manus: i am as well in the studio. here is today's top stories. shares of the csi 300 slide, markets in hong kong and south korea are shocked. manus: the ecb [indiscernible] nejra: and shocks bond traders. the argentine president tells chance thehat no nation fault. -- will default.

good morning and welcome to daybreak europe. it is 6 a.m. in london. here's what has been happening in the asian session. andshanghai comp is it down chinese and japanese markets were closed yesterday. you are seeing a difference in japanese markets, they are higher today. we will talk a lot more about the trade tensions in the show that are playing through an equity markets and also in punished,pper getting that is something to keep an eye on. we have seen a bit of a stronger dollar, we have been talking about the theorem of 10 year treasury yields higher. it is holding gains today. meanwhile the end at a two month low against the dollar. we have those boj minutes out. and rent at a four-month high,

-- brent is at a four-month high. is have bank of america joining j.p. morgan calling for higher oil prices and we have others saying that the spike will only be temporary. brent and wti higher today. are -- you love a higher french old, is that an arbitrage moment? goldman sachs told you at the end of july that it was the moment to step back into emerging markets. were you brave enough because what we have done is we have seen the biggest drop and selloff in a.m. since the 2008 crisis. but we have is the bloomberg barclays emergency market, total return is you're seeing a slight drop in yields, rise in returns. total return index, 28 basis points. you also saw a big flow of money coming back in.

jpmorgan dollar and etf, themarket and biggest weekly inflow of any etf, you saw that last week area the question is do you want to step into emerging markets? the fed is in play, you're saying some of the runs are already done in emerging markets. the chart tells the truth, they sliced and diced on yields, the question is are you brave enough to step in. we saw some weakness come through in the session and trade tensions are playing into the session but also u.s. politics, the deputy attorney general progress and sign will leave his post. president trump he will discuss what is going on with rosenstein. we saw the u.s. and s&p 500 close lower. futures are flat.

manus: we have conversations to get into the show, bob dudley joins us later for an exclusive interview at 1:00 p.m. juliette saly is standing by. that it: china has said is up to the u.s. when trade talks between the world's two biggest economies resume. in a news conference in beijing, also said china is fully capable of offsetting the effects of the dispute and will boost domestic demand am a investment, and business sentiment. >> china does not want a trade war but we are not afraid of one. we have the confidence and capability to deal with all kinds of risks and challenges. china has cap the door open to negotiations but negotiations must be conducted on the conditions of neutral -- mutual respect and credibility and should not [indiscernible]

juliette: u.s. president donald trump said he is looking forward to looking -- meeting with rod rosenstein to discuss his future. toldberg learned that he john kelly he was resigning. he said he would record conversations with trump. u.s. up in court nominate brett "nevergh has said he sexually assaulted anyone" and a fox news interview. he defended himself against allegations that threatened to unravel his confirmation. republicans have scramble to save his nomination and mitch mcconnell promised he will get a floor vote soon. checks i am not going to let false accusations drive us out we are process and looking for a fair process where i can be heard defending my

integrity, my lifelong record of promoting equality for women starting with the women who knew me when i was 14. i'm not going anywhere. argentina's president said there is no chance his country will default and day revised imf agreement will help shore up investor confidence. he made the comments in an exclusive interview with bloomberg >> the level of support that we are receiving from the countries especially from the u.s. and the level of withtment of my government this new exchange rate [indiscernible] has a competitive exchange rate. we are balancing our foreign accounts. juliette: 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. you can find more stories on the bloomberg at top . today it is hong kong and south korea's turn for a holiday. we have markets in china, down 1.1%. the first time investors have had a chance to react to the latest in the trade dispute between the u.s. and china. you're seeing some good gains coming in japan. the longest winning streak since october last year. wehave the yen steady and are awaiting the comments coming through from the bank of japan's corrode up. and getting the daily limit in china down and this is the last of the suspended units to receive trading. this is after we saw goldman keeping a buy on a lot of tourism stocks saying they see a turnaround coming through in that space and in the tourism sector, web jet in australia

falling the most in 10 months, one of its hotel suppliers thomas cook in the u.k. said it cfo.etrace -- replaced its that has weighed on web jet as well. manus: thank you. the latest on the markets. as juliet was saying, chinese stocks are lower this morning and fx industrial metals are also taking a hit. markets are digesting the impacts of washington and beijing slapping hundreds of billions of a different -- of different tariffs on each other. chiefldman sachs global strategist is playing down the impact. >> i think the markets already observed the risk to some degree even from these levels in the tariffs. that the overall macro effect so far globally i think is relatively modest. there is a multiplied affect through the process and i do not

