yvonne: we are live from bloomberg headquarters. welcome to "daybreak: asia." day, another record. offset new highs. the s&p closed over 2951st time. trade remains the driver. 2900 for the first time. trade remains the driver. ramy: it is just past 7:00 p.m. on wednesday. clouds are gathering over emerging markets once again. faster credit from the imf. magic approaches apple's

number, the trillion dollar market cap within striking distance. good morning yvonne. again withllish want the s&p and nasdaq both hitting records again. i will show you those numbers. what we are seeing is this bullishness coming from the optimism from u.s. and mexico and the u.s. and canada. there is still uncertainty with regards to what happens with china. according to analysts, that seems to be something further. aboverst time it closed 2900. up by nearly 1%,

8100, breaking that level. we will get more on that from su keenan. let's look at the boards. over little more insight into what is happening with the currency. lowerged but it had been in u.s. trading. the canadian dollar and mexican dollar strengthening. yvonne: we mentioned how exuberant these markets where. we heard the president of china when it came to why the sessions are breaking down. it might be cupping some of the enthusiasm of her. an all-time high yesterday. we are coming off of that now.

tokyo and seoul looking positive today. it is perhaps a beneficiary when it comes to the yen slump. it will take a look at currencies volker. at 681.91.hat study the turnover has reached unprecedented levels. the daily volume quadrupled in the month of july. adjusting that factor. $.73 for the aussie. let's dive further into the market close. indexes, the nasdaq and nasdaq 100 to another record. su keenan joins us with more. for the most part it was a broad rally. su: a good day for the bulls.

a lot of risk on the back burner. for now, it does look good. let's take a look at the snapshot. the dollar helps commodities. nasdaq.he the semi conductors also coming on strong. take a look at the stoxx that grabbed the headlines. amazon.com coming up on a trillion dollar market. take a look at bloomberg. dtv is great can find the chart. -- google has outperformed the yellow here. this morgan stanley analyst up his price target on amazon by

35%. let's take a look at some of the other stocks that will be making big headlines. you know the story. 95% increase in earnings. twitter doing well. they will be aligned with apple. it induced angst. that is the latest that we have right now. amazon could be the next $1 trillion company. let's get to first word news with jenna dagenhart. jenna: sterling rallying. investors turned more optimistic that a brexit deal will be reached before leaving the

european union next march. negotiator is prepared unprecedentedn an partnership unlike any deal it has offered to another country. slumpedntinian peso after an appeal to the imf. ofy approved a pale as part a credit line. 3 billion nexter month. the government is acting -- asking to speed things up. turkey has reintroduced borrowing limits for overnight transactions in the money market. effectively tightening liquidity. set at about 7be billion u.s. dollars which is more loose.

special counsel robert mueller is asking for more time to consider retrying paul manafort. the lawyers have not filed a motion. campaign trump's chairman was found guilty on a string of charges, but they could not decide on 10 more counts. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: president trump is warning of far bigger than ever military joint exercises with korea and japan if the talk stalls. suggesting that china is getting in the way of progress. i do not -- >> i do not like to call it a

trade war. i think china makes it more difficult in terms of our relationship with north korea. let's bring in greg sullivan with the latest. we usually hear these kinds of comments from the president when trade tensions are high with china. what is the significance of linking china and south korea this time around? has linked china and south korea with north korea issue. the u.s. has failed to show progress. what is interesting is that instead of placing the blame on frustrated, they are by influence. trying to bring north korea to the table.

some of that frustration could be coming into play. either way, it is clear he is frustrated with the pace of progress. president trump suspended these efforts since june. they have long angered north korea. given the rhetoric about how the talks were going well with north korea, the relationship remained fine with kim jong-un. jointg to restart those war exercises.

in the hopes that he will get help on the denuclearization front and the trade front area ramy: could --trade front. it is possible. visibility into chinese strategy and trade talks is sometimes opaque. we know that the talks between u.s. and china did not produce much, even though they went in with low expectations. another looming set of tariffs on $2 billion worth of goods. ramy: washington, d.c. reporter

greg sullivan there. talks of canada are going well. the president says he is optimistic. president trump: i do not think it will be good if they do not. ramy: covering the canadian government for bloomberg. josh, bring us up to speed. left a meeting with the u.s. trade representative here in washington. struck an upbeat tone. compromise and 's position is well known. this after president trump

comments. similar comments from justin trudeau, not ruling things out. ay thing is that friday is political deadline, a deadline to end a notice to congress. there are reasons they are trying to do that, but there is some room. ify could send the notice they have the broad strokes of something by friday. ramy: it looks like there is the will on all sides. mexico to one side and canada here. just recently spoke on camera and echo that optimism. let's take a look. >> i feel that both parties are coming to this stage of the negotiation with a lot of goodwill. certainly that is what canada is

bringing to the table. we understand each other's position and what both sides need, very well. through the trade lens, what can the biggest woodblock the? there is like one of worst trade that is left. deal really mexico solved the car issue. that is good news. what is left is u.s. canada. the two big ones are dairy. trump wants confession on the dairy imports. court, canada says it is essential for them to get fair treatment. the u.s. wants to kill those courts. those are the big ones. if they can find a way around those, a lot would be easy to

