nejra: good morning from bloomberg's european headquarters in london carried i'm nejra cehic with manus cranny, live from to buy. this is "bloomberg daybreak: europe." stocks in asia slump as china threatens retaliation on trade. president trump claims beijing. that, soan't do they'll be paying. nejra: the hunt for yield, 10 year treasury sales see that weakest demand in 10 years. a recession could see massive losses in u.s. corporate debt. anadarko could be looking for

chevron to topple a bid from occidental. the deadline for a revised offer is friday. manus: a bid for unicredit, numbers will face the market in terms of net income, one poin -- 1.30 9 billion. that is a beat. everybody's name seems to be attached to commerzbank. setting money aside for bad loans has been something that has been a hallmark of unicredit. italy is where it gets 40% of its domestic revenue. it is confirming targets for 2019, and that is probably one of the most important elements. i will hunker down for more

details and handed over to you. you got deutsche telekom. nejra: the red headline is first quarter adjusted ebit post please comes in at a slight miss of the and -- estimate of 5.79 euros. there are u.s. subscriber gains. deutsche telekom's first-quarter revenue coming in at 19.5 billion euros, a beat on the estimate of 19.3. it is confirming its full-year courts -- forecast. system solutions first-quarter revenue falling. analysts expected a steady set of results with eyes on updates to regulatory progress with t-mobile's sprint merger in the u.s. but there was a warning from bloomberg intelligence that german carrier could show moderated topline growth and headwinds. ebitirst quarter adjusted number is coming in at a beat

a higherll, posting operating profit in the first quarter, propelled by forecast speaking u.s. growth. they are making up for slowing momentum in germany. manus: let's talk about hard industrials. the firststimates for quarter sales, net income 19.19 billion. big crush on demand in europe. it has been one of the big concerns from the market. the topline sales is a beat. 1.60 five, a slight miss on that versus 1.7. 4.3 are seeing for your of billion. there has been quite a bit of pressure and steel giants, it is one of the -- you need a deal. he made a trade deal done between the u.s. and china. more breaking news coming through on mitsubishi.

nejra: mitsubishi calls to buy back up to 7.5% of shares for ¥300 billion. this is the red headline crossing the bloomberg now. it is writte -- to retire all shares purchased on may 9, 2020. er and a conversion off is rising as much as 5.4%. the 300 billion yen buyback and it would get 86.0 percent if the option was exercised. this can exercise the option after july 1. mitsubishi shares, rising on the fact it is the buyback over 7% of shares. manus: look at the treasury market because one rallying by that did not come up on the street last night was bonds. they didn't rock up.

was it because the eu wasn't so tempting? i think the bid to cover ratios is at the moment 2.17. a lacka buyer strike him of yield, or is it a warning shot about the fiscal indiscipline of the u.s.? at the four a look words that have re-rated the risk in the market from oil to the won. it is at a two-year low. be more tariffs? not according to our oil reporter. oil, down .8%. this is where we are. have these markets already impugned a ratcheting higher in terms of tariffs? are we just getting started? you are looking at the equities. nejra: in the equity markets, it

seems there was a lot of what sign during the session. almost down .2% on the s&p 500. european equities ended in the green yesterday. futures on the back foot another day. s&p, down .6%. seeing the yen bid, strengthening for a fifth day against the dollar. this is after we got bloomberg dollar index strength against other g10 currencies. weaker against the yen, but most other g10 are declining. the aussie is the worst g10 performer. we are down .2 percent right now, 69.73. you had china data coming through, credit growth slowing in april but consumer inflation driven by food price gains. let's check on the markets in asia with juliette saly in singapore. there is quite a bit of conviction in risk off in asia today. mind,te: with all that in

is a prize we are seeing asian stocks down for a fourth session in a row. weakness in the south korean won. the kospi is down almost 2%. samsung, dragging on that index. the hang seng and csi 300 extending losses in late trade. some hefty selling their. you mentioned china credit growth. the strong yen weighing on the nikkei, down .9%. the australian sharemarket a bright spot today. it is firmer on the close. stocks we are watching, mitsubishi and the likes of toyota, honda coming through with numbers. honda, missing its own guidance. it is off 4.4% in late tokyo trade after it posted its fourth-quarter net loss citing currency effects and car production changes in europe.

