>> good morning. manus: these are today's top stories. reviews its decline after a big rally yesterday. asian equities lower. the dollar climbs back. .encent under pressure chinese regulars are said to freeze game licenses. than one hundred $50 billion market value in january. value inillion market january.

and buffett bulks up on apple. manus: throughout the morning, we are going to be covering .urkey again live from istanbul my colleague is on the ground. another morning and another ratcheting up of rhetoric, and the lira facing pressure. hours -- fewl fear hours in istanbul. we had a response from the united states, not with tariffs, but still strong words being fired back at president erdogan. here in turkey, u.s. products are now the target in the sense that new taxes are being introduced. everything is being raised by another notch in terms of those tensions, and a of questions swirl about stability where the

lira is that, because there are some painful longer-term implications for the countries who have been borrowing on cheap greenback debt. yousef, thank you. let's have a look at the overnight session in asia. this is the mic asia-pacific, down. it is being tested by what is going on in turkey. technology stocks coming through a little bit weaker in the asian session. when we get to europe, we have a number of markets closed today, italy, austria, poland not in business. price down by 1.5% on the . we have seen this happening over many sessions. the dollar extending its rally is part of it. all of this is sending the

copper price and other metal prices lower. this is the fourth day we are seeing copper slide. and we should keep an eye on what is going on with the turkish lira. the lira is losing ground once again, losing a bit of the ground that it made up yesterday. emerging markets fx once again under pressure, and the dollar at a 14 year high. manus? , we saw an annihilation of turkish assets on monday morning, and that has continued with a relief rally yesterday. the broader question is, what is happening to em assets? we touched on this briefly yesterday. are we going to look back in 10 years time and say, look, this is one of the greatest buy-in opportunities? what do you believe? this is emerging markets on a pe 2015. the cheapest since

do you want to take this kind of exposure again? two years ago when you saw this the of the evaluation, .arkets took banks by 60% on a valuation basis, the pe is blended10.8, the twelve-month forward pe. this is something to think about in terms of valuation. from a fibonacci point of view, you are at a 38.2% retracement in emerging markets in the indices, and that is critical in creating a support level. from evaluation point of view, it is the cheapest since 2016. but i have seen a lot of two things that turned out rather tawdry. anna: let's have a look at what is going on on the futures. this is a picture of the u.s. futures. this is something we are going

to watch next week. away from thek bull market in u.s. equities being the longest in history. we will see if we get there. we are expecting a little bit of downside. let's get a first word news update for you. in the u.s., donald trump's spokeswoman says the president has "a great deal of frustration" with receptor one -- recep erdogan. the standoff continued to weigh areaobal financial markets the lira has lost more than 30% of its value in the last two weeks alone after washington imposed sanctions and embraced tariffs. in italy, at least 35 people have been killed after a highway bridge collapse in a mediterranean port. more victims may be buried in the rubble.

there are questions as to whether the country should respect eu constraints. police are searching three houses as part of a counterterrorism probe, after a car attack on parliament yesterday that left pedestrians and cyclists injured. a 29 euro man was arrested by armed officers after crashing into computers and striking barriers outside the home of the british government. theresa may called on the u.k. to come together and remain vigilant. frozen thehave approval of game licenses amid a shakeup. a restructuring of power among departments, and regulations are being concerned -- considered about violence in some games.

a spokeswoman for tencent declined to comment, while the ministry did not immediately respond to our request for comment. berkshire hathaway has added to its holdings in two of warren buffett's favored sectors, banking and aviation. it boosted investment in goldman sachs, delta, and southwest last quarter. it is part of a strategy to shift its stock portfolio. long-termhas quit holdings, including ibm, while holding onto apple and other companies are you -- and other companies. currenciesf digital was a bubble and the ecosystem is stronger because of it. this was not unexpected. we do feel it. we do feel the exponential increase in activity in our ecosystem is overwhelming what is going on.

