haidi: it is 7:00 a.m. in hong kong. i am yvonne man. welcome to "daybreak asia." face acific markets mixed open. the lira plunges again and the selloff spreads to equities. the fallout reaching across the globe. from bloomberg's global headquarters, i am ramy inocencio in new york, where it is past 7:00 p.m. on a monday. easing inflation may offer indian policymakers the chance of a breather. his fundingys

secured tweet came after talks for saudi arabia but wall street is not completely convinced. good morning, yvonne, and to our viewers across the asia-pacific, the united states. talk of turkey as well as the lira, because it is having a knock on effect in terms of the cratering of emerging-market currencies as well as equities. let's go to pull up the latest in terms of the currency. we can see the bloomberg dollar spot is at its strongest in a year, but look at the turkish lira, 6.9. it had been hovering earlier. see the knockly on effect in terms of the south african rand. they are seeing their weakest. the peso, it's weakest ever.

a recap of what happened. that was the lowest since the start of this month. top laggards included energy and stronger thanks to the dollar. yvonne: even for asia, it was a hard day on monday. the worst day since june. $280 billion of value was wiped out, and we are in for a mixed open as we mentioned before. we are seeing signs of contagion. currencies obviously taking things the hardest. let's take a look at how we are faring. around 110.71. to theflat when it comes aussie as well as the offshore renminbi. heated appoints in china coming up later on today. as well ass

industrial production. we're looking like a mixed bag. wellington pretty much flat so far. sydney futures pointing slightly higher. nikkei futures, interesting. we have seen the nikkei and the topix fall, weighed down by the stronger yen and impacting exporters. some say it has gone a little bit too far. kospi futures heading lower here. we did see an ugly day in seoul theerday, especially with won. jessica summers joins us from new york. hey. .essica: thanks turkey remains under pressure from all sides. bolster theto financial system were seen as insufficient by some analysts. outident erdogan lashed against the u.s. and said he would not accept any international bailout. it contributed to a further selloff of turkish assets and

starting to spill over into other economies. the indian rupee hit a new low as the crisis in turkey ripples three emerging-market currencies. theell the most against dollar since september, 2015, continuing its role as the worst performer in asia. inflation eased for the first time in four months. chances of thee reserve bank keeping rates on hold after back-to-back hikes. bad loans and chinese banks searched by a record last quarter. billion to 280 $5 billion, the biggest jump ever acorded in data going back decade. sour loans represent 1.8% of total advances. that is the highest ratio since march 2009. the crackdown has made it harder for weaker borrowers to refinance. wall street remains divided over test citation plan after elon

musk confirmed his "funding secured tweet" was based on discussions with the saudi sovereign wealth fund. no question that a deal could be closed. gordon johnson says that means funding is not secured, but gene munster says the financing question has been answered. global news, 24 hours a day, on twitter,t tictoc on powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. ramy: diving back into the u.s. 'srket close, and turkey crisis. metals, andd oil, caused the biggest emerging market etf to plunge. su keenan has all the action. where do we begin here? su: we started the market higher , and then it was all about turkey. concerns at into trade

war concerns. let's go right into the bloomberg. gtv is where you can find our library of charts. the two-year rising faster than the 10 year bonds. it is an inverted yield curve. and short, what it means generally, pain in the near-term theories the financial are being broken and that is an understatement here. doubled tariffs on turkey on friday. president erdogan signaling the finance, lashing out at the u.s. country, heme his says. the lira plunged. turkey took higher rates off the table. while it took steps to bolster its banks, analysts are wondering, was it too little, too late? the lira lost a quarter of its value, pushing down turkish assets, kicking off a selloff. let's go into the u.s. reaction. the market snapshot says it all. mentioned, that punished

commodities from oil to metals. the s&p 500 falling for a fourth day, the longest losing streak in five months. let's go into some of the big movers of the day. what you can see his energy,ban. have the materials company. those were the three stocks down the most. exposure.com -- it got to bitcoin, and that volatility drags stock down. the lira is making bitcoin volatility look pretty tame. let's go back into the bloomberg. gtv again, where you can find these stocks. stocks onalled em sale. let's call it a fire sale. the price tag estimated earnings ratio is the lowest since early 2016. not to go all the way back here. this was down 2% for the month. , and down 10% year-to-date

really what you had was a lot of investors just hitting sales. yvonne: it will take stomach to dip your toes into some of those fire sale bargains, but despite the market concerned, there is a view that this crisis will likely be isolated, but that did not stop the selling when it came to the etf site of turkey. su: it was extended again in the latest session in the u.s.. let's take a look. a couple of them exposed to emerging-market currencies and you will notice at the top of the list is the one titled tur for turkey. it was down 11%. that extends the loss on friday. the one-month chart of the etf, you will see this really took a beating, and the bears were piling on. we saw a huge influx in the amount of cash coming into the etf, and it did not have to do

with people wanting to invest in turkey, but rather, wanting to short it. one more bloomberg chart, and this is about the huge surge they took in. 53 million amid the market turmoil in short position. one analyst said you have got a lot of bears out there that "smell blood," and they think the downturn is going to continue. ramy: thanks very much. let's continue this conversation because turkey's crisis is rippling like shockwaves through those emerging markets. in thee, let's bring chief economist and head of credit portfolio management in los angeles. he is a bloomberg opinion columnist. good to see you again. let's hop into the bloomberg terminal. we know where the lira's. looking at the volatility over the lira over the past week, this is at a record as we are seeing record weakness. how much further can this go? en: this looks like a real

extreme that we have not really seen. like a huge earthquake if you think about it this way. the lira has a liquidity crisis. there is no liquidity there. people are looking to short turkish lira is off, and the turkish bank trying to stabilize it, but a really soft intervention. the pboc intervened in the with smallket amounts, so it's not helping. the volatility will stay elevated. it is survived by political factors such as the tension within the u.s. and turkey related to the u.s. pastor. el-erian said he is looking for a circuit breaker, but it seems the will on behalf of the turkish central bank as well as mr. erdogan is

just not there yet. but what lever could they pull if they decided to for a first maneuver? ben: the different things they can do of course, they could do a unilateral intervention in the currency itself. by erdogane allowed for that matter. or, you know, the worst thing is you have capital controls, a bank holiday, and worse, even, that they would call to stop doing debt payments to foreign creditors. that would be negative for foreign markets. we'll sit here with the turkish until thereolatile is some sort of diplomatic solution. one of the things that would happen today that i thought was important is the german prime minister merkel did put her support out there for turkey to not be destabilized. that was picked up by markets.

