anna: good morning from london. manus: this is "bloomberg daybreak: europe." these are today's top stories. negotiatingo the table. beijing will send a delegation to washington after talks broke down two months ago. the line gain for the first time in seven days. and turkey gets outside help. $16 billion worth of investment. erdogan calls on merkel for support. and elon musk it's another speed bump. shares slide after tesla is set to receive a subpoena. goldman said it is officially advising the company.

manus: a warm welcome to the show. breaking news coming through from the best longer in the world. high single-digit organic growth. the numbers coming in at 5.1% for the first half. the organic revenue comes in at 5.17. in terms of sales that 30.90 seven,to just slightly ahead of the company estimate of 30.6. and while the numbers at 4.15. the big issue is brewing margins, higher costs and emerging-market currency may not rip into these numbers in this quarter but this brewer has a lot of beer in russia.

it could be the back half of the year with the emerging market currency rush we've seen with the demolition that took place on some currencies like the russian ruble and the lira, it may well impact. nice weather in britain, remember it was a little warm at home. france, u.k. and scandinavia all playing into these numbers. high single-digit organic growth for the full year. first half i am growth, 3.4%. the ceo joins the bloomberg team a little bit later on in the day, eight to 5 a.m. london time to talk us through the numbers and the risk from emerging markets. and a moment of reprieve and slight risk on in markets at the moment. it is a little bit of a mixed picture in asia when you compare some asset classes with others. .25%.ci asia-pacific down

we're seeing a bit of a boost but that comes after we saw emerging markets on an intraday 20% from their january highs. so that is a bear market. the chinese currency trading higher, the conversation between china and the united states looks like it could heat up. indexoomberg u.s. dollar down by .25%. this is the first day in six that we seen the daca does seem the dollar weaker. boost earlier from the qatari news. route the last couple of days in the annals markets, recovering after phil

four percent in yesterday's session. china is part of the story and the week dollars helping some of those commodities market rebound. oil looks pretty stable this ever. manus: you mentioned the balance, -- you mentioned the , copper becomes the fourth horseman of the metal apocalypse. do you blame the dollar, or do between china's growth and pmi in china and three-month copper? at the end of the day it is the beast that each copper. to that extent, the rollover in china, the potential rollover is correlated to copper. we turned it around as you say on that lme. down the most in nearly three

years, 4%. there's a fundamental concern of global growth. china and the u.s. are going to get together and have the first substantial discussions. we are turning around from these losses. goldman sachs in and oversold position and they are right in terms of the initial call this morning but we saw donald trump walk away from negotiations before. so one day's headlines does not make a market. they want to rely on the china credit data. i think the queen of charts be happy with that. we love a correlation coefficient. ports business in global trade business, saying that global trade continues growth at the outlook is uncertain. something we've talked about many times. where expected to go higher at

the start of the u.s. trade. that's where some of the risk on is coming from. nasdaq is down by 1.2% yesterday. tencent was weighing on the nasdaq in yesterday's session. here is juliette saly in singapore. china will dispatch a minister to the u.s. for trade talks later this month. they will meet with an american the under secretary of the treasury department. the chinese communist party's top newspaper has issued a rare direct criticism of donald trump's agenda saying his america first policy is hurting his own people. said that newe tariffs on turkish goods will stay in place even as president erdogan received a unanswered life i'm from qatar that should

help from received qatar. erdogan has gotten a promise from the emir to invest $15 billion into his country as well as reaching out to germany's angela merkel for support. italy's prime minister has said he will start procedures to -- sayinge license the government cannot wait for the outcome of the prosecutors broke and subsequent trial. that's as the death toll from the disaster has risen to 39 and it is feared the number of for tallies could rise further. in the u.s., donald trump has revoked john brennan security clearance, accusing him of erratic conduct and behavior. rennie was a 25 year veteran of the intelligence agency before leaving it under president barack obama in 2017.

