haidi: welcome to "daybreak australia." >> an i'm sophie in hong kong where we're counting down australia's major market open. >> here are the top stories we're covering the next hour. read all about it. the trump administration wants "the new york times" investigate the op-ed writer may have committed a crime. kim song young is calling for a second summit.

the white house says diplomats are already working on details. and hurricane florence strengths to a category 4 as it targets the eastern seaboard, a million people are told to leave. >> and we are seeing most u.s. stocks held on to gains, of course we have trade tensions continuing between the u.s. and china. not to mention there's still no nafta deal with canada. .2% w the s&p 500 gain despite the fact that the dow was down for a second consecutive session. we had some weakness with some stocks, especially apple, down for the fourth consecutive session. the longest losing streak since april. not to mention other stocks like amazon. gains daq did hold on to of about .3%. >> a lot of players are still on

the sidelines. when you take a look at futures we could see japanese stocks extend game after a seven-day slump. marginal gains coming through. sophie: th the whole thing will be on emerging currencies and goldman sachs' models are working ahead for some of them including the rupee, not good news for india's financial markets as speculators are closing in. plus we could see more pain ahead for hong kong. we do have suppliers among the biggest drag on suppliers. following "newsline"s around apple, the tech giant warning of what the impact of tariffs my mean for their products in the united states for consumers there. that could be a tax on a u.s. consumer there.

haidi: taking a look at what to expect as asia wakes up, let's get you caught up with the first news in the meantime. india's current deficit widens to the most in phi years, in the mid emerging market selloff. the government says -- has asked aussie to step in with supports. extending losses the first week since june. -- this is a be bear market on monday. investors are pulling out of assets due to worsening trade disputes. that's after apple warned that tariffs would affect many of etc. products and increase its cost. the u.k. economy expanded at the fastest pace in almost a year between may and july. condition instruction rebounded and the hot summer boosted

retail sales. g.d.p. boosted .3%. the result boosts brecks tiers that the u.k. economy will slide and the e.u. now says a deal is still possible within the next eight eighth weeks. i see that if we are really -- we are able to reach agreement on the first stage of negotiation, brexit. t was in six or eight weeks. haiti: japan and russia say hay want to strengthen economic ties between president abe and president trump. ey met ahead of a forum that will attract many global

leaders. global news every day on air and ticktock on twitter. this is bloomberg. >> the controversial anonymous -- york tivepls author is times author is still in the news. let's have the latest with our editor joe. we saw president trump applying pressure on attorney general sessions. what could the d.o.j. do? >> there's -- the president has said that it might be a national security issue, however some of his aides now are dialing back on that just a bit. we've gone from trump demanding an investigation by the justice department to his spokeswoman today saying that they would be asking the justice department to look into whether there should

be an investigation. there's also no indication at the white house that they're taking any steps to unearth the author of the op-ed such as requiring officials to submit to lie detector tests. so there's -- most of the experts we have talked to really do question whether there is something here that the justice department could investigation because it was in fact an opinion piece. with an inside look at the trump administration that frankly a lot of news reports have already reported. >> lots of reports out on what's happening in the white house. of course one distraction could be the north korean issue and we're hearing a second meeting between kim jong un and president trump could be taking place. joe: right but there's no indication where or when that would happen. the president received a letter from kim jong un that was described as very favorable and

very open to more discussions. the north korean leader clearly wants to have another opportunity to have a summit with trump and trump seems to be quite willing to do so. this has been sort of a hot and cold relationship. it was just last month that trump abruptly canceled a trip by secretary of state michael pompeo to north korea over what it said were some indications that they were not ready to negotiate. however the recent parade in north korea celebrating its founding was taken by the president as an indicator that they're sortening their stance and want to make progress. >> other than the latest letter, are there any other signs that progress is being made? joe: there are no active negotiations and it's not clear hether -- there's some sort of preliminary meetings that would

have to take place before such a summit would come about. and it was just in july that the secretary of state also testified to congress that north korea seemed to be continuing to develop fissile material for use in nuclear weapons and there are other indications that their missile program hasn't halted nudge in the -- much in the process. trurp is eager and it seems kim is eager but there's still some ignificant gaps remaining. >> thank you for that. still ahead, four u.s. states declaring emergency as hurricane florence stakes -- takes aim. could be the strongest storm to hit the carolinas in almost 30 years. we'll take a rook at the storm warnings for investors. >> plus the emerging markets continue to struggle and our next guest says there's no end in sight. this is bloomberg. ♪

