haidi: welcome to daybreak australia. shery: i'm shery ahn in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major market open. ♪ haidi: these are the top stories we are covering in the next hour. wall street holds a three-day advance after goldman and citi are overwhelmed.s&p 500 slipping . trade back in the headline. leta after tariffs to president trump claim a win. fire ravages one of the most

famous monuments in paris. notre dame has been a symbol of france for centuries. shery: a quick check of how the markets closed the monday session in the u.s. goldman sachs was the biggest loser on the dow after losing estimates on the sale. the dow fell 1/10 of 1%. the s&p 500 also saw financial being the biggest losers. it did not really help that we saw wti moving towards the $53 a barrel level. uncertainty over global economic growth. energy shares weighed on the index, although the s&p 500 did manage to finish above 2900. a level it talked last week for the first time in six months. ..s. future slightly higher, let's see how we are setting up for the market open in asia. sophie: to kick up this morning, kiwi stocks opening higher, set to extend gains for the fourth straight day. in japan, stocks may take a's

after closing at a december high, after u.s.-china trade talks continue. aussie futures also pointing to a soft start. rio tinto numbers due at the bottom of the hour. the rba releasing its april meeting minutes today. observers not expecting a shift from its recent dovish tilt. we also get home prices later today from china. i want to mention we will be watching jet airways open later today on a mixed news report that lenders have shortlisted four bidders for the carrier but have yet to decide on funding for the struggling airline. haidi: sophie kamaruddin in hong kong. let's get to the first word news with jessica summers. jessica: fire has swept through the notre-dame cathedral in paris, forcing the evacuation of thousands of visitors and residents. president macron gave a speech to the nation. the 850-year-old gothic building

had been undergoing renovation. live pictures shows the spire and part of the roof collapse. the paris fire brigade says most of the structure has been saved. larry treasury secretary summers is back in current fed policy while suggesting the next move will probably be a cut. speaking at the peterson institute in washington, he agreed the markets are betting that jay powell is considerably more likely to lower rates than raise them. president trump has argued the fed is restraining u.s. growth at a time of low inflation. deficit as trade higher oil prices raise cost. the gap between exports and imports raised $10.9 billion, up from $9.6 billion in february and more than $1 billion wider in a bloomberg survey. the governor warned last week that weakening global growth and

trade are a threat to emerging economies. and, china's treasuries holding rose for a third month as beijing adopted more u.s. government debt amid the trade war. bondss, bills and increased $4.2 billion to $1.1 trillion in february. japan remains the second biggest holder with over $1 trillion, up to billion dollars from january. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. shery: diving back into the markets. disappointment earnings from goldman and citigroup brought an end to the three-day rally. the s&p 500 was within striking distance of a record high but fell. su keenan has more. after jpmorgan's results, there was optimism bank earnings could

help us propel the market to the record high this month. it seems like it will be a little difficult. su: really focus on growth outlook. as one strategist said, the momentum is still in the stock market, but perhaps it will take a breather for a few weeks going forward. let's take a look at the snapshot. you will notice the s&p 500 financials were the area of weakness. $63, oil falling towards but we will get more to the oil story in a moment. when we look at the big movers, you will notice again goldman really disappointing. it fell almost 4%, biggest the kleiner in the doubt -- decline in the dow. citi retreated, but they really failed to impress. that put pressure on morgan stanley which will be reporting later tuesday and bank of america which will be reporting

on wednesday. let's go to the bloomberg real quick because oil, as we mentioned, is part of the bigger story. what happened to the big rally we saw? six straight weeks of gains and now lower. oil may stay at a range, but look for a wider range as it is starting to narrow in its move higher. the uptrend could snap. one veteran trader said there are questions on demand side. it is a looming issue of slowing growth. the banks sort of dealing with growth issues did not help. haidi: despite that being pretty overwhelming -- underwhelming, citi and goldman came out and defended their strategies. su: one analyst asking goldman what is the story with this strategic review? goldman's response -- again, they are looking at reevaluating the efficiencies in their market, combining some moderate -- some operations, that it will take time. they realize for investors, it