juliette: global news 24 hours a day, powered by more than 2400 journalists and analysts in more than 120 countries. here in asia, the nikkei down by around 9/10 of 1% in late trading, but it is the selling you are seeing in hong kong and china, the hang seng getting to its lowest close at around a year. we have seen the yuan at its lowest since may of 2017. commodity markets, which is interesting considering the plunge and copper that we saw. tech stocks are really dragging the index lower. we are awaiting $.10 earnings from hong kong -- tencent's earnings from hong kong. interestingly, wh group, a port producer, has been hit hard by the terror of news, doing well today. credit suisse has upgraded its

stock to outperform. it is doing quite well in the sydney session, up by over 3%. it's four-year profit, though, down by almost 60%. it is still on track for its merger in november. anna: thank you, juliette saly in singapore. the lira is resuming declines. measures by the central bank stemed insufficient to te around in the currency. this comes as president erdogan shows no signs of backing off with the united states. joining us from istanbul, yousef gamal el-din. what is the latest? the russians have been in town. bring us up-to-date. yousef: it has been another dramatic few hours were turkey. we had an important speech from president erdogan.

he talked about the turkish economy being under siege. he accused the american economy attacking economies around the world. as a result, the turkish government would be boycotting american products. they are going to switch from iphones to samsung and other alternatives. the u.s. is turkey's fourth largest trade partner. russia and china rank a little bit higher. we also had the russian foreign minister in town, so that made for strong optics as the threat to move away from this historic alliance. we also had big pronouncements in terms of the currency and where it is in the turkish economy. he said it is functioning like clockwork. manus: let's talk about the bonds that need to get rolled over by turkish companies, specifically the banks. there is a heck of a wall of worry. but it does not come to maturity -- excuse the pun -- until next

year. yousef: absolutely, and that is going to be the key question now is destabilized area as little representation that may -- is destabilized. as little representation that may offer, how is this going to affect corporate, banks? $60 billion worth. has doneberg team amazing work in terms of laying out the schedule of bonds and when and how they are going to be falling. first in line is going to the coca-cola with $500 million in a senior unsecured note on october 1. hearing more and more voices here on the ground who are pushing for tighter monetary policy. there is growing speculation that the bank may yield, maybe

not at an emergency session, but at its regular meeting in the coming weeks. guys? manus: yousef, thank you very much. my cohost of "daybreak middle east." let's talk about one of the stories. tencent and other game developers in china are facing renewed pressures with regulators setting frozen approvals of new game licenses. was a red headline. this really adds to the woes of tencent in terms of regulation. what happened? industry is just in absolute disarray. the freeze has been happening for a few months. we have not seen any new game approvals since march, and for now we are not seeing any signs that the situation will improve. we are midway through the third quarter, so this could also hurt

their third-quarter earnings. talking to analysts, they are expecting a century -- a sequential drop in game revenue for tencent, ranging from single to double-digit decline. the share price has obviously taken a huge hit, declining $150 billion since the january peak. anna: and we are expecting to see earnings out, archway? what are we looking for? lulu: all eyes on their plans on how they are able to deal with this issue in the second half. people will be asking when they are going to start introducing fortnite, when they will start monetizing mobile games that have already garnered more than 116 million installments on mobile phones, and yet the company still has not been able to make money off of it, and

that is putting a drag on their mobile revenue growth this quarter. anna: lulu, thank you. thanks to bloomberg's, joining from hong kong. coming up, home depot reported results yesterday with sales rebounding in the last quarter. retail numberst out of the united states. u.k. inflation data also on the radar. lots to come. this is bloomberg. ♪

manus: a live shots of singapore. it is 6:17 in london. you have the msci asia-pacific down. there is a retesting in terms of currencies and the equity market space this morning. juliette saly is in singapore. juliette?

juliette: serbia's capital management is among parties holding talks to acquire a stake in swiss for. bloomberg has learned that hna is working for and risers -- working with advisers on the possibility. swissport could be valued at $3 billion. representatives declined to comment. pay $4.9 billion -- the bank of pay $4.9 billion relating to the housing crisis. rbs disputes the allegations and did not admit to them agreeing to settle. a spokesman was not immediately available for comment. a week after elon musk shocked the market by proclaiming tesla may become a private company,

evidence has piled up that he tweeted too soon. sources have told bloomberg that goldman sachs had not been formally tapped as a financial advisor when musk revealed its plan. the private equity firm silver lake still had not officially signed on when he tweeted monday that he had been working with them. a representative for goldman sachs declined to comment, while representatives for silver lake and tesla did not respond to requests. diamondback has agreed to buy antigen in an $8.4 billion deal. permian basined buying spree has arrived, promising to shake up the american shale industry. $30 billion in transactions this year centered on the permian. the pipeline shortages have boosted costs, adding fresh momentum for the push for consolidation.

