♪ anna: good morning from bloomberg zero the and and quarters. i am anna edwards. u.s. and tribulations, the could announce more tariffs on $200 billion on the chinese imports imminently as the deadline for public comment passes. em stocks for more than 20% from their week after eight solid days of declines, the longest streak losing since 2015. and, the inverted curve. the feds john williams says the central bank should be willing to invert the curve to hit its targets as jobless claims fall the lowest in half a century. ♪

♪ anna: good morning, everybody. it is "bloomberg daybreak: europe." welcome to friday morning, this is a picture in the asian equity sessions. we are weaker on the msci pacific. a question for markets, will trump applied tariffs on $200 billion worth of goods from china. onther question being asked emerging markets, vulnerability to trade hikes. because of trump policy toward tech in china. also because the selloff we saw in the united states yesterday, there are questions about the viability of chip demand to react we are starting to see some appetite for the more typical safe havens in the context of this trade row that is taking place.

the yen is gaining. the dollar had been the big beneficiary before, but we are seeing that appetite for gold, the swiss franc. be putting attention on trade talks in japan. also, the brazilian real. being taken from one emerging market to another in terms of our focus this week. , was in focusreal yesterday as stocks and currency rising in brazil, after the ofgic news of the stabbing the candidate, he was left injured but he will run in the elections, this is how the .arket goes in brazil he will still run, and perhaps the sympathy brought about by this attack going to boost profits, that is how the thinking goes in brazil. this is a picture in the equity market, we expect to see it up

at the start of the trading day. it is also jobs a into the unit is days, so we get the payroll update and details on wage data as well. conferencehere is a taking place today and will get some contributions from the guests at the event, including an interview with the ceo of nlc , and the jp morgan's international chairman, jacob frank well and italian prime minister as well. there are a few former italian from ministers that we will be speaking to german the program today. -- italian prime minister's that we will be speaking to today. we are joined by juliette saly for the news from single. juliette: or the deadline has passed for public comment on turf on 200 billion. dollars on chinese imports some of the country's most prominent companies and retailers made a final push to convince president trump to reverse course.

last night, trump told a rally in montana that he would strike a good deal with china for american farmers. >> we are cracking down on unfair trade practices emanating from china. america is tired of getting ripped off. we are going to get a great deal for our farmers and ranchers and factory workers. we are giving our workers and businesses a level playing field . juliette: emerging-market stocks have fallen into a bear market, saiz of the msci emerging market index, which has now dropped 20% high.its generally 2016 developing markets are under pressure from a stronger dollar and rising u.s. interest rates, as well as american protectionism. contagion concern has come to the fore as the most vulnerable developing economies like argentina and turkey, fell into crises. brazil's presidential election

.ampaign has been jolted after the leading candidate was stabbed during a rally the attack on the controversial former army officer through what had a ready been a raucous race into an even turmoil.tate of the right when lawmakers condition has now stabilized and brazilian traders are betting that the incident could help propel him to the presidency. burt reynolds come otherwise cracking 1970's movie heartthrob and oscar nominee has died at the age of 82. his manager says the star passed away yesterday at jupiter medical center in florida after a heart attack. he shot to fame in 1972's "deliverance come co the coming in 1972'slegend -- "deliverance,", becoming a hollywood legend. 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 bloomberg at top .

the bear market is not great sentiment for the asian equity session this friday. the worst week for asian equities since march rounding out. long longest losing streak have seen since december. the csi 300 is coming back after the lunch break, and the passing of the deadline for tour, and tatian, actually up went through percent. we are still seeing weakness in hong kong and japan on the stronger yen, and of course, the earthquakes there. pretty weak right across the board. let us have a look at some of the stocks, the technology sector is really lacking in the. region, following the u.s. session. on the index in taiwan, tech stocks have been hit hardest. the tech sector is down by over 2%. tencent. a .4% in hong kong, but it has been a rebound in china tell which is had a really volatile week.

-- china tower. anna? anna: juliette saly in much.ore, thank you very china is bracing for potential new u.s. tariffs that could come imminently. duties on $200 billion in chinese imports are expected to cover everything from bicycles, rees-mogg last-ditch digital everything from bicycles, baseball gloves, to digital cameras. we have talked about on a number of occasions, they have run of imports to match if china goes tit-for-tat with the u.s., so what do you think their response will be? at this stage, i think we should expect the chinese to calibrate their response in terms of the timing, pretty closely to what we have seen from the u.s.. that theyalready said will be putting tariffs on about $60 billion worth of u.s. goods. you are right, it takes the

total of goods targeted by china to about $110 billion. so they are running out of our text a target. they will be targeting things like industrial products, chemicals, so the industrial target here -- industrial sector will take on more of the costs, so.consumer, less so china's being forced to take these moves to retaliate on this trade of aggression from the u.s.. the other side of this is that the chinese continue to flush out their response to support their businesses here, continuing to talk about the need to step up infrastructure spending and investment spending to support small and midsize enterprises. there also supporting foreign firms based in china, to see what they can do to support those businesses. anna: we should say, we don't know about the timing of any of this, what happens this morning, commenting and it, so it is possible that the

