yvonne: it's 7:00 a.m. here in hong kong. welcome to "bloomberg daybreak: asia." then trading on wall street, the s&p 15 points of a record. bhp will be in the spotlight after full-year net is the lowest estimate. underlying profit has hit a four-year high. and from bloomberg's global headquarters, i'm ramy inocencio in new york where it's just past 7:00 p.m. on a monday. president trump lashes out again, accusing the e.u. and china of manipulation as well as promoting jay powell's performance at the fed. and malcolm turnbull fee is that feels the heat as party

lawmakers meet in canberra. his leadership could be challenged. ♪ yvonne: of course all these headlines on president trump really highlighting more traction when it comes to jay powell's speech on friday in jackson hole. the president saying he should be getting a little more help from the fed. he doesn't like the nuts of cheap money fed raising rates. given the short positioning we have when it comes to treasuries. ramy: pushing the norm if not the addition of central bank independence there. so the bloomberg dollar spot fall to its weakest level while he was talking there. maybe get you up to speed with where he ended the monday close, and beside that, it was a pretty green session.

the s&p 500 was up by little under .25% but still the highest in almost two weeks, just 15 points away from an all new record. also just two days away from the longest bull market -- longest bull session run in history if we can get there and don't see any major false. talking about the dollar movement, i'll show you what's happening, you can see the bloomberg dollar spot down, the third decline in a row. also looking at the u.s. 10-year at 10.82, really falling there. new york crude moving 66 and the turkish lira still week, 6.09 to the dollar. yvonne: and of course asian currencies will be in focus here today but given these comments, let's look at how the euro is doing, stronger on the back of the dollar weakness that you mentioned and donald trump's comments to reuters. giving the short position

especially when it comes to the euro and the renminbi. at 114 for the year. the aussie just slightly higher and the yen as we mentioned earlier falling below the one -- falling below 110 for the first time in months on the stronger greenback. it down about .10%. of the nikkei futures from flat right now and kospi futures high. we've been watching about the speculation mounting in australia with prime minister malcolm turnbull and whether he can cling to his job. plenty to focus on here today. ramy: for more on president trump's impact on the dollar and a rally in stocks and bonds ahead of jackson hole later this week, let's bring in su keenan. despite all the ups and downs in

volatility, we still so markets in in the green. there's a lot of optimism, it weakened gives a trade were concerns that they. let's go to the market snapshot, third straight session where the s&p is becoming in 15 points of its all-time high. we did see the doctor we can again on those comment -- we saw the dollar we can again, -- we saw the dollar weaken again. before the close we saw the s&p get back aims along with the rest of the market as trump came out with another comment on alleged manipulation of currency. the nasdaq ending with a bit of semiconductore stocks, down for seven straight week. let's take a look at the big movers, tesla in the spotlight after we can of speculation .bout ceo elon musk there were number of developments, the sovereign fund

allegedly looking at investing in tesla and looking at investing in a rival. there have been a number of investors and of come out and talked positively, perhaps another tech mogul will come in and assist the running of tesla. what investors suggested apples tim cook might be the one to do it. southwest airlines rising higher on positive news, southwest will be raising its rates. macy's rebounding after a sharp drop last week. spotlight, it's been under pressure from regulators and china to remove its gambling apps, which it is now done. let's go into the bloomberg takese the focus as bonds center stage, you can find our library of charts and a widely path foundere fund

is saying the extreme nature of the position, is at a record low, setting up speculators who have so far been dead on on the bond, with great risk should whichbe a second change, could happen, given all the crosscurrents in the market right now. a very interesting morning and an interesting set up in the bond story ahead of the big meeting in jackson hole. you, su keenan joining us from new york. to the top story, president trump said to have complained that they chairman jay powell has not been the chief money policymaker he expected. your marks to donors at a republican fundraiser or his most personal criticism of powell's performance to emerge so far. .e're joined by joe sobczky this seems to be a little more of an escalation of the president's criticism of the fed. joe: that's right, he's not the first president to grumble about the fed but this is a bit of an

escalation because he went directly after the fed chairman he appointed to the job, saying that the fed should be more wages somehim as he battles on trade and everything else. wasng the campaign trump complaining that the fed with keeping rates too low and it was creating a bubble economy, but now that he is in office, he seeing that the rates are rising , although frankly more slowly than they do typically in a recovery that were end, given the fact that inflation remains low. so he has called it up a notch in terms of trying to put pressure on the fed to prevent them from raising interest rates. this pressure is nontraditional, at least for the last few decades. how much of an impact might this actually have on the fed? fairly well is insulated from outside

influence. the chair and members of the board are appointed for a set term, so it's not really a situation where he can hire and fire. they do live in the real world, they do here the political atmosphere are feeling around them, but that said, in the past, fed chairman and the federal reserve in general has moved at its own pace, despite the political effects of paul volcker raising rates to squeeze inflation in the economy that did not do much for jimmy carter and even ronald reagan was a little bit chafed by that as well. in washingtonzky with the latest out of the city. came in at $8.9 billion. the earlier report came in at $9.62, so we wanted to correct that. that's for underlying profit

against the estimate of $9.2 billion. that means underlying profit was a miss versus of the. get the first word news with jessica summers. jessica: president trump has repeated his claim that the e.u. in china manipulate their currencies. he told reuters that when the u.s. puts tariffs on chinese goods, beijing artificially lowers the level of . in a wide-ranging interview, the president said he had no timeframe for ending the diplomatic standoff with turkey and said it's dangerous to have company such as twitter and facebook regulating themselves. the hp paid out a record dividend and plates to return the proceeds of recent asset sales and profit jump to the highest in four years. stronger prices and higher copper output helped earnings jump 33% to $8.9 billion. the world's top minor raised its annual dividend 42% to $1.18 a share, which included a record

final payment. a strange prime minister malcolm turnbull is facing government lawmakers which could be a challenge to his leadership. he is struggling after months of poor polling. a recent election defeat and a backflip on his national energy policy. challenge could come from the home affairs minister, peter dutton, ahead of an election which must be held by the middle of next year. see butave begun to some areas remain in accessible to rescue teams and nearly a million people are in rescue camps. 341 people have been known to have died since the monsoon began in june. more rain than normal in the first 19 days of the month. the fear now is disease from contaminated water. 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.