>> sydney open, a beautiful, sunny day in sydney, futures looking flat at the moment but of course we have u.s. stocks holding on to gains so we should see some gains at the open in asia. i'm shari aun in new york where it's cloudy and dark and rainy. i miss asia right now. >> come catch the sun in sydney where we're just getting started on beautiful spring days. you are watching "day break australia." our next guest says it's hard to enen-- generate sustained recovery. matt great to have you. let's get started, this is a reminder of the week that was in particular equities. let's just try and bring up this

chart here guys. for a little bit of a remainder of what that narrative was. a lot of people are talking about when we'll see opportunities. if you're a value investor, there's lots of opportunities now with that in space. what's going to be the catalyst for us? >> that's a great question. when you look ahead, valuations are indeed attractive as you say. at the moment i think we're lacking a catalyst with a trig point to yen rate what would be a sustained recovery. there are two key drivers always. china, which drives the economic and earnings cycle, and the u.s. which among other things drives the funding costs. when you look at those two factor, u.s. fed is clearly tightening rates, u.s. dollar is appreciating, got some strong upward momentum. not going to get help there. 2012,ou look at china, in 2015. it's doing more infrastructure investment that doesn't have quite the flow through to

emerging market earnings that property investment did, for example, a few years ago. so at the moment i think that trigger point remains elusive and whilse it's good value it might stay there for quite some time. >> you're not opportunistic or very selectively? >> i would be looking for another down leg. i think there's more down legs to come from numerous sources. cost of funding is going up, i think this trade war will get a lot worse before it gets better. so whilse the temptation is to go in now, i tend to think it's much more downside risk and the risk metrics, they might rally out of here. >> investors are focusing on domestic focus companies, the go library showing a chart there. the line in white indicates that investors are focused on domestic stock instead of those

internationally exposed equity. the dollar strength you can see in the yellow line right there, reflecting solid economic data out of the u.s. that makes sense to you if trade will be the big issue going forward. just focus domestically. >> i tend to think it has some merit to it of course, u.s. economy is growing, it's straightened out around 3% we think in the september quarter. but it doubled the growth rate irrespective of whether you look at q2 or q3. the economy is running high, real interest rates from the fed still at zero. so i tend to think it makes sense for domestic investors in the taos focus where it's running good and to kind of ignore the risk that are emanating from global sources and this risk is not just trade wars. it's also the fact that growth has decentralized and it's also

the fact that china is slowing. emerging markets got all this debt. if i was a u.s. investor i would focus on the domestic market but the key risk there of course is valuations. so if the economy continues to slow, those valuations may be even less attractive than what hey are now. >> not to mention jitters over what the fed will do. but at the same time, factors inflation, real wage growth still nonexistent. do you believe the fed will take that into account when they make the next decision or when it decides next year? >> i tend to think overall the fed's guiders have several more rate hikes to a rate of 3.4. when i look at the numbers i don't see it. i think the fed has probably got four more at most this cycle iving the rate up to about

