♪ anna: good morning from bloomberg's european at letters. i am anna edwards, this is bloomberg europe. stories.today's top trump's longtime lawyer admits to violating campaign finance laws. u.s. futures initially took a dip but they have recaps some of their losses. trade talks, trump ruffled feathers in beijing ahead of negotiations in washington. meanwhile, a report o of a massive breakthrough. discussions are said to be nonstop. the pound gains as both sides agreed to pick up the pace. ♪

anna: good morning, everybody. this is "bloomberg daybreak: ." ope it has just gone 6:00 here on wednesday morning. we have been digesting the. metaphor news, and the michael cohen news, coming at similar times. also beenacific has trying to bank some gains on the .4%.y session, up by asking questions about risk appetite in light of the fact that trumps long-term lawyer, please guilty to various federal charges. we saw a bit of a dip in risk appetite, dip in so-called riskier assets, a slip also in the haven assets, and you can see that reflected in the bloomberg u.s. dollar index. we saw a dip in the dollar this.e of

amount of reducing of demand for risk assets, and a mild move into some havens. certainly not a pronounced effect, but it was there, and it was around the fact that we got the knees. on the other side, a little bit more progress on the equity side. we saw the mexican peso on the move higher, the canadian dollar also making gains on the back of this news coming from politico around what we might expect to see tomorrow on the handshake moments about nafta. especially the u.s. dynamic on nafta. we are keeping an eye of course, on that story. as we said, trump is casting doubt on the quick resolution of trade talks with china, that is things.ther side of on the u.s. futures, we saw a bit of a decline in appetite for risk assets as a result of the michael cohen. three that we have come back a little bit from that. equity futures are expected to be done by about 3/10 of a percentage of the start of the trading day. then after news already in

their. another thing today, that is the longest bull run in history. march of 2009, if you accept that it is still in tact, today marks the longest bull market rally in u.s. stocks in history, something we will discuss, and we will talk about whether it matters. whether it will ever die in old age. msci's ceo will be joining the bloomberg team as 7:00 p.m. united kingdom time. stay tuned to bloomberg tv all day for a lot more on those top stories. that as get the bloomberg first word news opted from juliette saly. anna, in the u.s., donald trump's longtime lawyer and fixer, michael cohen, has admitted that he made easy go camping contributions at the behest of donald trump. while the president's name was not mentioned at the hearing, the crimes he admitted -- he hushs he admitted to pay

money to a point actress to keep quiet about an affair she trump. to have had with michael cohen o said admitted he took part in a scheme to pay money to a second woman to keep press.ry out of the >> these are very serious charges that reflect a pattern of lies and dishonesty over an extended period of time. they are significant in their own right, particularly significant when done by a lawyer. a federal jury convicted him a trump's former campaign chairman, of tax and bank fraud. he faces 8-10 years in prison on alone.t charges he is scheduled for a second trial next month on charges of money laundering, obstruction of justice and acting as an unregistered foreign agent of ukraine. the verdict hence a crucial victory to special counsel robert mueller as the president and his allies question the legitimacy of his work. the mexican peso gained against the u.s. dollar on reports that

the trump administration is planning to announce tomorrow that it has reached a breakthrough in talks with mexico. according to politico, time has been cleared on the white house schedule to announce that the two countries have made enough progress to make what one person described as a handshake deal. the move would clear the way for canada to rejoin negotiations to revive the free trade act. u.s. president donald trump has said china's economy is no longer on the swift case to be america's. the comment is likely to stoke concerns in beijing that his administration wants to contain the asian nations arise. this comes as. negotiations are due in washington today on trade talks between the >> countries in more than two months. $15 billion on chinese imports are due to come into effect tomorrow. china is expected to retaliate in kind.

the eu's chief brexit negotiator has said that talks with the united kingdom will continue from now on. his comments come as time is running out to avoid written crashing from out of the bloc without a deal. was negotiations at a virtual impasse for weeks, there racing to reach a deal by october. hitwerful earthquake northeastern venezuela, shaking buildings in caracas and interrupting a pro-government rally. on controversial economic reforms the u.s. geological survey says it was a massive 7.3 tremor with the epicenter of 20 kilometers. no injuries or major damage have been reported. a similarly powerful earthquake killed dozens of people in the same area in 1997. global news, 24 hours a day, on air and at tic-toc on twitter,. powered by more than 2700 journalists and analysts in over 120 countries. you can find more stories on the bloomberg at top . we did have other bit of weakness coming through in asian

markets early in the session, as we heard that michael cohen news. things have started to turn around a little, with the exception of what you heard on china. of course, we had two days of very strong gains on the china markets. today, we are seeing the csi 300 markets ared many out of action today in asia, including here for in singapore, for a public holiday. we are getting earnings from aac tech. which has been falling quite significantly shell may in hong kong, we are watching the stock up by about 2%, but it has fallen about 20% from its ipo price. this company has confirmed talks with a merger with vodafone, in an exploratory stage at this point. this bank is the biggest. loser in the index, falling the theloane 2003 as

scandal deepens. the 2018 decline is now at 75%. anna? anna: juliette, thank you. thank you very much, for the update on the markets. ,'s terrible day yesterday afternoon. his personal lawyer implicated him in a crime at almost the same moment that his former campaign chairman became a convicted felon. bloomberg's chief white house correspondent kevin cirilli had this report. >> president trump. former campaign chairman found guilty on fraud. and michael cohen, his former personal attorney and longtime fixer, pleading guilty to providing hush money to women who had alleged extramarital affairs with the president. this comes as trump had defended paul manafort, including shortly before a rally in. >> houston, west virginia this has nothing to do with the russian collusion. this started as russian collusion. it has nothing to do with that.