we are watching softbank having its biggest gain so far this year. incould be a bright spot turning the japanese market sentiment around as we await earnings. we have heard it will higher number of and goldman on its japan deal. a bright spot. it started seeing slowing demand and its business traveled mystically so qantas airways warning of fewer passengers in that department. nejra: juliette saly in singapore. let's turn back to the top story. president trump has declared china's leaders have broken the trade deal he has been negotiating. he ratcheted up rhetoric ahead isnegotiations, saying there nothing wrong with taking in $100 billion a year in tariffs. >> by the way come you see the tariffs we are doing? [applause] >> they broke the deal! so they are flying in, the vice

premier is flying in, good man. but they broke the deal. nejra: this as china's top trade negotiator comes for new talks. the white house is confident an agreement can be reached. >> we have indications they want to make a deal. our teams are in continued negotiations. they will sit down tomorrow and we will see where it goes from there. nejra: china's ministry of commerce warned it would strike back with necessary countermeasures if the u.s. raises tariffs. despite trade tensions, the ceo of jpmorgan's china business says the country's financial reform is likely to accelerate. he spoke to us exclusively. >> the determination for china raisen up its sectors and global investors and capital markets will remain and sustain and likely accelerate. french,et's get simon great to have you with us. we have been talking about this all week and trying to work out

whether the markets are too complacent that a deal will be reached. you had the yuan today hitting in january low, something like a fifth day of declines and taking a hit.t fx our markets to complacent we will get a deal? simon: i don't think so. at the comments of president trump the past 24 hours, he mentioned joe biden in terms of the chinese potentially sitting this one out, anticipating the u.s. political cycle and therefore having an easier ride. i think that this is all driven by the political business cycle in the u.s. and i think the president has been more consistent in his tweets indicating he wants to run the u.s. economy hot into reelection and if he wants to run it hot, he will have to come to a deal. manus: good morning.

he may have to come to a deal that there is always the risk. you talk about policy error from the fed, but there is a risk of political error. this is the quote from one of our columnists. he talks about the potential for messy, unusually messy in the final stage of the negotiations. something perhaps more malevolent might be there. there is always the risk. this can get very messy. would you agree with that? simon: absolutely. view is notbase guaranteed. you can't guarantee anything, or in from the president the nature of bipartisan economic discussion or bipolar political discussions between the u.s. and china, but this is one of those things investors it doesn'tce out, matter who is the incumbent in the white house. it doesn't matter who runs the republic in china.

what matters is what two economic superpowers trying to write the rules of commerce. nejra: with you are right or wrong, investors, markets seem to be very focused on tariffs at the moment. that is the headlines market react to, despite the structural issues that may or may not be resolved regardless of what we get friday. let me ask simply if you think there will be more tariffs imposed friday. goldman puts a 60% probability of yes. simon: i don't think they will happen on friday. i think this is negotiation for talks over the next 44 hours. you can't be assured of these things but on the balance of ability, i think this is trying to create the strawman, leverage to 11th the chinese hour concessions, to go back on the campaign stump and say look at my rhetoric. and willong on china

take a policy when. words, they broke the deal. one thing they have done is invoke volatility. the you remember that? in all its glory, and it is in the offshore yuan. if we hunker down for ongoing angst, will we see a lower yuan and more vol there? simon: a lot of people have called a lower yuan the past three years as a direct response to more and more challenging trade policy from the u.s. this is not a one-shot game for the unit -- chinese. they have to worry about capital. look at their fx reserves hovering 3.4 trillion yuan. they want to use up a lot of those to protect the yuan and manage devaluation. i'm not convinced given the

implications on the capital account. manus: simon, stay with us. panmure gordon chief economist. the first word news with rosalind chin in hong kong. u.s. official mike pompeo has often rebuked against you k's approach to national security. tougherto take a approach with china and iran. this comes at a sensitive time for the prime minister. she is struggling to deliver brexit and under daily pressure to resign. bitcoin has climbed back about $6,000. the cryptocurrency has been on a wild ride the last few years. to rose above 19,000 in december, 2017 before sinking last year. to theclawed back highest in six months. a chief to executive about the future of