2.75. and whilse real wages growth -- while real wages growth is low, that's not a real driver of u.s. inflation. u.s. imports more of its inflation. the r squared of wages growth to headline ininflation is only pbt 1. u.s. tends to import its inflation. inflation remains pretty contain the fed will take opportunity it can get to list the fed, to list the rates, particularly with the economy growing at twice the pace but in the end, you're getting fairly close to inversion, i think if they do four more heights it will invert. while it's not the be all and end all and not part of fead fed policy mantra, they'd be paying attention to it and would not want to invert it deeply for very long. so i still suspect there's only four left. >> how inflationary a power for the feds, something to worry about? >> they would already know what

the inflation impact, it's not tremendously inflationry. but the interesting thing for me is that it's a one-off. much like when australia hiked the g.s.t. in 2000, the inflation spiked up but the r.d.a. overlooked it. the fed will overlook a one-time inflation hike, they'd be more concern and the labor market and growth. we tend to think if there's 5% in tariff the fed will probably pause in december because it will create a lot of uncertainty about the u.s. economic outlook. and there's no worry about them missing their policy objectives in terms of inflation and full employment if they just stage manage the rate hike into march where they'll know the impact on the economy. >> i want to go back to the kind of, i guess, downside, the descent you see in e.d.f.'s,

you're pretty bearish molding. what kind of is the major driver for your expectation taking a look at that? >> what the model does is looks at lead indicators. we're looking at things like p.m.i.'s, exchange rates, credit spreads. what it show there is is that earnings growth globally is going to slow from the current pace of around 7% to 8%, to around 5% within eight months time. the good thing about the model is it picks turning points very well. when i'm looking at things, rates are growing -- going up. the tax cuts fade. europe slowing down. so the model is picking up what the data is telling us. that the global economic cycle has peaked. as a result you would expect earnings grelt now to start to turn to more nominal g.d.p. type levels. it's a dramatic slowdown, yes, but the models upwards of 70% so

it's a powerful model and told a good story in terms of picking a turning point his porically as well. >> the u.s. economy so far seems to be solid. where will the next global recession stem from? >> that's a great question. and typically since 1929, global receptions have all emanate out of the united states. you normally get a typical buildup of excesses and the fed miscalibrates the power of its monetary policy or policy impulse. my suspicion is the fed will still have a part in the next global recession by lifting rates but the debt burden really has lifted in emerging markets. for the first time in eight years, it might be the case that if everything went wrong, the global recession could emanate out of the emerging markets and spread into developed markets. the good thing from that point of view is that at the moment .s. inflation so the fed

doesn't have to automatically increase interest rates every quarter. if some head wind came along that made it question the economic outlook, they could recalibrate the policy guidance, their policy rates. so even if there -- even if there was a tpwhrobal recession i don't think there's going to be a particularly deep one. it'd be like 2000. if there's not a lot of excesses at the moment, there has been a bit of leverage growth main any in -- mainly in emerging markets. i think at this stage it will be minor. >> when you talk about the next global recession potentially emerging, does that include asia? we see asia being very much better positioned than say during the 1997 asian financial crisis. >> that's true and when -- the next level recession may emanate

out of china. the rule i have, and it's, you know whether it's good or not is probably for other people to judge, i look for where the leverage buildup in a recovery has been the greatest. that's generalry where you get the next recession because you get missed allegation and resources. china's rev ladge growth has been utterly phenomenal. that to me has brought a lot of excesses in the chinese economy. they're trying to remove those and doing a fairly good job of it. but leverages and high rates is generally what kills cycles. but there's a lot we can do, it's not this automatic recession that's coming in 2020. there's a lot of head wind in 2020, fiscal cliff in america, you know. igh u.s. rates, etc. if i guess it will come at the moment, they are better positioned than 1997 but not immune to the policy power of

the u.s. fed. >> sure and also trade wars doesn't help. matt, thank you so much for that. matt sherwood, head of investment strategy for perpetual in sydney. if you missed out on any of the charts we shed throughout our interviews, gpv go to is your function. lye from new york, sydney, and hong kong, this is bloomberg. ♪

shari: welcome back. >> you're watching "daybreak australia." let's get you a check of the latest headlines. apple is stepping up in the film industry with the acquisition of two family-focused movies. the losed the deal for right for wood walkers. apple also picked up global distribution righters in documentary feature "the