he has been in outspoken critic of donald trump. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . mark kieran asia, seeing a little bit of turnaround coming through in the chinese markets. it seems like a strong signal sent from china with these trade albeit at a lower level. and the yuan higher against the dollar. the nikkei still under little pressure in late trade but up from lows of the day. this check in on tencent because it is the big stop -- big stock after came through with its first loss in decades. , cloudingd 3% uncertainty but still 55 on the

stock. before your profit drop, down by 9%, but better than what the market was looking for. and we been closely as closely watching the strike action in chile. bhpmain copper mine -- trading to that backward trend of what you saw in the contract yesterday. you very much, juliette saly with the latest round up on the markets. and the trade standout between china and the u.s., could finally be coming to a close? low-level talks are set to take place later this month. the first sign since negotiations broke down two months ago. ralph, great chris to see you this morning. so we have this splendid rally in the yuan, we've really broken trend. with names.ing out

are we getting overly excited on the possibility of low level talks, chris? chris: i think we potentially are, manus. as you said earlier, the people the u.s. are sending into to the trade discussions are not particularly high level, and as we've seen time after time in these discussions, the power lies with the president. he dictates the agenda with all the other parties, whether it's where,turkey, as far as we are not seeing trump playing at the talks at this stage. anna: what does this do to your investment strategy around china? where do you stand on investments in china? we will talk more about emerging markets, but it's interesting what this chart has shown. was listingagues

reasons to be cheerful about china. trade talks perhaps will materialize at the into the month. the pboc is supporting the economy. a number of reasons he says to be more positive on chinese stocks. chris: there's always reason to be positive long-term on chinese stocks but the short-term data is not that great. the activity data is not particularly positive. in terms of longer-term position, we need to ignore the short-term and say where -- we think investing over the medium-term is a good thing. we see managers looking for

opportunities at the low levels. one of the conversations we had is what is driving emerging markets, is it the fed, is in china? this is emerging-market stocks back in bear territory. we make it a little bit of reprieve on this. we had a conversation yesterday and it's strident, forthright views, this is your opportunity, by the lower levels, it will give you a much better rate of return in the medium-term. stocks are in a bear market, but the fx is only down 2%. how would you look at it in a bear market? think you're right, share prices the emerging markets have fallen quite a long way. which does means there is more opportunity, there is still a lot of earnings growth coming through from stocks and emerging-market countries.

it's not is overseeing a fundamental decline which would be more concerning. if you look in terms of valuations, emerging market relative europe, stocks look at health a lot cheaper. there's deathly reasons to be putting money in after the recent ball. with continuing strength in the u.s. dollar, the move to quantitative tightening obviously hasn't followed through in terms of emerging-market currencies. that's one of the reasons why em has been weaker on the whole. anna: bill pick up more on the conversation in a moment. chris stays with us here on "bloomberg daybreak: europe." later, the european union pushes back in italy over the fate of the do no up bridge collapse. will have the latest live from rome. will look at the latest on the brexit negotiations.

at duncan smith joins us 9:30 a.m.. this is bloomberg. ♪

manus: a live shot of singapore. let's check in on the asian equities session. tencent disappointed the market in terms of profit. between china and u.s. negotiations. tencent seems to have one the bearish sentiment. juliette saly always has a good story on stocks. shares as youent say have fallen after reporting for quarterly numbers. it surprised investors with its first profit drop in at least a decade.

said itrs -- executive had little clarity on when the process would return to normal, putting more pressure on a company that lost more than $180 billion of market value since january. tesla has received a subpoena from the sep over in on musk's efforts to take the company private. following his tweet last week saying he was considering taking tesla off the market and had funding secured. indicating the regulatory scrutiny of his that had reached a more serious stage. the sec and tesla declined to comment. the twitter ceo has said the company moved to slowly when it comes to involving its rules on toxic content. jack dorsey make a comment to nbc nightly news after the suspension of the social media site of far right conspiracy theorist alex jones. >> any suspension, whether permanent or temporary, make

someone think about their actions and their behaviors. it does have that the potential to impact and change behavior. that is your bloomberg business flash. manus: juliette, thank you very much. turkey's getting some outside help. qatar plans to invest as much is $15 billion in the country. with the diplomatic standoff in saudi arabia, meanwhile the u.s. in turkey remain locked in a stalemate. the trump administration set the imposition of retaliatory tariffs against the u.s. were a step in the wrong direction. i middle east manning -- managing editor is here. 15 been dollars, is not going to be checked, but it's the sentiment about investing in standing by your neighbor. >> it's a search for allies.

back then there were huge efforts to isolate qatar. who came to their rescue, we had turkey, closer ties with iran, and more than a year after that, qataresolve jumps to turkey's eight. one of the interesting things in thestatement that came from company site, the 15 been dollars are coming in profits, investments, and deposit. so they're trying to figure out exactly the divisional component. anna: we wonder if any other countries might step up. what is china going to do? iran.even we wonder about that. what do we know about the $15 billion in how far it goes in turkey?