tariffs could come any moment now. what is the mood as we wait to see what will happen from the white house? amongst the business leaders and those in china? we have been speaking to both officials and business leaders over the last few minutes here, and the official view is that we are digging in and shoring up our defenses, we are not budging and we will not back down. from a business perspective, i spoke to a very influential lawyer the us morning in china, right at the heart of dealmaking and chineseeign businesses, and he says it is a pretty grim situation. there was a lot of concern overshadowing the business here.ent many companies are looking to change their supply chains which

is not easy and time-consuming, and costly, and he says that dealmaking is slowing down particularly because of concerns about oversight of chinese investment by the u.s. here. he says that in terms of implementation, province by province, he is not necessarily seeing any changes from tax cuts, which is a concern to the business community here. anna: thank you so much, bloomberg's chief asia correspondent, tom mackenzie joining us. we are joined by the head of investment strategy at barclays, william, thank you for joining us. let me start by asking, in the near term, if we do see the trump administration imposing tariffs, if we do see them actually going ahead and pressing the button, what kind of impact will it have on asset? i have the ubs view which the just let we could see a 5% drop in the s&p, which is interesting, because chinese stocks have clearly fallen now, but equities have been resilient? there is a number of

things to try on, trying to isolate the effects of trade on everything else is hard. i think that as long as this bilateral game, i think it would be unhelpful, but if it is not broadening out into a trade dispute with all their trading partners, you will start to see a much larger and greedy us economic effect, and that is when economic impact. markets in general, had plenty of opportunities to discount to this, so it is not a new story, as you pointed out. how the market we ask on the actual news, it will be interesting to see. anna: indeed come over will see it in the price, i suppose. u.s. going to hurt the consumer a bit more aggressively? but if itgger number, comes, it is on a bigger value of chinese imports, it could hurt more.s. consumer

than the tens of billions of dollars we have seen so far? william: what we have seen so far has been on the major percentages. goods and negative that did today are more intermediate from theich are away consumer a little bit, there is more of a gap between the consumer and the price rising. once you add in more trade between china and the u.s., looking what it is like it will happen, it will have more of an impact on the consumer. that big story on protectionism is the inflation rate. you start looking at issues in nafta negotiations. that usually has to be paid for by some -- that, eventually, has to be paid for by someone. anna: yes, some of these costs have to be passed on, and there are usually passed on to the consumer. the typical havens throughout

these trade tensions, have been the emerging markets selloff's. of dollaren a lot strength, but we haven't seen a lot of yen strength, swiss franc strength, gold strength, although, now they're a suggestion. more yen-positive instead of dollar-positive, for example? could we start to see the u.s. market deal differently with this? william: the fed normalizing monetary policy, you have an globally, andring you have the fiscal steroids starting to . -- you have the fiscal steroids starting to move through the u.s. economy's bloodstream, so you wouldn't expect the normal safe havens to behave the way they should. it is always different, isn't it. , that is aifferent

problem, and at the moment, we are still focused on a stocks. we think a lot of this will settle, and we are focused on the underlying economy. but there are definitely lots of signals going around at the moment. thank you very much, william to read he will stay with us, they will be plenty to minutes.n the next few . coming up, a boost to the ministeratar's economy tells us that the blockade against the country is helping you to diversify and find new export markets. we hear from him coming up next, and we also the bring you the interview with the emirates airlines president. that is at 3 p.m. united kingdom time. this is bloomberg. ♪

♪ anna: good morning, everybody. london, to: 17 over in tokyo. we see a little more appetite here in the end this morning, we

were just discussing with william hobbs from barclays, or that we will see more appetites for that nontypical safe havens. let us get our bloomberg business flash with juliette saly in singapore. juliette: british airways is investigating the death of data including personal and credit card details from customers who use its website and mobile up to make reservations. 380,000 payments are said to have been breached by hackers, and it says the stolen data tha does not include travel details. theft.ogizes for the ♪ anna: it appears we have lost communication with juliette saly. we cannot hear you, so i will pick up.

