welcome to daybreak australia. i am paul allen. shery: i am shery ahn. sophie: i am sophie kamaruddin. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. president trump turns up the heat on china, threatening to impose more tariffs on imports as he is not happy with the pace of talks. the philippine central bank governor has plenty of room to ease. he also welcomed the upgrade from the s&p.

or in the footsteps of his criticism of private equity firms, accusing some of dishonesty. we will have more from the meeting in omaha. looking at how markets close, looking at u.s. futures plunging more than a percent, 1.3% at the open. we had president trump tweeting we could see these tariffs on $200 billion from chinese goods being hike to 25% friday. that the u.s. china trade talks continue. 500 gained the most in a month, taking the surge to 18%. we have the nasdaq composite closing at a record high. we have amazon shares jumping the most as we heard from warren buffett that berkshire hathaway has been buying its shares. data that strong

job growth, which could read a -- -- reaffirm that made investors happy with the equity markets. it is all about what happens on the geopolitical side of things. u.s. futures down 1.5% at the let's see how we are setting up for the markets. we have some closed and we have tons of economic -- igo data. ecodta. -- ecodata. sophie: the prospect of tariffs sed this friday. aussie futures are hinting at danes after a two-day decline and qe stocks extending losses. the policy decisions from australia and new zealand, both looking live this week.

westpac is interview after results this morning, first half rockets fell 22% with weakness in consumer and business banking. -- profits fell 22% with weakness in consumer and business banking. 2.8% next year. disappointing set of numbers from westpac. let's get the word news -- first word news. on we start with the latest brexit. u.k. by mr. theresa may is set minister theresa may is said to be withdrawing her brexit bill. the new clause would keep the u.k. in the e.u. customs union, guaranteeing no checks on goods crossing the border. that is a key labor demand. weekend whenthis

she had blown the confidentiality she had. she has jeopardized negotiations for her own personal potential. su: in australia the countdown to the election is well underway with 12 days to go. changecare and climate dominate the manifesto. they will take australia with vision and purpose. and the former prime minister tony abbott could lose his seat. the survey for the activist group get up shows him trailing by 56 points to 44. more than 40 people are feared dead after a passenger plane landed in flames in moscow. jet made an emergency landing after the engine caught fire, forcing it to return to the airport soon after takeoff. there were 76 passengers and five crew aboard. russian news agency interfax

said 41 people have been killed. blake -- and bangladesh have launched a widespread recovery and relief operation after a cyclone on the coast of the bay of bengal. several people are known to have died in an indian state and another 14 killed in bangladesh. to hitthe most powerful since the super cyclone killed 10,000 back in 1999. 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. i am su keenan. this is bloomberg. shery: president trump is ramping up pressure on china to finalize a trade deal during talks in washington. he is threatening to double saless on $200 billion of

to the u.s. and imposed new import taxes per let's go to washington. we already are seeing the impact on the market with u.s. futures falling 1.5% at the moment. we haven't seen such a big move since april 1. we haven't heard from both sides there -- we have heard there had been progress, so what happened? ros: very interesting development from donald trump. what we are hearing from our trade sources there has been growing frustration on the u.s. side among the hawkish elements of the team about china backtracking on some of its promises as this mammoth trade deal supposedly comes to a conclusion, that china is that peddling on issues like technology transfers and other things the u.s. wants it to make promises on. president trump is getting irritated by that. as we have talked about so many times, it is always unclear who is running the u.s. trade show,

whether the hawks or the dose. today it -- the doves. today the doves are in command. very critical talks coming up and this was president trump's best effort to really put it to you to put this group -- put it to china to put this group on. nobody was to negotiate with a gun against the head. negotiatingntioned tactics. doesn't seem that is all this is and has there been any response -- does it seem that is all this is and has there been response from the president? ros: it is like a big opening salvo. we haven't heard much from china. it is early in the morning, we have had editorial rumbling from the newspaper reporters. essence, very interesting from president trump

