>> good morning. i am paul allen in sydney. we are over an hour away from the market up in japan and korea. >> good morning from new york, i am shery ahn. >> i am sophie kamaruddin in hong kong. looking to "daybreak: asia." >> our top stories this monday, g20 ministers water down their statement on the trade war admitting cause for pressing need to resolve the escalating tensions. president trump tales of

migrants deal with mexico, but there is some confusion over what may have been agreed. the nissan-renault alliance comes under pressure. france wants to reduce its stake, while japan's as it is all or nothing. >> let's get you started with a quick check of the markets. u.s. features gaining half a percent after the u.s. and mexico agreed on a trade deal. president trump indefinitely suspended his plans to raise tariffs on mexican goods. that came after the close on friday. we still some markets are rally more than 1%. the nasdaq saw its best four-day gain since january. we had weekly jobs numbers coming out. those spurred speculation that the federal reserve may cut. the 28.700 above level. let's see how we are setting up for asian markets. at the nikkeig futures in chicago arriving at

1% for the benchmark you we could see gains in seoul despite warnings there could be downside risk to growth. u.s. features are gaining ground. on the agenda, we have japanese gdp figures and the trade numbers. that reminds me australia is closing today and we will have the china hong kong trade numbers. the aussie dollar retreating ahead of the chinese trade figures, off .1%, hopping around the seven day handle while the mexican peso is the outlier, gaining 2% against the dollar on the u.s. mexico trade truce. paul? let's get the first word news with su keenan. >> we start with hong kong, which has seen one of the largest the menstruation's since china in two decades ago. hundreds of thousands marched

through the center of the city to protest legislation that would ease extradition to mainland china. organizers claim more than one million people took part. despite the turn outcome of the hong kong government indicated it would push ahead with the bill. calling for talks over the huawei blacklist. it's as microsoft and others were told to can find with the van and that would be to competitions for future business with china in sector participants. makesoft was made to not "hasty or ill-conceived decisions about huawei." moving on to the front runner of the next u.k. prime minister. we are seeing an even tougher line on brexit and holding back money the country owns for pass agreements. we are talking about boris

johnson. he is the favorite to succeed theresa may. his hard-line stance has worried the market. a no deal brexit could see the economy shrank by 8% with house prices falling by 30%. global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am soon kim. this is bloomberg. shery: trade wars and growth risks have dominated the agenda at the g20 finance ministers meeting in japan. the advertiser ahead of the main course. kathleen hays is here for the talks. president trump's decision not to put tariffs on mexico eliminates one big trade issue. it is doing nothing to solve the other big one. >> the big one, and i love the analogy, the metaphor about appetizers and main courses.

an appetizer can make or break the entire meal. in this case, the appetizer served up at the g20 was, yes, we can see the trade. the trade war in the trade tensions are trying to -- we seeing real damage to the global economy. we don't have a recipe yet to find an end to it, even suggest it to the leaders. starting off the weekend with this decision by donald trump to ourthat x go has met demands and we don't need to put those tariffs on, that was certainly a big topic of conversation. she definitely gave the thumbs-up. thatas under no illusions it was the end to the trade war. >> it is creating a more -- more publications. -- complications.

it creates less room to maneuver when it gets too big politically and security for both sides. that is what we see as the potential that it will be longer than just the trade. >> i think it is an interesting observation. there are politics involved. it is more than just trade negotiation. looking at a battle of two economic giants of the 21st century. japan's finance minister said, why don't we try a multilateral approach? bilateral approach isn't working. there is no sign donald trump is ready for any kind of local letter was and yet. of multilateralism yet. he a college is this is hurting global growth. steve mnuchin spoke with our reporters at a press gaggle on

saturday. he was clearly did not expect anything big to happen when he met last night with the head of the people's bank of china. they were together a lot on these negotiations. he to deduct the talks were constructive. i guess that is better than nothing. the ball is in osaka's court. ministers and central bankers could not find any way to do anything except it -- agree that trade is hurting the global economy, it's hard to believe that leaders will go much further. paul: the problem was identified. trade is global -- weighing on global growth. was there and agreement that the world may need more stimulus? that was a big source of conversation. are stilladers saying, including governor kuroda, there will be a second have pickup. they are seeing signs that things are picking up.

asked, i spoke to ignacio visco, head of italy's central bank. visco said, we think things are in a good place, but if we have to, we have the jobs report on friday, increasing the bet the fed will cut rates not at the june meeting, but the july meeting. jay powell opened the door to lisa go. jobs reports saying hey, we are looking for signs of damaged economy. that increases that idea. saidn to what mr. visco when he endorsed mario draghi's position. if things do not go how it is

predicted, we will act. there is no question. it gets back to a problem. central banks don't have much ammunition left. they don't have many wants to fire. countries like italy, there is a budget battle going on with the eu. getting ready to bust their budget cap. not too many answers, with a lot of big issues. we will see a president trump or president xi after all this uncertainty and global economy turmoil, maybe they're closer to getting the talks back on track. paul: goal economics and policy editor kathleen hays. president trump has hinted at additional measures for mexico after the two signs signed a that avoidsxico tariffs. he treated about clauses that have not been made public, encoding a pledge that mexico will buy more u.s. agricultural produce. mexico denies any side deal on

food and said the subject was not even brought up. let's get to the bottom of this with our washington editor ros krasny. what is the side deal the president has been tweeting about? ros: it seems like there was no side deal that -- in the talks held last week. mexico may end up buying more and products if the usmca the replacement for nafta is ratified by u.s. congress and by mexico and canada later this year. going into those talks, the top officials were insisted that wrapped up on a discussion of border protocols, enforcement at migrant protection. it seemed like president trump was getting ahead of himself. the next in ambassador on u.s. chance the usmca, and a

for a surge of mexican farm buying. mexico is already a very large buyer of farm products from the u.s.. much they could build that up. there will be some potential to buy more u.s. products. it seemed like nothing is being formalized on that. shery: does that mean terrifies could come back? ros: yes. said,k as steve mnuchin this deal with mexico is subject to enforcement. president trump has been very angry about the surge of people over the u.s.'s border coming through mexico. there is now a plan in place. move to already on the stop this human ways. there will be regular meetings

between the u.s. and mexico. if the u.s. and president trump , thet see the progress terror threat could come back. now, but the table for nothing is for certain three or six months down the line. paul: this issue with mexico was solved relatively quickly. is there a bottom message about the way the president prosit -- president's approaches trade deals? ros: his great friendship is very interesting, his trade tactics. -- his brinksmanship is very interesting, his trade tactics. now we think about president trump as tariff man, he is also a 401(k) man. he loves it when the stock market is up. thereated on friday about dow jones having the best week