elephant queen" at the toronto film festival. >> the holding companies formed if the overseas investments of former yahoo may raise over $4.5 billion by selling its entire stake in yahoo japan. they increased the size of the sale after initially planning to offer about $2.5 billion worth of shares. its off of about 360 yen per share is a discount on the last close of about 5%. >> nike is close to recovering all losses from the colin kaepernick ads they lost. more than $4 billion was removed after the release of a controversial campaign. the stock briefly regained the full loss on monday and sales seem to continue despite critics. >> hurricane florence is now a category 4 storm as it

approaches the eastern seaboard of the u.s. the system is expected to make landfall late thursday in virginia or south carolina. and could cause as much as $27 billion in losses. a million people are being warned to leave. drew keenan is watching this. i hear hurricanes are pretty common this time of year but this is actually a very big, historic one. >> we haven't seen one hit this part of the country in decades and it's being called extremely dangerous, possibly being upgraded to a cot fware 5, which is the most dangerous we have. let's go to bloomberg right now, we're looking at satellite pictures now they can view from up above. again these storms change by the hour and what we have right now is four storms, we rarely see this. we've got a tropical storm paul, zach, but this is the big one, florence. as mentioned it is barreling toward the east coast of the u.s., the carolinas, which are a

very big area of homes along the coast, and virginia. let's go back into some video to take a look at how people in those areas are preparing. again, what we have is a big evacuation among the outer banks, under mandatory evacuation. we just now as we went on air got word that virginia, the state to the north has ordered against mandtoir evacuation of 240,000 additional people and there are estimates the storm could bring as much as $27 illion in damages. let's look at how people are going to store, buying home supplies. we're seeing big moves in home fliers and any kind of repair. this again would be the most powerful storm to hit the airline area since 1989. a lot of people paying attention to this.

>> thank you for that. coming up next they are selloff of crip toe currencies deepens. whether the market may have peaked. this is bloomberg. ♪ xfinity mobile is a new wireless network

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>> it is 8:30 a.m. here in sydney, marks open in about 90 minutes time. pretty flat really this market struggling to recover off the worst week of selloffs since the meltdown in february. it is a beautiful morning here in sydney. not much of a lead to go from on wall street. >> at 6:30 a.m. you're watching "day break australia." let's get the news from jessica. jessica: the trump administration asked the justice department to investigate the controversial "new york times" op-ed with a view to identifying

and possibly prosecuting the author. press secretary sanders declined committed a or she crime but said it would be a problem if he or she had attended meetings on national security issues. kim jong un reportedly would like a second meeting with@trump tissue with president trump. the white house declined to say whether a second meeting would be in washington or even if it could happen this year. washington is seeking fast track congress approval for a trade deal with the european union it falls under trade promotion port authority, a legislative tool that allows the president to seek a simple yes or no vote. the talks between the u.s. and e. rumplet going well less than two months after they threatened to slap tariffs on each other. australia cut its forecast for

this season's wheat production by 13%. due to a drought in parts of the country's east. the government expects production of 19 ppt 1 million metric ton next fiscal year, the smallest crop since 2008. however it's shaping up as a tale of two coasts with storms setting western australia up for a butcher harvest. the latest news on bloomberg on air, and on tibblinging to be on twitter. i'm jessica summers thises blotberg. >> thank you. let's go to sophie in hong kong to see how the markets are shaping up. sophie? sophie: after the s&p 500 managed to break a four-day slide, asian stocks could face a mixed session, albeit lackluster. techs could remain the achilles heel which could make stocks more vulnerable to selling as the hang seng edges closer to

its lowest in three years. it's down more than 90% since ts january high. nike and wal-mart stock tumbled or a 10th day. and that is hitting hong kong hard. firms with a primary listing in the city make up 23% of the emerging market index. >> thank you so much for that. pretty key day when it comes to hong kong markets while we see if they can stage a bit of a recovery. let's see what we should be watching as the day gets under way here in asia. we saw that most u.s. stocks managed to hang on to moderate gains. apple suffering even ahead of the new iphone, new apple watch