harley davidson is pushing back at what he calls misinformation surrounding plants to move production overseas. the iconic motorcycle maker has been a target of president trump's anger. that hey, he tweeted would support a boycott of the company if it went ahead. the ceo says harley invests overseas to stay price competitive in markets using tariffs. anna: thank you very much, juliette. .et's go to our top story we continue to watch what is going on in turkey, the lira down 2.2% against the u.s. dollar. emerging-market fx very much the story. jeremy, great to have you with us. a chart here shows turkey versus argentina. for thesety stunning

two countries. are we being discerning enough between emerging markets, or are we -- is the fx world tempted to put everything in the same basket? >> that is the first target as soon as something like this kicks off. start playing against them and see how much we connect size against them quickly. we do not think the situation warrants dollar-rupee above 70. objectively -- and abjectly large move on the day for the dollar-rant. dollar-rand. they are always the first kids to get picked on, unfortunately. manus: jeremy, good morning to you. the global market map really

encapsulates what you have been saying. the rupee is still under pressure. i was looking at the trade deficit for them, the widest in five years, $18 billion. the market had penciled in 15 point something billion dollars .- $15.7 billion the indonesians may raise rates later in the day. are we starting a new momentum of targeting second round currencies? >> could easily be, but it has to be based on fundamentals. large doublee deficits like you are talking about with india, for example, that is a viable reason to sell the rupee. think there is too much air above 70 in dollar-rupee. modi does not want a move against his currency as he starts campaigning. we think the r.b.i. will start

to push dollar-rupee lower. in the grand scheme of things, it is this double deficit issue that needs to be taken by policymakers within their own currency areas. but for now, if turkey is leading the headlines, people are going to sell. anna: we were just showing you a tweet from the cio at guggenheim partners. 1997 and the current turmoil. do you? also point to lessons learned from that crisis and better management generally in the crisis. in 1997ay the country got very hurt. they have put plans in place to try to limit the pain we saw in 1997, for example, building up tion ofs, non-dollariza

debts. there is more of a buffer. there are obvious parallels, but for now the real currency crisis is limited to what is happening out of ankara. startedhe one thing i the risk radar with this morning was the dollar. the phrase is the dollar showing its muscle, really beginning to flex its muscle. does that continued with the fed, which we are working on the assumption will continue with gradual hikes? is dollar a risk for you? >> it looks like it is going to continue higher. the only thing we think can get in the way is the weakening of the u.s. economic picture, which we are not seeing at the moment. anything above $4 billion is what people think will continue

to hold the u.s. dollar in the pocket. with the slight turn on emerging markets, we will see people move into the u.s., maybe the euro if the bank situation comes apart. it will be g10 versus the emerging markets, and that will bring the dollar higher. for now, it is the end of the year. more u.s. data matters than what comes out of bankers, in that sense. even if the political tensions go away between the u.s. and ankara, and even if there were to be a turnaround from erdogan and he took a different policy stance, unc strong data -- you would see strong data out of the u.s.. >> but there is a strong sentiment gap in dollar turkey, for example. the fundamentals remain the same. in the rally in turkey would sell pretty quickly as it would

in em, as we saw yesterday. manus: what did you learn about liquidity? i hear a lot of say the markets are thin. is it really? work in the south african industries or the indonesian industries on sunday night, you would have been at the lack offf liquidity and prices we saw in the rand, the movements there. yes, liquidity is a bit of a problem at the moment, but in the grand scheme of things, the are -- these are exercise moves amidst market pressure. it has been a tough year for us, so as soon as we get anything close to a short that, we will pile in. manus: jeremy, thank you very much, a hacked off trader on a sunday night in south africa.

up next, we are going to talk about the u.k.. the cpi inflation data comes out later. will inflation fall back below the target? we bring you the latest research. ♪

>> i am bothered by the spending. at some point, the grim reaper shows up. we cannot long suffer trillions of dollars of debt, no way to it is ok to have this kind of debt. >> what about trade? >> if this is a ploy, god bless him. >> what if it is not a ploy? >> if he believes in tariffs, go back to the 1930's. it does not work. believer, passionate

and it is in and of itself, if he is a passionate believer, he will pay a price. what price? he might not get reelected in 2020. manus: a brilliant line there, the grim reaper always shows up. the home depot cofounder. you can see the full interview on bloomberg television tonight. all about trade and debt. let's get to nejra cehic on markets. how are the markets looking? nejra: a couple of markets closed in asia. we have india and south korea closed. we take a look at jigmn. losses in china. this, after we saw small caps lift the s&p 500 after a few days of losses. the u.s. benchmark is a record

high. risk off in the asia section. dollar weakness and a lot of the asian currencies. indian rupee, we talked about that yesterday. some weakness in the south korean won. strong dollar, weakness in other places. the turkish lira gave up some gains we saw yesterday. weakness in the rand too. money moving out of metals. i talked about the dollar, dollar strength means the bloomberg index is at a 14 month high. this is the dollar index of breaking through its october 2017 peak levels. a big part of that is the euro. weakness, we see euro as the dollar strengthens it is one of the reasons feeding into this. we are saying weakness in gold.

