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 says diplomats

are already working on the details. may reachflorence category 5 as it targets the eastern seaboard. a million people are told to leave. >> let's get a quick check of the averages and how they ended the session in the u.s., the first trading day of the week. we are still continuing to see trade tensions between the u.s. and china, president trump insisting a trade work with china will create more manufacturing jobs in the u.s.. the dow falling for the second consecutive session. if the s&p 500 was able to hold onto gains, halting for sessions of losses to gain .2%. still some weakness among stocks, apple falling for a fourth consecutive session, the longest losing streak since april. other stocks like amazon and also that down. still the nasdaq up .3%. a bit of a mixed picture in the u.s., setting things up for asia, sophie. sophie: that is the case. we are bracing for a mixed

session in asia after eight days of losses. tech remaining the achilles heel as we inherit that mood from wall street. that could mean the tech heavy kospi is in for pressure and the worst may not be over for the hang seng. geopolitics also on the boil. the e.m. exited. that is showing signs of letting up. goldman sachs' latest models are warning of pain for currencies like the rupee. pressure on japan to sign a bilateral trade deal. shinzo abe champions free trade as corporate profits are seen to suffer. abe is reportedly eyeing a cabinet shuffle in early october. nikkei futures pointing higher ahead of that. haidi: thank you so much, sophie kamaruddin taking a look at the set up in asia. let's get the first word news with jessica summers. jessica: washington is seeking fast-track congress approval for a trade deal with the european

union. that falls under trade promotion authority, a legislative tool that allows the president to seek a yes or no vote. the move signals talks between the u.s. and eu are going well, less than two months after they were threatening tariffs in what would appear to be the prelude to a damaging trade war. japan and russia say they want to strengthen economic ties after talks between shinzo abe and president putin in vladivostok ahead of the economic forum, which will attract regional leaders. is a long-running dispute over four northern pacific islands called the northern territories in japan and another set in russia. the rupee sank to a new low after india's current account deficit widened to the most in five years amid the emerging-market selloff. it led losses among asian em currencies, but the government said to ask the r.b.i. to step in with support. indian stocks also fell, extending losses after the worst week since june.

the rupee has been asia's worst-performing currency for the past month. at the. economy expanded fastest pace and also a year between may and july as construction rebounded and the summer boosted retail sales. from the three6% months through april, the most since august last year. the result boosted brexit fears and insistence the u.k. will thrive after the split. the u.k. says a deal as possible in the next few weeks. >> i think if we are really stuck, we are able to reach agreement on the first page of these negotiations, which is the brexit treaty. it was in six or eight weeks. jessica: 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. i'm jessica summers. this is bloomberg. haidi: jessica, thank you.

the controversial new york times op-ed continues to dominate conversations and news out of washington. the white house is asking the justice department to consider identifying and prosecuting the author, who may have committed a crime. for the latest on the fallout with our congress editor, joe. what would be congress investigate? does the white house have a case ? joe: a number of experts we have talked with question what they could investigate or whether there was any crime. there were no state secrets, per se, revealed. a of it wast similar to reporting by bloomberg, new york times, and other people over the course of the administration about the internal workings in the white house. whether or not there is an actual crime, there may be something that is a firing offense. the white house is starting to dial back a little bit from the president's demands for investigation to now they are

saying they are asking the justice department to look into whether there should be an investigation. there is also no indication that within the white house they are actually going through with any extensive plans to on earth who this author was -- no lie detector tests being requested. it seems that they are beginning to move away from it and to let it subside. haidi: extraordinary. let's take a look at the latest when it comes to south korea, this hot and cold relationship between the u.s. seems to be getting warmer again. we have indications we might see a second summit? joe: there was a letter sent by kim jong-un to president trump and the white house received that. they describe it as a warm letter and something they want to proceed with trying to set up a meeting and they are going ahead with some talks to make

this happen. but there is no time or place set for this. there is some speculation that perhaps the un's general assembly opening in a couple of weeks, but there is no indication that kim is planning to attend. it would be unprecedented for the leader of north carolina -- north korea to make the trip for those meetings. keep in mind it was just a month ago that trump abruptly canceled a trip to pyongyang by secretary of state mike pompeo, because there was not enough progress. we are still a ways to go before they actually set up a meeting, and we will see how far it goes. haidi: not to mention secretary pompeo told a senate committee in july that he suspected north korea was producing nuclear materials. have we seen any signs of progress in this regard? joe: the white house sees a lot of progress in terms of the parade in north korea the other

day did not showcase nuclear missiles. there is not any indication they have stepped back from their nuclear development program, other than not testing any weapons or testing missiles. it has been status quo in that regard since the june summit between trump and kim. john bolton, the president's national security advisor, said before any meeting takes place, they are going to have to see something real from the north koreans to show they are stepping back from their nuclear program and are willing to denuclearize. haidi: we seem to be seeing inter-korean talks going smoothly, president moon jae-in heading to pyongyang september 18, i believe. have we seen any more signs of progress when it comes to u.s., north korea working level relations? joe: there has been nothing set up so far other than the white house saying there is some sort of process going on to try to

negotiate the where and when for another meeting between trump , but that is at a very low level and it is not clear what conditions the white house wants to make for such a meeting, if any. there are no signs from the north korean regime that they are willing to bend on some of the demands from the u.s., including a clear timetable for denuclearization. they seem to be intent -- the new koreans -- the north koreans , on trying to get some formal agreement to end the korean war. haidi: great to get your take, thank you, joe sobczyk. meet ahead, abe and putin in russia, pledging to strengthen trade ties. we will have more with the former japanese trade negotiator later in the show. financial explains

what it would take before they get back into the markets. this is bloomberg. ♪

haidi: this is daybreak asia. i am highways -- i am haidi stroud-watts in sydney. shery: stocks held onto gains on monday, closing higher despite can learn over trade tensions. let's look at the action with quint tatro. great to have you with us. in your notes, you tell us you reduced your cash position to 20% from 30%. what good bargains did you get? >> since i was last with you -- first of all, great to be back. we did put money to work specifically in the financial and industrial space. the time or around when we started getting some positive news regarding a trade deal with mexico, and on that

particular day, those two sectors reacted very well. it told us that the market in those areas is really waiting for some confirmation regarding , thoseand when we get it are going to be the areas that perform the best. we took a little money off the sidelines and bought those two groups. haidi: a canadian foreign minister saying again and again that no deal is better than a bad deal. if this gets prolonged, do you still stand with your conviction that this is a gain? i am not entirely sure what you are saying -- shery: if we don't get a nafta deal until next year, will this still be again if it rebounds after that? >> certainly. i think again, what we are waiting for it to put the rest of the money to work is some more clarity. we started adding back.

