anna good morning from bloomberg european headquarters in london. i am anna edwards. this is "bloomberg daybreak: europe." the u.s. president complains --t powell the fed chair president trump also accuses china and the eu of manipulating their currencies. little hope of progress with trade talk with beijing. the ceos a largest miner tells bloomberg america could lose out from the trade war. a lot of countries want to trade more with each other, and now it looks like the u.s. wants to trade less.

anna: good morning. this is "bloomberg daybreak: europe." 6:00 here in london. the index is up in positive territory shy of 0.5%. we have comments from president trump around jay powell. the big picture, moving equities is all around trade talk, and jackson hole, looking forward to that at the end of this week. a lot of big picture stuff to talk about. the all-star market is down by under 1%. .hat has been weighed down

critical bringing down its global growth estimates as a result. let's talk about what president trump had to say. this is the bloomberg dollar index down by 0.3%. reacting toollar what president trump had to say. he has complained to wealthy republican donors that jay powell is not the easy money fed chair that president trump had expected apparently. on the other side of that, euro strength, we put the euro in 1.1529 is where we trade. trump says europe and china manipulates their currencies. coming up on the u.s. trading session, things look flat. as we had to the united states,

s&p closed 15 points away from a record. tomorrowe celebrating the longest bull market in history? the ceo, wenzie will hear more from him. we played a clip in the headline, and we will have more from the conversation. he talked about dividends and returning to shareholders, metals, markets and the trade war we are seeing globally. let's get a bloomberg business flash. juliette saly is in singapore. juliette: u.s. president donald trump says he expected jerome learned- bloomberg has he said to wealthy republican donors on friday he has raised interest rates, five times. including twice this year under powell. the president nominated the fed

chair. meanwhile, president trump said he will not make concessions to turkey until he secures the freedom of the evangelical pastor. he also repeated his claim that china and europe manipulate their currencies. goods, beijing lowers the level of the yuan. problems from dodgy data are in the past according to the man in charge of government statistics. exclusive interview, he says the country's growth will exceed its annual target by 6.5%. 6.8% economica's

growth in the first half of this year, domestic consumption contributed 78 .5%, while domestic investment accounted for 31%. exports went down. andking about growth achieving a target of 6.5%, china is not that affected by the fall in exports. australia's prime minister malcolm turnbull has survived a leadership about. growing unease among colleagues about the government. dutton byefeated 48-35. while the win hands him a those that voted against them shows just how wide the rift is. >> i do not bear any grudge

against peter dutton for challenging me today hurry at i invited him to continue in his position. differences, it is important to put them behind us and get on with our job. juliette: global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . the australian share market is the only one in the red. bhp wang, to do with and key banks coming under pressure. the nikkei is up by 0.2%, but it is chinese stocks powering this rally. pharmaceutical stocks are doing well on a number of key earnings.

let's have a look at other companies we are watching in the region because i mentioned bhp coming through. corporate tax cuts -- bhp did rise in yesterday ahead of these results. well --telecom doing china telecom doing well. it has an upgrade from jefferies. optical rise sunny for the first time in eight sessions. this is a stock that has been hit hard. worth $83 iss slightly below that. we are seeing a pick up in the share price today. thank you to juliette saly in our studios in singapore. president trump has complained that jay powell has not been the

fed chairman he wants. earliernback weakened after trump repeated his claim that china and europe manipulate their currencies.

euro. in terms of the chinese, we have seen the depreciation in the chinese, remember in the last you months a peak of and at the moment in response to chinese concerns on trade conflict in the chinese economy. it is also in response to general concern, they do not want the economy to decelerate that quickly. and had eased fiscal policy the result of easing policy when the fed is tightening, the chinese have devalued.

anna: and all kinds of emerging-market currencies. in terms of if these comments do anything, with the fed be swayed by any comments from president trump? byave been reading comments saying the bond market is screaming at fed independence, because the bond market is suggesting the fed will carry on with rate hikes. fed will raise rates in september, and probably again in december. however, i challenge the fed's guidance on raising rates three times in 2019. the fed rate increases may stop in the middle of next year, so less than three times in 2019.