juliette saly in singapore. we will get those business headlines to you shortly. knowledge of emerging markets. investors are feeling short-term pain after the bear market arrived yesterday for emerging-market stocks. the rising u.s. interest rate and the threat of american protectionism, as well as contagion concerns. theme of emerging markets with our guest in a moment, but first, we have an exclusive interview with the qatari economy minister, who told bloomberg that the qatar embargo by saudi arabia and others has been a "blessing." saying that he sees opportunities in emerging markets. he spoke exclusively to bloomberg. >> i can tell you today that the embargo, or the blockade on by our neighbor from an economic point of view, it is

behind us. we are doing excellent, in fact, from an economic point of view, it is a lesson. numbers.ok at the in 2017, we reached or met our growth target, which was 1.6%, of our total exports increased total trade with the world increased by 19%, and the world bank expects that qatar will be the highest growth in 2.9%, and 3%.8 or following until 2022. there are huge growth opportunities as we are moving toward more diversification in the economy. we are opening more opportunity to the private sector, and here is.here opportunity

as i said, public-private partnerships, we announced many projects in health care, , foodion, tourism security, to the private sector. it can be either foreign, local or joint venture to come and take part in this opportunity, and we are working in the final stage of public-private partnership loans that will clearly governed the relationship between the private sector and the government, when it comes to ppp projects, and that means that we will open more opportunity for the private theor to invest in some of projects that classically, we as a government take care of. >> are you concerned about your trade relationship with iran wants the u.s. economic sanctions go into effect? will you recognize the sanctions? >> we recognize the sanctions,

we respect to them. we did so in the past, and will continue to do so. after the blockade, will cometh iran through iran also, so it is not only about trading with iran, it is also the route, from turkey and central asia, trading through iran, via trucks, that is important for us, and we are keeping an open dialogue and, negation with our friends in the u.s. -- dialogue and communication with our friends, but the short answer is that we respect any decision that will be taken on this matter. >> are you concerned, by the way, about the trade tariffs that president trump has respect toith your holdings in a company like volkswagen, which has taken a real hit on concerns about these trade tariffs? >> you know, we believe in the globalization business, we

believe in the wto creation, and created.n why it was we believe in open markets and open competition, and that is what we are doing with the rest of the world. our market is open to the world and different products coming from all around the world. we do not increase tariffs for anybody, that is what we believe and that is what we will continue to do. anna: that was the qatari economy minister, sheick ahmed speaking to bloomberg. ,ressure on emerging markets leaving the qatar story there but talking, -- about emerging markets more broadly and the bear market, we are now in a emerging market chuck o'neil era. i have a chart that illustrates -- we are now in emerging

markets'new era. there was an analyst who foresaw the selloff and e.m. in february and now he says that he should buy that brazilian real, and other stocks. do you see the truth in this? >> if you look at the bear theet we have experienced last few months, he have to put it in the context of what 2016-2017.om the reality is you had an almost perfect backdrop for stocks, and emerging markets coordinated economic growth, valuations were cheap, and there was also went iv phasee.gest an now, you have trade tensions rising a little bit. we are overweight in emerging-market equities, focused on asia, and i think one of the interesting things, or sad things, is that you have an increasingly lengthening list of

emerging-market economies suffering from heterogeneous economic and political ales, but there are not symptomatic of a wider emerging-market malaise. we haven't seen any spillover effects on the economy's rough focused on, the asian economies primarily. i think of the economy continues to grow, and the recession is not imminent, he would have a hard time finding reasons not to invest in emerging markets, because historically they have outperformed in a growth. anna: period. anna: i have this chart which looks stunning, the price of crude in some emerging-market currencies has surged. followed byosely turkey, the countries that import energy are having a weak currency against the dollar, obviously. causing him some headaches are you at the point of dust year, d chicago mercantile

exchange that have been on a duly hit by this association with the emerging markets? william: that is additional context in turkey is one that is sort of not very appetizing to us at the moment, have to admit. the overall inflation in those the imported price story is going to be quite alarming and difficult for consumers to digest. that makes it something to watch with interest. certainly, these markets have discounted a lot already, but we would rather wait and see for the moment. there is enough opportunity for us in the robust emerging markets like korea, taiwan, there markets are quite interesting. you. william, thank head of investment strategy at barclays investment solutions, he stays with us for the program. alwaysrg radio is available to you if you need to tv. off bloomberg

up next, from hock to death, our next guest who was always in favor of high interest rates now says he is not in a rush. we get more details on the fed, coming up next. ♪

anna: good morning, everybody. 6:30 in london. this is a live shot of new york. s&p futures are expected to be weaker at the start of trade. keep an eye on tech futures on the nasdaq. we saw a tech selloff concern about how durable demand for chips is going to be with the talking point yesterday. >> markets in asia has been headed toward their worst week since march. we are seeing fluctuations in china. been declining as donald trump can announce another round of tariffs as early as today.

australia down 0.5%. some of the biggest declines are in japan, down nearly 1% as donald trump hinted japan would be the next target of his trade tensions. i want to dive into charts. is not just equities in japan, yen. also the again -- the the yen's post for highs against the dollar, but there is double trouble. we have technicals coming into play. this is the 100 day moving average. the yen is poised to break through that. we saw the trend line starting in march that has been tested before bounceback. it is going to break through their again especially as tensions ramp-up. the other big market in pain is emerging markets. here i have the largest e.m. etf. traders saying you don't think the pain is going to last.