on friday, talked up the deal and hoped it would be going ahead. he also said, maybe this is a tell, he said if it doesn't happen we will be fine, maybe even better. so he has been on the sidelines recently. perhaps this is his last gasp. we had larry kudlow on fox news earlier this afternoon trying to downplay this but at the same time u.s. business groups coming out, very upset, sashimi about the suggestion there will be another $325 billion in chinese exports. -- especially about the suggestion there will be another $325 billion in tariffs on chinese exports. you can expect to see consumer goods, lobbying groups and publicly traded companies coming out against this today if not

over the week. shery: the vice premier of china returns to washington this week. what can be discussed and will it be the last round of negotiations? ros: there was a lot of sense from the white house this was the last gasp, that there could even be the broad framework of a trade deal announced as soon as friday. very trickyhua in a situation. thorny expect those issues like technology transfers, currency manipulation could be discussed. we knew the hardest elements would be left until last, but now the negotiations are starting really on a defensive note from china. very likely we will hear something from beijing later this morning and have to wait

and see. krasny, u.s.-china trade talks very much alive again. the philippine central bank governor tells us there is room to ease. we will look ahead to the policy decision in the philippines and preview the risk throughout the region. shery: hand talking big tech and -- talking this is bloomberg. ♪

tol: we are counting down the sydney open with futures pointing higher at the moment, but it will be interesting to keep an eye on that. ity will receive -- reset for the start of trade in australia because we do have u.s. futures sliding now. the s&p is off 1.6% and this is

on the news that president trump onld like to raise tariffs china by friday. he is not happy with the pace of trade talks. i am paul allen in sydney. shery: let's discuss those renewed trade tensions that look set to weigh on wall street with the week ahead also kicking off with a new round of earnings. su keenan joins us with more. tariffs man is back and the markets are not liking it. su: the greatest of these at the onset is the tariffs news and that will set the tone monday. look at how we ended the week, a small -- strong week for the nasdaq, closing at a record. the s&p 500 groups fired well strong jobs number. let's go into it. the bloomberg gtv is where you can find our library of charts. the economy added 63,000 nonfarm

hijabs and the jobless rate was the lowest in 49 years. that appears to be a strong piece of data. weekit translate into this is the question because earnings and now shery mentioned, the latest trade news will likely [indiscernible] -- will likely dominate. disney, aig, the insurance company, barrett gold in the headlines these days and softbank among the big reports out with their outlook. that will weigh. we have had s&p 500 companies reporting, exceeded expectations that were lowered ahead of the earnings, but it has been mixed in terms of projections. buffett had its -- had his shareholders meeting. he praised the retailing behemoth amazon as a company and

investment. he is not alone. su: the praise for amazon keeps heaping on. fridaygot a big bump on when it came out ahead of the shareholder meeting that amazon's fund manager had been adding shares of amazon and the billionaire buffett himself said he was an idiot not to buy company.ot the and then the cofounder of home depot and now an author saying in a recent conference but he highly of the company amazon and the ceo, kind of giving if you can't beat them, join them kind of message. >> what you want to do is study amazon and learn what they are doing right and try to improve on that.

i give this guy credit. , developedid technology and is doing it. su: don't be a hater, look at what he is doing. that is the message and they recently reported a record $3.6 billion profit. you can see the returns of the stocks making it one of the best reporting thing -- faangs. falling right now, so what should investors focus on? su: that could have to do with the trade news and the tariff news. oil traded on that news because it impacts of the demand and supply equation. also into this weekend oil bulls losing faith in the rally that had a huge surge on friday with drilling in the u.s. and we are also seeing the bullish backed by hedge funds to

cleaning the most we have seen recently. supply disruptions already priced in so the news comes on top of that. concern about china, big buyer of -- perhaps being put off by the latest trump news. paul: thanks for that. let's get some strategy advice with our first guest. want to start off with this news we have had from the trade seen, president trump threatening to raise tariffs. you don't get caught up in this. >> it is easy to get caught up butt and seems impactful investors have tried to position around what trump was saying and china's rumors of meetings, i don't think it would be fruitful.

