nejra: good morning. i'm nejra cehic with manus cranny in dubai. from mates abe. -- trump meets abe, promising something "very good" on trade. mainstream parties hold ground against an assault from the european elections, but brexit wreaks havoc on the uk's main players. fiat chrysler is poised to announce a tie up with renault that could lead to a merger, and way ways founder -- huawei's founder stands defiant of being threatened. >> i will ignore trump.

and then, with home can he negotiate? if he calls me, i may not answer. ♪ manus: warm welcome to "daybreak europe". one message comes from the chinese. do not shorten the yuan. the longest winning streak since the start of the month. get ready for a form of cold deal. yuan has dropped 2.6%. the banking regulator says you will have huge losses if you short the yuan. get ready for a cold deal. the cash bond market is closed, but futures are trading. as futures rise, the yield drops. lowe's, $131 billion of paper

will hit the street. our yields too low to cover ratio in? that's the question i ask. inflation is dropping. short positions on the bonds are the highest since november, 2018. have we gone too far too fast? you are looking at the biggest loss of the year last week. what can stop the drop in oil? potentially good news even though the drillers are the lowest numbers in a year. could morning. -- good morning. nejra: backlash in the eu elections have not come to pass despite gains in italy. the liberals and greens were the biggest winner. 112.08 ands flat, cable, we saw again on friday as theresa may announced her resignation. different story in the u.k.. in early results, the brexit party out in front, 100 twice

andn.33 -- 127.33 chancellor philip hammond warming against -- warning against a no deal. third weekly loss for the s&p 500. it looks like we could open again. he was markets closed for memorial day. when this markets reopen, we could be on the back foot. manus: let's talk about the mainstream political parties in the eu. that's according to the provisional results from the european parliamentary elections. they saw the highest turnout in a decade, and it looks set to reward the greens and the pro-eu liberals. but there are a couple of notable exceptions, with the far right winning in france and italy. we bring you coverage from across the capitals of europe. we have our team standing by, and reordering and -- annmarie

hordern, maria tadeo. maria tadeo, good day to you. bring us up to speed. maria: good morning. political fragmentation into this election. that's what we got last night. the democrats won the election, but they did particularly bad and germany. the liberals and the greens now kingmakers in the new parliament. when it comes to the populace, the risk did not have, and that's good news for markets. is pro-european majority still holding in the neil parliament. the big question is what kind of coalition will be get? nejra: thank you. let's turn to paris. this is the second straight win le pen is set for in france. is this a setback for macron?

>> it is a setback at home and in europe for the french president. it is not as bad as some european polls predicted. and the president called these resorts -- results acceptable because it is a narrow defeat, one point behind the national rally of marine le pen. this is home. le pen called at this resolution of the parliament. even if that doesn't happen, it will make it hard for macron to carry on in france. to bring up other issues, such as immigration, and take concrete steps to fight climate change. 13%, this is the other big surprise in france of these eu elections and in europe. it will make it harder for emmanuel macron to push for

further eurozone integration. annmarie.'s get to brexit front and center and the brexit party literally victorious for nigel farage. when he to work out whether it's a protest vote or something more substantial. annmarie: i think that's a good point. part of it is a protest vote. look or the conservatives ended up last. 9% of the vote, one of their worst in history. a lot of that is the brexit party taking conservative vote. the two parties that did well, the nigel for rods party and -- nigel farage party and the green party. we want to stay close to the european union, maybe a second referendum. those parties to go. this whole collection is a massive reminder to the people in britain they are supposed to be out of the european union.

they were supposed to be in this election. it's really quite a significant vote, showing how brexit still divides britain. one thing is clear with the brexit vote leading, it's going to galvanize somebody like boris johnson, already the favorite to proceed theresa may. philip hammond saying anyone who comes in and thinks they will get a no deal through parliament is going to think again. they could face a no-confidence vote. manus: that's one of the material risks, annmarie hordern, on the green westminster. caroline connan in paris, maria tadeo in brussels. let's bring in our guest, kim foxx. good -- kim foxx. good to see you this morning. it was the turnout that staggered me, 51%, the highest turnout in 20 years, an active population is perhaps an incendiary device we all underestimated. tim: i think it's very

encouraging the population in europe turned out in different ways in different countries. the expectations of the big gains for the populist parties and some countries that happened. in others, it didn't. the greens, the liberals did better, as well. --be the other properties parties did better than the mainstream parties, but the greens, also the anti-europe parties, in some respect, in europe, france, the u.k.. nejra: we're not seeing the euro react. we're pretty much flat. if you take a look at the performance over the past year or so, the currency's net support level looks to be low. it has been getting lower and lower weekly highs. with a these elections out the way, does this take away a key risk for the euro?

