade tensions with the u.s. for the first $34 billion worth of tariffs. they are going to take their toll. we will get the official print at around 9:00 a.m. hong kong time. any slowdown, we have seen quite a bit of easing numbers when it comes to tax cuts and whatnot. is that likely able to put more cushion here on some of these numbers in the second half? potentially forward to the month of july, the fiscal measures that have been outlined in the last few weeks or so, they are unlikely to provide much support. in the second half, there is a view that these measures that are going tolined ensure that they will meet this

growth target for the full year of about 6.5%. all those things come into play. are looking potentially in the second half with another cut for the rrr rate for china's banks. we will get the official pmi at nine. we will the private survey tomorrow that will round out the picture or chinese manufacturing sector as this continues to lined on. -- grind on. yvonne: tom mackenzie, joining us from beijing. breaking earnings to tell you about. the samsung second quarterfinal numbers coming through for the company and operating profit coming in at 14.8 trillion won. and in linected with what we saw a couple weeks ago in their preliminary numbers. that was a miss in the second quarter sales. pretty similar to what we saw in the preliminary numbers.

that was also a mess. a lot of speculation was that it was due to these prices of smartphones that continue to see declines. lcd panels. we will see the breakdown sector by sector. we still have not got that detail yet. we will get you some color as to what we do see in this resilience for prices as well. we certainly saw that and heard that from sk hynix, when they reported earnings in the second quarter, which did beat estimates. we continue to watch those lines coming through from samsung. caterpillar is another one to watch for the earnings side. showing resilience to rising trade tensions by beating earnings and raising their forecast. investors remain wary and shares fell on monday. what the highlights were for this quarter? demand.itely the robust

no doubt about that. there was the head of investors relations. that is definitely showing a lot of robustness for the big yellow dump trucks and diggers. generally, it is backing up what we heard with them days ago. a lot is happening in the mining industry. read through for them as a bellwether stock to what is going on in the commodities specs. yvonne: is there still worry about the impact of tariffs, too? matthew: there is no doubt there is worth. we noticed the shares did have a earningsup on their outlook. they did raise their forecast a

touch. investors are getting worried as well because they did mention impacts from the trump administration still tariffs -- steel tariffs are going to be hitting and they will be passing them off with a $200 million impact. caterpillar is not alone in this fight either. we heard from conoco phillips last week. they are seeing a fairly significant increase in their cost for steel. ity are adding another -- will cost them another $40 million for their pipeline to the basin as well. it's across the board, the impact of the tariffs, especially for u.s. companies. ramy: as for other asian stocks, what should we be watching post earnings? matthew: you certainly need to be watching komatsu and he taught she. -- hitachi. we are expecting that. the frontrtainly in

of investors minds, whether they can undercut caterpillar for their machinery given they have to pass on those costs to the customers. what we are going to be looking at in australia is the impact in seven group holdings. that is a dealer for caterpillar. they report results on august 22. that will have to pass on this costs as well. looking at rio tinto bhp, fortescue metals, with their machinery which will be coming on hopefully in the next not-too-distant future. they have got dealerships in china as well. betty: our asian equities report in sydney, thank you very much. we will assess the outlook for property in china and hong kong. our exclusive interview with ronnie chan is next.

this is bloomberg. ♪

ramy: welcome back. this is "daybreak asia." i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. mainly due to declining property sales. 59%. down with -- let us break this down with ronnie chan. always great to see you. let's talk about this drop in property sales. are you disappointed? how are you reading what we saw in the first half? ronnie: not at all. a is transitioning from being property investment and property sales company to become basically property investment company. yvonne: what does it tell you about the property demand in

hong kong at the moment? i think starting to slow down or could things revive in the second half? ronnie: in the long run, there is always a shortage of land. yvonne: you're are talking about selling properties. you mentioned some of the inventories you still have. 13 units, 12 of which are in happy valley, of course. what is the strategy to sell down those units? they have been taken for some time now. ronnie: yes and no. sell itbeen trying to consistently. the problem is it is rough. hong kong dollar has popped. there's not many buyers. whenever we can find one, we are very happy to sell them. we sold three in the last six months. yvonne: what is the strategy now? we are coming about a vacancy tax that could be coming through here. are you planning to speed up sales of your inventory? ronnie: it is not possible for