call option open interest is at its highest since february. and is approaching a high set back here. these are options that would pay off should em rise. there is upside from here. anna: think so much -- thanks so much. let's get the bloomberg first word news. juliette: i have found my voice. in the u.s. the deadline has passed for public comment on tariffs on $2 billion -- $200 billion of chinese imports. companiestechnology made a last-minute push to convince donald trump to reverse course. a rally intrump told montana he would strike a good deal with china for american farmers. pres. trump: emanating from china. america is tired of getting

ripped off. we are going to get a great deal for our farmers and ranchers and factory workers. we are giving workers and businesses a level playing field. juliette: emerging-market stocks have fallen into a bear market as the msci emerging market index has now dropped by more than 20% since its january high. areloping economy assets under pressure from a stronger dollar and rising u.s. interest rates as well as american protectionism. contagion concern has come to the fore. argentina and turkey fell into crises. brazil's presidential election campaign has been jolted after the leading candidate was stabbed during a street rally. the attack on the former army officer through what had already been a raucous race into a greater state of turmoil. the lawmakers condition has stabilized.

brazilian traders say the incident could propel him to the presidency. japan's international airport in osaka bay has reopened. runwaysn flooded interminable things -- and terminal buildings. and also ripped a taker from its tanker from its moorings. global news 24 hours a day and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. to central banks now, a speech by the hawkish new york fed president has bond traders buzzing he may be changing his feathers. he says unemployment and inflation are as good as it gets and the fed should not be in -- be afraid to invert the yield curve.

hobbs, head of investment strategies at barclays is still with us. williams over at the fed, let's start with his comments on the yield curve. he did say he is not worried about inverting. he referenced -- they are going to do with their goals need them to do. if that means short-term rates go higher than long-term, that's going to be the case. he also represent are hearing by buying long-term debt. may be the signals are not the same as that used to be. what are your thoughts? >> it is that latter point. in the yield curve has been a reliable indicator. pretty much every recession since the postwar period. has been one false alarm, they called it a recession and it was a credit crunch. ,he point about the yield curve the intuition is the market starts to predict sharp interest

rate cuts. because the term premium is not existing now, a flattening or inversion of the yield curve is not saying the same thing as it has in previous cycles. we have got to interpret it differently this time. they are looking for a sharp and sustained inversion rather than something more moderate. part of this conversation yesterday was about this inversion and not being worried about that. on the other side he seemed to turn from hawk or dove and suggest wage growth was confusing, not as strong as you might have thought. wages pick up a little bit. they have not been as robust as some expected. we saw as a result of this buying of treasuries. this hawk had turned dove. do we make the conclusion? >> it is hard to do that.

certainly for us, compositional factors can explain quite a lot of the wage conundrum up to now. if we look at today's data we are not going to get much different in our opinion. a couple of interesting statistical quirks in today's data which may mean the bond market gets another little pip. every august since 2011, the payrolls numbers have disappointed. averageook at the weekly earnings, generally in days you have had to adjust with greater adjustments with regards working hours to a found that you have found working hours of disappointed on that metric as well. that would suggest maybe you are going to see more today. we would not chase that too much. we think the fed is going to be raising interest rates. the u.s. economy is humming. anna: to your comments about the quirks in august data, it is the august payroll that falls short

of consensus estimates and prevailing trends. oppressive consistency. we will keep that in mind. from the micro to the long-term picture, i was fascinating -- fascinated reading earlier your piece on the last 1000 years of growth per capita. you were talking about investment lessons being drawn from the past. one was to do with the regularity we see recessions and learning to look through recession risk. >> sometimes it is difficult. when you look at these stretches of time, none of us are going to live for 1000 years. >> that was even a bloomberg terminal headline. see,nerally what you you're got to be careful about relying on data like this. before 1700, academics would have argued there are recessions 50% of the time. what changed was not the nature of innovation.

it was the institutional context. >> what about the industrial revolution? >> it is the things that go alongside the industrial revolution. we change innovation, but we started to develop a kind of institutional complex that allowed us to protect ourselves against recession and harness the gain from growth spurts. what that meant was the recessions since 1700 are 30% of the time, since 1900, 19% of the time. long-term investors ignore recessions altogether. all you are looking at is valuation. >> you have the populations don't erode -- >> it reminds you of the local story, big changes. still mynot going to innovation, necessarily. that kind of thing has changed little bit. i am free to innovate and see those gains. anna: an possible to do justice to it in just a few minutes. thank you.

william hobbs, head of investment strategy at barclays investment solutions. stay tuned. you can tune into the radio. we will bring you our interview ath the former pboc governor 3:30 p.m. u.k. time. something to watch out for this afternoon. markelly 20 years, jack went from english teachers to china's richest man. the alibaba chairman is donating his time at fortune to philanthropy. tom mackenzie said down with jack ma to discuss his philanthropic vision for himself and alibaba. >> we have so much resources, so many talents, so much inference. we have 600 million people using is almost every month.