five months of losses for gold, the longest losing streak. the worst since 2013 as far as losses. look how far below we are the 200 day average. does that mean the path is clear to 1145? does it mean mean reversion is coming? anna: thank you very much, nejra cehic. news get up bloomberg update with juliette saly. juliette: in the u.s., donald trump, the president has a great deal of frustration with turkeys erdogan. they called again for turkey to release an american pastor. than 30%has lost more of its value in the last two weeks.

washington imposed sanctions and raised tariffs. u.k. police are searching three houses as part of the counterterrorism probe. this is after an attack on parliament yesterday. arrested-old man was by officers after crashing into early-morning commuters and striking barriers outside the home of the british government. theresa may called on the u.k. to come together and carry on as normal, but remain vigilant. china's regulators have frozen and approval of licenses amid a government shakeup. the restructuring of power among departments and regulators are concerned about violence in gambling. the sector has been rattled as gaining companies from online giant from tencent to small developers await approval. respondstries did not to our request for comments. italy, 35 people have been

killed after a highway bridge collapsed in the mediterranean port. rescuers say people may be buried in the rubble. it was said there can be no trade off fiscal rules and the safety of italians. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus, anna. anna: thank you, juliette saly. we have the latest on the disaster in italy. good to have you with us. we know 35 people have been killed. bring us up-to-date. >> that is likely the temporary death toll which is likely to

rise. the antiestablishment coalition asks if the government is preparing for next year, and after this event, someone in the government, the cabinet asked whether the fiscal rules should be respected if external .onstraints question whether it makes sense to follow the rules. there cannot be a trade-off between the fiscal rules and the safety of italians. how has this been taken

by the people of italy? the former prime minister saldini,d selby -- saying this is not something to make political capital on. are the people of italy concurring with the government that this is a tragedy you should make political hay from? >> it is hard to say what italians see. there are a number of infrastructures which date back to the 1960's. said, prime minister infrastructure across the country, is it good enough? mozzarella mattarella,

highwayany managing the mentioned there is a need to check and make sure what is the cause of this collapse. manus: thank you for putting the story and context. that is our bloomberg reporter on the phone. this get you set up for the trading day ahead. a lot of things to focus on. ,he u.k. economy and inflation anna: before wall street opens retail sales and openings from macy's, a big week for u.s. retail data and profit reports out of the company.

manus: retail sales will be critical. it will be decided if the former president, who is serving a lengthy prison sentence for corruption can run in italy's election. back to one of the agenda items. u.k. inflation and the rates probably held steady in july. the recent rise in the cost of gains set to keep price around the current levels in the coming months. , inflation trends should reinsert itself as an impact of depreciation. bloomberg economics expects the headline rate from the bank of england to come back to 2% by the end of the year. the chief economist is our guest tonight. the decline of sterling is

beginning to fall out of the inflation numbers hence the peak of inflation -- take a look at this chart. fading. post-brexit will we test the 2% on the end of the year inflation story? >> yes, you would have to say that sterling move is starting to eke out the next couple of months. i think your colleague is right. year, byd of the christmas, inflationary pressures in the pounds decline will be less. the key thing now for sterling every data will view piece out of the u.k. economy as a litmus test of whether the bank of england was wrong to raise rates a fortnight ago. wages staying stable, unemployment continuing to run lover. if inflation numbers start to disappoint, retail sales numbers

among which are more important in the u.k. than the u.s. this week, given the usage number at the beginning of the week, would suggest the bank of england did not need to. cuts may be coming before another hike. anna: on the implement data we receive yesterday, going back to 1975 with an unemployment rate as low as we have, they were lower than estimates. does this matter in the context of what is to come? that peopleatters can keep it in the back of their minds. anna: does it matter to sterling? does it have the impact you think? >> not at the moment, everything is depressed and suppressed by brexit. look where cable finds itself today in the face of a strong u.s. dollar. brexit stops,

people can look back at this unemployment number, this wage data, maybe real wages will the positive. that shines a little sunlight on sterling's picture. but at the moment, not at all. chart,i have created a our clients can pick that up. this is the debate, they have raise rates. if sterling crashes, the theory would be they would have to raise rates. i say, have to raise rates to save sterling, would they? does that cause an inversion? would they? i do not think so. i do not think they will go for an interest rate rise. it will be the jawboning and the play reserves to work in the background to hold the pound up.

