paul: welcome to daybreak australia. i'm paul allen. shery: i'm shery ahn. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. big tech leads wall street lower amid antitrust speculation. the nasdaq down 10%. the fed president james bullard sees a rate cut soon. u.s. manufacturing sinks to the lowest under president trump. and the president hinting at a

big trade deal as the country throws off the shackles of the european union. shery: let's get you started on a quick check of how the markets closed in the u.s. major indexes managed to finish on session lows but not a great day for the beginning of june after capping the worst month of the year. the s&p 500 fell 3/10 of 1%. we saw the biggest selloffs in facebook, amazon, apple and the tech giants over concerns of those antitrust investigations coming their way. we had some not so stellar economic data while the u.s. manufacturing pmi seeing the toughest month and 10 years. we have the dollar taking a hit. yields taking a hit on jim bullard's comments of a rate cut on the horizon. u.s. futures up to tenths of 1%. let's see how we are setting up for the asia open. paul: thanks. we got new zealand back trading

today. catching up to do after monday's public holiday. a shade more than 1% following some of those u.s. markets lower. we have futures pointing weaker after some surprising days of gains by about one third of 1%. nikkei futures looking flat while in australia, futures pointing higher by a third of 1%. a big day in australia with the reserve bank expected to ease cuts 25 basis points off the cash trade. that will be the first move by the rba in a most three years. let's get the first word news with jessica summers. jessica: the st. louis fed chief james bullard says there made to -- may need to be a rate cut soon to counter risks to the economy. he says the trade war has only had small effect so far, but the implications for the u.s. and the wider global economy are concerned. it is the first time a senior

fed official has publicly suggested the need for a cut whose rates were put on hold in january. manufacturing.s. fell unexpectedly last month to its lowest in 2.5 years. i signed the trade war is an increasing dragon the economy. purchasing managers index declined 52.1 from 52.8. that missed the median forecast of 53 and the lowest level since president trump won the election in 2016. intodent trump has waded brexit politics at the start of his state visit. he told the country to throw off what he calls the shackle of the european union. he also hints a big trade deal if brexit go through. critics say a deal with the u.s. could imperil the national health service by increasing the evolvement of private american companies in the u.k. public sector. thatdish court has ruled

wikileaks founder julian assange does not need to be extradited there as part of a rape investigation but still should be question in the u.k. assange denies wrongdoing in the case. he was arrested last month after seeking political assignment. he is still fighting extradition to the u.s. on charges of publishing secret documents. onbal news 24 hours a day air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. paul: thanks very much. big tech tumbled in new york as antitrust regulators took what could be the first step in a sweeping investigation of their business practices. regulators will split up with the federal trade commission, taking responsibility for facebook and amazon. while the justice department will reportedly open an inquiry

into google and oversee any action on apple. for more on this, let's go to san francisco with her tech executive editor tom giles. no action has been taken yet, but why is this sending ripples through the tech sector? tom: there has been signs for a long time that the government might step up its inquiry, its scrutiny of these companies. we have gotten signs of it before with various hearings, et cetera in d.c. now what this shows is the government is laying a foundation for even further action. it is kind of getting organized over, ok, you are in charge of this, you are in charge of this. it is like a team in a huddle before the big game. it is themeans is, government organizing itself. what we are seeing nays there could be more coming down the pipe. specifically doj, that is the

one to watch. doj and alphabet, the parent of google. that is the one that really seems to be with the greatest potential. remember that google has come under great scrutiny in the eu over the way it handled the android operation system. is it fair to new entrants of competitors? the eu has looked at that. now the concern is the u.s. will take a deeper look at google through the doj, which remember can take unilateral action unlike the ftc. it does not have to get commissioners on board. it can just go right after a company. that is whatcern the doj will do. shery: it seems like the criticisms for google are not only in the antitrust issues. for other companies, they seem

to be unique to those individual companies. we are talking about facebook and privacy. not to mention amazon's role in the online marketplace. tell us how these differ from each other. tom: for each company, there is a host of things the government could take a deeper look at. ftc. remember, facebook has already set aside as much as $5 billion for a settlement with the ftc. we think that is in the -- remember that there was a consent decree from the ftc towards facebook way back in 2011. what they are looking at is whether there has been a violation of that. has facebook sufficiently protected the rights, the privacy of users like you and me. the sense is the ftc has come down and said there has been violations of that earlier