in terms of this important question on fed independence, first,wer is twofold, the fed's independence is guaranteed, but the first point is that president trump has the ability to make his own appointments to the fed board. i suspect he will make appointments which are sympathetic to his views on interest rates. there is a risk of fed independence gets eroded over time, over the next year. fed independence is not threatened today, but it is something we need to watch carefully. the second answer to your question, if fed independence is threatened, you will see a bond market reaction, and that will be negative. anna: we are not seeing that yet . the dollar is weaker. does it power higher from here? bob: first of all, we have a situation where fx market volatility has been low, and

will stay low. the exception has been the emerging-market currencies that are under pressure. if we look at dollar euro, dollar-yen, it has been low. i think volatility will stay low. my theory is it probably trades we are at there moment for the next few months. as we go into 2019, the trend of dollar strength reverses. anna: bob parker, quilvest wealth management investment. a significant slowdown in china despite the ongoing trade war. we bring you more from our interview. that is coming up next. this is bloomberg. ♪

anna: good morning, this is "bloomberg daybreak: europe."

6:15 here in london. 1%.asx down by that has to do with the mining industry, and the numbers from bhp billiton weighing on that market. speaking of bhp, the world's biggest miner says protectionism is hurting economic growth and raising the price of goods. bhp expects consumers to push back as they become aware of what is the true economic problem. seeew mackenzie does not any slowdown for bhp, especially in china. andrew: we are not seeing a slowdown in china. copper,a little bit in but other than that, everything is going well. obviously, the concerns looking forward is that if protectionism takes hold, it will have a dampening effect on the economy, and that will affect bhp. but we do expects china will

mitigate some of the impact it faces. we do not just sell to china. we do more to stimulate domestic demand, and this week we will what irder, and from learned from talking to trade ministers around the world, a lot of countries want to trade more with each other, and it looks like the u.s. wants to trade less. china will walk into that area and find exports with other people. we do not think the impact on china, even as these issues become real, is going to be that significant in the short term. we worry about protectionism generally because it is bad for the growth and global economy. >> we have seen prices from commodities. something like 19%. how does that affect you? andrew: we are a big copper

producer, and we run one of the biggest copper operations in the world. of course, it has an impact on the top line of those operations. we know we face volatility, and that is why we as a company are trying to drive costs down. we will have to walk against like thel factors ratio of waste to ore. and we see a little inflation. we try to quench that by becoming more innovative, technically adept, by continuing to advance the culture of our workforce. we have done that successfully. that is why we have the same margins today that we had in 2011 when prices were higher. a $7.5 billion exit from shale, you are lifting dividends, at the same time could you use that money -- if

you did, you'd be dammed if you do and dammed if you don't -- but could you use that money to expand other parts of your business as well, and conventional oil production or further growth in copper? andrew: we are using money to expand our production. we have nine significant projects underway are we have a major escalation program. we told the market we are not going to spend 8 billion for the next year or so. we continue to improve our capital. we are doing everything with our cash. we are investing in the future of our business. we are at the low level of our target range, so we do not need to put more on the balance sheet. that means the exit can find its way into the shareholder's

pockets. there is money left over to grow the company in the future. we have a cabinet full of options. they have to compete for capital, and we have a strong capital allocation framework which keeps us to that discipline. tos is a company committed strong cash generation, real discipline around capital, and targeting rising value for the company and rising returns. a returns to share our 14%. it will be 18%. at another 40% to the value of our company. >> when you say you would use that money as future growth, are we talking in organic growth, or would it be organic? would you be on the m&a trail

even though people say there is nothing out there on a big ticket item basis? andrew: no, this is all organic growth. as a result of what we have close toelieve we have an ideal portfolio. we have access to some of the best ore bodies on earth, and i am in a geologist. -- i am a geologist. we understand geopolitics, so we think we are in the right locations so we can be expandable. we are exploring some of the best exploration fairways in the world for oil and copper, which is where we want to add things. we do not need to do any m&a to grow our business significantly, and it is all organic. ,nna: that was andrew mackenzie ceo, bhp billiton.

bob parker is still with us. let's get your thoughts on metals and mining, and the mining industry. let's start with the copper price. fallen inpper has recent months the last couple months in particular, average pricing is at the lower end, 6500 to 7000. -- wherethe volatility do you see the copper price going? it is highly correlated with chinese growth. if we see chinese growth in the second half of the year averaging 6.5%, next year i think it is highly likely, assuming no major escalation in trade conflict, it is highly likely chinese growth will be in the order of 6.3% to 6.5%. on that basis, chinese demand for copper remains muted. a big driver is chinese real