it is better to focus on long-term drivers of businesses. capital allocation management teams, total adjustable markets, that is where individual asestors and professionals well can play a longer game. on u.s. tech.keen do you put yourself into they market for amazon, or did you miss that and is there something -- berkshire, and i have also been an investor in amazon. i suppose i can avoid just warren buffett is being hard on yourself, a genius. ,ig tex has been -- on himself a genius. big tech has been struggling but people overestimate regulatory risk. europe is difficult. if you look at the u.s., i am big with probabilities. i look at elizabeth warren, bernie sanders who want to break

it up. if you look into the odds of it, they are five to one to find odds to win the presidency. what are the odds they have a congress that will work with them and this is something that matters january 2021. you cut it in half, what are the odds it is a priority for them because a lot of presidential candidates say things they never follow through on. you are talking about 20 to one odds you have a breakup of these companies and even then i am not sure it is bad. if you were to take youtube and separate it from the best -- the rest, there is a good argument youtube would be worth more separated from google. people who are not as enthused as it being part of alphabet. chairman powell talked about global risks moderating and then we had the latest headlines with more trade tensions. can the u.s. economy, as we have

seen with the jobs report, keep the global market afloat this year if we do see a no deal scenario unfold? >> it can help. in terms of trade wars, day today we don't do much. -- day to day we don't do much. you will have these parties come together to find a conclusion that works because it is everyone's interest. trump has a stronger set of cards given how strong the u.s. economy is doing and the political situation in china requires continued steady growth. internalizednd how the economy is where is the -- that will lead to a conclusion that people come together on with aligned interest, it will tilt towards the u.s. i would assume. that is why we are more u.s. tech centric then china.

the big picture -- than china. it will be a conclusion that works for most people. shery: we have seen this massive rally in u.s. stock markets. in ainvestors priced potential no deal scenario and if there is no deal on this $250 billion of chinese goods, what if you get additional tariffs on $350 billion of goods as trump has threatened? joe: it is marginally bad. to get your point on some u.s. tech, i will cut to the zoom ipo. ,ome u.s. tech is attractive strong, competitive positions great look at zoom, that is something we said, we think $36, we can get something that delivers over five years. it opened in the 50's. last i checked it was north of

70. there is some tech valuations that are getting hard to explain. i struggle to see how you look at returns that are in double digits. i am a focused tech investor. paul: lake house c i/o, thanks for joining us. stay with us, this is bloomberg. ♪

boeing is under renewed fire from regulators and pilots groups after admitting he knew months before -- it new monthly for the crash of the 737 max 8 jet but said it wasn't working properly. they didn't share findings with the faa until a lion air plane went down in october.

these planes have been grounded since the second crash in ethiopia. paul: occidental agreed to sell anadarko assets to france's total. this covers nigeria, mozambique and south africa and will be worth almost $9 billion. it will only go ahead if occidental's long-running effort anadarko goes through. they were in a bidding war with chevron for the top reduce her in the permian basin. north korea may have conducted its first ballistic missile launch as a -- since 2014 as a challenge. this is appears -- this is what appears to be the firing of a short-range missile. chief asia correspondent stephen engle is watching this and it seems kim jong-un again wants attention. this was almost predictable given or following

kim being left at the altar by donald trump in hanoi in the second nuclear summit that didn't give any progress. since then kim jong-un has blessed to the white house as exhibiting bad faith -- blasted the white house as exhibiting that faith. that is what he said to vladimir putin recently. you could have predicted this. it is a direct challenge to trump's bottom line here at jim has expressed frustration -- bottom line.ump's kim expressed frustration. in south korea, condemning this, saying it was a new tactical weapon and artillery traveling 150 miles. a south korean spokeswoman condemning it as well. and south korea is on holiday today, unlikely to get immediate reaction on the stock market.

pyrotechnics was a cry for attention, it has a really work. the response has been muted. stephen: it has. one analyst has spoken to bloomberg news saying it is the beginning of kim jong-un's push the line strategy, something to see how far the white house will turn a blind eye to his provocations. so far it has been a fairly muted response from donald trump as well as the secretary of state mike pompeo. donald trump without a lengthy realizes thekim great economic potential of north korea and will doing it.ing to interfere or end he doesn't want to break his promise to trump according to him, trump. paul: all right, thank you. still to come, the reserve bank

of australia meets on tuesday, less than two weeks before the australian election, will the vote factor into the decision. we will talk about that and other central bank meetings. this is bloomberg. ♪ berg. ♪