agreement. that stuff has already been in the works. it makes sense that the ftc would already kind of have facebook under its jurisdiction. amazon, the issue there is remember, amazon sells directly to consumers but it also has this platform, this marketplace where smaller businesses can also sell their wares to consumers. amazonstion is whether is using data it collects about these smaller businesses that operate on its marketplace and using that to its advantage, to the detriment of these competitors. is it acting anti-competitively in that regard? we have seen rumblings about this from people like elizabeth warren, who is in the senate obviously. she's also a potential democratic contender for the presidency. she has raised a lot of attention around these questions. what this means is will the ftc take a look at this?

the 2020pecially election cycle, this will become a huge issue. tom giles, thank you for that. our global tech executive. as you might expect, tech stocks got hammered. the faang stocks fell by more than 4%, ranking in the top 10 worst ever losses. su keenan has more. we are not just talking about the stocks that are directly impacted like facebook, amazon, google and apple, but other mega giants like netflix. su: netflix was the least affected in the faang group, but yes, it was widespread the impact. this was one new headwind for tech at a time where there is a lot of headwind. check out the size. no facebook and alphabet, took the biggest hit. apple and netflix were the least down of the day. let's go into the big picture snapshot of the day.

the you see here is, again, rally rolled on with speculation the fed will warm up to rate cuts. do we have a snapshot for the market? if not, we will move on to the other stocks of the day. we have dupont which has one of the biggest gainers of the day. that had a lot to do with the chemicals. the s&p 500, 2800 in the rearview mirror is the title of it. would that be possible? all right. what you can see here is that we did have late day volume but we closed below that support earlier in the day. it was looking pretty negative in terms of the selling, how broad-based it was. many would say it was a positive, but 2800 did not hold. majorwe did have some mergers on monday. more than 100 m&a deals totaling

$140 billion. what was the highlight? su: the second biggest merger so far. let's take a look at the size of the moves. we should have a chart on that.if not, i will quickly $40e their work 111 deals, billion in total value. blackstone was buying a singapore group that has warehouses. paid $9.4 billion for a semiconductor. j.p. morgan chase paying $2.8 billion for el paso electric. paul: su keenan, thank you very much. still to come, president trump dangles a big trade deal for the u.k. after brexit. we will assess how his tariffs strategy is playing out across multiple fronts. shery: from the u.s. to japan and beyond, factory weakness goes global. we ask a chief strategist where best to put your money to work.

this is bloomberg. ♪

shery: we are counting down to the open. futures up 2/10 of 1%. we are forward to that rba rate decision. they will probably trim rates by 25 basis points. we have seen rising job list rates and inflation as reason for more easing. the aussie dollar holding stable at the moment after the dollar took a hit on jim bullard's comments on a potential rate cut being on the horizon. i'm shery ahn in new york. paul: i'm paul allen in sydney. you are watching daybreak australia. the global march to lower interest rates seems to beginning momentum. jim bullard says the u.s. may need a rate cut soon. the reserve bank of australia getting ready to end an unprecedented pause in cuts. kathleen hays is here with the

central bank watchlist. which areas of the economy is jim bullard worried about? kathleen: he has been worried for some time about inflation being below target, but what he adds to the list today is something all fed officials have mentioned of not having a big impact on the economy yet. as the trade war escalates on the u.s. and chinese side, president trump threatens tariffs on mexico, it is taking a bigger part in what the fed is looking at. jim bullard today in a speech, plant remarks, singles the door is open to rate cuts, at least for him. we coulde eased now, help reset our inflation equitation 72% target. a good thing for fed credibility and the credibility of our 2% target. it could provide insurance in case the downturn in global

growth was more severe than we had previously expected. kathleen: insurance against a downturn in global growth being more severe than expected. this on a day when the institute for supply management purchasing managers index, the first big report of the month in the u.s., the smallest level and the trump presidency, almost three years. as a matter of fact, it dipped to 52.1 in may. above 50, still signaling it is expanding. components inside getting weaker. as you can see from the chart, the direction is lower. this is the concern. this is on the same day that j.p. morgan global manufacturing purchasing manager index shows a 49.8. it is well below 50. the weakest since the middle of 1016. where are we with the fed? a voting member of the fmoc,