estate. upside issis, the probably limited. to possibility of going back $7,000 per ton as we were a few months ago, the probability is low of that happening. months,pened in recent we have seen lower chinese demand reduction in inventories, reduction in long positions. there is a risk we move for speculative long positions to speculative short positions, that might drive the price down in the next two or three months. ceo said -- they talked about how their margins in copper prices because of what they have done costs. that is where they have been successful. that was a very

comprehensive interview. cost management is second to none in the buying industry. their capital management is also very strong indeed. that results, the point that came out of that interview, the powerful point, is that margins have been maintained in a tough environment for the mining industry. anna: you are not a fan of the minors as a whole. you said a case for owning the minors is weak. globally is that we have a strong upturn in global growth in the second quarter, led by the u.s. the poor growth numbers we had out of europe and japan in the first quarter reverse in the second quarter. that is being maintained. one has to look forward to what will happen in the first half of next year. they emphasize in the states that the federal reserve is

forecasting growth next year at 2.4%. that is a deceleration what we saw at 4% this year. on that basis, slowing global growth, and european will hold at 2.2%. japanese growth probably holding at 1.2%. chinese growth is decelerating albeit slowly. picture is the demand side of the equation for commodities is going to weaken. anna: thank you very much bob parker, investment committee member, quilvest wealth management. if you're a bloomberg customer, you can follow all the charts and functions that we use. rewind and catch up on anything you might have missed with that function. up next, china's dodgy data is a

thing of the past, according to the manning charge of statistics in china. we will bring you that interview next. he sees the growth rate coming in and defends the methodology. ♪

anna: good morning. this is "bloomberg daybreak: europe." we are live in london. the dollar against the yen, pretty stable. that is where the stability seems to ending currency markets. the dollar is much weaker in general. president trump suggesting china and europe manipulate their currencies. out the market with nejra cehic. nejra: good morning, president trump setting the tone for markets in asia today.

let's start with equities, we are seeing a mixed picture overall. you can see australia is lower. we have seen some yen strength in the session. at one point, the yen was at an almost two-month high. state funds were said to be supporting the market. take a look at the fx space, we are seeing some weakness in the dollar for a full session. euro, the pound, the aussie all gaining against the dollar. in fixed income, the 10 year yield is tracking higher. a bit of a mixed picture elsewhere. yields are moving higher. higher, cold up by 0.4%. a little more on the fx reaction, i am talking general dollar weakness the euro has been one of the beneficiaries of

this. hitting its high since august 9. how much more momentum is there above this at the moment? are seeing that higher for a fifth day against the dollar. finally, looking at emerging-market equities, we're seeing gains in today's session. pe ratio of emerging-market equities versus the s&p 500 has traded in this range of 75% during good times, 66% during bad times. you can see at the lower end of that range at the moment. perhaps, this is a buying opportunity based on valuations. anna: thank you, nejra cehic with the data this morning. let's get up update from juliette saly. u.s. president said he expected jerome powell to be --

bloomberg has learned he lamented to wealthy republican thats that he is unhappy he has raised rates, five times, including twice under powell. the fed has historically frustrated presidents by raising costs without regard to politics. president trump meanwhile said he will not make concessions to turkey. the center of the diplomatic dispute that has rocked the nato ally's economy, the evangelical pastor. he also claims china and europe manipulate their currencies. he said when u.s. puts tariffs on u.s. goods, beijing artificially lowers the level. it's dodgy data are in the past, according to the man in charge of government statistics. in an exclusive interview with

bloomberg, he also said the country will probably exceed its annual target of 6.5% despite the trade war with the u.s. revealed that cyber attackers linked to russia have targeted an american in group. created sixgroup web domains that mimic organizations such as the international republican institute. microsoft said it is sifting through evidence of the group's intentions, and getting a court order to take over the domains. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you very much juliette saly in singapore. from aaces headwinds deleveraging campaign, and trade frictions.

tom mackenzie spoke to the manning charge of government statistics in beijing. tom joins us now. what did he have to say? what was his conclusion. tom: it was interesting. it is where to get face time with an official of this rank. he is the head of the statistics bureau here. he stressed china's stats can be trusted. he was also try to push back against the idea that the soft economic data we have seen out of china suggests the economy has been derailed in any way. he said he expects the gdp target of about 6.5% to be met or beaten by the end of the year, even as he conceded tensions with the u.s. over trade posed a serious risk for the economy. take a listen. i do not think the data are

disappointing. there are some slight fluctuations, the fundamentals are sound. judgment, the economy is operating steadily with improvement. that condition has not changed. tom: the data does suggest a gradual slowdown. when does that slowdown bottom out? >> the goal we set at the beginning of this year is for 6.5%.s gdp to grow around in the first half of this year, we have realized growth of 6.8%, which is higher than our original target. i think it is fair to say growth of 6.5% is a rapid speed in the world. economic powers, only india can beat that. we will continue to aim to achieve these growth targets, but in my personal opinion, this year's full-year growth may

surpass the government target. let me ask what you think of a key downside risk of the economy in the second half. change.stems from internally, we must solve the lingering structural problems in china's economy. one of the external risks facing the country at the moment does come from the international hasomic environment that been harsh, complicated, and further changing. including the trade frictions between china and the u.s. he is also saying china is less dependent on external demand. domestic demand among the support, and there might be a tick up in spending ahead. anna: he's making the point that

the exports to the united states -- do you get the sense from him as to whether china thinks we are closer to solving the trade dispute? he is the man to but the question to because he was in the meeting in those trade talks in washington between the u.s. and china, he was part of the delegation. the fence about from him is that china has yet to drop what many are hoping for, a creative solution to this problem that would assuage trump to some degree, but so that china does not lose face. he said he wanted to push back against what he decried as protectionism, and said he thinks u.s. tariffs are self-defeating. from china toorts the u.s. are produced by foreign companies, many of those americans. we may be surprised when these low-level talks started

washington. maybe the chinese will come up with something creative to move things forward. anna: what about the underlying that the allegations we have seen over the years, that the data is dodgy? what does he have to say about that? quite simply, can investors trust your economic data? he said things have gotten better. there is a zero tolerance policy . he admitted in the past, officials had juiced growth numbers in some circumstances to boost their career prospects. he said now the system has changed. he said they will be demoted or lose their job if they do that. he said ai will offer more transparency. he suggests things have changed,

but he may have to do a bit more to appease all of the data skeptics when it comes to china's stats. anna: thank you very much. bloomberg's correspondent tom mackenzie joining us from beijing. --bob parker,ie investment committee member, quilvest wealth management is still on set with us here. you had this conversation 20 years ago, even 10 years ago, to be highly critical of data gathering and policy of data, and also manipulation of data for the chinese economy. you cannot make that statement today. they have put huge resources into improving their systems for clarifying data statistics on the chinese economy. to answer your question, i have a lot of confidence in chinese data. 10 years ago i did not.

this is a chart that shows the consistent growth story out of china. that is in there with the bloomberg measure. do you still look to alternative measures like electricity use and other factors to get a sense of chinese growth? bob: yes and no. it is because the chinese economy, like a lot of modernizing economies is changing to the extent that the service sector is becoming more important. if one looks at structural changes in the chinese economy, point number one, china is no longer an economy run on export machine for the u.s. consumer. it is clear to economic strategy to reduce that depended on exports in the united states.

the chineseor economy today our consumption, health care, technology, and theucture spending, service sector. as a result, some of those indicators, heavy production data like electricity and transport, are becoming less valid today. anna: they met be missing the picture. -- they might be missing the picture. we have a next thing story on whatloomberg today about can be targeted by the consumers , and the chinese with south korea and france and japanese brands, either overtly or more subtly asking the chinese to boycott these. do you worry about nike, starbucks, mcdonald's with trade tensions in mind? bob: in the past, the interesting point of when the chinese consumer was courting south korea and the japanese,

one good case study was the impact it had on sales of cars in the chinese market. there is a chance that could happen. american brands could be hit in the chinese consumer market, and it will be the consumer market as opposed to the industrial market. i think if one goes back to previous periods where the chinese consumer went through this boycott period, it was shortly lived. will it be a long-term trend? absolutely not. anna: bob parker, investment committee member, quilvest wealth management here on bloomberg this morning. you can browse all the charts on bloomberg, and save them and use them in your own work. coming up, we will be live from brussels to bring the latest on brexit as negotiations between the u.k. and the eu resume. and the german spokesperson joins the bloomberg team at a:

30 a.m. u.k. time. what would he say about the report overnight that the eu will apply tougher sections on russia? this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." let's get a bloomberg business flash from juliette saly in singapore. juliette: deutsche bank is doubling down on troubled commodities trade. goh less than a week to before shareholders, and the restructuring plan, unsecured bonds will be $.45 of value.

the process will increase support for the restructuring. hit a recordave high of $82 per share. amidis after upgrades positive views on the athletic category and the north american region. -- analyst planning a new low-cost laptop and an upgrade to the mac mini desktop. bloomberg has learned it will resemble the macbook air, but with a high resolution retina display. news also set to launch iphones, i watches and ipads.

that is your bloomberg business flash. anna: thank you very much to juliette saly in singapore. let's check in on what is trending across the bloomberg universe. , the eagles have the best selling album of all time. to 1975 hits from 1971 have topped michael jackson's "thriller." times.hit platinum 38 the u.k. foreign secretary will --ch united states response most stories on the terminal, apple is planning a revamped line of lower cost macs. jay powell has not been achieved money fed chair, we talked a lot

about that this morning. find out more now. let's stay with the tesla story. bloomberg spoke to one of the most outspoken investors, this of kawasaki. he says tim cook would make a good number 24 tesla. >> -- he would make a good number two four tesla. -- for tesla. , thattim bought tesla logistical expertise is exactly what he did for steve jobs. it is like a perfect match. we would absolutely be serious if anybody tries to get rid of

elon musk, he is the genius of our time. this guy is the howard hughes of our time. i want to invest with elon. he needs help. there is no doubt he needs help. anna: one investor in tesla's expectations. i do not think he really thinks tim cook will take that post. bob parker is still with me on set in london. , talk that the european counterpart michel barnier. still weeks until the october deadline. later this week, the u.k. will publish the first of its technical papers designed to help businesses prepare for a no deal scenario. what do the two sides have to

accomplish today in brussels? >> the main negotiators are getting together here in brussels again today. it looks like they are going to be assessing how far apart they actually are. later this week, there will be some guidelines in terms of preparing for a no deal. it gives you an idea of the stasis we are at in terms of negotiations, very little has been accomplished since december. there are just two months to go before a real deadline when a deal has to be put on paper for the parliament to be able to consider it. today, they will be assessing where they stand, and preparing for a big push that will come over the next eight weeks. watching, hee is says on twitter the u.k. can strike a deal the partners.

"i am looking forward to meeting with michel barnier today. can strike a deal that is good for the u.k. and our eu partner." officially, it is optimistic, that is what they are saying, we need to reach a deal and we will reach a deal. at the same time, there is more talk and worried about a no deal situation that is coming from officials on both sides in london and in brussels. it is also coming from businesses who are saying, we need certainty to prepare for this. today, they will be trying to figure out what they need to make progress on in order to move this forward. there are a couple deadlines coming up, and informal summit of eu leaders in austria on september 20, and the eu is looking at that to show progress on these issues.

at this point, it still looks like they are far apart. you listed the three main big issues they need to make progress on to get this done. jonesthank you very much hayden joining us from brussels. still with us in london is bob parker. there is a lot to get done by october. bob: they have to do is sing which between agreeing what are the terms in the u.k. withdrawal, and what will be the future relationship between the u.k. and the eu. on the withdrawal, there is the problem of agreeing to the terms on the irish border with ireland, and i do not see any real progress made on that. we have got the divorce bill, that has been agreed. the status of eu citizens in the u.k. is largely agreed, as is the status of u.k. citizens

serving in the eu. that is agreed. worries are the loss of businesses, including my own, is what is the future relationship of the u.k. and the eu, and there is still complete confusion. they will be talking about fisher -- arce, a fissure in relationships that will take a generation to heal. there is still the risk of a messy divorce. i have a chart that shows the way markets have been bringing down their forecasts on sterling. does that sound sensible to you? bob: i think that is absolutely right. back-check a month or two, we have an agreement has been discredited. what is the current policy?

it is unclear. there will be a lot of disagreement to what the future relationship should be. there are two observations to make, the first is british businesses, whether the service sector, manufacturing, or the financial sector is increasingly basing itself on the assumption that we have to have an insurance policy against no deal. the second, what is the capital markets reaction? you have to forecast the downward pressure on the pound, and capital inflows are stalled. anna: thank you very much for joining us. bob parker, investment committee member, quilvest wealth management. bubble continue his conversation with us on bloomberg radio. biggest the ceo of the miner says the u.s. will be hit worse by a trade war.

we will bring you more from our interview with the bhp billiton ceo andrew mackenzie, a wide-ranging conversation. this is bloomberg. ♪

anna: good morning from bloomberg's european headquarters. these are today's top stories. the greenback falls as the u.s. president complains powell is not the fed chair he wanted. accuses chinap and the eu of manipulating their currencies. meanwhile the ceo of the world's billitoninor, bhp tells bloomberg the increase in protectionism is bad for business after profit misses. >> the concerns we have looking if protectionism does

take hold it will have a dampening effect on the global economy. anna: good morning, everybody. let's have a look at futures. of course, the ftse 100 futures up. the cap futures just opening a little while. pointing downwards on the ftse futures. we will see where they end up. that would fly in the face of the asian session. breaking news coming through on the housing sector. we've got numbers hitting the bloomberg. the u.k. housebuilder of course, there revenue number coming in at $1.84 billion. we have the pretax number as well of 516.3 million. this just a few days ago, or a comments ago, we got

on the housing sector saying the negativity around house builders has been overdone. they saw the macro backdrop as supportive. brexit headwinds could be one of a host of factors that are negative. we have seen a slowing in the u.k. housing market. perhaps some of the new builds are a little insulated from that. berenberg was making. withmmon hit the headlines the pay of the ceo -- a likely that is a hot potato. let's go to the risk radar. this is across the asian equity session. we are positive, up by 0.4%, trading around the big things we have talked about. looking ahead to jackson hole, that gathering of central bankers, talking about trade tensions, waiting for any development in the china-u.s. trade talks this week. the australian equity market is

under pressure. that has to do with bhp billiton in the mining sector is weighing down. we will watch that in london when we open and keep an eye on that. that could be one of the things influencing the underperformance of u.k. futures. the bloomberg u.s. dollar index down 0.3%. complaining to an audience of wealthy republicans that jay powell is not the fed chair he thought he would be. not the chief money chair he thought he would be. the other side of that is what we see on euro-dollar. the euro is up by 0.4%. a number of other currencies strengthening. we put the euro there because it is up above 1.15. let's have a look at bond markets. bear in mind we are watching with the btp market in mind. -- latestst developments around that tragic bridge collapse, the tensions

between rome and brussels. the most in -- recent news flow and how much companies might have to pay to compensate victims of that bridge collapse. let's get a bloomberg first word news update. u.s. president donald trump he expected jerome powell to be a cheap money fed chairman. public and donors his nominee instead had raised interest rates. the federal reserve has raise rates five times since trump took office, including twice this year under powell. the president nominates the fed's chairman, but it is independent and has frustrated presidents by raising borrowing costs without regard for politics. president trump has said he will not make concessions to turkey to secure the freedom of a detained pastor at the center of

a diplomatic dispute that has rocked the nato ally's economy. claim thateated his china and europe manipulate their currencies. in an interview with reuters, he said when the u.s. puts tariffs on chinese goods, beijing artificially lowers the level of the yuan. with data arems all in the past according to the man in -- behind government statistic. the head of the national bureau of statistics said countries growth will exceed its annual target despite the trade war with the u.s.. >> within china's 6.8% economic the first half of this year, domestic consumption contributed 78.5% while domestic investment dispute falling accounted for 31%. the exports actually went down.

thinking about growth and achieving a target of 6.5%, china is actually not that affected by the fall in exports. realtte: microsoft has a -- has revealed a new group of cyber attackers links to the russian government. post, president brad smith said the shadowy group created six web domains that mimicked organizations such as the international republican institute. microsoft said the group's intentions after applying for and getting a court order to take over those domains. minister hasrime survived a leadership vote, but he may be challenged again amid growing unease among party colleagues about the government's slumping poll ratings. while the win has earned him a

reprieve, the vote against him shows how wide the written government is -- the rift in governments are. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. that leadership challenge in australia, closing at the session weaker by 1%. that is related to bhp and the banks. look at the big rally in chinese stocks led by pharma. there is a sense the natural steam is stepping in. the second session of gains for a little bit of upside coming through in e.m. and the japanese market just finishing slightly higher. has all been about currencies. of course, the aussie dollar in focus after that leadership challenge. you could see the aussie fall to 70 u.s. cents.