disgrace.tch hunt, a it has nothing to do with what they started out looking for russian involvement in our campaign. at the same brevity, president trump made no mention of paul manafort nor of michael cohen, but he did say that the latest developments provided no evidence of russian collusion. >> fake news and the russian witchhunt. we have a whole big mix tonight. where is the collusion? you know, they are still looking for collusion. where is it? find the collusion. collusion.find the >> democrats have said that the latest developments but the president in legal jeopardy. reporting from washington, kevin cirilli, bloomberg news. anna: that was kevin cirilli washington.ing from jodi schneider, bloomberg's senior international editor in hong kong joins us with the latest. quite a historic scene unfolding politically here, jodi.

what is unique and historic about this, we have seen some market action? jodi: yes, a little bit of market reaction. they have largely shrugged this off, going to haven assets and the us futures down, but the markets seem to be waiting to see what happens with this. but it is a remarkable set of occurrences. as we just saw in the report, first we had in manhattan courtroom, the president's former lawyer, michael cohen, pleading guilty to campaign finance and illegal campaign finance charges. in doing so, saying that in making that leak, entering that plea agreement, saying that he had done so with the cooperation and at the behest of the federal candidate, the resident of the united states, now donald trump. so it was pretty remarkable that he was directly implicating in the plea agreement, the

president. minutes later in a courtroom in alexandria, virginia, paul manafort, the former campaign chairman of the president, convicted on eight town counts f bank and tax fraud. while it does not directly implicate the president in that way, it complicates and -- makes marek hamsik in it for him, the politics and some legal risk going forward -- it makes very him.icated politics for it is the midterm election year and democrats will seek to make can.ver points they they are already sending around fundraising appeals with this information, about the charges in them, saying that this is -- democrats thinks best that the president has not been implicated in this. ban on saw steve suggesting to republicans that those who are in favor of trump need to step up on the other side as well. what happens next? clearly this leads us to the midterms and influences that

potentially. people will be asking questions as to whether this gets any close to trump. juliette: several things, first of all, there are the legal cases. in manafort's case, this puts more pressure on him, certainly, to cooperate with robert mueller's investigation. he faces 7-10 years in federal prison on the eight counts he was convicted of. there were 10 other counts that the judge declared a mistrial on because it jury could not agree on them, and those could be potentially retried. there is certainly pressure on him to cooperate and get a lighter sentence. as for michael cohen, even though part of his agreement did not include cooperating with the investigation and was separate from the mother investigation, one of his lawyers came out and cohen would be

happy to provide any information or knowledge he has about camp activities to the mother investigation. so we may see a lot more coming out either from both men, if the corporate. then there is the political question. the republican-led congress is very unlikely to start impeachment proceedings. if the democrats do take the house during the election, which is increasingly possible that they will come a day may start impeachment proceedings in the house. that puts a lot of pressure and attention on the midterm elections. anna: thank you very much, jodi schneider, bloomberg's senior international editor in hong kong. let us get a market view, allen higgins, chief investment officer joining us here in london. the blog asking on this morning on bloomberg, how much does this matter to the investment committee? -- i those, at a time suppose at a time where you control a line for impeachments, butcan also draw a line

there are big unknowns for the markets? alan: there are, the futures market taking a bit of a more so.st look, done .4% or my instinct would be that this would not trickled to him, despite being quite shocking news. he will come. . when was a time year ago people thought the market would be better if trump left. so market in fact come i think the market is slightly in love with trump, because of the positive impact from the tax cuts. it would be a negative if it thatall the way through, has changed from a year or 18 months ago, i think, when people were nervous about trump, or the markets were nervous about trump. my instinct is, he seems to be very, very aware of staying clear of this, high-level. we started talking

about why markets were nervous, --'d you attention to the class protection, the cost of hedging against large price moves, near all-time highs in u.s. stocks. what is this telling us about how nervous markets are in general, despite the fact that we are touching new all-time highs, looking set for the longest rally in the s&p's history? alan: longest rally, we have been here many times, and there is lots of narrative in terms of hedging of the market what. this shows is the cost of put options relative to call options , regardless of volatility levels. despite that, you have professional investors paying up options.put that is a contrarian indicator to me, it shows the amount of worry that professional investors have. it continues to be the wrong turn cheap. there is not

euphoria, there is a nervousness in the market, and this bull market will continue. anna: it continues, but we are talking specifically about the u.s.. here is a chart that shows the performance of u.s. stocks, does lan? continue, a alan: we think it does. we are overweight on positions in japan, for example. but this is a sector specific situation. essentially, scots in the u.s. .ust cannot get anywhere else those stocks do not exist. jenna has a growing tech sector, but however -- china has a growing tech sector. they are talking about the tech sector with extremely strong earnings. that is likely to continue, driven by earnings, it is hard to fight that trend, looking at the chart. anna: thank you for joining us, n.a

johnson and the gun. mexico is said to have denied the existing plans for a handshake deal. and. , the eu and the united kingdom will conduct exit talks continuously from now on, lucky us, as they rush to go put deal by the end of this year. keeping journalists on both sides of the china very busy. this is bloomberg. ♪ this is bloomberg. ♪ we will talk about all of these things next. ill talk about all of these things next.