think it will be significant. manus: we renew a broad church of voices at bloomberg. let's bring in our voice of the morning, bloomberg's managing editor for asia. joining us from tokyo. the chinese are saying we do not negotiate, not with knives that are neck. -- at our neck. chris: we had a day after the tariff hikes kicked in on the latest round, $200 billion worth of chinese goods. chinesen array of giveucrats come out and where the chinese see things at this point. number one,e was our door is open, number two, we're not going to negotiate when we have got these threats

underway, with these tariff hikes coming through. number three, they made the point consistently that u.s. companies are already benefiting from trade with china and have even more to benefit. they are going with the carrot and stick approach. they are prepared to go toe to toe with the u.s. on the trade war and they say they have plenty of space to boost their economy on the domestic side to counter any impact and on the other hand, they are throwing out the prospect of benefit to american companies if the u.s. comes back to the negotiating table. in terms of market reaction in the asian section, we are seeing a difference of what is happening with chinese and japanese equities. our chinese shares reacting to trade tensions where japan is reacting to it the yen is doing today? chris: you hit the nail on the

head. keep in mind that both of these markets were closed on monday. reacttraders were able to to the fact that the u.s. and china are no longer proceeding with talks. when markets close on friday. it still looks like there were lower-level talks assume is this week. there is that hit to the chinese market. at the same time, the yen has saiddown and as your guest , mr. oppenheimer from goldman sachs, there has been no evidence so far that for all the rhetoric and the actual imposition of tariff hikes, there has been a hit to global growth here in this region. exports are growing 10%, japanese export growth has ticked up from three and change to six in change. south korean exports are doing

well. investors are saying we have heard a lot of rhetoric on trade but trade is still growing. growth is still there. there was that disconnect. good point about the disconnect. joining us now, great to have you with us and good morning. as chris was pointing out, oppenheimer said the rockets are observing the risk of the trade war. how much longer can u.s. markets keep doing that? guess poland the more that it escalates, we have gone to 10% now, if it is threatened we go to 25%. the more that is going to weigh on global trade and the global economy will suffer. chineseo you expect the to do more to counterbalance that, that will be an argument, they said the slowdown in china is in theory manufactured by the

chinese this year and that with they will do is they will do more stimulus to balance that. is possible. they are trying to get their credit boom under control and focusing on that. they also have a couple of weapons potentially up their devaluationontinued of currency and they could look to do something with treasury holdings or their desire for treasuries going forward. the always is in their court as to what to do next. you say a hit to global growth could come, more people say we could get a recession in 2020 that are you changing the way you are managing money? guest: absolutely. people get so much closer to the recession, they are unlikely to change the way that they invest. there is -- that means that there is more room in u.s. equities. manus: we saw the flow of money coming in, our producer has a

lovely chart. we like to recycle. we have this wonderful graphic and i am determined to get it. it is interesting because you saw there is a lack of fear that seems and we are seeing money flow back to u.s. equities as we hit record highs. $14.5 billion came in last week. in terms of allocation, are you allocating more -- there you go. are you going all in on the u.s.? guest: one man's lack of fear is another matter complacency. manus: where are you? rexam a little bit fearful. you would want to allocate to asian emerging markets are other parts, to europe? guest: it is difficult to know where to go at the moment. a -- itat the moment as is about holding allocation and waiting for those opportunities

to appear. dislocate inarkets theory we should see more volatility. would you be a buyer of protection? a lot of people say do not spend money on puts are buying volatility. you have gotten knocked out if you had done so for you but do you buy protection, how do you defend yourself against the spike in volatility? yes: if you are worried about a spike been some form of chooseion to what you make sense. as a long-term investor, not so worried about protecting the next couple of months, i am looking out three to five years. index, and this do how high that has gotten. in other asset classes, are you protecting your portfolio, are you doing it through fx? guest: we are seeing massive shorts through treasury and huge vix shorts and huge gold shorts

in terms of the commitment trade. the market is incredibly risk on. be contraryult to and when you are fighting against everyone else but maybe now is the time. what have we got next, this is what we have got, mario draghi sees relative vigor in inflation. what does that mean for the rates in the euro? brexitthe uk's shadow secretary joins us after 8:30 a.m. u.k. time. this is bloomberg. ♪

nejra: it is 6:19 a.m. in london . the sun coming up, a gorgeous skyline. cable a little soft up by .1 of a percent. let's get bloomberg business flash. ofiette: the founders instagram are leaving facebook after growing tensions with ceo mark zuckerberg the direction of the photo sharing up. the founders who have been at the company's since the acquisition of instagram have been able to keep the brand and product independent. bloomberg has learned that they were frustrated with an unusual uptick in day-to-day involvement by zuckerberg who is more reliant on instagram for facebook's future growth. planning and organizational shakeup including layoffs that will start at top levels. to revert it tries