will we need to? we only see that scenario taking place if there is a no deal brexit, and a move to a no deal brexit would limit the time on the fiscal clock moving to march, 2019. if that does happen we are looking at cable down to 115, sterling down to 95. those kind of issues. that may cause mark carney on the morning shows to say this is normal and the bank of england stands behind it, as they did in the hours after the brexit vote became real. tensionsh trade war and the tensions with turkey, in the eurozone, who is next after draghi? that is part of the mix. what is the guiding force? jeremy: i think it is the trade war. in the larger context, it is the this week it has

been turkey. --re are a lot of people fundamentals are ok. it is not the fundamental picture that can drive the dollar back up to 120, anna: it is a little bit of ketchup? manus: a little -- jeremy: a little bit of ketchup after q1. catch uple bit of after q1. anna: jeremy will continue his conversation with bloomberg. cryptocurrencies take another hit. we hear from the cofounder of etherium. manus: china's regulators posed and approval of game licenses, and the government shakeup.

what does it mean for companies like tencent? we bring you the latest. that is next. this is bloomberg. ♪

manus: stocks are down. the midst of the longest bull run in history. equities, will it endure, that is the question. retail sales have kicked off this week with home depot and tapestry thing the first report. the other big names will results -- release results. what should investors look for? >> u.s. retailers face investors.

they begin to report second-quarter earnings. investors look for positive news after piling into the space this year. the retail index is up 30% today. the $750 million etf is up 13% on the year. home depot and tapestry beat earnings and revenue expectations. for home depot, it was the 17th straight quarter it be estimates. the highest gains since 2013. analysts noted the second half of the year can see deceleration and growth. at tapestry, earnings suggested a rebound. the brand is known for its accessories. the ceo said fiscal 2019 will be

pivotal. on wednesday, macy's report earnings. the department store giant is up 60% year-to-date. twos stay positive the last quarters. many investors and analysts argue more should be closed to real estate value. the world's biggest retailer will not report thursday. all eyes will be on e-commerce as the company dukes it out with amazon. said, retails is not dead. bloomberg news. let's talk about cryptocurrencies. they are in the crosshairs today. a slump could wipe out 10% of its value in 24 hours. after dipping below the 6000

mark, they have balanced 9% today. >> this is something we have seen so many times in the 2009chain ecosystem since when bitcoin was invented. we have seen rises and falls. we have seen what many call bubbles, and i would agree. >> what happened last year was a bubble? >> we have seen six big bubbles, each more epic than the previous one. each of these bubbles are back,shing, when you look they seem like pimples on a chart. the growth has been exponential. each of these bubbles has the advantage of bringing attention into our ecosystem. it brings entrepreneurs, developers, money, the prospect of building fundamental infrastructure, and creating more value.

what we have noticed is that with each of these bubbles, we have a tremendous surge of activity, and that is what we are seeing right now. we had a big bubble and we are back to november, december prices, which we thought were incredibly high. and then, -- since then, we have developer activity, an increase in scalability technology. it is actually going quite well. thates it worry you at all the developers, entrepreneurs, talent and money that enters the crypto ecosystem on the way up exits on the way down? >> know, we are not seeing that. feel likeder types their fortunes are rising and falling with the price of bitcoin and either. these tokens are correlated.