we don't know exactly the details in terms of timelines or when they're going to deliver the money. we trust that turkey's economy is strong. don't forget that qatar has investments in turkey. interest inve an propping up the turkish economy aside from politics. you mentioned other countries and you mentioned iran. one of the things that came about in the last few days is that turkey said is not going to support secondary sanctions on iran. it means that perhaps iranian oil experts will continue in a afterperhaps higher even november. manus: a message from america, no a letter from the president, but a step in the wrong direction, that's the message from america.

we seem to be moving further apart, not closer to discussions. >> there are no signs that this is about to let up. it's a question of how turkey can weather the storm without perhaps taking the action that investors are asking for, which is fundamental issues. and maybe try to negotiate resolution. manus: thank you so much, always on top of the story. anna: let's go back to chris ralph, he still with us here in london. then there's the contagion, is this something that raises red likes to you about emerging markets are have you been through line by line the emerging markets? what are your fund managers

telling you? chris: the contagion risk is a big thing in people's minds. it's not considered to be a major global equity problem at this stage but it's considered to be a bigger problem, as we were just describing earlier in the conversation, markets are 20% cheaper looking than they were in january. it means the fund managers will be looking at those opportunities. we've got to see where it goes and what it means in terms of the european banking exposure which is considerable in turkey. manus: the one thing that caught my eye with this. we put it into a graphical format. the central bank has not physically raised rates but they squeezed the repo winter -- window. they doubled the one-month

implied volatility. we're talking about rates at 35%. in talking about argentina and indonesia. are there more to come? chris: the situation in turkey as we just described is particular to turkey. we are obviously seeing problems in argentina but that separate to the global contagion risk. i think what we will be comforted by, as your correspondent was just describing, is the qatari move followed by other countries seeming to support turkey in saying we are behind turkey and we want to stabilize the situation. the other thing that strikes me about the adjustment in the repo rate is that we know erdogan is not a fan of publicly raising

interest rates, and therefore doing it through the technical measure of using the repo rate seems to be a way of trying to protect the currency in turkey. seeingome say we are interest rates go higher and capital controls being imposed. are seeing these things behind the scenes. are you concerned about emerging-market governments having too much control over interest rates? concept intively new the global economic scale of things. thes: he comes back to protectionist and populist agenda and where it control is being taken back by governments. it's not just in emerging markets. president trump has been vocal about how he feels the federal reserve ought to be acting. but erdogan in particular is

saying he's not a fan of the central bank of turkey raising interest rates for turkish consumers. manus: chris, before refinish on this, are you seeing any redemptions? have you heard any redemptions called in the market? street? of it on the sign: we have not seen any exitingar fund managers shares spirit is more likely they will be adding shares are adding to their positions. .nna: thank you, chris ralph he stays with us a little longer here on "bloomberg daybreak: europe." will have the latest on the commodities sector. we see copper rices bouncing a little bit but we saw a big fall yesterday, down by 4%.

the chinese story out overnight and the weakness in the dollar overnight giving a boost to metals. this is bloomberg. ♪

manus: a live shot of junk yeah. a little more risk on in the markets this morning. the dollar has an got muscle. you have a little bit of breaking news there. providers is a payment ,'s revenues are only 5% the size of deutsche bank revenues. this explains why are talking about this company right now. they are raising their guidance for 2018, giving us first cap

full-year ebitda. raising their guidance, so it positive story from a company that's on the rise, it seems, in germany, in the financial it you have a different story in germany with some breaking news. story,a very different if you think of the kind of this is they are involved in, they are cutting their guidance and earnings per share. they will grow their earnings per share by 3%-6%, and earnings per share comes in lighter in versus 1.61uarter is what the market had estimated. the ceo just recently said we hope to raise prices, were hoping to look for acquisitions. they've invested 6.3 billion

euros in acquisitions in the past two years. it's quite a significant shift in the guidance in terms of saying we still have organic growth sales. highg in at reaching a new but this is a warning. the north american consumer business is good, it's getting back to normal service levels. , little bit of a nkel. for he nejra cehic has the morning roundup on these markets. we are grappling with this potential renewal. good morning. the resumption of low level trade talks between the u.s. and china not giving a live to the msci asia-pacific index.