jessica summers. this is bloomberg. you -- still ahead, a u.s. and china return to the negotiating table. why hek eswar prasad believes the chances of a breakthrough or slim. ramy: thornburg president and ceo jason brady said the fed's rate policy is changing incentives for investors. we will look at real yields and preview jackson hole. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." ramy: u.s. stocks rose as investors held onto hopes for a trade were easing while treasuries advance at of a meeting of central bankers later this week in jackson hole, wyoming. skin behind all of this with thornburg president and ceo

jason brady, joining us from santa fe, new mexico. let's take a step back and look at the markets here. we are 15 points away from a new all-time high for the s&p. optimismisplaced behalf of what's happening with trade tensions, or do you think there's something behind this? jason: i think what is driving the s&p higher, the part of it is strong u.s. growth. one of the reasons why the fed is in play or perhaps the president is trying to influence the fed a little bit is because they are raising rates because we are seeing the usb strong in some contrast to -- seeing the u.s. be strong. donald trump has complained that mr. powell cheap money fed chair, but with that said, looking at the situation with the economy, it can be argued that he's just doing what he needs to be doing. jason: i don't think it's good

for global stability and probably too much volatility if we talk about money being very cheap. money got pretty cheap and venezuela recently and i don't think that worked out so hot. i think the chair and the .ederal reserve have a mandate they are a bit further behind than they should be, but obviously it can be tough in the shorter term for maybe a politician at has a four-year cycle. ramy: i guess that's fair. looking ahead to jackson hole when jay powell does he, what are you hoping to hear from him, or what do investors really need to hear from him? jason: what we're doing here at hornberger is take a global, broad perspective. that one worth noting of the themes that jackson hole this year are what are, for example, what is the effect of amazon on global markets, or technology companies and large

mega-caps on what's going on around the globe? that's something that we think about a lot on how it affects the rest of the ecosystem. actually a more interested in what comes out of the theme of jackson hole than maybe any kind of noise that we hear from, if the going to raise in september or december or not. i think that is less interesting. jason, we just got some lines coming through your from australia. sky news reporting that prime and is to turnbull has been declared -- has declared the leadership bacon in the parting -- party meeting. we've been talking about this kind of groundhog day that were seeing in australia once again with this revolving door of prime minister's. prime minister turnbull facing more sticky relation -- more theulation, giving some of polling were seeing and

undermining from his own party. duttons saying peter buying for the leadership against turnbull, saying they do have enough of these boats and backing perhaps for that challenge. we will continue to watch those lines coming through from australia and see how things go. ramy: getting back to jason here, we were talking also about cash and the fed and how that is changing incentives for investors. what do you mean by that? jason: i think what you are less trashash being that it was. when you see rates rise, suddenly your discount rate for everything else is more important. rates at zero means that monetary policy makers are trying to push you into anything else. at that rates in the u.s. are at a level that provide you some real yields, maybe they are less interested in taking risks. that can provide more volatility both economically, potentially,

which is obviously what trump is worded outcome and politically, which is also worried about and perhaps a contributing factor to a slightly more little situation, particularly around housing, in australia. yvonne: i think there is still a risk of heading into cash. some people say you look at the equity market, you saw double-digit earnings. that good an idea to sit on the sidelines here? jason: look, i don't think for any long-term investor, and our time horizon is much longer term, that you should be sitting in cash, trying to pick the bottom or the top or figure out exactly what's going to go on tomorrow. without a doubt it is an incentive, when you're automatically losing a couple percent on a real basis in cash and now you are not, that changes investor behavior. it doesn't make it good or better what you should or shouldn't do, but it certainly

changes investor behavior. when the price is lower, you are more excited about it. that's a bit of what is happening right now. yvonne: do you think you could just ignore the noise we see in em's? jason: i think it's a key you saw inat emerging market countries is a lot of borrowing in very low rate regimes. when u.s. dollar reserve currencies in the euro. that has -- especially on the corporate side. that has led to some significant indebtedness. in 11 and 12 it was the em countries that were in better shape versus the eurozone. these incentives around monetary policy make a big difference and we just have to pay attention with regard to what's happening in regard to those incentives. yvonne: turkey still has its

problems, but are you seeing any opportunities or entry points? jason: exley, yes. there are some interesting things to do. in asia, china has gotten a lot cheaper. there's probably some stimulus coming through the pipeline a year plus out that is interesting. a lot of negative sentiment around that area but some places where we think there are some serious challenges and obviously turkey is one. there are various latin american investments that we are casting a skeptical eye toward, just given overall indebtedness. yvonne: and i want to bring it back to jackson hole because jay powell ignore the em volatility before. does the situation change now that were seeing not just turkey but argentina, indonesia as well, face similar troubles? jason: sure.

the fed in the past has reacted. in the late 1990's we saw the react. in 2015, 2016, were much more cautious as a result of international development. this fed seems much less interested in being federal reserve for the world. it again, markets have not really tested this fed yet, by which i mean domestic markets. it seems to me that the rhetoric is pretty clear and they believe their mandate is a domestic mandate. that would indicate they are going to stay the course. yvonne: to what extent are these trump comments going to derail the fed from raising interest rates? 2019 looks a little less certain now. do you think jay powell can do so without looking like he bowed down to trump's pressure? jason: it's a great question. i would hope jay powell and the whole federal reserve open

market committee, which has shown themselves to be some adults in the room, is sticking with their mandate. their mandate is pretty clear. .hey talk about it a lot in front of congress they talked that staying in their lane. it seems to me that 2019 might be more of a challenge, not because of my be lots of tweets or presidential pressure, but rather because we've seen expansion here, rates are dampening down housing in the united states. they may not be able to raise rates, not because of the president but because of the underlying economics. yvonne: we will leave it there, jason brady, joining us from santa fe, new mexico. don't forget our interactive function, tv .