just a couple of weeks ago, may 14, said she is not in favor of a rate cut to boost inflation. she is wary of trade risks. another dove saying not quite there. the bond market rally is not. yield down to 2.7%. the inversion is getting deeper. shery: it seems governor philip lowe is there now. an rba seen as a slamdunk and another one from the rbi. will central banks come back to the rescue? kathleen: they are trying, aren't they? in some parts of the world, the reserve bank of australia will be the first move since 2016. unemployment is rising. property prices are falling. the rba maybe would have cut anyway. we expect that. reserve bank of india, remember what we were talking about yesterday? gdp down from 4.6%. thursday, european central

bank meets, it already has a rate. it can provide more bank financing. this is a big question is will look at the global recession because big central banks have very little ammo to use including the bank of japan. they are already marching. it is a big question. the trade war continues. there is a lot of risk. shery: kathleen hays, thank you so much. let's get more perspective on the economic outlook as well as the markets. doing reported about the tech-led stocks lower with silicon valley expected to face antitrust investigations. joining us this peter. great having you with us. we have seen the tech stocks leading the decline but we have seen concerns over antitrust regulation for the longest time is this a regulatory headline hitting the market? or the macro punches coming from all sides? peter: we are more in favor of

the macro punches. i would like to say, one month ago that we made highs. everybody was concerned about fear of missing out. now everybody is concerned about "f." i will let people decide what term to use with that. it is a real concern because when you think about the growth, history says declining interest rates by central banks, they are following the market. they are not leading the market. that is not an indication of them cutting an interest rates will pick up. all we have to do is look at the bank of japan. it has been 30 years since they embarked and inflation. there are major structural issues in the world economy that are leading towards deflation. and, you cannot take 60 years of policy that reverse it and expect to get the same outcome. shery: we are seeing symptoms of

that potential slowdown in the economy with the latest economic data out of the u.s. the chart showing u.s. manufacturing pmi falling to 50.5. that would be the toughest month in nearly 10 years. on that chart, you can see the euro area entering contraction. the u.k. entering contraction in three years. is it time now to look at the global consumer story once again? peter: yes. the u.s. has been basically an island. it has been outperforming on the equity side. it has been outperforming on the consumer side. it appears to be catching up a little bit. the leading indicators we look at for the strength of the consumer, visa and mastercard. you have that number this morning the u.s. and they had a particularly weak base. relative to the rest of the market, they are still up strongly on the year. we look at the weight of the evidence. it does not say that the consumer is yet dead.

it's closer and we look at technicals and fundamentals, but they have not broken down to the point where we say we are negative as we were if you look at those stocks in the late fourth quarter when they really started to go down. paul: we are just getting breaking news the bloomberg at the moment. the u.s. responding to the chinese white paper on trade. president trump saying the u.s. is disappointed that china is misrepresenting the trade talks. the rhetoric seems to be continuing to ramp up. i'm wondering to what extent does this dual front is really weighing on things and the risk of a dragging the world into a recession? peter: yes, so when we have spoken before on bloomberg, we have talked about game theory and the implication for that, that the chinese do not have an incentive to make a deal because

their timeframe is much longer. in addition, weak u.s. equity markets puts more pressure on the u.s. to make a decision. china being the largest holder of u.s. treasuries. it started the year at 2.66 and now at 2.06. that is a 20% move on $1 trillion plus of u.s. treasuries. those gains have offset a lot of the economic weakness for china. it is not a very positive cycle we are on. if we are on this merry-go-round, i'm not sure who is going to be willing to be a leader and get off of it initially. paul: i have seen some productions today that on one hand of the u.s. 10 year yields. we are seeing an ongoing bond rally. i just want to check out this chart on the bloomberg. market bets on the federal reserve easing continuing to increase. what are the odds that the fed backs and we see a couple of

rate cuts 2019? ther: as i always said, market tends to lead what the fed is doing, not the other way around. when that was strong and the fed indicated it was going to tighten this year, if you look at that same chart and move it back to the fourth quarter of last year before we started to go down, people thought we were going to tighten. they were in a cycle. now we think they are going to be forced to reduce rates because of the inverted yield curve and where that is. one little outlier perspective is because there is a big risk. we have the debt ceiling issue coming up in the united states as we move towards the fall. if that is not addressed in a timely manner, we can do some -- see some very interesting things with the yield curve. could be muchrs steeper as the rest of the yield curve goes inverted.