chinese stocks outperforming on the upside, as you can see on the left. some weaknesseing in asian equities. days.rst time in seven pulling away from that safe haven, the euro trading, the aussie jumping along with the yuan, so reacting more to trade story rather than the employment data. in the fixed income space you have some evidence of risk on because were seeing the junior treasury yield higher. we are steeping a little bit in this session and seeing a bit of a bounceback in commodities, the bloomberg commodity index up .8%. we are still seeing a little bit to emcern when it comes equities. they dropped into a bear market the slide extending

today, still some concerns around turkey. also either banks and copper come that brings me to my next chart. the fourth horsemen of the apocalypse you called it. 1% inrebounding by about today's session after four days of declines in a 4% drop yesterday, goldman says it is oversold. anna: and the dutch financial business coming up with some numbers, the underlying profit number just a shade above the target. they say they will be to meet the 2018 targets. bloomberg first word news update from juliette saly in singapore. dispatch china will

its prime minister for trade talks later this month. the chinese delegation will meet .ith an american group exchangeark the first since earlier negotiations broke down two months ago. the chinese communist party's top newspaper has issued a rare direct criticism of donald trump's agenda saying his america first policies are hurting his own people. the u.s., donald trump has revoked former cia director john brennan security clearance, accusing him up erratic conduct and behavior. he is a 25 year veteran of the intelligence agency before leaving it -- before serving under barack obama and has been an outspoken critic of trump. >> of decided to revoke the security clearance of john brennan. he has lied in recent conduct characterized by increasingly frenzied commentary is fully

inconsistent with access to the nation's most closely held secrets and facilities. allies have met to review a financial support program. the finance ministers of saudi arabia, the uae and kuwait met with their counterpart yesterday and said there countries were foritted to backing a rain stability and economic growth. italy's prime minister has said he will start the procedure to revoke the license of a highway operator in the fate of the -- in the wake of the fatal to know a bridge collapse. toll fromthe death the disaster has risen to 39. it's fear the number -- feared the number of italians will rise further. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more

than 120 countries. this is bloomberg. manus: juliette, thank you very much. is our guest host this morning. we started the show with this chart, china, the pmi and copper. butr was in a bear market today has changed that. copper becomes the fourth horsemen of the global metal apocalypse. do you think it is china that's driving the demolition on copper? sliding 4%, the most in three years yesterday. is that a fair call? probably is, if you look at the longer-term relationship between commodities and the performance of the chinese economy, there is a relatively high correlation between the performance of commodities and performance of the chinese economy.

i think of some of the monetary's jimenez i referenced earlier -- monetary stimulus starts to bear fruit, then i can imagine the commodities sector would turn around a bit. you mentioned earlier that some people are seeing this as being a good buying opportunity for some of the commodities. preference is to see some evidence come through before saying it's the right time to commit to commodities. new look at copper, you can see a lot of the dollar in there. what about demand, are we losing track of the demand side of the commodity story? , if fallen a long way golden it is as resilient as we thought it was. chris: clearly what's been pushing the copper price lower and other commodity prices lower

is sentiment rather than actual demand. we are not seeing damage i referenced earlier there were some activity data coming through from china that's a tiny bit softer, but it's not consequential to cause in the copper price that we've seen so far. anna: chris routes stays with us on the program. coming up, tesla is said to have received a sec subpoena over it ceos efforts to take the company private. it ended 2.5% lower yesterday. we will get the latest. this is bloomberg. ♪

anna: good morning, a live shot of the sydney opera house this morning. you can see the aussie dollar is

on the rise against the u.s. dollar. the trade news overnight about china offsetting any domestic gains. the whipping boy as is sometimes referred to. .ake a look at this chart this is the australian dollar and the chinese currency. the correlation between them the strongest on record. let's leave that there for the moment and get to juliette saly with the bloomberg business flash. juliette: tencent shares have poorn after it reported quarterly numbers. it surprised investors with its first profit drop in at least a regulators restructure. regulators said they had little clarity on when the process

would return to normal, putting more pressure on a company that's lost $180 billion of u.s. market value since its january peak. cells were 1.2% above average analyst estimate. 10:00ins us just after a.m. u.k. time. generated profit in two weeks as turkey's economic turmoil triggered a slump in emerging-market assets. bloomberg has been told that traders made more than $10 million in the turkish lira plunged the most in almost two decades. the senior barclays trader is understood to have faced losses of about $19 million on turkish bonds over the past few days. that's your bloomberg business flash. anna: thank you, juliette saly in singapore.