a lot to talk about with the bond market and the short position we've seen these days. be part of the conversation, send us instant messages during our show. this is for bloomberg subscribers only but check it out at tv . this is bloomberg. ♪

ramy: this is "bloomberg daybreak: asia." i'm remy innocence you in new york. yvonne: on yvonne man in hong kong. prime minister malcolm turnbull declaring leadership they can in the party meeting. we are now set for some type of vote in parliament later on this afternoon, according to sky news. the home affairs minister, peter dutton, will stand against turnbull in a ballot of party lawmakers, according to scott. once again, we talked about this kind of revolving door of prime minister's. whichseen the nation's

prime minister's five time since 2007, none of which have lasted a full term. this one has been interesting, given some of the signature energy policies that have led to a lot of criticism and frustrations among even his own party. watch this afternoon. bhp billiton one to watch as well after full-year income is the lowest analyst estimate. underlying profit rose 33% on stronger commodity prices. andrew has been covering this for us. tell us the highlights of this and report, what really drove it this time around? andrew: the highlight this time was copper. increase their% which was a big change for the company. the other thing to look for was the big boost in dividends. what can investors take away from this result?

jason: they're going to be looking for detailed very much on how much they get them u.s. shale. php pledged to return a lot to shareholders. that's the question for them. ramy: what was missing in the result that folks may have wanted to know? jason: definitely news on the shale sale, and i suppose a bit more about where china was going. bhp made a comment that china is a huge market, they made a bit of a comment on the trade war's affecting road there, but we will get more when we speak to the ceo later today. ramy: andrew hobbs in sydney with the latest on bhp. up next, and maybe a worst-case scenario for some iconic american brands. at the trade spat between the u.s. and china could lead to boycotts and factory closings.

more on the possible impact, next. this is bloomberg. ♪ retail.

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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. yvonne: 7:30 a.m. here in hong kong. p.m. monday here in new york and markets closed about .25% higher. there has been some optimism that those low-level talks between the u.s. and china i provide something, but with that said, the guess we been talking to this morning in the asia-pacific are not really holding their breath, so we will see. watchingou're "bloomberg daybreak: asia." all theen watching headlines crossing when it comes to australia and now were learning that malcolm turnbull, fromrime minister, has won

48 votes against 35. a quick turnaround after this leadership backing and vacancy that he declared just minutes ago. ramy: solidifying what had been a tense hour or so in terms of some kind of challenge to his position as australian prime minister with the home affairs minister possibly buying for that. malcolm turnbull winning that leadership vote. yvonne: let's get you caught up with first word news with jessica summers from new york. jessica: president trump has said to have complained that they chairman jay powell has not been the policymaker he expected. the fed has height five time since the president took office, including twice this year. he criticized powell saying he was not thrilled with rate increases.

blackrock says it saw significant second-quarter slowdown in china's economy after analyzing a wide range of data. the fund managers cam -- cios told bloomberg the pullback was more visible in alternative data dan the government's official pmi rating. send a trade dispute has played on sentiment but the dead enough shows stabilization. but maybe the conclusion here is that overall fundamentals seem to be not bad. slowing down a bit, but not that bad. for domestic chinese companies in the second quarter or how global companies think about china. jessica: the yuan strengthen for a third day in a row, rising to on thehest in a week --

back of the weakening dollar. its recent events has trimmed it slump since mid-june to around 6.6%. that's on science policy are seeking to limit outflows in offshore liquidity is hiding. last ofas completed the his three bailout programs but still has an enormous task ahead. the essence stock exchange and run index has risen from this year's low in august 2016 but is more than 60% below its lowest level since may 2010. the benchmark performer -- best performers of banks, all of which have plunged 99%. on itsw greece can walk own two feet and have free access to markets. i really think the amount of somems that it been glass, 450 reforms, make greece a much more secure country.

ofsica: worldwide sales alexa cars cracked the 400,000 very in the second quarter, rising 77% from a year earlier. found yound eagles homes, more than half the sales coming in china. found new vehicles homes. 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. i'm jessica summers. this is bloomberg. yvonne: jessica, thank you. sophie.ing in manipulation will be top of mind in the asian session. sophie: we do have a softer dollar, easing some of the losses we saw early in today's session. below 110.k when you look at the set up on the terminal to check on the currencies that i want to

highlight, we do have the yen trading at an eight with high. the dollar selling will continue as the fed is expected to suggest it will keep raising rates its upcoming minutes as well as at the jackson hole gathering. set for a fourth day of gains as trump complains about currency manipulation. given how the pboc has maneuvered as of late, analysts see limited room for depreciation before wednesday's trade talks. we had the aussie moving for a one-week high as we wait on the rba minutes, but given the political chatter we around malcolm turnbull now winning back the leadership of the party, we did see it lower. you could be set for the first up in four days. check in on asian futures, it's looking like a mixed start, mostly pointing lower across the board. preliminary august trade data due for thailand and checking on the asx 200, futures

seeing a slight nudge lower even with the political backdrop. ramy: checking markets ahead of trade. some breaking news crossing the bloomberg turning -- terminal. at $79.2e coming in million. that's first-half net income. interim dividend per share is lower year on year, two cents versus four cents year on year. you can see the share price of today by a little more than 18%. yvonne: sticking to australia, prime minister malcolm turnbull has reportedly retained his post after a liberal party meeting in canberra. peter dutton stood against him in that ballot. can't quite keep up

with some of these headlines but it seems like the prime minister lives to fight another day. michael: he does, but it will only be another day, i think. we've seen this playbook numerous times in australia over the past 10 years. these things tend to gain momentum of their own. , butay have survived this the step is once taken when someone challenges, unless they are soundly defeated, these things tend to build. unless malcolm turnbull can change course and somehow placate the rebels within his party, he looks to be in really deep trouble. since 2007, we haven't had a prime minister complete a full term since they were elected. it's just an ordinary situation here.