it can be in exciting time to be a participant in the market. shery: where does that leave us in the emerging markets? today rebounding on the weaker dollar but the dollar could get bit because of haven demand. peter: in the short run, it is supply and demand for money. the emerging markets were radically underperforming relative to the u.s. it seems to be a short run adjustment, but if we start to move downward in a more significant fashion, those markets will be moving in lockstep with us and maybe even faster. paul: all right, thanks very much peter boorish, quad group chief strategist. a reminder of our exclusive coverage today from morgan stanley's australia summit. we have life interviews coming up with the bank of australia ceo, and the chief executive. this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. apple breaking off itunes as part of a series of new strategies unveiled at its developers congress. the platform will be split into three new apps. apple is also introducing a new operating system. neww desktop computer and augmented reality features. paul: deutsche bank fell to a fresh low with a slump in european faang stocks. shared dipped the most for the first time ever, while the cost to protect against the default in the bank's debt jumped. putting pressure on the ceo who has already told shareholders he is ready to make tough cutbacks to restore market confidence. shery: boeing is facing new issues with it 737 aircraft including the grounded max version which wing components

that may be prone to cracking. some leading edge tracks may have been improperly manufactured and could pose a safety risk. it allows the wing to expand and create more lift on takeoff and landing. this is bloomberg. ♪

paul: 8:30 a.m. tuesday morning in sydney. snow in the blue mountains just a couple of hours away. the markets open is 90 minutes away. futures pointing higher by almost one third of 1%. shery: in new york, it is 6:30 p.m. you are watching daybreak australia. let's get the first word news with jessica summers. jessica: the u.s. and mexico have begun talks in washington following president trump's threats of tariffs. he is proposing putting duties on all imports from mexico if it is not try to stop illegal immigrants crossing the border. mexico says tariffs could cause severe financial and economic hardships and may hurt the government's attempts to stem

the movement of migrants towards the u.s. the world's top independent oil trader expects opec and its allies to extend production curves into the second half of the year because of growing uncertainty in the market. ian taylor says continuing the policy is the easiest thing to do for the group, with worries about the trade war and stable demand due to the output restrictions. brent has fallen from its april high and wti is close to entering a bear market. >> it is the easiest thing to do. they will make a decision very late which is very understandable. obviously, we are expecting more in the second half of the year. role ishink the probably not in time. jessica: india's election

process is not only the biggest democratic exercise in the world, it is also the most expensive. 900 million voters over the six weeks reached $8.7 billion. that is more than twice the amount of the 2014 election. a track of spending in u.s. politics says the 2016 presidential and congressional races saw unexpended your of $6.5 billion. china's tightening its controls of the internet ahead of the 30th anniversary of the cracked out in tiananmen square. users of wechat have been blocked from profiles and personal information. a video streaming site says it suspended real-time comments for technical upgrades. research group citizens lab says a livestreaming app has added 700 words to its blacklist. global news 24 hours a day on air and on tictoc, powered by more than 2700 journalists and

analysts, i'm jessica summers. this is bloomberg. shery: let's get a check of how asia stockmarkets are looking heading towards the open. we are seeing nikkei futures under a little bit of pressure at the moment. not much changed after the nikkei fell four sessions in a row. right now the lowest level since february. not surprising given we have a strong japanese yen against the dollar since january. kospi futures down after three sessions of gains. we have seen some rate cuts from the slowing economy but also speculation that samsung could benefit from huawei struggles. we are looking ahead to the rba rate decision as well. paul: that is right. the reserve bank of australia widely expected to cut the cash rate today to 1.25%. just to economists seeing the rba remaining on hold so the

consensus is that cut is locked in. asx futures putting higher despite seeing some declines on u.s. markets. down 1.2%. worth remembering that monday was a public holiday, so they are playing a little bit of catch-up. let's get more on what we should be watching as trading gets underway. we are joined by andreea. the selloff in the u.s. is largely concentrated on tech. malaysian futures showing markets could gain but the broader macro picture is bad as the window. andreea: it was a very u.s. pacific sell overnight. u.s. specific story. we saw some smaller declines in the s&p 500 so we could see markets steadying but having said that, the macro picture seems to be getting worse day by day. that it is arging

very prolonged trade war and it is really starting to bite. we have a u.s. pmi report its lowest reading in a decade overnight. that already adds to the softness we are seeing in japan, u.k., germany and china's pmi falling. this growing concern and threat posed by the escalating trade war. we don't know who is going to be in the light of fire from day today as we saw with mexico. these are concerns that are really becoming entrenched in the market. even though we had james bullard overnight say the fed may be needs to be warming up to kick -- cut interest rates, that was a not enough to push treasury yields lower and just add so the concern that the global economy is in a really precarious position. we have also had banks like morgan stanley come out and say

that a recession is probably a lot of closer than a lot of people thought. shery: it also pushed the dollar lower so not surprising that emerging markets rebounded today. andreea: that is right. that is one of the bright spots out there. emerging markets are benefiting largely from the decline in the oil price which is declining because of the trade war. we saw developing nations stocks slide for a third day. currencies edging higher. a lot of the emerging-market economies are oil importers. cheaper oil price is good for them. it does allow central banks like , tondia to cut rates stimulate the economy. tono means are they immune what is going on out there with the trade war, but having said that, at the moment, they are largely benefiting from this decline in energy prices. and also another positive is a

stable yuan. we have seen the chinese yuan stabilize somewhat in recent days. paul: andreea papuc, thank you for joining us. you can check our library for some of the charts you just saw the. that is not gtv . shery: president trump has waded back into the u.k. politics, hinting at a big trade deal if the country throws off what because the shackles of the european union. we will discuss the implications of his comments with greg sullivan. given have any curveballs the president has thrown at trade partners, whether the british really believe they will actually get a big trade deal. how has the visit gone so far? greg: there is a lot of uncertainty around the issue of the trade deal. also, the uncertainty around brexit itself. calling for the u.k. to throw off the shackles

of the eu prior to his visit to the u.k. now he is not actually set them to discuss business yet. you can be sure that he will address the idea of a trade deal with the u.s. and the u.k. depending on how progress it goes. another issue you can expect on the president's agenda, the u.s. wants to push the u.k. to help block huawei and other chinese telecoms from the 5g networks for issues of national security. it is important to remember that prime minister theresa may has already said she will step down. what can actually be accomplished could remain constrained by that and be more seen as laying the groundwork for potential work for whoever succeeds theresa may. paul: given all of that and given a lot of this trip is dealing with pomp and ceremony, how do you measure success especially given theresa may will not be there much longer? greg: it is hard to say.

a lot of this has been pageantry so far. we saw president trump lay a wreath at the tomb of the unknown warrior and later at a banquet with the queen. the queen made a toast towards the assembly of international institutions and president trump took two common values. there will be some potential talks with u.s.-u.k. business leaders. whether the issue of an eventual trade deal or if huawei comes up, it could mark some success. largely, this will be a visit based on pomp and circumstance. shery: the mexican tariffs are still in play. that could be implement it on june 10. talks going on in washington. any chance those could be averted? greg: mexican officials are here in washington right now having talks with u.s. officials about how to potentially of her president trump's threat to

impose tariffs on june 10 on 5% of mexican goods. mexican officials are trying to make the argument that any tariff could backfire. that they are doing a lot to turn back refugees on their southern border. if cooperation broke down, the u.s. might see more migrants. another key thing to note is this potential tariffs threat is not popular in congress, even among lawmakers in the president's party. some have gone to say that such tariffs could threaten the passage of the usmca. there is a lot of uncertainty around this. the threat still looms. we will see how these talks go. shery: greg sullivan, thank you so much, with the latest on the mexico tariffs. we are not hearing from billionaire hedge fund manager druck miller speaking at the economic club of new york, saying that china hardliners got

a gift with the president's mexico move. the 5% tariffs on june 10. he is also talking about china, saying the u.s. has no chance in this conflict with china and 30 years. that the president is giving china no offramp to make a deal. druck and miller talk about these trade tensions and assuming the president will get beat in the next election. he is talking about the 2020 residential election. he is also commenting about the fed, saying he does not understand the exception of a 2% inflation target and that we are not in a recession but keeping his eyes open on the latest economics -- economy. paul: still to come, after almost three years with no interest rate move, the rba expected to and a pause in an attempt to revive inflation. we will ask hsbc how many cuts

it sees this year. this is bloomberg. ♪

shery: i am shery ahn in new york. paul: i am paul allen in sydney and you are watching daybreak australia. the reserve bank of australia looks set to end a 2.5 year pause on interest rates as it ratchets up efforts to start inflation. the inflation comes on tuesday. to look ahead to that, we have paul bloxham with us. paul, i know you recently changed your call on the rba to join basically the overwhelming majority of a cut today and probably another one in august but we are into the war of diminishing returns. paul b.: we have rba cuts today and they get to 1%. we think they stop there for the moment. that is the view we have in mind.

we think that will be enough to get the economy going. there the thing is you have to keep in mind it is not just about monetary policy. we will hear from the governor of the rba tonight. we think people highlight that monetary policy has a role to play but what we need to see other forms of policy coming into the forefront. things like more spending on infrastructure, more tax reform. a fiscal response. paul: the rba has been talking about that for years and nothing from the government. now that we have scott morrison back in power, a majority odds of thatdo the fiscal stimulus increase? paul b.: i think we are seeing some. we have more infrastructure in the pipeline at the moment particular yet the state level. there's a lot more scope for further reform. the budget in australia, the federal government -- budget is in surplus for the first time in a decade if you look at the rolling 12 month average.

you will already in a position where the government has the scope to provide more growth and now growth that has slowed and inflation that is below target. a central bank that is knocking on the door and saying we cannot be the only one providing sources of growth. we need other arms of policy. shery: how desperate will the policymakers be when we are continuing to see these economic trends worsening in australia? paul b.: surly gdp growth -- certainly gdp growth is running. we think it will be running below 2%, 1.8%. we have inflation that is below target and now in unemployment rate that is trending higher. there is plenty of scope for policymakers to have an excuse to support growth. monetary policy is starting to reach its useful limit. we think there will be other arms of policy that will provide support for growth. things like infrastructure

investment, tax reform, tax cuts potentially. this should be part of the agenda in terms of thinking about the policy response to keep australia's growth continuing. shery: president trump just downplayed the chance of imposing tariffs on australia. the white house was actually considering doing that. what is the trade relationship like between australia and the u.s.? how badly has australia been hurt by the china and the u.s. having this ongoing trade war? openb.: australia is an exposed economy to the rest of the world. what happens to the world matters a lot. our major trading relationship is with china. if you dig deeper, australia's major export is commodities. metal, liquefied gas. it makes up 55% of our export market. that is not tend to go into the manufactured export chain. it is not going to the

manufacturing system globally. it goes into domestic construction in china. we are dependent on what happens with chinese domestic demand than the global manufacturing export supply chain. australia has been reasonably well insulated because chinese domestic demand has been the source of driving our story. iron ore and coal prices, they have been holding up pretty well. if they were to weaken, that can be a challenge for australia. if we were to see those prices fall, that would weigh on australia. paul: i want to return to your earlier point about inflation australia. we have a chart here that illustrates this in australia. inflation remains consistently below the rba's cash target. nmillerd from drucke saying he cannot understand the obsession of the 2% target. does inflation still have a place as part of central bank

mandate? paul b.: i think it does. the inflation target is all about a demand management tool. what it is about is grow demand in line with supply. when demand is slowing down, that puts downward pressure on inflation. likewise, global demand speeds up, and it put downward pressure on inflation. i don't think it matters as much on whether the rba has inflation on target every period. what they need to do is believe that inflation will be heading back to target in the medium-term. at the moment, that assumption has been tested because the labor market in australia, the jobs market has started to weaken. the unemployment rate is drifting higher. it is hard for the rba to argue they are on the right path for inflation to get back to target but we think they will cut rates and that will be the story they will be delivering. paul: we will hear on that story in six hours time. paul bloxham, thank you very much for joining us.

a reminder of our exclusive coverage today from morgan stanley's australia summit. we will talk to the bank's australian ceo richard wegner just after 10 a.m. sydney time, 8:00 p.m. monday evening if you are watching in new york. this is bloomberg. ♪

shery: i am shery ahn new york. paul: i'm paul allen in sydney and you are watching daybreak australia. let's get a quick check of the business flash headlines. forng cypress semiconductor $8.7 billion in cash. the near $24 a share offer is a fridaymium on cyprus's close and 50% from last week. fineon fell in frankfurt and it was put on review on

potential downgrade on concerns of financing. shery: american airlines received tentative approval from the u.s. transportation department to partner on flights between the u.s., new zealand and australia. final approval is subject to public comment and review by the department. it comes after the obama administration rejected the airline's 2016. on concerns over competition. carrier saysbudget it has received several investment proposals, but will only consider offers it considers strategic. it has more than enough cash and will see if accepting investment is in the long-term interest of the airline. it will lead to 2.5 thousand planes, over $3 billion in the next two decades. shery: vw looking to lift its heavy truck division despite a nervous stockmarket.

bring a valuation of about $18 billion. vw originally planned to sell 25% of the unit, although the offer may fall to 15% or even 10% depending on market demand. now apple has upgraded the operating system devices and preview a range of new products and features at its annual app developer congress for the most important change is potentially apple's vision for the future of its own software. to san francisco now and mark gurman joins us. what exactly is this vision? mark: apple's vision is to unify all of its applications. apple is accompanied with third-party developers that is not an application that can work with any major apple platform. now apple has several. they have the ipad ios. ios for the iphone and ipod touch.

apple tv, watch, mc, etc. now instead of having to do all the work, now you will do it once and it will run anywhere. this is not something that will happen overnight. it will be a two to three year thing but the pieces are in place to make that happen. app: apart from the strategy, what other new features is apple adding to the operating system? mark: the iphone will get a revamped health application. there are some new features for sleep as well. some features for the ipad, like the ability to manipulate texts. the apple watch is becoming more independent. it will have an app store built into the device versus having to take it from the phone to the watch. shery: today, the news was really overshadowed by this antitrust concerns over these big tech giants. apple seems to be in their

crossfire with perhaps a doj investigation into the company. what do we know? mark: perhaps is the key word because if you look at apple and you look how the company is organized and you look at the market share for their significant product and revenue drivers, they are not really doing anything that is monopolistic or would warrant an antitrust investigation. you could make the case about spotify and app store competition but apple is offering a lot of tools to mitigate that so i don't think the apple probe will go anywhere. if it does go anywhere, i think it will be a waste of time on the u.s. government because i have a feeling apple has a stronger argument than some of its siblings in the big tech industry. paul: we did hear a little bit about new hardware coming from apple, particularly the new mac pro computer which does not get much of an update. what is going on there? mark: i call it the cheese grater mac pro. it is very similar to the design

they had 15 years ago to the original. this is one of the fastest machines you can buy on the market when it does go on sale. the thing to note is that this is very expensive. the baseline model is going to be $6,000, that is without the monitor. the monitor with the stand which for some odd reason is separate is a $12,000 package altogether. that is for the base configuration. this is a computer that will range upwards of $20,000, $30,000, $40,000 if you will max it out. shery: mark gurman, thank you so much. plenty more ahead on daybreak asia. we are joined now by matthew to discuss central bank policy. more room for rates to fall then to rise over the next 12 months. paul: that is almost it for daybreak australia but a quick check on how markets are trading. new zealand underway, back after

a public holiday. currently off vibe 1.25%. futures industrially pointing higher by one third of 1%. more to come in a moment. this is bloomberg. ♪

paul: good morning. we are under an hour away from the australia market open. shery: welcome to daybreak asia. paul: our top stories, tick will be in focus after antitrust and wall street lower. futures in tokyo, sydney and hong kong showing modest gains. a rate cut soon