ofwe do not put those kind responsibility thisour business model, giant alibaba could destroy a lot of things. do good things, do bad things. technology is very cold, people set. -- say. you have to make the organization warm. >> are you succeeding? >> 10 years ago when i said we should put 0.3% of the total revenue of alibaba into , atanthropy and education that time, nobody cared. 0.3% of alibaba, we have no revenue. the board said go ahead. now we have such a big revenue. i say, we have to do this. is not a 0.3% profit, it's the revenue. >> in terms of technology, how

do you bring that the plight of a crime your vision for technology? -- how did you bring that to play in your vision for technology? >> in the future, what we teach kids is about innovation, creative, constructive. how can you do the things the machine cannot do better than a human being? that is education. i am thinking all the time about that. >> that is a big focus for you? >> i can be a teacher and mentor to young entrepreneurs. i do not call myself successful business people. i'm very successful in life. i have gone through tough decisions, tough days. these can be very good for many young people. i'm not going to teach math. i'm not going to teach english, i'm not going to teach business in the schools. i'm going to teach young people had to face challenges. >> when you communicate with

your counterparts in the west -- >> i think it will. common that people on china, people in america, we all have the heart of love and respect and trust. this is the common language we should have. revolutionechnology caused world war i. the second cause world war ii. now we have the third technological revolution. what happened yet go we should not have war. if we have war, war should fight against poverty, disease, environment. we should find the common things we are working together. that would be the trust. it is easy to complain. it is easy to finger point. we have got somebody, say this is the problem, if we work together, it is the opportunity for all of us. that is something i hope i can

do. >> you employ more women than other tech companies. how important is gender equality? >> so important. last century, it's the competition of muscles. this century it the competition of wisdom. of experience. of care. we have more than 50% of the employees in our company are women. -- thisenior managing is one of the secret sauce of alibaba. we have a lot of women leaders. anna: that was the alibaba founder and chairman jack ma speaking with tom mackenzie. bloomberg users can interact with charts, gtv is the place to go and you can browse all the charts i have been using.

well.n use analysis as save them for your future work. coming up, an close of interview from the forum. that's coming up next. ♪

anna: that was some of our reporting from 2008 i'm the aftermath of the collapse of lehman brothers. very much in focus for us next week. we will have interviews coming up for the 10th anniversary of the lehman collapse. we will be speaking with the former ceos of barclays and deutsche bank and the former president of the ecb, the former governor at the bank of england, and many others. watch out for those interviews throughout the week as we remember the collapse of lehman 10 years after the event. let's get a bloomberg business flash. juliette saly hazmat in singapore -- has that in singapore. juliette: british airways is investigating the theft of data including credit card details from customers who used its website or mobile app to make reservations. the airline says 380,000 payments were breached by hackers between august 21 and september 5.

the stolen data do not include travel or passport details. arepologized and said they contacting affected customers. deutsche bank is trying to reassure its most important customers in new york that it is ready to handle their business. bloomberg has learned and invited a select group of hedge fund managers and other institutional investors to mingle with a half-dozen of its most senior executives, including a cfo yesterday. while it is not unusual for investment bank's to hold high-level meetings with lucrative clientele, deutsche bank is under pressure to defend its business. carmaker famous for chairman mao's red flag limo is hiring the designer become -- behind rolls-royce's recent cars. this symbolically important brand used by a late chinese

government official is rolling out more models, including the h5 midsized sedan. twitter has permanently suspended conspiracy theorist alex jones and the account for wars website. it says content he posted i like the platforms harassment policy. violated the platform's rested policy. facebook and youtube also purged content related to alex jones. that is your bloomberg business flash. anna: thank you. we are live from the amber city forum in italy. ceo -- bybeing enel the enel ceo. >> we have exclusive interviews. we start the day with francesco starace, the chief executive of

enel. thank you for joining us. this is going to be a busy day. a lot of it will be focused on the concern for growth worldwide. a lot of it will also be on italy. do you worry about italy or what is going on with emerging markets? >> i do not worry about italy. position is complex and less difficult to understand than it looks. there are, perhaps, bigger but, again,he world if you look at the world overall , it is not that bad. the economy is doing ok. it is strong. maybe the only big worry i have from an economic standpoint is the trade war cloud. it is still not fully settled. that is a question mark really.

>> we will find out whether this escalates. escalate, it would shave off 0.4% of world gdp next year. does it actually have an impact on enel? >> not immediately. where not exporting. of course of the economy slows down worldwide, energy demand goes down, and energy companies don't like that. it is an indirect impact. in the short term, no. venezuela,argentina, how were you affected by those? >> we are in argentina. argentina, we knew from the onset it was not going to happen all of a sudden. the miracle is in the process. i think we are right now in the second phase of the process. it is wise that the president of

argentina asked for the imf intervention. the imf has a good chance to get problems and the help argentina out. are that argentina , denyingout of this the reality. it just requires time. we need to be clear that argentina is going to get out of the crisis, but it will take time. it is not a 100 euros --. -- a 100 yard dash. >> you think it depends on what in gdp, it will either allay investor concerns or and them up? >> i think it will allay concerns. argentina will indicate that

italy has a chance to continue reform and also to restart growth. the idea is that we have heard and read and we have been exposed to our ideas of pushing investment as a way to restart the economy. investment in infrastructure is needed in many parts of the world. that includes italy, too. . it makes sense and that is the right time to do it. the flow is finally out, investors will look at it and say, there has been a lot of noise within. i think it will take another couple months before it happens. >> what kind of energy policy do you think this government will put in place? >> an energy poly -- policy from what we understand that we push more renewables, we go in the direction of the eu for the nuclear energy package, we push

for the transformation of and it is an energy policy we think makes. in general for the world -- makes full sense in general for the world. .> the chief executive of enel with that, i send it back to you. anna: plenty more to come from the team. about death ceo talking about emerging markets, for example, argentina, and italy. that looms large as we head into the fall. more from that ambrosetti forum. surveillance will bring you interviews from former italian prime minister's. they will be joining us on the banks of the lake later on this morning on surveillance.

in europe, we will talk more about trade tensions as we wait to hear from the trump administration as to whether they will impose further tariffs on chinese imports. ♪

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included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. anna: good morning from bloomberg's european headquarters. this is "bloomberg daybreak: europe." trades and tribulations. the united states could announce new tariffs on $200 million -- billion dollars of chinese imports. em stocks fall more than 20% from their peak after a solid days of declines. the longest losing streak since 2015. don't fear the inverted curve. john williams says the central bank should be willing to invert the yield curve as the u.s. dollar gains for the lowest in almost half a century.

good morning, everybody. we got to friday. was talk about these markets from a data perspective. german data just hitting the bloomberg as we speak. we have to lie, getting trade data coming through. also getting industrial outputs. july industrial output is down by 1.1% month on month. we get a host of trade numbers as well. the july current-account surplus , we talk about that in a .ifferent context that industrial output figure, a drop of 1.1%. the estimate was for an increase of 0.2%. it does seem as if that number low estimates, we had another yesterday on the german economy from the manufacturing sector, that was below estimates as well. we will keep an eye on the euro and any reaction we get that. it is too early to talk about

trade tensions, or is that what is going on in germany? let's talk about futures. investors really waiting to find out today and into the days to come ahead whether the trump is going to impose these tariffs on $200 more -- worth more of chinese imports. i say in the days ahead because we do not know about the timing. the public comment period has passed which means trump could impose does -- of those tariffs from now. a kind of holding pattern now. we have the jobs report out in the u.s.. a little quirky in the month of august. often it disappoints in the first reading for august. we could be in a holding pattern in the european equity session until we get to the afternoon. that is what we are expecting when we start trading. let's put the risk radar. down 0.4%.

ability,market for her but also questions round the technology sector. tech stocks are weighing on asia like they did in the united states yesterday. nasdaq futureshe look weaker than the rest of the u.s. feature pictures -- future pictures. the dollar against the yen, we are getting a little bit from the yen. are we starting to see trade tensions and emerging markets selloff are going to be yen positive? that is a conversation we have been having. with put in the brazilian riyadh as well -- realize well. -- the brazilian rial as well. the candidate was injured by that stabbing. as a result of that, the thinking of a credit brazil is there could be more sympathy attached to his candidate -- candidacy. perhaps he does better in the vote. that is the thinking in brazil. let's tell you what else.

the bloomberg first word news for you now with juliette saly. juliette: thank you. in the u.s. the deadline has passed for public comment on $200 billion in tariffs on chinese imports. the country's most prominent technology companies made a last-minute push to convince donald trump to reverse course. last night trump told a rally in montana he would strike a good deal with china for american farmers. pres. trump: we are cracking down on unfair trade practices emanating from china. america is tired of getting ripped off. we're going to get a great deal for our farmers and ranchers and factory workers. we are giving workers and businesses a level playing field. juliette: emerging-market stocks have fallen into a bear market

as the msci emerging market index has dropped by more than 20% since its january high. developing economy assets are under pressure from a stronger dollar and rising u.s. interest rates as well as american protectionism. contagion concern has come to the fore as the most vulnerable developing economies sell it to crises. -- fell into crises. brazil's presidential election campaign has been jolted after the leading candidate was stabbed. the attack on the former army officer through what had already been a raucous race into turmoil. the lawmakers condition has now stabilized and brazilian traders are betting the incident could propel him to the presidency. qatar's economy minister said the embargo of his country by saudi arabia and three other arab nations has helped to push its gdp growth to the fastest -- the comments were

made in an close of interview with bloomberg. >> i can tell you today the qataro or the blockade on by our neighbor from an economic point of view, we are doing excellent. it --a blessing or blessing. and burt reynolds, the oscar nominee has died at the age of 82. his manager said the hollywood star passed away yesterday in florida after a heart attack. in 1972's fame deliverance. 24 hours a day on air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top .