the beverage giant behind corona beer is making a $3 billion bet on america's love of cannabis. increasing its stake in the canadian grower to 38%. manus: tesla never far from a trend on the bloomberg. it received a subpoena regarding the musk efforts to take company private. the indication is the regulatory scrutiny of his statements could have reached perhaps a more serious stage. anna: third base, commodities recover after wednesday's plunge. and talks set to resume after talks broke down just two months ago. different,ng little spending has surged over the past three months. find out more on the bloomberg

right now. manus: let's talk about tesla a little bit more. the stock sank after the company is said to have received a subpoena from the sec over elon musk efforts to take the company private. the twist began last week when he tweeted that he had secured funding to do so. shares were below their pre-tweet price for the first time. bloomberg's detroit bureau chief brings that's the very latest. the musk has hired goldman sachs as his banker to take the company private. he tweeted this out and was in there whether it was a done deal . it's not surprising because theman took tesla public in first place, now they may take them private. they've also personally loaned elon musk a lot of money.

this is probably a good move by musk. to take itdifficult over the line and goldman is wall street's largest bank and they will have connections to get people to buy shares or cash out some of those who don't want to go private with the company and convince some of the others to go along with musk. may haveews is that he gotten a subpoena from the sec on his tweets about going private in the first place. i guess he's been looking into this -- the sec is looking into this to see if he had funding lined up. he could be in hot water because he could be seen as manipulating the stock. they made a nice gamble and it looks like they could end up making out on that deal if this move actually goes through because they would you cast out much sooner and at $420 a share.

welch with was david the latest on the tesla soccer. the italian government has called on managers at atlantia , atway operator to resign least the deputy prime minister said the failure of the highway bridge in general shows the importance of increasing investments and hinting that you spending limits could put lives at risk. the pushed back and said in his statement, we will not endanger any -- not engage in any political finger-pointing. responsew strong a from the e.u. is this? kevin: actually it is quite strong, especially that phrase about no finger-pointing. the e.u. the e.u. executive branch went on to point out that in fact, italy receives billions

of euros for infrastructure and importantly, the e.u. pointed out that countries themselves set their own spending priorities. that was one of the points they were making and talking about the amount of money and encouragement they get to spend on construction in italy. the finance minister in italy has been weighing in on the spending issue. what are the details there? >> he issued a strong statement saying there must be spending on infrastructure and he sat a lack of funds cannot be an excuse. that is quite strong and that's what the finance minister is telling people after this tragedy in genoa. manus: kevin, there is a lot of finger-pointing at home in italy. what is the sentiment there? the blame game is in full

swing. there's a lot of talk about maybe the bridge was badly designed. there are questions about the a callance and there is for the management of the operator to step down. the operator has come back and acted correctly and it has fulfilled its obligations under the agreement. that thet is a chance operator loses its license here? they were closed yesterday so they reopened in an hour and 10 minutes. kevin: the government has said it's looking into taking away the operator's license and exactly how that will happen, the extent to which it might happen remains to be seen. some of these things may have been spoken in the heat of the , sont after this tragedy the government will have to sit down and decide exactly what he wants to do with the operator. kevin,hanks very much,

joining us live from rome. chris ralph is still with us. what are your thoughts on how .ig this becomes clearly a dreadful event has happened, 39 people losing their lives. this is turning into a battle between rome and brussels. this could dominate the european agenda this autumn. the titans could be using this as a way of stimulating disagreement between brussels and rome, which ultimately may create dysfunction in the and if that italy leads to fresh elections in italy, that would not be perceived as being a good thing for the euro. talked about the strength of the u.s. dollar.

there are reasons to be cautious about the euro's prospects. these are the risk reversals at their lowest since 2017. just how low can it go? we've seen the dollar flex its muscles, that's undeniable. terms of a real challenge , where italy and germany could it potentially go? >> i would say that one could easily see the euro against the dollar, if there is usually negative sentiment against the , we get onto this agenda of countries disagreeing with the stability of the europe project going forward.

we had a couple of people talking about parity. anna: do you think that is on the radar? are you putting in a credibility on the idea? chris: i think that would be a really bearish outcome. that would be the euro in crisis if we got down that far. people are postulating this on the basis of what the crisis could look like if there were serious dysfunction between brussels and some of the peripheral european governments. u.k., let's turn to the and this is in the library. there was a cracking article written yesterday. we are getting levels where in dollar terms the london market

relative to the world market is at a level we have not seen since the 1970's. the skew against the u.k. is building. is that an opportunity or just a reality check? chris: i was on the program last month and i was saying some of the fund managers i'm talking to are really looking at the opportunity to buy uk's securities. u.k. companies are performing reasonably well. we spend a lot of time talking about starting weakness and a benefit for u.k. exporters. with the proportion revenue they gain from outside the u.k., definitely there are opportunities in the u.k.. i know you have an interview coming up with iain duncan smith

and i'm sure you will ask him about the prospect of an earlier brexit. you could see further economic weakness in the u.k. and for the domestically focused stocks, that will not be quite so good. that dealmy hunt said would lead to short-term weakness in the pound. do you think that could be sustained? i think it would be hard to imagine starling retaining the current levels if we went into a no deal scenario. it's not clear at all what the uk's trading position would be, how companies actually could trade with their european counterparts post a no deal brexit. so we could see the pound going weaker. it's either 50-50 or 60-40 probability.

manus: chris, thank you so much, chris ralph. take your opportunities where they come. he continues his conversation on bloomberg radio at 7:30 a.m. u.k. time, so stay tuned for that. let's get set up for the day ahead. we'll get the monetary policy decision from egypt's central bank. that will be an interesting one, given the inflation story there. and an investor call and that reassuring the markets, but will it? interesting that the 2018 earnings outlook is unchanged. it's all about the lira

and what happens next. keep an eye on dollar-lira at the bottom of your screen. a little bit of strength at last, really? ♪ retail.

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manus: good morning from dubai. anna: i am and edwards the city of london. these are today's top stories. manus: back to the negotiating table, aging will send a delegation to washington after talks broke down two months ago. that yuan gains for the first time in seven days. help, gets outside pledging $15 -- $15 billion worth of investment. calls for-- erdogan support. hits another speed bump.

said to receive a subpoena from the us -- s.e.c.. a warm welcome to daybreak europe. if you are based in rent you're doing better than anyone else. share adjusted rises 5% and a, 13, 12.5, 13%.by those of the top lines coming from standard bank. let's look at the equity markets. hit overee there is a

the past three months. let's see what happens next under the tenure of the new leader. equity markets were set for a slightly better open. there are a couple of different factors. had talks, not very high level but there has been a shift and the dollar is lower. turkey and germany are talking to one another. $37 billion worth of bilateral trade is done. $15 billion, there will be a cash element. erdogan are talking. retaliatory tariffs not such a great move. how is the risk radar? more we are looking at

risk on as we go through the day and that is, some of the asset classes we are attracting -- trekking in the asian session. getting a little more positive. emerging markets dropping 20% at least on intraday basis compared to their highs in january. that is a bear market and that is that back up to all of this and we have the more positive news flow around china and trade, pushing up chinese higher ons moving trade talks. on the other side we have the u.s. dollar moving lower and increasingly as we move through the session. we are down .3 of 1% helping a host of risk assets to make gains area that is in emerging markets whether that is, ids or other currencies. we see the lira on the move, a big boost to the lira in yesterday's session. to short thes currency. the first time we have seen this

move in this direction. copper getting a reprieve down by 4%. china giving relief here as is the weakness in the u.s. dollar. of weakness helping some these commodities to get a little bit stronger this morning. manus: copper, the fourth horseman of the global metal apocalypse. could we go back to -- equities? 17 points will, the london market. you see the [indiscernible] i could go on and for you to death but is -- it is a big dividend. let's look at the bond market. for all the moments of reprieve in terms of that bond market in the u.s., moving away from the flattening trade, it reasserted itself yesterday.

turkey is unlikely to assuage the federal reserve, the disruptions unlikely to disrupt the movement from the fed and so the flattening returns in the u.s. you are seeing that reprieve, a slight drop in bunds and o.a.t.'s. those markets are reacting on the bonds by a little bit lower. higher in terms of yield. it is proving hard to get above the 3% level for u.s. market. juliette saly is standing by. the trade talks are scheduled later this month, the chinese delegation will be with an american group. it will mark the first official exchanges since earlier negotiations broke down two months ago. haschinese communist party issued a rare direct criticism

of donald trump's agenda saying his america first policies were hurting his own people. the white house says it needs tariffs on turkish goods to stay in place. erdogan [inaudible] the white house said u.s. tariffs will remain. is investing $50 billion in his country as well as reaching out to germany's angela merkel for support. in the u.s., donald has revoked a former cia director, john brennan since security clearance conduct him of erratic and behavior. he was a 25 year veteran of the intelligence agency before leaving it under president barack obama -- leading it and has been an outspoken critic of trump. >> i have decided to revoke the

clearance of john brennan, former director of the central intelligence agency. his recent conduct is inconsistent with access to the nation's most closely held secrets and facilities. juliette: global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. stories on there bloomberg at top . still weakness on the msci asia-pacific index but not as dire as it was earlier in the session area -- session. low-levelalk of the talks happening at the end of the month between the u.s. and china. the csi 300 in positive territory. and some working -- weakness in the em's create having a look at some of the other focuses of the session, tencent the big one

after it came through with its first profit drop in a decade. we have been watching this big move coming through in the offshore as well, we have seen the kid -- liquidity very tight end playing it forward to the european session, we saw this coming through in basic resources yesterday down of her percent. we have seen that rally coming back through, not a rally but a rebound and copper so it does look that miners should have better session in europe today. you.: thank we are getting a little bit of breaking news. we will come back to that in just a moment. it is one of those headlines that takes your eye and then you move on but the lira is never far from our minds nor the markets and trade and the standoff between china and the u.s. are finally coming to a close. low-level talks between the world's two largest economies

set to take place a little bit later this month. the first since negotiations broke down two months ago. .oining us now from frankfurt great to see you this morning. yesterday i extolled the virtues of the dollar showing its muscle, it was on our ripper and on aurora, we see the wind taken out of the dollars sale on the prospect of talks. is it a moment of reprieve and a better opportunity to reenter my longs? guest: it would be a risky step. two risk factors. on the one hand there are talks with china and so this move is going to be important until the end of august. hand, there is the turkish story and the fear that the emerging markets could lead to a risk off move.

we are seeing some temporary calm as well. it will not be permanent but for now. anna: how long does it carry on for? some on the street are with you and say the dollar goes higher from here, trade tensions persist and that will be dollar supported and others say this is going to come back and the dollar will go too far and come to an end soon. guest: i think in general weekend see a stronger dollar against the euro or a strong dollar against the euro until the end of the year. we are going to see that they will slow down the rate hike and the big question is whether the will start the normalization process. the dollar rally is going to and but so far, there is a lot of uncertainty to the steps so until the year and there is still a chance that the euro

will retreat against the u.s. dollar and the u.s. dollar will be the preferred safe haven. one of the most attractive currencies also. manus: one thing that struck me this morning, you have this demolition on the equity side in emerging markets down over 20% but the fx opposite for emerging markets is only down 2%. argentina has acted, the indonesians have acted. are we going to see more rate hikes come through from a.m.? em?rom guest: it might be from other countries such as south africa. the question is whether we will see anything from turkey. the signals that the bank is not setting an investor friendly policy. i feel we will not see that anytime soon. that higherg risk

uncertainty will return to emerging markets. the focus is still on turkey. we will talk more about that, thank you very much, staying with us. a quick word on the story that has crossed the bloomberg this morning, this is coming from writers, amazon is [indiscernible] the next sector to face the amazon phenomenon. we will keep watch on those. other breaking news. bayer andterday was monsanto faces a new dies-action lawsuit over camber.

what we are showing your is the roundup we'd killer, that was in regards to the news flow earlier in the week. a quick reminder to any of our bloomberg users, you can interact with all the charts and we have had a taste of charts for you, they are on gtb go. you can browse the library and you can manipulate them and have a look at the time series as you wish to have them. that is the latest. the aussie dollar chart is the most splendid one of the day. you can vote on that. this is bloomberg. ♪

anna: a few headlines coming us -- to us from italy. this is the fallout between rome and brussels, after the collapse on tuesday. other parts of the story is the future of atlantia.

atlantia issuing a statement. that is something that has been talked about by the italian government and some talking about the possibility of atlantia losing the contract. revocation requires early and the statement comes after the jenna would is -- disaster. we will see if we get any further moves. manus, you have a market check for us. manus: a lot of this is based around the yuan. the biggest one day, the biggest moves in seven years on the yuan forward so this gives you a sense of what is going on from the political ground, even

though it is an evident. -- ex-dividend a. the yuan is moving, the dollar retraces its steps, it is the first drop for the dollar in a number of days area the risk sentiment is turning ever so slightly. we have the turkish lira rallying and that is because of pressure being exerted by the authorities in terms of the ability to short the currency. the qataris are stepping up in billion, and they have rallied for three days in a row. have not seen that since july 6. the lira rallies, the dollar drops and the possibility of trade wars and negotiations shifting on the dial. anna: the weakness in the dollar is breaking with a trend adding relief to commodities. they regained some of their