the australian has barely reacted to the whole thing. everyone has sort of seen this scenario before. yvonne: what is going to be turnbull's priority now? there's a lot of talk about the energy policy which is led to a lot of controversy with the other party members. when it comes to the huge task of closing that main opposition later parties league in the opinion polls, how is he going to go about that? michael: it's a really difficult situation. the basic political very in australia is if you can't govern your own party, you can't govern the country. in a situation like this where the challenge highlights instability within their party, for the past decade it has bedeviled the forces australia. down,e would not climb

insist on trying to cut commissions in australia. yesterday he ditched that from the policy to placate the conservatives. when people are like malia, in the concession just means they asked for more. given he basically sold everything out to the conservatives in order to try to keep their support, it's difficult to see where he goes from here. on the other hand, the people who generally support him, australia is a fairly centrist country. it's political parties seem to to thanparty logical the country itself, i think it's fair to say. andas abandoned the cuts missions that were an important part of that party to placate the conservatives. that means he standing on zero principle whatsoever. he's looking after his own career, he's not trying to in the national interest, many people would

argue. it's simply about self-preservation. he has little to fall back on in terms of the arguments for why you should be in the job. those who are challenging him tend to come from the more conservative sections of the party. the electorate is quite centrist and not that interested in politics and not that ideological. the notion that people from the conservative side will draw more support in the election is difficult to square intellectually, at least. i think you'll find this will continue, turnbull is in deep trouble if not a dead man walking. perhaps i shouldn't go that far, but he is in deep trouble politically in australia. echoing the comments of another guest, saying he's a sitting duck, if not a lame-duck, until the next general election. some of america's biggest brands

are sweating the next step in the trade spat with china. tensions could mean boycotts as well as factory shutdowns. matt townson is here looking at this. how much too big u.s. brands have to worry about their operations in china? matt: it's a big worry, for two reasons. any big brand, china is her most important growth market. nike, theyny like source like 25% of their goods from there. it's but the huge source of products and a huge consumer of products, which gives the chinese potential leverage here in this potential trade war. here is this sort of pain lever they can pull it they wanted to they could use their state run media to push boycotts of u.s.

brands. they can use their regulators to or slown u.s. stores down u.s. factories. far-fetched, but the chinese did this just last year to south korea over a dispute about a military installation south korea. so it is a potential threat. ramy: looking beyond south korea, is this strategy new, or how many times have they done this in the past? jason: they have done it against japan. they target a couple of big consumer brands and make the case that they're trying to protect consumers and put up stories about potential bad products and things like that. last year they did this to nike, calling them out for fall sever or something like that. whenusly it's much easier

you have a state controlled by the communist party. this is a potential, but so far they haven't. there's been some reporting that they tried to keep the word trade war off websites and out of the media because they don't want to inflame this yet to meet if things keep escalating, who knows? they will run out of things to put tariffs on. yvonne: boycotts we haven't seen yet, but whispers of made in china 2025 seem to be little more silent here tuesdays as well. potentially they know what the downside is for china. a lot of these multinationals to work with partners with chinese companies. matt: it will be tough for them to focus on potentially u.s. companies or brands that don't or are notet up

owned by a state backed entity. , there'sght starbucks love restaurant and coffee --nds over in china, but there's a lot of restaurants and coffee brands. starbucks owns most of its stores there. they tried to make it seem like they're part of the chinese community. if you doing something to hurt the operation -- the operations of there could hurt operations of these companies. yvonne: matt townsend joining us from new york. just ahead, trade talks are set to resume. politicalsing imperatives, will they stand in the way of the u.s.-china deal? will have eswar prasad joining us next. this is bloomberg. ♪

lines: more breaking

coming through from australia. we have just learned according to sky news, reporting that peter dutton has quit as the home affairs minister after that challenge and losing it essentially to the prime minister, malcolm turnbull, just a couple of minutes ago. peter dutton resigning from the australian cabinet after that boat. dollar losing some of the gains we have seen, given this weakness in the dollar after president trump's comments , but a lot of questions here in australia. what the prime minister can do right now, he is in troubled waters, to try to toe the line within his party, whether his energy policies and how he's going to bridge the gap between the main opposition party as well. certainly a lot at hand there. just on saturday mr. dutton had said he did support the current leadership, but

clearly now a change of events. looking at the aussie dollar, it on thisssion lows latest news as well. there you go on your screen come you can see it there, down by just a fraction. $.73 to the dollar. yvonne: let's talk about currencies, president trump accusing rivals of currency manipulation, saying that china artificially lowers the yen. let's discuss that with eswar ms china division head. always great to have you. we've heard this before from the president but it seems like he is doubling down once again. why do you think the president is so adamant in calling china a currency manipulator and fighting against what his own fed is saying? is thathat is happening u.s. policies and the strength of the u.s. economy are driving up the dollar and driving down many other currencies. interpretsees --

digressionspetitive by other countries. in terms of trade deficits, and whatever happens turks of currency seems to be very much stuck in his mind and that's how he evaluates every bilateral relationship. it means more conflicts with china and other trading partners, especially the u.s. dollar were it strengthen further with any fed rate hikes. yvonne: we're already not too optimistic about these latest low-level talks, given the fact they are low level. now we had this element of rhetoric here. what is your outlook for what could come out of this? could we see this as a breakthrough? a positive sign that the two sides are back to talking. my view is that mr. trump seems to view the following attributes in his april. he has behind him a strong

economy, a well performing stock market, a congress that complains but doesn't seem to do very much to deter his policies, and a political base, most importantly, that seems to feel the effects of tell you tory tariffs, but is not willing to act away from trump. sounding and acting tough against trading partners, especially china, he probably sees as a winner. what the trump administration seems to be looking for from china is capitulation to all of the u.s. demands, and china seems to be in a perplexing situation because it don't quite know who to talk to and what concessions they might offer that would get an agreement, and if they did make a deal, what sort of deal would stick. that's why i think they've been reluctant to come to the table. why were notsibly seeing any clear strategy on behalf of beijing. earlier we had our bloomberg news reporter talking about the regulatory levers on u.s.