launched this week. >> that's right. i think what we're going to see pretty much a fixed -- a mixed day which has been the pattern, i guess, recently. apple, amazon, the biggest decliners on the nasdaq 100. that's largely dominating sentiments at the moment. optimism for investors remains tradge ill with the trade not letting up. of course that's on top of fed interest rate increases. saying he -- them overnight trade uncertainty is slowing down the positive effects of tax reforms in the u.s. thatst playing on investment sentiment and of course you have the emerging market meltdown that really doesn't look like letting up. >> especially when it. co-s co-indian assets taking a big hit. >> that's right. the indian rupee was the latest

to falter yesterday, falling 1.3%. it joined the philippines peso, another one among the worst-performing in asia. the indian government has asked the central bank to support the currency which is the worst performing currency in the past month, the worst performing asian currency in the past month. on top of that, look at the index of currencies it's close to dropping below its 200-week moving average for the first time since early last year. and as i said this epain doesn't look like letting uple goldman sachs said its model signals further declines in some developing markets. >> andrea, thank you so much. global markets editor, don't forget to check our gtv library for some of the charts we just showed you.

bears continue to prowl around crip toe currency, sending them to a fresh 10-month low. also we're see manager fallout from ethey are's co-founder after he said it's come and gone. i can't remember just a few months ago, i was still thinking oh my goodness they could make a comeback and i missed out the chance to buy but it's not happening. >> it's probably that you missed -- probably better that you missed that chance to buy. i looked at what bitcoin is doing, 62.77. some say 5,000 may be the next target here. it's what you were talking about, the u.s. securities regulator here saying that you know, we're not sure where these two digital-backed, whether they're exchanges or notice or something or other they're not sure what's happening so they say we're going to do a suspension a pause. they're called bitcoin trker one and ethey are tracker one. this on the screen is part of

what the sec said. last lack of current, consistent, accurate informs about these two, whatever they are, resulting in confusion a amongst market paristies pants that say public interest is now what they're concerned about here saying the protection of investors now requires the suspension of trading. of course we're talking about if they're -- ethey are co-founder saying hey, guys, it looks like we're at the end of our heyday of growth. you don't want to hear one of the biggest founders of a crip toe currency out there saying that. i want to show you swell our viewers what has been happening with ethey are here. this is the second largest crip toe currency here as you can see in the note. over the past few days over the weekend here, it really has taken a hit. that's in the white here. even more so than what's happening at the crip toe currency index that looks at the

10 larblingest out there. lso to add insult to injury. i.c.o. funding is at its lowest since 2017. in the first three months of the year it was three billion dollars, say on average it's about one billion rather than 300 million so that's meage bleed here. >> pretty trying times as you've taken us through. some good news, maybe, from citigroup. the bank is potentially looking into a new way to informs in the digital secondor -- sector. >> this is interesting here. we heard about american depository receipts. this is a play on those letters. they're called d.a.r.'s, digital asset reseptembers. basically citigroup is saying they could let investors trade coins by proxy, meaning that investors actually don't have to own those coins, so they can possibly do that and it could be relatively safer and you'll notice that even as i say this,

it's possibly and could there's no certain think ty that this would provide a safe haven here. it's unsure how u.s. regulators would see this because we've just been seeing those two digital asset backed securities definitely not doing so well right now, being suspended but september 20. let me hop right back into the bloomberg terminal. i want to show you as we recap this what's been happening for the entire narrative for bitpoint. hop back in the gdt -- gtv library. it is nothing but down, down, down, year to date. taking a look at ethey are, which is what we've been talking about, yellow, down about 5% year to date. bitcoin in white, the best of the worst, i suppose you could say. ripple down the most losing by about 7%. a lot of negativity here. just the sec piling on more. citigroup, seems like it's not

helping. >> i feel like shari definitely shouldn't have bought that thank you for that. the worst of the best is still not great. coming up, russia and japan see eye-to-eye when it comes to strengthening ties. we're live at the eastern economic forum next. ♪

shari: welcome back. >> you're watching "day break ustralia." >> i'd like to note that japan is an important and reliable partner for risch. we intend to further develop russian-japanese relations based on the principles of being good neighbors, mutual respect and

consideration for each other's interests. haidi: ann marie is there, what was on the agenda with the two leaders talking and was there any progress made on the long-anticipated peace treaty? >> good morning, haidi. they discussed those islands which are not far from where i'm standing right now. it's a quick flight from tokyo, this side of russia. when abe landed they toured an engine factory. they have a joint relationship between russian and japmeeze automakers here. and then of course they discussed those islands as you mentioned. the northern territorys they're known in japan. these is a sticking point. they are russian controlled but the japanese say they were illegal -- illegally occupied following world war ii. they have been talking for years

about a peace treaty. putin acknowledged this tension between the two countries. >> obviously, we touched on the peace treaty issue during the talks. it's well known this issue has been discussed for decades and it would be naive to assume it can be resolved in an hour but we are ready to seek to a solution satisfactory for both russia and japan and accepted by -- accepted by both nations. >> it's important to know, abe is pushing for joint commeck ties on the island, also calling for more flights to the island so japanese residents can visit graves of their ancestors there. economic ties may come now more than ever. abe is under increased pressure if the trump administration to sign a bilateral trade agreement. before abe took off to come here, yesterday in japan he was championing free trade and said tit for tat sanctions don't help nyone.

haidi: we know the chinese president will be the first chinese leader to attend this event. >> that's right. esident putin has really wrangled sol big names. all eyes will be on xi here, they are kicking off a joint military drill today. many say the audience for that is just one, it's a show for president donald trump as china is under trade war tariffs with the u.s., president trump said he's ready at any cost to put imports on china -- tariffs on imports from chi -- china. the u.s. talking about a bill that one senator called a bill from hell. haidi: thank you, ann marie. joining us now here in new york,

a professor of post-soviet policy at columbia university. we heard today from president trump and the white house that the president could be looking into another meeting with north korean leader kim jong un. we know the north korean issue will be at the top of the agenda. there are so many players here in east asia. does any other player compare to the power that china has on this issue? >> china is really the dominant player here. the economic aid they give to north korea keeps the regime in power. russia provides very little financial aid. japan and south korea have to negotiate relations with the united states so china is the player to watch here. russia, it's very interesting in this case, they'd love to play mediator role. the logic goes something like this, that if the u.s. and north korea need a third party to help

close the deal, china will be seen as too close to the north koreans, south korea and japan won't have the kind of diplomatic and military heft that russia would have. russia, even though it has -- can't project the kind of economic power or military power that other countries can they can play this brokering role and that's the strategy in russia. >> can we expect more cooperation between these nations? especially given the new dynamics we have seen surface since the north korea-u.s. summit where say prime minister abe seems to be more isolated from the process. >> yeah, it's interesting that prime minister abe has met with putin 22 times even though japan is part of the sanctions regime. it's really, i think a testament to the diplomatic skill of these two leaders that they're able to keep this relationship going together as the report stated. >> how much of a bug bear will

continue to be this historical grievance after world war ii and how realist -- realistic is it, we heard prime minister abe say they're optimistic, but history continues to mar this relationship. >> there's few things more difficult for countries to do than give back territory that's been seized. it can be a hot button issue for both countries if both leaders decide to play it up. at the same time we've seen more cooperation on this issue in recent years than we've seen practically ever before with leaders talking in more concrete terms about what kind of framework might be possible to fudge over some of these issues to make it politically palatable in both countries. >> china seems to be the natural partner for russia or russia for china in terms of the effort to thwart u.s. dominance.

do you give much credibility to this so-called ax soifs autocrats or the chinese-russian axis that's been built up? >> their natural trading partners, russia is energy rich, china is natural resource poor, russia needs finance which china has in abundance but there's underlying geopolitical tension between the two, both are vying for influence in asia. both are vying for influence in central asia. and even in the arctic, china has recently said they'd like to have a polar silk route and they consider themselves a near-arctic power, or near-arctic country. so although the economics would drive the two together in some kind of big block, there's still not the -- there's still lots of geopolitical tensions that make it difficult for them to cooperate. let alone it's difficult to operate in both of these countries.