the corn. 6000 will struggle around free while. i feel better about bitcoin today than i have at any point in my career. rosalind: saudi arabia plans to meet all oil orders from customers who refuse to buy from iran. this follows the u.s. failing to approve waivers for the gulf nation. still expected to remain below the kingdom's ceiling under the agreement of opec and allies. south africa has started counting votes from yesterday's election. opinion polls point to a outright victory for the african national congress but the scale of the wind will be crucial for president ramaphosa. a narrow victory could embolden critics. the final result is expected this weekend. 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. this is bloomberg. rosalind chin in hong kong, thank you.

coming up, have investors finally had enough of outside government debt and ballooning deficit? the u.s. treasury holdings weakest option in a decade. we discuss why, next. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." i'm nejra cehic in london. manus: i'm manus cranny in dubai. equities are being roiled again forward. the asian equity sitting a two having month low. money flows into yen and a lovely chart hanjin- . -- yen-yuan. vol is spiking. nejra: the 10 year yield moves lower by two basis points, 2.47 handle. be concerned should we

about the auction yesterday? the dollar gaining against. -- against peers. oil on the back foot. crude was pushed higher yesterday but we are lower today. let's get the first word news with rosalind chin. to price uber is due shares for its ipo today. still expected to be the largest listing this year, but unlikely as big as initially thought. the company is considering pricing chairs -- shares slightly below the midpoint of its range. it could debut with a market value of around $79 billion, a far cry from the 120 billion some were talking last year. occidental's corporate debt has landed in the netherlands. according to flight data. while it is unclear what the plane was doing there, it was close to the headquarters of royal dutch shell. the company has a joint venture

with anadarko. the takeover target is looking for a revised offer from chevron that matches or exceeds the new occidental bid. novartis has agreed to pay nearly $3.5 billion for assets from takeda. the japanese drugmaker is making the sale after it 50 be a -- $62 billion acquisition of shire. the deal is a prescription i drop for adults with dry eye disease. that is your bloomberg is -- business flash. manus: thank you very much. seen thetreasury has weakest demand for its benchmark 10 year notes in a decade. they lack of appetite among investors to accept current yields. for the $27 billion of notes exceeded the offering by -- a bid to cover ratio of 2.17 times. speaking from beijing,

jpmorgan's ceo jamie dimon warned yields may not be correct at these levels. jamie: i think the 10-year is extraordinarily low. when governments bought $12 trillion of sovereign debt, that had to have an effect on the 10-year. i think 4%, when you are having good growth, is not a bad number. manus: where does the hunt for yield take you next? friedman spoke exclusively to erik schatzker at the salt conference in las vegas. josh: there are so many different types of investors who are desperate for yield right now and we went through a period in december where there were zero new issuance, rates are down, the fed said it would keep rates down and rates globally are down, so there is a contest

with a lot of investable capital looking for yield. issuers take advantage of that. manus: today's mliv question of the day is how concerning was the weakest treasury auction for tenure paper in a decade? .e are part of the conversation, simon french, chief economist at panmure gordon is with us. a plethora of stories written this morning. the weakest mid to cover ratio in 10 years. was it the chinese not showing up? the low yield and not incentivized? could there be something more malevolent in the message about the fiscal position of the united states? you've got three to choose from. simon: can i have all three? manus: you can have all three because i like you. simon: very generous. i would focus on the third aspect, yields are too low for where we are in the cycle.

the market is still pricing in potentially rate cuts, potentially qe4 from the fed. is happening that and investors are coming around to that view and currently looking at 2.4% on the 10-year. much more comfortable with a bit than cover around 2.5, 2.6 2.1. it is not indicating the buyer strike, but i don't fancy the yield if i can get more in six weeks. nejra: for foreign investors, you have to take into account the hedging costs. how much prospect is there that investors are going to get any that are yield on the 10 year treasury yield as long as the trade tensions roll on and expect haitians of a fed rate cut stay where they are? i thinkn the first one, they will get better news on trade talks with the political cycle in the u.s. turning toward meeting a deal on trade.

i think the fed cycle is not going to be an aggressive cycle, but there are conditions for a rate cut. the question is how quickly will rates move higher from here. in an environment where the boj, stimulus move -- mood, there isn't a long way for investors to expect a higher yield but you can see a push up toward 2.75, 3% later in the year as growth except and that is what i would hold out for. manus: what do you make of the comments in regard to yield curve targeting? joining with clarida. does that show innovation or desperation? notes a frustration of persistently low core inflation in the u.s. economy and looking for other things. beenal banks, he has

pretty much the best central banker in terms of the commentary of the last past couple of years. you've got to put more meat on the bones. if you say it is still full, you got to offer specifics on what that maybe. a change of policy is priced in the near-term for the fed, but they are talking about specifics, it would take it a step forward. nejra: simon french from panmure us.on stays with the leaders meeting a romania and it could be iran and the trajectory of the 2015 nuclear deal that steals the limelight. we are live in romania next. lots to discuss in terms of europe and lots going on in the markets today. another risk off session across assets. we've got to mention the metals because we've had news over that from president trump overnight affecting the metals market. ♪ will talk about that

and the implications in terms of what saudi arabia has got to say about filling the void. for those people who are no longer able to buy their rude from iran. this is bloomberg. ♪

brain -- four words that rocked the market. they broke the deal. mobile equities has lost over a trillion dollars. where youo question, want to run for protection, it could be the yen. chargt,how you this yuan lower. again higher. -- yen higher.

trade angst continues. yuan hitting a january low. the question becomes, how much is priced into equity markets? the u.s. market whipsawed yesterday. 0.2%. how much could it drop if we get result for these talks? cropwill probably cause a -- drop of 10-15%. chinese equities. that is according to one of our favorite guests. >> it comes down to what will the policy response be. undere seeing the yuan

some people think i create my own charts. .ig shot out >> definitely. great to get those emails. big day and the markets. let's check in from bloomberg. annmarie hordern. great to have you with us. it is a sea of red. what is driving stocks down other than the general sentiment of trade angst? difficult to distinguish. you would believe indian markets are going by that rule only. because of strong weakness we are seeing, we are slightly better off than a lot of other red in other markets. a fair bit of correction, this

is due to local factors. war breaks off, it could be a beneficiary. something i was talking about, volatility in indian markets, it is the election jitters. one barometer of this, the heaviest stock in india, coming down. they do not own major parts. steepest fall which leads one to believe there is a risk for domestic participants in india. that might be the main reason for the weakness. >> as you say, volatility is

back. stories justs keeps getting richer? >> the latest in the quest is we to boost theirnt did to exceed. you can see what they have been. the white line is the occidental offer. $38 billion proposal. the yellow line is the value of the chevron bid. to boost,until may 10 seek an extension, or walk away. the purple line, that is the anadarko share price. the winner has been anadarko. look at that compared to occidental. their share price has been under pressure. bid,if chevron does make a

flight been tracking the data. one thing we can say, even if chevron makes the bid, i don't think that will be enough for the ceo to give up. we learned overnight the jet,tream, the corporate was at the hague. we don't know what it was doing. home of hague.he interesting. we will continue tracking these flights around the world. >> thank you so much. annmarie hordern in london. let's turn to europe. for the firsting time since the deadline was extended.

bloomberg plus maria is there. great to have us with you. iran an important point of discussion. tell us how much the discussion will dominate and what direction they are expected to take? >> good morning. european officials put this to me, this is about housekeeping and the future. nothing to do with brexit. skeptical about these negotiations. they want to look into the future. , themeans these jobs european central bank. you are seeing a number of countries lobbying about jobs. try to get that balance of power between the french and the german government correct. summit thatuch a ee future at the

end of the month. >> good to see you this morning. are they likely to change their stance on iran. what can i do that does not put them in direct conflict with the u.s.? this is a delicate issue. they are in a difficult situation. everybody is aware of it. union is almost squeezed between the u.s. and russia and china. theyean officials felt thought their deal was the best way forward. they still think it can move forward. the conundrum is whether they decide to savage the deal, go on in. maybe another confrontation with president trump or they go with