companies based in china. nike, starbucks, mcdonald's and others. do you think they will eventually get involved? usual this is where the political dynamics don't seem to be working, given the pain chinese has already inflicted with their targeted tariffs on specific parts of the u.s. economy, and they have these pain points you have referred to, how they can put the squeeze on these industries. you would've expected those voices to be heard in this administration, but that's not the set of voices the administration seems to be responding to. leading up to the midterms, the remain tough stance seems to be nominating the administration's policies toward china. ramy: and there are voices trying to be heard over the next , some 360 business

executives here. to the degree that the white house is or is not listening, what do think it will take for them to listen? or is this the prism that mr. trump is held in that he can only look through? eswar: congress has the power to act but they've not done much more than talk about negative effects of the trump tariffs and retaliatory tariffs having on their constituency. it suggests it might turn against those policies in the midterms, there's a groundswell of opposition they could have a significant effect on the midterms. given the balance of power among the different factions within the white house and the administration with the hardliners, very much still having the upper hand. ofnne: there are still a lot questions, our tariffs just a way to get china to play by the rules? or is this just a small part of

a larger plan for stopping china from growing into a global superpower? is this a new cold war just beginning? front theree trade are legitimate concerns that many of china's major trade partners including europe and japan have about his protection of intellect property rights, market access, access for investors and so on. it's interesting that there are talks between europe and the u.s. and japan and there will be talks against china. there have been murmurs of trying to create a common front once again against china. it hasn't worked in the past, especially given that the allies of the u.s. are somewhat embittered by the u.s. tariffs imposed against them. but that is a distinct possibility that there's something of a common front created against china, which could add to the pressure on china. yvonne: having said that, is now the time for china to adjust? is it time to open up to more

foreign business, project intellectual property and create a more level playing field? can they do so without looking like they are bowing down to the president's demands? eswar: that's the political impaired it from the chinese side. protection ofer intellectual property rights. under the whip asked by the u.s., the threat against initiative is5 to geto be a hard sell much political support for moving in the direction the u.s. wants. i suspect going to see some concessions on trade issues, but there are broader tensions simmering in the background for a good while to come.

ramy: here in the u.s. there is broad agreement that something does need to change. if you had donald trumps year, if you were writing commentary aer the six days, what is caution that you would want donald trump to know if those tariffs actually come to pass? eswar: the key issues to get the chinese a clear set of demands and negotiate with them. laying down a broad set of markers and indicating that -- it's not part of a negotiated settlement. there are many performers in china who would like some amount of external prodding to get the chinese economy, the regulatory structure and the openness of financial markets going in the right direction. using them to try to effect change in china in doing this with all of america's

traditional allies on the side of america, rather than butting heads with the right approach. that has not been the path the administration has taken so far. ramy: you were talking about concessions. what is something real they could happen where both sides could walk away and say face and claim a win? eswar: certainly the u.s. backing off from harris in response to china agreeing to take measures to buy more u.s. goods number which is a concession they have offered already, would be a good start. in addition, both sides providing better protection for investors would be another start with the proper safeguards. these are good things to start with but certainly there are more fundamental questions about intellectual property rights protection and so forth. it's going to be difficult to come up with clear deliverables that would be writable. credible.uld be ifnne: is there a question

he can control the levers of money and power? eswar: the chinese economy has lost some growth momentum and the possibility of a trade war may have had something to do with. what would be worse if he did give concessions without getting anything from the u.s. and return, that would create some blood in the water that would strengthen his domestic adversaries, what there is left of them. i think he will stick to a fairly tough line and give concessions only if the u.s. is willing to do so as well. yvonne: great to have you, eswar prasad, joining us from ithaca. the market open is just a couple of minutes away in japan, south korea, and australia. .20%, the down about stronger yen falling against the dollar for the first time in two

months. that will weigh on sentiment here today as well as president trump talking about china and europe, the e.u. potentially manipulating the currency. we have more coming up. this is bloomberg. ♪

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off, and free shipping, too. go to buyleesa.com today. you need this bed. yvonne: we are live from bloomberg headquarters. welcome to "daybreak: asia." ahead to now look jackson. the lowest estimate when underlying profit hit a four year high. it is just past 8:00 p.m. on a monday. mecolm turnbull narrow survived a leadership challenge. president trump lashes out again

accusing the eu and china of manipulation. good morning to our viewers across the asia-pacific. it has been a very busy past few hours. most specifically with breaking news out of australia. surviving. with that said, we did check the aussie dollar. this was expected and looking ahead, it seems like he is a sitting duck, if not a lame duck. he passed the first challenge and some saying that we could see seeing a second

one. bracing.markets are not liking the fed raising rates higher. watch ahead ofo jay powell's testimony. meantime, let's get caught up. sophie: we do have trump limitations around the currency market. board.across the the nikkei 225 off. the kospi up .1%. .e do have a slew of earnings it has been a mixed bag so far.

as we learned about the showdown . turnbull managed to hold on the aussie dollar is trading at 7387. looking slightly choppy today, but it could be a fourth day of gains. given how the pboc has maneuvered, analysts see limited room ahead of wednesday's trade talks. we do have the yield curve looking to test the -- benefiting from monetary policy and domestic political picture. the three year yield not able to break below 2%. that is approaching a 2.47%.

lowest that wee have seen since december. lastly, a look at potential stock movers. we want to put bhp on the radar. earnings did miss analyst estimate. . 50% drop in profit keep it on the radar. tightened its production guidance. plenty to watch out for when it comes to earnings. we will be talking to andrew later. lun withined by haidi the latest out of sydney. heidi, is the prime minister a dead man walking? lifting at the very

least. there was that dramatic vote that was held. the prime minister role was vacated. he did manage to narrowly survived that leadership. he was challenged. he has resigned. other resignations also coming through. the tenure of malcolm turnbull, he is looking at a bit of a cabinet reshuffle. julie bishop also vacated her position. that was uncontested and she remains in that role. talking about this chipping away of the credibility and legitimacy he of malcolm turnbull as prime minister. how much time will pass before

we see another attempt at the leadership. when it comes to the numbers, it is not looking pretty in terms of that widening margin. the most recent numbers that we had from opinion polls looking pretty unflattering. you have that trailing of the national coalition behind the labor opposition by 45% to 55%. -- it looks like at this point, the opposition will win pretty easily. this really did come down to a few issues. taking a look at the economy, there is data out there.

haidi: part of that, you could argue is the structure of where the economy is at the moment. still very much an economy driven by command and commodities. this rebalancing towards services. chinaou see a slowdown in , that is going to weigh on it. probably one of the most vulnerable commodities. some of the other issues like stagnant wage growth is kind of sticky. there is a sense that -- they are stuck between a rock and a hard place. we have gone 27 years without a recession. some critics would say that is

due to good luck rather than good policy. it is almost impossible to make long-term policy in australia giving this revolving door of leadership. if we did have a successor today, that would be the sixth prime minister in less than a decade. you spoke about the energy policy that was really important. malcolm turnbull has had to retreat from his energy policy when it comes to the emissions target because of the pressure being put on him to support the coal industry as opposed to alternative new energy. ramy: for now, we will be talking -- we will be calling mr. turnbull prime minister. let's get the first word news with jessica summers.

the yen rising once again. this on the back of the weakening dollar. the yuan about 6.6%. policymakers are seeking to limit outflows. has completed the last of its three bailout programs. it still has an enormous task ahead. itss more than 60% below levels since the package was announced in may of 2010. plunged 99%.e recede.ave begun to some areas remain inaccessible to rescue teams and nearly a

million people are in rescue camps. kerala receive more rain than normal. 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. i'm jessica summers. this is bloomberg. ramy: president trump has now been given expectations of a in expectations of a break. tom mackenzie joins us from beijing. tom, what else did we hear from trump on china. downplaying.y the optimism surrounding these talks that kick later this week. overso took aim at china

what he says is currency manipulation. that puts them at on's with his own treasury secretary or treasury department who put out a report in april where they did not label china as a currency manipulator. from the chinese perspective on , i spokede tensions exclusively to a policymaker in china. he is the head of the statistics euro. the major state planning agency. right at the heart of these discussions. said that the trade tensions

do pose a serious threat to china's economy. the exports from china to the u.s., 40% are made a foreign companies. not -- not only chinese companies but american companies in china will be affected on the restriction. meanwhile, u.s. exports to china have seen double-digit growth in the past four or five years until this year. for u.s.al trend exports to china is very positive. the broader quick to learn -- the broader concern is that beijing could start to target u.s. companies.

they could dust off the play they played against south korea. when china effectively took measures that squeeze many south korean companies operating in china but also the tourism sector and cosmetics sector. it has done this before. it has used its playbook against south korea and others. it could target u.s. companies later down the line. that is certainly a different story for china as well. tradeid they expect these tensions to have when it comes to china's growth? tom: it was interesting. he expects china will overshoot .t gdp target he said the fundamentals were relatively sound and was andppointed by retail sales

investment. when you sit down with the head in china, you ask about multiple cases. can you trust china's data? take a look at what he had to say. a director of the national bureau of statistics, i can say with full response to the that china's economic data is authentic and credible. it can live up to the international standards. tom: he told me that officials in china used to use fake data to get promotions. , theyf they take data will be punished. they will have zero tolerance on fraudulent data. he is also a man with an year to the ground. to thet -- an ear ground. he expects trade tensions could pose a risk in the second half. we will talk more about

trade next. also on the show, boom or bubble? we will does that question to chris chen. you do not want to miss that bloomberg exclusive. rich asians in the box office. talking diverse city in the film industry and china's growing influence on hollywood. this is bloomberg. ♪

ramy: welcome back. this is "daybreak: asia." trump: president complained that jay powell has not been the policymaker that he expected. donors at as to public fundraiser are his most personal criticism of powell's

performance. we also heard lines coming through with his interview with reuters. richard, how much faith should we put in these headlines? i think it is a cheap money fed. the question is whether the government likes it and whether they will do anything about it. president trump clearly does not like it. that is no surprise from a guy who has run a busy -- reality business. all the appointments they have been putting in our quite orthodox appointments. he have not tried to manipulate the quality of the people making policy decisions and the fed. from that point of view, you have to look the data. inflation is a target. interest rates are low.

you do not have to be a genius to figure that out. yvonne: is it about higher rates or is this an attempt to strong hand the dollar? i think like many other things, he has been putting in insurance. if something goes wrong in the economy, he can a well and i was doing my bit, but look at what those guys in the fed did. they let the country down. he is planning ahead in a defensive way. more directly, trying to get the dollar down a little bit. tends to be a little brief. we had tension in the beginning of the year talking about the strong dollar and the desire for a weaker dollar. richard, talking about the

strong dollar, where do you think it is willing #a lot of people are changing their calls for it from being bearish to bullish. >> have been looking for a bounce in the dollar-based on the deferential's. we think it has gone about as far as it should. when you get into next year, we think the weight of those huge american deficits on trade with bit -- will begin to send the dollar weaker. yvonne: to what extent has the stronger dollar tightened liquidity to the point that it has done a bit of the fed's job already? >> for sure, that has happened. at the leveloking of the dollar. at the same time, financial

conditions have loosened through the strength and financial markets in the drop in bond deals for the past two or three months. the fed is probably saying we are still far below neutral. two or three rate hikes look like easy decisions. then you have to look at whether inflation is overshooting. then it becomes a little unclear. the next two or three hikes are easy after that. it comes more controversial. ramy: with the dollar and the links to emerging markets, looking to where that may go, where do you think this is going? saying it isle are not going to get very far. what are your thoughts as to where this is going?