is a show me market. goldman have no tiger in the tank, in reference to the big win of tiger woods. it did have signs of a comeback but no. one analyst said the reserves could be a sign that management has a handle on the malaysian scandal. again, it was overall a disappointment. citi also met expectations, but earnings seem to be hardly a result of tax result. it also talk about slower growth in its consumer units, even though it did well in its bond trading revenue. again, the question really is about outlook and you saw investor concern. very interesting to see how the rest of the banks, blackrock, bank of america, morgan stanley and american express fare. they are all on the agenda this week. haidi: it looks like markets are

taking as we digest. su keenan with a wrap of the overnight action. the other story investors are watching, the latest back in the trade negotiations. we are told china may be considering a u.s. request to shift tariffs so the trump administration could sell any eventual deal as they went ahead of the election. we have the latest. the two sides seem to be creeping closer to an agreement, but there is an understanding of the political optics being very important. guest: there is some indication that the fact the chinese are considering this suggests there is some movement in the talks and they are negotiating on one of the key sticking point between the two countries. products areral politically sensitive for both countries. in the u.s., that is the foreign ministry that is under stress from floods. traditional low margins. constituency for

the president going into 2020. it is also very visible action by the u.s. to relieve some of the persons in the farm industry. it also has to do -- in china, the price of things like soybeans and work products are politically sensitive for the government there as well. that there is at least a little bit of movement. what is left unclear is where these tariffs will shift. the trump administration is insisting on keeping tariffs that the u.s. has in place until it can determine that china is complying with the deal. china in turn is reluctant to lift the retaliatory tariffs they put on u.s. products. the other sources of big u.s. imports and things like aircraft equipment, semiconductors, chemicals, and a wide variety of other things that if tariffs are imposed on those could also

prove some difficulty for the president. shery: that is the problem in this narrative because we are not talking about lifting those tariffs on $50 billion on u.s. goods. we are talking about shifting them to other u.s. products. what are the risks involved here? joe: if for instance the aircraft industry, primarily boeing, is suddenly hit with tariffs from china, that is going to have some ripple effects as well and affect workers potentially and industries that are sensitive as well. how they can be spread out and still leave china some of its own leverage is part of what they will be working out here. there is probably some easier way for china to do this shift, but if it ends up affecting major industries of the u.s., that could have a definite political affect for the president and for the economy. haidi: there are distractions

another trade negotiation fronts as well with japan and the eu. we know the japan economy minister is undertaking these talks over the next couple of days. where are we at and are we hearing anything? joe: right now, the japanese are wanting to avoid any sort of confrontation with the u.s. since they rely so much on the in. for security assurances dealing with china and north korea so close by. real crux of the matter. head. will be some talks a both sides are eager to put a good face on it and make some progress here. arewhile, the u.s. and eu looking over to smooth over some trade relations over trade and security issues as well, and avoid anymore. it tariffs -- any more punitive

tariffs. that is also part of the issue with japan as well. shery: the eu also does not want the agriculture sector to be part of the negotiations. goodsms always farming the center of these stocks. thank you so much for that. joe in washington. still ahead, we go live to the shanghai auto show where carmakers say they are optimistic despite falling global sales. haidi: coming up next, blackrock's chief multi-asset strategists shares her view on where the markets are headed. this is bloomberg. ♪

haidi: we are counting down to the start of trading in sydney. things are looking pretty muted given we had u.s. stocks falling after three days of gains. bank earnings from the lack of

citigroup and goldman sachs underwhelmed investor sentiment. the s&p following below that key 2900 level. the bull market a bit of a break. we are looking at a decline of maybe 1/10 of 1% with australia stocks coming online. i'm haidi stroud-watts in sydney. shery: i'm shery ahn. three days of u.s. market rallies came to a sharp halt after disappointing results from the big banks. let's dig in with isabelle mateos y lago. how much has today's break have to do with fundamentals and how much is it just a breather given investors have to digest these earnings report? isabelle: we have looked at it very much as a breather. we are going into the earnings season with the most optimistic expectations and earnings revisions ratio since 2016. the markets are not expecting