it is a trader types moving them around. >> went either is at 1300, you are more wealthy than today. ande can look at the price make growth plans and projections, and we are still on track basically. this is not unexpected, and we do feel it. we feel the exponential increase in activity in our echo system. it is overwhelming with what is going on in terms of our different product projects, scalability, teams projects, developers entering our echo .ystem, -- our ecosystem manus: that was the. efounder -- that was the lubin. cofounder, joseph

joining us from abu dhabi. how worried are the crypto investors at this point? they are richer. a pimple according to mr. lubin, would you concur? >> i'm not sure i would use that exact description, pimple on a chart. but to your question, the flip it response -- flippant response investors should respond. if you took out a second mortgage to get that point -- to get bitcoin, you should be worried but if you bought in cash as recently as october, your head is still above water. just barely for the moment. there is some reason for concern. this week we have seen broad volatility in the wider market. if you think bitcoin and cryptocurrencies were supposed to be a diversification play to

other financial assets, we have not seen that this week. correlated tomore general greed and excitement in the financial markets more generally. if you thought cryptocurrencies were an outlet for countries experiencing capital controls, look at the example of turkey, we have not seen that many people switching out of the lira and into cryptocurrencies. at least not to push up the price. that knocks this argument that maybe they are a safe haven play. finally, the other concern is we have seen a broad-based weakness in the virtual currency environment. if you look at the total market caps for currencies, it used to be $835 billion, and now down to less than 200 billion.

interesting weather cryptos will remain a more viable alternative. thank you very much, tracy alloway joining us from abba daddy. -- abu dhabi. it is an interesting market. interesting overnight session. if you look at the gm function, we have bounced back from where it was yesterday. this morning it lost ground once again. , whichfallen out suggests the moves are not as outside as they were yesterday. not bad.just 0.25%, manus: the dollar is flexing its muscle. up next, measures announced by

the central bank. we are straight to istanbul. this is bloomberg. ♪ xfinity mobile is a new wireless network

designed to save you money. even when you've got serious binging to do. wherever your phone takes you, your wireless bill is about to cost a whole lot less. use less data with a network that has the most wifi hotspots where you need them and the best 4g lte everywhere else. saving you hundreds of dollars a year. and ask how you get xfinity mobile included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. manus: good morning from dubai.

i am manus cranny. this is "bloomberg daybreak: europe." anna: i am and edwards in london. edwards in london. manus: asian equities are lower on technology concerns, and the dollar climbs back. pressure. under chinese regulators will freeze game licenses. the company will report later, shedding $150 billion in market value since january. the billionaire investor with the 5% stake -- other hedge fund

managers on facebook before the earnings sank their shares. manus: warm welcome to "bloomberg daybreak: europe." we have pushed and pulled on these markets between the lira, the movement, u.s. equity futures, but europe is for the moment showing a little strength. poland, italy, and austria are closed. that is something for you to note. -- somesome companies countries on vacation. one stock that will be in focus, they have agreed to pay $4.9 billion in their role in the housing crisis.

we have this news early. this was one of the big .angovers for ross mcewan once that was done, the settlement on sirius's conduct that contributed to the financial crisis. that will be one to focus on. the department says it was the largest of its kind, stocks are a little higher. the question is, are we done with the turkey route, or is there more to come? this is the picture on asian equity markets. msci asia down by more than 1%. part to do with the turkey story. move onto to the picture in asia. we have some names in technology

under pressure. $6,000 onpping below the cover price. the dollar extending its games. the ongoing tariff story. what we are seeing and currency markets linked to turkey, all of that part of the mix. copper is down for the fourth day. --ching efforts to resolve keep an eye on the dollar against the lira. in the last hour we have seen the dollar up by 2% against the turkish currency. now we see the turkish currency in the ascendancy. the move is small as they stand. we have a few lines from rbs. indeed, this is rbs declaring an interim dividend. i sat down with ross mcewan.

the point from him is about the dividend and getting relief from the mortgage-backed security litigation, which was the last vestige and hangover. they stole a huge amount of bad assets. the dividend is at 2% the share. the you can government is still the beast that lurks behind it. they are the single biggest shareholder on the company. to refresh anybody's news flow as you hit your desk, this is the largest penalty ever. , and the justice department announced $4.9 billion settlement for rbs. rbs invisioning of regards to the litigation, what were they able to say? nothing until this juncture. , thebillion settlement

largest single penalty ever. the rbs penalty is the largest single entity for financial crisis era, and this is the doj and rbs. residential mortgage-backed securities. if i had to lay money out, this would be a stock to keep an eye on at the start of trade. let's get to juliette saly with the first word news. lira is: the turkish looking for direction today. after rebounding 8% against the dollar yesterday. meanwhile, the countries officials listed goods on which additional duty will be imposed. it comprises 22 items, but does not include mobile phones, like president erdogan calling for a boycott on iphone. in italy, 35 people have been

killed after a highway bridge collapsed in the mediterranean port of genoa. the deputy premier and his allies have seized on the collapse to question whether the country should respect eu constraints. be no said there can trade-off between fiscal rules and the safety of italians. u.k. police are searching three houses as part of the counterterrorism probe after a car attack on parliament yesterday that left pedestrians and cyclists injured. at 29-year-old man was arrested by armed officers after crashing into early morning commuters and striking barriers outside the home of the british government. prime minister theresa may called on the u.k. to come together and carry on as normal, but remain vigilant. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . coming through in asian

markets today as we continue to see the contagion effect. do not pay attention to india, it is out of action along with south korea for public holiday. chinese stocks in late trade down by 2.3%. also, big selling coming through in hong kong led by that tech players is on track for its lowest close in a year. australia is doing well despite the selloff in copper. have a quick look at tencent, we are awaiting earnings to come through. there has been a gaming clampdown from chinese regulators. awaitingesian, we are a central bank decision. most saying itbe will be on hold. turkey is clouding things for the bank and indonesia. sterling is a little weaker

against the dollar. the dollar is at a 14 month high. a lot of home price numbers coming out of the u.k. today. , thank you.tte to the turkish lira now. upestors are trying to way bank measures to stem the rise in the currency. temple us now from his is my cohost of "bloomberg daybreak: europe -- b; thoses one of grandstanding moments for erdogan. they have raise taxes. what is the latest in the rhetoric from erdogan versus trump? we had a cascade of important speeches in the last 12 to 16 hours. we heard from the president, combative, saying turkey's economy is under siege.

he is pointing the finger at the united states, saying they are responsible for attacking economies around the world. that is beefed up from a response from the turkish government. basically it puts an additional 50% tax. jack daniels will be more expensive. 20% on cars. as the relationship with the u.s. is an important one, the fourth largest trade partner, it comes in a broader signaling that they are willing to move away from this historic nato alliance and explore other friendships. the russian was in town yesterday, and today we understand there will be meetings with the leadership of qatar. underscoring it is far from settled with the united states. anna: still on the central bank in foreign currency, turkish

companies are calling for higher interest rates at this time yesterday. this hardly because of the foreign debt they have to repay. yousef: absolutely. the central bank is in focus. domestic pressure from bank voices, but not necessarily an emergency meeting. terms of foreign debt, we put together a graphic that laid out what is coming due. some fabulous numbercrunching, and you are looking at $16 billion coming due by the end of 2019. this will be a gradual process. an unsecured bond is coming october 1. we will see if the government can clawback losses.

the lira has lost 30% of its value in a month. it will have serious applications for consumers. bloomberg's yousef gamal el-din live for us in istanbul. good morning. how do you see this developing? the only way forward is hi gher interest rates from the central bank? or will other names step in here. shanti: it is unlikely that another country like russia or qatar, a lot of problems in the isporate sector government loans, but that is not an issue. those countries have their own issues to deal with. you will probably see the central bank raise rates. they are creeping up a little bit.

there are a lot of political issues, but structural economic issues in turkey that are of their own making in terms of excessive growth money supply they have had the last two years. manus: shanti, good morning to you. , we getting a chart ready multitask at bloomberg. ,his is the value that perhaps and i want to see what you say, the em stocks offer us. the cheapest relatively speaking since early 2016, and two years ,go only saw pes at this level how brave are you? would you be tempted by rushing back in through the narrowest gate in history to pick up em risk? shanti: yes, you are right. p/e ratios are quite low.

there is a lot of bad news priced into emerging markets. that has manifested in fx is terms of risk more than anything else. china looks attractive still. a lot of tech sectors are exposed to the trade war. russia is still attractive. are a country that has a credible central bank. they have a current account surplus. aboutve to be selective which areas you are going into. the crisis of the lira has been localized. countries like brazil, south africa, turkey have been hit, while others have been spared to some degree. anna: i want to ask you about havens, where you put your money. the japanese yen undervalued. it has been gaining since this crisis. gold extending losses. gettingt make sense

into the yen and out of anything that looks -- gold is typically a safe haven. shanti: gold tends to be linked to the u.s. dollar, so dollar strength is what has been driving yen weakness. the yen, it looks undervalued. the central bank rumblings we had earlier in the month were a good reminder that we have forgotten about global influence . any move forward in interest rates, or getting us guidance, would be a boost to the currency. i think japan knows they need to get rates up. the banks can get back to profitability and lending. that will be the tight rope they are walking. manus: i want to get your opinion on the s&p 500. ,ne of our bloomberg columnist

a great writer, we are one week away from being the longest rally in history. in tax cuts, share buybacks, to , how much more leg room is there in the u.s. rally? bank of america, merrill lynch, their survey, allocations of u.s. stocks jumped 10 percentage points in august. how overweight are you on the s&p? onnti: we are about neutral our u.s. exposure, but we have more exposure to sectors we like such as health care and technology. economic cycles are getting longer because you have global economies more interconnected. there is no signs of recession in the u.s. at present. it is growing strongly.