>> they have prevented the central bank from doing what is necessary. i think it is not purely idiosyncratic. we are seeing higher american interest rates. they are putting pressure on countries that have significant funding. it is lining up who is next. indonesia, there is some focus there. they have done a good job in trying to get ahead of the markets by raising interest rates. fairly proactively without being forced to by the weakness of the currency. they seem to have had effect in slowing down the decline. when you look around, the emerging markets, there are not that many countries that have material external deficit. we talked about 3% of the world

economy. it is uncomfortable if you are one of those countries, but it is not enough to be a global systemic problem. yvonne: it raises the question of how much maneuver does asia really have when it comes to raising rates further? towards theitching fiscal spending side. is asia done tightening? >> know. i do not think asia is done tightening completely. it still looks like it has a way to go. when you look at the current inflation numbers, i am dubious that they will be able to stop at this rate hike recently. indonesia, they will do more. thathave made it clear currency is more important than the concern about overshooting the interest rates in terms of

domestic or a lack of domestic inflation pressures. i think there will be more rate hikes. the next move is up, but it is quite a ways off. yvonne: always good to have you. chief economist joining us. do not forget our interactive function tv . catch up on past interviews and dive into any of the securities or functions that we talk about on the right side of your screen. this is bloomberg. ♪

ramy: a quick check of the business flash headlines. about elon musk's plans to go private. turning bears saying the deal is far from being proposed. saudi arabia's wealth fund might

buy a stake. apple is said to be planning an upgrade to the many to the desktop. it will resemble the current macbook air. apple is also said to release new iphones in the coming weeks. the battle for supremacy in global networking equipment area a week to a record last quarter. -- equipment. it reached a record last quarter. it has been fueled by expansion in asia and north america. you can get a roundup of the stories you need to know to get your day going in this edition of daybreak.

the trump headlines when it comes to the fed and china and eu currency. .t is also on your phone this is bloomberg. ♪ retail.

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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. yvonne: just a half hour away from opening in singapore. ramy: you are watching "daybreak: asia." the first word news with jessica summers. australian prime minister malcolm turnbull is clinging on to power after nearly surviving a challenge. they declared the leadership open and won the party ballot. pressurehas been under for failure to deliver his energy policy. >> the prime minister called a

ballot in the liberal party room. witness. a ballot with the result of the ballot was malcolm turnbull was elected leader of the liberal party by a margin of 48 votes to 45. jessica: president trump complaining that powell is not policymakers he had a acted. -- expected. -- hi five rate times, including twice this year. -- height -- hiked five times, including twice this year. a trade dispute with washington has weighed on sentiment but the

-- there is now some stabilization. -- rising 77%es from a year earlier. 411,000gy finance is vehicles found homes. more than half of those sales coming in china. 22% of deliveries with north america on 19%. 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. i'm jessica summers. this is bloomberg. how thetied to see asian markets are shaping up so far this running. sophie: a snapshot here. asian stocks looking mixed. that below 110 against the greenback. i want to highlight what is going on in australia. australian shares off. the biggest drag.

we had the aussie dollar looking a little changed. we also want to highlight what is going on in korea. korean assets gaining some ground. climbre continuing to after the sector has been battered by emerging-market concerns. rising 14.9%. aftercond month of growth that fall that was posted in june. a more positive export picture helping to climb. let's check on the action in korea and bonds. -- sending the five year yield back below. you with somee stock movers in australia. bhp very much in the spotlight given the trade

risks. we had bhp forecasting output. we are seeing stocks surge the most in nine years by reporting an annual loss for flexing group. flexigroup. that is just a look at some movers in sydney so far today. ramy: sophie kamaruddin on the markets there. meantime, a burst of tirades from president trump against the euro, the yen and policy. more dig into this and with our strategist mark cranfield. on the fed and the dollar are not new. why were they enough to weigh on the green back #-- greenback? >> probably because of the

timing really. some of the senior traders are deciding it is safe to take some vacation time. emerging markets have been so volatile. people have been delaying time lloyd from their desks. , liquidity ist less than it would be. he has not said anything particularly new. impact,ally having an particularly on the dollar yen. we are seeing that tending to lead at the moment. it is nothing really sensational, but the timing of it into a fairly liquid market help to make the move. the fact that treasuries are responding, we are seeing a weaker dollar. ramy: we have been watching the

five-year breaking below the 2.7% mark, now at 2.69%. >> there are a few key points to watch. if the five-year drops below that level, it will probably drive the 10 year yield down. positioninge heavy where people are short of the 10-year part of the curve. it also applies to the dollar as well. again, that is what is awaiting the market as well. a combination of a quiet time of year. you might get bigger moves than you expect. yvonne: they are certainly magnified. let's take a look at how the euro is right now. .he euro-dollar climbing .5%

it is the highest we have seen since august. sawshort positioning we that shortro with squeeze, even before these headlines. let's move forward talking about em as well. cutting turkey's reading even lower. >> it is very important for the emerging-market complex. if turkey continues to have credit downgrades, that will affect other large countries within that. there is an interview with an analyst from harvard who says that brazil is a country that needs to watch out. if turkey has further downgrades, brazil could be in line. withinre large countries the emerging-market world.

even indonesia might be affected by this as well. it is not the end of this lori, -- the story. the credit development situation is certainly going to be a very big factor as markets come back in september to more liquid situation. if somebody as big as brazil gets dragged into it, even the big markets like north america could be looking into that as well. yvonne: thank you. joining us from singapore. you can follow more on this story on our markets live blog. you can get a market run down in one click. asre is analysis from mark well as his bloomberg expert editors out there. coming up next, a vaccine scandal. is chinese biotech all bad medicine?

talking exclusively about the company's growth rate area this is bloomberg. ♪

ramy: now for a look about some of the stories trending. recordabout the stimulus currency devaluation. record currency devaluation. how fashion companies are turning to southeast asia for production. on tictoc we have a feature on generous and -- generation z. check out those stories trending on bloomberg online. the biotech company reported a 61% jump in revenue for the first half of $153

million. it is a dominant force in the outsourcing market with almost six times the market share on its next closest competitor. joining us is the ceo chris chen. always great to have you. this company has been able to deliver. you're talking about 70% revenue growth. how sustainable is this? >> it is great to be here. it is my first time in hong kong. biotech is an incredibly fast-growing industry. yvonne: is there a topline growth that is reasonable to you in the next three or five years? we have seen incredible results. we have been saying that we

wanted to grow 50% and continue to grow 50% in the next coming years. yvonne: venture capital falling into the space as well. allowing for these biotech companies on the exchange. how much has that benefited wuxi overall? >> when company is risks money, they go with us. they work with us. it is better than what they are doing in-house. years, aave over the platform. if they work with us, they are standing on the shoulders of a giant. ramy: one thing i want to raise with you, bloomberg intelligence has will boards saying that reportss are lower -- saying that forecasts are lower. hugethink -- there is a

chinese new year at the beginning of the year. over the past couple years, we have been severely growing about 40% per year. i believe we can grow another 40% to 50%. ramy: in terms of manufacturing revenue, you said it was 200 $40 million. any update for 2018? we grow topline 150%. a 900 million me dollar number comes i was not sure if you wanted to update that. at the share price. it has been a volatile ride. 120%, but now it is

up by 50%. consumerterms of concern, what do you want to tell them? revenue i0 million talked about was actually the total revenue we can achieve. it was at the time when we announced the ireland facility. it could be up around 220 million capacity. that is revenue. -- peak revenue. yvonne: there is concern about the space think it is not just a boom, but perhaps a bubble as well. are you concerned? >> have not concerned. i think there is a huge medical need. there was a movie about drugs. yvonne: i did watch it.

>> it is huge. if you think about china, the vast population. it is huge. there is a huge medical need. yvonne: you are expanding internationally as well. you announced expansions in singapore last time. what is the strategy there? from the get-go, we want to be a global company. we start with china first. latest, u.s.. closer to the customer. yvonne: how are the sites progressing? >> we are to start in ireland

this year. yvonne: how does your manufacturing approach compared who use competitors stainless steel facilities when it comes to a cost perspective for you? >> we can achieve the same cost goods, but we are more flexible. this is more instructive technology. ramy: telling more about the project topline -- pipeline. what do you have in store for the world over the next year or so? 187 being developed out of wuxi. medicinesing cancer and auto immune disease medicines.

the new area we have seen is infectious disease. we are making antibodies for yellow fever. announced witho the vaccine company. it was after headlines came out about the vaccine scandal. how big of a dent on investor confidence do you think this scandal has? >> we have been looking at vaccine opportunities for the past couple years. china needs to upgrade its infrastructure and policy on vaccines. it is natural for us to enter into vaccines. it happened coincidentally. we announced entry into vaccine areas a couple months before the scandal. we help the chinese industry learns his lesson. yvonne: are you focusing

domestically primarily? >> initially, domestically. we want to go global. yvonne: great to have you. in a moment, it has been a crazy big win for crazy rich asians. the implications for diversity in box office success. this is bloomberg. ♪

ramy: welcome back. this is "daybreak: asia." yvonne: let's do a quick check of the latest lash headlines erie it mixed messages revolving array and -- are at two-year high. skepticism about the company's debt yield business model is driving it. the equivalent about $2 billion. a 25% gain ing first-quarter profit. that is on the back of unstoppable homes ales. -- home sales. they have into the vineland buying into the 18 month

ownership tussle. winning eu approval for their merger. they tried to secure u.s. antitrust backing for a deal that combines two of the biggest suppliers of industrial gases. to sell thes agreed entire gas business in europe as well as stake in the italian joint venture. ramy: the first domestic u.s. dominated the north american box office over the weekend taking $25 million on its debut. let's discuss "crazy, rich asians." what it means for diversity in hollywood. mean aversity here benefit to the bottom line is this just a one-off thing? >> it definitely means benefit

for the bottom line. we are seeing can immerse, the audiences of the american public ready, not just ready, but looking to see the diversity in the big screen. tv, thed of success on preferences of what american public wants to watch. we are seeing that diversity is also capturing the marketplace when it comes to consumer packaged goods. people in america are ready and really embracing the diversity in hollywood. terms of the industry itself, warner bros. is behind "crazy rich asians." a fullys a gamble of asian cast pulling in the numbers. thatat we are hoping is

your studios, networks are all watching what is happening here and that they see in these numbers the american public is ready. they are buying the tickets, going out, breaking grounds and it comes to ticket sales. it is also an opportunity for a lot of these studios to look at thatipelines, making sure they are incorporating that i diversity in the business, that they are looking at their marketing strategy to make sure the are being inclusive. the group that marketed this money did a phenomenal job of really tapping into that asian-american market, but also with everybody else. the 60% wereut non-asian who went out and bought the tickets to see this movie. it really speaks to the audience

being ready for this type of diversity in hollywood. yvonne: we have seen hollywood go through some hurdles when it comes to the movie market in china. do you think the likes of "crazy "ich asians" and even "the meg provides opportunities to open the door once again? >> absolutely. we have seen a lot of consumer trends, things that are popular and hot in america. overseas and it is hot and popular there. it is digital technology that has really taken on borders. we see these conversations happening on social media. this momentum that we are seeing in the u.s. will certainly go

abroad and resonate with all audiences across the world. ramy: he said that 60% of people were not from asia or asian-american. what does that mean about the growth --he asian asian buying power? to 2017.w from 2000 it is expected to reach 1.3 trillion by 2023. the asian-american segment in this country is still small, but when it comes to buying power, they are going out there and using their wallets to champion these types of projects. ramy: i was one of them as well. coming -- i am coming up on friday to watch the movie.

we are seeing trepidation when it comes to equities with south korea. down .8%. bhp missing when it came to their earnings and a lot of trouble within the government with the prime minister malcolm turnbull just barely retaining that leadership spot. a lot of questions about his leadership moving forward and the kospi up one third of 1%. a mixed can see it is bag. this is bloomberg. we have plenty more to come. ♪ this isn't just any moving day.

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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. rishaad: emerging markets, on track for their worst month in 2 1/2 years. beijing statistic says we can trust the numbers. president trump lashing out, accusing rivals of currency manipulation and the moaning jay powell's performance of the federal reserve. in hong kong, i'm rishaad salamat it. in sydney, also coming up a strong malcolm turnbull survives but his weekend. 35 lawmakers voting against his leadership. this is "bloomberg markets asi "