yvonne: what does this mean for emerging markets? i have a chart showing the correlations we have seen with the lira and the rest of the space and that correlation has only gone stronger in hitting a one-year high right now. hiff of a have a w crisis or is this something different? ben: something different. turkey has just like back in the 1990's, a very large funding requirement. a current account deficit and little reserves. significante pressure was no ability to repay its debts. that's the issue. that is a result of the lending boon that happened to turkey and like it did to indonesia in 1997. there is one difference, and that is the trade policy we are

dealing with from the united states. the fact that you have this link between trade tensions and trade tariffs for political reasons that then affects the turkish then youegatively, and get this contagion effect. that is a bit different than what we had in the 1990's. all that being said, the effects are similar of cross market contagion, as we have seen that the market seeks out other weaker currencies like the south african rand were the indonesian rupee. -- or the indonesian rupee. yvonne: you mentioned how it is different. we have the trade aspect mixed into this. is it fair to put all of em under one basket? we have seen a lot of these p.m. countries have done their -- e.m. countries have done their homework. think thenot correlations will moderate at some point because as you

mentioned, there is a good fundamental basis and a variety of countries. these currencies got under pressure, too, and investors will seek those out as an opportunity to invest, so will be a broad contagion at this point, and that will only happen if you get contagion like you saw in european bank shares. that will spill over into other markets, the broader channel of contagion. with looking at turkey and some of the other weaker currencies out there, making at those countries that have good fundamentals, my view is investors will seek those out as an opportunity to invest given the store and volatility. ramy: it seems as if the u.s. is really the ultimate safe haven play here. hop back into the bloomberg terminal. let's look at average geopolitical risk in 2018. on average, it is higher than back in 2017. how does this change the talk of where we are in the cycle? ben: i think the geopolitical

risk -- you know, if you take us back to your ago with north korea, you have this real geopolitical risk emerging, and it became a situation where markets reversed back to low volatility. this could be the situation going into a geopolitical tension phase and it subsequently becomes an investment opportunity. i think that dynamic has not changed. the only difference this time is the trade policy is a different year and yearsst before where we tried to estimate what the impact really is. ramy: of course, we got the cbo that u.s. gdp is expected to go down. we will leave it there for now, ben emons. you're still staying with us. still ahead, coercion over

diplomacy. we will examine president trump's way of transforming global trade with eurasia group managing director kim wallace, later. yvonne: and of course, as we were talking to ben, he stays with us to talk about the global economy and markets as turkey crisis deepens. how do global central banks respond to the volatility in the market space? this is bloomberg. ♪

ramy: this is "daybreak asia," and i am ramy inocencio in new york. yvonne: i am yvonne man and still with us is ben e mons. how do you think global central banks will proceed with policymaking? is this a harsh call that this is what happens when you leave it to load to long -- to olow,

o low, too long? think if you deal with the currency that gets volatile and out of control, then your toolkit becomes limited. you have to intervene in the spot market and hike interest rates. high, andtes really the argentina currency is weaker. we have central banks and emerging markets like indonesia, for example, that are trying to control currency at the same time as the major central banks. it is monitoring what it will do so the financial system given the exposure to turkey. yvonne: we saw indonesia and into thewell intervene

currency. do you see this as merely band-aid solutions given what we have been seeing with turkey and china as well? we have seen these currencies tied to the renminbi. is there room for tightening in asia? ben: there could be more tightening happening. that is one of the charts i wanted to show. if you look at the financial conditions index of asia, that is a lot tighter than the u.s.. financial conditions as the stock market keeps rising. but some ofthe pboc the other central banks. chinaade war is affecting close to the region. that is where the negative effect comes from, and central banks have to lean against that with currency interventions which are indeed not always effective. currencies will look at fundamentals and determine what is the best value, so i think we will stay in a sort of pattern of seeing interventions

responding to more volatility in currency markets. at the same time, you have other major global central banks like the ecb that want to continue tightening, watching the currency as he carefully do not go too fast. ramy: in terms of the fed and what they could be doing, surely they are looking at this with closer scrutiny then. do you think there is even more of a case right now to consider more hikes? ben: in that front, you would say, yes, the latest inflation data showed some further strengthening of inflation, and we could well be on target this year even with the core index. that that basis should continue to hike. if the financial conditions are that loose, there is no reason for the fed to not hike. rather than simply continue.

we start to take into account that the global factors, the developments in turkey, for example, continue to play a role. it is not something that we can completely ignore. he will stay on course here for now. yvonne: look -- ramy: looking also at where the dollar is headed, we continue to go back and forth on whether it will be stronger later or weaker later. what are your thoughts on that? ben: some dollar strength is happening here, coming through. if anything, it is just a currency weakness. first of all, if this situation continues, there is a contagion effect on the euro. component of a big the dollar index that drives up the dollar. at the same time, if the dollar

reaches the superstrength like we are seeing in 2016, it will become a bigger focus among global central banks to not have that coming a superstrong currency, because that would impact the global economy negatively. yvonne: before you go, how are you playing the situation right now? where do you hedge? where do you feel like there is a bargain for the exposure? ben: one thing is -- you can be defensive for securities. i do think you should look in this episode of what is attractive, what is interesting. so there is some emerging market country and some of the smaller ones in asia. they have strong fundamentals. that?uld you not consider it will thus phaseout. to doerefore, if you want

it that way, taking opportunity of the current volatility. chief: ben emons, economist and head of credit portfolio management. don't forget, our interactive tv function, tv go. you can catch us on past interviews we have had through the morning and the securities that we talk about on the right side of your screen. become part of the conversation as well and send me and ramy a question. check it out at tv . this is bloomberg. ♪

yvonne: a quick check of the latest business headlines now. national australia bank third quarter profits fell as its net interest markets declined and compliance costs rose. u.s. dollars. like all of us really as big lenders, he is facing a tougher outlook as the housing boom unwinds, revenue growth slows,

and it struggles to regain trust after a series of scandals. ramy: a surprise fall in earnings last quarter. that is slowing demand for apple's flagship device. u.s.ll to 570 million dollars through june, compared with the average estimate of 700 million dollars. operating profit was well below expectations. it relies on apple for more than half of its sales and is looking to diversify. earnings doubled in the first quarter, birth -- bolstered by demand in india and the global demand. net income was 279 million dollars with revenue climbing 22% from a year earlier to $5.4 billion. the global sector is benefiting from china's anti-pollution push while infrastructure spending fuels demand in india. ramy: up next, elon musk says he had "no questions" at a deal

with saudi's sovereign fund would come through when he dropped his tesla privatization bombshell. more details on whether funding was procured or not. this is bloomberg. ♪

yvonne: 7:30 a.m., tuesday on this cloudy day in hong kong. we are 30 minutes away from it is first major market open. monday, here in new york. similar view, actually, yvonne, even though we are thousands of miles away. i am ramy inocencio in new york. the s&p 500 down .4%. alot of that had to do with stronger dollar and geopolitical tensions pushing energies and commodities lower. to the let's take you market open. we have been counting down to this, of course. a lot of big things to factor in whatever it is, the turkey issue. a lot of data up ahead with