we still have a lot of cash on the sidelines and we are still in a defensive position. shery: with trade tensions looming with china, is it inevitable that people will be favoring cash positions? >> the market is near an all-time high and investors are very bullish, so i think we're certainly in the contrary and space with our cash position. i don't think investors are cash heavy at all. that is one of the things that concerns me about this market, if we don't see clarity or progress with the trade deals, the market could experience a priest with decline -- a pretty swift decline, which would be a better buying opportunity. haidi: we were speaking during the break about what it would take for you guys to be fully invested again. you said essentially being able to solve all these trade tension issues.

for our viewers at home, the state of play when it comes to where we are at with tariffs. furtherfor tariffs on a 200 billion. president trump is now threatening to put tariffs on a further 270 billion, which is essentially all in. it does not look like there will be a circuit breaker. it has almost turned into a war of attrition. -- how do get investors work their way around this? >> well, again, i think the best case scenario when we have cash on the sideline is not to necessarily buy at higher prices. i would prefer a correction that would bring the market back and allow better opportunities. i think the market and participants, despite the rhetoric regarding what we are placing as far as tariffs, really does not believe this is going to create a long-term

problem. i believe if the participants really started to embrace that, we would see lower prices in the market very quickly. i think again it is just clarity. if we start to see even positive talks -- we have yet to really anda deal with mexico, the market responded favorably on positive discussions. if we start to see positive discussion heading in the right direction, that would give the market -- would get the market higher from here, especially some areas that have not done as well as tech. has the market volatility contagion story paused for now? >> goodness. every time i think the price is low enough and baked in -- i think i said this a few weeks ago. we wake up and the market has been crushed overseas. the emerging market, specifically china, continues to

be under pressure. feel they are a great place to be a buyer here. certainly better valuations banned the domestic markets, but it is tough to pull the trigger until you have real clarity on these trade issues. i would rather be late to buying the turnaround then be trying to continuously pick a bottom. haidi: when you talk about the tech sector, is there a difference on how you view u.s. tech stocks against a chinese tax giant -- tech giant? >> chinese tech giants are a no touch for me. if you take china and the general market and add gasoline, that is a chinese tech name. i am not touching those names. u.s. tax of the most part, when most people speak to that, they are talking about names. that is a stretch for me. they're coming back in. i like to see the decline in the last few days area it the sector

shakeup we see in united states in the next few months will be interesting and i think may present interesting opportunities. just as we see a rebalance. there are still tech needs that are interesting and not stressed -- the cisco, intel, names that we own and continue to look at buying more that are not stressed at all. solid balance sheets, good places to be invested in technology. haidi: what is the problem with chinese tech? >> chinese market right now is extremely uncertain. we have significant pressure due to those trade challenges that are going on. tech, just like in the u.s., especially chinese tech, has significant beta. it is more volatile. if the chinese market is down 1%, it is safe to say that chinese technology stocks are going to be down 2%. again, it is just volatility

that i don't have the stomach for and probably most investors don't either. shery: thank you so much, quint tatro of jewel financial. you can get a roundup of the stories you need to get your day going on daybreak. dayb is the function on the bloomberg terminal. you can also find it on your mobile in the bloomberg anywhere app. you can customize your settings to just get the stories you care about. live from new york, sydney, hong kong. ♪

haidi: this is daybreak asia. i am haidi stroud-watts in sydney. shery: and i am shery on in new york. the bears continue to prowl around cryptocurrency, sending them to a 10 month low in reaction to u.s. regulators suspending trading. recently, securities and more fallout from either's cofounder after he said blockchain's

heyday has come and gone. ramy inocencio has the story. given the volatility, not surprised we are seeing more regulation. ramy: exactly. it comes to the point with these two etf's or notes, something known as nonequity link certificates. the question is what they actually are. i just said three titles. that is because in the filings with the sec for bitcoin tracker one and ether tracker one, now suspended, in different filings they labeled them as different things. the sec is saying, get your stuff in order and stop confusing investors. let's show something of what the sec was saying, saying there is a lack of current, consisting, and accurate information concerning those two whatever they are, resulting in can use in -- resulting in confusion among market for this offense. it will only go until september 20, 10 or 11 days until

hopefully those documents are updated. but really this goes to the point of confusion that still reigns that the volatility, the uncertainty, this does not help that. let's go into the bloomberg terminal. let's show our viewers what has been happening with ether specifically. ether has taken the brunt of the falls over the weekend. you can see that in the white that i have outlined in green on the gtv terminal. you mentioned just now the ether saying over the past weekend that they have seen the end of the growth, the end of the heyday. versus what is happening in the blue line. this is the mbi crypto. biggest,asically the most liquid cryptocurrency funds. you can see wallace falling, ether still taking the brunt. not only that -- let me pile in more bad news while we're at it in terms of the funding, the ico's happening, the initial coin offerings. since mayts lowest

2017, $326 million. compare that to the first three months of this year, something on the order of $3 million on average per month. versus $326er month million, you can see there is a live uncertainty. investors saying, we are not sure what is happening, we are going to hold our money back for now. and i guess i will say dot dot dot into the future. haidi: that could be a bit of positivity from citigroup, these reports looking into a new way to invest in the digital sector. ramy:. that's right i'm going to hop into another bloomberg terminal chart. why don't we take this while we are talking about that? this is what you look at in terms of the year to date, bitcoin and cryptocurrency have been sliding down. i will talk about this new thing that citigroup has come out with. we were talking about 80 yards -- adr's, american depository

receipts. i'm going to flip those letters and dar's are what we are talking about with citigroup, digital asset receipts. citigroup is saying this will theoretically let investors trade cryptocurrency by proxy, meaning it could insulate them from possible volatility. with that said, we are talking also about what happened with these two securities that have been suspended by the sec. we don't know what the sec is going to be thinking when it comes to this citigroup mechanism, these dar's. looking ahead, there definitely is still a little hope with citigroup, but looking at the general scheme of things, that is down by more than 50% and ether taking the brunt of it this past weekend, down by 75%. a little hope, but a whole lot of fear. shery: ramy, thank you so much

for that. ramy inocencio in new york taking a look at the latest bearish development and crypto. let's get a quick check of the latest business flash headlines. petrochina has signed a deal to buy 3.4 million tons of liquefied natural gas annually. the agreement is petrochina's biggest ever and comes as the trade war jens -- a trade were threatens chinese purchases of u.s. gas. they imported 35% in the first eight months of this year, hoping to overtake japan as the world's biggest buyer of natural gas. shery: -- set to raise its bid. a total of $6 billion. is world's biggest dealmaker offering to repay all of the companies borrowing. dozensteel is one of the large bidders went into bankruptcy court after the r.b.i. wound down troubled companies. haidi: a holding cell company

formed from overseas investments of the former yahoo! mays raise almost $4.5 billion by selling its stake in yahoo japan. the increased the size of sale after initially planning to offer $2.5 billion worth of shares. share is af ¥360 per discount of almost 5% on the last close. shery: coming up next, emerging markets thinking -- sinking deeper as trade tensions escalate. we will look at why a rebound may not yet the insight. msci emerging markets down to the lowest in 14 months. we will tell you about it, next. we will look at why and if there is a rebound insight. this is bloomberg. ♪