come to after that. it does not mean that they are out of the woods. it would have to be voted on in congress. trade deals are very complicated and toxic. yvonne: i read a headline that the mexico stab canada in back by getting a deal with the u.s. first. does the president have the upper hand here? congress might not actually go through with the bilateral deal. that gives canada a little more wiggle room. >> it depends on who you ask. the congress is telling donald trump you have taken us down this path for a trilateral process. it lends a lot of trade power to the president. to throw canada off, you have to

either restart the process or get canada on board. canada will take that to heart, but they do not look to be digging in their heels yet. this is a tough deal. they wanted to reduce nafta and .ake it at her for the u.s. they wanted to improve nafta because they believe in free trade. sees not great, but we only trade deals that will not be great. great to have you. joining us from d.c.. still ahead, the latest retail data. we will look at what that means for the boj. ramy: we have a bloomberg exclusive. unpacking their earnings of the trade war. this is bloomberg. ♪

coming fromtensions washington that canada will agree on a new deal sometime this week. chief macro strategist is here in your studio. thanks, good to see you. it seems like a perfect storm of goodness for u.s. equities. give us your take on what is happening. you look at the gdp numbers, we are in a late cycle. it is really strong above trend

growth. earningseing corporate growing. we have not seen it in a while. when you put all that together, the current environment today is still positive. bloomberg -- the ramy: let's pop into the bloomberg terminal. the blue line i want you to concentrate on. 3000 as well as saying hopping in. >> is still positive. the 10 yearat coming you are still around 75 basis point.

it does not mean the cycle is over yet. , the last cycle of have a two-year yen -- window. as of right now, we are enjoying growth. it is flattening but still positive. yvonne: do you really have to see inflation or is it more the likes of the pressure that we are seeing in margins and following cost? >> it could be any combination of those things. next year it will slow down as tax cuts get put in. you have higher costs. it will be more expensive now. companies will heed those

margins or they will pass on consumers. if it became a problem, the fed would ask. what we have seen is when the fed converts, that is when the tighter quality assets and investment grade credit tend to perform better on a risk-adjusted basis. performalities tend to inferior to the higher quality. you start having a shift in your performance. yvonne: what about when it comes to the volatility in the em? stocks should.s. be more susceptible, but we are not seeing that right now. em, you havek at some pocket that you are

struggling with. we would look for some currency stability. there is value being traded for some point, given how much they have sold off. we are looking for stability in those currencies. another chart for subscribers, the dollar correlation. this negative correlation, we are back to levels that we saw in 2016. should we expect them to strengthen? what would cause them to break down? >> you look at the dollar and growth differentials being enjoyed by the u.s. versus the rest of the world and this is late cycle peak growth. they are going to do well. we forecast above trend growth

next year. europe and some of the countries were growth is slower. ramy: it finally got below the 19 handle. this is the bloomberg terminal chart i want you to the in your library. this is southern azure. it is taking the most cash. new nafta deal is not a big plus for mexico. it is like moving vegetables around. the devil is always in the details. we will use it as an example.

you are shifting a larger percentage as do outside of north america. there is some moving of how they work. there will be consequence area ramy: the record -- consequence. strategist.macro bloomberg users can interact with the charts. you can browse the charts to catch up on key analysis and you can save those charts for your own future reference. this is bloomberg. ♪

yvonne: ford has seen its credit rating cut. a restructuring plan that could take years to complete. outlook setting the divisionf the business and the turnaround plan that could cost more than $10 billion in the next three to five years. ramy: may facing -- facing new fines. more extensive than the actually admitted. weighing action against the bank and actual employees. they have already paid heavy fines and are moving money through the u.s. on behalf of iranian clients. yvonne: warning of rising pressure. higher demands and the need to invest in new technology may

overwhelm several lenders. record low interest rates are legaling revenues while bills and capital demand has eroded profit. this is bloomberg. ♪

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limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need this bed. yvonne: 7:30 a.m. thursday. it is 7:30 p.m. wednesday here in new york. closing for the first time above that 2900 mark. you are watching daybreak asia. that's get to the first word news with jenna dagenhart. jenna: amazon made it just gain in four months. now within striking distance of that valuation.

adding $800 billion in market the wealthiest person on the planet. crossing the line for the first time on august 2. out money doesd not seem to have worked. the government estimated of the $220 billion worth of relief in circulation, 70 billion were gotten a legally to avoid tax. more than 99% of the notes have been handed in, suggesting there was hardly any cash unaccounted for. the indian government is said to have asked the r.b.i. to clean up a banking system that is drowning in bad debt. officials want to clear timeframe for creating better

capitalize lenders and improving regulatory oversight. indian banks have the worst debt ratio. famous --rld's most is heading for an ipo. not james bond, but his carmaker. turnaround,iyear the company said to target a valuation of $6.5 billion. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the clouds are back over emerging-market. it was the one on the proposed trade agreement but have rolled back in as argentina appealed

for faster credit from the imf. kathleen hays has this story. definitely the immediate victim here. kathleen: it is not just what has been happening recently. argentine pesos and the country was go back to earlier in the year. tv had to be the raised earlier in the year. now what they have done is asked to speed up the monetary payments. their first payment was made in june and now they need to ensure investors that they can survive the financial crisis that hangs over the country. me asnto the library with we look at this chart. the one-day percentage change going back to march.