poise after the global route yesterday. let's head to our reporter. >> we covered some of their commodities space but you can bet it was down and having a rough day. here we're looking at precious metals, spot gold and blue and yellow is silver and purple is platinum. you can see them taking the downward trend yesterday, quite a plunge and as you can see, the dollar in white, that is where the haven was and that is where investors were putting their money. moving on to copper, i want to talk about the correlation with emerging markets. 52-week relationship tween the classes, you can see here, what belows if copper stays $6,000 per metric ton. and the biggest copper productions are in em countries. goldman sachs says there needs to be a sustained rebound in copper and in commodities in

general for emerging markets to do well. and i want to touch on steel and this is donald trump giving an interview talking about the fact he believes his tariffs on steel will rescue the industry in the u.s. you can see steel versus copper, look at that divergence, trump's tariffs have sent steel prices soaring and china curbing some production and goldman sachs is saying that this divergence has run its course and they expect copper to catch up. manus: thank you, i will pick it up from here. the latest on the markets and commodities. emerging markets have taken a beating this year, that is fair to say. fares are intensifying about a trade war and the turkish crisis keeps on giving. let's bring in justin carrigan. showed the lira rallying for

the third day in a row, we have not seen that since the middle of july. the qataris are stepping up, putting their money where their mouth is. the qataris and the turks, that only to be bearing fruit. >> there is a certain amount of payback for the turkish support during the standoff with some of its gulf allies. the qataris have alleged $50 billion in investment in a time friend that we are, it is not clear at the moment. it comes at a good time to read we have this action from the regulator yesterday in turkey to limit shortselling of the lira or the effect thereof is that. these are good headlines at this time but the background music has not changed on turkey. it is about policy and about the trust of policymakers and the credibility thereof. anna: the msci index of emerging

markets, teetering with a bear market. 20% downve touched since january. something tells me technology has something to do with it. beenin: a lot of this has a gradual payoff in stock rises around the emerging markets since the peak earlier this year. and you have to look at the headlines from yesterday when tencent which accounts a most 5% of the msci index, we are talking about some disappointing prescientd that is about the text story in china and when you couple that with the commodities tory we have seen and talking about --relations with copier copper, that is a fairly bearish picture but when you look at lu asian's, the valuations relative to the u.s. are six or seven wide.

perhaps we are reaching the and game and we might see a turnaround before long. -- i would not call this a big turnaround on the rand. euphoria dissipating and that is an adjunct, it is about personalities as well to the rand as well as an onslaught on the em generally. is about the background story and south america -- south africa and the fundamentals which has similarities with turkey and that it is dependent on flows and it has a high level of thatgn flows as well and could become out very quickly. that is the story and there is this element about the land reforms which is a worry in the background with elections coming soon. that is where the euphoria has

evaporated. they are back to where they were period.he zuma talked about emerging markets, which are flashing on your dashboard as ones to be concerned about, have we passed the kent state -- the contagion phase from turkey? guest: turkey remains an issue but we have seen when the the mostira slumped, vulnerable to contagion effects and this is due to the current account deficit. whoe who need financing have current account deficits are most likely [indiscernible] higher volatility in turkey. manus: the one thing i have an

looking at is the action taken by the central bank in turkey, they are squeezing, closing that window and that is squeezing the forward. if you look at what is happening, real rates in one month's time in turkey are at 35%. is this the backstory that is putting a little bit of steadiness into the lira? guest: yes, clearly, but this is not going to last because we are going to see inflation surge due in thetremendous decline turkish lira. we are expecting much higher inflation rates and it is unlikely the turkish central bank will be willing to take the necessary steps like with explicit rate hikes to set attractive real rates that are going to be attractive for this extrato give financing they need and to [inaudible] the current account deficit. anna: how week does the lira get

from here? -- your call? concernede of this that the ecb could get more cautious is going to fade and the near-term. right now we are not seeing any affect on the real economy in europe so they are going to sound cautious but they are going to stress we're looking at price stability, we are on target and we are going to continue with the normalization policy we set out. manus: thank you. ichelt. esther re i think it is about the yuan and the one year forward. we have seen the rally to and all rallies, up .68. thank you.

radio and halfn an hour's time. i will be back here. this is bloomberg. ♪

guy: good morning, welcome, you are watching bloomberg markets. this is the european open. i am guy johnson alongside matt miller in berlin. matt: there is a slight red streak across the board for equities especially in asia as the dollar falls for the first time in six days. the cash trade is less than 30 minutes away. guy: a sleuth of