the comment period for the next potential round of tariffs has ended. china has been fluctuating today. it was up, then up again. now it is fairly flat on the csi 300. selling coming through in hong kong. japan closing out the session weaker. a lot of that is the yen story. a little bit of relief in e.m.'s. have entered into bear market territory over the course of the week. a very bad one for asian stocks, down seven sessions in a row. on track for its worst weekly loss since march. let's look at currencies. this is where the action is. yen strength up by 0.1% against the dollar. we are hearing president trump -- japan could be next in termsent trump's fight in of tariffs. the korean yuan is interesting because analysts are saying it looks like it's a haven in this environment.

the has to be a winner in the currency market. would you believe it, it is the chinese yuan, said to be the best forming e.m. currency this week. performing at the highest level since february. a state owned bank said to have bought a lot of the offer currency area -- offshore currency. anna: the best of that particular bunch. thank you. let's stick with chinese themes. china is bracing for u.s. tariffs that could come imminently. $200 billion in chinese imports, everything from bicycles to digital cameras. joining us now on set, head of ishares investment strategy at blackrock. great to have you with us. me talk to about what you expect in the near-term from the trump administration. we cannot know whether he is actually going to go ahead and

put these tariffs on. if he does we do not know what percentage you will apply. what impact will this have on sentiment? in thee tensions near-term, between the u.s. and china, certainly could get worse before it gets better. if you think about the progress ,rump administration has made facing off to mexico and the eu, it would appear they are now freeing themselves up to focus on discussion with china. caution around the news that could come up as evidenced by interest in gold inflows as well as minimum mobility strategy. anna: we talked about how some of the more typical safe havens have not behave that way in the tensions around trade and the emerging markets selloffs. maybe we are seeing that now and we will return to that.

their forecast. ubs says the s&p 500 dropped by 5% if we see trump imposed tariffs on these goods. that is what they think will be the market reaction. that contrasts with the shanghai composite in blue, which has been underperforming. do you see any change ahead for that divergent path of u.s. stocks versus chinese stocks? is there anything in the data that tells us that we have seen that tells us? .> we have seen interest within the broader equities space, it is our number one overweight. 20% in terms of the eps growth in a year on year basis, very consistent with the price action

emerging markets has a livered. we are starting to see increasingly different stages of investment behavior going into u.s. equity markets as well. more sector by peaks. investors focus more on value for money in constructing their portfolios. eps are being used for access in addition to the broader top-down target access. anna: where does that leave -- technology stocks have been a bit of a weak point. is that being reflected in flow data? >> technology so far on a year-to-date basis continues to be the biggest sector in terms of the inflows. it is keeping a performance despite recent price action correction. your today is still reasonably strong. some sort of consolidation

around regulatory concerns is perhaps not entirely surprising. earnings have been supported over performance. anna: when you talk about the prospects for the u.s. equity market, how much visibility do you have around that? you were talking this morning about the potential for a summit in november between president xi and president trump. do you see that theater around the midterms, a potential summit , that could be an inflection point for markets. midtermtually think the timing is very important in terms of expecting how trade discussions could play out. at the end of the day it is in neither party's interest be involved in a drawnout full-blown trade war. some of this very tough stuff may just been tactics to get the additional support going into the midterm elections. we do expect things to get better in the medium-term.

in the short term, things could get worse. anna: thanks very much. investmentares emea strategy at blackrock. sweden faces storm he pulls as the global populist wave washes over europe. can we link the phenomenon to other parts of europe? surveillance will bring you interviews with former italian prime minister's. those are both coming up from the ambrosetti forum later this morning. on the banks of the lake. this is bloomberg. ♪

>> lehman brothers, which was allowed to fail.

>> the firm which survived railroad bankruptcies. >> this is no act of god. >> companies have formed the the foundation of our financial market are disappearing overnight. >> we have a crisis in our financial system. >> lehman brothers filed for chapter 11 protection. that was some of our reporting from back in 2008. three remember it well. the aftermath of the collapse of lehman brothers. we have a full slate of interviews for the 10th anniversary. we will be talking about this next week with the former ceos of barclays and deutsche bank and the former president of the ecb, the former governor of the -- marking the anniversary, the 10th anniversary of the collapse

of lehman brothers. let's get back to business news as it presents itself today. the bloomberg business flash from juliette saly. juliette: british airways is datatigating the theft of including credit card details from customers who used its website and mobile app to make reservations. the airline says 380,000 payments were breached by hackers between august 21 and september the fifth. stolen data does not include passport details. they apologized for the disruption and said they are contacting affected customers. is laying the groundwork for a future away from alibaba, the company he founded. said he ishest man dedicating more of his time and fortune to philanthropy with the creation of a foundation focused on education, following in the footsteps of bill gates.