paul: it is a: 30 a.m. in sydney, we are minutes from the market open. futures are pointing higher. we have seen s&p futures slightly on this trade news. i am paul allen in sydney. ahn, you arehery watching daybreak australia. let's get to first word news. has turnednt trump up the heat on china, tweeting he intends to top up tariffs on a range of goods from friday, despite positive comments from both sides in recent weeks, president trump hardened his

tone, saying he is not satisfied with the pace of trade talks and tariffs on $200 billion of chinese products would increase from 10% to 25%. former legalmp's fixer michael cohen begins his sentence monday, convicted of violations,ance bank fraud and lying to congress. new york prosecutors rebuffed requests for a final meeting in which he offered to provide more information about alleged wrongdoing by the president and people close to him. reports from north korea say kim jong-un personally oversaw a live fire rocket test that may have included the first ballistic russell launch since 27 -- ballistic missile launch since 2017. guidanceere tactical -- guided weapons going into the coast. president trump said tim doesn't

want to break his promise on the dash cam doesn't want -- president trump said kim doesn't want to break his promise. thailand's new king has been crowned. it was two years after he took the throne. the coronation comes as they of weight -- they await results theyan in conclusion -- await results from the inconclusive election. 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. i am su keenan. this is bloomberg. paul: thanks. the rba holds realistic policy meetings tomorrow, and economist and traders anticipate a rate cut. let's bring in our australian economy reporter. what is the argument for the moving and also for doing

nothing? has come down to inflation and growth versus jobs. shocker atas a real the end of april. it was way lower than anybody had thought it would be. the rba has spent more than two years, a longtime with inflation below its target range. inflationeart targeting central bank. considering the second half of 2018, we saw a market slowdown in the economy, all of that says cut now. but then you look at jobs, and jobs are in a good place. the unemployment rate is low, levels in the past would have had the rba considering hikes because it would be worried about the inflationary fix coming through. wage growth has been very slow.

there are sometimes it is picking up and crucially we get wage growth data later on this month. those are the reasons why the governor might restrain himself. into thiscially going with a neutral bias, so to go from that to a cut you would think you would need everything saying it is time to go instead of two out of three. shery: we are also going towards a tight election. how might that play out in the rba decision if at all? >> that is another thing that is difficult to call because of the -- he never made a decision since he became central bank governor back in late 2016. we are at sea as to what his processes are. the rba wants to move forward,

playing too much of a role in politics. overbefore john howard 2007, former rba governor and then governor stevens was willing to hike before an election. you can see the overwhelming need -- the question is whether they see an overwhelming need. what the plans are. they are counting on spending increases but need to get those through the upper house. there is nothing that says it will be rapid. i don't think it will stop low moving if he is going to not move it will be because of his strongerent caution and jobs numbers, not because he doesn't want to play a role in the election. for rates big week around the region. new zealand has something similar. week inflationve

and growth. one thing they have which australia doesn't have, and australia is fortunate, they have week jobs numbers that came out recently. fell anded employment wage growth stagnated. factors andthose the new zealand central bank governor, he did say he thinks a rate cut is likely to come. for him the rate cut is on the table. goes more likely the rbnz and if the rba goes, the rbnz well. shery: thank you for that. this week there will be policy decisions from southeast asian central banks. let's go to sophie. any rate cut contenders this week?

sophie: central banks will try to decide on policy this week, malaysia and the philippines could be candidates for rate cuts given the policy room in light of the fed's stance. they could hold with thailand which is staying unchanged in the first half, even as the boj governors- the bot said -- did take ahe bot cautious take. they had the slowest expansion for the economy in three years, cutting the forecast to 3.8% as well as lowering inflation. trimmed its forecast for gdp growth forecast in march lower than the government's rejection of 4.9% for the year. 25 basis point cut

from malaysia which would reverse last year's hike when it comes to back -- comes to inflation's, they are below growth, forcing a case and also a rate cut at this week's decision or later in the year. there is upside risk with lebron trend higher with oil prices even with the drop in wti. that would allow for bank of malaysia to see a pause on policy. paul: the philippines a central bank governor hasn't been boy about a rate cut. -- been coy about a rate cut. sophie: they say it is a matter of timing. analysts see this bank unwinding last year's aggressive rate cuts and reducing the key rate to