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haidi: we are 30 minutes away from asia's first major market opens, setting up for a tepid aart in sydney, looking like consecutive day of declines. asian markets will continue to see more declines today, the longest losing streak in four years. i am haidi stroud-watts in sydney. shery: it is 7:30 p.m. in new york, where markets close of a bit higher, hanging onto gains. he can barely see the skyline -- you can barely see the skyline. we are expecting hurricane florence to pass through any time. the s&p 500 gained .2%. foggy.and

it does not even matter if you move the camera. i am shery ahn in new york. haidi: cloudy and foggy may be the best way to describe this day of investor sentiment. unknowns along with the nafta talks and the trade war as well. you are watching "daybreak asia ." first word news with jessica summers. says they willm use a combination of trade deals and domestic reforms to survive the fallout from a u.s.-china trade war. the prime minister told bloomberg his company will remain resilient. resilient.conomy is we are thinking new ways to grow. we already have 12 free trade agreements and are promptly working on four whether trade deals including with that you -- the e.u. we want to maintain good relations with both the u.s. and

china. jessica: kim jong-un has written to president trump, asking for a second meeting. says diplomats are already working on the details. the administration says it will not release the letter a mess givesves -- unless kim permission but described it as very warm and positive. we're not sure if it could happen this year. the trump administration has asked the justice department to investigate the controversial new york times white house op-ed with a view to identifying and possibly prosecuting the author. sarah sanders declined to say if the writer had committed a crime. hong kong will be hoping for some news after the hang seng index briefly entered a bear market monday. they pulled out of riskier assets as the trade dispute prompted a move to safety. the worst performer was a sunny optical followed by the technologies company. they warned -- apple warned

tariffs would increase costs. on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. shery: thank you. emerging-market currencies seeing the worst slide since the financial crisis. hays is looking at this. the rupee down, the lira down. how much worse could this get? kathleen: just when you think they are down so much, and people come on our shores and say the weaker they get, the more you may see buying opportunity. president trump throwing few on the fire. there is an individual story to explain this.

president trump saying china tariffs will be good for us, used u.s. many fracturing -- boost u.s. manufacturing. this comes at a time when the emerging markets are grappling with the fact that the era of global liquidity is ending, led by the federal reserve raising rates, ending the easing of money. governments from india, to turkey, trying to restore investor confidence. as you say, jump into the bloomberg library for what of our #gtv charts. what you are going to see is trade barbs from trump really being blamed for sinking this msci emerging markets index to this low. it is the lowest we have seen in 17 months. look how well emerging-market currencies were doing just a few months ago. troubling tois so many investors. our bloomberg news team caught

wind of a study from goldman. two analysts who have looked at line,g models -- bottom the model signals that even the em currencies are pretty undervalued -- not yet as undervalued as they were in 2016, when the chinese stock market selloff led emerging-market currencies lower. numerous says there are seven s in danger oft exchange rate crises including argentina, south africa, and turkey. it is not too surprising that emerging markets investors are continuing to head for the exits, haidi. not just the broad global forces, the trade tensions, rising rates, or divergent rates, but the idiosyncratic stories. brazil is the latest, case in point. kathleen: brazil, the real

leading emerging-market currencies lower today. the latest here, of course, has to do with the presidential race. the first round in that election coming on october 7. meanwhile, there is a poll coming up this evening in brazil. everyone is waiting for this poll because last thursday, as you may recall, the presidential stabbed at awas campaign rally in the stomach. having not been closer to a hospital, he would have died. people are wondering, when this poll comes out, will the sympathy vote for what happened to this socially conservative man -- some people liken him to donald trump -- draw others to support him? will he be rising in the polls? also rising.s a lot of drama on that. meanwhile, i am just going to put you back into the bloomberg library here to look at another

chart, if i can -- i guess i won't. i will just tell you that the brazilian real, the volatility our team inut -- the control room, thank you, guys. you can see this whole idea that you can see how the brazilian real has been hit hard over the last several weeks. look at that jump in volatility. you do not see anything that high until you go back at least until 2016. let's go to turkey. the lira ending the three-day rally. 5.2% annualized. anotherns the hopes for interest rate increase, which could support that currency. hitting a new low. topping things off, indonesia's finance minister warning of the downside risk to the global year, but alsois

going into 2019. trade war, the fed is hiking rates, and this is potentially something that is going to weigh on emerging markets for a wild. -- a while. >> kathleen, thank you so much for that. kathleen hays. of course, we are counting down some of the major market opens in the asia-pacific. taking a look at the set up in asia. in the u.s., we had a bit of a rebound. we had the faangs settle. it looks like we can follow them higher? >> there is a sense we might see eight the claim -- eight days of declines in asia. as you can see, we did have the s&p 500 adding about .2%. the dow jones under pressure. when you take a look at what is going on in asia, we have the study yen to look out for --

steady yen to look out for. the focus today will be on china .arkets kicking off a major market open, the nikkei 225 looking to edge higher by .4%, so the pressure is coming through for the kospi, given its tech heavy rating. the sydney asx 200 could open marginally higher. when it comes to the eco-lineup from japan, we are waiting from tool orders. trade data from the philippines series of huge deficits over the past year. this morning, we are going to get a check on business , evenence from australia before the political drama unfolded in canberra over the past month. shery: tell us what is happening with mining stocks. they have seen quite a beating recently. sophie: they have been beats down hard. a company has lost nearly 19%

since the january high and sent valuation to the lowest level of since 2012. you can see the chart using this terminal. jpmorgan reckons this makes them to cheap to ignore. -- too cheap to ignore. they are coming together for a bounceback in the next 12 months. rising chinese demand for metals thanks to -- metals are looking cheap, particularly rio tinto, which was upgraded to overweight at jpm. rio may move with other producers. in sydney.s trading they are preparing for cuts as early as this month amid these u.s. sanctions. that news sent aluminum prices higher. kamaruddin, thank you, checking the latest on the markets. japan and russia pledging closer ties.

we will discuss that with a former trade negotiator for the japanese foreign ministry. this is bloomberg. ♪ . ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. putin has met with abe. the strengthening humanitarian ties between the two countries. i would like to note that japan is a reliable partner for russia. we intend to further develop japanese relations based on the principles of being good neighbors, mutual respect, and each other's interests. haidi: annmarie hordern is there. it was an ambitious agenda.

how much of it got done? annmarie: that's right. ambitious,y was especially since the conference has not even kicked off. it really caps off and i missed today. this -- it really kicks off in earnest today. abe meets with the south korean prime minister. the disputed islands have been on the agenda years since world war ii. russia controls the islands. in japan, they are known as the northern territories. the japanese say they are illegally occupied by the russians. president putin briefing the press yesterday alleged and signaled the tensions between the countries regarding these islands -- take a listen. we touched on the peace treaty issue during the talks. it is well-known that this issue decades,discussed for and it would be naive to assume it can be resolved in one hour,

but we are ready to seek for a solution satisfactory for both russia and japan and accepted by both nations. heard similarave comments like this from president putin and shinzo abe regarding steps towards a peace treaty. nothing yet has been done, but it seems like that is the goal. abe this year is working on stronger economic ties with russia, part of his eight point land. he is urging more joint economic ties on the islands and more flight to the islands for japanese residents. e is not by any means the only global leader going there this year. we are expecting an historic visit by the chinese president, too. annmarie: that's right.\ it will be xi jinping's first visit to the forum. vladamir putin was able to wrangle this forum into a pretty major asian forum this year with xi, and the south korean

prime minister coming. there was talks of kim jong-un coming. the north korean leaders agenda was apparently to fall, but he's -- too full, but he says he wants to make a trip to russia this year. important port city for russia in terms of their pivot to the east. onjinping, all eyes will be him. he is meeting with president putin today. today is the start of a russian military drill, the biggest since the cold war, where chinese military will go along side russian soldiers. it is really a signal of a joint military action, not just economic ties between beijing and moscow. and many say it is for one audience only, and that is president trump in the united states. haidi: thank you so much for that, and marine corps down -- annmarie hordern. a former trade

negotiator with the japanese foreign ministry. great to have you on for us. first of all, you look at the bilateral meetings between shinzo abe and vladimir putin -- this relationship is really key across the region in terms of the desire. -- both by russia and tokyo to contain this rise and influence in china. indeedk you very much for having me here. a march 22as been meeting between mr. abe and mr. putin, and they have been discussing about the possibility of what we call joint economic activities. nothingar, i think dramatic really happened in terms of discussions on the possibility of a peace treaty between japan and russia. i feel a little bit awkward that we have been talking about joint

economic activities for the sake of, you know, the confidence building. but really, nothing happened in terms of, you know, territorial issues, nor about this peace treaty, so i think, you know, we have to accelerate our bilateral to thegain with a view talking about territorial issues as well as the peace treaty, and without a solution, japan will not be ready to conclude the peace treaty with russian federation. haidi: is it crucial to have such a deal sooner rather than later to counterbalance china and stop its activities in the south china sea? yorizumi: it's interesting that this time, mr. xi jinping, the chinese president, will be participating, and also, it is really a very important moment in terms of denuclearization

talks on the korean peninsula, the joint military drill to be taking place between russia and china will be quite important sort of event, and we diplomacy right next door to the economic talks to be held in the economic forum. , it is great to see you again. we just heard from annmarie about the historic military drills between china and russia, which of course will make neighbors in asia more nervous, especially the japanese. is this going to have a material impact on trade relations in the region? yorizumi: well, actually, this is more about the military and the security issues. fact thatby the

russia and china will have joint military exercise. on the side of the economic integration or economic corporation in east asia, i think the partnerships are set, which is a 16 country endeavor that kind ofasia area. there has been momentum piling up to have a kind of framework agreement towards the end of this year, and china has been making therefore -- japan is making a leadership role. i hope that on the economics and politics are to be divided, separated, for the sake of developments in economic cooperation and integration of the region. shery: and yet, that is not what we are seeing from the u.s. administration with president trump, where you separate trade and geopolitics.

how well-positioned as russia to increase trade in this environment with japan and china? well, i think this is very much mobilized. russia's movement has been very much mobilized by the internal political situation in russia. there has been a kind of piling up -- you know, increasing anti-putin movement within russia, and he has to counter that, so this time, it is a very huge kind of demonstration. in fact, mr. putin is ready to deploy more than one third of troops to the far eastern part of russia and more than 1000 aircraft have been mobilized from the russian air force to join this joint military drill in this region of the far east of russia. so, i think this is very much, you know, the kind of demonstration, sure, of prudence

utin's power within the russian federation. shery: president trump seems to be hinting that his next target could be fixing the trade relationship with japan. how vulnerable is japan is president trump would go ahead with this drive? yorizumi: i do not think japan is more normal so much -- vulnerable so much because japan ine massive investment particularly the auto sectors, and providing may be 1.5 million and in the united states, also more than 2.7 million units of japanese cars being produced in the united states, so those are really the contributions to the u.s. economy. more than 400 units of cars made in the united states have been exported by japanese manufacturers in the united these, takenl of

into consideration, i do not think there will be too much hustles on the part of japan, and also towards the end of this japan-u.s.e will be summit talks to be held in the united states, next to, you know, side-by-side to the un's general assembly, and hope that there will be a deal struck in misgivingstigate the of this u.s. protectionism against japan and also against other countries. to beare considered allies to the united states. haidi: we have seen high-level talks recently and it ignited hopes that maybe they would be a stronger trading relationship. i have this chart for the viewers to show the picture when it comes to japan's trade surplus with the u.s. in white, steadily increasing, and the

trade deficit with china. despite the historical as well as diplomatic tensions between see annd china, do we argument that there can be a stronger economic relationship there? in terms ofthink, the japan-china relations, it has been dramatically improved. east asia free trade agreement. the partnership agreement. negotiations have been picking up momentum. leadership economic for that matter could be displayed more extensively towards the end of this year. haidi: thank you so much. yorizumi watanabe, a professor from keio university. plenty more to come on "daybreak asia." this is bloomberg. ♪

haidi: we are counting down to the open of major markets across asia. let's take a look at some of the stocks we will be watching as we get into the market open. sophie kamaruddin taking a look for us. what is on your radar today? sophie: we are keeping an eye on yahoo japan. billion and.2 represents a 4.6% discount from yahoo japan's last close. we are watching samsung and hyundai. this company is positioning itself as an alternative to lutein i am batteries -- lithium-ion batteries. that is some of the stocks that could move at the open. shery: thank you. the market open in japan, south korea, and australia is just

ahead. this is bloomberg. ♪ this isn't just any moving day.

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♪ >> a very good morning to you. i am haidi stroud-watts in sydney where asian markets has opened for trade. >> and good evening from bloomberg's global headquarters in new york, i'm shery ahn. sophie: and i am sophie kamaruddin in hong kong. welcome to daybreak asia. ♪ haidi: our top story this tuesday, asia-pacific markets looking mixed after wall street gains declined, the longest losing streak in four years. but trump administration once .he new york times investigated

: hurricane florence targets the eastern seaboard. a million people are told to leave. just like the weather, stormy and turbulent sessions in it the emerging markets, which have sunk to the lowest in 14 months. the u.s. market is also mixed in this first trading day of the week. that and see how everything is affecting trade in asia. sophie kamaruddin has the latest. . sophie: shery, that turbulence may be tempered a touch on tuesday's session in the region, we are seeing gains in the md x50, the nikkei 225 extending gains for a second day. >> the risk appetite may remain curb given some of the woes still moving around. we saw a stock selloff continue, and that could weigh

on the kospi which is marginally lower today. the asx 200 is also extending declines as well. we are keeping an eye on mining shares in particular given the valuation for that space in the region, the helpful into 2012 levels. of the aussie dollar also getting down traded, just under 71 u.s. cents. .uys haidi: self, thank you so much. a little optimism, may be. let us get news with jessica summers next. jessica: thanks, haidi. north korean leader kim jong-il jong on is asking for a second meeting and the white house diplomats already working on the details. the administration says it will not release the letter unless kim jong-un gives them permission but they describe the warm. is very the administration declined to say whether the second meeting could happen in washington or year.his

vietnam says it will use a combination of trade deals and domestic reforms to survive the fallout from the trade war. the prime minister told bloomberg the country will remain resilient in the face of global challenges. the at economy is particularly problems in the global supply chain as trade is about twice of its gdp. ways toeeking new growth. we are ready have 12 free trade agreements and are working on for others. anduding with the eu others. we want to maintain good relations with both the u.s. and china. >> hong kong will be hoping for better news after the hang seng index briefly entered a bear market on monday. investigators pulled out risky assets as the trade disputes prompted a move to safety. the worst performer was sunny up to go. tires could affect many of its costs.s and increase

the uk's economy expanded the fastest pace in more than a in between made in july -- between may and july. april,reased .6% from the most since august last year. this boosting insistence that the british economy could thrive after brexit. >> the have seen that if we are fixed, we are able to reach agreement on the first stage of negotiation, which is , maybe within six or eight weeks. >> global news, 24 hours a day, on air and at tictoc on twitter, our by more than 2700 journalists and analysts in with a 120 countries. this is bloomberg. ♪ markets sankng further a amidst the

escalating trade spat, currencies at a 20 month low and there appears to be no recovery in sight. we are joined by our next guest now. it was a bit of a pause particular wanted comes to currencies. fundamentals though have not changed. >> now, people are still looking at some of the issues which we were focusing on last week. when you have the situation in the united states were interest rates are high and rising further, the u.s. economy doing so well, the dollar so strong, none of it is good for emerging market currencies. there are signs of hope though, you are getting some differentiation between the performance of em currencies. we saw a very bad start for the indian rupee this week and the russian ruble, and yet in brazil , south africa and turkey, currencies haven't made any new lows in those areas, so it is not an across-the-board collapse for emerging-market currencies, but of course, it is

disconcerting especially when you see high volatility in big markets like india and russia. that we are starting to see people getting a little bit discerning about where they can be come a maybe it is a bit overdone in certain countries, but there is some hope. it is probably too early to say that yes, it is safe to go back into emerging markets across the board riyadh shery: what about china, is it overdone in china or can they build on this slightly more positive issue in the u.s.? is the big question for everybody, and it depends on so much as to where we go right now with the next stage of the trade war. one of the most serious issues that came out the last couple of days is the united states could assets orring seizing freezing assets of chinese companies in the u.s., if they are considered to be out of some kind of cyberattack. or intellectual property theft. it happens come at

would take that trade war into a completely new dimension. and even though the pboc has an working hard to stabilize the yuan and give it a tight range, it can become totally blown out the water if the u.s. seizes assets of chinese companies, something that is not priced into the market at all. so it really depends on whatever market w direction we go in thee war's. tariffs are expected in the market but they do not expect the u.s. to take the draconian measure of attacking certain companies. shery: mark cranfield, thank you so much. you can follow more of the story and all of these issues on our market live blog on bloomberg @mlivego. you can also get commentary and analysis from our editors like mark cranfield to find out what is affecting your investments. yvonne: let us discuss more of

what is happening across e.m.'s. joining us from hong kong is rabobank international hk branch, head of financial markets research, michael every. we were talking with mark about the potential trues that could be's against china. what about what china can do, given that nowadays he trade tensions and trade tools, protectionism, it doesn't necessarily take the form of tariff barriers. what could the chinese do if in fact president trump goes ahead with all of his threats? michael: well, we know that they could shift it to services. you could certainly see newspaper headlines in china saying, don't go on holiday to america, it is incredibly dangerous. they could use tourism and services as a weapon. they could also if they wanted to come start to penalize particular american firms. suddenly, you could find imports from company x or companywide get slowed down, our exports, or

regulations are suddenly tightened. of course, they would be shooting themselves in the foot to do that, but it doesn't mean you should roulette out. shery: that is my question though, what can the chinese do without shooting themselves in the foot? michael: to be honest, my view is nothing. china has bad options or worse. shery: if that is the case with china, how much would the 10-25% tariffs on chinese imports affect u.s. consumers? michael: now that is a much larger question. there are lots of different views on that. thingsgoogle how much would cost to be produced in the u.s., you would get answers from 2000-20,000 dollars. there are all manner of people who think their experts on this. the simple matter of fact is, there are so many products made in china that cannot be made in the u.s. right now. they do not have the skilled labor. president trump has tweeted

auntie on what you would like to see happen, but that will not happen overnight that she has -- president trump has tweeted bluntly on what you would like to see happen, have the goods be made in the u.s.. that would never happen overnight. it is not only about what you buy, and he would imagine that retailers would see lower margins, as with companies producing the goods too. i don't think inflation is necessarily -- the threat of inflation is necessarily as big as people think. haidi: is that just for the u.s. or for china as well? the inflationary threat. michael: well, from the chinese side, it is deflationary threat. you're talking about removing production from china and trying to carve it out and ship it off to every other country in the

region or mexico or the u.s.. that is overtly what the u.s. moment.at the maybe not everyone is willing to connect the dots, but china can see what the u.s. is trying to do. so it is inflationary in the short-term, the question is how much in countries outside the u.s.. it is deflationary in china. . than of course, the issue becomes a point to what we were just hearing about the renminbi. if that happens, china is forced to do value currency or let the currency appreciate naturally, does that offset some of the inflationary impulses you get from supply chains being on do to other countries other than china? it is very complex and nobody really knows how it will play out. there are too many moving parts. haidi: it is interesting, when we spoke to the x pboc governor in the last few days, he said there are two top priorities. one is to avoid an asset double thetwo is to avoid using

currency as a weapon in the trade war. is it really clear that those are the priorities? because you could argue that the top of the sea priority is maintaining growth? michael: in terms of asset bubbles come out have to laugh at that. their policy has been to inflate asset bubble after asset double, hasn't it. by the way, that is with every other central bank. by their policy of course is maintaining growth. their currency, they would like it to remain stable for any number of reasons. they aren't aiming to make it weaker, but if you look at the fundamentals, particularly if the u.s. succeeds in seeing companies shift back production in other countries or in the u.s. itself, there will be downward pressure on the renminbi. it is as simple as that. shery: let us talk about emerging markets as well. we are seeing from a zillion presidential elections, the

there poll showing that is a narrow gain for the candidate. he seems to be gaining ground. we have seen significant weaknesses in a lot of these em currencies including the brazilian riel. how important would the politics of the election coming up in october be in determining the fate of the brazilian economy and its currency? michael: absolutely enormous. and nervous. because of backdrop for emerging markets is generally poor at the moment because of what is going on in the u.s., in terms of interest rates and the looming trade war. it has a ripple effect around world. by the domestic fundamentals in a after emerging market are exacerbated or ameliorated, on.nding on what is going

if you have political volatility picking up in a key economy in brazil, a lack of confidence over who will be running the place and on what kind of policy platform, that can make things either infinitely better or infinitely worse depending on who wins. haidi: what is the biggest basket case in the emerging market world right now? michael: that is a nice question to ask me early in the morning. i will make lots of friends answering that. [laughter] say, some ofjust the countries i might want to be the would actually worst basket case. let us just say, there is a long list of candidates. [laughter] shery: thank you so much for joining us michael every, joining us with the latest on emerging markets. breaking news crossing bloomberg right now, the second-biggest supplier of semiconductors for cars is set to be nearing a deal to acquire integrated device technology. a move to expand beyond the auto industry. bloomberg has learned that the company is set to be close to a deal to acquire idt a deal which

could be worth a lot. in order to expand beyond auto and also beyond this industry. it could be worth about $6 billion of according to people. renesas is the second after nxp conductors when it comes to the business. next, take two. kim jong-un asks for a second meeting with president trump. we discussed the implications. haidi: and the electric vehicle. haidi: revolution aims to lower dependency on oil that is raising demand elsewhere. we take a closer look at cobalt and the potential threat to suppliers. this is bloomberg. ♪

♪ "daybreak asia." a beautiful day in seoul, the

kospi up .1 percent, rising for a second consecutive session. the korean won is slightly weaker for a second consecutive session as well. very different from what we are seeing in new york, rainy, cloudy, foggy. i am shery and in the big apple. haidi: happily, sunshine when it comes to the latest in these north korean developments. we are hearing reports that a second summit could be in the works. i am haidi stroud-watts here in sydney. the white house has delivered a message to north korea, announcing it is ready to start second. a meeting between the two leaders earlier, the top national security adviser had said nuclear talks were stalled. jodi schneider joins us now. jody, we need some help decoding the white house message, here? is a whip smart message, isn't it? we heard from president trump that he wants to start china

plans for a second set of talks leader.th korea's the white house saying that president trump had received a very warm, positive letter from north korea's leader kim, saying that he wanted to have talks. so apparently, that planning has started even though the national security adviser, john bolton, just hours earlier, delivered a message.erent saying that he thought that talks were stalled and it was up to north korea to start making progress on denuclearization before they could go forward. we really have not seen any signs that north korea has started the process in a meaningful way. hear from the we national security adviser john bolton, in terms of the tone from his statement? jodi: they were pretty sober. it is up tog that north korea now to get the process going. that after the summit in

singapore between president trump and north korea's leader, that the u.s. had said they needed to move ford but they were not clear on the timeline of denuclearization or how that in.d be phased but now, mr. bolton is saying that has not begun yet and talks were stalled, even as president trump is saying, let us start lending to meet. clearly, this shows president trump has this on-again off-again kind of approach to trying to move forward. but he really very much wants to make this a legacy issue for him , that he has done something about north korea's nuclear capabilities. even as they say, we need more, he says, let us see for can move forward. so it is back-and-forth, on-again, off-again. hery: and he did like what saw during the military parade in a north korea market the 70th anniversary, a pretty toned down parade? -- theys, there were did not showcase their nuclear

capability at all, their weaponry, if you will. ity had a large parade, but was not of the sort we have seen and it recent years where they were trying to show off weaponry. president trump tweeted that it chairman kim as he calls it, that he was ready to start the process. that they were ready to work together. great, that is not north korea has began the process. the defense secretary mike pompeo testified to congress in july, that it looks like there were still nuclear materials being gathered, and the program was moving forward. then independent analysts have seen that as well, even after that summit in singapore between the two leaders in june, that there was more work being done icbms.

so, the rhetoric and evidence of any move toward denuclearization , there seems to be gaps in their. but president trump wanting to move forward, saying that they will start planning for talks -- we don't know when or where, but that is the latest. shery: jodi schneider, thank you. bloomberg's senior international editor. haidi: let us take a look at some of the stories trending. as global trade tensions continue to escalate, bloomberg.com asks, can we survive the next financial crisis? new anter, up oh has a estimate on this week. trump's top economic adviser correcting his claims that u.s. gdp growth topped unemployment for the first time. shery: in the century. shery: check out those stories trading online or on the terminal. this is bloomberg. ♪ nal. this is bloomberg. ♪

♪

haidi: this is "daybreak asia," i am haidi stroud-watts in sydney. in newand i'm shery on york. hurricane florence is expected late thursdayll in virginia or south carolina and could cause as much as 27 billion dollars in losses to property, business, agriculture and tourism. su keenan is watching this. i understand these hurricanes are pretty, and the east coast, so how bad could this one get? this one is being looked at as very dangerous, for this part of the country, potentially the worst in decades. we see them develop, but they really get to this strength. that strength and speed of this is changing by the hour, now poised to become the strongest hurricane in a most 30 years to hit the carolinas. you can see we have a couple of storms out in the atlantic and

in the pacific, that is rare. one is a category 1, 1 is a category 3 and the other is a tropical storm. the one in red is hurricane florence and the speed is about hour.les per if we go and look at the pictures, people are getting ready, early stages of development for this storm but there are already mandatory orders of evacuation. the outer banks of the carolinas virginia.n the richmond mayor has declared an emergency, so people are really getting ready and already in stores, purchasing anything to do with supplies and even rebuilding materials because of the damage expected. haidi: take a look at what could be most affected, people preparing for the change in weather, just seeing a high up for the most in 30 years.

improvemente companies are going up, also, trucking companies. a roofing supply and installation company also. the trucking index flying, a lot of these truckers are expecting to get a lot of business and see rates rise in the week of a major hurricane. another panel of other companies here that are rising higher, we have talked about how we are and some of the other commodities move higher that have to do with that part of the country. we are also seeing a lot of the insurance carriers fall because expected.e of damages airlines are also starting to waive a lot of the change fees which normally sell for about $100, because they expect large disruptions in the area. again, it would likely not hit before the end of the week, but the east coast is bracing for it thank you so much for

that. iscoming up next, vietnam looking for new ways to overcome risks from the trade war between partners.est trading we have and is close it with the vietnamese prime minister. this is bloomberg. ♪ e minister. this is bloomberg. ♪

♪ haidi: it is 8:30 a.m. in hong kong, one hour away from trading in a market that is struggling existentially at the moment, after briefly dipping into their territory in yesterday's trading. taking his brother weakening in a chinese data, trade war issues and also emerging-market. turmoil we have seen. wholesale selling across the tech sector, tencent in particular. it is a beautiful day though on the other hand. you can look out over the water. shery: doesn't it make you nostalgic, haidi? haidi: it does, and a bit homesick as well for you.

shery: i know, a beautiful day at the harbor. i am shery and in new york, watching daybreak asia. that is get the first word news with jessica summers. jessica solon japan and russia -- they the best genic jessica: russia and japan saying that they want to rekindle economic ties. a major hurdle in the two-way try is the wrong running dispute over the northern territory island in japan. the trump administration has asked the justice department to investigate the controversial new york times white house op-ed with a view to identify and possibly prosecute the author. press secretary sarah sanders declined to save the writer had crime, but said it would be a problem if he or she had attended meetings on a national security issues. washington is seeking approval for a trade deal with the eu.

it falls under trade promotional authority, and it would allow the president to seek a simple yes or no vote. the move signals talks between the u.s. and the eu are going well less than two months after they were threatening to flop tariffs on each other. >> the rupee sank to a new low after current account deficits went down the most in 10 years. eit led losses among emerging markets. indian stocks also fell and extending losses after the worst week since june. the rupee has been asia's worst-performing currency for the past month. australia cut its forecast for production byeat 13% as drought withered crops in east.of the 19.1 million metric tons for the next fiscal year, that would be the smallest crop since 2008. however, the susan is shaping up

with rain setting up was in australia for a bump harvest. global news, 24 hours a day on air, and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm jessica summers. this is bloomberg. ♪ haidi: let us get a look at how asian markets are shaping up so far in the trading session. looke: haidi, asian stocks like they could be set to snap an eight-day decline. but do not bring out the cheering just yet, the market still hovering around a one year low. the question is whether or not the relief could be sustained when it china and hong kong come online. we still have existential crisis laying out in the region. for now, the asx -- the original -- evenk is higher by as countries have lowered their growth forecasts. indicators show slowing momentum zealand.

in the currency space, we see it tried waters as the dollar is holding losses. the korean is also back low below the dollar. let us take a look at some of the movers in the region. i want to highlight yahoo japan as muchs fallen as 3% in tokyo. by .3%,is off fluctuating this morning as the japanese company is said to be closing in on a $6 billion-dollar all-cash deal. they are hoping to expand beyond the auto industry. speaking of shaking up the auto space, we are seeing moves in lithium-ion battery makers. one of them gaining ground in seoul, the korean daily reporting that the company had toned a deal with a carmaker supply batteries for its

electric scooters. to a fresh high, extending the gains we saw on monday, as the battery technology race heats up amidst glowing global demand. we are seeing the likes of samsung and shindei attempt to get ahead of that. companies are investing in being battery makers. shery: thank you. the world economic forum on aseabn is kicking off in hanoi. chief southeast asia correspondent haslinda i'm in hanoi.s from has come a great to see you. we miss you so much, and of course, as always, you are busy, busy. what are you expecting out of the form? haslinda: well, 90 government companies, 1000

participants. expect a robust discussion to 4.0 in reality. what is different this time around is the participation of 80 companies chosen from 300 startups which wanted to be part of this discussion. they come from across industries, the likes of e-commerce, fintech, agriculture as well. remember, asean has been a battlefield for companies, the likes of alibaba, softbank, who have been investing in asean startups come up betting on the growing middle class and the population.g so we expect the discussion to focus on how to tap resources in this part of the world and an sure that the growth we have been seeing in this part of the world continues to be sustained. this meeting is also important because it comes amid all the issues we have been seeing in the world, including a trade war

in the u.s. and china that is escalating. i broach the topic in my discussion with vietnam prime minister. he says, everybody needs to be concerned about this trade war. >> the trade war between the u.s. and china, the two biggest economies which are also the two largest trading partners of vietnam will surely impact our country. andver, a resilient vietnam a resilient member of his our house inl get order so that we can overcome any obstacles. important for vietnam is that we continue to maintain our growth, maintain macro economic stability, maintain levels of export and the living standards of our people.

haslinda: can you quantify the impact of the trade war on vietnam's economy considering that close to 100% of what you produce pretty much is exported to countries like the u.s. and europe? we are seeking new ways to grow. we are ready have 12 free trade agreements and are promptly working on for others including with the eu and others. we went to maintain good relations with both the u.s. and china. haslinda: is it possible that the u.s. china trade war think more of an opportunity rather than a threat, as the u.s. moves away from china? both are bringing opportunities and challenges to us, but more opportunities and opportunities and

challenges. it has forced us to balance our trade with other countries. we are not adversaries with anyone. them, andus, we need we cooperate on an equal footing. haslinda: how concerned are you that trumps tariffs would now be focused on vietnam, given that it trump himself has said that after china, he would be looking to the rest of the trading partners in asia? >> last time i told trump that i agreed with him, that we need to trade. our that what we shipped to the u.s. is actually benefiting american buyers and investment inflows from the u.s. to vietnam is also very positive. vietnam on this are exploring ways to boost its growth.and it has artie talked about establishing trade deals upon from the 12 deals it already has today. shery: and of course, coming as are seeing more trade tensions between the u.s. and china. has susceptible will vietnam be?

haslinda: shery, vietnam is susceptible to the flows in itbal trade, simply because is so exposed, more than double of its gdp, that is the amount of trade it does with the rest of the world. so it is most exposed after only singapore. it is at the mercy of the global trade negotiations, and global trade happening right now. this is a country that has been growing at 7%. in the movement or slowdown in its trade with the u.s. or china would impact it. remember, if you put it in perspective, trade with china for vietnam a monster about a quarter and the rest for to the u.s. and the eu, so it is important that vietnam maintains its good relations with both sides. haidi: as we see, emerging markets falling like dominoes lately, how resilient is

vietnam? haslinda: you know, surprisingly, haidi, vietnam has been pretty resilient. growth in excess of 7%, second only in asia and that is to india, which is growing at 8%. the currency is stable despite what we are seeing with emerging-market currencies. and inflation, although it is rising, it is pretty muted because the central bank implemented measures to rein in inflation. so it is pretty stable at this point in time unlike during the temper trend from dust during the asian financial crisis. vietnam was pretty -- unlike what we saw during the asian financial crisis. this is a country where your investments will do good, you will see returns. in fact, when you take a look at vietnam as a market, it has been pretty stable.

the only market in this part of the world that has maintained its gains from last year. haidi: thank you so much, haslinda amin in hanoi. still ahead, the electric vehicle search continues. governments could face a growing threat. it has nothing to do with engine's or elon musk's tweets, it could be simple geography. we dig deeper into that story next. this is bloomberg. ♪

♪ shery: this is daybreak asia. i am shery and in new york. haidi: and i am haidi stroud-watts in sydney. in theglobal demand electric vehicle revolution threatens supply shocks. the democratic republic of congo accounts for the lions share of reserves. when australia a distant second sophie kamaruddin has been looking at the markets.

sophie? sophie: that has seen prices for materials like cobalt and lithium search over the past three years on shortage worries. cobalt prices have more than doubled back to what they were in 2016. they had retreated in 2018, moving to a $65,000 a ton. analysts are predicting -- analysts were actually predicting oversupply. tracking the metal declines this year, that is the line o in chart.n this elon musk said the amount of the cobalt the company would use is headed toward almost nothing. then, uncertainty over how future tech meet revolutionize batteries as carmakers pushed it . electrified vehicles there is still no word as to where supply will go from here. one of our analyst expects prices to be below 45,000 by 2022. but bloomberg's new energy finance is forecasting a supply surge, the white line on the

chart, to increase in the next five years. as to what could help keep coble to prices elevated, logistical bottlenecks and challenges ,acing miners like in the drc that could increase the cost of capital projects over there. haidi: thank you so much, sophie. let us get more on the outlook of cobalt. we are joined by anthony milewski is chairman of coble to 27 to react comes to regulations in the drc, how does that affect your outlook when it comes to demand. -- anthony d milewski cobalt 27.of anthony: you're talking about adding a very small amount to the price of cobalt. instead, i think the issue is with the regime changing.

do you get the spend that you need for new mines. over the longer-term, the question becomes whether or not miners should put billions of dollars into the country if they don't feel that the regime is stable for investments in the next 30 or 40 years. ,aidi: regime stability regulatory uncertainty, certainly things that investors looked into. and there are lots of other concerns about kabul to mining in the drc, not least -- about cobalt mining, not least of which child labor, which has been reported. in terms of your mining operations elsewhere, do you see an opportunity in terms of being able to provide greater transparency? anthony: 100% of our activities are outside the congo, we don't purchase materials in congo, so we decided as a company to 100% avoid it. we think it is challenging. . ofwithstanding, over 60%

cobalt is produced in congo and ine, you look at the new m glencores and others that are coming online,, 60% over time may move as high as 80% of world production. if you think about what that means going forward, the overwhelming majority of the world's cobalt will come from congo which will only intensify in the coming years. i agree with you, one of the most important issues here is issues around the allegations of child labor. a second issue with artesanal mining is environmental. people haven't gotten to that yet, but the process used by artesanal miners are destructive lead.ment to i think what you will have potentially over time is concerned about purchasing kobold outside the drc where possible. isartesanal mining destructive environmentally. shery: talk about the demand side of the equation.

we are seeing china. shakeup when it comes to batteries. how will this affect the market? anthony: since 2011, 5 million electric vehicles have been sold. in the last six months, one million have been sold. so in perspective, we are seeing a rapid adoption accelerating. today, the cobalt market is tons.0 metric if in 2025, adoption of the electric vehicle is somewhere around 20%, demand for cobalt might be as high as 250,000 metric tons. so you have a market then is to times, and is5 there going to be enough material? i don't think that is a problem. carmakers and battery makers, will they be able to show consumers that the material they have is ethically sourced? it is not actually getting the cobalt, the issue is showing whether it is ethically sourced,

that there are no child labor or environmental issues. shery: when we talk about cobalt, we tend to talk about auto issues. what about military needs? with jenna spending more on the military, are we going to see more needs for -- with china spending more on the military, are we going to see more use for cobalt? anthony: i think it is also airplane demand. the demand is growing, depending on the numbers you look at. you have a situation where new production tends to be an immediate product and the business is consuming metal. i will point out one thinks that is being shown, the lme contract. that is not the way that cobalt is priced, so you have an interesting moment where commodities are priced off of metal and the majority of cobalt

is actually an intermediate product. i think going forward, as it becomes a bigger portion of cobalt conception, we may have to relook the way cobalt is priced. certainly with decreasing metal production and increasing demand for super alloys, it could put pressure on cobalt prices in the coming years. haidi: when it comes to the penetration of electric vehicles in the auto sector, when we last spoke, you estimated that it percent.ch 35 to what extent does that depend on companies like tesla witching critical mass when it comes to production capabilities? and,? anthony: has your view changed? i would say we are more bullish. i would say tesla is a red herring, they have done amazing things, but when you look the reduction of the electric vehicle, you're talking about chinese consumers adopting electric vehicles. so while elon did a fantastic

job promoting and pushing the electric vehicle story, if we are talking about who will sell the most electric vehicles going forward, it will be chinese automakers in china and really all the automakers. look at volvo, it is going to be 100% electric. so as i indicated earlier, in the last six months, one million electric vehicles have sold and off.emand is taken a remains bullish that the demand is accelerating and people are not appreciating how rapid the adoption of electric vehicles has been. shery: i am guessing by the answer that you will see your biggest customer as remaining in china? anthony: there is no question. it is my view that china wants to be the silicon valley of electric vehicles, the detroit of electric vehicles, whether it technology.or we come to the region regularly now, and what we see is a commitment at every level of industry and government that we don't see frankly, in the

rest of the world. it is my view that china will dominate this space in the decades. i think it is great, a moment where china is leading the world in a environment policy if you think about it, right? saying that they will help to clean up the air in saiz, and interesting environment even politically. china taking a lead on a major issue in environmental policy on electric vehicles. haidi: anthony, thank you so much for joining us. coble's 27. add joining us from hong kong. if you catch up with us on tv , you can watch these interviews live, and dive into any of the other interactive bloomberg sanctions that would have and also sent as instant messages during our show. >> it is only for bloomberg subscribers though. this is bloomberg. ♪

♪ haidi: this is daybreak asia, i am haidi stroud-watts in sydney. shery: and i am shery and in new york. isauto chipmaker renesas looking to explore and beyond cars. let us bring in our reporter in hong kong. we had heard from their management before the were actively looking for an acquisition here. how much of this is a supply -- surprise, and how much can we

expect? renesas: that is clear, has been vocal about their hopes to grow via acquisitions. last year, they purchased. a company, they have been vocal and are closing in on this, another multibillion-dollar , and other semiconductor designer and manufacturer in the u.s.. their goal as you said, is to keep growing and also to ask and beyond cars, which is their main area. they are looking into health care or aerospace, or even solar industries. haidi: does a valuation look like a fair one? manuel: i think it should be enough to get the deal done based on previous reports, and where shares are trading. i think we are expecting something around x billion

dollars, or something in the high -- around $6 billion or somewhere in the high $40 when we talk about share price. them in question would be whether any interlopers show up. haidi: thank you so much manuel for joining us. before weng, and just hand over to bloomberg markets rishaad and dave, let us see how markets are trading in the early part of the session. the nikkei 225 seeing .9% gains, the kospi looking a bit optimistic as well. breaking the ninth session losing streak when it comes to australia. this is bloomberg. ♪

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