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. to counts aren growing in economic threats.

u.s. manufacturing sinks to its lowest under president trump. the world's top independent oil trader sees opec's production curbs continuing. we will hear from the chairman. news out ofing south korea, we are seeing first quarterfinal gdp numbers come out. rising 1.7% year on year. revision fromward the preliminary numbers. it was 1.8% and it is revised down to 1.7% growth one on year, contracting 0.4%, a bigger contraction than was initially thought. cpi prices are gaining 0.7%, and acceleration from the previous , the previous month of april but it is missing expectations of inflation, writing -- rising 0.8% in may. you're on your inflation gaining

0.7 percent, year on year month on month 0.2%. they are mostly missing estimates. downward revisions, not surprising that we have -- considering we have seen pressure for the south korean economy. a big deterioration in investment in the first order. the oc be cut its gdp estimate to 2.4% for the south korean economy from 2.7 -- 2.6%. six straightacting months in may, down 9.4% for the month of may. gdp numbers, revised downwards for growth of 1.7% year on year. coming up iny more asia trading hours, including r.b.i. are great -- and rba rate change. paul: asian markets, in south korea, futures are pointing lower. this is after three days of

gains that we have seen on the cost be. -- on the kospi. futures traded out of chicago for the nikkei are flat right now. out of singapore, looking more positive. in australia, set up for a gain 0.3% on a day when the reserve bank of australia expected to cut the cash rate by 25 basis points while in new zealand, they ended off 1.3%, returning after a day of public holiday monday. a reminder of our coverage today from morgan stanley's australia summit. we have live interviews with the bank's australia ceo, plus the chief executives of several companies. let's check in on the first word news with jessica. the world's top independent oil trader expects opec and its allies to extend production curbs and the second half of the year because of

growing uncertainty in the market. a chairman says continuing the policy is the easiest thing to oilor the group, with caught between staple demand due to output restrictions and worries about the trade war. the prices have fallen and wti is close to entering a bear market. >> we expect [indiscernible] which is understandable. obviously we are expecting more u.s. exports in the second half of the year as soon as the pipelines get going. but i think [indiscernible] jessica: president trump has waded into brexit politics. he called on the country to throw off what he described as the shackles of the european union. he hinted at a big trade deal if wrecks it goes through. say trade deal

with the u.s. could impair the national health service by increasing the involvement of private american companies in the u.k. public-sector. a swedish court ruled wikileaks founder julian assange doesn't need to be extradited as part of a rape investigation, but should be questioned in the u.k. julian assange denies wrongdoing. he was arrested in london after seeking political asylum at the ecuadorian embassy. he is fighting extradition to the u.s. on charges of publishing secret documents. the u.s. and mexico have begun talks in washington following president trump's threat of tariffs. duties ond putting all imports from mexico if it doesn't try to stop illegal immigrants crossing the u.s. border. mexico says tariffs could cause severe financial and economic hardship and may hurt the government's attempt to stem the movements of migrants. global news, 24 hours a day, on air and onto talk on twitter,

powered by more than 2700 journalists come on jessica summers. this is bloomberg. shery: reportedly open an inquiry into google and oversee action on apple. santair joins us from francisco. , having as of being hands-off approach, what has changed and how significant is this? >> the biggest change is that the companies are bigger than they were even three or four years ago. haveook and google probably about two thirds of the digital advertising market in

the u.s. google, if you look at the search market, is dominant in the u.s., maybe 80%. apple has a dominant app store. facebook has come from nowhere in the past five years to be the second-biggest player in the display advertising market. amazon has been steadily becoming the largest de--commerce market retailer in the u.s. and that has been happening for years but it has really started to bite on small businesses. moment, appears at the the federal trade commission and department of justice are starting to get organized. what are the next steps? >> the next steps will be, they will start an investigation, even for that they will have to start on what they will focus on. if you are facebook, you are probably relatively happy that the ftc is looking at you. if you are google, you are not

so happy about the doj, which has more power and is generally considered a lot tougher than the ftc, especially when you look at over the past 5, 10 years, what the ftc has done. they will start the investigation, take an area and start sending requests for information. from what i can tell, it is going to be quite a broad look to start with, than they will see what they find and start narrowing it down. shery: thank you so much. the latest antitrust issues in the u.s. as you might expect, tech stocks got hammered. they fell by more than 4%, ranking in the group's top 10 worst ever losses. su keenan has more. this doesn't just affect the companies, but the tech sector in general. su: the regulatory situation has long-term overhang and the ancillary effect hits the rest

of tech. look at the size of the declines in the faang. it was google that took one of the biggest hits, along with facebook. if you go to the snapshot, the most., down the the index itself was down 2% at the low and there was some late day by but the heaviest index, down more than 2%. let's take a look at the other big movers. some of them were tech related. microsoft took hits. surprisingly, in the bull's-eye of china's tariff war, not down as much as you might think. you can't heavily affected, up heavily way -- dupont affected, up in a big way. that is interesting. let's go to the bloomberg. the support and technical chart

shows us 2800 is in the rearview mirror. we talked about, will it hold? it didn't, even though we closed off the low and in the positive for the dow, 2800 broken through and many say that foretells more drops ahead. after hours, and internet application software, down in a big way as it cuts its first year revenue -- full-year revenue forecast. another negative as we head into the tuesday trading day. it was merger monday. more than 100 deals worth a total of $40 billion. su: this was the second biggest merger monday for the year so deals.0 billion in that was 111 different ones. look at blackstone, probably the largest, 18 $.7 billion they are paying for a warehouse unit from a singapore group.

and itand technology -- big move higher, jpmorgan fit -- jpmorgan and el paso electric. those are the highlights. paul: thanks for joining us. still to come, apple lays out its vision for a new future, but will customers take a bite? we will get the latest from their annual developers conference. shery: a strategy for bond markets as the rally continues. this is bloomberg. ♪

shery: this is daybreak asia. match -- marchl the lower interest rates is gaining momentum. -- may need ayour

rate cut. the reserve bank of australia getting ready to end its unprecedented pause in cuts. here with theis central bank watch lists. let's start with jim bullard. what is his driving -- what is driving his logic? >> seems that for everyone around the world, everyone was .lready on their economic plate the u.s., for example, good economy in terms of jobs but you've got persistently weak inflation, trade, the trade war, the escalation of the trade war, that is tipping the balance for many. jim bullard gave a speech in the u.s. on monday. these are prepared remarks well thought through. this is what he said. , we couldased now help resent her inflation expectations at the 2% target. should be a good thing for fed credibility and for the 2%, the

credibility of our 2% target. it could also provide some insurance in case the downturn in global growth was more severe than we had previously expected. what is currently the biggest thing driving a potential downturn in growth -- global growth is the trade war, taking an impact, potentially getting worse. what are people watching? they are watching purchasing managers indexes around the world. the u.s. institute for supply management put out those today, at its lowest level since donald trump took over the white house. still above 50, 52 .1 in may from 52.8 in april but the trend is clearly moving lower. production hit its lowest level since 2017. employment was stronger but on top of this, jpmorgan has a global purchasing managers index. it fell to 49.8 in may.

it is below the magic 50 line, signaling contraction rather than expansion, the weakest since 2016. the bond market is more convinced than ever the federal reserve will have to cut rates this year. some people say twice, three times. let's look at what the bond market is telling us because the a year note yield has had drop in yields. looking at it this way, its biggest decline in the month of may since june 2015. clearly, this is driving the expectations. voter on thether fmo c says she is not in favor of an insurance rate cut to boost inflation. a trade war might be another thing. speaking just this week, one expert says he is not there for the need for a rate cut. he says tariffs could hurt u.s. a lot going on, but with the rba and the reserve bank of india ready to cut, this seems to be growing.

central banks like the ecb and theyank of japan are, don't really have a lot of big tools to wield. that is a question also hanging over the global economy. shery: thank you so much. kathleen hays in tokyo. asia's is matthews portfolio manager, teresa. listen what the guggenheim partners cofounder had to say about the treasuries market and how over-bought it might be. , our the near term indicators are showing things thisetting over-bought and vicious fight down in yields we have had over the last week is likely to get reversed sometime in the near term. shery: where are we headed in the market? interestingn

question. typically, what we found in our empirical studies of the -- is that the 10 year u.s. treasury is more driven by global pmi's it is by u.s. pmi's. u.s. treasury market is actually a reflection of not only the u.s. but globally. when we look at what is happening with global pmi's, as your previous speaker alluded to, they are not looking good. surely, the bond market is -- looking at more negative sentiment. has it overshot? that is tough to call because at this rate, it is possible. looks like it is more likely that the fed's rate move will be a cut and not a hike. this is difficult ascertain. it will be driven by whether we will see first the contraction in the u.s. being worse than expected, or are we actually going to see inflation coming through? mexicanof the incoming

tariffs as well as the chinese tariffs? when we talk about the cuts that might be necessary, i think they are hinting at insurance cuts. if we cut now, we buy ourselves some time because if we wait until 2020, the fed may actually be between a rock and a hard place. we might be in a place where the economy is slowing and we see signs of inflation, where it would be much harder for the fed to actually move rates down. shery: i want to get to the trade war, but first, the global not onlye chart shows the u.s. manufacturing pmi having its worst month in a decade but also the euro area manufacturing pmi contraction territory right there. when it comes to trade tensions and the potential for inflation, we are talking about the fact that they will affect u.s. multinationals. does this mean we should take

another look at the exposure to u.s. margin cap's? are their corporate profits in the firing line? >> absolutely. what we have seen in the trade war is a move from phase one, which was talking about tariffs and tit-for-tat in terms of leveraging tariffs, and we have moved onto stage 2, which i think is much more about market access. market access is a more dangerous territory because if you look closely at the trade imbalance, specifically the goods trade imbalance between the u.s. and china, the large majority of our input from china are actually accounted for by u.s. multinationals. decides toif china also go tit-for-tat and retaliate in terms of what we ,re doing in terms of huawei this could go poorly for u.s. corporate earnings. you can imagine the next move by the u.s. could also be detrimental for chinese

companies. if we do something a simple as banning microsoft windows in china, that could cause a blackout across many of the pcs in china. this could escalate into something much worse than what we are currently seeing. escalation,ms of fewer countries are becoming immune to the winds of trade blowing out of the u.s. president trump, looking at removing india's developing nations status. despite that, you see a lot to like in the indian rupee dominated bit? >> yes. we see the stars aligning for india in terms of currency rates and credit. the was a strong mandate that means the currency will be held relatively orient by inflows into the country. by inflowsuoyant into the country. we may be heading into a risk in

the latter stage of this year. we also see room for indian rates to come down. we have seen much greater coordinated efforts between the government and the central bank, and we think there is much more even based ontes, fundamentals. if you look at india in the context of other emerging market countries, indonesia, it still offers one of the highest real rates, the difference between actual rates minus inflation. credit spreads are actually quite elevated in india and that has been driven by the lack of access, by the non-bank financial institutions. we had an issue with one of the financial the institutions and that led to a liquidity squeeze for many companies. that may not sound like a lot but the reality is, the national institutions today account for there -- a majority of

funding for many of these smaller to medium enterprises. the central bank has been quite innovative in terms of talking about how they might ease these liquidity squeezes so the financial institutions would continue to be able to lend. we see quite positive backdrop or india in terms of credit, currencies, and rates. kong, thanks for joining us. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." it is available on mobile in the bloomberg anywhere. you can customize your settings so you get the news on the industries you care about. this is bloomberg. ♪

shery: apple upgraded the operating systems of devices and previewed new project and

features as its latest -- at its latest conference. , it is overshadowed by these big concerns over regulation surrounding tech giants. how will this affect apple? >> at the end of the day, it is not really going to impact apple much. i think the u.s. government will see apple is not an antitrust violator like some of its peers. i don't say this often but i think apple has a good case. aside from that, what were the key features that apple unveiled? gotome of the things that the biggest cheers were project catalyst, the ability to run ipad applications on the mac, which can make it easier for to import and apple its ios apps to the mac platform, brightening the ecosystem. the stark mode feature -- the

dark mode feature, the mail reminders and messages, little tweaks around the system that that a lotomething of developers and consumers will like. shery: the conference, coming at a time when the app store and its relationship with developers has been in the spotlight. did we get any more on that? >> i don't think many people were talking about that today. apple came out with a lot of new tools for developers, which should be pretty appeasing. they have opened up the entire economy of app developers, so to speak, so developers have a lot of gratefulness towards apple. the issue is talked about publicly but i don't think people who are developers are speaking up much. in sanark gurman francisco, thanks for watching the apple conference. coming up, president trump dangling big trade deals of the ..k. breaks free from the eu

the latest on his trip to london. this is bloomberg. ♪

shery: this is daybreak -- bullard fed shape james -- fed chief james bullard says there may need to be a rate cut soon. he said the trade war has had small affect so far but the implications for the u.s. and the global economy are a concern. it is the first time a senior fed official publicly suggested the need for a cut since rates were put on hold in january. couldwe eased now, we help re-center inflation expectations up a 2% target, which would be a good thing for fed credibility and the 2% credibility.

it could also provide some insurance in case of a downturn -- in case the downturn in global growth was more severe than we had previously expected. of u.s. a measure manufacturing fell unexpectedly last month to its lowest in two and a half years. in a sign the trade war is a drag on the economy, the institute for supply management's index declined to 52.1 from 52 point eight, missing the median forecast of 53. that is the lowest level since president trump won the election in 2016. italian prime minister gs up a contact says haim may -- the italian prime minister says he hisresign if members of government don't stop there tit-for-tat squabble over policy. he is attempting to mediate between deputy leaders. who had nossor

political experience before being named as prime minister. prolong my presence here. if they don't clearly show a sense of responsibility, i will hand in my resignation. jessica: global news, what a four hours per day, powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. thanks, jessica. let's check in on futures in asia. we have the futures in australia currently pointing higher by a little over zero .25% on the day. the reserve bank of australia, expected to cut the cash rate by 2.2 5%. futures trading out of chicago for the nikkei ticked into positive territory. kospi futures weaker, breaking counterintuitive gains that we have seen in seoul. new zealand

off by a little more than 1% after the public holiday. shery: the u.s. is now disappointed in the release by china that outlines views on the trade dispute. a statement from the trump administration accused china of playing the blame game and misrepresenting the dispute. they assessed -- we assessed the implications with greg. it has become a war of words. who backtracked? who misrepresented? for thesn't bode well trade negotiations. >> that's right. the u.s. is doubling down, saying a recently released chinese white paper on the trade negotiations seeks to misrepresent facts. the u.s. says china is engaged in the blame game and it doubles down on what the u.s. says is impetus forthe these negotiations, a history of

unfair trade practices. the statements has a couple times that this is the reason why we are here. it doesn't bode well for meeting at the table anytime soon. there is no talk scheduled currently. that said, the leaders, xi jinping and donald trump, are set to be at the g20 later this month. while the rhetoric might be hot now, there are chances they could meet face-to-face and come to some accord. both sides appear to be doubling down. let's turn to the mexican front. mexican officials are going to be getting talks in washington am a trying to avert trump's proposed tariffs. what will their argument be? how likely are they to find a friendly ear? meetingan officials are with u.s. officials to avert president trump's threat of a 5% tariff on mexican goods on june 10. mexican officials are prepared

to retaliate. they said they wouldn't necessarily do abroad tariffs -- do a broad tariff, but they would work strategically. they are trying to make the argument to the trump administration that tariffs could backfire. they are saying we are doing a lot to turn back migrants at the mexican border. these tariffs could undermine our efforts to keep migrants from coming to your border and you could see more migrants reaching the u.s. border with these tariffs. they are trying to play up the cooperation that exists between the u.s. and mexico, and hanging over all of this is the passage of u.s. laws. president being more conciliatory towards the u.k., hinting at a potential big trade-off -- trade offer if the ..k. breaks from the eu >> president trump, before arriving in the u.k., saying the u.k. could shake their shackles of the eu and joined the usn a big trade deal.

we know there have been calls on both sides of the atlantic for people to embrace brexit and look at a bilateral trade deal. the president, signaling he is interested in a bilateral trade deal but brexit needs to quit connects -- quicken its pace. could be a countless the visit besides the pomp and circumstance of the banquet? that remains to be seen, given theresa may is expected to leave her post soon. whether any actual progress could be made, that might be left to whoever succeeds theresa may. paul: greg sullivan, thanks for joining us. the world's biggest independent oil trader says it expects opec and allies to extend production cuts. the chairman spoke to bloomberg in london.

the chairman and the exclusive interview, we may bring you that later on. arey: coming up next, we live at the inaugural morgan stanley australia summit, speaking to the bank's co-head of market research and strategy. we will talk about the rba and more. this is bloomberg. ♪

paul: let's try that again. the world's biggest independent oil trader, expecting opec and allies to extend production cuts when they meet. chairmanto the exclusively in london. >> there are difficult times in the markets where the financial flows are obviously negative and

so was the rest of it. understandably. the spreads, it is pretty good still. it is relatively solid. [indiscernible] .t doesn't look bad it is a most too early to rule out a recovery price and i think it is an exceptional time where some of the systemic trading has been in a negative direction. >> do you see demand growth holding? there is a concern about the trade war between beijing and china and mexico and india. demand, 6% is still big growth. some of that will be oil. i think we are not totally negative on the fundamental at this moment in time but we have

to be careful on positioning on things like flat price. >> how much do you see demand year on your up? >> that is what we are looking at. we have been counting numbers slightly below everybody else but we are still above the minimum. we think that will still happen. bit income off a little the last two or three months. >> given the supply-side concerns ranging from caracas to thought opec would have to increase production. now with this demand, many people say we have to keep a little on exports. what should opec do when they meet in vienna? >> it will have to ask opec. i don't know. i didn't expect them to roll. [indiscernible] which is understandable. expecting some more u.s.

shale exports in the second half of the year, some of the big pipelines keep going. probablynk the role is just at this moment in time, most likely. ask them a of the year, we will get three pipelines, a lot of u.s. shale. how do you see u.s. production and exports in the second half of the year? >> that depends. [indiscernible] will go up. does it go up by 300, 400 or more? it goes up and [indiscernible] to go up by enough to compensate for that but that is one of the key things we will have to look at carefully going forward. group's chairman. of the morgan stanley australia summit featuring more than 70 speakers, aiming to disk -- explore the restrictive forces in global

companies. let's go to the summit and bring back haidi stroud-watts. so happy to have you back. haidi: lovely to see you, great to be back. lots to talk about. as i come back for this event, we are still reeling from the surprise effect and surprise outcome of the australian federal election. trade tensions continue to worsen. we are looking at the market implications of that. we have morgan stanley, one of our regular guests joining us in sydney. great to have you. ,et's start with the evergreen trade tensions. early in the year you said you feel like markets are being complacent about their policies and investors and markets have a tendency to look past the policy

lyanna view of what happens. >> i think the s&p is down 7% from its high and if we think about the combined effects of 25% tariffs on $250 billion and we think there might be another billion, that300 is $90 billion in total tariffs, 22 percent of global growth. if you figure a growth estimate of 2%, 2.5 percent, somewhere between 0.5-1 basis points off u.s. growth, maybe 7% is reflective of that on the s&p . what is interesting to note is, certain sectors like semiconductors are down significantly more. they are down more like 18%. we are closer to placing it in but it also depends whether the united states will do 5% or 10%

on $300 billion or whether we see tariffs hitting mexico, as well. got $100 billion in tax refunds and they are spending the money to effectively offset the impact of tariffs and buying intermediate goods from china. we have had a bit of a cushion between currency and the tax bill, but now, that is being eliminated and companies will have to figure out what the effects will be. di: president trump is doing what he promised to do. ?ow much is this rhetoric do you think the tough stance is working well to his advantage going into the next election? wellis is an area he polls on. he has the highest approval rating of his administration, 46%. this is an issue that he does well with, and he probably wants to have going into the next

election year. if you can't get a really good deal, by which i mean one that solidifies him with both his base on the right and the democrats on the left, he is better off not having a deal and remaining strong for the time being. i don't think we will see at this point a strong drive to get something done, unless the equity markets fall another 10%, 12% and that was what we saw last year in december, where he aproved deeper steps to get deal. that was after significant market selloff. haidi: what are the implications from global central banks? we heard for -- we heard from james bullard. this is the first time in central bank in the u.s. has come out and said more easing could be warranted. do you think this is warranted? is that likely what we see in the next three-six months? >> it is impossible for us to

separate the fed and the trade dispute. whether the fed likes it or not, they are in the trade business by default. have hadle, we discontinuity between people saying we will get a deal done soon, the next couple weeks, maybe the g20 in june, maybe the end of summer, yet the market is still pricing in a rate cut. if we get a trade deal i don't think we get a rate cut. that is equivalent to physical stimulus coming into the u.s. economy if we start ratcheting back the tariffs, and even the rhetoric around the tariffs. and well drive cuts should see business investment pick up. ultimately, the fed has to be the counterbalancing force and if we are going to drag the trade dispute on, as morgan stanley wrote in the economics report, to 2020, the risk of recession goes up and the fed should be responding to that. him a evene a cut

the right now, we still have neutral position through the end of the year. haidi: has the disconnect in the u.s. dollar taken a pause? it was the best out of the basket of bad kerning -- currencies. has that lapsed now? >> i don't think on a relative basis because we have seen europe weaken considerably. there are fresh concerns around china with some of their data. ultimately, i think we have a situation where central banks around the world are trying to normalize monetary policy 10 years after, in a coordinated largest they did the loosening of monetary policy ever. we are trying to contracted and doing it piecemeal. the u.s. begins to tighten, europe slows, and europe takes their foot off the gas. they indicate they are going to ease at the federal reserve moves after that to say we can't tighten that much further,

either come otherwise the currency appreciates. that tightens up financial conditions outside of rates. i think we are in this game between the global central banks. , this isy respects part of the great strategic competition of our time. the theme this year at morgan stanley is disruption. how much of a risk do you think there is when it comes to worsening, noticing things like the huawei ban? also, how regulators are struggling to grapple with the power of tech giants? we are looking at a potential unprecedented purge. is there risk as well as opportunity in that space? >> i think so. undeniable growth is and it is something we get excited about. we publish a lot on issues like artificial intelligence, cybersecurity. we believe in the fourth industrial revolution. there are companies in the united states that have

effectively become the toll roads of the internet, and there are questions about how we progress forward. anfar, those companies have -- have been enabled to grow it exceptional rates. we have taken a look at this overtime at some of the industries that have been regulated as part of antitrust measures, and the ultimate impact actually tends to be relatively modest. there is an increased it -- increase in costs for a couple years after the measure, then overtime, companies can recoup that because the regulation increased the cost of entry for new players. in some cases, it solidifies the position of the bigger players, who have to survive perhaps for a couple years, and investors have to take that but ultimately, they can expand their profit margins thereafter. i think we should continue to watch the regulatory risk around technology, but it is not something that i think warrants

a massive move. i think it is a little bit of a wait and see scenario. the long-term growth opportunity is strong. haidi: we will check in with you again shortly. great to have you here in sydney. back to you, but lots more when it comes to morgan stanley plus summit. ,e have guests including a ceo well around the intersection between trade and tech that we are stuck at. thanks for that. haidi stroud-watts joining us from sydney. plenty more to come on "daybreak asia." this is bloomberg. ♪

paul: the reserve bank of australia looks set to end an unprecedented pause in interest-rate cuts as it ratchets up efforts to revive

inflation. the governor aiming to push unemployment below 5% to drive faster wage growth. australia's economics editor is here. markets and economists see this as a done deal. what is the governor's statement expected to say? asyour guess is as good mine. we are in uncharted territory. moved since hasn't he has been in office, september 2016 was the last, the last couple was october -- was august 2016. we don't know how he will handle the statement because we have never seen him cut before. my guess it could be fairly vanilla. traditionally, the rba hasn't provided a lot of guidance on its cut or hike. but we will also get a lot more flavor of how he is thinking tonight because the governor is

speaking at the iba board dinner in sydney, and we expect to get more color on his way of thinking and potentially if there is more cuts. shery: how much is the recent trade escalation going to impact the rba's thinking? chris: i guess i am thinking it is going to be on a lot. i mean, just this morning, we have the fed chief saying he thinks a rate cut could be on the cards. cited the trade wars as a main example why. if the u.s. is worried, you bet australia will be worried. the australian economy is the most exposed to china and you the governor will not be impressed with the recent acceleration of tensions. paul: this rba decision is

coming a day before gdp. the rba has pulled back its forecast of growth. if we get a surprise, how could that change the picture? chris: it is a backward looking fear. we are not expecting it to be that strong and the rba is already expecting only 1.75% growth for the year through june. what is more on his mind is the jobs market going forward. we had a bad one yesterday, jobs down 8%, the worst since 2009. paul: thanks for joining us. as we look ahead at rba decision. shery: the latest business flash headlines. guggenheim partner is joe -- warning the treasury has over-bought him a global bond rally, pushing yields to multiyear lows. yields touched their lowest level since 2017 with traders expecting the fed to cut its

target straight -- target rate by more than 0.5%. apple is breaking up itunes as part of a series of new strategies unveiled at its developers conference. the platform will be split into three new apps called music, podcasts, and tv. apple is introducing new operating systems across its desktop showed a new computer, and augmented reality. it wants ipad apps to run on mac computers. new issues with boeing 737s including the max version with wing components that may be prone to cracking. boeing told the fbi -- the faa that it may have been improperly manufactured. the parts allow the wing to and create more risks. a component must be replaced within 10 days. on the nextto come

hour, we will have more from our exclusive coverage of morgan stanley's australia summit with live interviews coming up with the bank's australia ceo, richard wagner. ♪

paul: good morning, i'm paul allen in sydney. shery: good evening from bloomberg's global headquarters from new york, i'm shery ahn. elcome to day day. paul: our top stories this tuesday, tech will be in focus fter anti-trust fears send stocks lower. futures in tokyo and hong kong showing modest gains as they're accused of playing the game --

blame game. shery: and we're joined exclusively this our by telstra 's head in japan. we are looking at some gains for the nikkei, up .2%. the japanese yen holding steady at below that 109 mark. of course, we have seen incredible strength for the japanese yen and yet the nikkei now gaining ground, given that we had fallen to its lowest level since february over trade tensions, not to mention the u.s. markets also losing ground. the korean market at the moment opened down .1%. is after the coss pay -- postkospi gained ground for flee consecutive sessions tv.

juan has risen to the highest in a week. paul: thanks, shery. we do have modest gains happening in australia as the stocks gradually come online. b.h.p., one of the best performers at the moment. perhaps a little bit of the relief after some of the resources stocks got hit on monday but president trump has since concluded that australia is not going to get swept it in the trade war, as far as the u.s. is concerned. pretty much the consensus from economists and the market that the r.b.a. will drop the cash rate to 1.25%. the aussie dollar just below the 70 cent mark. a quick check on the market. 75% but perhaps

playing catch-up after it was closed monday for the queen's holiday. let's get a first word with jessica. jessica: south korea's economy contracted more than estimated in the first quarter. g.d.p. shrinking a 10th more than forecastses in april. however, the bank says the domestic economy should expand this year in line with its proks of 2.5% growth. the world's top independence oil trader expects opec and allies to extend production curbs in the second half of the year because of growing uncertainty in the market. the chairman said continuing the policy is the easiest thing to do for the group. with oil caught between stable demand and worries about the trade war.

it's fallen from its april high. >> we probably expect them to -- it's the easiest thing to do. they made the decision very late. it's understandable. you know, obviously we are expecting some more u.s. oil exports in the second half of the year as some of the big pipelines get going. but will roll at this moment in time, most likely. >> the st. louis chief bowen said the trade war has had only small effects so far but the implications for the u.s. and the wilder global economy is a concern. it's the first time a senior official has publicly talked about the need for a cut since rates were put on hold in january. >> if we eased now, we could help re-center expectations at

the 2% target. which would be good for the fed and for the credibility of our 2% target. it could also buy some insurance in case the downturn in global growth was more severe than we had previously expected. >> global news, on tictoc and twitter. and jessica -- i'm jessica summers, this is bloomberg. sage: thank you. asian markets seem ready to digest competing developments in the news. growing expectations that the fed will caught can -- cut rates could be seen as bullish for markets. mark joins with us his take from singapore. mark, we are sitting -- seeing a bit of a mixed picture across asia. what's moving the markets right now? mark: i think in the short term there's probably going to be a

little bit of consolidation. we've had a lot of bad news in the last week or so. we're now in a bear market for u.s. equities in particular and that will drive down global assets. we've launched a kind of trade war that is going to hit economic growth and resells. we're probably headed towards the first u.s. recession in 10 years. that seems much more likely now. it's obviously not definite and certainly earnings forecasts will be cut. short-term it's much harder. bear markets grow over many, many months. overnight we finally saw the first equity strategist we act to the trade war deterioration. citibank is among the first wall street strategists to cut their earnings forecasts. overall we have a lot of bad news to price but it's going to happen very slowly. paul: mark, let's focus in on

one potential one that's brewing right now. have a look at this chart on the bloomberg. w.t.i. right on the cusp of a bear markets now. what are the implications of this? mark: oil has been tanking for the last few weeks. i think we're getting towards the sort of stretch face. we're starting to see capitulation in the market. i don't think it's going to turnbullish. but there's a chance we're getting towards the end of the slump. i think it's turning much more towards a neutral area, maybe a little bit more downside to come. while oil hasn't been the main driver in the u.s. field, there's certainly been a component. it might cause a little bit of a short-term in yields. these yields aren't long term,

it's just short term, the move in yields seems very stretched and emily: will play into that story. shery: scott miner saying that treasuries were pretty overbought at the moment. what's going on with south korea bucking the trend? even today it started lower and now it's rebounding and gaining .1%. mark: your confusion slightly matches mine. korea has been a massive underperformer so far this year. one of the worst performing asian stock markets, definitely one of the worst of the majors. the economy has a lot of problems there. something we've talked about in the last couple of months. as we enter to a slightly more bearish markets, it's a chance for the underperformers not to do so badly so we've already been very negative on korea for some time. now we're sort of taking out some of the enthusiasm for

other markets. people are going korea is already way off its highs. the chance for greater losses is in other markets like china or the u.s. market seems much more vulnerable. paul: mark, thanks for that. trade war tensions continue to ratchet up. the u.s. saying that it's "disappointed" in a statement from china that outlines its views on the escalating dispute. the trump administration accuses beijing of playing the blame game and misrepresenting the issues at hand so let's assess with our senior international ettory jody. it's starting to sound like a story of he said-she said. >> that's right. we hear one side from the u.s. and one side from china. it looks like in recent days things are escalating more that president trump will make some comments and china will come

back in sort of retaliation. so far there hasn't been any real effects of this but we are seeing these rise in tensions kind of day by day and frankly, no break in them. no discussion about when talks may resume, anything that looks like an olive branch is not coming from either side. shery: definitely, and we're seeing more moves inside the s. to try to curb -- and we're talking about even perhaps student visas being curbed. what what are we hear something >> that's right. first it was trade, then technology and now talent as we're seeing with students. this has been one area where the u.s. and china have really cooperated with the number of students, not just going to the u.s. but going back and forth in their education system. there are about 360,000 chinese students at american universities currently but we've seen in the last year the number -- the increase go down

by hatch to 3.5% and now it's taking what used to take weeks for this annual renewal of these visas is now taking months and students are starting to see that they're having some -- they're feeling like there's some real question about whether they're going to be able to stay at u.s. uniforms. and also they're starting to think about going back, which could have some repercussions for the u.s. paul: as you're saying there's no real sign of any olive branch being extended in that environment, does the importance of this meeting at sacka d of this month in o between xi and trump gaining performance by the day? >> potentially. but this is just a sideline meeting at this point but it looks like the two will try to have some kind of discussions. lots of pressure being put on

that. president trump saying he welcomes talking to him, he's still his friend and yet turns around and makes more threats. there really isn't anything else scheduled besides that sidelines meeting. it's symbol nick importance. ge: president frump -- talking about the possibilities to have u.k., saying if they get rid of the shackles of the u.k. -- how is his visit going so far? >> yesterday it was pomp and circles. he had all the kind of pomp, the symbolic kinds of visits. today is more in the next day, will really be more real detailed meetings. he'll be meeting with u.k. and u.s. business leaders on really trying to get them interested in trying to do a deal and then he will meet with theresa may. he is being -- at this point

there's no real negotiations of a trade deal, obviously, while they're still negotiating brexit but he has made it clear he wants there to be a sharp brexit. he wants that to happen and then the real discussions can happen on trade. he's also, of course, being president trump, made some comments that are unusual for presidents to make about local issues when visiting a country. he's made it clear that he likes boris johnson. he thinks he would be an excellent prime minister to phenomenon teresa mail and he'd ke to see nigel farage negotiate those deals. it will be interesting to see what comes out of wilt theresa may, the current prime minister. shery: thank you so much. still ahead, a pair of exclusive interviews from the morgan stanley family in sydney will speak to australia's largest telecom company later this hour.

paul: first, the c.e.o. of rgan stanley asia, richard ragger in, he's up next. this is bloomberg.

shery: this is "daybreak: asia." i'm shery ahn in new york. paul: and i'm paul allen in sydney. we're heading back to the morgan stanley australia summit. haidi stroud-watts is standing by for an exclusive conversation with the held of the bank in australia. haidi? haidi: thank you so much for that. i'm here at the first ever morgan stanley australia summit where the theme is disruption. this is the australian economy. it's at a cross roads after 27 years without a recession, looking at what's going to power the next round of economic growth as the trade tensions have seen britain and australia lurking in the

background. i'm here with the c.e.o. of morgan stanley australia, richard wagner. great to have you today. >> thanks, haidi. obviously disruption is a very hot thing and when we look to our investors, it's going to be a thing with us for another decade and decades and decades to come. haidi: that's sort of a catch phrase. what does it mean? the key thing is making people think about what might force them to change about a company they own. there are certainly many sectors down here that have been significantly disrupted in many companies and we think that disruption is going to be more prevalent in the next 10 years because we're seeing the evolution of machine learning and robot picks and many other things that are going to impact companies over the next 10 years.

haidi: there's been a lot of criticism that australia's growth has come in spite of inconsistent policy or par liss as -- paralysis. now that we have the election behind us, do you think there's better footing? >> certainly the markets would say that the re-election of the coalition government was good for markets. we saw strengthening markets off the back of the election. the reality is that the australian economy is in pretty good shape. we've got growth at just under 3%. unemployment at a manageable level at around 5%. corporate balance sheets are not overgeared and there is a lot of money out there and obviously interest rates are very low and we'll hear more about that this afternoon from the r.b.a. and all of that is a good backdrop for business. despite the noises globally going on with trade wars.

the reality is the australian economy has had a sustained long period of growth and we don't see that stopping in the near term. haidi: the question is whether they move that 25 or 50 basis points. there are views that they don't need to be doing this or that they should be doing more? >> there has been a groundswell of people in the last week talking about caution around the rate rise but the markets are saying it's happening. it's up to about 90% in for a 25-point basis cut. the reality is inflation is very low. wages growth has been very low and i think that the r.b.a. will be looking at those two factors. inflation well below their target and also looking at unemployment slightly ticking up and saying we're better off going now than waiting. haidi: the fed has come out and said that in order to prop up

the inflation, once other things were addressed, the fed ay do something. you're not much on saying pow poorly the -- how poorly the economy is doing. >> no, i'm not. the fundamentals i mentioned a while ago. the statement of balance sheets, there's no overgearing. interest rates are extremely low. foreign money is cheap. that's not a back drop that says to me you should be too worried about the downside. people are worried about the big global markets, the trade wars and other things. but the goebel markets in the last 10 years have put all those issues behind him. the reality is the u.s. economy is very strong. a similar set of numbers are happening in the u.s. that you see in the australian economy. haidi: when you talk about the

australian economy, i know that liquidity was one of the top 10 risks for morgan stanley. looming condors rather than black swans going into 2019 is that becoming more of a concern? >> no, i don't think so because of where interest rates are at. that makes household dip a manageable issue. the reality is, debt i think is now at a point where the consumer is much more corks of that dealt level and that's probability led to a slightly lower growth rate and slightly lower inflation in australia as the consumer has pulled back. haidi: australia is an interesting market. at a time when you are seeing global volatility in the market. is this the view at morgan stanley that it's going to drive on another couple of

years. is there a sense that there are opportunities to be had here? >> the reality is, i think most investors at the moment are pauseed and are slightly concerned about the downside. despite all of the things i said about the health of the economy. what i think they're most worried about is the earnings of the -- over the next 12g months. share prices affect that. and i think investors are worried about corporate growth sector. and that's affecting the growth attitude right now amongst australian investors. oism i know there was a strong emphasis on the wealth management side of the business a few years ago. has that been a positive benefit? >> yes, i think the world -- ission has resulted in a

equality where a global manager with huge business. $2.7 trillion worth of business under management. i think the world commission has reminded clients that being with a firm that's global, quality product that has a great culture is very, very important and we are seeing that as a result. haidi: we have to leave it. great to have you, richard wagner, the c.e.o. of morgan stanley australia. i think that's a good investment thing to leave things on. he's sounding pretty glass half full at this point, which is a nice change. shery: i know in this requirement, thank you so much. hide hide there for the australian summit. bloomberg subscribers go to your terminals. you can customize your settings

so you only get the news on the industrials and assets that you care about this. is bloomberg. ♪

paul: this is "daybreak: asia." i'm paul allen in sydney. shery: and i'm shery ahn in new york. guggenheim partner c.e.o. is warning that treasuries -- as global bond rally pushes them to a low. their lowest level since november 2017. miner told us the data gives cause for concern. paul: marriott boss has told bloomberg he relatively relaxed about the impact of the trade war on the hotel industry. he admitted he's more apprehensive than in the past but said mat -- marriott's

operations in china depend more on business conditions than politics. > we do know that of the 350 or 360 open hotels we have in china. 100% are owned by chinese real estate partners. we manage that business for chinese real estate investors so our economics are not simple american economics. yes, we're an american economy and earn management fees but the bulk of the profits go to chinese investors. shery: itunes will be split into three new apps. apple is also introducing new operating systems across its devices. showed a new desk tom computer and new features. it's letting developers rework ipad apps to work on mac

computers. for jeers tesla made cash on the side by selling environmental celts. we'll discuss. this is bloomberg. ♪ rg. ♪

shery: this is "daybreak: asia." i'm jessica summers with the first word headlines. a measure of u.s. manufacturing fell unexpectedly last month to its lowest in two and a half years. in a sign the trade war is an increasing drag on the economy. he purchaser manager's index declined, missing the median forecast of 53 in a survey. that's the lowest level since president trump won the election in 2016. meanwhile, president trump has waded into brexit politics at the start of his state visit. he called on the country to throw off what he described as the shackles of the european

union and he also hinted that a big trade deal of brexit goes through. officials say that could weaken the british economy. a swedish court has ruled that julian assange does not need to be extradited there as part of a rape investigation but should still be tried in the u.k. he was arrested last month after seeking political aslim -- asylum at the ecuadorean ambassador in 2012. he's still facing charges in showing n publicly secret developments. conte has been under pressure, attempting to mediate between depy leaders. conte is a law professor and

had no political experience before being named as prime minister. global news, 24 hours a day on twitter.ttic tock on -- attic tock on twitter. this is bloomberg. paul: thanks very much, jessica. let's check in on the markets we have open. the nikkei weaker by .1%. topics looking kind of flat. the kospi looking kind of flat right now. here in australia we're higher by .5%. shery? shery: some big players in the auto industry are turning to tesla for help with their efforts in dealing with intensing -- intensifying u.s. policies.

the first acknowledgement from carmakers they're using tesla this way, or environmental credits. dave, how many money are we talking about here? tesla making money from these celts? >> that's right. it is significant. tesla said it's about $2 billion since 2019 but that amount is accelerating -- 2010. but that amount is accelerating. last year alone it came to $240 million. not a huge amount for a company that has annual revenue around 20 billion as of last year but that amount is accelerating and it comes -- it's not free but it's definitely a high-margin proposition for a company like tesla. paul: dave, is it going to continue accelerate something how sustainable is it going ahead with carmakers boosting

their electric fleets? dave: exactly. you have a lot of competitors coming in that may need less of these but at the same time the emission standards are rising and increasing and more and more countries are adding these kinds of restrictions that will require automakers to balance their fleets and some of them will need to buy credits to do it. tesla's c.f.o. said in april this will play an increasing role and be a significant part of tesla's revenue so in creasing commissions regulations will increase this business for tesla. shery: chrysler in discussions to merge with renault. we're hearing from disk nissan that they're going to spend their interest. what's this about? >> there's a lot of interest that any carmaker has in such an alliance.

they're competitors and doing so everywhere from the dealership level to the supply chain to the factories themselves. all of these need to be negotiated and each company wants to have its interest protected. a good example would be mitsubishi motors, which is currently part of a three-way alliance with renault and nissan. it's introducing its first cross vehicle with nissan based on the outlander motte in the u.s. that's going to be a competitor to some of fiat chrysler products like their dodge ram and also their jet stream line of vehicles. so in a case like that where you would have the alliance supporting the dealership to bring out this new cross platform model, when you do have an alliance or merger of these carmakers, they're going to zoiled which group or dealership to support.

who will be the main suppliers for each vehicle brand and make. it gets very complex and nissan definitely wants to see that it's interests for -- its interests are defending. we're seeing that negotiations g.m. fiat, chrysler, nissan is -- what saying we're inevitably going to be part of this as well so we want our interests defended too. paul: thank you. big tech is scram to believe secure supplies of lithium, which is a key ingredient in batteries. creating a chance for two goebel superpowers. we have david stringer here with us in sydney. david, what moves are these countries make something

>> it's another part of the story we're hearing from david. the rise of electric vehicles, chile and australia, they supply about 75% of all the lithium into the battery supply chain. they see that as a really unique chance to lempling that position. they want to move downstream, into industries that are going to produce more value. both of those nations are used to seeing -- in the case of australia, they've been selling to china and japan since the 19 sixth where it's turned into high-value steel. the same for chile and copper. lithium, they want investment in refineries, in plants producing intermediate materials and the aspiration is to try and have battery producing industries in both of this -- those countries. shery: so with the capital

investment issue here, what are the challenges in moving downstream? >> it's not just a case of capital. there are a lot of challenges for those countries. not least that there are plenty of potential rivals. lots of countries from mammy to ermany who want to.com lithium resources but also it's skills and the kind of industries to have battery plants. what both companies would see -- industry. neither has that right now. also this issue of skill. if these countries really want to move into the most complex downstream sectors, they may have to be importing the skills to do it. a lot of challenges ahead but governments in both of those nations are trying to support in offering subsidies and incentives and it's an aspiration they're grasping

for. paul: let's talk about goment for a moment. perhaps a little bit unloved until threels global risks, mostly dritch by trade started to pile up. what's driving it now? >> that's right gold has been the kind of beneficiary of the trade things -- engines -- tensions and we're seeing more with the whole dynamic of the u.s. and mexico moved into the mix. we're seeing a lot of strength in gold on the back of that sentiment. already holding pretty firm about -- above that $1,300 level. investors are wondering whether 'll see it go as high as maybe 1,750. strong period for gold. paul: thank you for joining us. don't forget a directv function, tv go.

you can catch us live and past in on past interviews. plus, you can become part to have conversation. you can send us instant messages during our shows. this is for bloomberg subscribers only. you can check it out at tv go. this is bloomberg. ♪ ♪

paul: this is "daybreak: asia." i'm paul allen in sids any. shery: and i'm shery ahn in new york. china says it strongly opposes statements from the united states marking 30 years since skin.n man square let's get more from karen lee. is this university widely noted in china? >> it is not. it's forbid on the commemorate

the events in mainland china and to that extent hong kong has become a refuge for people to commemorate this. today is the 3079 anniversary of these events. people will be gathering in hong kong this evening to remember the victims in taijuan there's been collaboration as well. this is something that the chinese government has worked hard to ensure people don't remember. they've scrubbed it largely from the internet and history books and anytime they've been criticized lately, they've defended it. aul: what's china been doing in the lead-up to today? >> china's minister said china has pushed back against comments by mike pompeo and basically said the u.s. is interfering and should stay out of it. shery: what is the significance of this year's anniversary in the current political

environment and is it being noted at all on social media? karen: this is a heightened political environment against the backdrop of u.s. trade sense -- tensions and the chinese have some of the tiggetse control of their internet in the world. users reporting they're not allowed to change their profile photos, that login times are slower, especially with c. isp.n.'s. this is something they've done every year in an attempt to make sure this isn't commemorated across the mainland. shery: how clear is it is that it's actually the government barring the social media to report on this news or just social media sites themselves being nervous about this event? >> it could go both ways but the chinese government has cybersovereignty. it's been a pioneer of that across the world. it has absolute control over

the internet within its borders and it's going to do whatever it can to ensure that people aren't logging on and talking about this service they can. paul: karen leigh in hong kong. thanks for joining us. busy flash headlines. acebook held mark zuckerberg can thank his company that he's still chairman of the board. limited powers would have passed were it not for his voting strength. proposals were ultimately four ed due to his near billion votes. shery: deutsche bank fell to a new low. shares dropped believe six euros for the first time ever. adding pressure to the c.e.o. who's already told shareholders is ready to make tough cutbacks

following the breakdown of takeover talks with commerce bank. paul: boeing is facing new issues with its 737 aircraft, including the grounded max version with wing components that may be prone to cracking. boeing has told the f.a.a. that some leading edge flat tracks may have been improperly manufactured and could pose a say. risk. they allow the plane to expand and create more limit on takeoff and landing. the wings one -- must be replaced within the next 10 days. shery: approval has been given to partner between australia and -- the move comes after the obama administration rejected fears lines' 2016 bid on a pact could harm competition for long haul groups.

paul: automakers offered good deals to clear mounting industries. eliveries rose 3.2%. a marginal sales gain was made. fiat crieser also beat expectations but honda's sales techines were worse than expected. shery: v.w. is going head with lans to lift its heavy truck division. hey make rigs and the i.p.o. could bring a valuation of about $18 billion. v.w. originally planned to sell 25% of the units, could be ken down to 15% or 10% depending on market demand. our exclusive interview coming p with andy penn will talk trade disruption as well as the

telco's cost cutting plan next. this bloomberg. ♪ ♪

shery: this is "daybreak: asia." i'm shery ahn in new york. paul: and i'm paul allen in sydney. a quick check on how markets in asia are trading right now. the nikkei is weaker. today. x a little lower

new zealand is lower too but the kospi is counterintuitive what's happening in south korea. such a trade-exposed market but the kospi putting in another day of gangs. that would be four in a row if it manages to hang on to the close. here in australia we're higher as well and it is a big day in australia, of course, in just about three and a half hours' time we'll have a decision from the reserve bank of australia. 36 of 38 economists surveyed by bloomberg expect the cash rate to be cut from 1.5 to a record low of 1.25%. we'll have that decision at 2:30 local time. morgan stanley's first australia summit is under way, focusing on the disruptive forces hitting the domestic economy. one of the keynote speakers was recently named as the most disruptive c.e.o. in the country.

telstra held andy penn is standing by with haidi stroud-watts. haidi? haidi: thank you so much, paul. andy penn with us here. as paul just said you've been voted the most disruptive c.e. norm. australia. what does that mean to you? >> i hope i can live up to it. thank you very much. there's no doubt we're entering a period of very decisive change vuments of what's happening in technology. telstra sits at the heart of that and we have to be prepared to disrupt ourselves before we're disrupted byos. haidi: sit difficult due to a lack of conte and a resolving door system when it comes to politics and leadership in this company. sit difficult for tech entrepreneurs and companies to make longer term focus and strategies? >> it may or not be difficulties but it's coming so

adapt.er find a way to item stra requires extra mention because you have a lot of legacy and incumbency on the one hand and on the other hand we're at the cusp of the ino vacation that's coming. haidi: telecommunications has been connected in a pretty negatively way when it comes to the fallout in the trade war. --, sit good that you don't don't fend on them? >> you think about the role that telecommunications plays today. it is the platform for innovation. we're moving into a world where virtually everything that can be connected will be so telecommunications has become a critically important form of

infrastructure. probably the most important. that triggers national security interests and considerations. it's not for me to comment on that but we do need to make sure that we have the best network, the safest network and a network that our customers can have confidence in and that's what we do. huawei e you removing funds? > no, if they were not able to manage those, we would consider moving hose -- those in the future. a phone is an individual device so our customers can choose whatever phones they want to buy. they don't necessarily need to buy them from us to connect to our network. we're mostly concerned with security issues. a hand set is an individual device and it's up to the

individual to make those decisions. haidi: where do you see the most opportunities and challenge? australia is a specific and unique market and there are limitations and opportunities. whether are those opportunities and the short balls, if you will, in australia? >> as we sit on the door on the 2020's and the 5-g, there are a number of technologies that are converging at the same time which is going to lead to an incredible period of automation and robotics. when you look around the world today, there are lots of companies that are digitized but they tend to be the companies they call didge active natives or in the services industry. if you look at heavy industry in agriculture, in mining resources in manufacturing, in logistics, lots of industries which are very preview lenlts

in australia today, there are incredible opportunities for automation and robotics in the future to improve product yivet and therefore improve the verall economy in australia. if australia can learn to harness there are those and invest in them we'll be in a very strong position. this as the see last roll of the dice for telstra? >> you have to put telstra's ourney in the context of the broad band network. we have to respond to what the overnment has done and we're responding to that. we're making great progress. haidi: is 5-g, the sort of transformative beacon it's made

out to be or sit more of an incremental progress in technology? >> in and of itself, it is a very significant advancement on previous mobile communication technologies. the second thing is that it's arriving exactly the same time as other technologies are maturing. so you have cloud computing, which is bringing sfadget compute power to the world. you've got 5-g, which is connecting things, not just phones and people. and up a.i., which is bringing the compute and the algorithms to take an enormous amount of data and convert that into insights and information. it's when you bring those three things together that i believe we're on the cusp of very significant technology change. haidi: -- is that something that still concerns you in terms of the change in competitive land same and how long telstra can continue being

the dominant player? >> my focus is on -- in australia and i'm very pleased with what we're doing. i think the only thing i would say in relation to mergers in telecommunicationings. it's important that both sides are taken into account. telecommunications is an incredibly capital-expensive industry and more so in the world of 5-g. we've invested close to $15 million in the last three years and that's crucial to underpin great telecommunications experiences for customers and of course, the more operators you have in the market, the harder that is to maintain. we don't want to end up like central europe. ♪ the latest innovation from xfinity

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>> it is 9:00 a.m. in beijing. welcome to bloomberg markets "china open." get your top stories today. james bullard a rate cut soon to counter growing economic threats. focus.rba in policymakers are expected to end -- as the economy slows. bracing for antitrust inquiries. shares tumbled on what could be a drawn out fight with washington.