too much. a lot of good news is already priced in. it makes sense for the market to take a pause until further good news surface. we have not got that much in the recent days, so it is very much a wait and see mode with investors to some extent saving the rally which is what we have been advocating to do given the very strong start of the year. shery: it seems it is getting harder for investors to gauge what is going on in the global macro environment. you work at the imf for over a decade. the imf is saying they will continue to lower growth forecast in the meantime given the situation seems a little precarious and we are not sure what data to follow at the moment. how challenging is it to gauge where we are at, whether it is economic data or geopolitics? isabelle: look, we are getting to the late phase of the cycle, no question about that. one has to be a little more cautious, to be fair, i was in d.c. the last

few days for the imf meeting and many people do not share the sense of precariousness the imf have been talking about. most people are pretty bullish about the second half of the year. i would say not exuberantly bullish but pretty relaxed that growth will rebound, particularly in china, and that is going to help lift emerging markets. that will help europe as well and u.s. growth in general seems in pretty good shape. but having said that, there is no question this is the end of the cycle and there is plenty of geopolitical risk around, in particular in the trade policy area that you have already touched on. until that uncertainty is resolved, it will be hard for markets to carry on generating returns at the pace we have seen in the first quarter. haidi: is the assumption in large part in the markets a

continuation of goldilocks conditions where inflation is pretty low, but late growth is still consistent, if not outstanding? is that supported in other areas? isabelle: i think that is right. we get growth being high enough for risk assets to do well, but not so strong that it is forcing the central banks back into tightening mode which obviously would be a big headwind. frankly, that is our base case as well, that these goldilocks conditions can continue for a couple of corners. that is very supportive of any kind of carrie asset. in fixed income space, credit, emerging markets. but it is also supportive of equities. we would keep a preference for equities in this particular time over fixed income. haidi: i want to get your views outside the u.s. because it seems like a lot of the factors,

including a potential trade deal, chinese growth and the physical package filtering through to supporting the economy there as well as the fed being on pause. all of this seems bullish for emerging markets. i want to throw up this chart for the chinese market in 2019 even as we have u.s. stocks nearing the record high. the thing is how much of this market is coming off a very low base of a horrible number of years of underperformance? em, asia china is what you are looking for value at this point given develop markets and where they are at? isabelle: i don't know if we are looking for value because value does not tend to do well in late cycle phases, but we are looking for returns. we are seeing china very well-positioned. beinga, en in general well-positioned at this point of time. the two preferred regions are u.s. and em, but you are right,

given the start of the year, the very strong start of the year in the u.s., we would expect e.m. to good. e.m.'s supported by inflows which are not the case for the dm equities. we are feeling pretty good about the region in general. shery: em bonds have been doing really well. there has been a global debt rally. now we keep focusing on it again because despite the fact we have been talking about worries about the debt market, the fact is we are seeing negative yield at that at over $10 trillion. this chart on the bloomberg showing this huge spike. how big is the risk here given that investors really have almost no buffer if prices drop? isabelle: look, there is a risk. that we go back into a trade war scenario, it would be very adverse. frankly, the most likely scenario we see playing out in

the next two quarters is the fed staying on hold, u.s. dollars stable, and assets like em debt doing pretty well. spreads have compressed significantly since the start of the year. going forward, we would expect returns to come primarily from coupons, not anymore from spread compression. the other thing that is important to note is that inflation has been very tame. that is true not only in developed markets, but also in many asian countries. that means also they have room to keep monetary policy pretty accommodative. in some cases, even potentially cut further. that is very supportive of the fixed income market. shery: the fed these days seems ok with overshooting inflation. we heard from the chicago fed president talking about the central bank. it should be willing to embrace inflation, modestly about 2%. i wonder if bought investors are being complacent about prices at