china data in focus, so in the meantime, let's get you caught up with the first word news. jessica summers. jessica: the fallout from turkey financial crisis spread through markets. rand's one month implied volatility soared by the most since december 2015. the yield in argentina's's entry bonds rose to 10% as the peso touched 30 to the dollar. you emerging-market stocks are the cheapest since 2016, which saw the start of a two-year 60% rally. the congressional budget office has slightly cut its forecast for u.s. growth this year. it warned of growing uncertainty from president trump terrorists. the cbo -- president trump's tariffs. that is down from a 3.3% forecast in april. is that it eased on slower business investment and government line. msci is adding 18 stocks and the

leading four from its index after a quarterly review. the only addition to the world index would be japanese chemical company -- in japanese chemical company. others joined the emerging markets index. msci said the changes will happen at the close of trade on august 31st. people feared dead and thousands more displaced as a tropical storm hit parts of metro manila. it caused the river to burst its goks, forcing residents to to makeshift evacuation centers. the local councils have declared an emergency for at least 20,000 people. global news, 24 hours a day, on air and@tictoc on twitter -- and act tictoc on twitter. i am jessica summers. this is bloomberg. ramy: we have breaking news across the bloomberg terminal.

carl icahn says he no longer tends to vote against the cigna deal. this relates to sigmas $54 $54 billion.gna's an advisory firm urged shareholders to support that deal. a quote here. he says in light of the recommendations, we have informed the fcc that we no longer intends to solicit proxies to vote against that transaction. breaking, carl icahn says he is no longer intending to vote against the cigna deal. let's move along to one of our other top stories today, and that is focusing in on tesla. investors remaining divided on the companies privatization push after elon musk confirmed a bloomberg report that his claim of funding secured was based on discussions with the saudi sovereign must fund -- sovereign fund. no question that a deal with the

pi have could be closed. this go to bloomberg news executive editor for technology, tom giles, in san francisco. this change anything with the fcc investigation of mr. mosque? tom: it just keeps the questions alive. this recently indicates that yes, he did have in fact a very wealthy organization that saudi arabia, sovereign wealth fund came to him very interested in a take private deal. they certainly have the capital that you would need for a transaction of that size. it explains why he had so much confidence, but it does not answer the question of why you would say funding is secured. was there a deal signed? go andre a bid ready to a proposal you could present to shareholders to give them the needed -- they confidence they needed to drive

up the share price on the heels of that tweet? those are questions lawyers tell us have not been answered by his statement earlier today on the saudi fund. ramy: it was revealed that the wealth fund had 5% of a stake in tesla. why are they so interested in the company? tom: there's a few things going on. we do know the saudi's are looking to a post-oil future at some future date. they need to hedge their bets. they need to hedge against that. there is also this question of tesla as an investment. there are a lot of people who really believe in elon musk's vision for electronic electric vehicles. these cars have a very loyal following. there is demand that outstrips tesla's ability to meet that demand. what is happening is that in the short-term, they are having problems with meeting demand,

with producing the number of cars that they want, that they target, that there is clearly a market for. there is also this cash burn issue. so that makes for elon musk and his management -- it makes the idea of going private very, very attractive. that means that you are not subject to short-term targets andby wall street analysts demands of investors who are looking for that very near-term return on their investment. if you are going to go private, you're going to need to take with you investors who are ready to buckle up for a very long knowsand you know, who when you might get a return on that investment? butne: there is his vision also his leadership that has been in question. some have called his behavior erratic. also with the but latest tweets as well. is his position as ceo in danger

now? tom: he is very unpredictable when it comes to what he tweets about. the question is, how much of his leadership what a big outside funder want to have at the table? we know when he was talking to softbank that he was interested in having a leadership role. the saudi's, if they are going to go forward with this, would probably have to accept a big leadership role for elon musk. yvonne: we will leave it there. tom giles, our bloomberg news executive editor for technology, joining us from san francisco. we are counting down to some of the market opens in the asia-pacific. that's get the latest with sophie kamaruddin. that we sawc monday out of turkey. we are hoping this could be put in the past and we could focus more on the china data coming up. sophie: there is a question on whether or not there was an overreaction. when it comes to japan, for example, asset management saying

yes. there are limited economic ties between the two. it should not hurt the earnings prospects for japanese companies or hurt the global economy. the stronger yen looking steadier now. you have the earnings outlook. they are looking fairly undervalued. hopping into the terminal to check out this chart. after losing more than 3% in two days, the topix trading at 13 times estimated earnings, and that is the cheapest level since july 2016. that compares to the roughly 17.6 times multiple of the s&p 500. there are still some concerns. remainrs will likely cautious. there will be some panic potentially in the air. ramy: other than turkey, what else could drive market sentiment? sophie: we have data from china that will be key after the slowdown we saw in credit growth

on the mainland. check out the functions on the terminal. we have chinese retail sales data which are expected to pick up steadily in july. ditto for industrial production, coming in at 6.3% for the month of july. fixed asset investment growth holding at a record low. while we have set the immunity to turkish turmoil, asian futures looking mixed but pointing higher with the nikkei 225 set to potentially recover after a four-day drop. we have the final report on activity do from japan as well, and this comes after the data indicated a 2.1% monthly decline. checking in on aussie futures, indicating a more positive mood ahead of the latest reading on business confidence. that has fallen for two straight minutes. yvonne: all right, looking set up to be better than yesterday for sure. thank you. early days.-- still chinese data is excited to come through. slower credit growth figures came out yesterday, and posted

by china, underlying official concerns that more must be done to boost the economy. string of data will focus mines in the markets with industrial production coming out on tuesday. the chief asia correspondent, in the current, joins us now -- enda curran joins us now. did we see a shift? completeis not a comparison, but nonetheless, we saw a big slump in shadow banking, consistent with the campaign to the risk the economy -- de-risk the economy. we have seen a shift going forward. people expect more credit. see banks are already being encouraged to lend infrastructure projects, to make sure activity demand on the ground keeps going over. the overall credit story remains somewhat subdued and continues to target the risky parts of the

economy where shadow banking is lurking. we know they are starting to keep an eye on the growth tories , getting more money for the economy. yvonne: industrial production, retail sales, they are due out this morning. things pick up a little bit as sophie have mentioned. do you think that we are painting a better picture here? is the second half pretty much in question? july we know to lie -- exports are pretty good. all points with a stable economy. there is a real sense that the action has yet to come in the second half of the year. we are only at the beginning of the trade war. in to thet to move next phase. as that happens, that is when you start to see it hurting real economic activity underground. ramy: the pain yet hostile to creep in.