>> the first technology revolution caused world war i. the second caused world war ii. now we have the third technology revolution. we should not have war. if there is war, war should fight against poverty, disease, environment. deutsche bank is trying to reassure its most important customers in new york that it is ready to handle their business. bloomberg has learned it invited a select group of hedge fund managers and other institutional investors to mingle with a half dozen its most senior executives, including the cfo. while it is not unusual for investment banks to hold high-level meetings with clientele, deutsche bank is under pressure to defend its business. that is your bloomberg business flash. anna: thank you very much.

what might be brazil's most tumultuous election in a century coming sunday. voters defect to a nationalist party that once the country to leave the european union, fueling populist forces some across europe. the european government team leader joins us now. , what woulddecides they mean for wider europe? all, what we are seeing red across europe, there is a splintering. you have nearly 20% for the sweden democrats, a nationalist, anti-eu, anti-immigration party. in the west you have 10% going toward the former communist. what that means is some hollowing out of the center for the establishment parties.

it makes it increasingly hard for them to govern coalitions. we saw that in germany after last september's elections. it took six months to get a government. europe's leaders will be watching this one very closely. anna: what are europe's leaders saying in reaction to this? this is part of a phenomenon we are seeing more broadly across other geographies. not unsurprisingly, there are -- they are actually avoiding the topic altogether. they do not want to be seen to influence the vote. increasede seeing is rhetoric, particularly from the french president about the importance of becoming -- the coming european parliamentary elections. normally these elections are not the most interesting. likeis instance, it looks

a real clash of values. emmanuel macron is talking about this already in terms of the progressives, and the german chancellor as well, against the nationalists. the dividing lines are very clear. they are over migration, over attitudes toward europe, and over free trade. there is a huge clash coming. already leaders are preparing for this. anna: macron of france has been meeting with other european leaders. groups,t tying up those thank you very much. european government editor joining us, putting the sweden election context. -- in context. more coverage on monday. shares investment emea at blackrock still with us.

you talk about your risk dashboard of european fragmentation. just over the month of august. tell us about this dashboard. what does it measure? the marketres what focuses on key political events and to what extent broker research reports as well as news reports such as bloomberg itself, to what extent they talk about geopolitical events. we have identified a list of events that could flag markets. we monitor individually all of them as well as an aggregate basis. august into september, european fragmentation is one of the top geopolitical events as evidenced by our indicators. with that sentiment around populism very much evident and dominating the news flow,

certainly very evident, what are the flows into europe looking like? >> you see equities -- anna: pretty unloved. >> almost on a daily basis throughout the course of this year. fragmentation assessment is not help especially in italy, despite recent improvements, as well as growth stagnating very much not recovering at the same pace as what we have seen towards the end of last year. in fact, we continue to see growth downside consensus. that has not helped investor sentiment. global trade tension facing up to the u.s. as well as european linkage towards the broader market has weighed on sentiment. because of that, very underground. -- under-owned. anna: we have got a graphic that

shows the ecb expectations. the expectations of economists around the ecb. there is an expectation amongst economists that the rate will be increased by september 2019. there are concerns about global trade, italian politics, emerging markets. they still see draghi pushing ahead with tightening of european policy. do you see that? >> i think from now until september 2019 that is a long time in the time horizon of markets. a lot of that will be growth dependent. a lot of that will be dependent on the election outcomes. because of all of that, it is way too early to say it september 2019 is the date to watch out or not. what we do know is that rate hikes will not happen until after summer next year. we will have to evaluate based on growth indicators as well as

inflation indicators what should be the right path. anna: it is a long way off. investmentares emea strategy at blackrock. larry kudlow will be joining the surveillance team after the u.s. jobs report that 2:30 p.m. u.k. time. 9:30 a.m. if you are watching in new york. with the threat of further tariffs on chinese imports hanging over markets, this is going to be a great time to hear from larry kudlow and indeed with that op-ed in the new york times as well. let's get a check on the markets. the euro stoxx 50 pointing higher. something has turned sentiment a little bit. u.s. futures point higher. nasdaq futures point to something that looks flat. a turnaround in sentiment the last half hour. there was a selloff in technology stocks yesterday.

we will get the job report data later in the united states. next.ean open" is up ♪

guy: friday morning, good morning. welcome to bloomberg markets. this is "european open." i am guy johnson alongside matt miller, who is in berlin. matt: asian stocks continue their decline dropping on worries about emerging markets and the outlook for tech earnings. although we have seen mainland china stocks start to rise, futures look good for us in europe. cash trade is less than 30 minutes away. guy: