morning.d i am paul allen in sydney. we are one hour away from the australian market open. shery: i am shery ahn, welcome to "daybreak asia." paul: our top stories this tuesday, the t ariff-driven selloff. investors seek safety. gold gained the most since february while the yen has strengthened in early trading.

oil goes the other way, dropping for a third day and erasing earlier gains sparked by tensions in the middle east. shery: that's get you started -- with aet you started quick check on how markets closed. stock markets losing more than in the hall of last week. without losing more than 600 points. trade sensitive stocks like caterpillar and apple losing 5%. the s&p 500 fell in this session. with all the nasdaq also losing the most this year. 10 year treasury yields falling to the lowest levels since march. the three-month tenure part of curve 10 year part of the falling. u.s. futures not doing much and holding above the 2800 level. let's see how we are setting up for the asia open. paul. paul: thanks. as you might expect, it is not looking too good.

nikkei futures are currently pointing lower by 1.7%. japan's setting up for its second straight day of declines. futures not looking much better. in sydney, the asx futures are weaker by .8%. we will get a fresh look and 45 minutes time. we are setting up for another day of the client to the asx as well. itt has been sliding since opened about one hour ago off a little more than 1%. let's get the first word news now with jessica summers. bayer has been ordered to pay damages to a california couple who claims they contracted cancer as a result of using roundup for 30 years. it is the third trial in a row over claimsas lost that roundup does cause cancer. they brought combines damages of $159 million. bayer is appealing the earlier

verdicts. two saudiclaims that oil tankers were attacked from the gulf is a plot. saudi arabia says the vessels were severely damaged as they approached the strata vermouth. it has yet to blame anyone for the attack and no one has claimed responsibility. tensions in the region are rising after the u.s. deployed a strike group and b-52 bombers there. counting resumes in the philippine election with allies of president duterte seemingly ahead in early tallying. leaders among the world in the senate race albeit with less than 1% of the ballots counted. hours after polls closed, 80% of vote returns have been sent to the commission on elections but preventedglitch it from accessing results. 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 jessica summers. this is bloomberg. shery: thank you. the u.s. has detailed plans to raise tariffs to 25% on all remaining chinese imports after china retaliated to u.s. tariff hikes i announcing it would raise its own duties on $60 billion of u.s. goods. that's dig into the details -- let's dig into the details. joe, let me start with you. tariffs on the remaining $200 billion of chinese goods won't go up all at once. it will not happen immediately. what will the process look like? has submitted for comment that the list of tariffs att is a 30 day process and any time, the administration can pullback or modify that list. these will start to hit if they are in place.

the u.s. consumers will start feeling the pinch is more directly with things like phones and toys and some other consumer goods that will be part of this round of tariffs. in the meantime, we do not have much in the way of additional negotiations planned, at least at this point. and the u.s. is going to also want to wait and see whether china goes beyond what it's already done in terms of retaliatory tariffs. might be a good moment to bring in tom mackenzie in beijing. we have heard from china. what is the latest? tom: we heard on monday evening beijing time the chinese response detailing plans to raise tariffs that are already in place on $60 billion worth of u.s. important to china. those were part of a previous retaliatory set of measures from china. they will raise the levels,

chinese officials have said, anywhere from 5% to 25%. are 2500 items as part of the $60 billion that will see duties rise from 10% to 25% on the 2500. these are products that include agricultural products. things like soybeans and corn, lng., fruit, wine, and that is the chinese response so far. what they did not do, interestingly, was raised tariffs on u.s. autos. ofse were suspended as part goodwill measures after the g20 meeting. the has been some expectation that maybe they would be imposed autos.n u.s. so far, they have not done that. you look at the likes of tesla, g.m., and fort, and their stocks were badly hit yesterday. course a g20f meeting coming up in japan towards the end of june. might be an opportunity for tosidents trump and xi

hammer this out in person. what are the chances of an agreement? joe: president trump with a lot of stock into his personal relationships and ability to negotiate these deals and he likes to do these things face-to-face, but that is at the end of june, in which case, if there is nothing else going on between now and then, it will signal somewhat less likelihood that anything can be achieved. moment, there are no new negotiations scheduled. china offered some vague invitation for additional talks, but those have not been put down in paper and no one has committed on the u.s. side to going either to china or having a chinese delegation here. there would have to be a little bit of groundwork that would be laid for any sort of deal to emerge out of this meeting of the g20. shery: we have heard from u.s. officials complaining about beijing reneging on the

agreement because they did not want to enshrine some of the reforms negotiated in these talks on the chinese laws. where can i find some common ground and how do we break this impasse? tom: it is very difficult. it has become increasingly clear since that set of tweets and the increase of tariffs on friday last week that china's position was that they were very concerned they would be coming away with a one-sided deal. theyhat is why it seems were unlikely or wanted to push back on this demand to enshrine the some of these agreements and chinese law, particularly when the u.s. was not agreeing to hold back and remove all of the tariffs. china has increasingly clarified its position saying it wants a two-sided deal. it is prepared to continue negotiations. he wants to see all tariffs removed. he wants a softening of the demand for china to buy increased agricultural products, and he wants a two-sided deal.

that is what china has been very clear about over the last few days, so it seems to some extent that the ball is back in the u.s. courts because china is hardening its position. paul: tom mackenzie in china and d.c.obczyk in asian markets are entering a new phase of uncertainty and increased volatility. the investment director joins us now from hong kong. environment,nd of what do you do to protect yourself? that hass something been going on since the middle of last year. this volatility due to what's happening between the u.s. and china. what we have been seeing is that uncertainty and short-term sentiment impact is likely to stay. the cycles are getting shorter

and shorter, and are in the period of such uncertainty, it is really about going back to basics. the focus on just individual companies, which are unlikely to get impacted despite the headwinds that we have, are likely to stay on. paul: how well placed are stocks in particular to weather this latest storm and the ongoing storm? do you expect to see more action from the national team or maybe some more stimulus? medha: exactly. if you look at what is happening since the middle of last year is that china has impact on monetary and fiscal loosening, that.ey have been doing and we are seeing the impact of that now on the economy. macro data has shown signs of stability in different areas. matt is likely to continue, so expect more of that.

on -- that is likely to continue so expect more of that. what we see in china that is unchanged is the structural change, right? and that it is likely to remain so, and by that, we mean this whole rebalancing towards consumption, innovation, automation, and technology being the pillar of the economy, so focus on this company is where most of the revenues are coming in from domestic growth. and that is really where, you know, where the markets are likely to give you the return. year-to-date, we did see that strong run-up in china, and valuations were no longer reasonable, but the current sort of market downturn just means that better by opportunities -- buy opportunities from an operations perspective. when: we saw five rrr cuts

it comes to monetary policy since last year. this gtv chart on the bloomberg showing that on the top panel. no real movement when it comes to the benchmark interest rate. what are we expecting in terms of monetary easing? are they done or could we see more measures if the economy takes another hit? think what the chinese we are really doing is a combination of measures. it is not a big bank stimulus. it is really targeted loosening. we have seen those cuts. we have seen tax cuts. the underlying principle is strengthen domestic economy, the domestic consumer, so that is to continue. you're putting up of the market is another and it should've. on the fiscal side, expect investment to continue to spur growth as well. we have cuts on this front and nothing on the other front and

that is what the leadership is indicating. shery: we saw state funds coming to the rescue last week with the shanghai composite gaining more than 3% on friday. are we going to see more of those moves if we see further turmoil in the market? medha: tough guy, that is something the chinese have done. we have monitored such developments, but you know, in the short-term, it looks like volatility is here to stay. you could see this risk off-risk ongoing entree while, and sentiment getting -- going on for a while, and sentiment getting impacted. what we are focusing on is the valuations in the market. what is is weak and fundamentally strong, and a real catalyst will come in from earnings of companies, and that aboutre it is really domestic rebalancing, domestic growth, which is likely to benefit these companies. paul: how about the rest of

asia? there are a number of emerging-market economies in the region that and to suffer some pretty heavy collateral damage from the trade dispute, so does this bake in more easing from a central banks in those countries? medha: if you look at the rest of asia, it is a lot of interregional trade between an area wheren, we thought things would get impacted. the asean economies are interesting. different drivers of growth. not homogenous at all. huge domestic consumption oriented economies like indonesia, where with the elections been washed out, we really seen them starting out. they have been watching this very carefully. plenty of room to loosen or cut interest rates. in is another story which is really not dependent on what is happening with respect to the

trade site or the export side. once the election cycle gets washed out, we are likely to see sort of that 7% growth likely to sustain. and the central bank likely to cut rates again because they are more of an inflation watcher and we seafood prices going up. shery: when it comes to the asian markets, can we expect a weakness in the em markets, global equities, safe haven assets rallying like the japanese yen, this trend to continue for the time being until we get some sort of resolution on the trade front? medha: absolutely. i think investors are likely to focus on what is not going to get impacted. risk-off means emerging markets as a whole do get hurt. that negative sentiment is likely to stay. but it's really about the risk reward scenario. and with markets going down, it is simply what we feel is buy

opportunities look to add to areas which were looking expensive year-to-date. shery: how concerned are you about the chinese market having all these negative factors including heavy insider selling, goodwill impairments? will pullat down the markets in terms of equities? has been a volatile trade, especially in the past, when you look at the university am about to us, it represents a huge universe of undiscovered companies. many of which are fundamentally strong. good quality bottom-up opportunities. the opening up of the markets, the inclusion of the index is really a very positive trend going forward and that is likely to reduce some of the sort of hiccups of volatility we have been seeing in the past. and institutionalization of the markets is likely to lead to more stability, the things are moving in the right direction. in the run-up to that, there

will be short-term hiccups. paul: fidelity international director of investment, medha samant, joining us from hong kong. thanks very much. still to come, we will have more on trade and investment in china with 52 capital. how the escalating tensions are playing out for commodities as investors seek havens. this is bloomberg. ♪ k havens. this is bloomberg. ♪

shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney. turmoil from the trade war continues to spread, and commodities and crude prices retreat for a third day in a row. belowe seen wti slipping $61. this even as oil was spared from china's latest target list. david stringer joins us from

melbourne. u.s. oil was bad, so why are shipments likely to be a casualty? david: good morning. this is a really interesting example of those materials, those centers that are feeling the chilling impact of the trade tensions even without specific levees. as he mentioned, no specific tariffs on u.s. crude from china. what we are seeing is the flow of cargo from the u.s. to china has been throttled. china was the top asian buyer now,ously of u.s. oil, and it really you dwindled. it looks like refineries are pretty concerned that eventually, they could get dragged into this dispute. they don't want to be caught out if oil becomes a target. through of u.s. crude march dwindled to 1.6 million barrels from about 60 million barrels in the preceding six months.

one of the impacts here is this is a market where there is a supply crunch so this removes another source of crude supply for those chinese refineries. we are already seeing some nations take advantage of that. iraq, saudi arabia. both among those exporters who raised prices on some products. liquefied natural gas, very important for china, which consumed so much energy. i was surprised to see that lng was one of those assets targeted by china for more tariffs. so how significant is this? i think it is. it certainly is significant for the u.s. sector and the broad sense. the lng sector in the u.s. is on track to become one of the world's biggest exporters. might be here is we will see it become slightly more difficult for some of those companies currently developing export terminals.

there are projects seeking billions of dollars in investment and that could become more difficult. it is unlikely we will see chinese customers strike any supply agreements with that u.s. -- those u.s. companies while tensions continue. in terms of direct impact, it may not be that much. we have seen trade out of dwindle after china put some initial levees on those imports in september. direct impact, not that big. the competitive picture. it certainly means that u.s. cargoes will be less competitive than competitors the likes of nigeria or equatorial new jini. -- new guinea, paul: we have seen that push through -- is there some demand for haven assets now? david: looks that way. while other commodities have struggled, we have seen gold take on the haven role.

it has not always been the case that there is an immediate flight to gold. we are already seeing some .ositive moves for gold certainly an indication that investors are returning to it as a haven assets. positive for the mantle. it has had three straight months of declines in the outlook is pretty good as well. we have seen the bullish bets on u.s. options and futures really increase in the past two weeks. definitely looks like gold is the winner in the commodities space. shery: thank you so much. we have more on the trade war with carlos gutierrez, former u.s. secretary of commerce and cochairman of film bridge. he will be on at 8:30 a.m. hong kong. do join us then. if you want a roundup of the stories you need to know to get your day going in today's "daybreak," bloomberg

subscribers can go to dayb on their terminals and it's also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. apple slumped as the supreme court gives consumers the green light to press ahead. a lawsuit accuses apple of using its market dominance to inflate prices at the app store. apple says the app store is not a monopoly, adding that more than 80% of apps are offered free. paul: the chinese owner of the says itng app grindr is being required to sell the app over national security concerns.

beijing says the agreement with the committee on foreign investment in the u.s. prohibits it from accessing any sensitive 'sformation about grindr users or pricing data to other chinese-based entities. shery: the escalation in the trade war is hitting tesla. investors betting it will not be long before cars are again subject to higher tariffs. onres slumped more than 6% one point, monday. daimler are the leading exporters of u.s. made cars to china. they fell in france. boeing slumped to its lowest in four months as the editor of an influential chinese tabloid tweeted that the plane hurt insales could be the escalating trade war. the global times editor and chief said that was an opinion and not an official comment. owing said it was confident the u.s. and china would reach an agreement that than you cited manufacturers -- benefited

manufacturers in both countries. there is more to come on "daybreak asia." stay with us as we unpacked the fallout from the latest trade tensions. this is bloomberg. ♪ bloomberg. ♪

jessica: this is "daybreak asia ." summers refers would headlines. president trump plans to meet xi jinping in next month's g20. the meeting could prove pivotal in the deepening divide over trade. stocks tumbled around the world as the u.s. rate tariffs on chinese imports and beijing hit back with its own measures. make a deal and warned beijing not to go too far in retaliation. china says a solution must be found. tariffs will not solve the problem. we never give in to pressure from outside. we are determined and capable of

safeguarding our legitimate and lawful rights and interests. we hope the u.s. will meet china halfway to address each other's legitimate concerns based on mutual respect and equal treatment and strive for a win-win agreement. and in: inflation -- your for a third straight month although it remains well below the reserve bank's target, prompting talks of another possible rate cut. that is the highest rate in six months and in line with the bloomberg survey. inflation has been firming since february, but don't wise below the rbi's goal of 4%. facebook may soon be unfriended by another democratic presidential hopeful. you mightsays consider breaking up the company and that dismantling large tech players is "something we should at."a really hard look

elizabeth warren has been the most outspoken democratic presidential candidate to pressure greater regulation of silicon valley's companies. 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 jessica summers. this is bloomberg. thanks, jessica. let's check in on asian market futures now. new zealand, the only market open at the moment, and has been slipping ever since it did open, now off about 1.07%. futures in australia also weaker by almost .9 percent. most members will reset in 15 minutes time so that is worth keeping and on. the case you'd -- an eye. on. nikkei futures almost flat. as a whole got hit the hardest in today's selling, but only one sector actually gained, so let's get more the equity trade and bring

in bloomberg intelligence chief deputy strategist, gina martin adams. hearing much of the u.s. session. what was the takeaway? morethink it is somewhat of the same although obviously, the declines are becoming more extreme as the concerns are rising over time. we saw two weeks ago the markets started shifting characters with a break on semiconductors and transport industries suggesting something was coming and then of course over the last week, you have the news on trade. i think the market is attempting to price in the most extreme scenario where you get not only retaliation from china as we had just today, but another $300 billion worth of goods, tariffs, by the u.s. in terms of chinese imports to the u.s.. the market in general is quite nervous, was quite nervous up to two weeks ago and the nervousness has been exacerbated by the recent news on trade. shery: the recent selloff was

pretty orderly. last week, the breadth of the decline was not too shocking. it was not wholesale selloff across the board. could this all changed now that we continue to see more trade tensions, terrorists, coming from both sides -- could this all change now that we continue to see more trade tensions, tariffs, coming from both sides across the board? toa: the market over correct the downside, especially negative news like the extra $300 billion worth of goods that may come under chairs. whether or not that happened is still a question. i think we will be in this volatile trade for a wild. frankly, you're right. we have somewhat of an orderly decline last week that has now become disorderly this week. last week, what we knew was we were going to have this modest increase in tariffs on the lines of what we were expecting last year. this week, we have something new to price in. when we get our most extreme

downside estimate that includes retaliation on every product the u.s. imports from china as well as tariffs on every product the u.s. exports to china, we have an estimate of 3% downside to ebit for the s&p 500, so that excludes any sort of broader impacts on global growth. tradestart to see more relations deteriorate between the u.s. and europe, they have not been on solid footing either. i think global investors are generally nervous this will expand beyond the u.s.-china trade relationship. when all these difficulties began in that trade remember one i place, i'd was the russell 2000 small-cap which continued to perform on the expectation that it would be insulated. even the russell this time around declining. is there nowhere to hide even in small caps now?

gina: the trouble with the russell this year as opposed to last year is the earnings story. we wrote about this. suggeste playbook would you want to hide in small caps and that the dollar should be rallying, there is a real question as to whether that is sustainable in an environment where earnings growth is decelerating. this year, the russell 2000 is going to be impacted by the fact situation is quite different. last year, there was a huge boost to the russell 2000 bps line due to tax rate reductions. the comparison to that year quitethe earnings outlook different. the earnings outlook is deteriorating. revisions are still negative. it sets a different backdrop tha n existed last year. the russell 2000 will not be the place to hide. they import quite a bit of goods so their import costs could go higher if the dollar does not

accelerate very rapidly here to accommodate for the acceleration and cost due to tariffs. paul: asia-pacific excluding japan has some of the most expensive markets out there. us moret make susceptible to a pullback as we continue to see the trade tensions escalate? gina: i think so. when you look at trades, impact anddp growth, asia-pacific japan is some of the highest rating missions in the world. their valuations have re-rated to somewhat extreme levels in comparison to five-year average. when we look across the globe at stocks, u.s. stocks are expensive relative to five-year average. asia-pacific stocks are even more expensive relative to five-year average. that suggests there is vulnerability in both areas and probably more in the asian region's because they are more sensitive to trade to drive earnings growth. thank you so much, gina martin adams, bloomberg

intelligence chief equity strategist. nissan,lk about reporting full-year results later amid speculation it is pushing back a merger proposal from top shareholder and alliance partner, renault. stephen engle is following this. what should we expect? nearly six have had months of turmoil in the oppressive lawns of the executive team at nissan with the ousting of carlos ghosn. really what we are seeing is management team, the current management team led by the ceo, perhaps everything there attention away from the road ahead and on getting this turnaround plan. keep in mind he has not formally announced any sort of turnaround plan and this is a car company that is having serious structural issues in addition to the carlos ghosn issues.

from the u.s. auto sales, is modeled come out of sync product cycle. again, there's these overtures from renault, the biggest shareholder, 43% ownership of nissan. they want a merger according to sources and the new chairman there has been pushing that, and so far, we are hearing that he has rebuffed those efforts. so what are we expecting today for the full fiscal year results? it is not going to look pretty. let me give you some highlights. it likely to get the lowest an operating profit in a decade, likely to get, according to sources, a dividend cut even as a possibility. likely to get as well a similarly dire 2020 outlook. we already got a warning from nissan in april. it cut preliminary profits for the fiscal year through march to two point 8 billion u.s. dollars. a 30% decline from previous guidance, which it also had lowered.

this is good context. this would be the first time in a decade nissan would earn less than renault, and one of the big reasons why the speculation has been that nissan wanted to kind of rebuffed a merger with anault is that nissan was bigger contributor to profit. the bigger contributor to revenue. the fastest-growing market. nissan had a better presence than renault. but tables are turning a little bit right now given the troubles that nissan. steve, given the push and pull happening at the executive level, where does this leave the ceo? can he survive? stephen: that is that th up with a formal turnaround plan, and there is said to be internal debate whether the ceo is the right man to actually lead that

future,nd plan, so his obviously in question as well. he has indicated he would not june.he company beyond he has also not stepped down at all. some shareholders have called for his resignation to take responsibility for poor oversight and governance. they are going to be implement in a new governance scheme as of june, but still, maybe too little too late for a lot of shareholders who have seen their shareholding value plummet. and right now, renault would like to see a merger, but to date, all indications are that saikawa, has been rebuffed by the efforts. paul: steve engle, thanks so much for joining us. still to come, we will have more on the u.s.-china trade

deadlock, and what comes next. this is bloomberg. ♪

shery: trade tensions continued to heat up as markets are nervous. our next guest says that this may just be a short-term strategy by the u.s. to pursue china to make a deal. founder and ceo, david. we have seen a side from the outright trade tensions between the u.s. and china. china mobile getting barred from his nose in the u.s.. lingering tensions over huawei -- from business in the u.s. lingering tensions over huawei. david: it is a great question. a highve there is probability we will continue to see heightened scrutiny with respect to m&a between the

united states and china. we are in a new normal economically. the has been heightened review. the implementation of firma. china.ocked deals with there is a high probability notwithstanding the near-term trade deal. normal, a neww amount of tension. through 2020, i see a high probability of high scrutiny. it is absolutely -- has absolutely had a major impact. last year, we saw a rationing of of the rhetoric and terror of activity. tariff activity. there was anticipation of a trade deal getting done last week. with a breakdown of the negotiations, it upended expectation among multinationals. the ball is in china's court. the fundamental deal issues that broke apart the transaction

last week, it is very much in china's court. those are critical point that require a renewed commitment by china in order for this deal to have a high chance of getting completed in the near-term. paul: david, one of our guests earlier today at the asian trade center was saying china cannot really retaliate to these tariffs in kind from the u.s., but what it can do is effectively make life very difficult for u.s. companies seeking to do business in china. what potential do you see for risks? david: there are real risks. always a tool in the tool shed for policymakers in china. hike terror activity that is in the tool shed. we will see additional risk in other parts of the chinese economy with respect to negotiating mergers and acquisitions, regulatory review, how the state council interprets

and issues obligations with respect to transactions in china. there is a vast panoply of tools that the chinese government can use to make life more difficult in this new normal. we can find common ground to get this deal done in the near-term and it will have a catholi catac impact for both countries. paul: have you seen any statistical evidence or numbers so far that suggest m&a activity between the u.s. and china is not what it once was? was an indication of a material slowdown. we saw in q1 2019, roughly a 32% drop in m&a deal volume compared to the first quarter of 2018. that is a massive reduction in that comes on the back of m&a activity through 2018. i believe that in light of the new tariff activity and the heightened tensions, we will

likely see a high probability of further reductions in m&a activity, both number of transactions and deal value in q2 2019. how big of a deal is this long-term given that for chinese companies, the u.s. market is huge, not to mention the potential of the chinese market for u.s. companies? david: china is a massive consumer market for american multinationals. the american market is a massive market for chinese investors. economies are interdependent, interconnected. long-term, our economies are not going away. mergers andave acquisitions. free and open markets. a level economic playing field with china. those are required long-term for the relationship. we need to have sustainability. the current tensions, it is unfortunate, but my own hope is we can get back to positive ground in the days ahead. shery: thank you so much. founder andartners

ceo. you can turn to your bloomberg for more on this and other news. on youriv terminals to get commentary and analysis from bloomberg's expert editors. this is bloomberg. ♪

shery: breaking news out of japan. we are getting the japan current account surplus now shrinking more than expected in the month of march, coming in at ¥2.8 trillion. this is below expectations of more than ¥3 trillion. also, a little bit higher than the previous months in february at ¥2.6 trillion. the surplus really falling more than expected. the estimates were for a number of of ¥3 trillion. we have had -- number of of ¥3 trillion. we have had negative trends, including weaker demand for some

of japan's products including steel, chipmaking, optical equipment as well and higher ball prices -- oil prices. the current account surplus coming in below expectations. let's turn back to the u.s. markets. uber falling heavily again, making a 17% drop in its first two days on the stock market. only by no means the one that started badly. su keenan, we have seen uber prices priced in a $45 per share and now just above the $37 mark. what is behind this selling? is it a broader selloff? su: there is a lot of concern looking at rival lyft, how it does not have a clear pass for profitability. -- a clear path for profitability. many had hoped after being

itbbered on day one, friday, was hit even harder this monday, down as much as 13% before closing down 11%. getting quickly into the white knuckle zone, and analysts said clearly, the bears are winning. if the stock breaks below 35, that is where it starts to get even more whites knuckles. continued to talk positively, sending and email to staff -- an you mail to staff, saying that -- an email to staff. tech giants face similar the cookies. he clearly stated he is in for the long game. --'s similar difficulties. he clearly stated he is in for the long game. >> are you building a great service? are you bringing and happy

consumers all over the world? we are going to focus on what we can control. we have raised a lot of capital to invest and grow for many years. that is what we are focused on. su: again, they expected a tough , andn this monday trading they certainly got one. paul: at least uber was not alone and was not the only tech ipo to get it, was it? su: that is part of their message. they are clearly in a much higher spotlight. let's take a look at some of the other company it is keeping. lyft has been down in a big way. it has fallen 34% since its ipo in late march. again, the question of profitability for lyft is a big one, and we do not have uber hitting the 20% markets, down some 13% to 17%, about 17% from where it offered. was down 9% onm

the day. it traded hugely on its first day of trading, so it is in much better shape. interest is another question. that was another -- pinterest is another question. some believe it will hit $1 billion profitability because it's a social platform very different from lyft or uber . many ask how could these rivals really exist in a profitable way? and some predict they will need to merge. but right now, both uber and lyft off to what many believe is a dismal start. keenan, thank you so much with the latest on u.s. ipo's. now, let's talk a little bit more about some companies in the u.s. while t-mobile and sprint continue to fight for regulatory clearance for their mergers, they are reportedly considering possible concessions to salvage the deal.

among the top options, the potential sale of their prepaid businesses. let's get the details from bloomberg's global business daver, david -- macombs. yearssman signals for that the justice department is not really happy with this deal, that they would probably seek to block it on grounds it would undermine competition by uniting these two providers. there's been lots of reported meetings between top officials from both the telcos and the department of justice officials. that is always a sign there are talks going on and that the boj has problem -- doj has probably not made a decision yet. he said at the end of april that he has not decided yet on this case, so i think it is pretty clear that they are presenting their case, trying to offer those kind of concessions.

paul: all right. bloomberg global business editor in tokyo, dave mccombs, thank you very much for joining us on that. let's get a check in on futures for asian markets as we count down to the open up the top of the hour. new zealand is already open and has been executing unimpressive swan dive. we have had futures for the asx reset in the past few minutes. sydney futures pointing downward and 1% as well. we can futures, after recovering , now down about 1.9% from the cost be futures. markets have a lot to deal with. not just china announcing tariffs. and talkinging up about more tariffs of $300 billion of chinese goods. we will be discussing all of that with carlos gutierrez in the next hour. the market open is next. this is bloomberg. ♪

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paul: good morning. asia's major markets have just opened for trade. shery: good evening from new york. welcome to daybreak asia. paul: our top stories this tuesday, the tariffs driven selloff is set to roll onto asia as china hits back and president trump asia not to go far. this raises new speculation about said policy and rate cuts this year. shery: nissan will be in the spotlight later with results

showing it makes less money for the first time in less than a decade. let's check on the trading in asia. we are coming back to renewed trade tensions and potentially more tariffs out of the u.s. on the rest of time -- rest of chinese imports. the nikkei has had the biggest decline since may 8 and the lowest level since february. we have seen strength for the japanese yen which is trading now a four month high against the dollar. below these yen is 110 mark. is falling 8/10 of 1% and the korean won is at the weakest level since the first time since 2018 and has taken a beating on renewed trade tensions and safe haven demands.

paul: we have a couple of market opened in this part of the world and have been trading for two hours and continues to weaken. let's look at australia. we have been up and running for a few minutes. weaker by one third of 1%. have aasx, we do not single stock in positive territory. we open ina, alphabetical order so we will be about 10 minutes before we are fully up and running. the aussie dollar is continuing to weaken firmly below $.70. is yield on the 10 year continue to creep a little higher. new zealand is off 1.2 cents let's -- 1.2 cents. here is jessica summers with a

check of the first word news. jessica: theresa may meets her cabinet later tuesday amid increasing pressure to end brexit talks with the labour party and give her resignation. sold nope major progress has been made. rank-and-file conservatives are increasingly unhappy with theresa may. allies of the philippian president ahead had in the early tallying. there are 12 lighters in the senate -- 12 leaders in the senate race. 80% of votes returned were sent to the commission on elections but they could not access results. ordered toas been pay more than $2 billion in damages to a california couple that claims they contracted cancer as a result of using the company's round up weedkiller for 30 years.

this is the third trial they have lost over claims that roundup causes cancer. the two previous trials brought about damages of 100 -- $159 million. bayer is appealing the verdict. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: the u.s. has detailed plans for imposed tariffs of up to 25% on all remaining chinese import. china is retaliating to the latest moves by announcing they will raise their own duties on $60 billion of u.s. good. let's look closer at this with derek while bank. new tariffs coming into place as trump plans to meet the president of china at the g20. to expect things to slow down until the meeting -- do we

expect things to slow down until the meeting? >> i don't think we can. there are a number of points we need to be watching for running up to the g20. the g20 takes on even more prominence now with the planned meeting and the meeting between trump and vladimir putin that is supposed to happen as well. , do u.s.ooking at this negotiators go back to beijing? do steve mnuchin and robert lighthizer go back? you are looking for possible signs there are exit ramps and you are looking at any sort of tangible progress on some of the issues we thought were settled, at least thought were far down the road toward settled but have come back. i am thinking in terms of execution of the deal, in terms of chinese compliance, things like that. so that is what i am watching for here. i am watching also for the fact

that some of these tariffs wind up having a little bit of delayed limitations from the u.s. side when goods land, so ships at sesa do not happen -- ships at sea do not have them yet. there are a lot of different points we are watching for before the meeting. so you are sitting and saying to yourself, i am going to press pause. it is not going to work. don't do that. paul: very reassuring. [laughter] we are also waiting for news of china's retaliation with extra tariffs on $60 billion worth of u.s. good. when you look down the list, you see these prices. the thing that struck because wetop line are not talking about the same

orders of magnitude. with the u.s., we are talking about implementation of 200 billion and 300 billion is the next level but the chinese are responding with 60 billion. they are not the same number. so this is where you get the idea that president trump has been tweeting about, the idea that china is going to be hurt by this more than the u.s. will. i think we have not quite seen if that will happen, but certainly if there is a trade deficit, if you are going to throw tariffs on everything at a high level, the person who's exporting more will feel more pain. that is simple math. so that appears to be the u.s. calculation here. paul: derek, thank you for joining us. says tariffs are likely to become a permanent onture and it might weigh

markets for some time without resolution. kirkng us from tokyo is west. we were just hearing from derek, whatever you do, do not press pause. is that sage advice? best case is we will see a resolution, but as you touched opening, tariffs will be part of the talking going forward and even once we resolve the issue with china, which we believe the u.s. will, there is still european -- still europe, japan, plenty of talk about tariffs this year. paul: on the subject of europe and japan, we are four days away from trump making the decision on whether to impose tariffs on european car imports. what potential does opening up another front on the trade more have on the market?

for markets,good particularly for europe or japan, given the sensitivity to the export markets. who knows what trump will say on the 18th? he may push it back. but i think that coming down the pipeline, i imagine europeans in particular will be looking to resolve that as quickly as they can. but similar to china, there are some very difficult issues to deal with. shery: you talk to bated a -- he talked about a global growth recovery that could give a leg up in the markets. is this still your best case scenario as we continue to see these trade tensions? >> i think it is still very possible. if we go back eight or nine days, we were seeing the road to recovery and the leading members of production in terms of earnings revision and that was supported by accommodating

policy and the markets in china. so i think if we see a quick resolution, and that -- by that i mean one or two months, you will not see an economic disadvantage and it is likely we will end the year with good financial markets. shery: but the tariffs are still in place and we have no word on what will happen. we continue to see earnings in the negative for the u.s. companies. this chart on the bloomberg showing it is less negative than before. so when can we expect tariffs to start impacting earnings forecasts for u.s. firms? we were starting to see those bottom out, the earnings revisions, and the impact of the tariffs will be driven by how long this uncertainty loss and

-- uncertainty lasts, and if i think we get some resolution in june, i think the second half of the year could be positive for market. but if it were to push until the end of the year and go into the election year, then it will be a very difficult year for the finance crowd. know the backdrop for credit is becoming more challenging. what are the implications? see recession over see a veryhat we do tight level, and so while we are not at the end of the credit cycle, we are near the end and the beginning and with this, we -- we tend to be in investment grade at the moment because it is high-yield and we

also have mutual on emerging-market debt. quickat is if we see a resolution and growth return in the second half, it way -- it may well present again further opportunities to go back. paul: in this turbulent environment, what does it mean for monetary policy? we had comments from the boston fed who has been downplaying immediate impact of tariffs, but then this morning we have the market pricing a rate cut. where do you see the fed heading in the rest of 2019? >> we do not see any change in 2019. i think it would be very difficult for the fed to cut rates, particularly where there is still good, solid growth in the u.s. however, if things go poorly on the trade issues and you see a stronger dollar and growth

tapering off, then the fed may act and it would be more than 25 basis points the market is talking about. but our best guess is no change this year. i think there is still a very good chance to get resolutions of the trade issues and see a much better second half to the year. you start to see inflation again started to come through, and the arrangement might still be up. , thank you very much for joining us this morning. more on the trade war, coming up as president trump warrants china against substantial gutierrezn and carlos 's asked his view on what lies ahead. shery: and we preview the big tech earnings out of asia as we navigate the tariff war. what to expect from alibaba and tencent later this hour.

this is bloomberg. ♪

paul: this is daybreak asia. i am paul allen in sydney. war wass if the trade not tense enough 24 hours ago, since then, china has announced plans to retaliate against higher u.s. tariffs against chinese goods. nowtrump administration has levied a list of 300 billion dollars of additional chinese goods that could face tariffs. we turn to a veteran of global commerce and policy, carlos companyz, ceo of tele -- new tele company. thank you for being with us. on at thef this going moment, how did the u.s. and china de-escalate the situation from here?

think in some respects, ideal is very close and they are to be had but -- there to be had, but we may have to lower expectations. when i come to china, i find there is not as much optimism as there is in the u.s.. in the u.s. we have heard that we are close to a deal and talks are productive. but there are certain things in china that are a redline and we saw in this last round, we are asking china to change their law and that is where i believe they have drawn a line. there response has been fairly measured, so that tells me they want to deal, but there are certain aspects they simply cannot agree to. shery: it is interesting to hear you say that, because we have heard from the chinese through the media with global times talking about how the u.s. attitude is swaying and they

have drifted between expressing optimism and arbitrarily waving tariffs stick. so how would you say negotiators have measured up so far? doubthink there is no that the u.s. has shown that it is willing to follow-up in a big way, so that clarifies a lot of things. people thought at one time that he would not go as far as he was saying. he has proven he will go that far. on the chinese side, obviously, they want ideal, as well. there are certain limits and aspects that they cannot agree to. it is very much like we have with domestic politics, china has domestic politics, and for china to agree to begin to

abandon their five-year planning or state owned enterprises or in this case, change their law, we are just going to have to be more creative to get a deal that includes verification and enforcement that china can agree to. issuek that is the final that we have to address. but clearly, two things are happening. one is the rejection of the changing chinese laws resulting the measuredd, and response by china, which at least tells me that they want deal, butthey want a in terms that do not challenge chinese sovereignty. shery: can there be a deal without the u.s. lifting their extra tariffs they applied to china? issue, theanother

u.s. wanted to keep tariffs on $50 billion of chinese export and that was not acceptable to china. so that will be an important part of the deal and that was a way of guaranteeing enforcement, keeping some tariffs on as leverage. and china disagreed with that. and i think what we need is a certain amount of creativity. how do we verify and enforce without going so far as to changing chinese law, which would be so unpopular in china? i am not talking about the government, i am talking about the people at large. and we need to acknowledge that. on one hand, we are so close. on the other, unless we change weectations and decide that

cannot get everything, but we are going to get a substantial how a dealo not see can be had. we are going to be living together for a long time. is 1 --t as though this it is not as though in this one negotiation we will solve every problem we have. it is not going to work that way. we should just try to get the best deal possible and we might have to go into other negotiations in the future. but i think we are doing damage right now with these tariffs. shery: if we get a trade deal, there are other outstanding issues. china mobile getting barred from entering u.s. markets, lingering tensions over huawei. how do we avoid this cold war scenario going forward with the u.s. china relationship? >> good question. the problem of course is that in the administration, people believe conflict with china is inevitable. so if it is inevitable, we might

as well start now and start moving toward the future. assumption critical and if you make that assumption, we are trying to convince countries not to let huawei in. we have declared china a strategic competitor, not just in trade, but in diplomacy, soft power, just about everything you can name. i believe that is a big problem. because this is not just a trade problem. this is a problem where some policymakers are convinced that the u.s. and china are headed toward some kind of confrontation bigger than what we have today, but it is inevitable, so we might as well start preparing for it. that is a very dangerous assumption. those are the people that are

whispering in the presidency or. -- president's ear. how will this impact president trump's base and him in the 2020 election? president hasthe widespread support for being tough on china, but there is no question that farming is suffering. farms are going out of business. inventory, the sale of soybeans are high and prices are low and farmers have to decide what to plant now for the future. there is so much uncertainty. they do not know. so the agricultural sector has been hit very hard and i think we need to acknowledge that. so the president has to balance

that impact with the fact that we have elections in 2020. at the same time, he is emboldened by the fact that there is support from fromlicans and support democrats to continue being tough. that will be the thing to watch. how far does the president go, and when does he start calculating the impact on the 2020 election? shery: and not only against china. against trade in general. we have heard from the eu trade chief talking about order tariffs and how they would respond. let's listen. >> we are already preparing a list of possible items that would be on the list. happens,ment,, if it we will publish the list, as we have to according to who rules and it would happen quite rapidly. quickly, how would you

advise businesses that are now trying to do business in this environment? >> i would say one thing we have learned is to take president trump at his word. nothing is too far-fetched. if you asked me if it is possible that he would put tariffs on german cars, the answer is yes. i think businesses need to be ready for that. at the same time, we need allies to help us with the problem, the trade problem with china, and at the same time, we are picking a fight with our allies and trying to get the beginning of a trade deal in japan but have also threatened japan with tariffs. even india with the indo pacific strategy, india is such an important part of that strategy, and we have taken away trade. so it is contradictory and hard

to connect the dots and come up with a coherent strategy. shery: thank you so much for joining us, carlos gutierrez. there is plenty more to come. this is bloomberg. ♪

now to jessica summers with the first word news. the g20 could prove pitiful in the deepening divide over trade. stocks tumbled around the world is the u.s. raised tariffs on chinese exports and beijing hit back with their own measures. the president says china wants to make a deal and warns beijing not to go too far in retaliation. raising tariffs will not solve the problem. we never give in to pressure from outside. capable ofrmined and

safeguarding are legitimate and lawful rights and interests. we hope u.s. will meet china halfway to address each other's legitimate concerns based on mutual respect and equal treatment and strive for a win-win agreement. that two saudi oil tankers were attacked in the gulf and amid tensions in the middle east. damaged ase severely they approached the single most important waterway for global oil shipment. no one has claimed responsibility for the attack. tensions in the region are rising after the u.s. deployed b-52 bombers. in india for the third straight month. there is talk of another possible rate cut.

inflation has been farming since february but still lies below the rba goal of 4%. unfriendedy soon be by another democratic presidential hopeful. joe biden says he may consider breaking up the company and that dismantling large tech players is something we should look at. lizabeth warren has been the most outspoken democratic presidential candidate to press for the rare regulation of silicon valley's most prominent companies. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thank you for that. let's check on the markets in the region. the nikkei is bearing the drop -- bearing the brunt of selling at the moment.

up 1.25%. sydney is performing are extremely well on the asx at the moment. but the rest of the index is pretty heavily down. shery: a couple of stocks are moving in japan and falling. and theyibo flopped lost $9 billion in market value since last week, despite the fact that they actually reported profits tripling. softbank is taking a hit on this and they have this big bet on rideshare, 18 billion dollars running on uber and other ride-hailer's. -- ride-hailers.

there was impact from currency fluctuation and raw material costs are rising. let's look at three of china's most valuable companies. they are said to report aaron -- earnings, giving us a glimpse of the chinese economy. let's look at alibaba, tencent, and baidu with peter elstrom. on top of everyone's mind, the u.s. china trade war and how it will impact these companies. >> that is the question at this point. tencent and alibaba are poised to report earnings late tomorrow. a lot of attention is being focused on them and their businesses and how the trade war is playing into the economic opportunities for them. alibaba is the e-commerce china china.iant -- giant in there is a slowing economy

overall. on tencent side, the question is a little different. the games business took a hit last year when the chinese government began cracking down on new titles. they froze approvals of new titles for a while and slow down the modernization of the titles. so a bit of a different issue for them. there is a lot of market value it spake -- stakes for both companies and investors want to understand how the growth prospects are looking globally amidst the trade war. paul: what will investors be looking for in terms of the context of the trade war? >> the expectations for these two companies are much lower than they have been in the past. we used to look at big increases on the revenue and profit sides of the companies and now analyst estimates are for alibaba to have flat profit and tencent will see profit decline a

little. when investors want to understand, it is how the court dismisses are doing. e-commerce for alibaba. how are they doing and expanding some of these new areas they set as priorities? online finances becoming a big area, entertainment is a big area. so they want to see evidence that they are making progress in new areas and protecting the core business at the same time. shery: are we going to see pressure on operating margins for both companies, given that alibaba has been investing heavily in their off-line business and tencent is trying to shift the revenue mix? >> that is exactly one of the sensitive areas. these companies need to use some of the profits from the core business to invest in growth areas to show they can get their top lines going quickly again and operating profits increasing as well. areuse the two of them competing with each other in some areas like online finance and entertainment come at end up

having to invest pretty heavily to be able to grab market share from the other. these giants have stayed out of each other's way historically where one is focused on e-commerce and the other on social media and game. now they are beginning to compete a bit more in the new areas they want to expand into, as well as investments on startup companies. it will hit margins. shery: peter, thank you so much. plenty more to come on daybreak asia. this is bloomberg. ♪

full-yearan reports results later and speculation is poking -- pushing back against reynaud. stephen engels is following this. what to expect? >> it does not look pretty.

the last six months have been highly tumultuous for this company. november 19, carlos ghosn was first detained in tokyo and we have seen the saga unfold. we know that he is out of the picture. his fate is sealed as far as the future in nissan but the future is not necessarily set for the currency yield. rebuffing the merger attempts by reynaud and trying to put together a turnaround plan and no details of a formal turnaround plan have been announced yet or revealed. there is a lot of uncertainty and against the backdrop of a slumping auto market. slumping u.s. auto sales and aging model lineup and what analysts are saying is out-of-state product cycle is dovetailing with the turmoil.

perhaps management is taking his eyes off of the road for future plans while dealing with the short-term problems with carlos ghosn. he will be battling for his survival as well and might not necessarily have the support of the larger shareholder which owns 43% of nissan. if he does not get the backing, he will not stay on as ceo and we already got a warning from nissan in april and it does not look good. theuts profit for cats for -- forecasts for the fiscal year. from the previous forecast, which was also previously cut as well and we are getting word from analysts that the revenue targets for 2022 could also be slapped and see operating margin targets cut 8% and the -- 6% to key takeaway could be that this

is the first time in a decade that nissan earns less than the main -- their main partner. shery: give us the latest on the alliance. informallyrman brought this up and we are learning they rebuffed the offers. this would provide equal ownership and more representation for renault and nissan, which would be an uptick for reese on, who does not have voting rights. -- nissan, who does not have voting rights. nissan wantsg that to be an alliance partner and a more equitable partnership is

not emerging. paul: stephen engle, thank you for previewing the nissan announcement for us. joining us from singapore for , there is a risk of profits sinking 99%. what are your expectations for the results today? the expectations are similar and we understand nissan is struggling because of the u.s., which is their profit-making market. and also theggling performance in china is under russian. all in all, it is not a rosy picture for nissan today. paul: also under question, the

-- hasof the ceo is not not laid out a turnaround plan. how safe is his job? think there is trouble ahead. nissan must be preoccupied with , theyrger of mitsubishi are there japanese partner and japanese partner and they have close ties. culturally, nissan and mitsubishi seem to be a lot closer. toyota andave seen honda, there forecast profit fell short of estimates. what is the future like for these japanese automakers as

they continue to face challenges such as self-driving cars and tariffs? as hydrogen cars, japanese players are well-placed. [indiscernible] hybrid and hydrogen cars. but they do not -- so the japanese players are well-placed. profit, of turning a what is the yen to dollar rate and trade values and how the global supply chain is playing out. the daily life is the details. they have done all the right

things to put the technology in .lace shery: china did not raise tariffs on u.s. cars on the expectation is they will probably do so eventually if the trade escalates. itt are your forecasts, would japanese carmakers have an upper hand in the car market? >> i think the chinese car market is fragmented into three major segments. one is the foreign cars like volkswagen. then there were the mainline chinese cars and local chinese .ade cars the challenge china we face is --is not with the cars but how electric cars are going to take over.

that is where they are likely to focus. there will be nontariff barriers thethat is where probably players will suffer. so far, they have not put a trade barrier. we seem to have lost you, but thank you very much for joining us. do not forget tv , where you can watch us live and catch up on past interviews and dive into the securities on the bloomberg function we talk about.

you can also be part of the conversation by setting up instant messages during our show. this is for bloomberg subscribers only. check it out on tv . this is bloomberg. ♪

shery: breaking news. president trump speaking at the white house, saying he believes, he feels that chinese talks will be successful and we will know in three or four weeks if the trade talks are successful. he said he feels they will be

successful. trump has said earlier today that he will be meeting with the chinese president at the g20 in japan in late june, despite the comments we saw from the u.s. trade representative that they are planning to hold public hearings on an extra 25% tariff on an additional $300 billion of chinese goods. so we are getting mixed signals from the trump administration with the president speaking at the white house now, saying we will know in three or four weeks if the trade talks were successful. --'s get a quick check life check of the headlines. shares closed more than 17% below last week's ipo price. the ceo send an emailed to staff during the session acknowledging another tough day in the market and warning of difficult ones ahead. he also noted that facebook and amazon dropped the road when

they first listed but there shares have recovered cents. paul: diesel pollution devices on to -- two cars failed to work. three years ago, they were called diesels amid criticism of devices. shery: volkswagen is heading back to the market and looking for buyers of unit. they want to have the unit listed by august. maker jumping u.s. trade on the ipa news and hopes for a complete takeover by vaux the -- by vw which currently owns 60%

stake. the: the escalation in trade war is hitting tesla hard. shares slumped more than 6% of one point on monday, the lowest level since january 2017. bmw is one of the leading china.rs of exports to they fell in frankfurt. shery: boeing slumped to the lowest in four months and a tabloid tweeted they could be hurt in the escalated trade war. he editor-in-chief said tweeted his opinion and not an official comment. boeing said they were confident the u.s. and china would reach an agreement that venue for -- that benefits the manufacturer's in both countries. almostitcoin has jumped $8,000. thanump on monday of more

25% comes a few days after the potential asset broke through $6,000 and rekindled the entire cryptocurrency market. losing theiris appetite for foreign recyclables and researchers are saying this could leave over 100 million metric tons of plastic with nowhere to go. students at m.i.t. have developed a robot to help solve some of the problem. for more than three decades, china has been one of the world's biggest importers of plastic waste but that is changing. last year, they closed their doors to over two dozen former recyclables and sent countries scrambling to adjust their recycling system. before that, china imported 40% of the u.s. recyclables and the new policy could be 111 million metric tons of used plastic with

nowhere to go. now a team of researchers at m.i.t. are looking to sort through the pileup. have developed a robot that can identify and sort recyclables. a hand thatncludes uses tactile sensors to detect the size of an object and pressure needed to grasp it. it can't determine if it is made of metal, paper, or plastic and establish a path. taskedycling centers are with the process of sorting and separating waste and this material and become recyclable. recyclables are so contaminated, they must be sent to landfills instead. the team sends the robot to tackle the problem. the robot presides a safe alternative -- provides a safe alternative to human labor.

one complication, replicating human intuition is not easy. it can detect stationary materials 84 -- 85% of the time but the success rate drops 20% when the objects are moving on a conveyor belt. buildinganies are their own robots using camera and computer vision and estimate the technology can cut recycling cost by 50%. reducing contamination is a top priority for the u.s. could ever bought be a step in the right direction, or will america have to find a new dumping ground? and bloomberg technology's lives all week at 7:00 eastern in boston. let's get you more on the news coming out of the u.s. president trump commenting on the chinese talks, saying we

will let you know about three or four weeks whether it was a success. at the whiteng he doesn'te said really know, but he is a feeling it will be successful. come amid talks that china will impose $60 million with the tariffs on u.s. goods. trump on an optimistic note at a white house event. we have trade tensions playing into the market. this is how asia is trading at the moment as the nikkei recovers a little bit after goeringt hard and early -- early going. in australia, we are weaker by 1.2%. australian gold miners are getting a bright spot amid all of the red.

best-performing stocks on the asx so far. shery: the markets are really taking note of every comment to come out of president. we saw futures in the u.s. turning positive after the president talking, saying he believes chinese talks will be successful and we saw the offshore chinese one --yuan strengthening and now holding at 690 level. all to do with the latest trade tensions. make sure to catch our interview . this is bloomberg. ♪

>> is not ok and in beijing. i am tom mackenzie. yvonne: i am yvonne man. we are counting down to the markets. dave: i am dating less. china is heading back here at the u.s.. donald trump says he feels talks will be successful. yvonne: the speculation about that policy. a rate cut being only factored in as a certainty. the chinese tell us about the state of the