it was bad enough in may, but look what happened today. nearly 8%. what is going on? justresident was elected three years ago, replacing a socialist government coming into rebuilding economy. instead, argentina is facing its second recession in three years. to a recordeso down of 33.8 to the dollar, inflation is rising. there are big problems. confidence is dropping after such high hopes in that election three years ago. it is seen as a way to reassure investors that argentina will not be forced to default on its debt by next year. we picked up in the bloomberg news reporting some feeling that maybe this is a move of desperation.

maybe it will not be good or cause further downtrend in that peso. at the same time, people are saying this is a buying opportunity. the fundamentals are better than this chart that i showed you. maybe if you have the appetite for risk, this would be the opportunity to buy. being: the lira is pummeled again. it has exposed a lot of vulnerability area kathleen: absolute --vulnerability. kathleen: absolutely. you have a stronger dollar as a result and a global trade war. you have sanctions. problems and sanctions against turkey, south currency is another currency under pressure. that is in large part due to the congress going ahead with the

fromto appropriate land farmers. pressures exist, wherever you are week, do you have a large rising budget deficit? this is the time when emerging-market will job and hit you. if fundamentals are strong, they are looking at those fundamentals. who to sell and who not to sell. in the last hour, he was surprised at the extent of contagion that has spread. thank you. we are counting down to some of the major market opens. .losely watching let's get the latest. we are seeing all signs pointing

to green. probably -- are they will be taking this into consideration when they adjust their policy. 1.2%.ting to nonetheless, jumping into the arminal, july could mark ninth straight month of growth. the outlook is not so hot. the perennial dilemma. the spike in the white line in june represents the biggest jump in wages in 21 years. next week, we will get a post-check on wage growth for july. employers opted to boost permanent wages instead of doling out bigger bonuses.

from korea this morning, we got one on business sentiment. what picture is being painted ahead of the meeting this friday? sophie: check out this chart on the terminal. it indicates improving sentiment among manufacturers for september, picking up to 77 after taking a sharp turn lower in to august. is --it is perking up, it markets are not expecting a hawkish surprise as they await more clarity around job growth. wargames, threatening the rally that we see could look vulnerable. be eyeing a higher

open. trading at around a four-month low. they could see gains ahead of data. starting the day under pressure after surging on wednesday to a fresh high that left it looking a little over. coming up, the new boss joins essex who simply for the first tv interview. earnings and strategy next. this is bloomberg. ♪

ramy: welcome back for a look at some of the stories trending across the bloomberg universe.

an essential reading on bloomberg.com. meantime, subscribers about the 20 hour flight. as can be a reality. check out those stories trending online or on the terminal. yvonne: they could here is more beds on those planes. the company said to boost sales and profit. joining us in our hong kong studio, i'm sure it has been a whirlwind of experience for you.

what is your read for the rest of the year. >> underlying growth in the 10%. we are really excited about that. they will deliver growth in the double-digit range. how well did they do? china moves a little bit but we had a terrific worst half. i would say as we move into the second half, we would move into

this single-digit range for china. feeling some of the impact to we think -- we think that might be working into sentiment at the moment. when it comes to the expansion, this is the opportunity you have been looking for. is excluding to me -- the business. we are just getting into stride. we are starting to push the strategy. we are integrating right into the start of 2018. our numbers were a little over 9%. asia should continue with

terrific results. we are opening stores in china. we have done all of that now and we are doing the push strategy to get them moving. it was the historic strength. backll moderate in the half. yvonne: the last three months you have gone through. they raised concerns about overall corporate governance. his resume. the company has rebutted the comments.

how misleading were they? >> if you understand our business, you will realize that the relationship that we have, particularly in hong kong are disclosed. i think a lot of the noise around party transaction was highly misguided and incorrect. it is very transparent. we have been very transparent in the reporting. when we think about how to respond, we had a very precise response. a lot of them had no real merit. they were incorrect statements. the first half results, you will get a sense of the performance in this business. continued to perform very well. when it came to your

predecessor's background, why did it take a short seller to bring this to light? raised?re any questions >> we were enlightened on the back of some noise. it goes back in time. we were paying attention to what was happening. we realize that some of the topics were a bit of a challenge. we never represented him. withre a little surprised the earlier history. the misrepresentation. it has brought some soul-searching. i will quote and say that the company had revealed slowing growth. inflated margins.

what process or checks and balances that you have added? you look at the underlying , ourh of the business growth for the last five years is 17.5%. that is what acquisition. this business has underlying growth. when you look at the tactical , executing price points, it allows us to play at the top of the market. they had a good mix direct to consumer. we are learning a lot on that side. you are not making any

changes or checks and balances? >> we are applying it to the rest of the business. we are really pushing products for consumers. we have started to apply it to the rest of the business with very good success. really fertilizing the business with our knowledge. do you follow continuation of the strategies laid out or is this a time for a fresh start? i am very integrated in the strategy. it is not an advantage. we think about the transfer mason of the business from when todayted to where we are .ith meaningful mix of brands a mix of a business pushing a little more directly.