we heard those comments from president trump about manipulating currencies, which has really weighed on the overall u.s. dollar. to watch for the london session, this is how bhp billiton has finished in sydney. remember, in sydney it rose by 1.3% yesterday. you can probably accept -- expect the same from london shares. anna: we will keep an eye on the. could be one reason we see london diverge from the european trading day. let's talk about what we have heard stateside. president trump said to have complained that jerome powell has not been the cheap money fed chairman he expected. weakened earlier after trump reiterated his claim that china and europe manipulate their currencies. joining us now is the senior investment manager onset with us in london. president trump railing against

fed policy. is this something we need to be increasingly watchful of? the president trying to influence fed policy? do investors expect jay powell to be swayed by this? >> i do not think they do. the point of central bank independence as it does not listen to what the president wants. the central bank should be looking at what the economy needs. i think this is quite a change of tune for trump. before he was elected he was quite critical of the fed for keeping rates too low. he said that would cause the u.s. economy to have to much debt. now he is wanting to spend more, he is wanting to spend more on infrastructure. higher rates are not good for the policies he wants to impose. >> he is critical of the federal reserve. i have this chart over many decades. growthit against the

story. you can see the white line on the far right is a fairly shallow climb. this is making the point that rates have been going up slowly compared to other bouts of tightening we have seen from the fed. >> rates are still very low compared to what they have been historically. plotslook at the feds dot , that is still very low compared to average interest rates in the past. anna: we see the fx markets jumping on this story. the dollar is down by 0.5% this morning. the euro higher. other currencies there as well. we have seen dollar weakness. does this seem like a turn away from the strong dollar? the dollar has been driven up by fiscal spending, rate differentials, weakness and emerging markets. a host of factors. will we be back to the strong dollar soon? >> probably. we have jackson hole later in the week. we will have the fed comment on interest rates.

i think they will raise twice this year. inflation in the u.s. is 2.9%. current inflation is 2.4%. they should be raising rates and i do not think trump's comments will steer the fed away from doing that. our guest in the last hour was saying the hikes that have been talked about this year -- maybe into next year some of those hikes the fed has been talking about, assuming they can deliver, might be questioned by the global growth story, maybe by the slowing of u.s. growth. is that something you have penciled in? quest potentially. we have seen tariffs impacting the chinese and u.s. economies. aid program for farmers is going to cost the economy. we will see what happens with tariffs. perhaps less rate rises could happen than we currently expect. anna: thank you, the senior

investment manager at killik and co. stays with us. sticking on the trade war theme, the ceo of bhp billiton, china filling the void left by the u.s.. the world's biggest miner shrugs off the trade war. although it did miss estimates. bloomberg spoke to andrew mackenzie in london. >> the concern we have going forward is that if protectionism does take hold, it will have a dampening effect on the global economy. that ultimately will affect bhp. we do expect china will mitigate some of the impact.it faces . we do not just self china. it will stimulate domestic demand. it is going to work harder to encourage exporters. have learned from talking to trade ministers is a lot of countries want to trade more with each other. now that it looks like the u.s.

wants to trade less with them china will walk into that area and seek exports with other people. we do not think the impact on china even if these issues become real is going to be that significant. of course we worry about protectionism generally. >> you have made this $11 billion investment in the u.s.. you're looking dividends. couldn't you use that money perhaps, i know if you did you would be dammed if you do and dammed if you don't, but couldn't you use that to expand other parts of your business as well? i'm talking about further growth and copper -- in copper. >> we are using money to expand our outcome production. volumes are up 8% year on year.

we have nine significant projects underway. we have a major exploration program. we have told the market we are not going to spend more than a billion for the next year or two. we continue to improving efficiency of our capital. we are doing everything with our cash. debt down to our levels at the low level of our target range. we do not need to put more on the balance sheet. that means the excess can find its way into the shareholders pockets. the has been money left over to grow the company in the future and there is lots more to come. options forol of the short, medium, and long term in all our commodities. they need to compete for capital and we have a strong capital allocation framework, which keeps us to that discipline. the bhp billiton ceo.

his company tracked the aussie index down. we mentioned that at the start of the program. the asx in a deviation from the seen it,rend we have which is broadly positive. back to the mining sector. someone said the trade war won't affect the company's -- but it will be damaging to global growth. she told bloomberg that demand for iron ore remains high. >> it is enjoying high profitability. high profitability is driving demand for those higher iron content doors. we know steel mills are sensitive. if profitability comes under pressure, we would see demand. in the second half of this financial year -- in the meantime we are selling iron ore

and -- >> you expect that to continue even though we are seeing a slowdown in china? >> we are seeing steel production reach record highs. the annualized rate has been about 950 million tons of steel. last year the annual rate of still production was 830 million tons. we are seeing in china that has been a lot of activity. some of that might be seasonal. as we go into the full year we expect to see production ahead of last year. we are seeing very strong demand. ,> the other major uncertainty the trade tensions. how much does that way into what your industry is contending with at the moment? >> china produces 50% of global steel. only about 1% is strictly exported to the united states.