4.5%. also thursday's decision is preceded by exports data and more. ,ooking at the expectations they could sell short easing but inflation expected to moderate for a sixth straight month to below 3% or the question is when is the slowdown in consumer prices enough for the bsp to cut rates? shery: the latest on the central bank decisions coming up. this governor has told us the philippine central bank definitely has room to ease monetary policy as inflation slows for a sixth straight month and while the u.s. and japan are on hold. he also welcomed the upgrade from s&p global ratings and said there could be another move in the coming months. he spoke to bloomberg on the sidelines of the asian development bank meeting in fiji. >> it is not really our target to get to the b level. a year or two years, not our

target. we know our job is not done until we did that. i think one of the reasons why we have an update is because of structural reforms done on top of the use for economic statistics. we have other reforms like strength of central bond to deal with new challenges, the hanging -- which we are as far back as president trump's term. national payment system and -- so the tax reform was also one part of this. been urging us to do that. we did it through our own, part of the economic problem. nobody is telling us to do this. we embrace a lot of this. it is only fair we get --

>> so a minus -- >> definitely and hopefully. haslinda: in one year? >> we have to go through stable -- haslinda: [indiscernible] >> possibly. haslinda: does this reflect true value? it >> it still does. it is stable and [indiscernible] got heftymber one, we to more, equivalent than seven months of import, $52 anlion u.s. and we have inflow of dollars from our workers and outsourcing. andreceipts from to resume investment -- twice

what we have been getting the last 10 years. that if weident that get enough dollars to support our -- we are not participating, by the way. our participation in the foreign exchange market is only -- [indiscernible] haslinda: given the calm stability in the currency, does it make sense to build up now? >> there is also an opportunity cost for building [indiscernible] because what you do is you minimal pressure, minimal interest rates. we are happy where we are right now. more than seven months. the rule we have found is three months. there is no need to build up. for --a: is there risk

and race for emerging markets the trade war deal could be coming or what is deemed -- cannot speak for all emerging markets but as far as we are concerned, we are ok. for example our debt to gdp ratio is around 14% and declining. we are ok. i don't know about the rest. haslinda: you are comfortable. >> very comfortable. paul: that was the philippine central bank governor. let's look at the philippine peso. more bets on a rate cut. into assets editor joining us. it has been the biggest gainer in the emerging asia court this year. >> it has been the only averaging -- asian emerging currency to gain but it looks like this rate cut does happen this week, that is another headwind for the peso.

one of the reason it has been rising as we have seen foreigners buying the nation's debt. they are calling on that now even though notes in the philippines are yielding 2%. they are calling -- pulling back from that. at the same time you have rising oil prices and a strong dollar overall. these are headwinds that could -- thisl stop these incredible rally we have seen in the peso yes your. -- this year. shery: investors in asia at weighing no a strong jobs report friday from -- but also the latest development with president trump's tweet on trade and also north korea's missile testing. what can we expect today? we have had u.s. futures opened sharply lower here in asia. it is safe to say it will set the tone.

it is going to be a risk off day. we have had the yen drop sharply in countries like the australian dollar which add a proxy for china with a slump. we will probably -- the positive from that very strong jobs report on friday be eroded in asia today. it is worth keeping in mind a lot of this global rally we have seen and the rally in u.s. stocks in particular hasn't been driven by optimism and by comments from both sides -- it by been driven by optimism comments from both sides this will be a positive outcome, but this is a negative we have seen this morning. you can find her charts on the gtv library. payrolls next u.s. look past all estimates but wage growth slows in the u.s.

we will look behind the numbers and asked what they mean for the fed with a chief economist. this is bloomberg. ♪

shery: friday's u.s. jobs report showed up better than expected 263,000 in april. the numbers don't tell the whole story. let's discuss this with the chief economist at point loma nazarene university. joins us from san diego. great to have you with us. when you say this number has powell'sated chair initial statements that the weakness we saw was transitory? >> it appears to justify that comment.