♪ >> good morning, everybody. x: 20 in london, 2:20 in hong kong. we saw a move into a haven assets, as a result of michael cohen news, the long-term lawyer of the president pleading guilty to federal.

tax fraud charges let us look at the bloomberg business last for you now. juliette saly has the latest from singapore. juliette: and i the italian government is considering a public takeover of the highway concession now held by atlantia's. bloomberg understands that the role for the company which manages over 400 20 billion euros in assets is one potential option being weighed by the government. another option is to revoke the confession following the collapse of the bridge in general what which killed 43 people last week, and hand the contractor the governments road operator. glaxosmithkline has requested by -- bloomberg has learned that the sale by the u.k. pharmaceutical giant has attracted interest from potential bidders including cap sicko and others. representatives for glaxosmithkline refused to comment.

facebook has for the first time named a country other than russia, that has been using fake accounts to manipulate local politics. very social network said it removed 622 pages, groups and accounts for in behavior that originated from iran, targeting people in the u.s., middle east and latin america. it also removed a consonant to previous identified as russian y intelligence services. youecurity is not something ever have enough of. we have to go certainly keep improving to stay ahead. the shift would have made from reactive to proactive detection is a big change, and it will make facebook safer for everyone overtime. juliette: that is your bloomberg business flash, anna. anna: juliette saly, in singapore, thank you.

has president donald trump said that china's economy is no longer on a swift pace to be larger than america's. president trump: when i came, we were heading in a certain direction that was going to allow china to be bigger than us period ofshort hayward o time. that is not going to happen anymore. it is not going to happen. this comes as china's vice commerce minister is in washington for trade talks, for the first time in more than two months. new reports that the trump administration's plan to announce that it has reached a breakthrough in nafta talks with mexico, and there is alternative reporting suggesting that mexico is denying that. us. higgins, is still with i picked up on the trump

comments there are saying that the u.s. -- sorry, china is not longer set to be bigger than the u.s., in such a swift pace. it shows what is motivating the states. do they really want to be around specific trade items, or is this about keeping the ambitions of china in check? that matters, is in it? that is what success would look like? alan: for the u.s. president to your midwest voter that got trump income, the kind of rhetoric seems to work. does it really matter? blast, bigger country the u.s., and it bound to in gdp at the u.s. some stage, but that kind of rhetoric is popular. there is a deal to be done on trade, where he does have a s.int is tariff you do have these ridiculous tariffs both here and in europe, and we will see if, but also in china. anna: and he campaigned to change that.

the oecd's outlook for global trade growth came off a bit, estimate. where do you see in off from for this? a lot of people say come up with this in context, the tariffs will not matter more than a growth.ge to global but come a little by little, things start to add up, don't they? where do we see in offramp in terms of this trade tension between china and the u.s.? the: so, a combination of fed over tightening, and causing some distress in certain sectors in the u.s., and trade slowing down. in version of the yield curve, maybe, that is a cocktail that brings it down. but if you look at the graph, obviously, 2000 8-2009 is the stand out period, but it is hard the ups correlates and downs in the markets. we were talking about the bull

market in the u.s., in 2011, we are most had it correction. the fed overthink tightening will do it for markets, more than trade tensions? the fed murdering the economy, as it usually does, it is used to make them policy mistakes. however this time, it is really fascinating. you have a couple of people at the fed who are paranoid about the yield curve. you have bostick has specifically said that he will vote against any policy that would result in an inversion of the curve. there were as reports of a knife pointing to a danger of a yield inversion, so they have read their economics textbooks and they know the power of a yield curve inversion. so that might be encouraging. as soon as the curve goes flat, you can see a scenario where the stops.t anna: we will pick up on that. thank you very much higgins, staying with us during the program.

up next on the program, the u.s. is set to invoke new sanctions on russia today, following in nerve agent attack on british soil. we are live in moscow for and the latest. ♪

anna: welcome back. this is "bloomberg daybreak: europe." 6:30 here in london. china's minister is in washington today for the first significant trade talks between the two countries in more than two months. these are talks about the talks, and they need to get higher level for the market to really focus in.

we will be watching. america plans to impose new sanctions for the nerve agent attack in the united kingdom. we will talk more about that in a moment. fed's the minutes of the august policy meeting. so much to talk about this morning. we have yet to mention that. let's check in on the market. nejra cehic has a rundown of what we need to know. area: fourth day of gains asian equities. the msci asia-pacific index higher overall. asian equities shrugging off the news about president trump overnight. we are seeing japan leading some of the gains. tech stocks have been leading the rally in japan. gains on the cosby and in hong kong. a number of markets closed as well. four of them, i believe. gains in asian equities. the s&p 500, if we can switch, hit an intraday record in yesterday's session. we are looking to see the bull run become the longest ever today, but what we saw overnight was reaction to that news about

michael: pleading guilty and paul manafort on the eight indictments which did affect the s&p 500 etf. u.s. futures pointing lower. mark cudmore said this could be a turning point for the s&p 500. you get certain analysts shrugging it off. he said this could be a turning point. not only that, but the s&p 500 have formed a perfect doubletalk, so that is something to watch for in terms of the technicals. let's take a look at dollar-yen. the dollar holding on to two days of gains -- excuse me, losses. the bloomberg dollar in that's pretty much unchanged in this session, so we have had a bit of dollar weakness. we have seen the yen strengthened some 2% since mid-june or july. what we are seeing is dollar-yen looking to test the 110 level.

