♪ >> good morning, from bloomberg's european headquarters in the city of london, i am anna edwards. >> and i am manus. cranny in dubai here are your top stories. anna: elon musk plots the biggest buyout in history, valuing the company at $82 billion including debt. shares surged. 11%. the uae is weathering the trade storm. exports rose further than forecast in july even as washington is set to slap duties with the second time in a month. and, chief executive officer bob iger is optimistic about absorbing the assets of fox. what it means for the bidding

war for sky. ♪ anna: welcome to daybreak europe . manus: another day, another report. for the second quarter for this company was over 688 million euros, net interest income remained strong despite low interest rate environment. this is a bank in change, credit suisse. ubs could also be going for another change as well, deutsche bank, commerzbank. change is the name of the game. analysts are talking about costs cuts and savings, of around 80 million euros.

that is the ambition, corporate and investment bank, risk-weighted asset reduction, 5 million euros, 80 million euros in costs. operating income, 2.9 million, beating the company's estimates of 2.1 billion. what are the changes that culprit is additional bank? or does it mean? what is happening with loan growth? you need to step up their game in terms of loan growth. an amro will take structuring provision in about 50 million pounds. anna.ng news for you, anna: yes, let us talk to you about breaking news out of samsung coming through this morning. and plans from samsung to invest trillion won over three years including capital expenditure, raising investment in their manufacturing hub and hiring of thousands of workers of the next few years.

aboutvestment will create 700,000 jobs they say, and boost programs to 4,000,000,000,001. it is a big announcement coming from samsung this morning. -- 4 trillion won. $161 billion, if you are trying to convert that. this is vital to future growth. of residente proof moon jae-in's efforts to shore up the economy. it has implications for the economy.th korean a little bit about what is coming up, we have a number of guests to tell you about. an exclusive interview with the ceo of credential, we will be speaking to him later on. that is mike wells, of course. we will also talk to novo nordisk, the ceo there, and also the abn amro group ceo. we just went through the big

announcement from abn amro, we will get details on their investment banking intentions as we go through the morning. that is coming on later on to this program. that actually what has been happening overnight in the asian section. the msci asia-pacific up about we have robust chinese at nearata, markets all-time high levels, the s&p in the united states yesterday as well. the news flow around tariffs, we have the exact details of the 25% plan to tax another $60 billion and imports from china. we have details coming from the united states, but the markets went higher just a bit. a little more stable on the dollar against the chinese currency. hardboc collington stop behavior in the currency, say that the have the tools to stabilize the currency and that they would not stop market forces.

saw action from the central bank a couple of days ago. this is accelerating for the lira, the general story here, the extent of the u.s. sanctions adding to the overall trend. how will the turkish president order one respond? talk about that next, what kind of measures the president might take. manus: anna, you perhaps remember the song -- murder on the dance floor. tesla, $7 billion added to isabel yesterday after the tweet camp out at 12:48 p.m., i am taking this company private, or at least, that is my ambition. traders got frisky, and it paid up. $420 is the price of the ticket that elon musk says he wants to take the company private. that is the ambition, it would give you an $82 billion price tag. the option traders are betting on the august expiration, the august 17 attempt.

but, we spliced by 460% in terms price, 1000% in terms of the call option trades on tesla for august 10. august 17 expiration. they are widely speculative calls, but they give you a sense of the momentum that happened yesterday in tesla as elon musk suggested -- i want to private. company would you let elon musk, $60 billion in a company that every year since it has begun, did not taken a money? that is a prospect for markets. the murder is on the dance floor, terror in the markets. that is a short highlight this morning. let us get to juliette saly with the first word news. you.tte: manus, thank the u.s. has said it will begin imposing 45% duties on another $16 billion in chinese imports weeks.w

u.s. customs will begin collecting the duties on 279 product lines, down from 284 items on the initial list. it will be the second term washington flops duties on chinese goods in the past month, despite complaints but american companies that the moves will raise business costs and eventually, consumer prices. meanwhile, china's exports have grown firs faster than expected while imports surged. domestic demand continue to rise despite the uncertainty of trade relations with the u.s.. exports rose 12.2% in july, well 27 .3%, itmbed leaving a trade surplus of $28 billion. the bank of japan may tolerate and even higher yield on long-term bonds in the .2% given by the governor kuroda. that is the latest summary of opinion. the details of last month's meeting showed one member had wanted freedom to yield to move

up and down around 25% on either side of the 0% target. leader hasysian pleaded not guilty to charges of money laundering linked to 1mdb, as prosecutors's alleged more wrongdoing but the x premier. he was charged with three counts of. money laundering, and related to a from a unit of the state fund 1mdb. that could carry a punishment of up to 15 years in prison and a fine of less than five times the amount of funds involved. 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. you can find more stories on the .erg at top we are just seeing a bit of a downside coming through in the nikkei which was earlier looking like it might hit a three-week high. the selloff moving in and late trade. the hang seng though is pretty