us to speed up. it's just finding the right i out there is willing to come up with a couple hundred million dollars each house. yvonne: where are the buyers now? ronnie: for all the ones we have from they one is mainland. the rest are from hong kong. hong kong people are still very wealthy. ramy: you mentioned a land shortage issue here. you talked to carry long saying yous a reclamation that think this will be the way to solve this. more detail on this? yvonne: a lot of people in hong kong-ronnie: a lot of people in hong kong did not want reclamation. i am against that, to. it's a natural asset of hong kong. there are many other parts of hong kong were reclamation would

not destroy the scenery or the view of hong kong. without doing that, i do not see too many other ways to supply enough land area the only one is to sell 1% or 2% perhaps of that. at roughly 40% of the total landmass. take 1% or 2% in the right places. it's very reasonable i think. yvonne: breaking lines coming through. earnings with samsung that we got for the second quarter. the second net income also missing estimates. 10.9 8 trillion won. -- 10.9 trillion won. theaw profit also a miss in second quarter as we are talking about the decline in smartphone prices and a lot of concern about the sustainability of the super cycle we have seen in chip prices as well. we will have more analysis a little bit later on. ramy: more breaking news across the bloomberg terminal. japanese industrial production

came out. iss month on month. the expectation by a survey was -0.3%.miss of asterisk industrial production year on year, that -1%, but the survey was for 0.6%, yvonne. yvonne: let's bring it back to ronnie chan. anti-semitic for waiting as we talk about hanlon's earnings. home prices continue to rise in hong kong. you have full a number of units with margin that 55%. did that's for you to reinvest more capital in the hong kong residential market? ronnie: it has been the case for the last several years. emphasis is very much in lease inl property for the mainland of china. hong kong is a great market, but there are strong players here. prefer to be in mainland china for property for

rent. yvonne: you talked about ricoh we can performance. that has improved in the first half. lower-tierlook at cities and they struggle. how do you see that improving? ronnie: it is just a matter of time. there has been anticorruption and so forth of the government. the situation has definitely turned. the atmosphere is a lot better. retail is up, in particular luxury retail, which we prefer. it's a very strong leap. in shanghai, it's been up anywhere from 13% to 26%, so that is really moving in the right direction. for in fashion brands are moving back into china. the grandhem in gateway and shanghai. yvonne: some analysts have said if you ship out the impact in the low single digits in china, how much further renminbi

weakness are you factoring in? are you surprised by the move we have seen? the rmb can move anywhere -- ronnie: the rmb can move anywhere. it fell 9%. that's in the second half. you expect to me why. if we were to run our company according to where the rmb is, we would be all over the place. i think the rmb, in spite of that, it's really the underlying business that is important. rentalerlying investment property in mainland china for commercial property is very good. yvonne: even in the midst of a trade war, you think? ronnie: the trade war is a two-edged sword. if it is only between the u.s. and china, i do not worry that much. trade is a very rational thing. there is a lot of room to negotiate for tariffs. stuff,as the nontariff who knows what they are. in the end, china may be ahead tariffs -- and they may

be happy to give and make donald trump look good. but what about the nontariff? who knows? i think the trade war, if it is just between the u.s. and china, it's manageable. what i do worry about is donald trump is picking on everybody. mexico, europe, and so forth. when that happens, it can disrupt the supply chain in the world, and that is dangerous. it reminds me of 1920's. that is how the great depression came about. so i think that it's important that donald trump knows how to stop and not just pick on everybody. goingdo you think this is to continue to the midterm elections here in terms of election posturing? do you think there might be push and pull to a real agreement? first of all, i do not think donald trump wanted an agreement. all he cared was that after the midterm election, his own reelection two years down the road.

i am not sure if america is really serious in negotiating a trade deal. there is so much domestic politics getting in the way. the rest of the world suffers because of domestic policies. ramy: you would not think of slowing down your investment in china? ronnie: not at all. we are going full steam ahead. long-haul, chinese investment property will be very good for commercial properties, and we will go ahead. yvonne: what about when it comes to land bids in the mainland? do you tend to put in more bids? ronnie: we bought a huge piece of hang jo. it's one of the top cities. , not a two-tier city. you see the chinese rivals of years getting less access to credit. do you think that this is a turning point for you guys to maybe double down perhaps?

ronnie: we never left. we have always been marching forward. it's just that it takes time for us to find the right deal, and so, the last time we bought was what? 2013? it took so long from the find the right thing. it's really worth it because in the long haul, you can design it right, build it right, and you will have a big market ahead of you. yvonne: talking about the second half, biggest risk for you for the industry, what is it? ronnie: the second half also be very good. i think we may even improve a little bit as there is definitely that possibility. terms of risk, as i said, trade is not necessarily the main thing. in beijing is important as always. let's hope they don't make any serious mistakes. so far, so good. i think that not just for the next six months, but for the next three years, i think the retail market in china will be very good. yvonne: in terms of yields, when it comes to the retail market in

china, they are not the same as before. i guess that is almost cut in half now. do you see any kind of upside in the opportunity? ronnie: not really. in shanghai, in the top tier cities, return is fantastic. and the other cities, it will not be like my orbit -- mike shanghai and beijing. like in the states, nothing is like new york city. it takes time to build up the yard. the last couple years have been very difficult. themarket has turned corner, and we have resolved a lot of our internal issues. i think that now, it is time to grow. i think our return characteristic will be a lot improved. yvonne: always good to have you, ronnie chan, from hang lung properties, the chairman. we are coming down to the market open. of course with that boj decision hours away, we are seeing equity

futures pointing south as we have a countdown to the market decision. yields ticking up higher here across the board. we will see if governor kuroda will tweak this as well. this is bloomberg. ♪

yvonne: 8:00 a.m. here in hong kong and we are live from bloomberg's asian headquarters. welcome to "daybreak: asia." thestories -- tech beat retreat in new york. the nasdaq saw its biggest three-day loss since march led by netflix. the group lost 9%. ramy: from bloomberg's global headquarters, i am remy innocencio in new york where it is just past 8:00 p.m. on a monday. samsung under pressure after confirming sales and profit miss in the last quarter.

bond yields -- global bond yields rise. there is still speculation that policymakers will address -- adjust their language for the boj. amy, it seems like we are getting ever closer to the meeting by the boj. we saw quite a bit of movement from the boj with these fixed rate operations -- three times to put a cap on yields. they may have to intervene once again now that yields are kicking up higher in the market theinues to guess and test threshold it has when it comes to the higher yields and when they will be moving the target higher. we willt only that,

also be expecting what might happen in terms of the inflation outlook. what isl try to balance happening with inflation expectations with what they may have to do with etf buying. and how that might also affect what is happening with the yen. we saw it strengthening in the last few days. where might that go after the next few hours? seeing a little more strength coming through for the japanese yen. looking at markets in the asia-pacific. we are set for declines. we are waiting for some type of indication from governor kuroda. let us bring up the boards. what we are seeing when it comes to a south korea -- earnings coming through. samsung earnings missing estimates for the second quarter due to the growth that small -- smartphone. in a lot of questions about the prices for chips.

about dollar-yen. now.e just below 111 right it has been fluctuating around this level until today. and we have to watch the 10 year yield on the jgb. we are unchanged right now at the open but 11 basis points perhaps we will see more movement from the boj to step in and support the market perhaps for a third straight trading day. that is according to wes goodman from singapore. a lot of questions now. let us go to the top story -- the bank of japan wrapping up the meeting on tuesday. what will they do? how significant will they tweak in policy be -- how significant will be tweak in policy be? beingnd production data released. >> the numbers continue to look strong. a robust employment rate.

withroblem is that even all of this, it is not generating the wage growth needed. it did pick up in may but it is not a game changer and it did not change the inflation story there. i think when you look at the job -- they were on the soft side of things for sure but i don't think it changes the overall picture for the boj because they are expected today to stay the course because inflation remains anchored. yvonne: you don't think it could get tighter than that and yet it can. is talk of policy changing, is that premature at the moment? little bit of all of the above. they have not signaled a policy shift. governor corrode a has been adamant that he will stay the course until they hit --

governor kuroda has been adamant that he will stay the course until they hit the 2% inflation rate. remember, banks are complaining that profits are hurting the negative rates. and of course the boj's own balance sheet is becoming bigger than the size of the economy. we are still nowhere near the 2% inflation target according to governor kuroda. that is the objective. yvonne: it is like beating a dead horse. enda: how does he manage balancing both? i believe he will broadly speaking stay the course. looking ats the boj reducing the unintended side effects for the banks? an emphaticave answer. buying. unlimited bond

signaling how serious they are. nonetheless, there is a view that they could tweak the yield curve control target. there is a view that they could thek their annual quota for purchases of bonds. there are various steps they can take that whatever they do, even modest steps, they have a risk of setting off a ricochet in the market like sending yields much higher and the yen much higher. on the other side of things. kuroda -- this could set the hares running. ramy: thank you very much. let us get to the first word news now with jessica summers. jessica: the man who popularized the term new normal says the u.s. is a first economy to shut off thefirst -- to shed

crisis malaise. he says the u.s. is alone and finding higher growth momentum of two point 5%-3%. he and pimco coined the term new normal in 2009 to describe meager outlook. we are gone from the notion that we have a synchronized global pickup in growth to it is all about different growth patterns around the world. that is where we still are. that trade come along yen, -- makesrade, long yen, sense. jessica: president trump says he would be meeting that he would be willing to meet with iran with no preconditions. much like he did with north korea. he told reporters that when dealing with critical issues, there is nothing wrong with meeting. one possible opportunity would be in late september where the

iranian press -- where the iranian president usually attends. >> anytime they want. it is good for the country. good for them and good for us and good for the world. no preconditions. if they want to meet, i will meet. the u.s. treasury department says government borrowing in the second half will jump to the most since the financial crisis as the fiscal health of the nation worsens. millionts to issue $329 net marketable debt from july through september. the 270 $3r than billion estimated in april. softbank's vision fund is said to have ended talks to invest in cadre. it is partially owned by kushner. president trump's son-in-law started the company with his brother and a harvard classmate. despitehis stake

shedding other assets. his role as a government figure and a beneficiary of a deal with softbank poses conflicts of interest. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. yvonne: thank you. samsung second-quarter net income missed estimates. rivals ramped up the competition. we are getting a couple of lines from samsung talking about the outlook for memory chip business. they say it remains strong. they say the mobile market conditions may remain challenging in the second half. they still think that when it comes to the displays that could set a rebound in the second half lead to their flexible screens. let us get more analysis from bloomberg intelligence.

what do you think caused this mess for samsung? what the company said about smartphones. the shipment was very disappointing. -- theylast year shipped about 40 million. most analysts expect this year based -- this year a slightly weaker shipping. meet 37 million for this year. on thee is clamping down shipment. and not only on the high-end side. t endntct on the meet that they have a lot of competition. this is all related to smart shown -- smartphone shipments. yvonne: what can we expect out of this galaxy 09?

how big of a game changer will it be? unfortunately, it is not going to be a big game changer. based on the track record, fourth ofey ship one the note series. iche segment. they had an earlier launch this year. wise, it is still not as much as the iphone x. i don't think that could be a game changer unfortunately. ramy: looking ahead to the second half, what might we expect for the earnings? robust on the

memory side. samsung giving upbeat expectations but also its rivals -- relying on the fact that andly remains constrained the second half, usually the demand is stronger. right now, it is in a very healthy environment. the economy is strong and this supply is controlled. on the demand side, however, the pricing will continue to decline in the second half and the expectation for next year remains very low. holding backt is the shares even though second-half earnings well rebound. there, 4%.ear down thank you very much. up next, more on the boj with sony's financial chief economist masacki kanno. plus, we get a preview

of the pmi with julia wang. this is bloomberg. ♪

yvonne: taking a live look outside tokyo. that is the imperial palace. strength. seeing some as our bloggers have been talking about the last 48 hours, from new york to london, all eyes on tokyo this morning with governor kuroda expected to make --e type of tweaks possible possibly. this is "daybreak: asia." ramy: the bank of japan does conclude its policy meeting on tuesday after intense speculation that it may very well adjust its massive monetary

stimulus program. kathleen hays is standing outside the central bank in tokyo with our next guest. kathleen. guest i mightl add because there is something afoot. senior fellowis chief economist at sony holdings here in tokyo. he is former chief economist for jp morgan asia and i want to get right to the first question. first of all, welcome and thank you for joining us. do you think something is being discussed? whether it is an official announcement or just governor kuroda speaking at the press conference afterwards will signal a change? what are you looking for? masacki: we think the boj will announce or suggest some widening of the 10 year bond yield target.

suggesting the boj will continue to target around 0% for the 10 year unchanged. the boj will say this is not a policy change but just fine-tuning to the current framework. believes 0.1%boj will remain unchanged. kathleen: about a week ago, the 10 year jgb was trading just over zero. new reports have come out that something is being discussed. why does the boj have to do this now? what is driving this? to make this small but significant week? -- tweak? this in they are doing

order to put a squeeze on the banks especially the regional banks. all additions also pay attention to this issue. this is closer to the reversal rate from november of last year. -- timing of the change unfortunately, shortly after that, the boj had to give up the monetization work. i think now is the time to change the policy. cap lane: ultimately you think they will say the range -- kathleen: ultimately you think they will say the range is ok. you believe they should extend it to 0.2, 20 basis points. masacki: either 20-25 basis points. the boj says in order to

convince the market that the change is just a one-off. the 20 basis points. do their change in operation at the tea-25 basis points and then the market will be convinced that this is a one-time change and the boj should also do this sooner rather than later. if it continues to keep its operation at the 10 basis points like they did yesterday, and it will have to purchase huge amounts of bonds from the market. the market is convinced that sometime later the boj would allow the bond yield to go higher. eventually, that will be a potential loss for the boj. kuroda --governor widely you think he might not be a little more aggressive or

definite right now? why does he hold back? -- why holding him back does he not just up up and say -- we are widening this today? masacki: the boj is very nervous about the response of the market. probably, they learned a lesson. avoid whatld like to happened in the u.s. and also when the euro appreciated last year. that is the reason why they are very careful on the market communication. : most people think it is an easier decision for them to announced today that they will shift the purchases to funds weighted more towards the topix than the nikkei. with that.agree

i plead the boj will announce the change in composition. but the market has already topix that in because rose and the nikkei fell a little bit in the last week or so. the announcement itself will not have a significant impact. that is needed to normalize the is a current there policy framework, it needs to go longer and the boj needs to do it. kathleen: why now? is there political pressure on the boj? is the prime minister concerned about the elections in september and doesn't want anything hanging over his head? sureki: i am not so exactly the political pressure on the boj were on the politicians. and if you look at the regional economy, it is stagnant.

in tokyo, the economy is great that the regional economy is growing very slowly or at zero growth. it is important for them to get the vote from the regional area. the role of the regional banks is very important. kathleen: who is driving this? isknow the deputy governor the brainchild -- it was his idea. does he have something to do with this tweak? the communications between governor kuroda and the deputy governor are quite good. they have been waiting for the timing and they think now is the time.

but governor kuroda will make the final decision. kathleen: very exciting. thank you for laying this out so clearly. kanno joining us outside of the bank of japan. he is a former senior adviser to the bank of japan and clearly someone who has a sense of what is going on inside and outside of the bank. ramy: kathleen hays, thank you so much. breaking news on the bloomberg terminal -- unexpectedly earlier out of china nonmanufacturing pmi has come out at 54.0. the survey expecting 54.9. the prior was 55. nonmanufacturing pmi coming out of china at 55.4. that is a miss. the expected time is one and a half hours out. early dataprise coming at us right there. don't forget our interactive tv function which is tv where

you can watch us live and catch and divet interviews into any securities or the bloomberg functions that we talk about. you can become part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out on bloomberg tv go. this is bloomberg. ♪

ramy: this is "daybreak: asia" and i am ramy inocencio in your. of the a quick check latest headlines. cathay pacific may cut jobs at its overseas operations in its latest attempt to get back to profits. they are discussing the consolidation of overseas sales, marketing, and freight operations. it has more than seven at a 50,000 workers. -- 750,000 workers.

petrochina -- petrochina says net income jumped between 107% and 122% from a year ago. profit at roughly $4 billion. bloomberg says that will be the highest annual results since the second half of 2014. yvonne: securities fall overshadowing gains in the wholesale arm. revenue rose at the company when the company announced a new buyback. they are facing weakening sentiment from wheat -- retail investors at him. -- a drop in 6% lending income. the bank says net income declined to $2 billion through june but it is still ahead of its for your target.

japan's is the first of three mega banks to report its results. games and movies keep sony's earnings on target. we go to tokyo to find out what to expect. this is bloomberg. ♪

yvonne: 8:30 a.m. in singapore. a live look at the city this morning. i am yvonne man in hong kong. ramy: you're watching "daybreak: asia." let us get the first word news now with jessica summers. jessica: samsung conference second-quarter net income fell short of forecast. average estimate was 10.8 billion dollars. global growth in the smartphone rivals ramped up competition. operating profit was $13.3 billion on a revenue of 58 point

3 trillion. confidence was subdued in july as the bank of england prepares to raise rates. a report from deutsche bank says company optimism was unchanged. -- a report from lloyds bank says company optimism was unchanged. brexit continues to create uncertainty. commerce secretary wilbur ross withnafta negotiations mexico are going well and they may be closed to wrapping up. he says the president-elect has wasted no time appointing a new trading before he takes office in december. earlier this month, president trump said he may pursue a bilateral deal with mexico and separate negotiations with canada. is said tof the nyse have fired about a dozen employees at the chicago exchange after acquiring the

business earlier this month. ceo john karen is among those that left. the chicago exchange try to sell its self earlier this year. the deal was rejected by regulators. the exchange handles less than 1% of u.s. equity trading. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. yvonne: thank you. time to see how the asian markets are shaping up so far this morning. the early release of china pmi numbers took us off guard. 40 minutes early. david: it was nonmanufacturing numbers. the manufacturing numbers should be out in about 30 minutes. being at the aussie dollar -- a slight wobble. a miss. we are also expecting a slowdown

in the manufacturing rate. hopefully about 51. look at equity markets right now. s&p futures drop overnight. very much in focus. a session low right there. australia -- we gave up all of the gains. and samsung in south korea is very much in focus. a lot of earnings this week not just in japan but across the region. well.g up in australia as let us change things and have a look at japan. the of the boj -- one of the shift that they may do is the focus of their etf purchases from nikkei 225 focus to the topix. they have several stocks within the nikkei that are not in the topix were are not as heavily weighted. softbank is one of the heavier weighted.

if we do get the shift, we may see incrementally more money flowing into this. and the yield story a also help. speaking of yields, mitsubishi, morgan stanley thinks at 1% on the long end in japan. when you look at the 20 and 30 year, if you get to 1% is when you see money coming back. looking at the 10 year, that is close to the ceiling. look at the long range. upending its legs to the side -- to the upside. the meeting today -- economists don't expect anything but they bracing for but -- for volatility ahead. it is not so much about the economy. a lot of speculation. bojaps the most anticipated meeting in years because of previous times they changed something, there was no

indication that they would. now, we have been sifting through a weeks worth of rumors and that is what it tends to do. we are bracing here for that policy decision in about two and half hours from now. ingles on the markets as we look towards that boj policy decision. look at sony. the company reports earnings and music its gaming divisions keeping things on track. our asia conglomerates dave mccombs joins us now from tokyo. what is driving these robust result expectations? dave: as you mentioned, games is a bright spot for the money. they rolled out a new game called "god of war. they have a couple of other tailwinds as well.

is a suggestion that semiconductor sales are doing well. they have done well in the past. that has been a volatile earnings point for them. they do a lot of sales of sensor sales.ied to smartphone it was a good second-quarter in that regard. there are a couple of good things coming in this quarter. yvonne: how much of a tailwind is a weaker yen for sony? dave: that is another important factor. they projected their full-year the dollar.¥105 to that was the basis for their estimate. we saw the last quarter averaged about 109. that gives them some padding and it also suggests that with good numbers this quarter, it could prompted them to change their forecast for the full gear. you know, there is quite a gap with what analysts are expecting for the full year and but the company is projecting in terms of operating profit.

that would be one thing investors are looking out for. another factor here is that analysts are expecting about 145 billion for the first quarter operating profit. that is a robust number even though it would be a slight decline from a year earlier. go back a year and that was a blowout quarter where earnings tripled with great video sales. -- videogame sales. a slight decline but it is still robust for them this quarter. shares are up more than 10% year to date reflecting that. thank you, dave talking about sony earnings. honda's first-quarter profit expected to fall after sales of -- sports utility model were suspended in china. we look at this with kevin buckland who also joins us from tokyo. such a tough quarter for the

u.s. automakers as well but the u.s. remains hondas biggest market and they also are facing the threat of auto tariffs. most: honda is one of the localized of the japanese makers. 75% of the cars they sell in the u.s. they build their but the bulk of the rest come from canada and that ago so nafta is extremely important. honda will be happy to see that things seem to be going in the trump administration continuing those negotiations there. and of course, this is a market where we have probably seen the peak, that is the consensus view, we had a good, strong sales results across the board in the u.s. in june and honda was no different. they benefited. overall for the year it is about flat. puts pressure on incentives. so far, honda has been

restrained in that regard. another big theme in the u.s. is the switch to the suv. japanese makers are stronger in said answer. they also have the -- in sedans. the civic is also net and neck -- neck and neck in the u.s. trucks is suv and light outselling sedans two to one. yvonne: we were talking about how big of a market china was for honda as well and we had the u.s. as the biggest market this year. how likely is the suspension of the crv going to hurt them? honda -- honda was on track for having china become its biggest market last year and

then sales slowed a little at the end of last year. this year, there is a good chance that china would become its biggest market but the problem with the crv is a blip -- a problem that could potentially put things off track. they had to start recalls. they had to suspend sales. in may. was back june, sales continued to fall for the fifth straight month. the rebound did not come right away but it does seem like they have turned a corner and they could expect stronger sales for the rest of the year. another problem is increased competition in china. for example, the japanese rival, a smallaving the chr, sized crossover -- just launching that into the chinese market. that will give some competition to the crv from honda. ramy: the yen has been volatile.

as strong as 105 and now at 111. how has that impacted honda? -- i don't do not want to tread too much of the same ground as dave just did but compared to three months ago, the outlook is a little brighter. 105 at the end of march. and now 110. it is going in the right direction for honda. we have seen though that automakers so far have not been rushing to review their forecast . which our consensus is 105. and mitsubishi motors reported last week and they were happy to leave those numbers exactly where they were. ramy: great stuff from kevin buckland in tokyo. thank you. coming up, we are looking ahead to the latest pmi data from china. us withulia bong joins

her prediction -- julia wong joins us with her predictions. this is bloomberg. ♪

ramy: this is "daybreak: asia." manufacturings pmi fell faster than expected in july amidst trade tensions. let us go to tom mackenzie joining us from beijing with the details. a little earlier than expected, nonmanufacturing pmi. pretty disappointing so far. tom: that is right. the manufacturing pmi is what we are focused on. we expect it at 9:00. nonmanufacturing pmi coming in weaker than expected. forecast had been at 54.9 but we of 54 versus the june number

55. as we discussed earlier in the show, there were early indicators that there would be a slowdown in the second half. you had the worldwide sales index and that fell for july. you had china's major trade partners -- a survey from them suggesting weakness. coal pricess and dropping. suggest, it is in this context, that the deleveraging campaign earlier in the year took its toll on shadow banking. and the trade tensions as well. july was the month when the first round of tariffs specifically targeting china kick in. that impact playing out in some of these numbers. we hope to flash the picture out around 9:00 with the official manufacturing pmi that we are looking for.

that to drop marginally to about 51 point 51.3 or 51.5.-- and the change for policymakers around more fiscal support and monetary policy support for the economy to injure a hit their growth targets amidst the ongoing trade tensions with the u.s. ramy: on the trade tensions, are they any closer to restarting talks? tom: both sides have hinted they are open to trade talks but we heard an interesting exchange with the china -- with the chinese foreign ministry official yesterday when he was on a stage with his british counterpart. he was asked about the tensions and he said he was perplexed. is suffering a so-called loss from trade relations -- that is nonexistent and hard to understand. it is like someone going to the supermarket to purchase $100 in

goods and then complaining he lost $100 despite getting the goods. how can this logic stand? tom: it will come down to whether president trump is looking to get a quick deal ahead of the midterm or if this is a longer-term challenge that the u.s. is squaring up to as outlined by the trade representative and secretary ross. he described it as a painful diet. it is time now to challenge china. if that is a longer-term position for the u.s., it poses more of a challenge for the chinese of course. corresponded, tom mackenzie out of beijing. on the latest regarding the trade tensions and the surprise release of the nonmanufacturing pmi. ore on that now is julia wong. --king at the actual number

54.09. nonmanufacturing pmi. since this is out, weigh in on this. julia: something to do with the financial deleveraging which is weighted on infrastructure enveloped -- infrastructure investment. especially in may and june. double-digitn from growth last year, 14%. the current conditions continue to tighten for local governments. i think that reflects some of the weakness. speaking, they are much more domestically focused. since thets lowest late summer of 2017. we are still expecting manufacturing pmi. the survey is 51.3. not too far from the prior 51 point five.

is there a degree of concern here? julia: some softness is expected. we have seen that things may be softening. -- the bigms question is the demand from the u.s. in the next few months with these new tariff rates coming in. will they lead to a sharp slowdown? that wethere is a worry will be in for a couple of volatile months. yvonne: you mentioned the service side. is this a long where the economy is going? is the growth target for china at risk right now or are these easing measures going to alleviate that right now? julia: we have seen quite a bit of policy reassessment in june.

a pickup and fiscal spending. a pickup in the delivering of tech stocks. i think these generally kick in pretty quickly. isfar as the second half concerned, domestic demand should be better supported by the partial easing of fiscal policy. years, weext 1-2 really need them to do more. yvonne: is there concern still with the easing that china is reverting to the old playbook of credit through stimulus? tax cuts, infrastructure spending? could that add to the risk for the economy? julia: at this point, there is no will or appetite to roll back the sector. policymakers are fighting this somewhat difficult battle of balancing on one hand the need to continue with deleveraging,

the principles around the guarantees and around tougher leverage ratios but on the other hand, trying to repair the excessive tightening. we have seen a lot of tightening for the government financing and corporate. some of that may be a little unwarranted. i think they are trying to strike a balance. so far, i do not get a sense that the reform is being kicked down the road completely. yvonne: how much support is there for this? julia: there has barely been any fiscal support in the first half. good revenue growth but not too much spending. when it comes to the allotted quota, in the first five months of the year. there is quite a bit to support the economy in the next six or seven months but depending on uncertaintyernal plays out, dear will be a big

question of whether we need fiscal policy to do -- to do much more of the heavy lifting. china is much more domestically financed than most in emerging markets. they have a surplus of saving. there is still a big question about how this fiscal stimulus will work -- it will have to shift away from infrastructure compared to the last couple of years. of corporate's. especially manufacturing companies. ramy: in terms of weapons, mark mobius chimed in earlier saying the u.n. could be used as a 12 but in the past, they said they would leave it up -- could be used as a tool, but in the past they said they would leave it alone. what do you think? julia: china is easing monetary policy a little all the u.s. is tightening. think given what we had in

2015, policymakers are wary of seeing a depreciation. it is a very delicate question and i don't think there is appetite to weaponize this. ramy: thank you so much. that was julia wong, from hsbc. breaking news wherever you are -- we have teamed up with twitter to launch tictoc by bloomberg. the first global news network designed for social media offering live video coverage and orated top news stories reports verified by us. you can follow us on twitter at tictoc. this is bloomberg. ♪

yvonne: this is "daybreak: asia. " ramy: let us do a quick check of the latest is no/updates. les moonves will remain ceo of cbs for the time being fall outside counsel investigates. several women say they were physically intimidated and that their careers suffered when they refused advances from him. on new yorker article goes to describe a culture of harassment at cbs. nissan says it will

decide soon on a new plant in china as it pursues its goals of expanding sales there by one million units by 2022. the ceo says the first step would be to add capacity at existing operations before any decision is made. in february, it said it plans to spend $9 million over five years to become the biggest global maker of electric cars in china. customerdman sachs has enthusiasm has delayed. the bank says key areas of second-quarter results are the sustainability of model week.duction at 5000 a the pretension for margin improvements and the amount of cash tesla is burning. it expects a loss of three dollars a share. yvonne: before we hand over to bloomberg markets, asia come here is a quick look at how markets are doing now. equities across the board led by 0.7% and we25, down

are still waiting for the boj decision. and china pmi manufacturing numbers expected at the top of the hour. nonmanufacturing numbers missing quite big there for the month of june. we will see what the manufacturing numbers bring but we are seeing these trade war concerns taking a bite into that segment. theds ticking higher across board in anticipation of that. samsung earnings were also a miss. 20 of bad news to chew on. ramy: looking -- plenty of bad news to chew on. futures are also down. that is it from "daybreak: asia. " yvonne: thank you for joining us. this is bloomberg. ♪ phones have made our lives effortless.

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medical a.m. in beijing. pmi's are testing. pmi's from china are coming in at 51.2. this is a week for services as a. reflecting ongoing conflict, trade wars and other structural practices with the chinese economy. this is the headline number that we anticipated on the services side and now on the manufacturing as well. haidi: this is back into the old economy.