we should see it move higher from your. tim: perhaps in the short-term, it should move higher. we saw profit taking and probably these results lend support to that, but i don't think the euro moves have been largely to do with the european elections. the down moves have been risk aversion, more generally, and the comparisons between the u.s. economy and eurozone economy, those definitions become or remain quite stark. i suspect that the downside to the euro remains in place. you may have a short-term bounce based on these results, which is probably a sigh of relief. manus: didn't want to drag you into the murky world of economics, which is 10 days before mario draghi decides what to do. he's got confidence at the weakest since 2014.

how or what policy from an economic point of view do you want to seek to reinvigorate confidence and inflation expectations? tim: i think mario draghi's points that he's made consistently has been the central bank, the ecb can only do a limited amount. is kept interest rates low. probably not going to be changing interest rates this year. particularly in a position to do an awful lot more what he has been emphasizing. governments need to be in control of events. to some extent, that means the european union, as well. the broader european government. it probably means individual governments within the european union need to be more -- circumstances. nejra: after the painful pmi data from the u.s., we've seen the u.s. pmi now falling below the eurozone's gauge. how much of the stability have

we seen recently is to do with transitory factors? a lot of the first quarter data that you saw, which has been relatively strong from a gdp point of view, a lot of that can be put down to the transitory issues that the fed has been talking about and other central banks. how that develops in q2, the data has been mixed. probably a little disappointing overall relative to what we saw in the gd figures -- gdp figures in q1. pmi data disappointed. but the euro has seen weakness. and that pattern is expected to continue this week. chinese pmi data later this week. is the secondy quarter will be as strong as the first quarter. nejra: that you instead of might be giving anonymous sign about the global -- ominous sign of

the global picture. let's get first word news with debra mao in hong kong. courtney: the founder of huawei has struck a defiant tone in the face of u.s. sanctions. they threaten the company's very survival. they will look for alternative supply chain options. they may also ramp up chipmaking. huawei is going to lead the way in 5g, but concedes the u.s. tariffs will hit his company. we might miss our expected growth target, but we are still growing. being able to grow in the toughest battle environment, that just reflects how great we are. china advised traders against shorting the you one after taking a critical rate of seven per dollar. they said bets against the currency will suffer from a huge loss.

these comments come as sentiment on the yuan ratcheted up in recent weeks. bitcoin sort to the highest level in a year. this extends are run that seen prices more than double since march. they are taking encouragement from headlines showing greater interest from mainstream firms. the fantastic ride follows a painful 2018 that saw the value humble more than 70%. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. nejra? let's get to another one of our top stories. president trump will talk trade with shinzo abe today after a weekend of golf and sumo wrestling. joining us from tokyo is our chief north asian correspondent, stephen engle. talk to us about this. is this more of a relationship

building for trump or will we get anything on the trade front? they played golf together. they didn't do a sumo match together. they attended the grand tournament yesterday and donald trump gave the big trophy. this four foot tall trophy. the they are now in the building behind me. the lunch is going longer than expected and that can put the news conference between donald trump and shinzo abe, scheduled to start 50 minutes ago within the next 45 minutes or so. yes, you're right. they're going to be talking about the building of their interpersonal relationship, but a unified front on north korea as they are rattling a little bit.

abe trump's soliciting of could be a big topic. the big issue is the threat of auto tariffs the white house is imposing on japan. that is delayed, but critical to any trade deal between japan and the united states. progress has been delayed until at least august, likely, after the japanese upper house election. shinzo abe and the japanese difficult to offer concessions during an election period. they'll shelve that until after the election period. manus: that's a $50 billion risk. the person sitting in the gallery is the poor producer. i'll leave you with that thought. nejra is much more grateful of the headlines than i am. huawei's billionaire is defiant

in the face of sanctions threatening his company's survival. we have the exclusive interview. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. manus: i'm manus cranny in dubai. synchronicity. we couldn't have introduced ourselves better together. who are you? i'm nejra-- nejra: cehic in london. take it away. manus: i'm manus cranny in dubai. we will do that again. let's get to debra mao in hong kong. debra: thanks. fiat chrysler is going to announce a tie up with renault it may come as soon as today and this could lead to a full merger, creating the world's third-biggest automaker. mitsubishieting with and nissan are not involved although they could be invited

at a later date to join the firm. nomura lost a bond underwriting deal following a ditto leak. five issuers dropped the bank. they faced penalties after employees shared stock information. this comes when japan's biggest brokerage is already reeling from its first loss in a decade. five banks are named in a lawsuit seeking damages for alleged forex collusion. the action was filed in australia. it claims they colluded to rig exchange rates, boosting profits at the expense of australian businesses and investors. the banks didn't immediately respond for comment. that your bloomberg business flash. manus: thank you very much. the founder of the ceo of while way -- huawei. they conceded trump's actions will hurt but the firm is

in 5ged to keep its edge even without american suppliers. >> the u.s. manages its own companies. the u.s. is not the international police. they can't manage the whole world. the rest of the world decides whether they should work with us based on their own business interests. if companies don't want to work with us, it's like a hole in the airplane. we're working to fix the whole, but the airplane is still able to fly. using,chips we've been half are from u.s. companies and half we produce ourselves. >if the u.s. imposes further restrictions, we'll reduce our purchases from the u.s. and use

our own chips. companies have permission from washington to sell to us, we'll continue to buy from them. what exactly have you put in place in terms of contingencies? >> we might have contingency plans for the core of the airplanes, the engine and fuel tank, but we may not have a plan for the wings. we need to review the situation and fix those problems. you can come back to interview us into or three years to see if we still exist. if we're gone in two or three years, please river to bring a flower and place it on our grave. -- place -- please bring a flower and place it on our grave. >> u.s. software? >> the we might miss our

expected growth target, but we are still growing. being able to grow in the toughest battle environment, that just reflects how great we are. >> you talked about having a two-year lead in terms of 5g on your competitors. does that lead get eroded? >> definitely. if we slow down, it's because the wing of the airplane lost his hold. if we fly slowly but others fly fast, of course they can catch us up. but we will keep fixing the holes. we will fly fast again once the holes are fixed. nejra: that was the founder of huawei speaking to bloomberg's tom mackenzie. still with us is tim fo. -- tim fox. we have china coming out, the insurance regulator, warning traders of huge losses if they

short the yuan after a period of stability and the yuan pushing. the pboc will avoid using the yuan as a weapon in the trade war. after the weakness in may, would you expect more stability in the yuan from here? it depends on how the broader trade negotiations take place and the outcome of those. i think if we see more instability and that relationship on the trade front, i would expect you could see more pressure, downward pressure on the one. if you start to see the makings of a deal between the u.s. and china over trade and the aspects related to that, that should help to stabilize the currency, as well. but the level on the yuan is going to be important. i think it's going to represent a lot of different elements and aspects of the bilateral balance

of power between the united states and china. i think the markets will be watching that closely. manus: when you look at how the market moves, the semiconductor dropped 6%, the biggest move since the financial crisis. saw one fantastic line, the huawei story is like a fundamental hand grenade. what are the reparations we don't understand from the huawei story? tim: i think the complexities are beyond trade. you start to bring technology to the trade dispute. it's not a million miles. this is all about power. trade is one aspect of that. technology is another. it doesn't take a big leap to say you might be moving into a broader power struggle between the u.s. and china over other things, military issues on

people's minds, as well. it's about strategic power, economic power, technological power. nejra: we got industrial profit from china today. take isg economist industrial profit shows trade war pressure. have you been encouraged by chinese data recently? came withtronger data the gdp reports for first-quarter. i think since then, we've seen disappointment. pmi's did bounce a little bit following those first-quarter reports. then they fell back a little bit. all of the -- a lot of the optimism dissipated. we have the may report released later this week, probably expected to show another get connected. manus: more can -- more to come. tie me up.

fiat and rental are set to create one of the largest automakers. that's next. this is bloomberg. ♪

nejra: this is daybreak europe. i'm nejra cehic in london. manus: i'm manus cranny in dubai. let's set up the agenda. bank holiday in the u.k. it's memorial day in the u.s. cash markets are closed in both of those. tuesday, eu leaders meet to digest the results and at one another on the back. they will discuss candidates -- pat one another on the back. they will discuss candidates. we get the central bank's financial stability report. the vice president will be highlighting the risks to the system. u.s.: and on thursday,

vice president mike pence will be discussing accelerating the ratification of the new north american trade agreement. also, we will get growth data out of the u.s. look for any impact from the trade war on gdp. breaking news, we were expecting this to come through in terms of fiat chrysler and run all. -- criminal. -- retinal. -- renault. set for a deal. we were expecting an initial equity swap and operational ties that could later lead to a merger. but now, we're seeing is a proposal for a merger with bernal -- renault. manus: and it's gone read on the screen. it will be 50-50 -- red on the screen. it will be 50-50 co-owner. we'll begin to understand the

size and the scale. they will make nearly 9 million cars and fault above you and i -- hyundai and general motors. annual run rate synergies in the deal. that's critically important. --s takes me back to online to a line where he did a story called confessions of a capital junkie. he said the auto industry wastes nearly 2 billion euros a year onduped -- on duped investment. this goes to the heart of the reason why this deal will go on a 50-50 venture. nejra: let's go to live pictures in japan. still awaiting a news conference from president trump and prime minister shinzo abe. they've been spending a lot of time together over the weekend. onwe understand, a deal

trade pushed back after japan's elections in july. president trump has become the first foreign leader to meet the new emperor. we are looking at live pictures, president trump meeting the families of those objected by north korea as we await a news conference. let's turn to european elections. mainstream parties held their ground, but italy and france are two major exceptions. president emmanuel macron suffer defeat at marine le pen's natural rally. >> considering the democratic thedelta to the government, president will have to face the consequences after he invested his ability in this election by turning it into a referendum for or against his policies and his persona. he has to dissolve the nation of resembling in order to better represent this country's

political opinion. nejra: for more on macron's defeat, let's hear the thought of the deputy mayor of paris. great to have you on the show with us. there's no doubt this is a setback for emmanuel macron. a setbackow much of is it for his economic reforms? guest: well, we're very close to call it a real set is -- setback is exaggerating. we're definitely second, but by a very small margin. of course, we're going to analyze what happened and draw conclusions about that. but the real important move in this election is the green party. the young people have really sent us a message about ecology -- so this is going to be the major force that we are going to have to analyze and

think about. this issue is going to be a major issue in france after this election. manus: good morning to you. the prime minister edvard philippe says i greet this with humility. what policy change, if any, will macron be forced to make to perhaps make up for the ground that he's lost? we're all, you know, growing party, a new party, so we're going to have to learn from every election. now we're going to sit down and analyze where we lost, where we disappointed, some of the people that voted for us in the election. but we were elected in the first turn of the presidential election with something not so far from what we got now. we still have to build. we are a new party, as i just said, and we need to address

issues in the rule of france that sends a strong message. and with the young and we will be working on those issues. nejra: how will this impact macron's push for tighter eu integration? anne: we have managed to do what we wanted in that regard because the central group that we were trying to build will be strong, not as strong as the right group and the left group, but it will be strong group and it will be in a central position to be able to negotiate. this is what we were trying to achieve. i think, in a way, we have achieved. manus: there's a lovely op-ed this morning written by someone who said macron's biggest problem i had is at marine le pen, but the changing dynamic --

ahead isn't marine le pen, but the changing dynamics. would you agree with that? anne: this is what brought us to power. it was central to our core. that is really one of the main points of our program is to be a european party. so yes, it will be a major issue. that's what we wanted, anyway. we were going to be working on that issue. nejra: i want to come back to the economic reforms. will this give your party, macron's party, more incentive to push on with economic reform or change what you prioritize in any way? anne: i'm not sure that's where the reforms will be going. definitely, we're going to need to be addressing the growing gap between the rule of france and france's cities.

that's something we've clearly identified and we will be working very much on that, more than economic reforms. it's more of a social set of reforms, i think, we're going to have to address. manus: how does macron and the party avoid a rerun of the debacle the world has watched on a weekend by weekend basis for now on a year? anne: i'ts not a simple issue. there's very few people, but they can come and block paris. their numbers have been going down. so, i think we're doing the right strategy for the moment, but it is very hard, especially for the people in paris. much, ok, thank you so deputy of mayor for paris. let's get your first word news with debra mao. she's in hong kong. debra: the founder of why way

has -- huawei has struck a defiant tone in the face of u.s. sanctions. they threaten the company's very survival. they will look for alternative supply chain options. they may also ramp up its own chipmaking. he says huawei is going to lead the way in 5g, but concedes the u.s. curves will hit his company. >> we might miss our expected growth target, but we are still growing. being able to grow in the toughest battle environment, that just reflects how great we are. debra: greece is having to a snap -- heading to a snap election. the opposition in new democracy scored 10 percentage points more than the party. the vote could come as early as june 30. this postpones a clash with

creditors. china has advised traders against shorting the yuan after taking to the brink of critical level. the head of the regulator says willagainst the currency suffer from a huge loss. these comments come as sentiment on the yuan ratcheted up in recent weeks. bitcoin has soared to the highest level in a year. this extends are run that seen prices more than double since march. they are taking encouragement from headlines showing greater interest from mainstream firms. bitcoin's fantastic ride follows a painful 2018 that saw the value of the digital currency tumble more than 70%. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. mass -- manus? manus: thank you very much for that.

fiat chrysler, the deal is on, the 50-50 venture between the two companies and it will create the world's third-largest automaker. that's the kind of stat were looking at. they thought it would initially involve exchange of equity but we have the deal in place. let's get to our reporter on the ground. good to see you this morning. you've got a whole new auto to chase after for the next 10 years of your career. what do you make of the deal? guest: it's very interesting. looks like he's fulfilling the dream to create a global carmaker, one of the first three carmakers in the globe. they are proposing a european one with renault. quickly anded very

the last few days and then yesterday morning, we discovered the announcement was going to be announcementd the is even stronger because here, it's fiat proposing a combination to read all. -- run all -- renault. we'll see what they say. we've been hearing that they are on board and it is for sure in advanced talks with fiat. almost 9 million cars a year. they will produce together. it will be a long way to the merger. in the be based netherlands. we believe both milan, paris, and new york. it looks like we are going into a european champion, which is also global. and they are

expecting the joint synergies to amount to more than 5 billion euros coming from areas such as purchasing power. there have been falling sales in the three major regions. you talked about global, china, the u.s., and europe. that's brought urgency to the calls of consolidation in the industry. is this merger, whatever comes to pass, going to address the issue of falling sales? guest: absolutely, absolutely. fiat toldearly, 2015 analysts. the is a way to solve excess use of capital. that theyd for years over expand about 2 billion euros every week. they're going to make savings

for 5 billion euros every year by combining the two carmakers. you can have a share platform. you sure the investment. they're not going to close any plants. we'll see. manus: what about the leadership? elkin, who i know you know well, is going to be the chairman. marchionne is gone. what do you make of the leadership, the potential leadership structure? is it inspiring? so, in the statement we just saw that's not mentioned, if i look at it correctly just a few minutes ago before joining the camera, we have understood in the last few hours that in the new company, likely, he might become the chairman and renault would be the ceo of the new company. what i find interesting here in terms of leadership is a looks like this is a fiat driven

effort. it was fiat making a proposal to renault. we have been about 5050% joint company. that probably means that the family will be the single largest shareholder in the combined entity. renault's board was scheduled to be this morning. can you tell us, in terms of timeline, what more to expect this week? guest: that's a good question. first of all, we're expecting this morning for the renault board to meet in paris and to give the first review to the fiat proposal. we'll see what the renault board will say in a statement at this point after fiat made the official proposal. then there could be the fiat chairman speaking today. he was expecting to invent in

milan this afternoon at a university that 10 years ago, the same day when fiat announced the chrysler deal, a younger ones spoke about an event. and today, he is expected at the same university. maybe this could be the first on the record. nejra: tommaso, thank you so much. we had more lines come through on the bloomberg. the renault board is set to meet monday morning over the fiat chrysler proposal, and renault saying it will evaluate the merger proposal. they are to issue a statement, as well, after the board has met . coming up, the european union's mainstream party's hold up against the party. we discuss results from the election next. this is bloomberg. ♪

manus: this is bloomberg daybreak: europe. i'm manus cranny in dubai. nejra: i'm nejra cehic in dubai -- in london. that's according to provisional results from the european parliamentary elections. they saw the highest turnout in a decade, looks set to reward the greens and pro-eu liberals. but there are a couple of notable exceptions, the far right winning in france and italy. bloomberg reporters are standing by. joining us, annmarie hordern in most of the start -- westchester, matt miller in berlin. bring us up to speed with the results in germany. matt: so, the real story here, i think, is the incredible failure of the spd, the social

democrats, and the greens really filling that spot, that emptiness that had been left by the drop. the spd fell from 27% in the last elections to less than 16% in these elections. the most widely read newspaper says the spd debacle on the cover. meanwhile, the greens got an astounding 21% of the german vote. moving into second place behind the ruling cdu/csu. angela merkel's party lost ground, fell from 35% to 29%. but they still had the biggest win of all of the parties. and the afd, the ultra-right-wing party here in germany, actually lost some 11%nd, falling to less than from more than 12.5% in the federal elections we had. it's not a landslide for the

populace, if you like to use that phrase, in terms of the afd, but definitely a big win for the greens since the kids in this country have started to come out with their friday protests. manus: let's get down to italy. we've got gerald standing by. theo savini has been biggest political force. what are the implications for that in the government structure? >> well, mattel savini has now become the leader of the biggest in italy. we have a trading places situation because, as you know, previously, the five-star movement was the senior party and this coalition. now the leak takes over that position. they basically swapped positions in terms of percentage of votes from what came out last year. so savini, who has similarly called the shots, now has the

clout to do that. you can now push with his side of the program, the league side of the program, and while he's saying he's not going to pull the plug, that he will continue to work with five-star, it certainly is clear that the league is the top dog in italy. nejra: thanks. let's turn to you in westminster. brexit wreaking havoc for labour and the conservatives in the u.k.. what can we take away from the results so far, showing the brexit party in the lead? annmarie: that's the biggest tech away. brexit is -- take away. brexit is killing the parties. both parties have a massive vote, especially conservatives, given they are the ones in power. the two parties, the brexit party and liberal democrats had unambiguous message to the voters. it's very clear that's what the

voters want. it leaves the door open to who wants to see theresa may, likely someone more of a brexiteer like boris johnson. much, thank you very annmarie hordern on the green, met merlin -- matt miller in berlin. our guest host is tim fox. can we hone in on brexit for a moment? boris johnson, a hard brexiteer as some would say. is the risk of a second referendum less if he gets the part or is the risk of a political slip up and we end in a general election? tim: that's what chancellor hammond was alluding to, voted to bring down the government in that situation arising where they push for a hard brexit without a deal. upte easily, it doesn't add for a straightforward no deal brexit. it does leave the stage unavailable for pressure on the

government to collapse at some point. and if you can bring about a collapse in the government through the arithmetic in parliament, then you can see another election. i think it's unlikely in the next few months, but as we get into the latter part of the year when you have the october deadline, if that came and went without any resolution of the brexit issue, i think the pressure for another general election will be greater. nejra: what would that mean for the bank of england policy? we saw the gilt curve hit its flattest since the financial crisis to last week. i think the delay to brexit means the bank of england can't get the position it wants to be, which is the monetary policy from the economics rather than from the political standpoint. so, the longer the brexit issue goes on, the more the bank of england is frustrated and the more the market seems frustrated

in monetary policy. perhaps as we get into the end of the year, if we do get a resolution in brexit, that's what the bank would like to see. then they can move towards probably raising interest rates in the current context of an economy which looks fairly well set. manus: the data hasn't been that bad. a wonderful quote, downshifting. if we had a hard brexit, it would be like downshifting the car from fifth gear to first. are we seeing more talk about risk of recession? tim: i think slower growth, but i think the u.k. can probably afford a long-term recession. but brexit would probably result in slow growth in the first instance. nejra: thank you so much, tim fox, for being our guest host this hour. coming up, we are moments away from a news conference in tokyo, as we look at live pictures of

the conference room away that conference from president trump of the u.s. and shinzo on bank of japan. remember, bloomberg users can interact with the charts shown using gtv . this is bloomberg. ♪

manus: this is daybreak and these are the top stories. trump admits abe. the u.s. president is on a tour from japan promising something very good on trade as soon as august. they hold their ground on an havoct but brexit wreaks with the main players. and fiat prepares for a proposal in a merger. and huawei is defiant in the face of u.s. sanctions that threaten his company's survival.

>> if he calls me i may not answer. >> just on 7:01. it is a bank holiday in the u.k. we do not have ftse futures or cash trading. we did see gains, dac and cac 40 futures in the green. global equities heading for ofir first monthly drop 2019. u.s. equity markets closed for memorial day. theing at the futures on s&p 500, dead flat.

softness coming through on nasdaq usurers. -- nasdaq futures. markets took a little bit of solace. the bond market getting ready for a barn stormer of supply. fruit -- sinceds 2017. a total of $131 billion. positioning is the shortest we have seen since november 2018. ofot of talk in terms politics in italy as we see the league succeed. move higher in the italian btp market. stomach has ever. let's get a little bit more on one of our top stories. it is all about trade. president top -- president trump

talking trade with shinzo abe. the leaders are in tokyo. we will hear from them shortly. president trump is arriving. president trump has said we should get ready for great things. $50 billion worth of tariffs on japanese cars. toyota.t with thes just listen in to president of the united states and mr. abe of japan. >> prime minister abe will speak, followed by remarks by president trump. prime minister, the floor is yours. may, hisrst of imperial majesty the emperor claimed the throne. we now have the new era. that if utmost pleasure

am able to welcome president melania as oure first state guests in the era. they are my dearest friends for myself and for my wife. talk at thesummit white house and celebrated, didn't we? he will be visiting japan again to come to the peace treaty summit. because of the security legislation, the u.s. and japan have become an alliance where we can help one another. the bond has become rocksolid. the close personal , theionship with donald bond of the u.s.-japan alliance has become unshakable.

the closest in the whole world. era, the u.s. and japan must lead for the peace and prosperity of the region and the international community as global partners. of president and is ae trump to japan golden opportunity to clearly the the unshakable bond to full world and inside japan as well. i would like to express my gratitude to the friendship of president trump and madame first lady. at the summit talk today, bearing in mind the latest north korean situation, we spent a good amount of time aligning our policy. the positions of japan in the

united states in this regard are on the same page. president trump and madame a --ia -- madame metta lamia like twolania, just years ago when they visited japan. they encouraged and give comfort to the members of -- the victims. the most important objection issue at the earliest possible timing is what i am hoping for and i'm determined i have to face german kim jong-un myself directly without any conditions, i will meet with the chairman and i would like to have discussions frankly in complete candor. president trump has expressed strong support to my determination as such by saying he would support me totally and

would not spare any effort in assisting me. we will have the close collaboration between the two countries, missing no opportunities and looking toward the early resolution of the abduction issue. we will act resolutely. will --'s meeting, we u.s.-japan the cooperation looking toward the including areas such as energy, digital, and infrastructure. going forward, we will walk hand in hand -- and promote the cooperation for the realization of this common vision of our nations. idea.l be promoting the with countries concerned like australia, india, u.k., and fortify inwill

cooperation toward the realization of a free and open indo pacific. we will enhance and expand our efforts. president trump came to the newce, japanese companies investment to the tune of $24 billion to the united states, creating 45,000 new jobs. tax reform the president automotive and energy-related japanese companies are making investments in michigan, alabama, and kentucky. and others. they have decided to make new investments. most in thebuting u.s. economy japanese companies. since been only one month

the last summit talks. in this respin of one month, japanese companies increased their investments to the united states by $1 billion. investmentrous appetite, japanese companies are deciding to make investments one after another. elationan economic shipped is developing in the major way, bringing win-win situations. following the joint statement of we areer last year, proceeding with discussions and i welcome discussion. in today's talks between myself , we shouldsident achieve early outcome based upon the trusting relationship

between our nations. we will accelerate the pace of discussions. ,ext month at the g20 summit president trump, i am going to welcome him again. looking forward to it. is.-japan cooperation indispensable. i will continue to collaborate closely with president trump. was able to talk with president trump on a aniety of issues in atmosphere watching sumo wrestling. our spouses joined. our friendship was even more enhanced. the exuberance of joy shown by the crowd that i witnessed in the stadium as well as the excitement of the general public

when the presidential cup was indeed,o the champion, a new page added to the prestigious history of sumo. donald, i think you very much. trump, iwith president visit our escort ship and show the u.s.-japan alliance to the people of japan in the world. lastly, once again, i would like to express my heartfelt gratitude to donald and madame melania as the first state guests of the new era. thank you. then president trump of the united states, the floor is yours.

pres. trump: prime minister abe, the first lady and i are honored to return to this very beautiful nation. as japan's first state guests following the enthronement of his majesty the emperor. we want to thank the imperial family for this gracious invitation and warm welcome. it was really wonderful. melania and i are thrilled to be back in the land of the rising sun. it is a troop leverage -- privilege to take part in this moment and witness an ancient japanese tradition as you begin the new imperial era. theook forward to seeing new emperor continue his father's extraordinary legacy. yesterday melania and i were delighted to join you in attending a sumo tournament. i have always wanted to see a sumo tournament and they are

bigger and stronger than i even thought. arenar very impressive where i presented the first ever u.s. president's cup to the sumo grand champion. it was something. this morning we participated in a welcome ceremony with the emperor and empress at the grand imperial palace. japan's time-honored customs of exquisite culture fill us with a deep sense of admiration. i want to thank the people of japan for welcoming us to this sharing of your beloved heritage. it is truly incredible. been asit has also chance for prime minister abe and me to strengthen our close friendship and the friendship between our nations. the alliance between the united a source ofapan is

stability and prosperity around the world. the prime minister and i continue our close consultation in pursuit of peace and security on the korean peninsula. the essence of our approach is peace through strength. indeed a strong alliance . the u.s.-japan alliances steadfast and ironclad. we want peace and stability. kimontinue to hope chairman sees the opportunity to transform his country through denuclearization. it is a country with tremendous economic and other potential. the united states remains ending abductions, a top priority for prime minister abe. i met with a group of japanese families who have suffered the unthinkable heartbreak of having their loved ones abducted by north korea. the united states will continue

to support japan's efforts to bring these abductees home. carnations are cooperating on other vital security issues. the united states supports japan's efforts to improve its defense capabilities. large -- large sales of defense equipment to japan made in the united states. in 2018 japan was one of the top purchasers of defense equipment from the u.s. and it has just announced its intent to purchase new f-35 stealth aircraft. the fact is, you cannot see them. this purchase would give japan's largest f-35 fleet of any u.s. ally. america and japan's close security ties are grounded in shared values. our armed forces train and serve

together all around the world. tomorrow i will visit american troops stationed alongside the japanese self-defense forces right here in japan. on behalf of all americans i want to thank the japanese people for graciously hosting our service members and military families. the united states and japan are also looking to improve our economic relationship based on the principles of fairness and reciprocity. a are currently negotiating bilateral trade agreement that will benefit both of our economies. tradeal is to reduce our deficit with japan, remove barriers of all kinds so that u.s. exports will really have a .air and profound footing the u.s. one week ago regained full access to japanese markets for the first time since 2003. we hope to have even more to announce on trade very soon.

today i am pleased to confirm prime minister abe and i have agreed to expand our nation's cooperation in space exploration. japan will join our mission to send u.s. astronauts to space. we will be going to the moon, we will be going to mars very soon. standpoint,ary there is nothing more important right now than space. startingn exciting point for collaboration on other things. mr. prime minister, our visit this week is a moving reminder of the strength of the u.s.-japan alliance and the friendship between our people. it is a profound honor to be in japan at this important moment in your nation's history. nametion is chosen the meaning beautiful harmony.

america shares this wonderful aspiration for the future and i look forward to continuing our tremendous partnership as we work together to bring this noble mission to life. thank you very much. >> thank you very much. the floor is open for accepting questions. japanese media first, followed by the press entourage accompanying the president. hand.se press, raise your press,ng the american , youanders from the u.s. decide the questions. first are the questions from japanese media. >> i have a question to prime

minister abe. japan-korea summit meeting. do you think the problem would be resolved in one time meeting with chairman kim? or do you have to go through a number of meetings to seek solution? by what timeframe would you like to realize? is it going to happen by the end of this year? could there be the discussion involving the u.s. as well? >> regarding the relationship with north korea, first of all, president trump cracked open the ,hell with chairman kim jong-un shared the bright future beyond the nuclear -- denuclearization and urging north korea to a new approach. the most important thing is the solution of abduction issue.