it is part of the strategy that we have been involved in. terrific really structure in this business. we think about how we run this business. we really understand these markets. good country managers. we brought to bear some of the pools and category expansion that plays against the market. i think it is a sound strategy. i will be focused a bit more with finance getting the balance of sales growth and operating leverage expansion. lookinginess, i will be to deliver sustainable growth story. we know that is there. everybody is expecting us to do that. i will be putting extra emphasis on that. yvonne: we got breaking data

coming through from japan. ramy: coming out of japan, retail sales coming in month on month. the euro .1%. 0.2%, so thatwas was a miss. this was actually coming in at one point 5%. the consensus was for 1.5%. atking at department stores -1%. year, that was 1.5%. we will get more on this and get some context. back to you. let's bring back our conversation with kyle. we talked about moving forward. we were looking at ahead to the rest of the year. trade war and trade tensions seem to be improving. china remains the big elephant

in the room. that 25%.ave faced always the potential hike of tariffs? >> i would view it as one of the cost component of our business. as we watched closely what is happening, the reality is what will happen if we saw tariffs work their way through is it will impact the entire industry. businesses are sourcing from china. we outsource 85% of what we produce from china. the real infrastructure for the bags and luggage industry is there. yvonne: would you consider moving that? >> it is not tariffs that is causing that. china over the last seven to 10 years has been moving up. we have been shifting our

business to vietnam and thailand. that will continue. china probably works out to be 60% of our sourcing versus 75%. see increases and it impacts the industry, consumers will feel that. you are -- yvonne: you are willing to rise -- raise prices? >> we will have to. we can manage other components of our sourcing engine to try to minimize impacts to consumers. tariffs is another cost component within your sourcing. early inou had plans the year to open a factory in the u.s.. what progress is there on that? >> we are evaluating with some that werepliers considering moving manufacturing

there. i would say we are in the early stages. it is not clear that it works for us. you will see that in the immediate term. i would rather focus on markets within asia that are better suited for manufacturing in place already. we appreciate your time and your first interview with us. we have plenty more to come on "daybreak: asia." this is bloomberg. ♪

ramy: let's do a quick check of business flash headlines. beating estimates, signaling strong demand for the cloud-based apps software. about seven -- 400 million above the average in a bloomberg survey. toy raised their forecast

$13 billion. talking about offices at one world trade center to be the largest office tenant in manhattan. it may take 18,000 square meters, which would push past jpmorgan as the company with the biggest office footprint in new york. rapid global expansion lifting up 110% in the first quarter from a year earlier. yvonne: counting down to the market open. less than three minutes to go and we are seeing a positive in the green when it comes to equity futures. the yen holding at a four-week .ow that will help canada talks looking a little more positive now, potentially with president trump be positive about that.

justin trudeau saying things are looking constructive. eric robinson, joins us to talk about trade and biggest market risk. this is bloomberg. ♪ xfinity mobile is a new wireless network

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yvonne: optimism that canada will agree to a deal this week. : just past 8:00 p.m. on wednesday, clouds are gathering emerging markets again as argentina as well as for an appeal for faster credit from the imf.

threatens bigger than ever wargames in the north korea nuclear talks stall. china is not helping. ♪ yvonne: acm green here with -- a sea of green here. it seems like the u.s. is showing willingness to compromise. drop talking about china why there is a breakdown between u.s. and north korea talks, that could limit the enthusiasm here in china -- in asia. ramy: if this were a set of dominoes, we've got mexico, looking like we've got canada,

but china will be the biggest hurdle of all. canada seems like, the friday deadline, it might be met. saw u.s. stocks hitting a record for the s&p and the nasdaq. sophie with the open in japan coming on strong. sophie: pretty strong for the nikkei 225. gains.th day of we got retail sales going for a ninth straight month on a yearly basis. looking pretty much flat at the brighter picture -- the broader picture as consumers are not willing to open their pockets. the boj. boj hopes.the we have the dollar-yen trading in a narrow range. low for the yen. look at the aussie dollar, higher by just a touch.

pressure has been loaded onto the currency. consumer spending would likely take a hit as banks will likely follow us back -- follow west banks lead. get business confidence, a survey, picking up after the sharp downturn hitting at august. -- that mightwhy provide some of the cushion on the meeting on friday. we are keeping an eye on the u.s. two-year yield, checking to see if it might gain momentum. it is set to fall for the first session in six. on gp telecom,

agreeing to merge with vodafone. down --l trim -- sultry cell trion lower. outsidec will move from london to amsterdam in october to avoid potential tax issues due to brexit. we see surrogate bank -- suruga the president is due to resign. that is a look at some of the movers. ramy: looking at the equities, it looks like it is fairly risk on. let's get first word news. jenna: sterling rallied above 1.30 as investors turned more optimistic that a deal will be a

reach to be for the u.k. leaves the european union next march. the pound fell from its highest level in three weeks. the block is prepared to give britain an unprecedented partnership, unlike any deal it has offered to another country. the argentinian peso slumped after macri appealed to the imf or faster cash. buenos aires is expecting another 53 billion . -- 53 billion next month. thatovernment estimated the 200 $20 billion of rupees in circulation, about 70 billion was hidden illegally to avoid tax.