it was a passing soft note. the job gains we saw in april shows the u.s. economy still has considerable momentum. what happens if president trump imposes those tariffs on chinese goods? he is threatening to double tariffs on $200 billion for chinese goods, not to mention additional tariffs on $325 billion of chinese goods. what happens to the u.s. economy then? change the entire picture. markets and businesses have been looking forward to a success of agreement on the trade front and we have already seen some softness in the business sector the institute for supply management in april and i think this would take a huge hit accommodativeach trade deal. what is your take on that development? does it look like a negotiating

tactic or could we be going into the second round of a trade war? or three a,ee with there is all kinds of surprises that can take place in this negotiation. both sides have tremendous potential on the upside to reach i am optimistic that this is probably a negotiating tactic. no one can be totally surprised if something goes awry at the last minute. paul: it is hard to predict what will be tweeted next. i want to return to the jobs numbers, very strong read, 263,000, and the fed think there is weak inflation that is transitory. if you look at the lips curve, sort of the guiding philosophy of a lot of central banks around the world, it is turning into an increasingly bad joke. is it time to abandon this model? >> it might be. we don't fully understand the

process of inflation. there are a couple of puzzles in the picture, what is the fact we have this very low unemployment rate but haven't seen the huge increase in wages. second week as we have increase in wages, you have the gains in productivity that doesn't necessarily translate into increasing prices. this all could be a delay in the picture. one thing we know from the jobs report from friday is people are out the sidelines through we thought there would be people that could be drawn from the workforce but the overall population participation rate in the labor market has shifted, not moved at all in the last year. either people have other things to do or don't have the skills to get back in the job market, so it might be much tighter than we thought. where does this leave the fed going forward? we have that strong start, does

it cemented the fed in the new composition for now? it does. inflation is still low, 1.5%. we might have to rethink the inflation goal that is targeted. is it 2% or should it be something lower. the federal reserve believes it is 2% and if it it is below that point they would see no reason to either raise rates or lower rates. the economy is doing fine, inflation still below target. they are on the sidelines for at least a few months. thank you so much -- shery: thank you so much for joining us. we have breaking news, occidental has raised their offer to buy anadarko for $76 per share. we know that occidental has delivered a revised proposal 0.39comprises $59 cash of

in -- this is a premium of 23.3% to chevron. we know they have been in a bidding war to acquire anadarko. the anadarko -- we have heard from occidental they were agreeing to sell $8.8 billion worth of anadarko's african assets in order to get this deal done and we are hearing they have upped their proposal to buy anadarko, now offering $76 per share, $59 cash, a new proposal that doesn't mean occidental holders have a vote. the board has now approved the new offer which is 23% premium to chevron's offer. we will have plenty more ahead. this is bloomberg. ♪ ♪

shery: warren buffett is stepping up his criticism of private equity firms, accusing some of being dishonest about the way they calculate returns. he was speaking at berkshire hathaway's annual meeting where he feels over -- fielded five hours of questions. covers berkshire hathaway their this is the first time he has hit out a private equity. what did he say? he has criticized hedge funds in particular, saying -- criticizing the fees they pay and the performance but this time he took a hit at private equity. he was criticizing the way they calculate returns and how much they are holding in cash and funds, waiting to produce, being deployed and how it figures in to the rate of return. it was a bit misleading.

buybacks subject of came up a lot. why was that resort many areso repurchasing shares but for berkshire it is a different he hasheory for so long preferred to buy apple stock and coca-cola stock or snack a huge acquisition but recently they have changed the buyback policy and it helps to off -- open a new avenue with capital deployment. it is an important change for berkshire. it has gotten huge. that has put pressure on on buffett's ability to make the returns that made him famous. hasng this other avenue drawn questions from shareholders about what it means for berkshire and how it might deploy cash in the future. shery: thank you so much for that. plenty more to come on daybreak asia. we will be joined by the jpmorgan chair of research. this is bloomberg. ♪ ♪

>> good morning. we are under an hour away from the australian market open. shery: good evening from bloomberg's global headquarters in new york. ." welcome to "daybreak: asia paul: our top stories this monday, yuan false the in eight months as president trump threatens more tariffs on china. u.s. futures also on the slide. warren buffett heads out of private equity firms,