stagnant sales and rekindle investor interest. in a memo to employees, you'd by bloomberg news, kevin johnson said we must increase the philosophy of -- philosophy of innovation. the changes will entail an undetermined number of layoffs including some employee shifts between company departments. jpmorgan ceo jamie dimon does not expect wall street to be forgiven any time soon by americans still angry about the financial crisis well out. he said washington did the right thing to avoid another great depression but admits it could take 25 years of people to accept that. he also said president trump is correct to admonish china on trade but tariffs are the wrong way to go. that is your bloomberg is this flash. manus: thank you. let's talk about the euro, the single currency jumped against the dollar. after mario draghi gave an

optimistic projection enough inflation averaging 1.37% through 2020. >> measures to underlie inflation remained generally muted but have been increasing as domestic price pressures are strengthening and broadening. underlying inflation is expected to increase over the coming months. the labor market is pushing up wage growth. our guest is still with us. i would maintain that what mario draghi did was introduce some frisky two-way risk into the market which i think we needed. look at the bond market, we have the bunds to reprice, it was at a three-month high, nejra: the 300 and 28 -- 2018 was over basis points. new two-waye invoke

pricing in the market? guest: he may will have done and i am slightly surprised that he made this pronouncement. not necessarily seeing what he is saying is we talked about core inflation. manus: i disagreeing with the head of the ecb? guest: i am not saying what he is saying. nejra: what he saw was vigorous pickup in euro area inflation. we can talk about oil prices but that does not affect the call. does. i do not think it we have to consider you have trade tensions around the world and global growth generally slowing in china in particular. i'm not saying where he is seeing the shifts of growth. later we will get data this week in terms of the call. we have an fx board and the

eurosterling [indiscernible] but to what extent does this reinvigorate the euro? guest: i am not sure does, the action will be around the euro -- the dollar. nejra: a lot of people are saying what we need to focus on is what happens after the end of 2019. are you doing that or are you waiting to get more information? away and is a long way we are starting to digest what happened and for all the terms of rejection -- inflation there is a lot of ground to cover between then and now. worry about,o you the outflows in euro -- europe, have you repositioned at all, have you changed anything him are you doing anything of consequence in regard to trade wars in europe? guest: we are quite defensive in

our strategy. we have not changed a great deal. we are holding on to companies with quality long-term cash flows. showing have a chart how defensive stocks have outperformed in europe so you would not be a buyer of the cyclicals. guest: not ready to get back in yet. copper,e have look at there is this differential between what is going on with shanghai copper and with the lme . metals and miners are coming back into a key focus create any thoughts on those from a global perspective, perhaps a little bit more and is the u.k. still exposed to metals and miners? there is pressure on metals and commodities. we have that disparity but the ,tory driving this is china slowing growth in the chinese seem happy to let that happen as they surface on the credit markets. nejra: someone pointed out that oil and gas companies best

and iming industry group am talking about in europe, are you a buyer of the oil majors or oil companies as an index? guest: struggling with oil majors in general for the sg and responsibility would be looking very carefully at slug -- and selectively. much, stayk you very with us little bit more to get through the morning. , anding markets excitement. we are talking about emerging markets and we will hear from the leaders of south america's two biggest economies. president mccree of argentina and from brazil. that is next. this is bloomberg. ♪

manus: it is six and the a.m. in the nikkei is frisky, and you are seeing the japanese stocks rise, shrugging off the tariffs post the holiday. an interesting differential between what is going on. the dollar yen is on a two-month low. you're seeing the minutes from the bank of japan just trying to invoke a little bit more of a tempered view in regards to forward guidance. u.s. president donald

trump addresses the u.n. and meets japan's shinzo abe later. -- at merkel's because it a conference of industrial employers in berlin. manus: and meeting her american counterpart robert lighthizer. thea: let's check in with markets. and someopening are -- are closed. >> it is the story of do virgins, china -- of do virgins. mixed picture on equities. intoiggest use coming play. thes a mixed picture on front, you have the peso and philippines falling and alicia gaining.

divergence and when it comes to the shanghai price, that is gaining and there is the government briefing on trade issues, a good indicator of industrial activity. this is chinese copper futures with the index in the blue. use and bankricity loans. measuring the economy. they are tracking each other, they have the uptick in futures. a possible sign that china can withstand a negative fallout from that trade picture. also worth looking at, the hong kong dollar. here it is all the way back through 2003. any green is a gain for the hong kong dollar. you saw that massive move in 2003, we have not seen anything of that magnitude.