49% of the notes have been handed in, suggesting there was hardly any caswell unaccounted for. the world's most famous spies headed for an ipo. not james bond, but as carmaker. said to target a valuation of $6.5 billion. the final decision on an offer will be made next not. has moved beyond simply making cars and into the water luxury market. -- to the wider luxury market. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm jenna dagenhart. this is bloomberg. ♪ yvonne: president trump says that were games with south korea and japan could be bigger than ever if nuclear talks with north korea stall. he says john -- china has been hindering negotiations. we are in somewhat

-- i don't like to call it a trade war. our country is doing very well. but china is having a tough time. . china makes it much more difficult in terms of our relationship with north korea. yvonne: that's crossover to seoul. we were at the singapore summit together. it seems this honeymoon period between the u.s. and north korea is over. itit definitely seemed like was they had the singapore summit. now it is a risk between what the two leaders are going to commit. they talked about declaring the end of war. they talked about. terrible path or to reach this irreversible denuclearization that kim jong-un has promised. but the rifts can be seen here between donald trump and kim jong-un on. as to who will be taking the

action first, the declaration of the end of war or kim jong-un showing large to show the u.s. he is dedicated to denuclearization. yvonne: how did the relationship deteriorates a fast? >> a lot of analysts i have been alking to say it points to lot of instability and insecurity for both leaders, for north korea and the u.s. in terms of u.s. and north korea relations, they have to bring back to their own people that they brought about tangible results. as for donald trump, he has to go back to the american people declaring there is no longer a credible threat from north korea, justifying the need for declaring the end of war, and telling them that north korea is fully committed to a deep -- denuclearization.

for kim jong-un on, he needs to go back to his own people in north korea, telling them there is no longer a threat from the u.s. counterpart, saying that it is ok to denuclearize and no need for them to use a nuclear weapons defense second some -- defense mechanism. ramy: that is an unwelcome problem for seoul. mike pompeo will not be lying to north korea until the so-called problems he claims with china are resolved. it has created a difficult situation for moon jae-in, the south korean president who is in the driver seat, to keep this alliance with the u.s. with the inter-korean summit coming in september, a lot of callingicials have been i didn't agree a new in violation of united nations -- have been calling

liaison aorean violation of you and sanctions. what isdi schneider, president trump accusing china of now? jodi: he is saying china is making it difficult for the u.s. to move forward with this relationship with north korea and for the u.s. to get what it sees as the denuclearization, the start of that with north korea. he says china is interfering in north korea because of the trade dispute that china and the u.s. are now engaged in. of usingusing china money and other commodities, further helping korea in ways

that are complicating the u.s.-north korea detente. ramy: we know china north korea are the biggest trade partners, supporting the regime. what is the current state of play? jodi: not much has happened. on this onwe heard was president trump saying it was not the right time to move forward with the talks, further talks with china on trade. as you know, last week, a delegation came from china to washington to have trade talks. they left in a few days -- they met a few days with a lower-level official. there was not much visible progress. they are notlike scheduling anymore talks. president trump says they will he. -- they will not have more talks with china until they get better with north korea. he's conflating the two situations.

there were $16 billion in tariffs that went on chinese products and china retaliated in kind on u.s. products. yvonne: in d.c., things are looking more optimistic. they talk about friday as an artificial deadline. are they likely to get something done by them? jodi: the u.s. is try to making added -- make it a deadline. they are try to pressure china -- pressure canada into this deal with mexico. they want something to the u.s. congress by friday. canada says they are making progress. although justin trudeau said they would only do a deal that is right for canada, too. so it is a game between the u.s. and canada now. canada wants some things that have not yet gotten in regards to their dairy program, which is

a key element of the economy, and a panel for resolving antidumping disputes, which is in nafta now and has not been agreed to yet in the new deal. there are some big sticking points. canada will have to decide if they are willing to agree to the u.s. -- what the u.s. wants here or whether they walk away and wait would happens. yvonne: and if there are any other windows after friday. still ahead, we talk strategies with gal cap know, which is launching the first locally managed fund of funds. you look forhould a value in emerging markets amid all these trade tensions and volatility? this is bloomberg. ♪

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elon: this is daybreak asia. ramy: our next guest says the tooet got to negative -- negative on china and too on the dollar. go to the dollar first. you say it is overvalued? why? how far do you think it has to fall? >> part of our thinking has been currently the dollar has enjoyed a cyclical valley -- cyclical rally based on u.s. economic performance, the fed raising rates when the rest of the world's sitting on his hands from a policy point of view. stimulusiscal initiated by the trump administration at the beginning of the year has created a very positive but cyclical environment for the dollar.

combined with that, we have had an emerging market weakness throughout the year, both in the fx rates and equities space. we think most of the good news is priced in. the fed is within -- let's call its -- cycle.s in the rest of the world's cycle looks ok. ramy: let's hop into the bloomberg terminal. we can see the last time he hit this blue line, the emerging stocks valuation started to recover. speaking to your point, eric. what are you looking at? i know the term collective instructive is in vogue right now. >> that is probably a fairly accurate way of describing our view. it is not an all clear signal. let's find pockets of value.

thailand is an interesting story. we think the economic outlook is very good. the central bank is moving towards a very gradual adjustment. well as area as relative outperformer in asia. are pockets in the fixed income space, like india, brazil, and mexico, that frank we got to levels we thought were very attractive. ramy: you have an interesting conviction trade. you want to short the dollar. we have some sound from the tie thaial-bank -- the central-bank. have moved investors to move into the thai baht.

ramy: he is not quite come through -- quite comfy and is no pressure to raise rates. >> i want to be very clear. our expectation for bought -- dependentgth is not on when the central bank will raise rates, although we think they will before the end of the year. baht lost a lot of its gains from the early part of the year. if you look at it relative to a basket of currencies, it is still well below its peak from the first half of the year. --ove in dollar bought to 32 would keep it in a fair range that will not

onshore exporters or the onshore policymakers concerned. yvonne: we have seen asia relatively resilient through this selloff that was led by turkey. how safe is the region really now that we see risks and cracks in the junk bond market in this part of the world? i think you make a valid point. one of the approaches we have taken in the em space and the credit space this year is to focus on growing up in value or up in credit quality. what we have tried to do this year is insulate ourselves, if you will, from those markets, those countries, those parts of the credit spectrum that are vulnerable to capital outflows or vulnerable to interest-rate all -- interest-rate volatility. for example, some of the

traditional high-yield or's in the local currency space, we have avoided the more speculative parts of the credit spectrum. i think that is the right way to play it. safe haven destinations or what we would call lower volatility, it's still the right way to maintain exposure to em, but it does not mean avoid em altogether. yvonne: always good to have you. we hear more about emerging markets next. this is bloomberg. ♪

a quick check of the latest business headlines. for has seen is credit rating

dropped by moody's. companydowngraded the to be delay three with a negative outlook, citing the erosion of towards global business division in the turnaround plan that could cost more than $10 billion in the next three to five years. yvonne: standard chartered me face new fines in a criminal investigation. are weighingies action against the bank and individual employees in announced -- and an announcement make this year. ramy: a new data-driven strategy and -- smarter loans says the bank must embrace technology or risk being left kind. the way the world has developed, we have to go with that flow or be marginalized.

hasbanking industry developed its own access channel to the world. >> when it comes to the fee income growth, that is getting hurt as well. in terms of new revenue stream, where do you see it coming for? usedod transaction of fees to be the easy fees and the banking industry. that will not be the case anymore. it's not unique for thailand. the world has got that. ,ou need that platform otherwise you totally miss the attention of the new kind of customers. >> where will your new revenue streams come from? the bank will still be doing lending, but in a more

intelligent way in the sense that we can figure out more from bestata analytics who is to lend to. the banking industry is trying to figure out what is the best analytics to go about and rely on to make intelligent lending decisions. >> some say you are pretty aggressive in china. what is your china strategy? >> we survive because we are not too aggressive in china. [applause] it is a very difficult market place to operate your we are a small operator. a great sense of consciousness. >> what other opportunities to see? -- do you see? the trade flow between china and asean, the bank looks at the new territory being asean plus three. asean plus china and japan and

korea. we have to be in the marketplace. >> with the opening of the banking industry within asean, what challenges do you for see? -- tied banks prepared to are thai banks prepared to be impeding at that level? are don't think thai banks taking on big banks in other countries. it is better to interact with our partners in a less costly way rather than just go and commit capital on a long-term basis to buy a banking network in another country. yvonne: coming up next, from foes to friends, relations are decent to improve.

we take a look next. this is bloomberg. ♪

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limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need this bed. yvonne: good morning. ramy: you are watching daybreak asia. let's get first word news. jenna: special counsel robert mueller is asking for more time to consider whether to retry paul manafort you he made his request saying he doesn't have enough information because -- have's lawyers have not filed posttrial motions. the indian government is set set

- is said to ask the r.b.i. we are told officials want a clear timeframe for creating , better capitalized lenders and improving regulatory oversight. indian banks have the worst debt ratio after italy among the world's 10 largest economies. turkey has reintroduced borrowing limits for owner transactions in the entry gain tighteningts, liquidity after unrestricted funding that aims to contain the lira crisis. amazon made its biggest gain in four months and is now within touching distance from the magic trillion dollar valuation. the stock surged 550% since the end of 2014.

making jeff bezos the wealthiest person on the planet. the first u.s. company with a 13-digit capitalization on august 2. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ ramy: u.n. trading went in barb's andfter trump the trade dispute. how much activity are we talking about? overdrive? significant pickup in transactions. we look at the trading platforms . they saw a pickup in daily average transactions of dollar a 1.4 billionto

u.s. dollars. that is more than four times the level they saw this time last year. ebs market also saw a tick up above their previous peak by about 20%. we see similar levels of , some of the highest yuan sincesure the 2017. it came at a time of four straight months of losses for the currency, down about 6% since mid-june. we have the pboc putting in place these measures recently to try to support the currency. banks here to the avoid heard behavior around the currency. in terms of the 50-day moving average, the transaction val aims have to down the last few days. but the intraday moving average

is still at its highest level since about 2016. the direction of travel remains one of continued decent volumes in the yuan, offshore and onshore. mentioned the pboc trying to stem decline in the renminbi last week. will that fuel more activity and the volume can be sustained? heard from dust we analysts at mizuho saying that there is stabilization around trading of the currency and that it has put investors at ease. we are likely to see continued levels around this area. this could be a catalyst for further trade in volumes because you'll see this cyclical factor playing against a growing economy and trade tensions with the u.s..