it means i have to directly see chairman kim face to face. without attaching any conditions and then, frankly, i must have discussion in complete candor. today, my resolution as such, president trump expects that he will give all-out support. he will spare no efforts rendering assistance to my efforts. it is very strong support. president trump and family members of abducted victims had a meeting and president trump would look into the eyes of the family members, and he was listening to the remarks very seriously. we have to resolve the abduction issue. this was shared by president trump.

ofking toward the resolution the abduction issue, i would like to pay tribute and gratitude to understanding and support. including the points that you asked on the topic of summit talks between japan and north korea, there is no specific goal in sight. upon the japan north korea situation, we want to solve comprehensive issues. we must come to terms with the unfortunate past and we must normalize relations. this is unchanged. the abduction issue is the most important for the administration. members have advanced in their age. i have a certain term your

question implied. a one time meeting to resolve this issue, you asked. irrespective of my term in office, i have to do everything efforts for the resolution of this issue. as the prime minister, i have a responsibility. going forward, i will discharge this responsibility and in order to do that, day in and day out i will do my best. >> the united states first question will go to the wall street journal. >> mr. president, prime minister

, mr. president i hope you will indulge me with two questions since we are far from home. if come -- if kim jong-un is not violating his promise by firing small weapons, what would you consider the violation? i think kimy jong-un or chairman kim as some people say is looking to create a nation that has great strength economically. i think he is very much -- i talked to him a lot about it and he is very much into the fact that people like i do that north korea has tremendous potential like few other developing nations anywhere in the world. he is looking to develop that. he knows with nuclear that is never going to happen. he understands that. he is a very smart man. he gets it well. to try at is going some point. i am an -- in no rush.

the sanctions remain. we have our hostages back. we are continuing to get the remains. a lot of good things are happening. there has been no nuclear testing for two years. i looked at a chart the other day. during the past administration there were many numbers that were very high like 10, 12, 18, having to do with missile launches a nuclear testing. for the last two years it had zero and zero. i'm very happy with the way it is going and intelligent people agree. by smalle not bothered missiles? >> i am personally not. >> last week you declared you will not work with democrats until they stop investigating you. how are you going to explain to your voters when it comes at the expense of the promises you made to them? pres. trump: there has never been a president more transparent. the mother report came out. no obstruction, no collusion, no nothing.

it is a beautiful report. the democrats cannot understand what happened. they thought they had some people on their side. people doing the investigation were 18 extremely angry democrats. many of whom worked for hillary and supported hillary clinton. robert mueller i guess you could say was a friend of mine. he did something that was really the right thing to do. they cannot get over the fact that -- never spoke to russia, never dealt with russia having to do with the subject we are talking about. i will say this. question, we have done a job like few presidents have done. the only thing you can say about me that some people may not like is that i have created one of the greatest economies. when i first met with yesterday with prime minister abe, the first thing he did was congratulate me on the incredible economy that we have in the united states. i think we will work with them,

a deal with canada and mexico everybody wants. it is all done. i think they want to be doing that. ambassador lighthizer is here right now. that is a deal that has gotten universal praise. farmers love it, manufacturers love it. you will not have companies going to mexico and canada like they were for many years. i would imagine nancy pelosi will approve it. i would think it would be very hard not to. we will see. as things get approved, i would love to sign them. i'm only interested in what is good for our country. it's very important. hope youminister i will also indulge me since i am far from home. did you get any reassurances today from president trump that he will not impose tariffs on cars or auto parts six months from now? pres. trump: i want to hear this

answer, too. >> last year in september between president trump and i agreed on a joint statement regarding including auto and auto parts currently based upon the joint statement of being discussed and talked about. we agreed to accelerate the talks as such. that was the agreement i reached with the president. >> my second question -- i left my translator. pres. trump: i think that is enough. your compatriots will not be happy with another question. thank you very much. >> once again a question from japanese media, please. >> i have a question to prime minister abe about the

u.s.-japan trade agreement. before the election, some voices of anxiety were expressed from trade organizations. now the tariff level, the maximum you can have on tariffs is the same as tpp. , inrding the calendar august there could be a major statement, announcement. prime minister, do you agree with president trump? what was the timeframe? what was the scheduling of those matters? between the u.s. and japan, trade friction or debate is happening. what was the outlook on that relationship? is there any mitigating role japan could take? two questions i guess. >> last year in september, president trump and i agreed on the joint statement.

that, we are vigorously discussing and talking. ,he minister and the investor -- the ambassadorial, discussion was held. agreedesident trump, we the letters accelerate the talks between the ministers. andave a joint statement that must be the grand premise upon which we must create win-win results which would be beneficial to both nations. that is my thinking. >> u.s.-china trade negotiations , that was the question. >> sino-u.s. relationship.

they occupy number one and number two economic positions of the world. between the countries, stable economic relations are built. that would benefit not only japan, but the whole world. it is important that there be stable economic relationships. that continuously the u.s. and china will go to dialogue and error to seek a constructive solution of the problem. discussed economic issues. something weas also addressed. there are a variety of challenges in the global economy we discussed today. tru.