of the year. putsy realize that when he up tariffs, stock market goes down. we have to look ahead to a potential meeting with president she in japan -- president xi in japan. what -- it'sd know possible to know what president trump's thoughts are going into that. there's always a question about who is driving the bus in terms of u.s. trade policy. is it the trade hawks or the trade doves like treasury secretary mnuchin and others? don't really know who is taking the wheel at the moment. couldossible that china be more confused about president trump's negotiating stance based on what just happened with mexico. we will just have to see. paul: bloomberg washington editor roz krasny. asia, we on daybreak

assess the state of america's trade policy with a former trade negotiator who worked on nafta across to presidential administration's. shery: up next, after week readings for the u.s. job market, more rate cuts from the fed could be on the table. we ask when, and by how much. this is bloomberg. ♪

shery: this is "daybreak: asia ," iamb shery ahn in new york. paul: i am paul allen in sydney. the nikkei futures are getting grounds. get over to sophie in hong kong. we will be gauging reaction to trade and gdp did. first-quarter growth is likely to be upward and a stronger reading could reduce the chance of another delay in the sales tax hike. as apledged to a policy

way to soften the blow. it wants to reduce pressure on consumers. the government is set to produce a plan this week to cut wireless fees by 90%. there also attempts to buy on barnier's regional jet business. have rejected there tends to buy them. nissan on the radar. not vote for the change of plans by nissan at the coming shareholder meeting. following weak u.s. job data on friday, analysts say the slowdown in u.s. hiring could get even worse as a trade war threatens employers. .et's dig into the numbers always great having you. let's look at the latest numbers. it was a flop.

it was very surprising. >> we have gotten used to it now. shery: were the week numbers weak enough? i think they were forced into taking action in january with the pivot. that was a big surprise. inflation is been cycling down since a year ago. that was causing them trouble. now, with the jobs report coming in weaker, i think it begins to give them cover. the markets have run ahead. they are priced in some rate cuts. with the yields on the 10 year 2%, those are really pushing the fed. they don't have cover with the unemployment rate low. with headline gdp still looking ok on the surface, very hard for them to cut.

the need to some cover. maybe this is the beginning. it's probably not enough, but it maybe it is the beginning. do you buy into the reasoning that inflationary pressure is slowing down and that is transitory. lakshman: not at all. there is a cyclical downturn inflation. there are business cycles and growth. you can see ups and downs in growth. we are in a growth range cycle. there are separate cycles and inflation. they don't lineup. the inflation cycle downturn began last summer. it caught the markets and the fed by surprise. the markets have been playing catch-up, looking at the inflation falling and saying, the fed is going to have to cut here. word, something that is

cyclical is not transitory. it is something that persists for couple of quarters. you have a future inflation gauge that you say saw this week inflation -- weak inflation. can you see it strengthening in the future? lakshman: the feature inflation gauge islakshman: a good indicator of cycles inflation. we got an update on friday, and it was a fresh three-year low. the bottom line is there is no cyclical upturn in inflation in the next few quarters. spells all you need to know with respect to where inflation is headed and the kind of pressure italy putting on the fed -- it will be putting on the fed. my suspicion is that what we saw happen, all of this pressure for rate cuts, is not going to go

it peaceful of moment with a trade deal rhetoric or something like that. this is still going to persist. something that a cyclical goes on for a few quarters. that is the message from the future inflation gauge. was aif there breakthrough of the trade front, surely that would be a positive signal? lakshman: h-share or. we could wave a wand and say all this trade stuff has got resolved, would that be a positive? absolutely. but what is important to understand is that the cyclical downturn in global industrial growth, a separate cycle, a very solid global cycle, global activity, because we are all making parts. glittery -- globally has been in a downturn for over a year. it began before the trade deal is routed. -- erupted.

it doesn't get resolved because the trade deal goes away. it is a negative. it is weighing on the cycle. removing it is a positive. it does not get rid of the cycle. it still has to run its course. you see that and pmi's and things like that. shery: shery: european and chinese pmi's, the u.s. recently, of course. the gtv chart showing china's monetary policy tools. we are talking with the rrr cuts in the top panel. they move down. the london rate, not so much. had anc governor interview in which he said china had tremendous room to adjust monetary policy. which way would they do that? lakshman: to the downside. which the command -- mechanism? any of these levers can be pulled and will be if the cycle does not turn. particular, overall

economy, slowing. not falling out of bed, but continuing to slow. the industrial sector, tied into the global industrial cycle is still decelerating. that is putting pressure on a significant importance sector of the economy. that may warrant a new letter to be pulled. shery: let's see what happens at the g20. great having you with us. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg's a priors go to dab go on your desk db go on your terminal. -- db go on your terminal. this is bloomberg. ♪

shery: this is "daybreak: asia,"

i am shery ahn in new york. paul: i am paul allen in sydney. a check of the business flash headlines. the french finance minister says france may consider cutting its 50% stake in renault to help strengthen the line with the sons giving the g20 talks. his comments follow the collapse of renault's merger discussions with chrysler. shery: fu sans international tour is immune a is in talks to buy thomas cook's tour operating business. sky news say they are working with jpmorgan on a potential offer. f hong kongu listed is alreadys thomas coates biggest shareholder. is part of a wider shareholderan. technologies is buying raytheon in an all stock deal that further expands its presence in the aerospace

technology after buying rockwell last year. it will become raytheon technologies with $74 billion in sales. united has become more focused on aerospace after spinning off its carrier climate control and elevator units. shery: the fourth division of kind -- of a chinese conglomerate has filed for an ipo in the u.s. they listed the size of its offering at $5 million. revenues rose to $1.3 billion last year. profit fell to $62 million. they say they will use some of their ipo proceeds to repay loans and restructure. coming up, we will bring you our interview with the italian central bank governor, including his thoughts on the ecb and italy's monetary policy. this is bloomberg. ♪

asia.this is daybreak let's get to first word headlines. treasury secretary steven mnuchin said talks with the people's bank of china governor were constructive but no major progress is expected until the president's trump and she meet -- xi meet in osaka. furthers threatened action. the stephen mnuchin said the u.s. would be happy to resume trade talks if china wishes. president trump hinted at additional measures agreed by mexico a day after the sides agreed on a deal on migration that averts threatened tariffs. he said things have not been made public including a pledge mexico will buy more u.s.

agricultural produce. mexican officials denied this and said the subject wasn't brought up. -- japanese prime minister finance minister has taken aim at big businesses for holding cash. speaking of the g20, he said -- $2 trillion and said the money should be used to stimulate the economy. capital spending grows up for a 10th straight quarter through march, wage growth and consumer spending remaining week. -- weak. canada will announce a ban on single use plastics. the cbc said the move could come into effect in 2021 and cover straws, plates and cutlery it is comes after the european out -- european union outlawed things that break up into smaller pieces and pollute the environment. [speaking simultaneously] shery: let's see how we are setting up for the asia open.

sophie: futures are nudging higher for the nikkei, again of .1% while the yen is on the retreat. the way this risk on his going, the mexican peso gained as much as 2%. the they -- it is at 19.10 potentially this monday and also treasury yield rising of 5% to 10 basis points. lower, off sharply 4.6 basis points. checking in on oil prices, brent and wti building on a two-day gain continuing to make a modest recovery after wti entered a bear market held by that helped by more over the day. optimism is taking a hit with funds turning bullish. shery: let's turn to a big deal in the u.s. united technologies has agreed to buy raytheon in an all-star deal that is one of the defense industry's biggest ever

transactions. su keenan has been tracking this. it is a surprise and a game changer, a merger of two giants in civil aerospace and defense combining together or they will put airbus out of being number two and they will be number two behind boeing. let's take a look at the numbers under the terms, shareholders will receive 2.33 shares, all stock deal and the combined company for each raytheon share they buy, shareholders of united technologies will own 57% of the new firm on a diluted basis and raytheon will own 43%. what is fascinating is the amount of sales they will have. sundaympany was reported and so monday will be the first time for a lot in the market to trade on it. it is going to be a behemoth. some would say a bit of a game changer.

these companies are both from new england, one-based where i am from. it will have combined $75 billion in annual sales. impact on thethe defense sector? su: they say it could define the future of aerospace. it is a civil and defense combined together. these are companies that between the two of them make everything from fighter jets and missile defense programs. their expertise in the area of andr, in missions cybersecurity is in play. a lot of early commentary on the computer in terms of analysts weighing in is it is a deal that makes sense. some say it is a deal that was a surprise. there was a report in the wall street journal saturday but even that grabbed people offguard, united going under restructuring but the deal came together and it is going to be called united

technologies and raytheon, they are combining their name, raytheon technologies, the name of the new company. paul: the european central bank will take further steps to support the region on trade appear this is according to the governing council member and president of the bank of italy. the downward -- he said them with kathleen hays. -- sat down with kathleen hays. >> has you may have noticed in our last meeting in frankfurt, there was not a total consensus on maintaining an easy policy stance but also which means also taking into account the fact that we maintain interest rate of these very low [indiscernible] and actually negative as far as

bank reserves are concerned for a longer time than we had decided. after all if needed. [indiscernible] including those you have it mayed if needed, somehow failed to be brought objective.e with our our objective is in this case goes hand in hand with the revival of demand which is if you want what the federal reserve is pushing with their dual mandate. we don't have a dual mandate but it is clear that the revival of inflation towards our price ability -- increasing domestic demand go hand in hand in europe. kathleen: would you say as long as this uncertainty hangs over consumers and businesses, that at the very least the ecb will

maintain the current level of stimulus even if it doesn't take these additional steps to add more? it is very favorable. we called for other policies to complement the ecb, fiscal policy in this case. fiscal policy, we know that there are differences across countries but the kind of countries which are fiscal space are calls for helping on that side. it is mostly an issue of composition. go howgs somehow do not it is predicted, we will act. there is no question. is -- he is the governor of the bank of italy. let's get you headlines crossing the terminal. the nissan ceo has been talking

to reporters today. he said he agrees with the on thepresident importance of the auto alliance between the sun and -- nissan might reduce its stake in renault and encourage a closer relationship with the sun. for more on the long-running but shaky alliance between these two, we will have the development over the weekend highlighted, the ongoing deep divide good let's get over to tokyo and conglomerates editor david. why is nissan opposed to the french government owning a piece of renault? >> their view is the french government is a source of , andon in this alliance this goes back to when renault was seeking a merger, pushing for a closer alliance with the carmaker at a time back when

they were doing much better and before this carlos ghosn scandal. those tensions have been brooding for a long time. as nissan sees it, the source has been the french government. it is easy to see in these negotiations with fiat chrysler and renault the french government does play a strong role in renault and could play a spoiler role as well, sticking into the interests of the french government and the french people really in terms of jobs, making it more complicated and difficult to proceed on the industrial logic alone of mergers and alliances in an incredibly complex automobile industry. it was the french government that prevented, seemed to prevent fiat chrysler merger with renault because they did stall and ask for more time to speak with nissan about this. now nissan says the french government is the source of the tension.

walking away from the deal and not helping the fact that nissan has tried to implement governance reform measures, but when they -- now we are hearing renault could abstain. specifically renault mentioned the three committee system nissan has proposed to put in place to improve corporate governance should not be used as a threat to the power of renault in the alliance. i'm not sure how that would play out. in general there is support for covering -- governance reform given the carlos ghosn case. whether or not you believe he is guilty or innocent, it is indisputable there was corporate governance lapses and nissan has to do something. this three committee type structure is a broadly accepted way to improve corporate finance and give more oversight to the board of what exactly is going

on in terms of ceo pay and those things. i'm not clear why renault exactly would believe this three committee system could be used against of them but they raised that objection and it is clear they have the power to block this. they own a 43% stake. this needs to thirds for approval. it seems possible this is them playing their power card and saying if you don't go along with us, we will not go along with these reforms which are important for nissan. shery: thank you so much for that. dave mccombs in tokyo. we assess the state of america's trade policy with a former trade negotiator who worked on nafta across two residential administrations. he joins us next. this is bloomberg. ♪ this is bloomberg. ♪

\ >> the trade tensions, trade

war, you want to call it, and it creates uncertainty. it is the uncertainty of growth. creating -- it creates less room for maneuver when it starts seeing the issue with these senses politically for both sides. , that thist we see will be longer [indiscernible] >> we all hope the trade tensions will vanish. especially because there is an agreement that could be reached between united states and china. this would be very helpful. paul: the finance ministers meeting, talking about trade.