or ate lines in the sand least flags we can look to on both those fronts. friday the pmi data out that should give an indication us the strength of the economy. they could come as early of next -- early as thursday of next week, tariffs on 200 ilion dollars in chinese goods. that could seers a spike in transaction volumes offshore for the u.n. and onshore as well. yuan and onshore as well. yvonne: let's look at what asian markets are doing this there's -- this thursday morning. we -- the have the kiwi down by .2%, heading toward

the six to seven handle. homebuilding approvals fell the most in three years. sales recovering from a weak first quarter. growth continues to be subdued with severe summer whether a factor. we have the nikkei 225 looking at a day of gains while the yen is trading around a four-week low. ospi is gaining. sentiment business among pre-manufacturers and non-manufactures going into september. stocks tomes to watch, i want to highlight was going on in sydney. .ou have tbg jumping the stock climbing nearly 10%. will start the review of the proposed merger. trionellee on

did post a drop in the third quarter. last, the jgb market, we see a pickup in the 10-year yield after trades recorded on wednesday. markets are still china to assess the boj's process. we see some nervousness in the market ahead of that. here is an interesting question. could president trump's trade war bring china and japan closer? that is what a lot of people will be asking when the japanese finance minister goes to beijing later this week. this is interesting.

what are the two nations hoping to achieve? there have been signs recently of japan and china trying to improve their relations. obviously, they have not been great in the past. since about 2012, they have fallen out over some disputed islands. they have gradually been improving. last week, we sign of her japanese officials in parliament terriers -- parliamentarians come and visit. also the finance minister is here today and tomorrow to discuss the trade war, relations with the u.s., and things that japan thinks it can help china on, rising debt levels, an aging population, and a lot of other things. sorry number of finance ministry officials talking about how china can manage the debt levels that it has. a number of issues they are looking at is a forex swap.

they're looking to sign it later this year. generally, the tensions with the u.s. have led both nations to try and better relations between themselves, to balance the correlations, especially china, but that japan has always had with the u.s. ramy: it is in the midst of many rocks and many are places. japan has problems with industrial policy. it wants to work with the u.s. as well as the eu on that. it is also in difficult trade talks with the u.s. what is their strategy? as you say, there are a lot of different issues. economy minister will meet with his counterparts in the eu and the u.s. next week in europe to discuss what they do about chinese industrial policy. they've had a lot of problems with china is doing with the

made in china 2025 policy, what ofy see as theft intellectual property. on the other hand, they are in difficult trade talks with trump in the u.s., an overhanging thread of tariffs. they are trying to thread a needle of improving relations with china but rushing back against china. they are trying to improve relations with the u.s. and sorting out the trade issues. they are try to push back and against whatconomy president trump. wants as well. it's hoping that something good comes out of it. whether that is the case or not, we will have to see. yvonne: plenty of moving parts. after this meeting this week, what comes next? the deputy prime ministers here today and tomorrow. they will be discussing an fx

swap, which will be signed when prime minister abe is expected to be here in october. on the japanese side, president xi jinping will visit japan next year to symbolize the improved and better relations. they are also discussing trading issues. onmay see some announcements intellectual property or the things that japan has but also improving bilateral trade between the two countries. yvonne: thank you. coming up, asia's first fund of funds, using mathematical models for investment decisions. to launch a best of funds. we speak with the cofounder next. this is bloomberg. ♪

ramy: breaking news along the bloomberg terminal. him donald trump has decided to maintain current steel tariff levels. he says he is still in -- the u.s. is still in talks with nations on the aluminum tariffs. that's crossing the bloomberg right now. issued an order on adjusting imports of aluminum into the united states. he said it is necessary to maintain current aluminum levels. these u.s.-mesko yvonne: yes, it these u.s.-mexico and trade talks, they were still intact. mathematical models to make

investment choices. chauwei yak joining us from singapore. there is a lot of hedge funds getting into these quantum funds -- quant funds. why now for gao capital? funds as a whole have not been doing that well. maybe because of the inflow of funds going into the sector. but we have been doing quite well. we have been focused on newer funds, smaller funds, and trade outside of the traditional u.s. markets or the traditional equities markets. quants still a hard sell? returns are limited. there's a black box element to them. how do you explain that the people? ultimately, returns

sell themselves. if you look at bigger names or established names and they are not doing too well, maybe it will be harder for investors to say i want to put money into them. but for us, you look at our returns. there is the possibility to generate if you look a little bit harder, looking at newer funds the nobody is looking at or smaller funds which might be trafficking in markets that have low capacity. go forrs ultimately strategies or funds that will make money, especially in these times when the markets are very volatile and traditional have trouble making money. i see there is a trout

strategy where this is based on 22% annualized return over the past three years. chauwei: right. trough.not a these are actual returns of our .nternal whole folio we are opening it to strategic investors who we have been talking to for a long time who say they want to come alongside. but because underlying funds have limited capacity and our objective is to maximize returns for ourselves, we are limited to 100 million. ramy: i noticed it is $100 million. one thing you did talk about in terms of volatility, there is a lot out there in terms of commodities, em, as well as government bond ships. how do you plan or hope to navigate this? as i said earlier, most liquid markets, the u.s.

equities markets, we would look beyond those, look at rate markets and commodities markets to see whether these can be traded successfully. commodities is a difficult quant to trade using methods. andill be looking at those treating carefully. yvonne: how do you utilize big data? differentre are systems. this machine learning. it's al qaeda mixed into one now. what is your strategy? chauwei: we are using similar strategies to pick stocks and bonds. predict a can recommend me what i should look

at, in the same fashion, we can use our data to decide what we should look at. we look at a lot of younger funds with a limited track record. we not only look at the numbers and performance, because there is not much performance look at. look at shops, that what they were doing there, how long. this is data that people might not look at when people select funds. data, ourentioned big underlying funds are using big data, like foot traffic. our investorsre looking at when they look at fund a? , ok maybek at fund b there is a correlation to that.

we are looking gun more and more. yvonne: interesting. thank you. ahead, -- still more ahead. this is bloomberg. ♪

yvonne: this is daybreak asia. quick check ofa

the latest business flash headlines. salesforce offered a revenue forecast that beat estimates, signaling strong demand for its cloud-based at software. ties 3.7 billion dollars, about $400 million above the average of the bloomberg survey. salesforce also raised its revenue forecast to $13 billion. yvonne: space share opening offices at the one world trade center. feety take 200,000 square or 18,000 square meters. rapid global expansion, up 110% in the first quarter a year earlier. that broughtpany us know chocolate and rocky road ice cream now says it is worried about our health.

the program is launching in japan. the population is shrinking. but the lifespan of the average japanese person is getting longer. everyone wants to live a long time and in good health. problems associated with food and nutrition have become a big issue. on ae must address that global basis and make it our mission for the 21st century. dream thats has a some might see is a nightmare. a 20-our flight is closer to take off, linking sydney to 20-hournd new york -- a flight is closer to take off, linking sydney to london and new york. i'm ok with this. tell me more. >> is a on which end of the plan

you are in. you will probably pretty comfortable out front, not so much in the back. dreams qantas's long time to rely on direct services halfway across the planet, from sydney to london or sydney to new york. up until now, no one has been too sure if this was infeasible. i spoke with the chief executive who said, yes, boeing and airbus have convinced me we have the planes to do this, and that is go further than any direct services has gone before, carrying 300 passengers with their bags, with fuel to spare for emergencies. that is really the tough bit. how do you configure the aircraft to fly that far in comfort? this is what they are scratching their heads about now. presumably, it is because the rise in efficiency that we have been seeing with airplanes.

also, who would theoretically be flying this? what is the economy passengers? would it be all business? >> what we have seen with previous ultra long-range qantas does, they have taken a few seats out of the aircraft in economy. premiumared more toward passengers, that's a business and premium economy that your average long-range flight that we have seen in recent years. it will be a premium service, fewer passengers. but you still have to survive it. thanill be able to go more 20 hours in an economy see if you want to do that. that's why they are looking at other options to make these flights more bearable. everything is on the table in terms of the interior design of this cabin. you'll have the typical seats you see in planes now.

the scope will include bunks, an exercise area? he tells me boeing and airbus have been creating and suggesting ideas that could be incorporated into the final aircraft. we don't know which plana will be yet. we don't know whether bowing or airbus will win that order yet. yvonne: i don't know about a jim, but i will take a bunk for sure -- i don't know about a gym, but i will take a bunk for sure. we have seen this boom and bust cycle in the industry? really going downhill now. 'that's true -- >> that's true. when itd up an aircraft was on its knees just a couple of years ago and he predicted a turnaround time in 2014. now he is recording record profits. he cut lossmaking.

he has cut 1000 staff. qantas is in a position of strength. it is true that the airline industry is set to head downhill. global profits worldwide will fold of this year to the lowest level since 2014 according [indiscernible] which represents all airline traffic in the world. qantas is doing this, yes, as fuel rises are rising and margins are falling. of profit margins, it is doing it with more fuel-efficient aircraft. we will see how it pans out in 2022. yvonne: great story. this is bloomberg. ♪

i'm all about my bed. this mattress is dangerously comfortable. when i get in, i literally say ahh. introducing the leesa mattress. a better place to sleep. this bed hugs my body. i'm now a morning person. the leesa mattress is designed to provide strong support, relieve pressure and optimize airflow to keep you cool. hello bed of my dreams. order online, we'll build it, box it and ship it to your door for you to enjoy. sleep on it for up to 100 nights and love it or you'll get a full refund. returns are free and easy. i love my leesa. today is gonna be great. read our reviews, then try the leesa mattress in your own home. order during our pre-labor day mattress sale and save. for a

limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need this bed. david: so one month after you get this job, you have a heart attack, and then there is a transplant. i assume you're not flying on private planes anymore? and there are a lot of people who have emotional support animals. animals that require another. >> would you fix your type, please? oscar: people would not recognize me. all right.