there is a steel exported to other countries that may end up in the u.s.. steel produced in china is consumed domestically. china is also focused on the road initiative. our expectation is the trade war will not have a direct impact on steel production in china. history has demonstrated protracted periods of trade protectionism are not good for global growth. program,ing up on the a return to brussels as brexit negotiations resume. confidence he can strike a deal with michel barnier. we will discuss that next. later we will talk to cowpens ceo at 7:00 p.m. u.k. time. this is bloomberg. ♪

anna: good morning, everybody. 7:20 in london. the euro against the dollar, 1.15. the euro getting a bounce. the dollar is weaker across the board. that is in response to comments aboutonald trump comments the fed and what he expected from jerome powell. futures across the european space, the ftse futures are down by 0.4%. others down less so. perhaps the mining sector is the difference. let's take a look at what we should be watching out for today. european union brexit negotiator michel barnier and his u.k. counterpart hold talks in brussels. , secondondon time quarter reports after first losses in two years. later, the japanese foreign minister starts a visit to the

united states. the u.k. foreign secretary also in the united states right now. dominic raab returns to brussels with -- for talks with michel barnier. he tweeted he was confident we can strike a deal good for the u.k. and our eu partners. just eight weeks remain until the deadline for agreeing on some sort of deal. the senior investment manager at killik and co. is still with us. let's talk all things u.k.. we have not quite finalized the divorce terms, have we? nothing is agreed until everything is agreed as michel barnier likes to remind everybody. still things to be done. there is a lot to be done in a short space of time. >> on the one hand we have dominic raab saying he is confident of a deal. on the other hand, the government is putting together guidelines for businesses in the

event of a no deal scenario. sterling has weakened steadily. investors are viewing sterling as a barometer for the likelihood of a deal. the comes down does not look good. 50%consensus is there is a chance. anna: uncertainty is the word. every time we hear talk of a no deal brexit, incidentally we have been increasing surges of brexit,se no deal market participants brain down there estimates of where the pound traits. every time we hear talk of a no deal brexit, the pound go slower. >> that is so. if we get a no deal it will go lower. that is good for exports. the government is keen to boost u.k. exports. a weaker pound is not necessarily a bad thing. anna: dominic raab is confident,

he said. we also have the u.k. foreign secretary on his way to washington. he's going to be making a speech talking about the importance of not having a messy divorce. the risk of a messy divorce as opposed to the friendship he says the u.k. is seeking. this is still so close to the deadline. this is up in the air. how are investors discussing brexit? >> they do not know what to do and it is making them avoid the u.k.. particularly smaller companies. if you are a small company based in the u.k., how can you plan for the future when you do not know what your legal framework is going to be? i think it is hampering growth of the smaller end of the u.k. market. investors are looking overseas. -- they feel more comfortable investing in american stocks. -- about making

the most of american growth? is it about avoiding europe? >> not about avoiding europe. it is just looking at a great companies making sure you are investing for the long-term and making sure you are diverse in terms of currency. have dollar, also have euro, make sure you have a real mix. anna: the european companies you are looking to, you staying away from those who could be impacted by trade tensions? the euro has been weaker recently. that may be helping german exporters and others. the premise of the german exporter engine is being thrown into doubt by trade tensions with the united states. >> it is and trump is annoyed about the account deficit the u.s. has with germany. if you're looking at cars he has keen to impose some tariff on cars. the have said they will try to

avoid any tariffs in the future. we do not know what is going to happen there. you should treat it with caution. anna: thank you, the senior investment manager at killik and co.. you're a stocks futures look like this. -- euro stocks futures look like this. u.k. ftse futures called down 0.4%, that could be to do with the mining sector. estimates,n missed brought time growth estimates. they did not see a slowdown in china right now. we did see the numbers coming through from bhp billiton weighing on their share price in australia. that could be something that divides the european markets. the dax futures are set to be flat. which is coming from the london market. we heard fromt president trump overnight, the dollar is down by 0.4%. that is one of the big themes we are looking at. that is it for daybreak europe.

the european open is up next. bloomberg radio is available on your mobile device. this is bloomberg. ♪ ♪

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guy: good morning, welcome, this is the european open. we are live from our european headquarters. i am guy johnson alongside matt miller. matt: great to be back. the greenback accelerating a slide after the euro breaks through the 1.15 level. chinese stocks are rallying hard. cash traded less than 30 minutes away for europe and the u.k.. guy: