nejra: good morning from bloomberg's european headquarters. this is "bloomberg daybreak: europe." chinaent trump targets with new levies on $200 billion worth of goods set to come into force next week. beijing vows to respond. chinese stocks slip after the white house announcement. the yuan hold steady. make or break summit. south korea's moon jae-in meets kim jong-un in hopes to revive talks on denuclearization.

good morning, everyone, and welcome to daybreak europe. it is 6:00 a.m. in london. let's catch you up on what happened overnight. the msci asia-pacific index in the green of 0.5%. a mixed picture. the shanghai composite headed. 2014. close since imposition united states is putting on chinese goods at 10% is coming next week, it will rise to a 25% levy next year. we are seeing the msci index higher nonetheless. the yuan stronger. the bloomberg dollar index is a steady as well. we saw a selloff across the london metal exchange yesterday. we and copper dropped 1.5%.

and has recouped some of those losses. markets taking the latest news on the escalation of the trade war in stride. joins us, howard shore after 9:30 a.m. u.k. time. that is something to look ahead to in surveillance. for now let's get the bloomberg first word news. >> the u.s. supreme court nominee brett kavanaugh and the woman who accused him of decades-old sexual assault will testify next week before a senate committee. the senate judiciary committee will hold a hearing on monday, bowing to pressure from ford, whoto hear from says cavanaugh assaulted her at a party when they were in high school. south korean president diane is ---- president moon john and in is in pyongyang.

feature aence will press conference with kim jong-un. in argentina, a federal judge has indicted ex-president and current senator cristina fernandez on corruption charges. she stands accused of illicit association and having received a bribe from a public works contract during her tenure in the presidency, according to court documents. it is part of a widespread probe that has ensnared many officials in her governments. -- former government. parliament wants a fine for bankers involved in laundering to go up. that scandal engulfing danske bank forces the country to rethink its defenses against crimes.

the current penalty of as much as 5% -- as 25% can be raised eightfold for the biggest banks. the new agreement contained several other measures designed to help denmark fight money-laundering. netflix has won the most emmy awards of any tv network, a sudden and dramatic rise for a company that got its start as a dvd by mail operation. netflix earned seven awards during the prime time presentation of enemies. for theest prize came crown, at period drama about the british royal family, and godless. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. thank you so much. let's check on the markets in asia with yvonne man.

clearly the upper former was largely shrugging off trade headlines. mostly lower when it comes to asian markets. the hang seng leading the way lower, 0.8% lower. large-cap has been fluctuating. we are around for your lows for the shanghai composite. this latest round of tariffs has largely been priced in, even the worst case scenario, given how bearish the government has been. we also did see the pboc coming to the rescue, injecting more liquidity into the financial system had of that busy holiday. perhaps it is building support when it comes to chinese markets. with korea we see the nikkei, 1.5% with just an hour away from the close of session. it seems like we see analysts, despite price declines and bearing the brunt of this trade

front, we see analysts raise their projections when it comes to earnings estimates. strong economic fundamentals backing this rally today. seems like this is more than a dead cat bounce. these korean meetings happening right now, we're seeing optimism. let's show more of the movers we are watching here in the hang seng. geely auto is the worst performer, down 6.5%. morgan stanley cut the stock, citing more domestic headwinds for the company and inventory pileup. also price competition getting more intense. these two indian state banks here are seeing huge moves today. a 25% upside after the finance the lendersommended to merge with another state bank. that overall to strengthen the banking system and the debt system.

also, this stock down 1.7%. this is the japanese e-commerce company. billionairempany that paid speak first passenger to head to the moon. we got that announcement from spacex a couple hours ago. not sure about the price techie paid. paid.ce tag he nejra: the u.s. government will slap 10% tariffs on $200 billion in chinese goods next week and will double the rate in 2019. donald trump's latest move strengthens what is shaping up to be a prolonged trade war between the world's two biggest economies. for more, our chief asian economics correspondent joins us from hong kong. great to have you with us as always. seem,as saying, markets to a certain extent, to be shrugging off this escalation in the trade war. what can you tell us about the

latest round of tariffs in terms of how they compare to what was expected? >> good morning. on the one hand, remember the u.s. threatened tariffs up to 25% initially. the news that the initial batch is going to be 10% probably gives markets breathing room. maybe it is in all of branch to china. may be in is a window for both sides to negotiate. don't work out, the u.s. will push ahead with 25% tariffs in january. the other side of this will be to see how china does respond. the u.s. has a number of new talks on the table. china has made it clear they want to be negotiated with as equal partner. they probably will not take kindly to being forced to the negotiating table under the threat of new tariffs and future tariffs. it will be critical to see how the foreign ministry does respond.

at the moment, i know we are still waiting for comments from the foreign ministry. is there a sense china is willing to engage here? or is it going to respond in kind? >> broadly speaking they are going to engage. before.e an offer the risk for them is optics and perception. they have sent tough delegates to washington already this year in the hopes a deal could be made. at one point it appeared as though a truce have been reached only for the process to be overruled by mr. trump. they will be hesitant to go back to washington, cap in hand, to look for a trade deal with the united states. there is the view that perhaps may be happy to

sit on the sidelines until the u.s. political process plays out a little bit and until there is an opportunity for president xi and trump to meet. i think more people point towards the g20 meeting in argentina in november for a better opportunity for the two sides to come together. the signal for china will be they will retaliate, but they will not want to overly escalate things. they will want to let it play out. you so much to our chief asia economics correspondent in hong kong. joining us now with simon french, cheap -- chief economist. thanks for joining us is always. about then talking fact the market reaction is fairly muted given that we have the official news of what a lot of people saw as the beginning of the worst-case scenario. is china's reaction more

important to the market than what the u.s. is doing? >> that is right in terms of we have less of visibility of what the chinese administration is thinking. the white house has been fairly clear there will be a ramp-up if china does not come to the negotiating table. we knew the move with a fair amount of certainty. the countermove remains uncertain. i also think the muted reaction to some extent plays and the fact we have almost a week now where we have seen previously the white house rate of the rhetoric only to back at the hope that the leverage will yield in negotiating position. i think the markets are sanguine over whether this is the end state. >> if we get that 10% on the $200 billion worth, what sort of hits to gdp are we seeing in china? >> it is difficult to disentangle single elements.

what you have seen in terms of putting this into context is domestic tightening in the chinese economy over the last six to nine months has been more material in be slowdown story then trade rhetoric. i would caution your viewers interpreting that as that will be the end magnitude. of the impact to gdp, the overall impact the trade policy always takes longer than headlines. headlines come quickly. but in terms of changing product supply chains, it always takes much longer. we are at 18 months before you get the full impact. nejra: are we likely to see more easing in the short-term, even before the end of the year? >> i think monetary policy reaction through the currency

with the reserve requirement and interest rates is something china does have to play. it is not a one-way street. this is the challenge the chinese authorities have. 6.8, 6.9 u.s. the dollar we have been before. they have this backstop of capital slight in a weakening yuan environment. they certainly do not want to re-invite the scenario of 2016 when a rapidly weakening yuan, they had to draw down on fx reserves to protect against capital flight. simon french, panmure gordon chief economist stays with us. emerging-market stocks could drop a further 10 to 15% on global trade. is the turnaround still not incite? and the chairman and ceo of roubini macro associates joins us at 11:00 a.m. u.k. time.

♪

nejra: breaking news just across the bloomberg from clary at. newceo proposed as the chairman of the board, one of the lines coming through. some shifts at the top here at clarion. also, about 9 billion swiss 2021., margin of 20% in let's get the bloomberg business flash. administration has named a category of high-tech products in the next round of tariffs imposed on chinese goods. that is as the u.s. government

released the final decision about $200 billion worth of chinese products that will be had with -- hit with 10% tariffs. smart watches, fitness trackers, and other goods were not on the list. gerber life insurance will be sold for 1.55 billion dollars in cash. that is as the world's largest food company plans to focus on its most profitable businesses. the transaction is expected to be completed in early 2019. a japanese billionaire will take the first spacex ride around the moon and plans to invite as many as eight others to join him. fly a spaceled to exploration technologies rocket in 2023. -- may also also

join the space flight. [applause] >> i am very blessed to be here. i am really honored. i really appreciate to be able to share with -- to share the announcement with you. >> saudi arabia's sauber wealth fund is to invest more than $1 billion in foreign u.s. electric carmakers, having already taken a stake in tesla. the funding is needed for the company to make its first model in 2020. to beginind schedule producing the car, said to start at $60,000. >> we found the most perfect strategic partner in the sovereign wealth fund of saudi arabia.

lucid to objective of create the best car in the world which is going to change the ev landscape. >> uber is in talks to buy its dubai-based rival. the deal could tell the company at $2.5 billion. management is trying to convince shareholders of the merit of the sale. a spokesman for uber declined to comment. that is your bloomberg business flash. nejra: thank you so much. russia has called off a campaign against the last major rebel held area in syria after presidents putin and erdogan reached a deal. the russia backed army will not pursue the attack. egypt's foreign minister said the situation in italy is serious and needs a coordinated approach. about hisy talking nation's relationship with the trump white house.

>> we have dealt with a variety of administrations, republican and democrat. definitely i think it has always been important to highlight the strategic nature of the relationship and the mutual recognition that the value this returned.ip has that this relationship provides to both parties. has consolidated the piece in the region. has provided security and stability and continues to serve for those interests. many consider this the final battle of the war. there are warnings of human disasters. turkey has said it is not going to stand by. look istion in it dangerous.

it is a problem that has to be resolved through coordination and understanding between all those involved in the conflict, whether the government, the russians, the iranians, the united states, all other interested parties, the understanding of the that exists, also recognizing where the problems lie. risks of the biggest would be confrontation between the u.s. and iran. countries have common interest in that. deal --hink the continue stability, or there is a good argument for more sanctions would lead to a change in behavior? as the u.s. keeps arguing?

>> we deal with the current conditions. we emphasize the need for stability and security in the recognize that have been interventions by iran in the nationaln security interest of the united states, and that this volatility must be resolved. we believe that there should be no extension of the influence within the domain -- the air of domain -- arab domain. nejra: emerging markets remain under pressure after the announcement of the trump administration will impose 10% tariffs on $200 billion worth of chinese goods. this comes as em stocks could drop a further 10 to 15% over the next year as default rates

rise amid the escalating trade conflicts. simon french, panmure gordon chief economist is with us. is there any light at the end of the tunnel for emerging markets? the -- a lot of this is being interpreted by emerging markets as linked to the u.s. electoral cycle. when you talk about light at the end of the tunnel, you have to start with november midterms. the degree to which the rhetoric, which is quite mercantile in terms of trade policy at the white house, starts to dial down a notch. from a sentiment perspective you will start to see a better picture emerging at the end of q4 into q1. then there is this fundamental point, which is in an environment for the federal reserve is the only central bank raising interest rates, which is providing a tale went to the u.s. dollar, that is a fundamental tailwind. how can emerging markets, which are more resilient than they were the last time we saw this can theyelloff --

survive a scenario where given leveragerutledge -- has led to u.s. dollar related borrowing, can they survive? that is difficult when the fed remains the only game in town. nejra: it is interesting you bring up the dollar. i keep asking if this is going to continue as long as we have a strong dollar. since the end of june, it is not strengthen that much the way it did earlier in the year. this chart i have here basically shows the negative correlation between the msci emerging market index and the greenback gauge has shrunk. dollar is note having as much of an impact, and something else is going on below the surface. would that be the trade war's? would be more concerns run china? >> you are right to sight it not being a bilateral relationship. the dollar is part of the story. the white house agenda to

effectively target trade surplus countries, countries the u.s. has a trade deficit with, is part of it. there is an acknowledgment amongst a large part of the investment community that having had a 10 year trade probably from west to east and from north to south, that is starting to inflect. opinions very on how quickly it will inflict. it is clear inflection is happening. it is damaging sentiment for emerging markets. nejra: simon french stays with us. i want to recap headlines we have from the chemicals company clariont, naming a ceo from october 16. that is one of the main headlines to come through. deal completion is expected toward the end of 2019 to make a consideration, yet to set a valuation, though. up next, kim jong-un and moon jae-in meet in pyongyang today.

what is on the table for south korea and the u.s.? ♪

nejra: this is "bloomberg daybreak: europe." it is 6:30 a.m. in london. .able unchanged on a 131 handle let's check on the markets with annmarie hordern. >> it looks like starting september 24, china is getting hit with a fresh tariff from the united states. . of -- $200 worth billion worth chinese imports. , manye stocks are higher say this is priced into the market. they have been fluctuating. japan of 1.5%.

the topics on for its best day since march. -- kospibe higher higher as the president meets with kim jong-un. it looks like futures in london and new york are set for a weaker open. talk abouti want to hedge against these trade wars. i'm looking at the end versus the taiwanese dollar. go over weight the japanese yen against the taiwanese dollar as a hedge against what is going on in the geopolitical realm. taiwan, he says, is the most exposed asian economy to the value added chinese exports. take a look at this potential hedge. looking at emerging markets volatility in the fx world, it has risen to extreme levels. this chart shows the ratio of em

to g7 f acts -- g7 fx. this is not a level we have seen since the financial crisis in 2008. at the bottom you can see the jpmorgan e.m. currency index down 13% year to date. its worst full-year loss was 2008. that was 15%. keep an eye on em currencies. nejra: we are, don't worry, me and simon french. ballots get the bloomberg first word news. in the u.s., the trump administration imposed a 10% tariff on about $200 billion in chinese goods next week and more than double the rate in 2019. the move deepens what is shaping up to be a prolonged trade war between the world's two biggest economies. the president says in beijing retaliates against american farmers and industry, the u.s. will immediately pursue further tariffs on about $267 billion of

chinese imports. an argentine federal judge has formerly -- formally indicted its former president on corruption charges. she stands accused of illicit association and having received rides from public works contractors during her tenure between 2007 in 2015. a probe thatart of has involved many officials in her former government. she has denied wrongdoing. denmark's parliament well -- wants fines for bankers involved in laundering to go up as a dirty money scandal forces the country to rethink its defensive against crime. the current penalty of as much as 25% the amount laundered can be raised by eightfold for the biggest banks. the agreement, which needs to be passed by the legislature,

contains other measures designed to help denmark fight money-laundering. netflix has won the most emmy awards of any tv network. start as that got its a dvd by mail operation. netflix earned seven awards during the primetime presentation of enemies and 23 overall. giant. 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. nejra: thank you so much. now want to brexit. bloomberg caught up with the european commission vice president. we asked with the eu was putting forward for a hard brexit scenario.

agreementlating the on the deal with the u.k., and hopefully we are able to do so in the next months or so. , we should also be outliningnotices different scenarios and possible applications, and possible reactions on the eu side. many different sectors including financial services. >> contingency plans are being made for the hard brexit. french officials telling us talks are extremely difficult. to you see it that way? >> charts -- talks are progressing for complicated issues. -- toto be got with his be dealt with is the irish border and what implications it withor the u.k. relations

eu in terms of customs and customs union. >> how that clearinghouse supervision? that is a hot button issue that has seen a lot of resistance from the likes of carlo of the cftc. is there anything that has been planned or proposed that would change your mind or others in the eu that you do not want to go ahead with the planned continued oversight of that for >> have ainancial -- proposal on supervision some time ago. currently, in parliament and eu member states, -- obviously of our international partners, ,yself, chairman jean carlos

discuss those issues, hopefully we can find a balanced solution. it is clear we need to be able to -- other risks. that is what our supervision proposal is doing. nejra: that was the european commission vice president. simon french, panmure gordon chief economist is still with us. you say people are right to take a positive view of the fact that we are backing away from a no deal scenario. you also talk about a blind brexit, which would be what? >> it is a new term for your viewers. a blind brexit is the idea that come q4, we are looking towards the november summit, the eu and the u.k. come to an agreement on a withdrawal that puts a lot of

the questions that were supposed to be established in certainty on the new relationship that comes into force in december 2020, it defers those into those 20 month period. it is blind because the u.k. will not leave the european what is the trade relationship, something both sides were keen to avoid, but it looks like the most likely scenario to overt a cliff edge. nejra: what does that mean for cable? we have seen a rally today. to those gains sustain? >> i think you see a little bit of a relief rally around the next couple of months as a little bit of certainty appears you will get that march 2019 cliff edge. investors should wake up quickly to the difficult questions being deferred over two years.

the pressure will come back on cable in an environment where the uncertainty that is holding back exports, investments, things that are going to drive the economy, and will drive the bank of england to raise rates. the underpinnings to a stronger sir -- stronger sterling are not going to come through. we have a 125 target on sterling dollar. i think we will get there and potentially below if it becomes quite fractious. nejra: how are you for the possibility of a hard brexit? >> 20%. that is lower than some people are's adjusting. -- are suggesting. i do not think you will because of a -- think it will be because of it a decision by the u.k. government. i think it will be because of parliament, which is deeply divided. we will have an accidental hard brexit where parliament votes down any deal on the table.

with no deal approved, the u.k. has a no deal scenario. parliamentarians are unlikely to do that, but you cannot dismiss it, which is why the probability is 20%. nejra: you have got to watch eurosterling as well. have a chart you have highlighted. the ecb unlikely to change guidance amid modest growth. what does that mean for eurosterling? --i think despite the fact the optics around the euro as a currency are not linked to monetary policy over the near-term. i expect eurosterling to strengthen in an environment where sterling is weakening. you are right to sight the core inflation in the eurozone, stuck at 1%. that is not an environment where driving or his successor -- where mario draghi or his successor is going to be aggressive on interest rates.

i think it is up to talk about real normalization, and therefore, strong euro will have to wait. we start to see core inflationary pressures build in a shrieking output gap in the eurozone. nejra: thank you so much. simon french, panmure gordon chief economist. simon will be continuing the conversation on bloomberg radio. south korean president moon jae-in has arrived for his third summit with kim jong-un. talks will be held later this afternoon. we are expecting a joint news conference tomorrow. he expects to salvage talks between the u.s. and north korea, but also has eyes on his domestic agenda. what to because know so far schedule? -- about his schedule?

jae-in's from moon presidential office, what we know are the scheduled meetings with kim jong-un. one is scheduled for this afternoon shortly after their lunch. ,nother is scheduled tomorrow which will be followed up by a joint presser between the leaders of the two koreas. we also know that while moon jae-in is meeting with kim timeun, at 3:30 p.m. korea , business executives will be meeting with north korea's vice premier. he is also known to be one of the top north korean officials in charge of economic policies within north korea. we will have to wait and see what the outcomes of those meetings are. a 200 plus delegation came with president moon. what can this imply about the meeting? >> there were many questions

about economic cooperation between the two koreas. with all these business executives attending, many are saying this could imply more active economic cooperation between north and south korea. the chief of staff yesterday in south korea told a reporter it is a quite tricky situation and that they are very carefully monitoring what certain united ,ations sanctions are at hand and that they are very well aware of what can be acted upon and what cannot. nejra: thank you so much for updating us on those meetings between the south korean and north korean leader. if you are a bloomberg customer, you can watch the show using tv . you can also follow our charts and functions. you can also message us directly. put your questions to the

guests. put us to the test. coming up, industrial metals recoup their losses. is there more pain ahead? glencore investors david haro, the international equities cio joins us at 10:00 a.m. u.k. time. ♪

nejra: breaking news to update you with. qatar airways 2017 2018 loss of 252 million riyals versus 2.7 9 billion of profit. we will bring you more as we get it. let's get the bloomberg business dubai.n to buy -- >> clariant has appointed a new ceo and will update its plastics

division. that is asked to cathie of the companies sketched out how they will collaborate. -- as theow chemical outgoing ceo moves to a chairman role. the company expanded its board to 12 members. its is in talks to buy dubai-based rival. the rival atvalue $2.5 billion. the coveney's management is trying to convince shareholders of the merits of the sale. a spokesman for uber declared -- declined to comment. saudi arabia's sovereign wealth fund is to invest in lucid motors, having already taken a stake in tesla. the deal clinches funding needs for lucid to start making his first model. is behind schedule on building a plant to produce the cars, which

are set to start at $60,000. >> we have found the most perfect strategic partner in the sovereign wealth fund of saudi arabia. we are so aligned with the objective to create the very and car in the world offering creation, which is going to change the eb landscape. ev landscape.e -- elon musk called a man a pedophile. apologized, but the war of words arrested again when he implied in an emailed to a journalist that he was a child rapist and engaged in sex trafficking. representatives of tesla did not respond to requests for comment. that is your bloomberg business flash. nejra: think you so much.

turning to elon musk's other business, a japanese billionaire will hitch the first spacex ride around the moon. he plans to invite eight artists to join him. to pay for the system that ultimately will enable citizens to travel to space. >> he will not be alone when he 2023.the spacex rocket in he is going to take six to eight artists with him in a project he is calling -- neither he or elon musk will disclose how much money changed hands for him to be the first private passenger on the program. elon musk did add it was a material percentage of the overall r&d cost. spacex derives its revenue from his partnerships and contracts with nasa in servicing the international space station and also from putting satellites into orbit to replace legacy technology for private companies

across the world. elon musk is making an appeal to other private citizens. ultra high net worth individuals. they will need funding for the project. it is a figure in the region of $5 billion. musk set out his vision for the future. he said the human race needs to be a multi-planet species and that the program would be capable of going to any planet in the solar system. musk said it is possible he could be on that four to five day trip in 2023. if we are talking about elon musk, our next guest has interesting thoughts on electric vehicles. first, let's talk industrial metals. they pared losses even after trumps ratcheting up of the trade war. the world's largest miner says tensions between the world's biggest economies threatened to curb productivity.

joining us now is a portfolio manager at the blackrock world mining trust. great to have you with us. we will talk about electric vehicles in just a second. i want to talk about metals. we have seen copper recoup losses from earlier. somewhat shrugging off news on trade wars. metals have been hit as the trade war has been escalating. have got a chart you wanted to highlight, showing what has happened in copper versus iron ore and china steel. does this tell us that a lot of the lawson metals have been to do with financial speculation more than fundamentals of the market? >> has been interesting since the beginning of the summer when the trade war concerns began to escalate in the markets. we are seeing a very sharp selloff in financially traded commodities such as copper, aluminum. yet the physical commodities were you cannot speculate as

much, iron ore, steel, has been robust. when you take a deep red look at fundamentals of the market, we are seeing moderation. we are seeing tightening in china. infrastructure has been weak. underlying demand conditions are ok. they are not as strong as what we saw at the back end of last year. they are robust. as we look into the second half of the year, seeing the response wem china the trade wars, are already seeing early signs of infrastructure spending come up again. nejra: that stimulus is what you think will support the fundamentals rather than any potential slowdown in chinese growth? with the escalation of the trade war posing a risk? >> i think it is going to depend on what this trade war ends up becoming. we are seeing another step again -- $200iffs now on $200

billion worth of impact -- imports. when we start to see china stimulate again, infrastructure, which is a driver of investment in the country, which has been week during the first half, starting to reinflate again, i think that has the potential to be commodity intensive and spur growth from here. as an investor, what opportunities do you take? tend not to take direct views on the commodity price. it can be difficult to pick those. ist we are good at doing taking themes in the market. a number of the copper companies have seen a sharp selloff with the ball in copper -- fall in copper. there is more than that. a big theme in the market since we came out of the downturn at the end of 2015 has been

deleveraging. has been a huge component of returns for us. we are excited deleveraging is turning into distribution. we're expecting to see strong dividends from this sector. nejra: talk to me about how you are investing around the theme of change in the transportation industry and electric vehicles. >> this is something we were early to identify. we're going to see more change in the transport industry in the next 10 years and we have seen in the last 100. transport is becoming more electrified. and in the future, autonomous. there are powerful forces behind this. there is an increasing awareness of air pollution. at the end of the day what matters is economics. economics will drive the -- ev's.of tv's -- e's

we're trying to play this on the commodities the go into batteries. lithium, cobalt, even copper. oute going to have to build the infrastructure to enable this kind of electric revolution. nejra: shareholder value is one thing you have talked about as well. is there a risk there is not enough investment happening? >> this is quite an interesting debate. we are by no means against growth. growth is something we have been focusing on for a number of years. the key is growth equals value per shareholder. we have got to remember that during the previous cycle, we had a huge amount of investment in growth. and we have enough. the markets are well supplied. at five years of underinvestment. nejra: thank you so much. portfolio manager of the blackrock world mining trust.

up next, the u.s. government will slap tariffs on chinese goods. we will bring you the latest from beijing. ♪

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nejra: good morning from bloomberg's european headquarters. europe."daybreak beijing faster response to u.s. tariffs. chinese stocks slid after the white house announcement, but the yuan holds steady. south korea's moon jae-in meets kim jong-un in pyongyang to revive talks on denuclearization.

good morning and welcome to daybreak europe. we are just under an hour away from the european equity market open. in asia we saw the markets shrugging off the imposition of terrorists, the 10% levy on $200 billion chinese goods from the u.s. -- it could be a little bit of a lower open. risk off coming through if you look at the futures. we saw the u.s. close lower. europe closed higher, but losses could come through. dax and cac 40 futures, ftse 100 futures down more than that. fixed income might perform -- we have the cash market open for bonds in europe. if you look at the 10 year treasury yield we are looking at 3% now. we are up one basis point.

you are not seeing that safe haven bid despite this escalation in the trade war from the u.s. side. where waiting to hear more details from china. not a lot of movement right now in the futures in btp's, struggling for directional little bit. we will keep an eye on that btp-bund spread. >> brett kavanaugh and the woman who accused him of decades-old sexual assault will testify next week before a senate committee. the senate judiciary committee will hold a new hearing on monday bowing to pressure from christineto hear from ford, who says cavanaugh assaulted him at a party -- assaulted her at a party. south korean president moon

jae-in is in pyongyang to meet kim jong-un. the landmark visit is an attempt to salvage stalled nuclear talks between the regime in the u.s.. the trip will feature a joint news conference with kim, who has resisted attempts to spell out a timetable for giving of nuclear weapons. denmark parliament wants fines for bankers involved in laundering to go up by 700% as a dirty money scandal engulfing danske bank forces the country to rethink defenses against crimes. the current penalty of as much as 25% of the amount laundered can be raised by default for the biggest banks. the agreement, which needs to be passed by the legislature in copenhagen, contains other measures designed to help denmark fight let money laundering. egypt's foreign minister has said, our country will help the u.n. agency serving palestinian refugees after america's decision to cut off funding.

comments in an exclusive interview with bloomberg. that has been since the rome conference. we will go all caps that have been created by the withdrawal of american support out of the recognition of the important impact -- humanitarian needs of the palestinian people. >> netflix has won the most emmy awards of any tv network. netflix earned seven awards during the primetime presentation and 23 overall. both records for the streaming giant. its biggest prize came for the crown and godless. global news 24 hours a day on air and on tictoc on twitter,

powered by more than 2700 journalists and analysts in more than 120 countries. they do so much. let's check on the markets in asia with yvonne man. the shanghai composite gaining more than 1% right now. , this marketesting reaction we are seeing. something positive in the last hour or so for chinese stocks. no signs of panic just yet. futures in japan of 1.5%. we have seen mostly lower for some of these emerging-market asian economies and markets in general. there are theories, perhaps this has been priced in. perhaps the economic impact will take longer to be felt. perhaps markets are waiting for china's way to retaliate. in the meantime, focus on

fundamentals. the cheapest stocks in asia we have seen in two years or so. perhaps we are seeing bargain buying. we are also hearing from the pboc and how they are calming the market. they have injected cash. there are reports this triple archive could be coming as early as october. take a look at the movers. some 300 products were listed in the original tariff list that were exempt in this latest round. including smart watchmakers. tim cook meeting with the president certainly may have helped. bluetooth devices, bicycle helmets. a mixed reaction from apple suppliers. still not able to shrug off the sentiment we have seen.

samsung having a decent day, up more than 1%. some bicycle makers of 1.3%. nejra: thank you so much. the u.s. government will slap a 10% tariff on chinese goods next week and will more than double the rate in 2019. trump's latest move deepens what is shaping up to be a prolonged trade war between the world's biggest economies. tom mackenzie joins us from beijing. what should we expect from china? commentslready had saying china's economic growth needs to slow down even without a trade war. >> that is the vice premier speaking, the chop -- the top economic adviser to president xi. what we have heard previously is the are prepared to target about $60 billion worth of u.s. goods,

which we should expect them to do shortly after the u.s. has taken place. the u.s. has said that is going to happen september 24. in terms of the exact items, we are waiting for that to come out. have previously said everything from natural gas to airplane parts. we have heard interesting comments from the -- speaking in the will economic forum earlier today, saying the chinese were preparing for trump to impose tariffs on the whole range of the entirety of chinese exports to the u.s., saying the chinese were repairing for a worst scenario. also the vice chairman saying if -- expect to see chinese gdp trimmed. he also said there are fiscal and monetary policy tools available to ensure the worst effects of these tariffs will be

dented. ultimately he expects the u.s. and china to get back around the negotiating table to work through this. citigroup saying if china does retaliate, you could see this third phase of the trade war, citigroup describes it, which is trump's threat to but tariffs on $257 billion worth chinese goods we are looking further down the line. chinese buying the midterm --ction, paring policies preparing policies to shore of growth as the deleveraging campaign continues. nejra: to have a chart we have showed often. just showing the tariffs basically that president trump is implementing on china. how much of a drag are these so far likely to have on chinese economy?

>> we have already seen an impact from the first round of tariffs the u.s. has imposed. a drag on the data over the 46 weeks or so -- the last four to six weeks or so. the likes of ubs saying in total you could see a cut of around gdp.of chinese they also expect supported measures to offset that. ultimately, if those measures are rolled out by chinese policymakers, you could see a dentist 0.3%. 0.3%.ent of as yvonne mentioned, there have been reports you could be looking at another rrr cut. are expecting additional targeted measures at the local level and central government level, whether that is tax cuts or additional subsidies to

support the manufacturing sector. nejra: thank you. joining us now is the global head of currency strategy at hsbc. great to have you with us very -- to have you with us. $200 billion of chinese goods. this support your dollar bull view, doesn't it? >> this is not how i want my story to pay out, but this is why you could easily go risk off . the dollar is the best currency to have at the moment. nejra: we talk a lot about dollar strength so far this year. if you look at the bloomberg dollar index you saw strength toward the end of june. it has leveled off. >> not in august against emerging markets. we had some gains or falls in emerging-market tariffs.

it seems when g10 is stable, e.m. is on the move. that is a very unusual mix of the moment when you have this massive volatility in emerging markets, but it has not affect the g10. the dollar is taking turns. it takes on one at a time. it seems to be picking and choosing as it goes along. one of the victims seems to be the brazilian real. that is part of the dollar's rotation. nejra: you are going against consensus with your bullish view on the dollar. >> the consensus keeps thinking the dollar is falling. every time it goes up. every time they are looking for this fall. eventually they will be right. there is no doubt about that. nejra: you have three different scenarios. two where the dollar keeps rising.

one where it does fall. walk us through how this works. >> the fed is raising rates, the u.s. economy is doing well. steady as she goes, the dollar does well. that is the world we are living in. the second world is, the fed says we are done. equilibrium.s at rates are high enough. that is where my view comes under pressure. that is what the consensus gets kicked in. the u.s. economy slows dramatically. -- one, theens, dollar wins. two, i lose. third, the economy slows down and global growth goes down and the dollar goes up. two sides were i win and one

game where i lose. that means you should belong the dollar as an investor. there are trading opportunities all over the place. as an investor, the dollar is the currency to own. nejra: even against other g10 currencies, you are looking at -- >> take a dark, throughout the map. that is what you want to sell. except the risk-off scenario. there you are wanting to buy yen and the dollar. nejra: let me take you to a chart that comes up in your note. this is talking about terminal velocity. the fed's assessment of terminal rates has not fallen in more than a year. how does this fit into your outlook for the dollar? normally you talk about the front end and say, the front end -- do you think that is why you should be buying the dollar? what about this?

>> this is what the market is focusing on. one little rate rise, the markets going nuts. i want, what is the full meal? you're a bit hungry and they show you just the starters. the fx market has not been full. the fx market want to see the trajectory of rate hikes. when you do just one, the market says, we are not going to be fooled. the first one, they went, sterling, sterling. sterling did not respond. . with the u.s. there is responsiveness on trajectory. we're looking at four more rate hikes. within eu, will they raise rates in the summer? are they going to normalize or give us one? the central bank of norway gives us one in october. i'm still hungry. i want more.

we have seen this with pm as well. the passenger terminal rates -- the path of your terminal rates. not just are you going to do one. i get what you are saying, the fed is the only game in town when it comes to a hiking cycle. have convinced are you we are going to get that hiking cycle? the market is dovish and has been undershooting where the fed is going. what if it actually gets it right? >> 2015, the market was wrong, the fed said we are going to drop rates -- that took them a long time to get going. the market was right, the dollar went down. $80.rices are sitting on two are in the bag for this

year. the fed say more. likely undershooting the fed. what is this that are on target again? -- what if the fed are on target again? it is the running of the bulls. it is all exciting, but you can get the horns. you have to be careful out there. people are looking always to sell the dollar. i do not know what it is. the dollar is going up and nobody likes it. nejra: if we get a u.s. equity bear market, will that change your view on the dollar? people will need fewer u.s.. dollars buy the european economy, you are going to say, what is the ecb going to do? it plays to the dollar in that scenario. nejra: it is hard to fight david

bloom's bullish dollar view. remember that bloomberg users can interact with charts using gtv . browse charts to catch up on analysis and save charts for future reference. a few stocks you want to watch at the open, just over 40 minutes away. sap is called lower on trade today. that could be linked to oracle after it reported a disappointing growth outlook. city has previously said sap is better positioned than oracle for the cloud. also keep an eye on the german e-tailer, called lower after reporting numbers late last lot -- last night. a challenging market backdrop. now let's get the bloomberg business flash.

administration has spared a category of high tech products that include the apple watch for its next round of tariffs it has imposed on chinese goods as the u.s. government released the final list of $200 billion of chinese products that will be hit with the new 10% tariffs. couples --ode that covers fitness trackers was not on the list. clariant has appointed a new chief executive and will upgrade its plastics division with assets from its largest investor, saudi basic industries as the company sketched out how they will collaborate. a former dow chemical executive will take the helm in october as the outgoing ceo moves to the chairman role. the company expanded its board to 12 members.

tradermer ubs group jailed in 2012 for causing $2.3 billion losses at the bank has won a last-minute reprieve from his deportation from the u.k. to ghana. he was to leave today under rules that required foreign nationals sentenced to more than 40 years in prison to be deported automatically unless there is a strong public interest in favor of him staying in britain. wall street is back where it was before the financial press -- crisis. the average salary rose to its highest since 2008. toual hand bonuses rose $422,000 in 2017. earnings were up. wall street is on track to add 1700.jobs this year that is your bloomberg business flash. nejra: we have a viewer request talk more about the rand.

david bloom is still with us. i already had this chart prepared. here we go. traders having bet on a surprise rate increase from the south african reserve bank's. read into that what you will. are we going to get a rate hike? >> it is possible. anything is possible. the question we were asking earlier, those of you with short memories and those of you with no memories -- we were talking about terminal rates. a rate hike to please people not to sell their end. it is not going to work because we want to know the trajectory. let's talk about the rant. -- the rand. they just had a technical

recession. have high unemployment and they're going to have to raise rates. nejra: that takes me on to the point of a number of emerging markets that have been using rate hikes to this -- to stem the rout and currency. -- in currency. >> if you think they are on a trajectory of higher rates in order to get real rates against the united states, the u.s. offers you 2.5% plus, and a real rate that is quite substantial. have got to give me more. i can buy dollars and get a great return. read the research, just chill out. emerging markets have to offer me a risk premium. as inflation picks up, the rates -- i need more.

they will sustain the higher real rate, then i am convinced. nobody is doing it. i'm getting into trouble, i raise rates. that's not good enough. nejra: from what we heard from the russians central bank, do you believe the russian central bank is on a hiking path? >> it is possible. the problem is russia has nothing to do with race. we like it structurally, but the u.s. senate is thinking about sanctions. your nervous politically. this is very political. you have to make a political choice. that is not a choice i can make. people have to make their own mind up when it comes to politics. nejra: you are not buying the ruble, you are not buying the rand. you are buying the dollar.

are their u.s. currencies -- are there em currencies you are buying against the dollar? >> not at the moment. some offer value in terms of being cheap. politically you have risks. the e.m. universe is tricking. -- shrinking. why would i want to take risks? show me the money. show me what you've got and i will buy your currency. we have just seen $200 billion of trade tariffs. another 200 62 $7 billion to come. billion to come. nejra: recently the negative correlation between the bloomberg dollar index and the msci index is not as strong as it was.

talking of correlations, i have a chart showing oil versus em currencies. it is showing non-asian emerging-market currencies have been failing to benefit from higher oil prices. is this a correlation that is important? >> not at the moment. it is interesting that financial markets have fashions. though the oil price is high, you are very happy to sell india and turkey. the currencies that have oil you do not want to buy. there is something gone wrong here. the fed is in play. the trade story is in play. these are bigger stories. behind the scenes, the dollar went up and the fed under shock, oil prices not falling. i think it still plays into the dollar. the u.s. produces more shale oil than it used to. i am not buying em on oil price.

the emu want to buy on oil price, you cannot really buy them. it is not playing in fx at the moment. ,ejra: david bloom, thank you head of currency at hsbc. let's get a check on the markets. we heard of the imposition of 10% tariffs on $200 billion worth of chinese goods, but we have seen the asian markets shrugged that off. 0.5% in the csi 300 up 1.8%. the msci asia-pacific index has been gaining. yuan fairlyen the steady and industrial metals recouping losses. of the chairman and ceo

roubini macro associates joins us at 11:00 a.m. u.k. time. that is it for bloomberg markets. the european open is up next. ♪

>> good morning, welcome to bloomberg markets european open. live from our european headquarters in the city of london. alongsideedwards, matt miller in berlin. >> we had a mixed trade overnight although asian stocks appear to be recovering into the close. not a lot of concern about tariffs, the extra $200 billion of goods from china. the trade is less than 30 minutes away. ♪ ♪ anna: ramping up,