looking in india, we saw inflation ease. does that boost the odds of the r.b.i. in its rate hike path? enda: we had a very aggressive series, two consecutive hikes, on the back of quick main inflation. slower food prices seems to have taken the wind out of the inflation sales a little bit eerie at there is a view that it does take pressure off the hike going forward. remains reasonably stable. but nonetheless, the issue for the r.b.i. is they are also dealing with one of asia's worst performing current these, the rupee. in a broader context of the em volatility, there is a feeling that the r.b.i. cannot afford to let its guard down. reprieve onng of a the inflation front. they will continue to watch the capital flow. ramy: and the karen, think --

enda curran, thank you very much. we will get the views of eurasia group kim wallace. this is bloomberg. ♪

yvonne: one of our latest stories coming out with our colleagues at tictoc. i am yvonne and in hong kong. ramy: i am ramy inocencio in new york. monday, wondering if it will be followed by a terrible tuesday. they do remain under pressure. the feeling is there developed peers are relatively well insulated. president erdogan insists his come -- country is under economic attack. let's discuss this with kim wallace, who joins us from washington. hasing at what mr. erdogan been saying in terms of not moving or excepting capital controls or rate hikes here, not really exactly sure what the endgame here is especially with the lira now near its record weakness.

where -- what are they waiting for? kim: they are likely waiting for evidence of how the negotiation with washington is going to unfold in the near term. the longer term issues of turkey's structural imbalances are not in question. short-term debt is very high, and will need servicing this year. at the same time, the political issue that brought turkey and the u.s. to this point is not yet resolved in the subject of talks that at least last week seemed to be making progress. ramy: are we too far away from a solution as relatively simple as allowing that pastor that has been retained in turkey to return? we have seen him meet with john bolton just earlier today. do not know if it is too soon, but it seems to be too soon for the two sides to conclude discussion.

timing is everything when it comes to politics and policy. on the political side, the president and the vice president are convinced that this issue is popular with their base, and certainly, public opinion surveys support that notion. at the same time, erdogan is very likely willing to see how far the u.s. will press this asian thathe realize turkey could be a catalyst for a contagion. yvonne: do u.s. sanctions on turkey do more harm than good? does this stir more nationalism in the country to push her no erdoganer to rush -- closer to russia? kim: you really do not judge the outcome except in hindsight. so by the time you can judge that you push too much and too far, it is likely to late. at this point, neither of the heads of state seem to be convinced that the other is willing to give the best deal possible.

again, back to the timing of it, for president trump, the relief of -- release of mr. bronson would play very well in the midterm election headline cycle. yvonne: what is the best case scenario now to come out of all of this? kim: the short-term is a lot less important really than the long-term. the long-term by the structural deficiencies. that made it a long-term in the trade roz and practices -- rules and practices that president trump would like to get the world to change. in the near term, what happens to mr. bronson with respect is very close to immaterial when you talk about the trade wars that are blowing in the country. and around the world. and what that means for your latin america and asia along with the u.s. we are at the beginning of the

process for the eurasia group. first round be the of conflict. with china in particular, the fight moves in 2019 into critical technologies and how china treats those issues from a trade standpoint. we are at the beginning, not at the end. ramy: i am glad you brought in china because mr. erdogan he citesoday says an economic vision, convergence with china. we will take our ball and had the other way. kim: at this juncture, ramy, rhetoric is high and hot because people have been surprised by betweennight reactions -- in the markets between the u.s. and turkey, but in reality, one of the reasons president trump feels comfortable and pressing his point with an economic to all his political not inis that turkey is a condition economically to sustain the fight with the u.s.,

and if it is counting on china to come to its rescue, you have to observe that china has some issues of its own both domestically and with its conflicts with the u.s., so i would be surprised if mr. it on -- erdogan's conflicts rattled people in the white house. ramy: how do you look at what is happening not just here in turkey, but also with u.s. and china with the lens of the u.s. elections? kim: the president promised on the campaign trail that he would level the playing field on trade, but he was often quoted as saying he would get tough with china. there is a strong bipartisan support for china relaxing some of its trade rules and changing some of its trade practices. the past 15 to 20 years have certainly damaged the u.s. at least from a national security long,oint, so this is a

transformative debate going on between beijing and washington. it is at its mason's. -- nacence. this conversation is going to frommany twists and turns a policy standpoint. the underlying economics, the fundamentals, of asia, china in particular, and the americas, u.s. in particular, matter more than the rhetoric and the posturing around negotiating tables. the view that you have mentioned -- the cbo, congressional budget office -- the u.s. economy is slowing from a peak that started in the second half of 2017. there is growing concern in the u.s. that when you go through the cycle -- and at some point, we will have a recession in the u.s. whether or not the country is positioned to weather that storm, we have extraordinarily u.s. fiscal policy in the right now, and the central bank

attempting to raise rates in part so it can build ammunition for that coming recession, whenever that may be, so it is the economic fundamentals and how policymakers manage going into the next decade as opposed to the next month or the next quarter and is more important for markets over the long term. yvonne: you look at the stock market in the u.s. and it seems to show more resilience. china in particular as well. does that give president trump more leverage to double down when it comes to tariffs and sanctions, particularly hitting some of these honorable targets like -- formidable targets -- vulnerable targets like turkey? kim: this is also the case with canada, mexico, and europe. again, the questionnaires the underlying fundamentals of all the countries involved. rely ons that usually each other for some elements of growth. trade is an element of growth in

most of these countries, including the u.s., when you look at the services side. to the degree that no one can predict the future, it would behoove policymakers to make sure that they are opening channels of communications among each other and more than anything else, that their policy apparatus is paying attention to thee fundamentals so when stress comes, you can manage through. what we are seeing reminded that the interconnectedness of the world imposes outcomes on everybody involved, including the u.s. yvonne: great conversation. kim, thank you. kim wallace, eurasia group managing director, joining us. now for a look at the stories trending across the bloomberg universe. trump's trade wars, not the biggest risks facing japan's auto parts makers. why ether slumped for the first time in months amid concerns that ipo's using the feeling blockchain are cashing out --

ethereum blockchain are cashing out. you can check out the stories, trending on bloomberg online, or on the terminal. this is bloomberg. ♪ ♪

yvonne: we are counting down to the market opened in japan, south korea, and australia. we are really hoping to put the turkey situation behind us. we have chinese data coming through in the next hour or so. retail sales, industrial production, as well as fixed asset investment. a mixed picture when it comes to asian equities after the worst data we saw since june. 280 billion dollars of market value wiped out in just one day. pointingi futures positively. some people saying it was overdone with the reaction to turkey. in the next hour of "daybreak asia," a deepening to this

turmoil and spillover into e.m.'s michael every -- we will look at the chinese markets with a market economist ahead of the key data coming up. the market open, up next. ♪ two, down and back up.