sanctions which would prove president trump correct. >> thank you so much for joining us. simon french.is let's pick up on the iran issue. how worried are you at this point of an escalation? will markets send wayne. we have heard from saudi arabia. you have president trump talking about the metals markets, but not too much reaction today. how worried are you? >> it probably doesn't matter how much i am worried. it does matter about the commissioner. by hit the nail on the head saying this is three-dimensional. if europeans choose to go head-to-head with the u.s. who wants to be hawkish, are they worried about a reaction elsewhere? an $11the suggestion of

billion tariff bill put on eu imports. at purely be looked as the merits or otherwise. >> it is interesting how we are almost like myopic. sino u.s.. there is japan in the background. tariffs may come to bear. they may come to play in the european context. from done from this theater of tariff angst. the question you probably need to ask yourself, whether your enemy's enemy is your friend. we saw some interest, about six weeks. an interesting bilateral meeting between the eu and china that

aboutme warm words to say ongoing cooperation. a natural relationship but clearly with a common potential word inet's use that the context of tariffs. they may choose to align themselves as guardians or what they see as free trade. president trump would call it fair trade. the difference is the dividing line at the moment. u.s. are focused on the china relations in terms of trade. what other risks might investors, not necessarily be ignoring but not quite as confident. >> i think the oil markets. we have talked about it in the context of iran but we have not seen the situation in venezuela. demands a potential coming later in the year.

if the u.s. economy wants to run going into reelection, will the supply-side keep pace? >> can we drill more into the european story? we discussed germany slowing down. that story has mixed messages. chart that defines when the coalition came to power in italy. euro-dollar.of the another moment of angst. quite aggressive language from the italians. are we under sue mina italian risk to our european story?

>> not particularly from a growth perspective. if you look at the growth rate the fact that the commissioner is assuming zero growth is not a huge movement. investor,ernational you are not suddenly looking at a change in the growth profile in italy. i think the politics here, how tolerant the eu commission will be to the rhetoric and the fiscal situation, fiscal loosening going on and france. whether that generates problems. respond. to be able to saying, why not me? hit. have seen currencies

the euro has been remarkably steady. it has closed every day this week. despite trade tensions and we have the downgrade. why is it not working -- moving more? >> there has been central-bank commentary talking about normalization. people trying to factor in what the policy outlook will be. in they be is dominating background. if you are trying to trade the headlines of the euro zone being affected by trade volumes, you may be missing the bigger picture. policymakers desperate to keep normalization on the table. negativescounted interest rates, than the marginal change is more hawkish. >> that is something we have to

understand and comprehend. simon french. stay where you are. largestp, the world's ride-hailing company set to price its ipo later today. timing is everything. the latest on the story. this is bloomberg. ory. this is bloomberg.

this is bloomberg daybreak: europe. middle east headquarters. the ride-hailing giant uber. i am really close by you at heart. it is all about the pricing for uber. the pricing, the dizzy highs anticipated.

convinced by is the evaluation. >> they are not valued in traditional valuation metrics. you are trying to short the fundamentals, which is difficult to do. >> let's get a little more. he covers the story for technology. we are excited about this. the timing just could not be more spectacularly punctured, could it? that was something like 20 times oversubscribed. three times oversubscribed at the top end. institutional investors always ask for more than they want. but nothing great. people got what they wanted. perhaps pelee -- people feeling more twitchy investing.

>> we do like to make those comparisons. uber justify such a valuation? about 7.5looking at times sales. lyft is growing, uber at 20.30%. they need to keep pushing hard, particularly in the food delivery service and keep the international growth. service-hailing delivering. >> what about disney? they have to assure people this streaming service is not going to rip away in cost. >> they printed pretty good results.

did flag something like a $400 million $500 million hit. -- the issue is they are pricing it competitively. $6.99. a great catalog of new content coming through. they will get a huge number of subscribers. all that content will keep people with the service. >> are bloomberg intelligence analyst, thank you for joining us. let's get the bloomberg business flash. occidental's corporate jet has landed in the netherlands. it is unclear what it is doing there. has a joint venture with anadarko. -- thatover looking for exceeds the new bid. pay $3.5ave agreed to

million from cicada pharmaceutical. makinganese drugmaker the move. the main move is a prescription eyedrop. weedkillernd up trial, soaking the company and damages could spur change. these comments came from a lawyer. the cases are over the chemical giant covering up the health risks of the herbicide for decades. that is your bloomberg business flash. >> thank you for the roundup. let's turn our attention to the u.k.. relief for the prime minister as lawmakers decided against making it easier to remove her. andrexit, the government opposition party put out statements indicating progress and their talks to find a compromise. simon is the chief economist.