we did have the huge leap on friday and it is the biggest and , the biggest since january 2016. the biggest jump since 2003. you have the borrowing costs rising and -- the most since december of 2008, a good way of putting it into perspective. manus: thank you. juliette saly is standing by with your first word news. that it: china has said is up to the u.s. where trade talks between the world's two .iggest economies resume officials said china is fully capable of offsetting the effects of the dispute and will boost the mastic demand, investment, and business sentiment. >> china does not want a trade of but we are not afraid one. we have the confidence and capability to do with all kinds of risks and challenges. china has kept the door open to negotiations but negotiations

must he conducted on the conditions of mutual respect and credibility and should not come at china's right to development. juliette: the uk's opposition labor party is preparing to vote down any deal with the european union that theresa may brings to parliament. tellrexit spokesman will delegates at the annual conference that while they may be able to rely on his party's support for a step into the unknown, she is struggling to win the backing as conservative -- of conservative lawmakers. u.s.-iran tensions are raised when donald trump addresses the general assembly at the u.n. key u.s. allies on the council including france and the u.k. have criticized his exit from the iranian nuclear deal signed by his predecessor. the eu's foreign-policy chief has said nations backing the deal will agree on "operational

steps to safeguard the accord." >> mindful of the urgency and the need for tangible results, the participants welcome tactical proposals to maintain notablylop channels, the initiatives to establish and facilitate payments related to two iran's exports. juliette: global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you. now to emerging markets as world leaders gather for the u.n. general assembly. bloomberg spoke with the leaders of south america's two biggest economies. first up, mauricio macri. there is zero chance of argentina defaulting again, he said. to moreok forward

certainty to the financial program of argentina next year. we will have more support from them. >> how much more? >> i cannot say. they are still negotiating. that would bring more confidence to the market. at the same time we are , the plan we had of five years to achieve fiscal balance and public accounts. we will be done next year so we are doing a huge effort. >> you wanted to avoid what happened on august 29 happening again. you went on national television and you told argentines you had yougreement with the imf, accelerated disbursement of funds and it turned out there was not an agreement and we are talking about a new agreement with the imf and we have not

heard anything from the imf. are you certain that the imf will give you more money and it is going to give you that money on a faster timetable? >> [inaudible] close to final agreements. that will benefit the program and argentina. >> every single dollar counts. there are some people who will say if you get $5 billion in additional funding from the imf, that is not enough. if you are going to meet the principal and interest payments on your u.s. dollar denominated debt next year, 24 billion dollars, you're going to need $10 billion or $15 billion more amount is it five or 15? days you will of know. do not be so anxious. i am confident that it will be something that will guarantee

and will find room for a new relationship with the markets and more stable terms and we will establish our economy after a process of some more months of recession. we will start growing again, reducing inflation, reducing taxes, and allowing new investors to come and partner with us in mining, it energy, agribusiness, there will be a great opportunity. at whichthe pace things have deteriorated over the past five months, it is difficult to predict with any confidence what is going to happen in 2019. what if even with additional funding from the imf you find yourself short of dollars, what will you do to keep argentina from defaulting? >> or is no chance for a large and tina to default. zero. the level of support we are

receiving from the countries especially from the u.s. of myvel of commitment government and our citizens with this new exchange rate, argentina has a very good exchange rate. our accounts.ng exports are growing. at the speed of 18% to 20%. that shows the number of starting the work very well. fortunately, the weather notcast shows that we are going to have neither drought nor flooding. production,ortant they are [indiscernible] rocketing to a new record of production. nejra: that was my resealed

mccree. president -- macri. >> my party, my party's cabinet even though he has a very appropriate [inaudible] and so does my minister of finance was very inched a mental in helping us recover. helpingumental in us recover. there are any gains we have achieved -- many gains we have achieved. what willven know happen, we will see what happens.

brazilian assets have sold off because of little uncertainty, we have weakness and argentina emerging markets area is brazil vulnerable to contagion? >> not at all. there is no potential for contagion. just to give an idea by way of [indiscernible] u.s.ve 380 billion dollars. we have not had to resort to any of these foreign reserves notwithstanding all the turmoil in neighboring countries or countries like argentina. there has been no ripple effect or contagion on the economy or the job creation [indiscernible] in brazil. auctions will be held in the future.

there has been no effect whatsoever in the brazilian economy. that was the brazilian president. we have headlines coming through -- kuroda.er rhoda to giveer if they want a dovish start when you are it with what we are hearing from kuroda saying it is continuing easing, in powerful terms of what else we are hearing from kuroda he is saying we must balance the effectiveness and size effective policy. the side effects are relating to also the impact of the yield curve and japanese banks and what happens to the end. he said the guidance is not based on a specific time, we need to see him much protection most effect trade.

he said he hopes the forward guidance makes the strong start clear. you have the likes of number out, morgan stanley saying the japan yield surge will be capped. manus: part of this rhetoric is to balance that. you look at the minutes from the bank of japan, there were a few members who recognized the shift in forward guidance to counter the market view that they were moving. let's have a look at some of these markets, you have dollar-yen at a two-month low, a four-day losing streak for the yen. that is a little bit more than a dollar story. topix is up and you are that coming into slightly overbought position. an extended time does not mean permanently, this is reflecting

back to forward guidance is not based on a specific period of time and the qualification is that an extended period of time does not mean opportunity. clarification around the report from kuroda. have seen u.s. equity benchmarks recoup from the february selloff and speaking of the u.s., the bank of japan is troubled by the yield curve, yield curve control, if you are worried about in version of the u.s., it may be too late. we are getting thoughts on an inverted real yield curve, he is our guest host this hour. that is next. this is bloomberg. ♪

nejra: 63 cm -- 6:37 a.m. in

london. the u.s. closed lower yesterday. some political risk coming through with reviews are reports around rosenstein. u.s. futures flat, struggling for direction. let's get more from juliette saly. juliette: the founders of instagram are leaving facebook after growing tensions with ceo mark zuckerberg over the direction of the photo sharing up. the founders who have been at the company since instagram's acquisition by facebook in 2012 have been able to keep the brand and product independent from facebook but bloomberg has learned that lately, they were frustrated with an unusual uptick in day-to-day involvement by zuckerberg who is more reliant on instagram for facebook's feature -- future growth. rally may be short-lived, according to janet tradingheads bps

business in asia. any spike on the loss of iranian supply due to u.s. sanctions probably will not be sustainable because the negative impact on demand from a trade war tween the world's two biggest economies has not been priced into crude yet. a death by 1000 cuts. isple are the market, it choosing not to price in that potential demand being much weaker than we thought in 2019. bps ceo bob dudley joins us for an exclusive interview after 1:00 p.m. u.k. time. that is your bloomberg business flash. inra: juliette saly singapore, thank you so much. let's talk about the yield curve in the u.s. we are looking ahead to a fed decision with a rate hike is highly anticipated. resuming its flattening in this session.

us that pointed out to we might talk about yield curve inversion, there were parts of the yield curve that are already inversion -- inverted. we are looking here at the 510's yield curve. atst: the real yield curve tens and twos, it is -- the global counterpart is already inverted. we are watching with close eyes, the tens or the twos to see what happens and wants that goes, the san francisco fed recent paper suggests that is it, recession is coming. manus: that is it, recession is coming. our core business in so that isd funds

what i have got on this, marching toward real positive rates. what i want to get a sense, this is the first time in 10 years we will have seen this in terms of for nation -- formation of the u.s. market. plausibility?ke they have to seem neither ahead nor slow it down with rates. the goldilocks level. guest: it is giving them's for thought. couple that with recent wage growth numbers and after 2018, the fed may be having everything after the three rate rises that are in the top -- the dot plot for next year. nejra: what does that mean for markets? guest: they will question why is the fed getting gloomy? manus: that depends if they think they should be doing something to help emerging markets. guest: powell has said he is

reluctant. manus: a reluctance from mr. powell. let's see what he says later on in the week area great to have you with us. investment here. continuing his conversation on the radio. michael kors is near the point theuying for such a dealing house at a tag of $2 billion. investors are not skittish about the proposition. michael kors shares down. , great to see you on a story like this. how is this deal going to get done? expecting asare soon as today, they have been in talks with some potential buyers

for a while. the company did a deal if you 2014 with blackstone because they needed capital and they sold 20%. they made a slight turnaround but i think the family is looking to finally do a deal with a big partner. nejra: does this come as a surprise then? company posted a small profit in 2017, it had sales of around a hundred million euros. it is an iconic rand. the bold label that was put together by johnny for such a who was killed in the 1990's. it kind of struggled but it has some appeal. in the fashion industry. gianni's sister has been very high profile, invested quite a bit and getting this company on a turnaround

track. that theyit is a bet think it will be part of the strategy to put together this assembly of well known fashion brands. independenthere any luxury fashion brands left either thin and italy or have they been bought up by everyone else? dan: there are still some big names left. prada, for example, considered very hype profile italian fashion brand while it is aced in hong kong. you have ferragamo, the task in shoemaker who is in the midst of a turnaround story and armani, one of the largest and most famous labels still independently owned. and remains to be seen whether that will stay that way and coming months and years. much, dannk you very

liefgreen in the land. -- in milan. instagram aref leaving facebook. the exit follows growing tensions with the chief executive mark mark zuckerberg over the direction of the photo sharing app. nejra: the u.k. opposition is very to vote down any brexit be brought to parliament. they will tell the annual conference at the prime minister cannot rely on the parties support for taking a step into the unknown. stories onmost read bloomberg, starbucks is planning and organizational shakeup including cutting jobs and a second supreme court nominee brett kavanaugh, is he not going anywhere in the face of sexual assault allegations and then at the top, it will take another 25 years for wall street bailouts

to be forgiven. that is a big call. dimon's stock price, he is in a strong place to make such statements. nejra: let's look at these kuroda headlines that are still coming through, he managed to -- he was saying we will keep watching as sudden market changes could arise. the boj will continue to thoroughly examine the jgb market function. they have to keep an eye on whether yields rise to much, we have some dovish statements coming through and it suggested in the minutes, bond transactions have become more active and we have comments on a.m.. manus: protectionism will not benefit any economy. stocks fx rates have been stable since july. there is the markets, no huge

topix is up.e we will do it again tomorrow. questions and opinions, get the man. -- get them in. this is bloomberg. ♪

manus: good morning from bloomberg's european headquarters. nejra: this is "bloomberg daybreak: europe." manus: china sticks to its guns. beijing says it will not negotiate with a knife at its neck. shares on the csi 300 are lower. markets are shut. nejra: the eu president inflation comments move the euro. macri president mauricio sews -- tells bloomberg there is no chance his nation will default.

welcome to "daybreak europe." we are getting a real sense of the reality of what is going on with trade wars. the reality is the chinese markets are lower. the japanese markets are higher. you have copper under pressure in london. would be traders, traders of the metals and -- in hong kong. london really feeling the heat. you have copper in london really getting battered. there is a different story in china. is there a resilience to trade wars? peter oppenheimer, we will get more later on, he says there is. the dax coming back to unchanged. likewise with paris. you also have iron ore under pressure. we are waiting for the next

results. nejra: a bit of a mixed session in asia. you have the topics rising to -- aighest since the fed racing its loss. gains in japan fueled by a weaker yen. the yen hitting a two month low against the dollar. divergence?olicy we have had comments from the boj minutes and from kuroda. on the shanghai composite, that is lower by 0.7%. it is chinese equities the risk of sentiment relates to trade wars seems to be reflecting. the shanghai composite lower. have been seeing copper get hit on the london metal exchange. that is something to know. -- notes. brent crude a four-month high above $80. we are now above $81 a barrel. wti higher as well. atst half revenue coming in 1.96 alien pounds -- a billion

pounds. tax coming in at 311.1 million pounds. the estimate was 315.3 million pounds. that first-half pretax is a little bit of a miss from next. the interim dividend per share is coming in. , whatare the main numbers investors were looking for was a focus on the u.k. consumer and any share buyback comments. not seeing any of those come through. a change of the top of the tobacco chain. we have breaking news. british american tobacco names the ceo. the new cl. -- ceo. the current ceo has delivered a return of 9.33%. his peers delivered a return of 13.3%. there is a new ceo.

it will be the first of november. jack bowles. that is secession planning from b.a.t.. seenears is where we have the leadership of the b.a.t. joined in 2004 as -- thereafter he became the managing director of a subsidiary of b.a.t. in malaysia. he appointed a management board back in 2009. he is very much an insider. the board pleased to announce jack bowles. currently chief operating officer, takes on the role. the current ceo will retire the first of april. def, is a great function,

see what the ceo managed to do. enough of the cigarettes companies. let's have a look at the bond market. it is fed week. kuroda has been speaking, forward guidance from japan. yield differential, that is the differential between bunds and u.s. treasuries. between jgb said u.s. treasuries. corona taking the market forward. government bond yields are little bit higher. the bid to cover ratio, we had a bond action last night, the lowest bid to cover ratio since 2008. getting nervous in the bond market. indirect bidders bought 40% of the paper. that is down from 42.8%. gains are unlikely to above 3.5%. 23 pips at the

moment. nejra: glencore boosting its buyback program by up to $1 billion. this is a red headline crossing the bloomberg. increasing its buyback program by up to $1 billion. increase and extension of the share buyback program is what we are hearing from glencore. getking of buybacks, let's something that the market was looking to hear from next as well. i brought you some of the lines earlier. , saying thee to add u.k. retail market remains volatile. they remain cautious in the outlook for the rest of the year. this after that first half pretax profit number came in at a miss. let's get the bloomberg first word news. here is juliette saly in singapore. china has said it is completely up to the u.s. when trade talks between the world's two biggest economies resume.

also said china is fully capable of offsetting the effects of the dispute and will boost domestic demand, investment, and business sentiment. >> china does not want a trade war. but we are not afraid of one. we have the confidence and capability to deal with risks and challenges. china has kept the door open to negotiations. negotiations must be conducted under conditions of mutual respect and credibility and should not combat china's right to development. juliette: argentina's president has said there is no chance his country will default and a revised imf agreement will shore up investor confidence. macri made the comments in an exclusive interview with bloomberg. >> the support we are receiving from the countries, especially from the united states, and the level of commitment of my government and our citizens with

these new exchange rates have a very competitive exchange rate. we are balancing our accounts. the uk's opposition labor party is preparing to the vote down any deal with the european union that theresa may brings to parliament. labors brexit spokesman will tell delegates the party's annual conference that may well not be able to rely on his party's support. she is already struggling to win the backing of conservative lawmakers. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts. you can find more stories on the bloomberg at top . today there are holidays for hong kong and south korea. you saw china come back online. you can see this red showing the rate of selling we were expecting.

the first time investors have had a chance to react to the latest in the trade dispute. you are seeing gains in japan. holding steady, its first winning streak since last year. a little bit mixed when you look at emerging markets today. was have a look at currency. we have heard from the boj in the last hour. kuroda saying they're going to watch as market changes can arise and they are going to examine the jgb market function. you have the u.s. dollar stronger there against the yen. also watching this week is coming through, dollar strength against the emerging-market currencies head of the affected said -- expected fed rate hike. we have been watching the stay virgins between china in -- top or in china versus the weakness on the lme. at least looking like the chinese copper traders are ignoring that trade angst somewhat. nejra: thank you so much. chinese stocks lower this

morning as investors digest the impact of washington and beijing slapping additional tariffs on each other. china says restarting talks is entirely up to the u.s.. let's bring in our china correspondent in beijing. to china's comments suggest a tougher line? we have had this white paper on trade. the comments seemed balanced. was that you're reading? >> potentially balanced with a bit of an edge toward a tougher line. what they did was crystallize the gulf that remains between beijing and washington. this was a show of unity between a number of ministries ranging from the finance ministry, the planning department, getting up there this morning for about an hour and a half to take questions from the press about their stance on trade tensions. there were lots of wants and don'ts when they talk about

their trading relationship. they said they will not be negotiating with a knife to beijing's throat. the visceral image there. they said it was the u.s. tariffs that derail talks and they did not address any policy that have been put in place in beijing to look at things like intellectual property and forth tech transfer, which are key to the concerns amongst the hawks in washington. the officials said the ip protection regime is not a problem and that joint ventures are valid under wto rules. these officials outlined additional policies or fleshed out policies they say will go some way to supporting the economy. they say they're going to step up domestic consumption, they are going to step up investment. you remember fixed asset investment reached a record low. the officials say also they're going to be stepping up corporation between --

cooperation between beijing and the european union, japan and russia to prevent a coordinated front against what they say that see as trumps attack on the multilateral situation. they are digging in and batting down the hatches. in terms of potential changes the head of the midterms, that looks like it is being kicked into long -- doesn't it? >> it does. there is a view in beijing amongst policymakers that my colleagues have been speaking to that after the midterm elections , there is a window of opportunity. until then there is no point in trying to see meaningful talks or the idea there are going to be meaningful talks is pretty much nil. there is an interesting comment from the chief economist at bloomberg saying for the moment the advantages with the u.s. in

terms of the corporate profits, in terms of the equity markets, and the political landscape. that could change, particularly after the midterms if the democrats when the house. you could see a politically weaker trump. that could be something chinese officials are looking for. the global growth outlook cut, slating -- citing the trade war as a reality. you could see up to half a percentage point cut of chinese gdp in the second half. chinese officials think it will help support the economy. many economists expect further stimulus measures. manus: thank you very much. a very practical impression on the descriptive this morning. let's turn to our guest host. had of investment strategy at waves and investment management. when we talk to our asia correspondent, i love the

language tom used. crystallizing the gulf between the u.s. and china. i think the markets are realizing the visceral rhetoric, steel is down, iron ore is down, copper is down in london. are we beginning to get a bit of a reality check in regards to what could come to bear on markets? >> obviously that seems to indeed have come to bear. copper had a good week last week. these things go a little bit in roundabouts. part of the problem is the actual level of tariffs imposed on chinese imports to the united states, it sounds like big numbers. it's going to produce tax revenue of about $25 billion all of the things being equal. that is about one third of their federal tax revenue. it is about 0.1% of u.s. gdp.

the actual tariffs i'm not convinced are disruptive enough to derail what looks to be a pretty strong economic backdrop in the states. the problem comes with the intangible, what does it all mean? does that affect corporate confidence? a feed how you get through that makes it turn into a bad scenario. at the moment we do not have a lot of clarity. the numbers we know suggest this is not about to derail the global economy. >> we can actually hear from brazil's president, who has a sanguine view on this as well. >> relations will main unchanged. i have met with my chinese counterparts and also when i , it had noo the u.s.

effect on our political, economic trade relations. no impact whatsoever from the chinese-u.s. trade dispute. nejra: i know you think the selloff in emerging markets has gone far enough. how are you looking to take opportunity in the em space? >> our favorite area is asia. there's a lot of sentiment issues around investing in china. i think as your correspondent was saying, the chinese policymakers have room to ease policy if they begin to be concerned about the impact being bigger on the chinese economy than people expected to be. the have flexibility. within the rest of em, a lot of the things that normally go with weakness in emerging markets are not there anymore. people talk about the dollar being strong. i know it is up today. nejra: up since june. >> the trade what has gone

sideways for three months. emerging markets have continue to underperform. theally those things, dollar and the relative performance of emerging-market equities, go close together. that relationship has broken down -- i believe em equities have gone a bit far. the commodities cycle is closely tied to this. the brazilian -- brazil actually is a beneficiary to this. u.s. is a big exporter of soybeans. brazil is the next most likely place to be able to benefit from the fact that the u.s. soybeans manufactures are unable -- are unlikely to move as much to china. i actually think the global economy is healthy, which i think it is. if the dollar does not appreciate from here, you have to look at some of the things that happen when that is going on. i think em equities fit into that. i think the commodity complex does. manus: thank you for those shot -- for those thoughts.

a line coming through from standard bank in regards to nigeria. standard bank says nigeria will not double the $2.63 billion over the ncm payments. more on that story, we will bring it to you. coming up, i'm going to talk about markets. we had breaking news with regards to glencore and next. bill stays with us. this is bloomberg. ♪

manus: it is just on 7:21 in london. we are just under 39 minutes away from -- 38 minutes away from the start of your trading day. futures are looking concerned -- confused. commodities are taking a hit. that is why london is taking pressure this morning from trade concerns. juliette saly is never under pressure.

she is ready to go in singapore with your business flash. juliette: i tried. the founders of instagram are leaving facebook after tensions with mark zuckerberg over the direction of the photo sharing app. companye been at the since instagram's acquisition by facebook in 2012. they have been able to keep the brand and product independent from facebook, but bloomberg has learned a were frustrated with an unusual uptick in involvement , who has relied on instagram for facebook's growth. beware, the rally in oil could be short-lived according to the head of bps trading business in asia. she says any spike on the loss of iranian supply due to u.s. sanctions will not be sustainable in the long run because the negative impact on demand from a trade war between the world's two biggest economies has not yet been priced into crude.

>> this is one of the cases i feel like -- people have not seen the front of the impact. thatarket is not pricing danger of demand. it is much weaker than we thought in 2019. bps ceo joins us for an exclusive interview after 1:00 p.m. u.k. time. that is your bloomberg business flash. nejra: thank you so much. let's talk about the euro and bunds. the single currency jumped against the dollar after mario draghi gave an optimistic picture of inflation through 2020. sectors remain muted but have been increasing from earlier lows.

in -- inflation is expected to -- as the tightening labor market is pushing up wage growth. at the head of investment strategy at waverton is still with us. manus made the point this was mario draghi want two-way risk into the bund market. we went up five basis points yesterday. we now stand at 52 basis points. are we going to see that treasury-bund spread tighten? >> possibly. i think the outlook is upward. we have stayed above 3% in the u.s. longer than we did back in may. the swiss government bond yield is positive after -- and it has been for a week. it may well be that the spread narrows a little bit. i think the direction of change

in bond yields probably continues to gently be upwards. i do not think that is necessarily a bad thing either. but it is about time. to get a are going couple of central banks in the emerging markets with rate decisions this week. on the equity side, the pieces of news we have been trying to together is on buybacks. glencore announces they're going to add $1 billion of additional buyback. this is nasdaq. it is just a frame for the discussion of buybacks. buybacks have been driving the u.s. market. buybacks are part of the metals and miners. this is incredibly important for the market in terms of continuation, isn't it? >> it is. --hink we should not get too buybacks can be a good thing if companies are showing confidence. some oft perhaps put

the miners in that category. when you have a lot of highflying stocks that are compensated with massive share , youns announcing buybacks have to look at in a sort of growth to net situation. the buyback is misleading. undoubtedly the situation continues to be important. i know that is supportive for the markets. i think at the aggregate level it is a supportive thing for the market. at an individual company level it can very. nejra: cyclical stocks underperforming. i know you want to talk about it. is this trade overdone? the think certain parts of universe are actually still relatively attractive. we like the industrials, we like the transportation stocks in the u.s.. some of the mining and energy stocks are interesting. manus: thank you very much. that is the head of investment strategy at waverton investment

management. stocks are set for a mixed open. that is it from us for this morning. nejra: the european equity market is up next. listen to bloomberg radio, too. ♪

anna: welcome to "bloomberg markets: european open." i'm alongside matt miller in berlin. matt: mixed trade in asia, but chinese stocks dropped on trade concerns and european futures are all mixed up as well. the u.s. 10 year yield hovering around seven-year highs as oil gets close to a four-year record. cash trade is less than 30 minutes away. anna: relative