our phones are more than just phones. they are pocket sized personal trainers... last minute gift finders... siri: destination ahead. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet. which could save you hunreds of dollars a year. plus get $150 when you bring in your own phone. its a new kind of network designed to save you money. click, call or visit a store today.

markets face next open is turkey's crisis deepens. the live plunges again. the selloff spreads to equities. the fall of reaching around the world. emerging market stocks and currencies drop to the lowest in a year. >> from bloomberg's global

headquarters, just past 8:00 p.m. on a monday. post with profit. the plateauing of demand. since his funding secure tweet came talks with saudi arabia but wall street is not completely convinced. ♪ >> it is a typhoon number three here in hong kong for markets, we are hoping for a little bit less drama after we are seeing the sieve -- situation in turkey. some good news possibly when it comes to chinese data later on this morning. in terms of what is helping with the lira and with turkey, one silver lining is that at

least, analysts continue to say that it is fairly idiosyncratic. we may see some contention in europe and the banks there but generally speaking, seems to be something that we possibly may be liable to whether over some long or middle term. let's could've first word news now jessica summers. >> thank you. the indian rupee hits a new low. it fell the most against the december 2013. continuing its role as a worst performer this year. for the first time in four months, it boosted the chances of the reserve think it's keeping on hold after back-to-back hikes. banksoans at chinese surged by a record quarter last quarter. rising with a $26 billion to almost 280 5 billion. it is a biggest quarterly jump ever recorded.

no 1.8% of total advances. that is the highest ratio since march 2000 and nine. the banking is made in order for weaker to refinance. the congressional budget office has cut its forecast for u.s. growth this year. it warned of growing uncertainty of the trump stairs. the economy is now seen it expanding 2.1% through 2018. that is down from a 3.3% for guests in april. this is growth will use to 2.4% next year on slower business investment in government buying food -- find. >> every six people are feared dead. the powerful storm caused the forcing burst its banks residents to take shelter in makeshift evacuation centers very.

an emergency from its 20,000 people. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more jessica countries, i'm summers this is bloomberg. a look at whate the asia-pacific market looks in store for us. most in the past few weeks. asian: sophie: haidi: equity investors may be seeing some relief year as we do see stocks getting ground across the region. it may be too early to say if asia will be able to avoid a terrible tuesday after that manic monday. sophie: losing over 20% in over four days. the dollar holding onto gains as the u.s. features are nudging slightly higher. you that yen trading at 1.70 one after touching an overnight high of 11011. on the eco-agenda from japan, we

are waiting for the final report on june industrial production. from sydney, we are waiting for the business confidence. australia, aussie shares going to point a percent. the cosby rising for the first eight and three. when it comes to today's data from china, it will be key. the offshore trading around a high-level ahead of that. putting some stocks on the radar, the bluescope steel, ahead of the worker strike in new zealand. what joe for the third quarter trading update from them as well out of australia. don quixote, discount store operator from japan, 83% since the start of the session. the company has said it is interested in buying the retail chain if walmart is selling. this morning2.3% after falling 10% this morning. this is chinese regulators or that it be removed from its service just days after its debut. a bit of aing

turnaround here today. given the turkey situation, the rebel across the emerging markets, something of a manic monday as i called is the lira lended losses among global peers. a little too just little too late. turkey takinge some action here but far shorter than what we were expecting. that's right, there was not the interest rate hike that the market had been anticipating. that is why we saw a lot of the turmoil yesterday. it was no mention of fire interest rates in the statement although, the government said they would take everything on the table and they would take all necessary measures. these measures were reviewed is insufficient to protect the lira but they did include things like

lowering the amount that commercial lenders had to park at the regulator and easing other kinds of rules for them with lira. most analysts that it was not enough especially, at this particular point. rami: we also heard point that the national security adviser met with the turkish investment fund monday in washington dc. i do not see anything much come of that. tim is something? >> they met at the white house. sentence a two statement from the white house press secretary in which he said, they talked about the relationship. an interesting time to talk about the. pastoralked about this .ho was jailed in turkey is caused president trump to imposing sanctions that is of course, led to this turmoil.

of itunclear what came and frankly, given the fact that both turkish president in the u.s. president have doubled down in their positions, it is hard to see that there is a diplomatic solution anytime soon. it does not look like that is happening. it looks at they are both sticking to their positions in terms of the united states and a pastor and other diplomats must be released. the u.s. may go ahead and impose further sections in the turkish president blaming the u.s. for its problems saying, they are in flaming this international situation. our senior international editor. it's good to the market implications now. this morning out of sydney. michael, good to see you as always. talk about this turkey situation right now, these measures that we saw from policymakers, is it

too little too late? very much so. everybody who's watching them when it came through was just waiting to see when we saw the rate hike and how large the rate hike is going to be. was it going to be 10%-12%? wasaw that the lira absolutely smashed. nobody was really interested in the details. when you went through the details, what they were effectively doing was to going to the edges. it was an economy that artie got too much. it is not have enough u.s. dollars on the other hand of the balance sheet. >> yvonne: is there a sense that could bethey do, they offset by any potential volatility when it comes to relations with the u.s.? could these policies actually go to waste? >> i think probably,

writers and people who like a in reallyine a really richer territory at the moment. whatever you look at it now, they are in huge difficulty. there is no easy part in front of them. they will have raise rates at some point. . do raise rates, they have an economic crisis and that is also been up a dumb pressure on the currency. politically, other president is going to blink or the president's went independent very difficult position. there was not a lack of liquidity when it comes to shortselling. i want to show you, what this is all about. it is called trading turkey. investors moving up short positions and are now at a record high. in terms of the possibility for rate hikes. it do you think they have

to be to turn all the surround. at this stage, the very minimum rate hike would be 10%. that is the bare minimum. that major something sell for the moment. if you want to get ahead of the curve, 15%. the big as aggressive as it appeared that is only thing that is what to stop this momentum. there is only thing that creates additional problems because that itself will not be enough. you'll also need to see a very sharp change in fiscal policy. they have massively aggressive fiscal policy in turkey appeared otherwise, the same problem will just come back. rami: what do you think mr. erdogan is looking for. do you think there is some endgame that is tried to gain out here? "bloomberg markets: asia >> one could say divine intervention but at the moment, he is really painted himself into a corner politically and economically. a blow to president of turkey, he is every right to take that rather contrary and policy stance on optical fronts.

while we still have markets, markets and are equally able and willing to take a contrary stance and we will see a thing of the day who will win that. i will suspect that it will not be turkey. rami: they have been saying that to pull someing lovers hear the lease, in terms of the central bank independence. that is something that has made skeptical that anything whatever, unless, it has his blessing, he really does hold all the cards. he does a hillbilly has stated that he wants the interest rates rising aggressively will he is a life. obviously, that is probably heated rhetoric speak into a crowd but he does suggest the central bank in the penance is still operating in turkey the same way that it does in other emerging markets for example, it does not suggest that we will see the 10-15% interest rate

increase this week. to thehen it comes spillover effects you, it seems like asia has been relatively speaking, muted compared will you than been seeing in argentina and south africa? yvonne: what do you think that is and who do you think that it is in the best position here? asia is quite a long ways away from turkey. what we're seeing generally is pressure. it is because of the fed. maybe the something we could talk about in a moment. you will see the worst sinners -- the most and obviously, that is if you run a large capital of trade deficit. particularly, those double deficits are going today smacked of the moment and anyone who is in a position, argentina, south africa for example, those are obviously the ones that are looking weakest at the moment. that is why the currencies are coming off much much less.

at some point soon, we could see an interesting leap across continents. one of the questions that is looming in the background here is a turkey is actively now trying to blackmail the west saying that we could walk away from nato entirely shattering the western military alliance if we do not get treated nicely on the economic front. that then raises the question of what if they tricked away from the west? did ahead had independent or do they had east? other major economies would abide and may potentially look at billing turkey out and inviting them in? i imagine that the u.s. and their firefighter went up interesting concerns countries. yvonne: we will continue our conversation on this discussion of turkey and also look at the fall of for asian emerging markets as well. later this, we will look at cleat data out of china.

what to expect for retail and industrial production. this is bloomberg. ♪

yvonne: this is duplication, i'm yvonne man in hong kong. rami: i am ramy inocencio in new york. harley any emergency markets was paired third on course for its biggest four-day drop since 2016. still with us, michael avery, head of asia financial markets. talking about the correlate of the fence between the lira as well as, the yen, it looks like it is at a yearly high but it is also a case of non-throwing the baby out with the bathwater. what are your thoughts? >> which baby in which but water? in the past few days, we have been talking to analysts for

there are opportunities for buying. this is just something that could be more of the short-term. i think of it tactically, just before the break, certainly, those who have been performing worse in terms of fiscal deficits are the ones that you want to be most nervous of. they are already been published. they should be performing better. iftainly, you be saying that the salt is over, which i do not think is likely to happen. yes, you suddenly swing back. you could argue that the worst performers of the ones that have not performed particularly bad so far. you take a nuanced view on that. i think you also have to look at this with a broader context as i try to allude to earlier on. this is not just about turkey appeared to the degree come on their domestic fundamentals are really extremely worrying.

a lot of it is about the fact that we have been planning ahead with rate hikes. borrowingge dollar across the emerging complex. the complex is not going to go away and even if we get a brief pause for the summer, you choose your time. that does not mean it is not going to come screaming back at us again. rami: with concerns of rising inflation moving ahead with these rising trade tensions, what impact do see in terms of any change of that rate hike? here is the irony, generally speaking, the fed tries to talk about looking at things domestically but when you know that they pay attention to things going on internationally. right now, we have such a sharp divergence that we are called between a rock and a hard place. i was suggest of your is make

themselves at home using bloomberg's. you look at the u.s. unemployment rate and ucl low that is. you look at the u.s. fiscal deficit a you look at how large letters, we have never seen this disconnect before post-world war ii between this low level of unemployment in this large of a fiscal deficit. the only response to the fiscal impulse with low unemployment is higher rates. said, for emerging markets perspective, they'll is the worst possible time. year aftern barlett year after year. the payoff is going to be enormous. yvonne: i think one of our guests have said that it is not just a one-two punch when it comes to emerging markets anymore, when it comes to the situation, is this an opportune particular to in perhaps, it is one thing to sell off and actually follow emerging markets lower, it is another thing to miniature currencies as

well. this is a potential opportunity for? is but it comes with very high risk. first of all, it is holding on ok. this is a moment when china wants to show, emerging market currencies. they are going to do everything they can to try to identify. it also offers china a huge opportunity. there ands openly out no shopping around for who is going to bill self. to does not like the terms and is going to come along with the u.s. bill of him on those are going to be higher interest rates which the president of sunlight. perhaps, phil looked east to a country that also does not like posterity and does not like i interest rates and is not a huge fan of the west. i'm talking much i do. if china steps up and bills of turkey indirectly, i would imagine that within a short order, all of the pressure would shift even more so, back to the

renminbi. yvonne: do think we are actually going to break out of seven? >> i'm sorry i didn't your what you said. yvonne: seven handle, do you think we are actually going to break up above that? i think near-term, i'm notoriously bearish on the chinese economy but i think we can old level provably because china is absolutely determined to hold right now. months-two years, if china carries on in the way that it is in the moment, they are going to have headlines about it. we" through seven. picking up in regards to what you're talking about a china, mr. actually did say that he cited an economic convergence with the country, to what degree

do you think this is rhetoric and how difficult would this be. let's be honest, it would be very difficult to a degree. it is just rhetoric heard a look also huge money money, it would dislocate everything. nato would be finished. as i said, that has enormous geopolitical ramifications. rise up at will not all. also come on give me that turkey's trade with the eu would certainly be interrupted. it would certainly rearrange turkey to a western facing orbit. turkey is a country that has obviously done that in the past. between europee and asia. these kind of opportunities, to say, we encourage you to lead from one direction to another politically and economically and financially, they have been once every century. from china's perspective, this really is a golden opportunity.

comes with a very high price and it does not pay off. it is financially going to be very very expensive and it will certainly rates that was a look much more the u.s.. therefore, putting more pressure on china. rami: the of brexit on one side of the continent, turkey and then, talks were fears of this happening on the other side. you could get a roundup of the stories that you need to know to get your taste going on the submission of daybreak. you can also customize your settings to only get the latest on the industry and assets are you can about. this bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

yvonne: a: 30 in singapore. good morning, we are in a typhoon in hong kong. just a half hour away from trading there. rami: i'm in new york and you're watching daybreak asia. at the first word news with jessica summers. remains: while turkey under pressure from all sides, it takes is for steps to bolster insufficientcy by

by some analysts. prison everyone lashed of that the u.s. and its so that the irate are not possible. he would not accept any kind of international bail out. assets are starting to spill over into other economies. the fallout from turkey spread to emerging markets and in stocks currencies to the lowest in a year. since by the most december 2015. we will on argentina century bonds rose to 10% as a ghost or eight dollar. emerging stocks are now the cheapest since early 2016 which saw the start of a two-year, 60% rally. street remains divided over to assist privatization plans. that is after elon musk confirmed his quote, funding tweet. musk says he left a july meeting with no question that a deal could be close. tessa of vertical group says

that means funding is not secure and loup ventures says the financing question has been answered. msci is heading 18 stocks and deleting for from its a cwi index after a quarterly review. the only addition to the world index will be japanese chemical company. china united network and hanley petrol chemical a-shares joined the emerging markets index. the changes will happen at the close of trade on august 31. global news 24 hours a day, powered by more than 2,700 journalists and analysts in more i'm jessicauntries, summers. this is bloomberg. yvonne: tennessee other asian markets are shaping up so far this monday. >> there is a reassuring column of green, asia stocks on the rise.