is the betting inside the house? will there be a deal on a customs union, rather than the customs union? think a deal is likely in terms of common principles. the question you need to ask yourself is whether in a green something, we actually reverse engineer back to the future to a withdrawal deal that looks a lot like the version rejected three times, effectively three times by the house of commons. if those people who want to leave the european union but have voted against it see something even more watered down as a credible option, will they offer the prime minister their support to get the deal through?

i think that is a likely outcome. >> i was looking through some of your work earlier. you advised investors on how to prepare for a labor government. how likely is that? you must think it is reasonably likely. >> every meeting that starts on the subject of brexit and's in the political implications. i look forward to meeting the person who knows what is going to happen. look at the scenario. crucially, question marks over the property rights. that is the change you need to reprice assets. real estate, financials, assets.

quite a bit of the utility space. those are areas investors would be very nervous about. >> i am manus cranny and dubai. your 32nd retheme. john mcdonald, 2017, and i quote, at the conference, he right to plan for a run on the pound. we are wargaming that type of scenario planning. if there is a run on the pound. this is all inherent in terms of the political risk. do you think it would be something like a run in the pound? even if it were in a coalition with another team? of the factors i

put into the model. to a significant devaluation. we have a very recent precedent. we got a 15-20 percent devaluation. seeing the read provides a decent case study. you can go back to other devaluations in 2008. you can look at the sectors of the u.k. that responded positively. it is not rocket science. is the labour party investors needhe to wargame it. it could alter the balance of your portfolio. >> how much lower could we go? aprilld slip toward a low. >> we will take the bottom out

of that. is it a coalition government, that would meet the downside. majorityalking about a labor government, you would take out 120. againstial cross rate the u.s. dollar. >> thank you so much for joining us. daybreak radio live to carry on the conversation. lots to get through. you have some breaking news. a flag carrier, profits dropped 44%. this is a pretty big disappointment. 3.2 billion.

the pressure on the airlines continues, we will break those deals down when we return in a few seconds. we are going to continue the trump conversation. doubling down on they broke the deal. ♪

good morning from dubai. this is "bloomberg daybreak: europe." slump as china threatens retaliation in trade. president trump blames beijing. >> they cannot do that so they will be paying. treasuries, the weakest in 10 years. the recession could see massive losses in corporate debt. and the cleanup accelerates.

less cash for bad loans. this as they confirm the full-year targets. >> good morning and welcome to "daybreak europe." up -- awaiting a strategy update on the release of the new ceo. any cost cutting measures, let's have a look. getting details. the final dividend per share comes in at 10.78. the efforts to transform operations on track. 2020, adjusted.

adjusted revenue, down around assent. it is going to hold its dividend unchanged in respect to the current financial years. at $7.3usted, coming in billion -- pat dollars. forecast, in-line with the estimate. what analysts are going to be looking for in the details, getting some clarification from management on where they stand a recentts following report the company is considering shrinking the workforce. >> pretty big headlines to chew over. soft -- going for a stock split.

if you take it back a year ago, that was 154.97. the stock split doubled the dividend. full-year derivative gains. up, ¥500 billion. looking at a derivative gain, 558 billion. versus 300 and two. the relationship with saudi arabia important in our part of the world. a 2-1 stock split. you have done shopping in the u.k., more sins. >> let me give you a correct. in the bloomberg, showing a different number. adjusted, 7.2 billion.

actually, that is coming through a little softer. earlier, we were saying it was in line but the forecast adjusted, a little softer than estimates. let me move on to more sins. first quarter comparable sales, up two point 3%. estimates of growth, 2.5% it still confident there are many sales and profit growth. expecting the market to remain challenging. >> a recap. here in the region. profits collapsed by 44%. the full-year profit over at emirates. collapsing by 44%. that is the latest headline

there. at theave a look futures, four words which have crushed the optimism. equities, a little bit of pressure. saw a gain inwe european equities. we did close in the red. futures, both in the u.s. and europe, all lower. we are seeing reverberations through global markets in concern around trade. the yuan hitting a low. >> honey flowing into the bond markets. bund, they did not exactly show up. what does that really mean?