there's lots of corruption, lots of politically arbitrary, unexpected decisions that can scuttle deals. the rule of law is weak. so even when there's good intentions to cooperate, it's very difficult to do that on the ground. >> yet just as we saw in that chart earlier, we are seeing trade with china, trade with japan being pretty high and also just increasing in the beginning of this year. this -- these are the figures for 2017, but for 2018 some are saying we could see $100 billion of trade between china and russia. how much has that do to the do with the fact that u.s. relations with china not good. >> u.s. relations and european relations. sanctions have driven russia to cooperate more with the chinese on economic deals. demand in russia has been slow for chinese goods because the economy is slowing and that drove down trade for 14, 15, 16, 17. so we are seeing just this boost in the last year.

but it's still, it's been declining for several years so we are seeing this boost. >> at the same time we are seeing this russia-china military drill. the biggest one since the cold war ended. >> since 1981. 300,000 troops. >> what kind of threat is this for a neighboring country, or even for the united states? >> it is designed to project power both at home, within russia, to show russia is back on the stage again and also to nato, where nato cannot conduct military exercises on this scale. and that china, although there's only 3,000 troops involved in the exercises which is a small figure but symbolically it's important. given this elong-standing rivalry between moscow and beijing. >> just a last word on furthering sanctions on russia. if the u.s. intensifies sanctions on russia, what do you

see as being the risk of destabilization economically and politically given that it's something of a haven within emerging markets? >> one thing i found in my reserge is there's very little rally around the fag effect in russia due to sanctions. most of the rally around the flag effect has been due to crimea. they have not -- sanctions have not had a huge impact on the average russian though they've hit some key firms. the new round of sangs, sanctions from hell, could spark more rally around the flag, and this would be ironic because putin is having a difficult moment in russia. there were protests yesterday around a very unpopular pension reform. the ruling party did much better -- much worse than expected in regional leks. and putin is struggling at home to find a legit mating force. economic growth was his calling card for his first decade in office. then for his last six years, he

was able to play on the an ex-ation of crimea. he's struggling for a formula. so one possibility is that a new round of sanctions could be used by putin to spark support at a time when his popularity is going down. >> a welcome excuse for nationalism or a distraction at least. timothy, thank you so much for your time. plenty more to come on "day break australia," this is bloomberg. ♪

aidi: i'm haidy in sydney. sr steel india to almost $6 billion, the biggest -- the world's biggest steelmakers has

written to lenders and offered to repay the company's secure borrow egg. it's one of a dozen large debt yoss ordered into bankruptcy court after the r.b.i. won the power to wind down the troubled companies. petrochemical signed a deal to buy tons of liquid natural gas annually. this comes as a worsening trade war threatens purchases of u.s. gas. china's l.n.g. has surged. helping it overtake japan as the world's biggest buy over natural gas. >> that's just about it for "day break australia" this morning. let's take a look at the setup for the day. we're seing a little bit of optimism when it comes to kiwi, trading there .4% higher, 6524.

is where the kiwi dollar is trading after hitting some pretty serious lows as we get manufacturing showing that we're starting to see the stresses coming through from the trade war. the kiwi bouncing back from that two-year low in the previous session. sydney futures on track for the ninth straight day of losses. the aussie dollar falling below 70678 lots of analysts saying 70 cents will be the next breakthrough level there as we have twin concerns over a strong u.s. dollar. the trade war deteriorating conditions here at home. looking at the markets if we're down another day in asia, longest losing streak in four years. >> we'll be discussing all of that and dissecting the market mood coming up on "daybreak asia." we'll talk to the founder of jewell financial. from 25% d his cash to 30%. we'll ask the he got good bar

gains. we'll ask him what happens if canada doesn't join the new nafta deal. this is bloomberg. ♪ to rent a movie?

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haidi: asia's major markets are just an hour away from open. from ahn: good evening bloomberg sequiturs in new york. sophie: welcome to daybreak asia. >> read all about it. the trump administration wants -- investigated. kim jong-un is calling for a second summit. the white house