but also pushing up against its 200 day moving average. the question becomes how much more dollar weakness, yen strength, can we see? anna: thanks so much. nejra cehic on the markets. now for a first word news update from juliette saly. in the u.s., donald trump's longtime lawyer and fixer michael cohen admitted he made illegal campaign contributions at the behest of trump. while the president's name was not mentioned, the crimes he admitted to matched the money cohen paid for stephanie clifford. affair quiet about an she claimed to have had with trump. cohen admitted he took part in a scheme to pay $150,000 to a second woman to keep her story out of the press. a federal jury convicted donald trump's former campaign chairman, paul manafort, of tax and bank fraud, ending a 10th legal drama.

he faces eight to 10 years in prison on the tax charges alone. manafort is scheduled for a second trial next month on charges of money laundering, obstruction of justice, and acting as an unregistered foreign agent of ukraine. the verdict has a crucial victory to robert mueller as the president and his allies questioned the legitimacy of his work. this started as russian collusion. this is absolutely nothing to do -- this is a witchhunt and a disgrace. this has nothing to do with what they started out looking for, russian involved in our campaign. there was none. juliette: the european union's chief brexit negotiator has said talks with the u.k. will be continuous from now on. michel barnier's comments come. with negotiations at a virtual impasse for weeks, the two sides are rushing to reach a deal on the terms of the u.k.'s withdrawal by october.

global news, 24 hours a day, on air and at tictoc on twitter in more than 120 countries, this is bloomberg. saly thank you, juliette in singapore. the u.s. is expected to impose new sanctions on russia today over the poisoning of a former agent in the united kingdom. the measures were announced earlier this month. considered sensitive our national security grounds. joining us from moscow is gregory white. is inie hordern london with the other angle on this. let's come to you first. this?s the latest on we have seen the u.k. foreign secretary in washington calling for more action on sanctions,. -- sanctions, but bring us up-to-date. was praising the trump administration and government on terms of shanshan sanctioning--

russia. we saw that you act in march. is really an opportunity for the u.k. to come out a little bit harder. they are negotiating a brexit deal. insult.veiled as of now, about 700 russian as well as the government are sanctioned. the sanctions today have to do with u.s. goods and technology. lasers, electronics. technologies about oil and gas. in 90 days, we can see more sweeping measures against the government. what's interesting is we also saw more sanctions against russia that had to do with russian chips as well as three hearings in the u.s. about russia sanctions and cybersecurity. onhas been a lot of pressure moscow this week as well as microsoft coming out as well to deal with russia. they were finding traces of russia hacking traced back to the military. that pressure of

on moscow, how are investors in russia taking this? it hase: -- gregory: been a nervous couple of weeks. it is about down to two year lows. , andyields have spiked up just yesterday, the finance ministry will cancel the bond auction because the demand is so unstable. fortunately for the russians, they have been planning for this for a wild. they have been under sanctions heavily since 2014, so they have been battening down the hatches for a while. among the things they have been doing is reducing the deficit and showing the .urchasing gold holdings have been steadily increasing. ana: even if it does not make

move in the direction they might have expected. yesterday, the u.s. we heard more news from the united states yesterday on this? the u.s. says this comes against u.s. and united nations laws. shippingtwo companies. they called out entities saying these individuals are making attempts to go around u.s. sanctions. all of this as we had hearings and the nonstop investigation that is continuing, the mueller investigation. anna: president trump reminded us that is where it all started. retaliate?likely to we heard about what the u.s. imposed on moscow. what is moscow's reaction likely to be here? gregory: for the moment, they are certainly unhappy about it and complaining, but they do not

seem to be moving to take any steps to actually retaliate at the moment. the reality is, so far, most of them have been announced overnight. they are relatively narrow and ofget individual companies narrow technologies used in military uses, that sort of thing, so their broader impact is limited, more a sentiment issue and matter of concern. the russians for the moment have been trying to hold back. they do not have a whole lot of levers to pull. note is not a lot of trade, a lot of things the russians can do that would hurt the u.s., without substantially hurting their economy as well. anna: how did we get to this point? weeks ago, we were talking about trump and putin in hell thinking. now, things have changed, or maybe not, in that individual, personal relationship. gregory: indeed, it has really been quite a swing if you look at the overall relationship

coming out of the meeting in the middle of last month where both seemed warm and happy. that is what ultimately seemed to have triggered the wave of new sentiments. republicans moved quickly to try and distance themselves on that. there was a push in congress for new sanctions. some people suggested the other sanctions were announced as part of a political effort to head off the push in congress for new restrictions. as a result, it has been a sudden sleep, and instead of improving relations, it has turned the other direction. for the moment, the russians are still holding out. they still think trump's relationship with putin is good and if he can get some political breathing space in washington on any of this, there might be a chance for him to deliver on his promises of improving relations. anna: interesting to look at the relationship between the two gentlemen and the broader relationship between these countries. gregory white.