form.a strike in one b up by five. italy is going into battle against the eu. quite a lot of rhetoric from the italians in regard to their deficit numbers. let's dig deeper into the asian session. the very latest on the markets. >> certainly we had president trump speaking at that rally during the asian open. a fair bit of data coming out of china, showing a mixed picture. credit growth slowing. cpi accelerating due to pork prices driving up inflation. they have been talking about the strength. the nikkei, lower by 0.9%.

the kospi you want to watch. the biggest drop since october. australia, a standout. let's have a look at currencies. the biggest holding, two year lows. concerns about higher tariffs. terms of abid in safe haven. session of gains. the peso, worth watching. percent. gdp slowing in the philippines, 5.6%. we are awaiting a rate decision from the central bank. they are likely to follow will

asia, new zealand cutting rates. >> certainly going to be the theme for the moment. thank you very much. great round up. let's get into the top story. president trump has declared china's leaders broke the trade deal he has been negotiating. ratcheted up his rhetoric ahead of negotiations, saying there is nothing wrong with taking in $100 billion a year in tariffs. >> you see the tariffs? because they broke the deal. they broke the deal. they are flying in the vice premier. good man but they broke the deal. tophis comes as china's trade negotiator arrives. the white house remains confident an agreement can be reached. >> we have indications they want

to make a deal. they are going to sit down tomorrow and we will see what happens from there. >> the chinese ministry of commerce warmed it would strike back with countermeasures. despite tensions, the ceo says the companies reform is likely to accelerate. he spoke to us exclusively. china tormination for open up the sector and embrace remain.nvestors will likely accelerate. >> thank you for joining us. goldman sachs, reckoning we are going to see these tariffs implemented tomorrow morning. of that.bility what is your best estimate? president, how difficult it is to track things in china, it is hard.

it is hard to imagine where we are right now, we are going to get by without some sort of tariffs. they will go back to their corners after this. we are learning two things. trade deals are hard. it takes a long time to do anything substantial or lasting. there is near-term turmoil in the markets but china, the trade war is only part of what has driven markets higher. there is underpinning to the data which has driven the u.s. and chinese markets higher. to isolatefficult how much of the reaction is to do just with the trade talks. making calls on that. saying, the imposition of a new tariff and a breakdown in negotiations would probably inse a drop of 10-15 percent

u.s. stocks from their highs. we could get the imposition of tariffs as they continue talking. what sort of predictions would you make if we do get tariffs imposed on friday? on friday, isosed this part of the late stage negotiations? china has always been backtracking as you get closer to a deal. his gamere part of plan. if this is part of a late stage pushing and shoving, that is one scenario. a more difficult scenario is it both break things off. there are a lot of companies that could face

retaliation. the head ofup with wealth management. he says this is an opportunity to buy into these dips. one thing i am struck by is the deleveraging. mostare delivering by the in three months. this is a market that has ratcheted higher. the longest run in deleveraging we have seen in three months. is that pragmatism? >> i think it is hard to track any particular movement in chinese wealth management or leverage. broaderlook at is the economic data. the chinese economy is clearly slowing but not out of the control of chinese authorities. i think barring some complete unraveling, which is hard to see

markets should recover. >> looking at china exposed stocks is interesting. they have outperformed. fallen versus the world index since the trade war escalation over the past week. not a surprise, i suppose. how much faith would you put in chinese authorities to support markets in a way that could reassure investors? >> i am not sure about near-term measures. it is a long-term game plan. focus moretries that on the next election cycle. up.a has been opening

it is slow and frustrating. it is moving in the right direction. we will look back over 10 years and see it is in a different place. lots more to discuss including the u.s. treasury market. for now, let's get the first word news. the u.s. corporate debt market will suffer massive losses if the biggest economy falls into recession. short fame.- of big >> the financial system of the u.s. is safe. that doesn't mean we won't have a recession. massive losses, but that will be the problem of those people who invest in the bond market. >> mike pompeo has launched a

rebuke against the u.k. approach to national security. he is demanding allies take a tougher approach. this comes at a sensitive time. to deliverggling brexit and under almost daily pressure to resign. bitcoin has climbed back above $6,000. inrose above $19,000 december, 2017, before sinking. it has clawed back to the highest level in six months. we spoke to the chief executive about bitcoin. struggle forng to a while. we are going to be much higher. anyel better than i have at point in my career. 24 hours a day. powered by more than 2700 journalists and analysts.

>> she rallies the call on that. bitcoin. another, south africa. they started counting the votes from yesterday's election. opinion polls point to an outright victory for the african national congress. a narrow victory could embolden his critics. let's bring in the johannesburg bureau chief. the votes starting. what is the latest development? of excitement in yesterday's election. the counting has begun. a three horse race with the anc leading. the democratic alliance following closely behind. the economic freedom fighters in third place. it is early.

the numbers could change rapidly as more and more votes are counted. for now, it seems as though the anc is taking that lead. >> look at how the market is set up, if you look at the rand, . 38.ng at 14 how high is the bar for rand strength in and anc win? the margin will be crucial with regards to the victory. thehing over 60% could see rand strengthen. relies very much on that margin. a significant one. if the anc gets a strong wind, investors and policy makers will have consistency when it comes to policy. watching quitebe

closely. bloomberg has a great story about what to watch. in votercould run turnout. thank you so much for joining us from johannesburg.

is "bloomberg daybreak: europe." >> the u.s. treasury has seen 10 weakest demand for its mark notes in a decade. this illustrates the lack of appetite to accept current yields.

the lowest since 2009. speaking with bloomberg exclusively from beijing, jamie dimon warned of yields at current levels. year isnk the 10 extraordinarily low. governments bought $12 trillion of sovereign debt, it had to have an effect. you are havingn growth, is not a bad number. >> and another exclusive interview, the money manager who predicted the collapse of subprime mortgages, warned of a collapse. the financial system is safe. that doesn't mean we won't have a recession. there will be massive losses in the bond markets.

that will be the problem of the people who invest in the bond markets. corporatereferring to bonds. we are asking the question, how concerning was the weakest auction in a decade? you can join the debate and reach out to us. still with us, the head of investment that bearings. i want to put this to you. a number of reasons have been put forward. chinese demand, the level of the yield, concerns about u.s. debt. investorsg of foreign making treasuries less attractive. how concerned are you? there are a bunch of reasons. generally, i come down between jamie dimon and mr. eiseman. yields seem a little low

given the resilience of the economy. earnings.od corporate the markets, in spite of what is happening, are strong. put too mucho meaning into a single treasury auction, even though it is part of the larger narrative we have to watch. >> do you think they are inflation, given the the lack of an explosion? >> the market is always right. i woulde the market, look at the underlying data. , they areying data lower than they ought to be. we have seen data continuing to come through.

the recovery in china, it has been slowing. toolingsponding to the the government is responding. number.nted a good gdp the outlook is better than bond investors are pricing in. >> you take a long-term view. if some of these concerns go away, the trade war does not escalate and they taught to each other -- stop talking to each prepare forould you significant repricing in the bond market? significant pricing is possible but hard to predict. someycle will end at point. is important to keep in mind how the next cycle is going to

be different. we have central banks with us to stay. quantitative easing is pulled back slightly. that is going to create a new investment space for markets to consider. the second big stage is technology. lastly, politics and populism. threat of tariffs are a permanent feature in our world. present is an ever threat. thank you so much for sharing your thoughts with us. the globalat some of news we have had. reducing operating expenses and reiterating their full-year views. that is good news. the new ceo forecasting a

decline in profits as the group is hit by a price cap. softbank operating -- 494 ¥9 billion. this is bloomberg.

>> welcome to european. we are alive in the city of london. i am an edwards alongside matt miller. >> the markets saying, should we be worried. stocks slumping despite president trump's assurance. demand for treasuries the lowest since 2009. the cash trade starts in 30 minutes time. ♪