the nikkei is rising for the first session in five for the yanis laquon are they study paired currencies of the under pressure as of late. it is the weakest level since december against the greenback. we are seeing losses for other currencies. i want to check in on some stock movers as well putting earnings an update on the radar you. you have qb next jump in tokyo after it announced plans to raise prices. the company offers excellent hair salon services. in sydney, cochlear citing the most in three years. the maker of your implants of mr. target a missed estimates. domino's pizza, getting burned in australia. falling over 12%. this after the earnings forecast is pointed. plateauing demand for iphones hurt second-quarter profits.

apple's leading supplier reported a 2% drop. the stick until of this with bloomberg opinion call list 10 in taipei. to a degree is the iphone really to blame year? easy clicheh a nice to keep blaming the iphone if you chime in misses its estimates but in this case, it is just not true. the recently could say this is because if we look at the top line, you're on year in the second quarter, that is the quarter from the end of june, revenue grew 17%. that is pretty much in line with iphone or apple sales for the same. of time. we do know that apple did better because of the is be group of at the same time, it is very atficult to climb sales apple for problems at all night when the top line group to 17%. that is a nice level of growth. it is too much of an easy cliche to keep that make them and really, where we should be looking as other parts.

rami: peddling explain this business in earnings? iphone sales of the group. they clearly missed something here. correct to say that iphone sales for the group to the revenue grew by 7%. only did see is a is pisa apple group. margin than the actual shipment about a group of little bit but really, if you look at the numbers, it is not at the top line. you have to look at the battle. the place you need to look as first item under sales revenue that you have to look at it. it is the first expensive item. we saw the cost of goods grew quite a lot and it grew the sales level. line, the gross margin strength. a shrank by more than one basis points. about 1.2 percentage points. that is huge.

when you are taken would 1.2 percentage points of gross margin, that is really going to hurt a company that really does work on the margins. we go down one level, we look at operating next to his come were up a little bit. that needs of the operating level, most of with operating income-based treatment because of the higher level. it's a cost of goods sold. that is what we needed look up. a lot of that is what we see it as component pricing. here near, there have been some currency fluctuations. their father been other component set of them more expensive. it has been good for suppliers in that area but it has not been good for companies like apple. that is where you need to look. the pricing. yvonne: of course, with the market looking we, we've seen them try to reduce its dependence on apple. do you think they are going to face more pain? what are potential growth

drivers for this company? they are trying to reduce reliance on apple. they are still getting 15% of its revenue from apple. you know what, given a apple has been able to give asp's and they are trying to keep ahead of the selling spot, it is probably a good client to have appeared they do have a white client base of support. the mobile itself is struggling in all sorts of various. they definitely will feel pain. if you are at the smartphone market and at which companies are going to come out on top, i say that they will hurt less. you'll probably hurt but not as much as some other players. yvonne: bloomberg opinion columnist joining us from taipei. switching gears to japan. the number one industry could be under threat with the push for cars to go electric. auto suppliers are bracing for cuts as cars are built with

combustion engines. to pursue some of the brunch is here. it is not just the trade war were automakers are worried, they are more concerned with a visa appeared. >> "bloomberg markets: asia the broad trend is going to be less demand. there's one to be less demand for specialized parts made by small manufacturers and 80 geographically centralized industry. his businesses go out of business or they retooled her business to make more parts are moving to other sectors, there is no question that some amount of people are going to be losing their jobs. the intern has ripple affects. they lose their wages to spend a bars, grocery sports, local businesses. which isustry centralized, geographically centralize like this, the report fence will be quite extreme and will have big macroeconomic implications for a regional

economy. it is the second biggest regional economy outside of tokyo. yvonne: it produces these new winners and losers as well. what are some of these companies to cope with this type of change? right, the company's again, the bigger companies of the resources are in testing in producing imports. parts andies, other will be used in electric vehicles are they are moving into new sectors entirely. companies, and i do prefectures colquitt so close to 60%. have the do not funding of the manpower. in japan, they are in the midst of a nation which shortage and is particularly acute in ig which has a lot of manufacturing.

the bigger companies, they do see the writing on the wall and they are being collective about this but a lot of the smaller companies are just getting by day-to-day. they can look too far into the future. rami: in terms of public policy, what role as applied? -- is applying? governments everywhere are promoting electric vehicles and japan is no exception. they are environmentally cleaner and everywhere wants to be the place where production is centered in the future. is considering, the government is considering promoting or requiring all of the vehicles be electrified by 2050. that is relatively later than governments and china most notably. the government is pushing it but there's no question that people are going to loose or jobs. they're going to have to have three training or some other kind of economic support for these workers to make sure they are not left behind. rami: we will leave it there.

japan economy reporter, in tokyo. thank you very much. up next, what china's economy set to be facing growth risks, we'll get a preview of today's industrial output and retail sales figures from jpmorgan. this is bloomberg. ♪

china's broadest measure of new credit sold last month giving initial impetus to move to support growth. china's correspondence joins us from beijing. what does the state until us? aggregate financing as he said slowed in the month of july. a trend lower by this continued squeeze on the shadow banking sector in which fell about 17 billion u.s. dollars for the

month. that fall is a record drop that we saw in june. this is in focus, it is an area where policymakers see risks in terms of debt but it is also a sector that the small businesses here in china are relied on in many cases for credit. really, these data points, in terms of the data flow, underscore the rationale behind the shift. it shows policymakers to support the growth as shadow banking is increase. it does underscore the logic behind this. loansmentioned yesterday, for the month of july came in but still colossally lower than the month of july. it does require a bit more time in but what we are saying and it can, policymakers are looking at the impact of what could be a prolonged trade war with the u.s.. rami: yvonne: what are we looking for?