annmarie hordern joining us in london as well. let's bring in the cio of -- still with us. we were talking a little bit about how investors have reacted to the latest round of sanctions. you have been somebody who has been quite confident of investment strategy around russia, but for a couple of years -- like this toeels be long rush in equities, so a modest one. really, the rationale is to look to be quite contrary and at times like this and go against geopolitical issues, which we did in 2016, and the fact that russia has always been a cheap market, but what we see today and what we saw in 2016 was cheap even by russian standards, so ultracheap. weak or thisis

emfx is weak in general. as greg said, they are relatively limited. involved in russian equities, maybe you have a strong stomach for it in the first place. you expect a little bit of it. alan: strong, lonely stomach. anna: i have a chart which place to the correlation between russian stocks and oil. it is not all that strong, but they are correlated, and it's obvious to see why they might be. of course, oil prices were being challenged by a strong dollar. now little bit less, down around 10% off their highs of early july. so where do you see the oil price heading? is that influencing how much you take? alan: when you get involved in russian equities, you kind of need to take of you in oil, relatively positive in oil. still up year to date. the global economy is in a good place, as we know, and that helps oil, and in particular,

what we talked about before is em demand, especially from china and india, despite other commodities. it may be more challenged. oil demand is strong. we're pretty confident on the oil story. that is another factor in being involved in russian equities. anna: alan hagans stays with us here on the program. can xiaomi justify the hype? they reported earnings for the first time as a public company, but will investors be satisfied? we will be in hong kong with a briefing. what to expect later on this morning european time. this is bloomberg. ♪

anna: good morning, everybody. this is "bloomberg daybreak: europe." breaking news from the dutch corporate cnn payments industry. we are getting numbers through from them. they still see their full-year -- their objectives remain

unchanged is one have worth mentioning. the first half net revenue -- this is the first time we are hearing from them in terms of their earnings -- their revenue rising 67%, so there are a couple of their headlines. 240 euros per share in june. went as high as 609 euros per share. this is a payments company that works for companies like uber, netflix, and spotify. uprooting the position of the big things, i.t. suppliers, who have been tying up this industry of late. the amsterdam-based company getting attention as a result, as is this other company in germany. the other business stories. here is juliette saly in singapore. governmenthe italian is considering involving state lender cdp in a public takeover of the highway concession now held by -- bloomberg understands a role for

cdp is just one potential option being weighed by the government. another option is to revoke the confession following the collapse of the bridge in juneau a killed 43 people last week. -- a $4.3 billion indian consumer health unit which owns the malted not brand. k brand. they attracted interest from potential bidders including nestle, pepsico, and another. representatives declined to comment, while spokesman -- spokesman had no immediate comment. the cost of uber's sexual-harassment scandal has been itemized. if the six current and former employees stand to collect an average of just under $34,000 each. in addition, those workers and

431 other female and minority engineers covered by a 2017 class-action lawsuit will receive an average of just under $11,000 for alleged pay disparity's. separately, the ridehailing company appointed nelson as its new cfo. that is your bloomberg business flash. juliette, inou, singapore. xiaomi is set to report earnings for the first time as a public company today. the results offer a close up of two of the most important initiatives. international expansion and the evil lucian hardware maker. -- and the devolution hardware make -- the evolution hardware maker. shelley, good morning to you. what does xiaomi have to prove with these results? we broke results from aussie on -- asean, and the same applies

for xiaomi. >> xiaomi's ipo was based on ais promise that yes, we are smart phone company now, but soon we will monetize and become this internet company where we make all this money off of services that we sell to our smartphone buyers. so the question for xiaomi that they are going to face quarter after quarter, starting with this one, is how is your internet services business growing? are you actually making more money off of these services or are you really just a phone company? anna: when we talk about apple, we talk about their -- voicesre bullish surrounding this company, xiaomi, so what are the analysts saying? >> the analysts are pretty bullish on xiaomi. a lot of them did work on the ipo, so you have to take that into consideration. there's about 10 analysts out of

16 that have bullish prospects for this company, but that is actually a rare thing in this part of the world. if you look at companies like alibaba, tencent, they rarely ever have any kind of cell or hold -- sell or hold ratings. the fact that they have six goes to show you just how much of a mixed bag these analysts.expect from xiaomi anna: we should rename that as wishy-washy. how is the competitive landscape shaping up for this business? is increasingly and services and other things as well. shelly: absolutely. this is such a competitive market for a company like xiaomi. not only are they competing on phone fronts, but a lot of these reallyompanies, they are fighting into xiaomi's success

already. one thing xiaomi does have going for it is its continued success in india, so definitely, investors will be looking to see is this continued success? how are you doing? and also in europe as xiaomi goes to sell their higher-end phones in europe. anna: thanks for the update. we will look for the updates as they break later on. shelly banjo. let's check on what is trending across the bloomberg universe on tictoc on twitter. the biggest u.s. bank is joining an escalating battle. jpmorgan is planning to roll out the mobile app next week that includes free research and some free trading. we saw that having stocks in the brokerage business. the chiefcording to negotiator, shall barnier, who says talks are entering final stages. a lot of ground to cover. when is the deadline?