we are seeing deregulation. we had tax cuts, those types of things are supported for the economy. further,this can run and we continue to long u.s. equities. anna: thank you very much, shanti kelemen, investment advisor, coutts & company. she stays with us. ♪

anna: good morning. this is "bloomberg daybreak: europe." let's check at what is trending across the bloomberg universe. suing iac for $2 million. they claim the owners of the dating app are trying to cheat them. manus: they are just not swiping the right way.

companies payst jumped by 23% from 2016 to 2017, according to a new study. with the rank-and-file workers. anna: if you want to do well pay wise, you should be a ceo of the ftse 100. more stories on the bloomberg terminal. china is said to have frozen game licenses. it is an industry shakeup. we will check on tencent's numbers in a bit. manus: let's check in on the markets. lirais where you have the having a bounce. breaking rupee is not 70. for the indonesian

central bank to give us their next decision, and that is one of the markets on the move. the indian rupee under attack below 70. that could be where the markets are trying to move. radar, under risk pressure. below $6,000. commodity complex is one to keep an eye on. let's get to juliette saly with the business flash. royal bank of scotland has declared an ordinary it end of two cents per share. that is after the statement and or will pay $4.9 billion to settle allegations of mortgage-backed securities in the years leading up to the

housing crisis. in the underwriting and issuing of securities between 2005 and 2008. the allegations are disputed and not admitted to in the settlement. talks --olding embattled chinese conglomerate airport luggage handler. &a is working with advisers, including a majority stake in the business. it could be valued at $3 billion. a week after elon musk shop the market by proclaiming tesla may become a private company, evidence has piled up he tweeted too soon. goldman sachs had not been informed when musk revealed his plan. formank and private equity

-- private equity firm silver lake had not signed on. a spokesman for goldman sachs declined to comment. representatives first overlake and tesla did not respond to requests for comment. that is your bloomberg business flash. anna: thank you, juliette saly in singapore. the u.s. session close yesterday that sheds light on investors and which stocks are getting attention from hedge funds. >> good morning. let's kick it off with warren buffett. he is putting more money into his favorite industries, banking and airlines. goldman sachs put it -- now holds more than 13 million shares as of june. this is valued at $2.9 billion. it could be worth more. bancorp, delta airlines, southwest higher in after-hours

trading. putting more money into apple. this is interesting because he put a 5% stake in apple before the company made history, reaching the $1 trillion landmark. trillion, $50$1 billion u.s. we heard from other billionaire investors. boosted his stake in facebook, under $31 million u.s. this is before their disappointing earnings result. shares plunged. he also has his biggest holding in liberty broadband. then over here, you can see spotify and pandora. gained 15% since

its april debut, and it is attention from other hedge fund managers. to the former money manager of george soros. he has a big wager on facebook. that was before we saw shares plunged. another big standout for truck and miller, putting his money druckenmiller. if you want to know more about the individual names, check out where they rank on the rich list. warren buffett his third. manus: thank you very much. let's talk about inflation. let's get to our guest host.

shanti kelemen joins us, investment advisor, coutts & company. if inflation tops out and we go back to 2%, was the rate hike? -- was the rate hike a mistake? shanti: we will not know if it is a mistake for a while. there is now a probability of ofut a 10% rate cut in march next year, which was not projected in futures. we will have to wait and see from the data. we will have to wait and see from the politics. anna: the politics is a lot to wait for. ,hank you shanti kelemen shanti investment advisor, cout& company. a quick word on the markets, we see the turkish lira is up and down. it is down now.

weakness coming through in the corporate sector. this is bloomberg. ♪

>> you are watching "bloomberg markets: the european open." we are live from our european headquarters in london. i am alongside matt miller in berlin. i am guy johnson. matt: markets in asia are down yesterday with india and south korea closed. china, hurting the most. the cash trade is 30 minutes away. guy: not backing down. president erdogan put taxes on american goods.