the moment. isabelle: about inflation pricing -- there is not much inflation to talk about. it is one thing for the fed to say we will tolerate inflation going about its target, but it is not showing any sign of doing that. if we get several more coders of -- quarters of growth potential, we might end up seeing it. but for now, part of this fed talk is also aimed and making sure market inflation expectations do not de-anchor. always a pleasure having you on with us. isabelle, blackrock chief multi-asset strategist. isabelle: thank you for having me. haidi: to get a roundup of the stories you need to know, go to your terminal. it is also right there on your mobile on the bloomberg anywhere app. you can customize your settings so you can get news on the industries and assets you care about. this is bloomberg. ♪

haidi: if you recall earlier this year, samsung unveiled the galaxy fold, which can be a phone or tablet. the price tag of nearly $2000. mark gurman got his hands on the device to take a closer look. mark: about eight years ago, samsung launched giant expensive phones and a group of you thought it was a gimmick. samsung is hoping to do it again and turned mainstream. the galaxy fold. a $2000 full double phone. you can run three applications at once. it is not as consistent as i would like when flowing between the smaller screen outside the phone and the bigger 7.3 inch screen when you open it but i feel like it will get better over time. when you open it up, it is basically a tablet. it is almost the size of an ipad

mini. it has an in screen fingerprint scanner like the latest phone and a 5g one. this one goes on sale in the u.s. it comes in several colors including this blue and gold color. there is a silver, black color. a green color that almost looks gold. overall, productivity and business users will probably like this thing for the multitasking. you can pin three applications next to each other at once. you can be watching video, looking at your calendar and taking notes. are peopleuestion, going to want to buy these things so soon after they hit the market given the technology is fairly early? i'm mark gurman in new york. shery: let's get you a quick check of the business flash headlines. foxconn says the device will go

into mass production in india this year. and big shift for the chairman who has focused production in china. the prime minister has invited him to india as part of foxconn's expansion plans. apple has had phones made there for years and it will not expand production to new or models. haidi: the former volkswagen ceo has been charged with fraud in germany as part of his role in the diesel emissions scandal that has cost the carmaker more than $30 billion. he's accused with other senior managers of authorizing the so-called deceit devices that allowed diesel powered cars to cheat emission tests. it carries jail terms of up to 10 years. coming up, we will be live in paris for the latest in the notre dame disaster. the iconic cathedral extensively damaged. ♪ so with xfinity mobile

i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers, and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars... do you guys sell other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. and now get $100 back when you buy a new lg. click, call, or visit a store today. haidi: the market opens in just about 90 minutes time.

futures working towards a slightly lower open across the board as we get asian shares approaching the six-month high. u.s. shares giving up gains after three days of a rally. underwhelming reports from the big banks, citigroup and goldman sachs. we are getting incremental progress on those trade talks. a potential compromise on agricultural tariffs. i'm haidi stroud-watts. shery: i'm shery ahn in new york where it is 6:30 p.m. let's get the first word news with jessica summers. jessica: china is said to be considering a u.s. request to shift some tariffs of agricultural products to other gets, so president trump could sell potential trade deal as a win for farmers. it would involve beijing moving duties on $50 billion of u.s. goods to nonfarm importers. washington says it will not lift its own terrace on chinese goods

even if a trade deal is a great. carlos ghosn is facing yet more allegations. he is being accused of improperly charging renault for a $3000 scooter when he was chairman. it was bought last year and seized after the company auditors asked whether he had been entitled to it as part of his compensation. he remains in custody in tokyo and denies any financial misconduct. the chinese woman accused of illegally trying to enter president trump's mar-a-lago resort in florida has been denied bail. the judge said her actions and statements indicate "she was up to something nefarious and she is an extreme flight risk." she has pleaded not guilty to charges of lying to federal agents and illegally entering a restricted area. japan has begun removing nuclear fuel riots from one of the reactors up fukushima after

eight years of the devastating earthquake. rodswner will withdraw 556 from storage bulls. a small step forward of what is excited to be a 40 year cleanup effort. the more challenging removal of melted fuel at the bottom of one of the reactors will begin in 2021. spacex has won a contract to play a real life version of the arcade game asteroid's. the $69 million deal to show nasa and has the power to deflect an astroid by smashing a spacecraft into one that high-speed. the mission is scheduled for june 2021. it will travel to space aboard a falcon 9 rocket and aims to hit a small asteroid 11 million kilometers from earth a year later. global news 24 hours a day on air and on tictoc on twitter powered by mother 27 -- by more than 2700 journalists and analysts. this is bloomberg. from: production numbers

rio tinto in the last few seconds. paul allen is here with the breakdown. slightly shy of expectations. paul: we were expecting this for iron ore. 74.7 is what we were expecting. the area in western australia, we had 76 million tons and we expected 79.7. we didn't expect a bit of a rough ride for other miners. dumped 14 inches of rain in 24 hours. a fire at the port facility. that same facility also suffered a fire in january. it was a different fire. there seems to be a lot of that going on. rio tinto says it is working with customers to minimize disruption, but still obviously

seeing the guidance at the lower end of the range. that range being 338 to 350 million tons for the year. shery: what does this mean for iron prices then? paul: yes, well, rio tinto was not alone in these supply disruptions. in january, we had that terrible dam first in brazil, vale. 93 billion tons -- million tons a year out of supply. bmp is worried it will become. also metals this week. that is having a profound impact on the iron ore price. the global shipments fell 8%. sees the price rising. a number of analysts and the iron ore spot might hit $100 a ton. this will have impact on chinese steel production as well. i want to take a look at this chart on the library. this shows the chinese still

industry may not be prepared for a looming iron ore shortage. the founder of shanghai steel homes morning -- warning volatility if mainland stockpiles sink below 100 million tons. shery: thank you so much with the latest on rio tinto. we will be looking forward to trading in australia. rio stocks has gained more than 30% or for what else to watch in all the markets, here's sophie. tinto, aside from rio due to report production figures this tuesday. we have also had linus out with its update. rare earth uptick in the first quarter. continuing to gauge in talks with malaysia on issues. we are watching cimic groupon its first-quarter results. net income at 181 million australian dollars. the company has maintained its full-year guidance.

this update comes after the construction cap its forecast for strong profit growth to continue into 2019 after last week's agm due to the recovery in the resources sector. myob groupo watching and the asx 200 index which will take effect after the close of trading on april 24. this the subject to shareholder and final court approval of the takeover of myob which will be put to the vote on wednesday. shares have been trading around the offer of 340 aussie dollars a share, while nearmap has doubled its value this year. haidi: that's get more on what we are watching as trading gets underway in this part of the world. we saw u.s. bank earnings underwhelming and investors taking a bit of a pause. what are we expecting from asia today?

this is a very important earnings season for the u.s. given all the headwinds. investors want to see how corporate america is shaping up and now it is faring giving all of these challenges from the global slowdown and the trade talks. we must remember we have had a very solid run so far this year. the msci pacific index is near the highest since october. we are likely to see a little bit of a breather. we have a chart that does illustrate it is the ratio between a version of the s&p 500 and the main gauge. it does narrow against the s&p 500 near the september record. kickcould very well investors on the back foot. we are also going into the easter break. there are -- we have these trade talks going. talk about a resolution, but nothing really conclusive to

help investors pin an extension of this rally on. liquidity is thin going into this easter break. probably momentum has not changed much, but i think investors will be sitting back and assessing what is coming out of the corporate earnings season in the u.s. and japan. shery: talking about japan, we have seen this rally in stocks with it gaining more than 10% this year. this could be running out of steam now. andreea: that is right. we had the topix rise for the first time in six days yesterday. whether this rally continues is becoming really uncertain now. first of all, you have these trade negotiations between the u.s. and japan. you also have the potential of some sort of currency clause that would prevent currency manipulation. market, the japan stock

is behind as we can see from the chart. it is underperforming the msci world index. behind,e topix is far probably the worst performer behind singapore. -- japaneseve been equity for most of this year. last week, hong kong overtook japan as the world's third-largest equity market by value. after the japanese earnings season. we also have these very long spring break, when liquidity is going to be very low. these are all things that are coming together. negative for the japanese market. on the positive side, valuations are a lot better than global stocks and asian stocks and that could be supportive. overall, a big question hanging on whether this rally we have seen in japan can continue.

shery: japanese stocks, some of the cheapest in the region. thank you so much for that. andreea papuc. you can find her charts on the bloomberg. president macron is vowing to rebuild notre dame after fire severely damaged the 850-year-old gothic landmark. this fire and ruth was largely destroyed, but the iconic twin towers appear to be saved. let's get the latest from paris with gregory. how bad is the damage on notre dame and can it be rebuilt? gregory: it is pretty bad. the best thing you can say is the stone structure of the cathedral survived. everything else is gone. the roof burned, this fire tumbled quite early on in the fire and severe damage. how bad, we don't know. were able to get

some of the art works out but the fire -- there is no doubt the inside of the church mostly burned. haidi: we saw some emotional reaction of people watching the structure burden. -- burn. how much damage are we perceiving when it comes to the economic and tourism revenue side of things given it is such a popular tourism's to visit? gregory: yeah, on an average day, 30,000 people visit notre dame. it could be up to 50,000. such as now in the week leading up to easter. it is a terrible blow. for the city of paris, people will still come to paris, but it is more just the artistic treasures that have been lost. just such an important monument for the history of paris. it fits right at the center of the city. when you see a distance -- when

you were on the highway in france and see the distance to paris, .0 is notre dame -- point zero is notre dame. it is hard to estimate the importance of this monument. shery: it is a beautiful structure. do we know at this point what caused the fire? gregory: we don't know exactly what caused the fire but it seems to be related to renovation work underway. you will probably see in the footage that the fire seems be in the area of the wooden roof where the risk of holding. there might be some renovation work. we don't know exactly what. wasinterior minister who here was suggesting it is probably accidental. it was probably not intentional, but they don't know for sure yet. haidi: gregory with the very latest in paris. what a terrible night for everyone who witnessed that. we are hearing from emmanuel

macron that they wrote rebuild -- they will rebuild. coming up next, goldman and citigroup defending the strategies as shares take hits. this is bloomberg. ♪

shery: i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. the big banks in focus in u.s. trading. goldman sachs and citigroup delivering better than expected earnings results, but that did not stop both stocks falling and executives defending their strategies to investors. joining us with more is equity research analyst david. were you surprised by the market reaction given the numbers themselves were not awful? david: i think what happened is friday with jpmorgan's results set a high bar.

there was not anything to surprising over citigroup or goldman sachs this morning but i think there was a little bit of hope that results, especially revenues, could have been stronger. revenues were stronger than what we were looking for even though they date -- beat on the bottom line but the market is really focused on that today. there were a couple of encouraging things. if you actually listen to the earnings call, the management team was talking about the environment exiting the quarter better then it started. the environment did get a little bit better. it sounds like the tone was pretty good. we are encouraged, especially given there were not any themes that were surprising. ultimately, the market wants more detail out of goldman sachs around some of these newer business initiatives. we need to get that detail and we were left hanging a little bit. people also wanted resolution on the big legal issue at the moment. the couple of things weighing on the stock, but the results

themselves are backward looking and no one was really surprised. haidi: definitely the overhang for goldman. in terms of the question mark business units that investors were concerned with, does this make the urgency for the strategic group viewed to be faster because the bank did not provide reinsertion -- reassurance on that either? devin: that is a good point. we all want to see what their plan is and the company has been dripping out some of the details around the consumer initiative and where it is going. the wealth management initiative. they are building a cash management business. we need more quantification around what the potential is and what the targets are. as we get more clarity around that, that will be important for the stock and will be what is necessary to see a sustained breakout. they talk about giving a more wholesome update at the beginning of 2020 and i think

that was disappointing to the market. the market was hoping we would have something sooner than that, but that is not mean we will not get anything between now and then. i think they will be disclosing quite a bit as time goes on around what their plans are and we will get some expectation around some of the newer initiatives. that is where the growth is going to come from. you take a step back, the market really needs growth. looking at each bank a little bit different in terms of what the differentiating elements are of each bank, but we need to see growth and we need to see some of the new initiatives of each company kick in because there is a concern we are late cycle. haidi: financials have been struggling especially as we see the yield curve tightening. this chart on the bloomberg showing the relative performance of the kbw bank index. devin, any chance of a meaningful turnaround for this sector when we continue to see this macro economic environment?

devin: yeah, it is difficult. the main thing to your point is where are we in the business cycle and are we at the end or do we get another leg? that correlates with what is going on with interest rates. if the yield curve is going to continue to flatten or go inverted, that is a major headwind for financials. the opposite. if we do catch stabilization in global growth and re-accelerate, that can be a big deal. and then you look at each individual company, there is hope for specific stories. morgan stanley has a lot of initiatives to drive growth in wealth management. i think some of those are underappreciated. goldman sachs, i think there are some exciting things going on in these new business initiatives. tell the market more about what the potential is. shery: great to have you with us, thank you. devin ryan. more ahead on daybreak australia.

this is bloomberg. ♪

shery: automakers are pinning their hopes on china like never before as sales around the world weaken. they are sliding on the mainland and everyone has the same idea. tom mackenzie has been talking to volkswagen at the shanghai auto show. how is vw trying to bolster its position in china? on: really, the focus is electrification. this is a market that is slowing but vw did have double-digit tax profit in 2018 from the chinese market. they will be investing heavily in electric vehicles, particularly around $30 billion. they plan to have about 70 fully electric models by 2028. they want to produce 22 million electric ev's, half of those in

the chinese market. these are some of the questions i put to the v ceo in this intervieww, along with questions about trade tensions and the emissions scandal. take a listen to what the vw ceo had to tell me about the chinese market and those questions as well. two quarters in decline. i'm quite happy with the development from our viewpoint quarter, wehe first could increase our market share by one percentage point. we are not two scared about china -- too scared about china. we hope in the u.s. and china, that situation can change. there is huge demand in the market and economy. work with thed reduction of 3% per cars

should have its affect on the market. tom: any to ask you this question. the news has broken in the last hour about your former ceo martin winterkorn being charged in relation to the emissions scandal. when do you think vw is able to put this behind them? herbert: i think most of the things -- in america with the in germany as well, we made a lot of progress with our customers. there will be updates to all the cars, 99%. we are gaining that momentum. the cars and technology. proceedings -- the deal is not yet over. we are through the roof. by: another question

investors would be given, what is your role in the scandal? if you were charged, what would that mean? herbert: i don't expect to be charged. tom: what are you seeing in the strength of the u.s. market? what are you seeing for the targets of the end of 2019? herbert: compared to china, we are relatively small in the u.s. mainly imports of our premium fleet, but operations are strengthening. the new cars are quite successful. aey are being launched there, new segment found customers. we are gaining market share. the team is making a lot of progress there. we have a leadership team that put a plan together.

they made significant progress and very optimistic. tom: really, this is such a pivotal moment for volkswagen which is going through this shift in terms of trying to take into account the demand for electric vehicles by regulators and customers as well, but also the regulatory challenges, the europe slowing economy adn ongoing -- and ongoing investigations. the diesel rigging scandal has cost them unless $30 billion. costs andpects the legal angles to continue. in terms of the chinese market and cooperation, he did say they were talking and making significant progress in talks with ford. that is another area to look out for, potentially a partnership between vw and ford. haidi: tom mackenzie in shanghai for us. we will have other major guests on the shanghai auto show

including the mclaren ceo. the lamborghini ceo as well. the ceo of bentley motors. cfo of audi. you don't want to miss out. let's get you a quick check of the latest business headlines. jet airways lenders have finalized a short list of bidders. they chose india's national investment and infrastructure fund. jet airways has suspended all international flights after failing to secure emergency funding. the carrier is only flying seven planes on domestic route. shery: that is it for daybreak australia. we will have all the action in daybreak asia next. this is bloomberg. ♪

haidi: a very good morning. i am haidi stroud-watts in

sydney. we are one hour away from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this tuesday, asia-pacific stocks facing declines after the rally ran out of steam in new york. rio tinto in focus as sydney opens. iron ore