our most read stories on the bloomberg terminal, the resilient real slumps -- brazil real slumps. day.'s terrible paul manafort convicted on eight counts and michael: pleading guilty. you can find out -- michael cohon pleading guilty. returning to the brexit story, michelle barnier warned the e.u. must the prepare for a no deal exit and britain must respect the single market. fx traders focused on talks. allen higgins cannot contain his excitement. talk does this continuous take us then? those that reduce the chances of no deal? alan: we have long thought that no deal is unlikely, relatively low probability more likely is a

or no brexit at all would be more likely than no deal. dollar downsterling at 129. the dollar has been strong generally. it is not just the sterling focus, if you like, in terms of focus, but we see sterling undervalued. anna: our forecast has been coming down for sterling. alan: so we bought sterling last year and it looks very good for a bit when we accelerated under 140. we are still long sterling based on what we see is the most likely brexit outcome and the undervaluation and the fact that the u.k. economy is performing relatively well, so we shall see, but it is partly dependent on the dollar as well. anna: i want to ask about what you are doing on the italian space, because we have seen the

debt return. i want to show you this chart, in the white here. this is italian yields creeping ds greece'stowar yields. alan: we recently bought italian debt. we like the bone the places as foreign investors. we are buying the front end and, thattially, our view is it's very unlikely for anything dramatic to happen. a lot of the bad news in terms bond market perspective, extra deficits is kind of priced in. the key point without being geeky is the curve is so steep minuse the cash rates are -- you have a very attractive had deal into dollars.

japanese investors and sterling-based investors. this concept of buying the italian bonds at the front end and hedging them back into base currency is very attractive, so we are not bold enough to be in your area. that can say elevated for a wild. the front end we think is very much good. anna: thanks for sharing your thoughts with us this morning. a trip around the world with adam higgins. , he will be considering his conversation with us on bloomberg radio. make sure you stay tuned for that. remember bloomberg users can interact with all of the charts we are showing during the program. gtv is the place to go to. up on the catch charts and save them into your own research as well. up next on the program, a tough day for trump. from cohen to collusion. what the president's legal risk

means for the white house and for markets. we saw investors a little bit risk-off overnight in the asian session, but some of that coming off a little bit. asian equities up by .3%. this is bloomberg. ♪ xfinity mobile is a new wireless network

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anna: good morning from bloomberg's european headquarters in the city of london. i am anna edwards, this is "bloomberg daybreak: europe," and these are today's top stories. trump's longtime lawyer admits to violating campaign-finance laws. u.s. futures initially took a dip but have since pared some of their losses. meanwhile, the peso gains as mexico and the u.s. are said to move closer to a consensus on nafta. time running out for a brexit deal. michelle barnier says discussions will now be nonstop. as both sidess agree to step up the pace.

good morning, everybody. this is "bloomberg daybreak: europe." 7:00 in london. let's have a look at the futures for the european equity markets. over myk negative shoulder. u.s. futures also looking negative, so perhaps no surprise. they have been open a little bit longer. cac futures opening up in negative territory as well. asian equity markets, the long-term lawyer of president trump pleading guilty to charges. that is something the market is having to deal with, get its head around. we did see a move into the haven and risk assets as a result. the msci asia-pacific managed to eke out gains. coming outt of money of risk assets. some money coming out of the dollar. we are pretty unchanged on the

dollar index overnight. slipping on that news about cohen, it was mild, the move into havens. slightly more positive for risk assets. the news flow there. it has slightly conflicting reports. politico talking about the handshake between mexico and the united states tomorrow: the u.s. the mexicans pushing -- tomorrow in the u.s. the dollar down by .5%. the canadian dollar higher on that news. let's leave markets to tell you that u.s. futures are pointing to .3%.around .25% juliette saly has that for us in singapore. juliette: thank you. in the u.s., donald trump's longtime lawyer and six are, michael cohen, admitted he made illegal campaign contributions at the behest of trump. name was not's

mentioned at the hearing. the crimes he admitted to matched the money paid to stephanie clifford to keep quiet about an affair she claimed to have had with trump. cohen also admitted he took part in a scheme to pay $150,000 to a second woman to keep her story out of the press. donaldal jury convicted trump's former campaign chairman, paul manafort, of tax and bank fraud, ending a tense legal drama. manafort is scheduled for a second trial next month on charges of money laundering, obstruction of justice, and acting as an unregistered foreign agent of ukraine. the verdict has a crucial victory to special counsel robert mueller as they question the lib dems me -- the legitimacy of his work. the mexican peso gained against the dollar as they move closer toward the consensus on how to forge a new nafta deal.

progress is being made. there is no broader agreement on reshaping the agreement. in the trump administration stocks with mexico are seen as an important precursor to a three-way final pact with canada. said china's economy is no longer on pace to be larger than america. the comment is likely to stoke concerns in beijing that his administration wants to contain the asian nation's rise. dueomes as the minister is in washington today for the first significant trade talks between the two countries in more than two months. the u.s. tariffs on $16 billion of chinese imports is due to come into effect in china and expected to retaliate in kind. a powerful earthquake has hit northeast in caracas on controversial economic reforms. has as. geological survey ..3 tremor

no injuries or major damage has been reported. a similarly powerful quake killed dozens of people in the same area in 1997. global news, 24 hours a day on air, and at to talk on twitter -- tictoc on twitter. you can find more stories on the bloomberg at top . having a look at markets in asia, we have seen a little bit of mixed momentum. it more a lot of the markets severalhis region and markets out of action for public holidays. chinese stocks coming out of pressure. two days a very solid gains. the nikkei having a solid session, up by .6% today. we did the australia's market close lower by .3%, but overall, that momentum coming through from japanese stocks, helping the ms yet asia-pacific index go up -- nfci asian-pacific index go up. nsci asia-pacific

index go up. to seeanese yen in focus whether we can push through this handle. it certainly seems to be back in the limelight. around 2% against the u.s. dollar since mid-july. and then of course closely watching what we can see out of the u.s. session. we did actually see a little bit of weakness coming through in closelyhe etf's that tracks the s&p 500, all of this on the back of the cohen latest headline, so it does look like we will see selling coming through in europe and the u.s. today. much,thank you very juliette saly in singapore with the latest on the asian session. donald trump terrible day. yesterday afternoon, the president's personal lawyer into the -- implicated him in a climate the same moment that his former campaign chairman became a convicted felon. kevin cirilli has this report. kevin: president trump's ex-

campaign chairman, paul manafort, found guilty on eight counts of fraud. pleading guilty to providing much money to women who had alleged extramarital affairs to trump. this comes as the president has defended paul manafort, even shortly after he gave a political rally. pres. trump: this has nothing to do with russia in collusion. this has absolutely nothing to do -- this is a witch hunt that is a disgrace. this has nothing to do with what they started out looking for, s involved in our campaign. there were none. kevin: president trump made no mention of matt forte or michael cohen, but he did see the latest say that- there is no evidence. pres. trump: where is the collusion? you know, they are still looking

for collusion. where is the collusion? find some collusion! we want to find the collusion! kevin: democrats have said that the latest developments but the president in legal jeopardy. reporting from washington, kevin cirilli, bloomberg news. anna: kevin cirilli in washington. let's talk about what this means, the politics of it. let's talk about what this means from a market perspective. frost atined by laura the fixed interest team and lng --at lng. we wake up with some reactions, little reactions, in your perspective? >> surprisingly little. we have to wait to really get the call on this, but the fact that we are not dramatically lower in bond yields or much , the in stocks or whatever

markets are unsure how to react to this. it's another step. perhaps the noose is tightening, but that's what this is, another sort of development in what is obviously going on. does it mean that the midterms are going to be harder for donald trump? almost certainly. does that mean the u.s. economy is go to slow down? no. does it mean the fed is going to stop hiking rates? no. it will carry on going up. , and in are as we were some key senses, we do not have all the facts, because it seems that despite what we heard overnight, you could go to a position where we are talking about whether the president is impeached by a more democrat washington after the midterm or we could get another term for donald trump. loomingse possibilities large, it seems the market is

taking time to work out what it thinks. marcus: i think we have -- laura: i think we have to think about the month we are in as well. it is august, the summer. there is a little bit of a lull. liquidity is perhaps less than it normally would be, because it's interesting. kind ofng else reacted more violently to things that have happened, and we have to example.n perhaps if there was a more robust market and more people not on holiday, essentially, we may have seen a lesser reaction, which is what makes is really interesting. you know, even the dollar strength has not really come off that. expect if theu market was taking seriously the possibility that trump will either go or have less power after the midterm, we would have seen much more reaction. the markets have liked a lot of what was delivered in fiscal stimulus. marcus: he has been talking the dollar down, so in some sense,

this is working to his own agenda. banng on for a while yet. this is more than collusion. we will let that play out in politics. the market is well said. equities are strong. the u.s. economy is roaring which is a reason the federal reserve will continue raising rates later this year, anyway, so market wise, i think we can take this putting much on the chin. anna: i am surrounded here -- marcus: i am waiting for the new york open. we sitnd others, as here, u.s. futures are looking more sluggish than they did half an hour ago. bouncingcertainly not back to zero, shall we say. i am surrounded by people of a fixed income persuasion. let's show you the s&p 500 chart am a which shows the climb up to a new all-time high which we saw yesterday and of course, we sit here on the day we could see the

longest bull market in the u.s. ever. another conversation about whether that really matters as a benchmark. all of this is about risk appetite at the moment. what does this mean, this kind of appetite for stocks we see continue given or take what happened last night? what does that mean for your world? laura: in our world, we have seen a definite shift from being risk-on to risk-off. if you think about the latter half of 2017, emerging market local currency was really the place to be. there is a definite shift out of that with dollar strength. we are now seeing almost a totle bit more flight quality. the u.s. tenure caught up to that 3% magic level where everyone predicted a big selloff and tested it. it came back. we have been filtering around and bouncing around the high 2.8. anna: we went up to 3%. interesting to think back to when the last time we touched these highs on the s&p back in

january, the conversation was about how we could contain inflation, how high will treasury yields go, will we get to 4%, should we even be at 5%? we have come a long way in six months. laura: absolutely. when you think about where we were back then as well, the biggest conversation with -- are the fed behind the curve? and how flat is the curve? what does that mean? there seems to be a bit of a dichotomy between what the market believes at the short-term and what the data is telling us. the long end in the short-term look very, very different at the moment whereby all the growth that you talked about is definitely in the short end. the long end really is worrying about inflation, which is only just that target. beneke and the 90 -- bought lots of long in bonds. there is a reason why the long and yields are so low. fed's problem.