is it going to be a better picture that we saw the on the credit side? >> we are expecting broadly positive industrial inspections to take it up about 6.3% from about 6% in june. retail sales are expected to show moderate improvement as well. inh the previous month, terms of industrial production, you may get some support from the domestic demand here. in terms of fixed asset productions further beyond july, you make it more support for that as well give it the support of policymakers on potentially more investment in the retail sector. household credit is taking up here and that could prove support to the consumer here. it is still relatively bullish. we do's expect a pretty strong number in terms of retail sales. a.m.ll happen around 10:00 local time. further in the year, we will see more of a play through. july, we saw the 34 billion worth of tariffs. later on, we could expect to see

much stronger tariffs. especially, the second half. they should be more cloudy. our china correspondent joining us from beijing. head china economists and of china equity strategy at j.p. morgan. he joins us here in hong kong. looking at the data that we see so far on the credit side, do you think that the shift to probe growth, it shows that they are actually moving early to head off the slump or are ready bond the curve? compared to the previous episodes that you sell, this time, it is more limited. on the one side, remember that this is not a broad-based policy. the government has emphasized that the housing will continue in the regulating will continue. if you look at the reports come off shadow credit in particular, still suffers. that actually offset the impact.

the second area that the people tentative ignore, fiscal policy, another key area, again, another mixed picture in july. the talk of a vantage of the space, at the same time, because of continued housing, we see it start to slow down dramatically in july. that will affect the local government. rami: yvonne: you mentioned the steep fall in shadow banking, we see these loans moving onto balance sheets radel. do think that is sustainable right now? do you think that aggregate financing will start ramping up right now? the previouso episode, the easing will be more leverage. i think it will be was limited, number one, nobody is expecting a policy cut. secondly, in terms of the social financing growth rate, we expect that it will stabilize in the second half. we see this phenomenon

turning on the liquidity taps but banks are not willing to lend an extended credit. why do you think there is still the kind of hesitation to do so? reasons, one in terms of the business cycle, i think the market consensus is still looking to an economic slowdown. despite the policy seeing easing, i think we will see more of the slowdown going forward. from that perspective, the banks are cautious about the business liability. second, very important, the banks constrained the regulatory requirements. see,u look at the cdi you if you look at the statements last week, a should encourage banks to raise new capital paired they also encourage banks to write off more bet notes to create space for the new credit lending. rami: looking ahead to the data hour'sd just over an time here, often to the terminal and i will show you in terms of

viewers, what are we standing currently, if the yellow line is industrial output. far,r, it seems that so things are moving up just attend. no effects yet from trade worries, trade tensions. would you think we may actually start to see this? >> if you look at the economic data in recent months, i should is not doing as bad as many people thought. if you look at what is driving the economic slowdown, on the domestic front, there is mainly to areas. there is infrastructure investment that has struggled on dramatically and it is related to the combination of the fiscal tightening and also, the shadow banking tightening. the second area is auto sales. that is related to the expiration of the policy for this year. if you look outside these two areas, manufacturing investment, that means the investment that the first half.

retail sales is escorting all the sales. ishink that my first point that on domestic demand, things are not as bad as many people thought. for today's data, though we have the consensus that it will do particularly, it is a very favorable effect feared last year in july, ip growth actually can down dramatically compared to the june 2017 reports. there should actually provide very favorable effects for today's ip growth. switching to chinese equities now. would you think this is headed moving ahead? a lot of people are saying so at least. >> the buying opportunity would probably be open. it offense on the policy measures and also, how this would drive the stabilization of the economic policy. so far, the china equity markets of have not been doing good for

this year. the three major drops affecting the market sentiment, one is the escalation of the trade or the china and u.s., the second is a week currency, the third is the market sentiment on the gross outlook. i would say, on the trade site, there is no crediting the very near term redistribution. i think a month next topic, in terms of policy and the gross outlook, things will probably call off. we are seeing a lot of policy and we believe that infrastructure investment will benefit most. ae currency was intervention few days ago. we are seeing relative stabilizers. these are the two positive catalyst that may drive up that equity market. yvonne: you're calling a bottom yet? >> we are still in the range because the market is still waiting for a more clear signal.

once is more positive news is confirmed, i think it is a opportunity for marcus to ramp up. it above 0.3 9% right now. is unlikely to be a bigger trip in the first round? >> not really. we see the inflow of the inclusion between the first half and foreign investors and china's own. equity but also the bond market. remember, the asia inclusion is very small. the that perspective, inflow will still be limited compared to the side of the asian markets. for more breaking news, wherever you are, we have to do with twitter to launch to talk like twitter. offering live video coverage and top news reports verified by us. if you are on twitter, nature to follow us @tictoc.

this is bloomberg. ♪

rami: let's do a quick check of latest business flash headlines. tencent has been ordered to remove the new monster hunter world game from its downloads just days after its launch. chinese regulators say parts of the game, made by capcom, failed

to meet standards and it led to a significant stand -- number of complaints. they have also failed to the approval to eat generating money from its gameplay are unknowns battlegrounds. itsne: breaking up international wealth management unit into seven areas rather than four in the latest push by ceo to regionalized the bank. the bank will give units more economy and each will have its own management team. the move is called project momentum and we are told an announcement can come later on this week. rami: china literature will buy new classics media for $2.3 billion. that to expand into film content. the e-books business spawned off by tencent says the final project is a burnout mechanism which has a possible downward adjustment if earnings fall below certain levels. news tvpopular tv

programs and movies to its content. yvonne: steel earnings doubled over the first quarter bolstered by expanding demand in india and growth in the global market. was $279 million. they have been climbing 22% from a year earlier to 5.4 billion. the global steel sector is benefiting from the pollution push. fisher after spending feels demand in india. before we hand over to bloomberg architect asia, let's do a quick check of how markets are trading right now. before that, we are really going to have to see how things play out with turkey. it seems at least, taking a look at our analysts and leave them talking to, it seems like everything is going to be contained. it is very idiosyncratic. " when you look at something, individual as we have been talking about. he asks, which baby and which path water when it comes to emerging markets there.

rami: yvonne: i think what they seem to be debating right now, it is interesting to see that investors are already looking ahead to the chinese data which perhaps, is a little bit more important when it comes to the asian markets. industrial production is going to go, certainly, that is where the focus is right now. we are seeing a bit of a rebound of the nikkei 225 of 2%. also down by a third of 1%. cindy shares are up 6/10 of 1%. certainly, we are seeing a little bit more green here than 24 hours ago. ,ami: a bit of a mixed year down by more than 1%. taiex as well as klci features are looking the other way. is it from bloomberg daybreak: asia. stand by for bloomberg markets. this is bloomberg. ♪

rishaad: positive in asia-pacific markets, betting that the asian crisis will be contained, the lira stemming declines. it is in one month, down 30%, but remaining vulnerable. president erdogan looking at high interest rates, or in international bailout, but the fallout is reaching around the world with international currencies dropping to the lowest in a year. in hong kong i'm rishaad , salamat. haidi: it's in the i'm haidi , lun. and hoping good results will overshadow the worries about turkey. this is "bloomberg markets: asia." ♪