.4%.supported, up about selling coming through in large-cap chinese stocks today, and on the shanghai composite. remember yesterday, the shanghai comp had its best day in over two years. we are also seeing goods coming through and asian stocks higher for a second session. here are the stocks you are watching, heavy in earnings season. cathay pacific resuming trade after lunch, falling after its surprise loss. it came through with a loss of -- i loss worse than the market was looking for, due to surging fuel expenses. we are seeing a bit of an uptick in china's biggest ipo in two years, and the cba of course, the largest lender in australia, recorded its first rough it loss in nine years, falling yesterday ahead of the result. it looks like there's a bit of buying on that result, dividends are still strong there. . manus: anna, manus thank you,, juliette saly. no singapore studio. this company, with it become

private? ,lon musk could pull his money taking the company and its .ritics and taking a private the billionaire tweeted that funding was secured to take the electric carmaker private at $420 a share. david kirkpatrick is our techonom editory and founder in chief, he joins us from new york on the phone. thank you for staying up late, david. . does this deal makes sense? , that is a lot of money? >> it came out of the blue in classic elon musk fashion, it feels a cap slap in the face and it is very hard to process. but could it possibly make sense? it could. there are a number of things which could make it very attractive to elon musk himself.

the number involved, if it were $70 billion private transaction, it would not only be historic, it would be jaw-dropping. given that this is a money-losing company but i can see a possible argument what it would make sense. anna: you can see an argument -- good morning, david -- you can see an argument what it would make sense. i am interested in. what the investment committee is factoring in, for how successful tesla will be, versus a conversation -- they surely have the first advantage in producing these kind of cars at scale. that?ill they maintain what happens if everybody catches up? >> that is the main question for ties love. they kind of established the premier brand for electric cars, the first wants to do it in quantity, but every single automaker in the world especially those in china, but all over the world, are absolutely focused on electric cars as their future.

so tesla is not going to have the electric car market to itself much longer. now are a few other players, but they are clearly the dominator. that will not remain the case. i was very taken as i tried to process this myself, by listening to one of my own favorite analysts, michael d unn, who is a real expert in the chinese auto industry. a lot of experts like myself like to look at things from an american lands. but if you really look at things such as the global luxury auto market, it is so intensely concentrated in china. more than doubled the them one of luxury vehicles globally were sold in china. tesla is in the process of starting a factory in china, they have a unique ability in china, to own their entire production facility themselves, which other international automakers don't have. and, there is an obsession with

high-quality brands like. tesla in china so think of this as a hypothetical. if tesla were to go private and favorite its entire strategy china, with the chinese government, more than any other country in the road getting behind and electrification, giving all kinds of assistance to companies there, may be the funding that he has "secured," might be partially chinese. keep in mind, tencent is already one of its largest investors. manus: can we just pick up on that? you say that the proof could be in the pudding. as i was reading to you, i said, the security -- he has said to the market, i have the funding in place. you would maintain that those backers need to emerge immediately, validate the claims he has made in this to each, otherwise, he could be in legal hot water ? >> that is totally true.

it cannot throw out a treat saying that my company's stock should be 50% higher than where it is trading today, you need to put some serious legal backing behind. the kind of claim he issued an internal email saying that yes, i am really thinking about this. it may technically be legal to do what he did, but it was certainly jerking everybody around. i don't think most companies ought to be in the business of having their ceos to eat out a prospective valuation higher than 50% of what they are trading on. is it possible that he could substantiated? yes, but he has a responsibility to do that right away. anna: as the world's 31st richest person, $1.4 billion poorer this time yesterday. thank you very much, david kurt founder and editor in chief joining us on the phone. coming up, we look at the first month of the trade war with the

united states and china. we look at the effect if any, tariffs have had. plus, kurt your grandson come novo nordisk ceo will be joining us. ♪ this is bloomberg. ♪ ♪

♪ manus: it has just gone 6:18 in the city of london, one: 18 in the city of singapore. taking a live shot right there, stocks are high of about 1%. china export growth shows that things are grand, even though you have tariffs. but is it too early to put that china. the day in nevertheless, it is helping the markets. -- is it too early to put the kind of value on china? stability in the yuan seems to be coming through. let us get to juliette saly in singapore with our is as flash. you.tte: manus, thank

snapchat's parent has reported a first ever quarterly drop in users, failing to top expectations. second quarter average daily users fell 2% to 188 million. it signals a controversial redesign of the app is still hindering growth. that and the news that saudi billionaire prince will eat has -- a saudike billionaire prince has taken a stake. disney ceo gave an upbeat view on his plans for new video streaming services after giving a $71 billion buyout of fox entertainment assets, even as earnings missed estimates. he told analysts how he sees the deal and has in the company's global offerings. >> as you know, fox also has a significant stake in sky, the most successful television company in europe. in addition -- the addition of these assets will enhance our

position as a global entertainment company, with successful reduction businesses in key emerging markets around the world. juliette: china company is stopping world trading after completing the largest ipo offering in years. the state run company which operates almost all of china's mobile phone towers of them surround from its ipo price of one hong kong dollar, to 26, keeping beijing based tower market value lower than what it was hoping for, as recently as a couple of weeks ago. that is your bloomberg business flash. ?nna, manus anna: thank you, juliette saly. the bank of japan may tolerate higher yields on the long-term bonds than the 0.2% given by the governor. that is the latest summary of

opinions. that he tilts from last week's policy meeting show that one member wanted freedom for yields to move up and down by around 25 basis eyes on either side of the target. the summary gives more ammunition to expectations that the boj could further widen its range. on this fromof our next guest joining us right now. did it have lasting implications, the tweak we heard from the boj last week? did it have implications for either the japanese or the other markets? >> i think it marked a significant move in some respects by the boj, in terms of that it has introduced a little intovolatility, not just the jgb market, but also into the core rates market. we talk about this band about zero, but it hasn't been a bound, it has really been the ceiling. 10 year yields have actually been trading sort of above the zero point.

i think it out, they will be trading in the sort of 10-50 basis point range. beer,is might be small but i think what underscore is more generally, which is a problem i think for the boj, is that they look at the fed and an exit strategy from strict monetary policy, the ecb tiptoeing cautiously in that direction, and the boj would like i think, an exit. but they cannot actually find one. manus: david, very good morning to you. we wrote a recently that we are on the tipping point -- when you look at 10 year government bond yields, we have a shorter snapshot of that in the past week. 10 year government bond yields have tripled in japan, what have bund? why have french

bonds? when you could see this flow of money back into the jgb market, which is perhaps one of the consequences for our markets as well? david: you're absolutely right, i think that is the most profound aspect of any shift in policy by the boj, is that japanese investors have been --e seekers and investors of seekers of yields and investors in global assets, whether it be u.s. treasury's, u.s. credit, french assets, and for that matter, emerging markets. i don't think it will shift higher than where we have seen so far, whether it is enough to take away the economics of japanese investors looking to invest overseas. so you're still getting a sufficient yield pickup, even after hedging costs over and above what you would be getting on the jgb, tenure or even the

30-year. anna: i wanted to ask you about turkey.going on in the role of an independent central bank, or perhaps, the difficulty the country is facing, that the central bank is not. perceived to be independent have a chart showing the highs and lows we have reached on turkish currency. are we headed toward capital controls? david: it has been an extraordinary few days in fact, in terms of turkish markets. as a chart has highlighted -- we are discussing the potential for capital controls for an economy that has a 6% current account deficit. it has always been a big consumer of international finance. quiteactually entrepreneurial, private sector been.y or base, which has part of its strength to even be talking about the potential of capital controls, i think, it is

quite extraordinary. baidu think that is one of the potential issues come out of thick it is the best case at the moment. i do think however, the turkish policymakers have gone missing in action -- where are they? anything.'t said the last time we heard anything from a turkish policymaker is a long time ago. anna: do think it is because it will upset the president? is that why they are quiet? david: possibly, but i am afraid come of do have to put up rates. in terms of euros come at market is demanding higher rates. if they don't have higher rates sooner than later, and i think they will be forced either into something like capital controls, or the imf. the delayed if had so far means that rates will go higher, they will have a higher landing that harder landing that there otherwise would. -- than they otherwise would. manus: excuse me, my apologies. let me sure you barclays bond

index. assets looking a bit more defensive, this would be the first year you have lost money in the bond markets, and yet, we are at record short positions. how much more defensive would you like to get on bonds in the u.s.? david: welcome, we are broadly positioned defensively in terms of u.s. investment grade credit, that is a position we've had across our global investment strategy, since the start of the year. partly because of what you were alluding to before manus, the shifting dynamics of the asian investors rotating some of their demand for u.s. credit into europe, because of the fx costs. more generally, in terms of getting defensive, i think for core fixed income, core government bonds, i agree with that. but for credit and the emerging

markets, not yet. anna: david o'reilly, head of credit strategy, he stays with us. we will talk media next. disney disappoints with shares falling after third-quarter earnings. this is bloomberg. ♪ retail.

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anna: good morning, everybody. this is "bloomberg daybreak: europe." 6:30 in london. a hazy tokyo. let's get to the earnings story. .umbers out of munich re we have it confirming its full-year net profit. written goals also confirmed. the combined ratio, 102% versus 93.9%.

that looks to be a little bit light and interesting to see that move in the combined ratio. this is europe's largest insurance business. this was one of the questions going into this. >> i am glad you got the insurance one in terms of the rates. there is the intricate swap between eon and the other. that is pretty much pretty much -- that is pretty much in line. rising by 10%. the one line that caught my eye

debtis economic that is -- is 19.2 billion. you have an asset swap. that was nice in march. that really is the new cornerstone in terms of germany's proposition to transform the thermal power generation to renewables. fews see if there are a more lines coming through on the transformation program. there you go. up 8.7%. anna: we have numbers from the world's biggest maker of diabetes drugs. they see full-year sales. they expect the selling price to be lower in 2019 versus 2018.

that was already expected to hit 2019, so we will see how well the market takes that. the q2 numbers versus the estimates. here it's broadly in line with estimates. mars slogans and -- lars will be joining us. but gets nejra cehic. nejra: despite the fact that in they will impose levies, the trade tensions stepping up yet again, we are seeing cautious respond in the asian markets for yet another day, following the s&p 500 really moving close, less than 1% away from its record high.

at the moment, it closed at its highest since that january high. the nasdaq not too far away from the record high. you can see the msci asia-pacific index up .25%. a bit of a mixed picture. not sure why the chart has switched. to thean go back previous chart and see what that is showing, we saw a flat performance in japanese equities. australia is up by chinese equities pulling back after we saw a strong performance for those chinese equities yesterday against more than 1% across those markets. yuan.brings me to the according to people familiar are said to have met with some of the biggest lenders to talk about currency stability and discourage them from herd mentality. that is not like we are seeing any big gains. it was actually ever so slightly weaker looking at the offshore.

seven than six. the pboc influencing the market in this session. oil, not doingon a lot in terms of wti and bright, holding above $69 per barrel. if you are looking at the api inventories data, you would think we see the price moving higher. in the month of august, we have really not the news either side more than three dollars. it is the tightest monthly range since 2003, and that means volatility has been coming down as well. manus: thank you very much. let's get your first word news. juliette saly is standing by in our singapore studio. >> the u.s. said it would begin imposing 25% duties on another $16 billion of chinese imports in two weeks time. u.s. customs will begin collecting the duties on 279 product lines, down from 284

items on the initial list. it will be the second time washington slaps duties on chinese goods in the past month despite complaints by american companies that such a move will raise business costs. eventually consumer prices. saidpresident donald trump he will make an announcement shxt week that would sla prescription drug prices. he made the comments at his golf club but did not further explain what action he would take. pres. trump: these companies are high,- the prices are too and we are announcing something this week which will bring them down really, really substantially. juliette: turkish officials are expected to hold her first meeting in washington today, hoping to find a solution to the diplomatic row, that has seen ministers slapped with u.s. sanctions as speculation is rising that and

cholera will meet -- ankara will need to seek -- powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. manus, anna. juliette saly in singapore. data out of china. china reported trade data this morning. grew faster than expected while imports surged showing demand continuing to rise. the data is notable as it marks tariffs, year of making it a early indicator of the impact of the trade war on china. joining us from hong kong is malcolm scott. great to have you with us with your analysis. what do these results tell us? malcolm: the big boost to imports is probably driven by higher energy prices and increased volumes of commodity imports for coal, natural gas,

and iron ore. probably too early to really see any impact from what we have seen in the trade front just yet. in fact, there was a bit of a narrowing in china's trade surface, but not with the u.s. it remains near those record levels, so no respite for mr. trump. onus: what kind of impact the next round of u.s. tariffs and other 16 billion on the market today? what impact will they have on global trade? where are we on the global trade -o-meter? malcolm: we have seen it referred to in the purchasing manager index report earlier in the month, but that is about it so far from the chinese data front. our economists have done a little bit of work on that. if we stick to the 50 billion of tariffs ons and

chinese imports and vice versa, then you are looking at a potential hit to chinese gdp growth of 0.2 percentage points. fairly negligible impact on the u.s. economy is it is around this level, which we have seen confirmed so far. that is assuming we do not have the fallout of global markets wobbling, which we have seen little bits and pieces, but nothing too severe so far. if the tariffs brought in and the u.s. starts increasing the volume of chinese imports that it slaps duties on, then of course we will see a slightly higher impact on to china if we get to about 200 billion plus the 50, then we are looking at .4 percentage points of chinese gdp growth. where it gets messy for the united states and the world is if we see affects on financial markets. china is insulated from all of that.

it does not really affect the real economy like they do in the rest of the world, so if financial market starts, that is when it affects the global economy more significantly. china toyou expect blink first or do they ride this out to the midterm and hope something changes in the u.s.? >> i think they are watching the -- the polls. after the midterms, they will be easing in the trade pressure by president trump's administration. the problem i have with that scenario is that there is one thing where there is broad consensus in washington on both sides of the aisle, which is that china is a problem, and that china is a strategic rival and doing bad things in terms of intellectual property theft. i don't think there is any real pushback to the white house in

terms of taking a hard line with china. there is pushback when it comes to taking a hard line with e.u.s like canada or the manus: one thing that really struck me yesterday was the pboc talking to the main banks, warning them that we do not want herd mentality. the pboc are not that bothered about where the yuan is at the moment, yet they are asking them not to act like a herd. not a market determined exchange rate, so let's not isude ourselves that that the case. clearly, beijing has considerable influence both in terms of signaling and putting moral pressure on various actors within the market.

i do think it is a reasonable policy response to those allow the currency to weaken against the dollar when you are facing tariffs. a 7% depreciation of the cnh versus the dollar. it more or less corresponds with a potential impact of not only the 50 billion but 10% tariffs on another 200 billion. the concern for beijing is if you start seeing an acceleration in the pace of move. let's remember, 2015, 2016, when the currency started moving a lot and you started getting capital flow and there were known implications for china and global financial markets. i do not think we are there, but i think they are quite wary about keeping control of the pace of depreciation. anna: as we watch closely, how are you adjusting your credit strategy around the streets tory -- trade story?

either in china or away from china or parts of emerging markets? where are you focused in terms of the street story? our focus is to think about the countries, the regions, and the sectors that could be vulnerable to this. as part of having a hedge, we have a bias to be short a number of currencies within the asia region. these are countries which are clearly going to be speaking both to developments in china and more generally. we have had the bias to be underway. that has been a broader sector story as well but also part of the rationale has also been some of the concerns around trade,

although that has dissipated a little bit as well. manus: thank you so much. david riley, head of credit , continues the conversation with bloomberg on the radio at 7:30 a.m. you take time -- u.k. time .to disney now, and it was upbeat. hollywood number one studio reported heard quarter earnings. the ceo, discussed his plans for the buyout of fox assets. >> as you know, fox has a significant stake in sky, the most successful paid television company in europe. the addition of these valuable assets will enhance our position as a global entertainment company with excellent distribution businesses in key and emerging markets around the world. manus: let's dig a little bit deeper. we have rebecca, who joins us now. so in terms of the numbers,

rebecca, good morning. good to see you. their earnings estimate, the stock initially fell, but we be around -- re wound those losses. what is the turning point? is it about the deal, about what iger said? rebecca: a combination of all this things. disney investors came into the earnings report expecting to hear more about the future of disney's video streaming plan and came out of it reassured by bob eiger's vision. even though disney took a write-down, his upbeat tone around the future of streaming, which is disney's way of taking on the netflixes and amazon's of the world reassured investors. the streaming service and support service is doing well and gaining more subscribers than expected, and he talked a -- about how the addition

if disney is also successful in acquiring sky through that purchase, it will really bolster plans for an additional streaming platform in 2019. anna: we will focus on what is going on with the streaming story over at disney. let's talk about something closer to home. where are we with the sky bidding war? rebecca: comcast is still has the highest offer and comcast is going about with fox, which is being acquired by disney. so yesterday, fox came back and submitted its official offer first guy. 14 pounds per share. comcast's offer is at 14.75. that kicked off the clock. during the period time, fox has a chance to increase the bid it sot comcast if

chooses, so we have time. at the end of that clock, the u.k. takeover regulators would host an auction if we do not have final offers in at that point. anna: who is going to ultimately win in this battle first guy? anna -- for sky. anna and i caught up with one of the advisors. moment, rebecca. make your call. [laughter] rebecca: as you know, i do not know who will win and who will come out of this. it is clear that disney's bob iger really wants sky. when you think about acquiring fox and launching the streaming service globally, the addition of sky and the original content has the platform it has in europe. he is really motivated. he will beer or not

successful is another matter, but i certainly inc. the expectation is that fox will come back with a higher offer first guy, backed by disney. if only because comcast forced disney to overpay for fox in the first place by coming in and bidding at the fox assets, so there is an expectation in the market that disney will want to make comcast feel some pain for sky is it it -- if it does not do right by sky itself. anna: thank you, rebecca penty, joining us on set in london. bloomberg business flash. juliette saly has it for us in singapore. juliette: snapchat's parent has reported a first ever quarterly drop in users, but sales topped expectations. second quarter daily average users fell 2% from the previous period. it signals that a controversial redesign of the app is still hindering growth, missing

expectations. of saudi has taken a stake in after-hours trade. the world's largest initial public offering in two years, averting a repeat of smartphone maker xiaomi cost disappointing -- xiaomi last month. it bounced around from its ipo beijing-based the china power market value 20% below the valuation it was hoping for as recently as a couple of weeks ago. comparable north weaker thane fell, analysts estimates, and sent the stock down as much as 12% in late trading. the founder and major shareholder, who resigned last a racismchairman amid

controversy, issued a statement following the results, saying history shows the company performs better with me involved and the clients when ice -- and declines when i step away. saly inliette singapore. let us check in on what is trending across the bloomberg universe. tictoc, a billionaire, backing aigley, company that makes medical marijuana. who knew, manus? manus: medical marijuana. [laughter] manus: maybe i need some of that. let's see what is happening on bloomberg.com. it is all about elon musk, taking tesla private. he would need $66 billion to complete the transaction. who are his backers? that is a question for the market. anna: really interesting conversation at the start of the hour. our most read story on the bloomberg terminal -- the papa

john's pizza company founder comes out swinging after the chains earnings missed. says itp administration will raise tariffs on chinese goods. find out more about those stories on the bloomberg terminal. let's stay with that tesla story because the stocks soared, $7 billion in value was created. he said he is considering taking the company private. $420 per share. bloomberg spoke to analysts and investors, who painted a mixed picture about the billionaire's revelation. >> it does not economically make sense for him. in the stands that the company is in, it does not make sense because he is in a growth stage. companies go private that are usually in a mature stage, and they are generating significant cash, but the shares usually are not getting a valuation that shows the value of their cash

generation. he needs the public market for financing. i mean, it would be easier to raise financing in both equity and debt for him if he is a public company. >> this does not change my outlook. shortingwe were in more shares today on the strength of the stock. >> that would certainly help the management and also remove the stocks from the scrutiny of the financial markets. they make it comfortable near-term, but they probably do not generate much resources and cash. it would make a lot of sense to be private. take whatever he said with a grain of salt because it has been no official announcement. >> this is not going to happen. this is a game to put the fear of god into the shorts once again, which clearly he did. do i think this will come to fruition? i doubt it. i do not think this will happen again.

it's elon musk, and if you bet against him, it's a very bad bet. the: a host of views on subject of tesla. let's move onto the emerging markets story. turkish officials expected to hold their first meeting with american counterparts in washington today, hoping to find a solution to the diplomatic row that has seen ministers slapped with u.s. sanctions, worsening the attention for the emerging market. joining us, dominic armstrong, cofounder of a fund company. debt.eld on turkish is that something you are interested in or du find opportunity elsewhere? -- or do you find opportunity elsewhere? >> elsewhere. it is tricky and going in a different direction. there are undoubtedly superbly well-run businesses within turkey who sell goods with hard currencies around the world and make whirlpool washing machines.

manufacturing costs back in turkey falling with the following year a. -- falling lira. you have to ask yourself some quite serious questions. manus: a very good morning to you. our last guest said, where are banks?tral i am reading lots of serious reports. we need an unequivocal movement from the central bank in turkey to stymie them rot. silence a deafening from the central bank in turkey. dominic: of course. that is exactly what the issue is. there is a complete mismatch between the political override and conventional economics. i have been trying to buck the system, which is what president erdogan is doing at the moment. having watched countries, then

in countries like a laser when capital -- malaysia when capital ittrols were in control, could take years or decades to come back from something like that. anna: you're looking at opportunities. columbia comes up on your list in a specific telecoms bond. what is it that you are looking for? what sets these apart? dominic: the most interesting thing is that when you look at credit analysis, what you really need to look at is where you have got political and cultural factors that are perhaps not necessarily considered in conventional analysis. somewhere like columbia, if you arrived at your desk and saw the latest episode of narcos, it will cover your opinion. free-tradeve, open policy, people paying their utility bills, but because it is

columbia, there is an opportunity to get 7.5% income out of it rather than 2.5% if the telecom company was anywhere else in the world. and you have got to differentiate that that is the point. theming markets, a lot of are a country mile away from turkey. did the china data this morning in terms of the growth and trade data, do anything to perhaps underpin or reprieve emerging markets more generally? dominic: i think you have to look across the broad spread. look at the response to argentina's problems. a very solid, yes, we are going to back you. turkey has been the other one. it has been moving for very strong political reasons away from political markets whereas argentina was a more classic latin american problem. the messaging has been very strong. with china again, there is every

reason it was a problem. these become more and more solid. anna: thank you very much. dominic armstrong. we will get you and for a conversation, next. we talked to the cfo of abn amro. this is bloomberg. ♪ n amro. this is bloomberg. ♪

manus: good morning from dubai. i am manus cranny and this is "bloomberg daybreak: europe." anna: i am anna edwards in the city of london. these are today's top stories. manus: tesla going private. elon musk with the biggest leveraged buyout in history, valuing the company at $82 billion including debt. shares surged 11%. china is weathering the trade storm. so far, exports rose faster than forecast in july. even as washington is set to slap it with duties for the second time in a month. disney disappoints in the third quarter. the ceo is optimistic about absorbing fox assets.

what does this mean for the sky bidding war? you're welcome to "daybreak europe." high forions were glencore. the estimate was for $8.55 billion. a strong first half of the year van.isinglass and bird -- i the market penciled in 5.39. when it comes to debt, that comes in at $9 billion. these are just a little bit lighter than the market had anticipated. the broader market conditions are likely to remain volatile. user, hop a bloomberg on your terminal and mobile. there is a tliv on the way.

all the editors are there. .he is popping out the numbers adjusted ebit 5.12. that is less than what we expected. again, slippage. less than what we expected from the consensus estimate. glencore is showing it is than its rivals. sanctions on russia, u.s. corruption probe, potential cost push inflation, morgan stanley saying we want more detail on why did you buy 78% stake in the oil operator? ivan has questions to answer even though they did a share buyback by the way. it is a thing in the metals market. $1 billion.

those numbers are light. let's see how the market reacts. are though the s&p futures just within kissing distance of the highs of january, our equity markets -- i would hardly call it on a showdown -- but we are just a little bit lighter. the china did it was good and supportive. you had corporate results. abn amro, we will talk to them shortly. they are in a process of change. it's interesting that you see a little bit of lightening up. it could be that they are more reflective on the tit-for-tat, whose tariffs are set to be in limited by the -- implemented by the united states of america. anna: things worsening as we go through the session in asia. under a little bit of pressure. we are up on the asian session by .1%, but be aware, we are

worsening a touch. the numbers are part of the story in the market focused on very nearme -- all-time highs. the s&p in yesterday's session. that is really a focus for markets and focusing on the terrace stories -- t ariffs stories. on the what is happening chinese currency. the dollar is stronger against the chinese currency. .8. we saw a little bit of strength. the pboc talking to the banks in the chinese market and calling for them to prevent the behavior. toolsay they have got the to bring about market stability. we have a little bit of further weakness coming through in the turkish currency. we talked about that with bloomberg asset management. david riley telling us where is the central bank?

they are missing in action against the president. let's keep an eye on the turkish story as well. manus: i quite like that. ra said weaid -- nomu need something demonstrable to stop the drop in the lira. go to the tliv blog and the team really point out quite nicely, $9 billion is critically important. , at the endwas this of 2017, the dutch level fell -- debt level fell $10.7 billion. glencore vows to keep an at the end of last year and we are looking at a $9 billion number. it would be interesting to see which way the market goes. have a look at your bond markets. i am talking about the

three-year option. it comes back, so no great moment. at the a bid to cover ratio was 2.65, below the previous 10 auctions you have had, which average approximately 2.88. you will get more today. $26 billion will come to the market today. paperllion of 30 year will come on thursday. don't your bloomberg and have a look at the bloomberg barclays bond index -- have a look at your bloomberg and look at the bloomberg barclays bond index. the european complex, the equity market, a little bit of lightness. we flipped over from asia. we will pick it up at 8:00 a.m. when the cash markets open. a little bit better bid on bunds all abouta.t., italian risk when it comes to having a hedge on in the bunds. line on bit of a

barclays. anna: recently, around barclays, cherbourg is one of those activists investors. they say the positive return was what they saw most in the first half. they are engaging with barclays concerning earnings and the chairman. they say they are in gauging on the search process for the chairman. mention the future of the investment banking part of the business, which might be interesting because the have been lots of talk and the markets about what exactly did cherbourg want? does it want a change in strategy?we spoke to jes staley and he said he was not entirely sure as yet what it was they were pushing for, so now, we know more about that. concerning earnings. let's get the bloomberg first word news update with juliette saly in singapore. juliette: thank you. the u.s. said it will begin imposing 25% duties on

another -- from august 23, u.s. customs will begin collecting the duties on 279 product lines, down from 284 items on the initial list. it will be the second time washington slaps duties on chinese goods in the past month, despite complaints by american companies that such moves will raise business costs and consumer prices. meanwhile, china's exports have grown faster than expected while imports surge as domestic and international demand continue to rise despite the uncertainty of trade relations with the u.s. july inrose 12.2% in dollar terms from one year earlier while imports climbed 27.3 percent, leaving a trade surplus of $28 billion. u.s. president donald trump has said he will make an announcement next week that ash prescription drug

prices. he made the comment in new jersey but did not further explain what action he would take. pres. trump: these companies are very -- the prices are too high. we are announcing something this week to get them down really, really substantially. former malaysian leader has pleaded not guilty to charges of money laundering linked to one mdd during his oversight of the states investment fund. he was charged with three counts of breaches. carry ages punishment of 15 years in prison and a fine of no less than five times the amount of the funds involved. yesterday after elon musk said he is considering taking the company private at $420 per share. that would value the firm at $82 billion. in an email to staff, the cofounder and ceo said, "i am

trying to accomplish an outcome where tesla can operate at its best, free from as much distraction and short-term thinking as possible." reach $420,ailed to showing market skepticism that he can pull off the largest leveraged buyout in history. onair and at tictoc twitter, in more than 120 countries. you can find more stories on the bloomberg at top . in asia, we are seeing the regional index higher for a second session. japan closing out the session slightly weaker, down .1%. you are seeing big selling coming through in china, but remember yesterday, the shanghai composite had its best gain in around two years may 2016, so a little bit of money coming off the table despite those strong export figures. australia closing higher. we heard from the governor this -- rba governor lowe.

at the macro look themes, samsung shares actually in focus in seoul. it has unveiled an investment plan. in a boost for president moon, who is really trying to shore up the economy, samsung shares weaker. we are watching a steepening of the yougov in japan. there is an important bond auction tomorrow. we heard that the bank of japan had considered raising debt ceiling by .25%. more weaknessbit coming through in the bloomberg dollar index. we saw the movement coming through in the offshore yuan earlier. you have seen commodity currencies rise, suggesting the trade tensions are not really at the forefront of investors might today. anna. anna: juliette saly in singapore. we talked about tesla in our headlines. we were just reporting that elon musk said yesterday that he money-losings

company off the market to silence critics. the announcement came via twitter, mentioning a share price of $420, and saying "funding secured." ramy inocencio has the details. ramy: elon musk is thinking about taking tesla private. a better operating environment for the company must say his is a distraction to workers who are shareholders. he said he has got funding secured. target share price. but the big question he has left us with -- how is he going to pay for that? find $66need to billion, and that means that would be the biggest leveraged buyout in history. there have been reports that saudi arabia's sovereign wealth fund could be lift to this.

it is said to have built a stake of less than 5% in tesla, worth about $2 billion. investors push tesla's share price up 11% into its highest in almost a year, but short-sellers are still out there. on daybreak asia, i spoke to the ceo of mainstay capital, and he has been short on tesla stock and he is sticking to his guns. david: this is not change my perception or outlook on my short position. we were in shorting more shares today on the strength of the stock. ramy: david kudlow doubling down. pushing this forward, the next question was should be asking elon musk is to show me the money on how exactly he will take tesla private. ramy inocencio, bloomberg news, new york. manus: we had the abn amro numbers. they reported second-quarter net profit this morning. operating income came in at 4.6% above the analyst estimates.

joining us now on the phone for his first interview of the day is the cfo, abrahams. the market is absolutely focused on the changes. you are in person. my apologies. my changes for the investment amro'shat will abn investment bank be. who will you compete with after these changes? 250 jobs are to go. is that a starter number in terms of the job cuts? >> yes -- no. we announced the change at our corporate bank this morning. we have a very strong franchise in our corporate bank here in the netherlands but also in a number of factors globally. the oil and gas sector commodities in shipping. we are not fundamentally changing our outlook. we are making a number of changes to ensure that business meets its r.o.e. target of 10%

to 15%, which is what we have for the group at all. we are looking to do three things in the corporate bank. we are looking to reduce the capital we deployed to that business, we are looking to cut costs, including some staff costs, we are looking to transform the business model to ensure that business is well-placed to succeed in a world.for -- basel 4 anna: you are clear on the extent of changes you are making to cib. it as beingibing court to the bank. did you at any point discuss with the board closing the cib unit altogether, or was that never on the table? at thingswe looked carefully. we said we would give an update on the corporate inc. at q1. bank at q1.q1 -- also the changes we are expecting over the next few 4, andin respect to basel

we have announced measures today that we think will ensure the business thrives going forward. manus: in terms of other changes, clifford, where might we see you step back a little bit? you are doing this restructure at the cib, but what other portions of the bank might use that frat -- step back from in terms of your footprint? clifford: yes, we have made some disposals in recent years, so we have sold out of our private banking business in asia and luxembourg. portfolio that we think you can succeed in currently. we bought a private inking business in belgium last week and we are buying business as well as reshaping our portfolio, but altogether, we are very pleased with the businesses we are operating in and we will continue to manage is operatively -- manage those

accurately going forward. manus: let me pick you up on that. you have a core equity tier one ratio of 18.3% due to active balance sheet management. you want to use the capital for acquisitions over dividends? it's all about share buybacks. why no share buyback? are you building a war chest for deals? clifford: no, we are not building a war chest. in february, we announced our target capital range to 17.5 to 18.5. we are 18.3%, so we are well-placed within our target range, and we are clearly comfortable with the prospects of distribution to shareholders reflecting the capital strength but also our ongoing capital generation, so selectiveok to make acquisitions as we did last week, but we will also look to return capital to shareholders in the event that we have excess capital and have indicated the

parameters in which we consider that. anna: now we know the impact of basel 4. what kind of scope is there to bring down the capital level and to distribute more? dividendsyeah, so our policy is to distribute 50% of and to consider additional distributions over the 50% within our capital range. 17.5% to 18.5%, quite high for the sector, but it reflects caution around the impact of basel 4, which is the new capital rules. really well-placed within that range. theill be looking hard at prospect of additional distributions towards the end of the year. clearly, any returns over and above the 50% will still leave us. we want to be within our target range. but we see the prospect of a

gradual improving return to shareholders in the form of cash over time. manus: can i circle back to strategies? it will be about what you're doing at the investment bank, so g a little bit deeper. what will be the best and most profitable product? who are you in the investment banking space? what is your least profitable area that will suffer the most blow? clifford: so we are in the corporate bank. corporateroad-based bank. we lend to our clients as well as providing services, so we are pleased with the franchise and the returns in a number of our businesses within that corporate bank. we are also very strong in the netherlands, top three. strong positions in the

energy business and the transportation business, so a number of good businesses that are delivering adequate returns currently through the cycle. we have highlighted a number of areas where we feel that we need to take action through our business, looking to take capital out of it. we are continuing to focus on global markets businesses so we are serving our core clients with a focused set of products, and we also look -- they are highly cyclical and we are not getting the risk-adjusted returns we are looking for. so that should give you a balanced view, which is the business's core. the bulk of it is operating satisfactorily. we need to take action to ensure the home business delivers good returns in line with our target over the cycle. anna: in terms of the overall business at abn amro, are you

concerned about trade wars? are you concerned about the impact that could have on your business, taking into account commodities, shipping companies, and other areas where you might have strength, and therefore, exposure? political developments, we watch closely. but so far, that has had very little impact in the strength of the economy. we are strong in the netherlands, and that economy is very buoyant. we have seen a growth of 3% gdp. we think that will continue. in terms of global trade, you know, it is possible that politics impacts economics, but for now, we are seeing improving commodities pricing, which supports our business, actually, in the short term. watch developments carefully. we feel confident that our business is in good shape, and the effects of trade words is muted at this point. manus: thank you so much for being with anna and i, clifford

abrahams, cfo at abn amro. let's go back to china as one of top stories. exports grew faster than surged, while imports showing domestic and international demand continue to rise. the data is notable as it marks the first month of u.s. tariffs on $34 billion of chinese goods, making it an early indicator of the impact of the trade wars. negligible would be the word we can go for. fx strategist.hic let me put this one to you. i have a couple of chats with various people at bloomberg. saying the pboc is more interested in trying to tie the value of the yuan to gold than it is a free float currency. is a run on the yuan dumb, and what do you make on that proposition? >> i am not really a fan of that

proposition. if you look at the history of the yuan exchange rate, the pboc has been managing the current the mainly against the currencies main trading partner. the main one was the u.s. and u.s. dollar. i cannot make sense of managing it against gold because obviously, that would not really help the economy. obviously, the exchange rate is used as a tool to support the economy in some instances, obviously, and i think that we are seeing or what happened as recently as that, is the pboc is looking at the dollar renminbi.the -- close to theg

psychological mark, when the pboc started to step into the market. do you think the pboc is targeting 6.9, seven? is that the limit of the tolerance on the you want -- the yuan? thu lan: i think so. i think they would start to draw a line at some point. this is the most effective way of stopping speculation. with the s&p.his this worked for a very long time because it was clear to the market that this was the line in the sand for the central bank. we could see something similar with the pboc. where they would draw the line at support the renminbi

to show the market that this is as far as it goes. manus: i love what you have written here about dollar-yen. let's have a chat about the pboc. individual about one who wants the bandwidth widened in terms of your targeting. i love what you wrote here. the bank of japan's for guidance guidance was not a surprise. you say the market has realized that the initial reaction to the bank of japan's decision was pointless. can you expand on that a little bit? thu lan: yes indeed. at first, following the boj's flexiblize the strategy, the end depreciated -- yen depreciated at first. the forward guidance was trivial. if you look at the inflation developments recently, the inflation trend in japan has weakened.

the underlying trend is around 0%. we are nowhere near the 2% target, so the forward guidance is trivial, of course. they should not be hiking interest rate because they have not achieved their targets. what i think was more interesting was their decision the year target to let the 10 year yield rise to a much as 0.2% now, which was stealth hike, as some people call it. to me, that was the much more important step because it signals to you that the bank of japan is ready to exit the expansionary monetary policy. anna: thank you, nguyen. we have exclusive interviews with ceo's this week plus the ceo of --

he joins us for the interview on these numbers. we will be speaking to the cfo of germany's merck. ♪

matt: good morning. welcome to "bloomberg markets: the european open." we are live from london. i am matt miller. stocks in china are finishing the day in the red despite strong export data. the cash trade is less than 30 minutes away. tesla's wild ride. brieflyurge are halted and then jump again after elon musk suggests taking the compa