qe is the reason why you cannot read into the curve a proper reaction, so i do think interest compared to growth in the u.s., and they are probably going to stay in the long end low. what is the two-year rate? it is still expecting for the rate hikes. anna: our guest in the last hour was suggesting the inversion does matter as a signal. the fed has been creating this curve. read into it what you want to, but it's nonsense, because they bought all the bond. -- they bought all the bonds. the reaction now is very hard to beat into. get: it's also nonsense to into it. does it matter as a market benchmark? marcus: in one word, no. anna: thank you very much. directorst, investment at the fixed income team stays

with us. thank you to both for getting up so early with us on "bloomberg daybreak: europe." you can watch this show using the tv function. it's like tv, but even better. you get the livestream and all the charts and functions we are using and fighting during our -- during the broadcast. traders expect to more hikes this year, but what is in store for the head? what to expect -- further ahead? what to expect, especially after president trump was so vocal. this is bloomberg. ♪

anna: good morning, everybody. 7:19 in london this wednesday morning. that is a shot of london. normal services resume toyed white skies above the british capital. let's check out the market for you. a little bit of reaction. as we were just saying, not that much reaction given the cohen plea that we heard about after hours, of course. what does that mean for euro stocks and euro stoxx 50 is? it means your negative. the msci asia-pacific and it's too out some dateeke -- managed to eke out some gains. it was a big story last week. thin volumes in turkey, even thinner than previously.

bloomberg business flash with juliette saly in singapore. the italian government is considering involving state lenders gdp in a public takeover of the highway concession now held by many as out of strata -- auto strata. option.st one potential another option is to revoke the concession following the collapse of them randy britt -- the mirandi bridge. has requested bids for its $4.3 billion indian consumer health unit which owns the popular malted milk brand -- it has attracted interest from potential bidders, including kaiser.pepsico, and representatives declined to

comment. spokespeople had no immediate comment. the first timer named a country other than russia that has been using fake accounts to manipulate global politics. the social network said it removed 652 pages and accounts for inauthentic behavior that originated in iran and targeted people in the u.s., u.k., middle east, and latin america. it removed groups and accounts linked to sources that u.s. government previously identified as russian military intelligence services. >> security is not something you ever fully sell. our adversaries are sophisticated. have made from reactive to proactive detection is a big change and it's going to make facebook safer for everyone over time. uber'se: the cost of sexual-harassment scandal has been itemized.

undertand to collect $34,000 each. those workers and 431 other female and minority engineers covered by a 2017 class-action lawsuit will receive an average of just under $11,000 for alleged pay disparities. separately, the ridehailing company yesterday appointed merrill lynch veteran nelson chai as its new cfo. your bloomberg business flash. anna: thank you very much. jackson hole will provide traders with their next wheelock of community -- real opportunity. ministers will be released today. a fourth rate hike this year. those minutes come from -- before last week's emerging-market turmoil. investors will be watching for any change in messaging as we get the minutes and indeed the jackson hole events taking place.

as we look ahead to jackson hole, interesting to think about ,hat we have heard from trump but the day before, when we heard him talking about how jay powell has not been the man we thought. do you think those words ring in the year? any chance that we hear a different message this time around with the politics in mind? >> we have to remember that these are professionals. they have been doing this job for a long time and they are in office because of their credibility. of tighteningth is correct. i think it is required. you only have to look at the data. it is strong. the u.s. is in good shape. there is no real reason why that should not continue, so yes, having a president making comments about your path of tightening is something he has heard.

i doubt that they are listening to that, particularly in the short term. reading a story saying be careful what you wish for. president trump strong-arming the fed might some might might sound like something he wants to do, but that is a big risk to take. laura: we have to remember that this is not turkey. the central bank is independent. a certain amount of guidance that has been given, forward guidance. the jackson hole symposium will end up being more of the same. we just have to look at the data. the governors and the voters in the data,very led by and they have been quite clear in their path of tightening. anna: we look for confirmation on the path of tightening. we have the flattening yield curve, continuing its downward trend.

we talked a little bit about this in the last conversation with markets. do you see this as a worrying sign of what's happening in the u.s. and the economy? it's engineered by the fed. therefore, we should not read too much into this? marcus: its operation twist -- laura: it is operation twist. it could be operation untwist. this is a notoriously bad predictor of recession until the curve inverts. yes, it is flat. there has been fed speak of late saying they will make no vote to create further flattening of the curve. they are pretty much on their is a but as i say, it notoriously bad predictor until it inverts, and with the data strong and the s&p on its highs again, you know, everything is

still good going forward. anna: we have had one viewer do you see saying -- a switch out of some areas of credit as we see spreads widening? is that something you are expecting? laura: maybe. it's been a little bit of an sixsite over the last months or so where there has been more of a run into credit from the european credit. risk-free?e what am i getting from it? while we have seen some correction in credit, it has been more muted in the u.s.. it is a good quality market. you only have to think about financials, for instance, and they do tend to do well with steepening curves and high rates. anna: thank you very much, laura. tv is a function to use. laura frost, investment director at m&g. u.s. futures pointing down, down

.3%. that is the u.s. futures. the open to see what the markets really make of the cohen news. this is bloomberg. ♪

welcome to bloomberg markets, the european open. we are live from l european headquarters in london. i am guy johnson. matt miller is back in berlin. matt: the reason enough out of washington to spook markets, but facing to shrug off concerns about the conviction of paul manafort and a guilty plea of michael:. the cash -- michael cohen. the cash trade is less than 30 minutes away. guy: guilty as charged. cohen