while it looks bleak, the next guest says it doesn't mean things can't be put together. trades a former u.s. negotiator and he joins us from hong kong. you heard some remarks. and thesury secretary governor of the pboc did meet. there is a picture of them smiling and shaking hands. mnuchin said it was constructive and candid but not really for negotiating. is that really the best we can say, at least they are willing to be photographed and have a chat even if there is no solution around the corner? case with the meeting, we didn't see any major rate through's, bold policy pronouncements or anything along those lines. i do think there was one noteworthy development from my point of view. i was struck by the extent to which secretary mnuchin was

fairly forceful in defending u.s. trade actions and at least attempting to win the blame for the current impasse on china. this is noteworthy because secretary mnuchin has traditionally been in relative terms of trade dove within the trump administration. i thought it was a bit of a departure for him. there has been a lot of ramping up of the rhetoric. we have seen companies targeted, and in china there is the huawei story. president xi visiting a rare earth's mind. are they painting themselves into a corner, or is there a way out? >> i think there is. certainly the situation right now where we are at an impasse, both sides digging in their heels and seemingly more interested in assigning blame

than getting things back on track again. but keep in mind any trade negotiation can be a long dance. what we are seeing now could be a stumble or a stutter step. don't overreact to where we are now. even successful trade negotiations, it is not uncommon for them to have one or even two near-death experiences. that might be what we are going through, going through now. from my point of view both isnarios deal or no deal still entirely plausible and on the table. given how deep rooted these perceptions of what is wrong with the trade relationship are between the u.s. and china, would any deal that comes into fruition in the next few months be anything more than a face-saving sort of symbolic deal? you put your finger on

precisely the point because anything we are likely to achieve will be by definition a fairly superficial agreement which creates breathing room, temporary peace but doesn't really address the key underlying issues which is the fact we have fundamentally different economic systems which are struggling to coexist within a single global trade architecture predicated on entirely western economic models. this is certainly not going to get wrapped up in a couple of months. let's turn to the other nafta.l, you worked on would you say the usmca has been saved, or will the u.s. congress not be able to get to an agreement? stephen: i think it is premature to say nafta has been saved. voiding the terrorists and reaching a nominal agreement is

thatul but keep in mind political consideration, particularly with regard to the election, areial now front and center in washington, dc . in agreement with mexico is hopeful but i don't view by any stretch of the imagination this has guaranteed approval of the nafta agreement. what are your thoughts on the interesting all caps tweet from president trump that there has been a deal on agriculture that mexico knows nothing about apparently? it is a head scratcher because no one else seems to be familiar with exactly what he is talking about. i don't know if he is making reference to the presumption that under a revised nafta, u.s. agricultural exports will nobodye, but frankly seems to know exactly what the

president meant and for better or worse i am not able to shed light on that. shery: we are trying to figure out what this is about. stephen, thank you for joining with us on the latest on trade whether china or nafta or the usmca. we are looking forward to data out of japan. we are expecting fourth-quarter gdp numbers and april current account data. we see for the numbers we are getting a surplus of ¥1.7 trillion, below what was estimated for april. these are preliminary numbers. this is above the estimate but still below the number from march when it came in at ¥2.8 trillion area 1.7 is the number. we are awaiting the trade balance but this is coming at a time when we are seeing the flowing -- falling global yields weighing on primary income but

japan is still remaining pretty stolid. -- solid. paul: we have gdp numbers for the first quarter, in line with estimates. quarterly gdp increasing .6% year on year, annualized 2%. this is exactly what economists had forecast. we are waiting for potential revision to the fourth quarter numbers, there were expectations fourth-quarter gdp could be revised upward but we will have to wait and see. for the meantime those numbers are coming in as expected, to percent on the year. -- % on the year. you can catch up on past interviews and dive into securities are functions we talk about her you can also become part of the conversation by sending us instant messages during our shows. this is for bloomberg scriber's

only. you can check it out at tv . this is bloomberg. ♪ s is bloomberg. ♪

paul: this is daybreak asia. i am paul allen. shery: i am shery ahnshery:. let's get a check of the business flash headlines. the sports division of the chinese company filed for an ipo in the u.s. they listed the size of the offering at 500 alien dollars. revenue rose to $1.3 billion but profits fell to $62 million. the company will use some of the proceeds to repay a loan related to the group's restructuring. ceo will anadarko receive a golden parachute worth $98 million following their $38 billion sale to occidental. this is part of $300 million to be shared among six senior

executives. this would be the largest takeover in the oil industry in four years. microsoft says the next xbox will be four times more powerful than the current counsel -- current console. flatnesswill reduce when loading games and be released for christmas next year with a new version of the popular halo. xboxsoft said that streaming platform will launch in october. paul: fosun's to resume unit is in talks to buy thomas cook operating. they are working with jpmorgan on a offer but discussions are at an early stage. the hong kong listed fosun is already thomas cook's biggest shareholder and is part of a water conglomerate that creates

businesses from insurance to pharmaceuticals. shery: australia closed for a long weekend but japan and south korea getting underway at the top of the hour. let's review the market open. sophie: we could be looking at a positive future, nikkei futures with a gain of .1% for the benchmark and the yen on the retreat. not seeing much in the way of reaction for gdp numbers so far. when it comes to stocks, we have auto stocks on the radar in japan and south korea with u.s.-mexico tariff truce. mazda is relating on kia motors to export and 80% to 90% of 300,000 vehicles it makes a year . we are watching japanese telco's on a report that the government is set to propose a plan by this week to cut wireless cancellation fees by 19%.

on the radar we are watching the sun as renault -- nissan as renault reported on the governance revamp plan at the upcoming shareholder meeting. this at any difference of opinion will be discussed. thanks very much. let's get a quick check in on a markets. the restraint -- new zealand has been trading, currently higher by .1%. in australia we are close for the queen's birthday even though the queen's birthday is in april, but she is the queen. kospi futures higher by .3% there nikkei futures also pointing higher by a little over 1%. risk on day. shery: you are so funny. the queen can do whatever she wants. we are seeing the japanese yen holding above 108, a bit of weakness, seeing the dollar gaining .2%. that is why we see weakness for the aussie dollar.

offshore yuan holding steady after it fell to its weakest level since november. plenty more to come on the next hour of daybreak asia. this is bloomberg. ♪ is bloomberg. ♪

paul: good morning. i'm paul allen in sydney. asia's major markets are about to open for trade. shery: good evening from new york, i am shery ahn. sophie: i am sophie kamaruddin in hong kong. asia." to "daybreak: paul: our top stories this monday, g20 ministers water down their statement on the trade war amid calls for pressing needs to resolve the escalating tensions. president trump held the migrant deal with mexico, but there is some confusion as to what was actually agreed.

itsy: hong kong sees biggest demonstration of years as hundreds of thousands protest the government's controversial extradition bill. we have breaking news at the moment. we are seeing china forex reserves for the end of may coming in above that $3 trillion trillion..1010 the estimate was for slightly lower than that. coming in higher than expected. we were expecting the foreign reserves to drop slightly, mostly because of the change of the valuation affect driven by the dollar rise. it is coming in higher than expected to you forex reserves for the end of may for china coming in at tree .1010. that's trillion. we are seeing others for asian markets. we have seen the u.s.-mexico trade deal late friday.

let's see what is happening with the market action. sophie: that trade truth can be filtering into sentiment today. australia is off-line this sunday. stocks are gaining ground on the nikkei. up 1.2%. topix on the front foot as well. japanese economy growing at a faster pace in the first quarter. the yen is holding a today climb. trading at one await-109 range. -- at the 108-109 range. let's check in on the board in seoul. the kospi is up .8%. keeping an eye on auto stocks and cosmetics. investors will have the government warning of downside risk to the growth. checking in on kiwi stocks. extending gains for a fourth straight session, about 10,000 points while the kiwi dollar is set to snap a six-day advance.

the aussie is retreating from the seven-day handle. the mexican peso rising as much as 2% against the dollar on the u.s.-mexico characters. offshore yuan looking steady after this trade on friday. goldman sachs has 743 months for the cmy. it doesn't seem to be in line for the pboc. 10-year rates are for basis points. ofsecurities sees a rise 5-10 basis points today. let's get the first word news with su keenan. > we start with the treasury secretary, stephen mnuchin, who says talks with the people's bank of china governor were constructive, but no major progress expected on trade. negotiations have been on hold since washington ramped up tariffs and threatened further action when he said the u.s.

would be happy to resume trade talks in china. hong kong is seeing one of the largest demonstrations since to return to china two decades ago. hundreds of thousands marched through the center of the city and protest at legislation that would ease extradition to mainland china. organizers claim one million people took part. police have said it was only 25 -- two at 50,000 -- 250,000. regardless of the size of the demonstration, the hong kong government said it would push ahead with the bill. china has called on global tech companies to talk about the blacklisting of huawei. it says microsoft and others were told to comply with washington's ban. it would likely lead to complications in future oh business in china for all participants. microsoft was asked not to make "risky ill-conceived decisions

about huawei." president trump has hinted at additional measures agreed to buy mexico, this, a davies -- after the two agreed on a deal migration. it posted tweets about parts of the agreement that have not been made public. that includes that the u.s. -- my school by more agricultural products. mexico will buy more u.s. agricultural products. mexico has denied this. global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. trade wars and growth risks dominated the agenda at the g20 finance ministers meeting in japan. the appetizer head of the leaders' main course at the and of the month you kathleen hays is there for the talks.

president trump's decision not to put tariffs on mexico eliminates one trade issue but does nothing to solve the other big one. kathleen: absolutely. the big one is getting trade talks back on track, getting both sides back to the negotiating table. at least president xi and president trump at the leaders meeting at the of the month will have a chance to do that. don't expect too much if past is prologue. we didn't see anything coming out of this weekend that anyone could agree on accept that the trade war is hurting global growth and they are ready to do something about it. trump toion by donald say i got what i wanted, mexico will change their immigration practice is, help us block people coming over the border, no tariffs there. good news to everyone year area finance minister

sell sees a protracted trade war but says this move was a plus for emerging markets and she is a little more hopeful on the outcome. hope this will also have a with the u.s. and china. this is just a good development. itself is going to be affected >> jamie: by this policy. kathleen: the other officials do seem help -- opal. ,apan's finance minister said let's try a multilateral approach. the bilateral approaches networking. we don't see donald doing that but maybe he is a point. germany's finance minister says he hopes the train tensions will the -- trade tensions will vanish. of chinae's bank governor and steve mnuchin met

on sunday. steve mnuchin did not raise hopes that anything would come up in a press junket. he said the talks were candid and constructive. that is better than acrimonious. bottom line, they did water down communique to the take out certain words. it leaves this meeting with the same shadow hanging over it which was here when it started. that is what will happen with this u.s.-china trade war. headspace backdrop in the photo, quite a powerful metaphor. let's talk about some of the other discussions. was there an agreement that the world might need more stimulus? >> it's interesting.

everyone agrees it may. they are ready to do it. many of them say, maybe not just yet. the indonesian finance minister saying the move by the fed to open the door to rate cuts is a plus for indonesia to follow along. there is a downside aspect. they're cutting because the economy is slowing. that is not good for her economy or emerging markets. , marioopean central bank draghi said, if this gets bad enough, we will not only by more bonds, it might even cut rates. this was echoed by the head of visco,k of italy ignazio when i spoke to him. things do not go how it is predicted, we will certainly act. there's no question. that weak u.s. may

jobs report underscore into the markets that the fed's statement that we will hold still until we see real evidence that the solid economic fundamentals of the u.s. economy are being undermined it by a trade tensions, that this is a sign that this is what happening. they would discuss it at the june meeting in a week. the rate cut people are looking for is probably not until july. the u.s. cutting rates, if you are in any other part of the world, if you see banks in the advanced nations doing it, it gives the others room to follow in their steps if needed. we shall see. giving anleen hays eye on things. the mexican peso jumped 2% as monday trading kicked off following the new deal to new u.s. tariffs. let's bring in joanna austin

for. we have payrolls on friday. what has the impact been? is a bad news is good news for markets. people in markets want the fed to be easing at this point and if you have a weaker report, it may increase the likelihood, and that also means you have a weaker economy possibly, but the markets took it as good news. the s&p 500 finished with its best week since november. now we have the deal with mexico , and futures are up. things are looking fairly good this morning. shery: how about oil extending gains? is this a supply story again? it is a bit of a next. you have the optimism from the markets.

it could be potentially risk on as well. supply is an next bag. you see some reports that producers are cutting back, but i think there will be volatility expected within the crude market for some time, just as you have the trade issue and opec looking at what is going to do, so it has been a back-and-forth there. shery: we are talking about the trade issue, at least with this issue as mexico seeming to be resolved. china continuing, are we going to see more concern over demands? joanna: definitely. the overarching markets issue is that people still are hoping that trump will see this as something he needs to resolve before the election cycle gets going. china will also want to make a deal.

as others have said, it will have to wait for the trump she meeting -- president trump-present she meeting and see whether there is a sign that they are working toward a resolution. the markets trading at the moment in asia. let's check in on on what is moving. want to highlight auto stocks, rising in tokyo as well as in seoul you -- seoul. mexico is a pre--- t production have for carmakers from moscow to general motors. nissan has three plants there. focus as itsn relationship with were now is under further pressure as the french carmaker could abstain from voting on a proposal at the next agm. it indicates it is open to

cutting its 50% stake in our now to shore up the auto alliance. trumpsstill ahead, how tariff truce with mexico could play out for the new nafta. we have that expensive interview with the canadian finance minister from the g20 in japan. paul: we look ahead to china's latest trade data as we gauge the impacts of the trade war. this is bloomberg. ♪ paul: this week brings a

shakeup of the world economy. we're looking ahead to inflation and industrial production of are some china, retail data from the u.s. and from central bankers and europe. we have with us alicia garcia herrera, chief acia pacific economist for natixis asia limited . g20 and start with the

smote the rhetoric that came out of there in terms of trade. that they --me out they communique came out that .aid they would take action a global summit sort of statement. is there anything the g20 can do to ease the tension? not really. this is a bilateral issue. the matter how much we europeans are tryingnd the g20 to make it multilateral, they will not agree to that. they thought it was a good idea, they would have started with a multilateral agreement on china before hand. basically putting china and the corner. i think it will not be the way forward. it will remain bilateral and this will give them propulsion. they are doing their utmost to help the u.s. economy.

paul: in terms of china we had numbers out, foreign reserves at $3.1a coming in trillion. has china placed better in this trade war than the u.s. expects? i charles seville, head of americas sovereign ratings at fitch never would have imagined any did that we are lower in terms of reserves. the pressure has been strong. data that every forex trader checks is for unreserved. i would not have expected anything else. the question that is most whether it is $3.1 million that was stands pressure, it is really all about what china wants to do with these reserves. in other words, it should -- if china want to continue to buy companies,high tech it is fine. a lot of those purchases are

debt-financed. they are not really using their reserves. it would become handy only if china would withstand massive capital outflows. if the chinese were not to believe in china's strength, and a certain economic strength. number point in time, no is enough to withstand the pressure. we should not focus on forex reserves altogether. shery: we are going to get some new lending numbers. credit expansion in china has been choppy recently. what are we expecting when it comes to new lending and the economy act out -- economy? alicia: the right. i was expecting a much faster number, especially bank lending. it has been very choppy, which -- basically what the leadership was saying, was please land.

we have not seen that throughout. we saw a big increase, but it came down again. that -- thisne time, but this way, it is getting serious. i think banks are going to follow and they will land. we will see better numbers there, because there is no way the pboc is going to get banks to issue perpetual's and they will continue to deal with much smaller banks and banks without them lending to the private sectors. i would expect much better numbers, especially on bank lending. one side has increased massively in the first quarter. 60% growth in the onshore bond market. what is really dragging behind his shadow banking. shery: what sort of numbers are we expecting out of japan given

the reliance on china? set of number -- a set of numbers out today, including one just crossing the terminal, the trade balance, now falling ¥98.2 billion instead of rising ¥5 billion for the month of april. we have first quarter gdp numbers as well. staying stable and steady for the first quarter. is exposedpan, being as they are two china, the rest of the global economy, and more pressure on a stronger japanese yen, investors seem to be wary. after a wonderful 2017, we have not seen any relevant good news for the japanese economy. neither on the inflation front or growth. the truth is that beyond the impact of tariffs and the value chain, which is important for

isan, the ultimate truth that wage growth continues to be extremely low. productivity as well. the japanese economy continues to suffer from the very same structural problems they have been suffering from for many years. that is not changing. we have not seen any major structural reforms in japan for a long time. is more than the trade war we have been seeing. paul: here in australia we have an important piece of data out this week. it will be the jobs numbers. that will be a closely watched one by the reserve bank. is goinger weakening to open a lot more easing. what are your expectations their? alicia: i never understood the written cuts in the sense that, i understand that there -- the labor market is not at its utmost, but it is

not as weak in my opinion. they are playing with these ideas that it wants to do everything primitively. it would be fine if the world goes in that direction. if they cut rates quickly. else, we -- it weakens your currency. there are a lot of exports of services you can get. in other words, i know that most likely, more will come. i want to say, is it going too far? that is my thought about it?. alicia garcia herrera, chief acia pacific economist for natixis asia limited . you can get a roundup of the stories you need to get with the

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shery: this is "daybreak: asia ." paul: i am paul allen in sydney. it's get a latest check of the headlines. paris may consider cutting its 50% stake in renault to help strengthen the carmakers alliance with nissan. talks, theythe g20 said renault should focus on forging create that closer links with his longtime partner before sinking other alliances. the comments for the collapse of the merger discussions with fiat chrysler. unit isosun's tourism in talks to buy thomas cook's tour is an operating visit. -- business. ony're working with jpmorgan

the offer. the discussions are at an early stage. their arctic thomas cook's biggest shareholder. they're part of a wider conglomerate like includes and churches from insurance -- businesses like insurance and pharmaceutical. paul: united technologies buying raytheon in an all stock deal that expands their presence in the aerospace industry. entity will be called raytheon technologies with $64 billion in sales. ony have been focused aerospace after spending office carrier climate control and other units. just ahead, pressure grows on hong kong after up to one million people protested in exhibition law. clashes with police broke out there. all the details coming up next. this is bloomberg. [laughter]

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>> this is "daybreak: asia. " we start with the g20 finance chiefs who have agreed to water down their statement, cutting language that would of called for a pressing need to resolve trade tensions. the q&a k nearly admits the tensions have escalated and it refers to a consensus among ministers and policymakers to support international trade and investment. to the u.k., the front runner to become the next prime minister even tougher line on brexit. including a no deal divorce and folding back money the country owes from past agreements. we are talking about boris

johnson and he is seen as the favorite to succeed theresa may. his hard-line stance has given the market some concern. the bank of england says no deal could see the u.k. economy shrank by 8% with housing prices falling by one third. hasnese finance minister taken aim at big business. he is chastising companies for hoarding cash. talk, heat the g20 said japan incorporated is sitting on more than $2 trillion. he said the money should be used to stimulate the economy. japan's capital spending rose for a 10th straight quarter and march, but wage growth and consumer spending remains weak. to canada. porch in the country said the government is prepared to announce a complete ban on so-called single use plastics. the cdc says the news would come into effect in 2021 and it covers straws, plates, cutlery, the plan comes after the

european union outlawed plastic products. the current to expert reports, pollute the environment for years. : news --global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. let's check in on the what is happening on the markets. let's give it to soak it -- sophie in hong kong. sophie: a green day for equities and the stoxx, rising higher in tokyo today with the nikkei 225 adding 1.1%. electronics and all those are the biggest boost in tokyo. the yen is under pressure, snapping a today climb. while australian markets are closed, the aussie dollar is under pressure. the kiwi dollar is halting a six-day advance. for ax 250 is higher fourth straight day and the kospi is adding .5% this morning.

the mexican peso is the outperform are in the currency space, rising 2% against the dollar on the trade chairs. checking in on bond markets, living -- the switching out the screen to check out this screen. i want to show you treasury yields which are declining. oil prices also gaining ground, extending gains for a third session on expectation cuts will continue. let's check in on some movers of note. i want to highlight japanese telcos, moving on a nikkei caprt that japan will cancellation fees as early as this weekend. they say it is a negative for the sector, but positive for rakuten as it plans to launch its carrier this year coming getting 3.5%. i want to highlight the temple in shares of a travel agency, his, dropping to the lowest in eight years.

hand, torley is climbing, it's on the news they are seeking fast-track approval for its cancer blood test. shery: the international energy agency is about to publish its first official forecast for the oil market in 2020 this week. any help of a return to $100 crude seems to be fading fast. here's what some of the industry's top players have to say about the outlook. marketsituation in the is far from a positive one. america would be helpful. >> we are planning the company on a $55 price to remain conservative. we have had these uncertain stance movements so painfully. by the sort served of volatility we are seeing today. it is not justified or sensible. >> we need to find the sustainable level of investment for this cycle. price to sustain this is

not where we are today. way off from where we are today. shery: our editor aaron clark going to us -- joins us. saudi arabia and russia seem to have resolved their differences in the past few days. what happened? i think what we saw in st. petersburg on friday, where both housing novak, the russian energy minister and the saudi arabian and nature minister spoke. -- energy minister spoke. they plan to extend these cuts into the second half of next year. the cuts began in january and they helped sustain global inventories. what they haven't worked out is the level of the cuts. there are still some details they need to work out.

they cannot agree on where to meet next. that was scheduled for the end of this month. now it looks like that will get into july. still some uncertainty. what we saw is the strongest signal yet that saudi arabia and russia are on board to extend the cuts into the second half of this year. paul: what are some of the other long-term factors to consider? saw from thek you panel members speaking a minute ago, there is more bearish sentiment coming into the market these days. that is for several reasons. u.s. shale producers continue to produce at record levels. they are flooding the market with u.s. crude. thing. the first there is a concern about a global economic slowdown. there is real concern about a

deepening trade war between the u.s. and china that could dampen global demand. energy producers are really concerned about those three factors. said, the iea report, the first want to forecast for next year will be out later this somehe at they are to have analysts forecasting a surplus for next year. there is a forecast that there will be a surplus of 800,000 barrels a day next year that is pretty significant. who had beene expecting next year to be bullish, you had some forecasters saying $100 for oil next year now changing and you are seeing much more bearish sentiment across the board. paul: asia energy editor aaron clock -- claarrk the hong kong government. is facing more pressure to withdraw a lot easier traditions to china after the city's biggest protest since the 1997 handover.

organizers say one million people joined the protest march on sunday. joining us with more is carol lee. give us some more details on the scale of this protest. >> this protest was huge. we know that hundreds of thousands of people marched through the streets of central hong kong, tying the world up. thus of them were wearing white and chanting for the resentment of the hong kong chief executive. more than one million people came out, which are be one out of seven of the city's population. the government is saying 240,000. we do know that this was one of the larger protests in the history of hong kong. it does show how much people are worried about that extradition. shery: let's talk about the bill itself. what we are hearing is that it would allow extradition to mainland china. critics are saying that would

damage hong kong's rule of law. what does it say? what does it do? why is it so problematic? >> this is one of the biggest issues in the city right now. everybody here is talking about it. it would allow extradition to mainland china for the first time. a lot of people are worried it would signal the erosion of autonomy for hong kong. that it can change the fundamental agreement made when they handed -- the british handed hong kong back to china that would guarantee their independence and free speech and rule of law and the things people here hold dearly and want to pass on to the next generation even with the approach of the formal chinese takeover in a few decades. the government has defended this. it wants to push it through next month. this public outcry could be something that gives them policy. pause.

paul: the hong kong government has backtracked on bills before in the face of massive public protest. in 2003, there was one of the national security proposal that had been abandoned. what are the chances of the same thing happening now or is the chief executive backed by the chinese government and altogether different proposition then sifting years ago? >> this outcry is bigger than people expected. the chief executive knows how people feel about it. she has shown determination to push it through x month. at this point, we don't have an indication from the government that that will change. we don't know what will happen the next couple of weeks. this is a big blow for carrie lam. it's something that will put this erosion of hong kong's economy -- autonomy in the global spotlight in a way they don't like. shery: thank you so much for joining us.

coming up next, we will talk to fitch ratings about the outlook for mexico after president trump changed his tune on tariffs. more coming up. this is bloomberg. ♪

shery: this is alicia garcia herrera, chief acia pacific economist for natixis asia limited -- this is "daybreak: asia." i am shery ahn in new york. paul: i'm paul allen in sydney. canada is chairing president trump's decision to suspend tariffs on mexico and take one off the table. the canadian finance minister, talk about how it would pave the way for usmca talks. bill: we are in a position where we don't think tariffs are helpful in the conduct of global trade. happen. not i won't speculate on what might

happen. from our perspective, the thing that has happened that has been most important is the u.s. section 232 steel and aluminum tariffs on canada, which was a very important statement that we could move forward on the ratification of the usmca. we will deal with the world as it is and move forward. >> since you brought that up, this whole question with huawei and where that stands. you did hand leaders of the company -- you detained leaders of the company. retaliation against canadian citizens. how would you describe where you are now and is there a clear step forward? bill: we don't have a clear step forward. we are in a difficult moment in our relations with china. we are following our extradition agreement with the u.s. and our approach, which is the right way for us to move forward. we think it is entirely unjust

for china to be imprisoning to canadian citizens. not helpful in any way with our long-term aspirations to have positive relationships. >> do you think president trump's decision to increase tariffs on china, trump and his team saying they of backed off of things they had agreed to, so that is a side of the story. have you noticed that china has toughened its stance against since that happened? bill: ibill: can't say that i can see cause in terms of that part of the relationship. we have seen some pretty difficult issues there. a slowdown of our canola exports to the u.s., a big export from canada to china. that is a problem. we are concerned that china would expand.

that would not be beneficial for either of our economies. we are hopeful we can make progress. we don't really have a path right now. this entire issue between the u.s. and china is something we hope will help us move forward. shery: canadian finance minister bill mrorneau. the mexican peso rose after the president of the u.s. stock tariffs on mexico. joining us now is charles seville, head of americas sovereign ratings at fitch ratings great to have you with us. you guys have the credit rating for mexico. has your calculation about the country changed at all in the last few days since we got this trade deal between the u.s. and mexico and there will be no tariffs for the time being on mexico?

charles: we put mexico on negative outlook, ddd+, following a downgraded to bbb this week. this is the result of a number of trends we have observed. the liability for the government for pen ask is growing. government is offering more support and may have to offer more support the future. others about growth underperformance. mexico is going more slowly than the median triple b country. there are another concerns about governance, which mexico's governance, the world bank governance indicator, the one we use, they are at the bottom of the bbb category. we have concerns about some of the governments of microeconomics with the signals they are sent. shery: let's talk about the government signals on the company of pemex. their bonds really dropping after.

-- after you downgraded the company last week. how does this company play into the calculation of sovereign ratings for mexico and how close is the relationship and support of the government for pemex. charles: it's clearly a close relationship. it is 100% state owned. we notched down there waiting to notches from the sovereign ratings. and our corporate group's estimation. that reflects high debt, declining reserves, steep falls in production over the last several years, which shows the productive bases that will be used to pay back the company's debts is going smaller. the government relies on pemex for tax income, but it has been injecting money back into the company, offering lower taxes so it can have space to invest and maximize production. that is where we see it taking a

toll on government finance. pemex'sh: pemex --' -- that is 22% of gdp. speaking to mexico's credit rating, is one of the risks surrounding political risk? as we count down to the 2020 election, what are the chances of migration becoming another political football and the tariffs being reimposed and you have to take a look at the u.s. at -- at the credit ratings as a result. charles: i think their credit rating is pretty stable where it is. we stabilized the outcome with some supportive factors. but we did see is the use of tariffs to achieve a national security objectives. that is something new. the point is we are in our third year of trade uncertainty for mexico with the u.s..

it started with the election and then the threats to withdraw nafta and renegotiate it. that has a serious risk for mexico. as it turned out, we haven't seen negative scenarios manifest. we have to be prepared for more volatility over the next year or two. paul: have those tears that impose, that you have a scenario set up for what that would mean for the mexican economy echo -- economy? charles: it's difficult because we don't know how long this tariffs would be in place for. it is magnified that -- by the fact that a lot of the imports are from related parties. all that makes the calculation difficult. clearly, it would be partly offset by peso depreciation. clearly it would have been a big impact for mexico. shery: how much of your decision on mexico's rating had to do

with those policies themselves have to how consistent are their fiscal plans? charles: we have seen that the new government has come in and charted an orthodox fiscal course. they have targeted a higher primary service for 2019 and a higher one again in 2020. policy, of monetary they have left bank of domenico alone to do it -- bank oh -- banco de mexico alone to do its own thing. announcements was about the airports. that was a wake-up call for investors. we have had some other issues along those lines. another key issue is the energy reform. the previous government opening the energy sector to private sector investments. this government has put the brakes on that and instead would , the state owned

company to play a greater role. shery: what would it take for mexico to regain the previous rating? charles: we like to see growth come back. mexico has been underperforming compared to their peer group. part of that is down to the oil sector. if you take q1 production figures, it is 11% lower year on year. otherwise, public debts have stabilized in that followed the forecast. greaterld give us confidence in the sustainability of their debt. charles seville, head of americas sovereign ratings at fitch ratings , talking about the latest on mexico. don't forget, our interactive tv watchon, tv go, you can us live and watch our past interviews, dive into securities or bloomberg functions. also become part of the

conversation. send us messages. that is the bottom left part of the screen. this is for bloomberg subscribers only. check it out. tv . this is bloomberg. ♪

paul: let's get a quick check of the latest business flash headlines. the sports division of a chinese group has filed an ipo in the

u.s.. they listed at $500 million. the company rose to $1.3 billion last year. profit fell to $62 million. the couple he said it would you some of the ipo proceeds to repay a loan related to their restructuring. shery: anadarko ceo al walker $98 million receive in a gold parachute payment following their $38 billion sale to occidental. the payout is part of a $300 million to be shared among sex senior anadarko executives. occidental trump chevron's competing bid for anadarko last be thend what will largest takeover in the oil industry in four years. paul: microsoft says the next xbox will be four times more powerful than the current console things to a processor from amd which allows for 120 frames per second. whenhip will reduce slacks boating gains. it will be released for christmas next year.

microsoft says it's next cloud streaming platform a launch in october. shery: asian markets paring back some of those earlier gains, but still in the green. let's get a preview of what to watch. sophie: we will be watching for the reopen of china and hong kong markets after the long weekend. china watchers will have trade data do anytime today to consider export growth. expected to container shanking -- continue shanking. we will be watching reactions to news that taiwan plans to invest about $650 million in the 5g space over four years. when it comes to storm socks worth watching, china oil fields may move after a-shares removed to overweight by of -- morgan stanley, setting their potential to recover after a 22% slide. are in auto players focus on policymakers' plans to boost auto consumption.

jeffries said such stimulus is disappointing as it lacks fresh content. -- 98%not be perfect repeating earlier statements. the barker says great wall motor is to benefit the most as china encourages the consumption of pickup trucks you when it comes to what bernstein sees, they see encouraging signs. consolidation expected at the top of the sector. bernstein is bullish on the market. paul: just before we hand over asia,"omberg markets: let's look at what we are trading. green on the screen. nikkei higher by 1%. the kospi higher by .5%. this is bloomberg. ♪

>> :00 a.m. in beijing, shanghai, and singapore. i am tom mackenzie. yvonne: and i am yvonne man. david: i am david ingles. g-20 minister is watered down their statement on the trade war, omitting calls for a pressing need to resolve the escalating tensions. kong sees its biggest demonstration in years as hundreds of thousands protest the exhibition bill. tom: the pboc governor says the yuan is subject to market forces and seven is not a critical number.