paul: welcome to daybreak australia. i am paul allen in sydney. shery: i'm shery ahn in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down asia's major markets open. paul: here are the top stories we are covering. wall street welcomes president trump shelving tariffs on mexico. 500makers lose in the s&p for the fifth straight session. president is threatening higher tariffs on china. the inside line.

someone with intimate knowledge of beijing's trade war strategy. shery: we will hear from some big guests route this hour, including the boj governor and japan's ceo. david atkin, head of the construction and building union fund. let's get you started with a quick check of how the markets closed in the u.s. the s&p 500 gained for a fifth consecutive session and finished just below the mid-may high of 2892. still the longest winning streak since april, the biggest jump since january. we have had al automakers and chipmakers the biggest gainers as president trump indefinitely suspended the tariffs on mexico. the mexican peso jumped the most in more than a year. the nasdaq up 1%, while the dow gained 3/10 of 1%.

we also had some takeover deals, merger news really boosting the stock market. investors squarely focused on what will happen going forward when it comes to trade. we are heading towards that g20 meeting at the end of the month. president trump threatening tariffs on the remaining chinese goods if president xi jinping does not meet with him in japan. we are seeing u.s. futures unchanged at the moment. let's see how we are setting up for the asian market open. sophie: this morning, futures are hinting at a mixed session for asia with kiwi stocks opening 6/10 of 1% higher. australia opens after the long weekend. filipino trade, factory output. we could get chinese new lending data as soon as today. plus, earnings in the wake of taiwanese data that shows shipments of ip components rose to a record, while total exports fell for a seventh straight month. the maybe more excitement around

alibaba potential listing with credit suisse leading the plant offering. a quick check on wti, hovering around the 53 level after falling below 50 for overnight despite saudi's assurances of continued cuts. it has been abrupt and has seen a supportive view of prices but the 2019 forecast of wti and brent. paul: thank you very much. let's get the first word news with jessica summers. jessica: the united states has "grave concerns" about a new bill in hong kong that would ease extradition of people into mainland china. the state department says it can undermine the city's freedom and damage of business environment. hundreds of thousands of people rallied on sunday against the proposal and what was hong kong's biggest protest since his return to china in 1987. rhetorictepping up the

by warning that the u.s. "does not expect a safe space" after it actions against tehran. a series of threats over president trump's rejection of the 2015 nuclear deal and most recent sanctions against the iranian oil industry. he says the u.s. launched an economic war that it will not be able to finish. and, the bank of japan says it has the tools to deliver more stimulus as necessary, but admits policymakers must be aware of the side effects to the financial system. governor kuroda said he would put further easing if 2% inflation is lost. he emphasized the bank does not need to act now because of the general health of japan's economy. we haveis moment,

carefully monitor the situation. our control.e our -- or expand strengthen the easing. jessica: the race to become the next u.k. prime minister has formally open. a record 10 british conservatives fighting for the chance to leave their party and the country. over the next two weeks, 300 tory politicians will narrow down the field to two. 160,000 party members will vote for the next leader. boris johnson is leading the pack with a pledge to push through brexit with or without a deal. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. shery: thank you.

president trump is ramping up the heat on china, threatening to raise tariffs again if xi jinping declines to meet at the upcoming g20 summit in osaka. trump suggested an eventual trade deal could include a provision about huawei. let's get the latest from joe. we have been talking about the xi-trump meeting as if it was a done deal, but we never really got official confirmation this was happening. joe: these meetings are never quite confirmed until all the loose ends are tied up. they are both tentatively scheduled to meet at the g20 later this month in japan, but there has been no official time set for the meeting. there likely won't be, if there is going to be a meeting, until just before the g20 begins. this is really an attempt to escalate pressure on xi. it is a rather risky proposition.

the president threatened he could increase tariffs by more than 25% on all of the goods that china exports to the u.s. that would certainly increase tension. he continueds to insist china is paying the u.s., when in fact the tariffs are essentially paid by companies and the consumers in the u.s. when they are buying chinese imports. it would have the effect of potentially cutting back on u.s. consumption of chinese goods. paul: joe, the president also linked threats to huawei to getting a deal. what is the aim there? joe: this increasingly looks like he wants to add a bit of leverage, but he is also suggesting that the u.s. is looking to block china's rise as an economic power. he said that he wanted china to do well, but not as well as the u.s.

huawei it is certainly a part of that because of the advances towards 5g networks across the globe which will really accelerate a lot of commerce and the ability for companies and consumers as well. that and they of are deeply tied into the global systems. u.s. companies are also concerned because they provide some of the components to huawei. huawei coming into the u.s. is a threat as far as the administration sees it because they want the u.s. to be the leader in 5g technology. paul: bloomberg congress editor joe sobcyzk, thank you for joining us. evan lucas is chief strategist at invest smart group. thank you for joining us. we saw a pretty reasonable rally in the u.s. returning to trading

this week, really on suspension of these tariffs against mexico which is a problem we did not even have 10 days ago. relief rally is all this market has left. evan: possibly. the way you can look at it is politics is very much intraday and intra-week. yes, we have the mexican tariff issue. we are leading to the g20 and that is also one. if you look at the overall positioning in all markets, it has not moved the dial in the last two to three weeks. bond market has not really reacted. you look at the overall movement in the u.s. dollar, and has not really truly reacted to that kind of geopolitical movement. while it is headline grabbing, it is very much intraday and intra-week, the movement and markets are more structural. they are clearly and looking and watching of sense best central banks. that will be a major part.

if you were to go down the path you alluded to that trump was not to meet xi, you will probably get some short-term volatility. overall, the global markets are worried around the malaise that is global growth and how we are going to get through that period. whether that is central bank stimulus or something else. paul: let's set aside curiosity, and a look close at the bond market. when you look at the yield curve inversions, does that give you cause for concern? evan: look, history is a very hard thing to argue against. you do have to say yes. if you look at what is going on in the 10 year and three month table, everybody alludes to the recession -- we did it in march. it is very negative. that inversion is huge. you also have to look at the differential between the fed fund futures.

the gap between that is incredibly large. and what happens with the fed. it is across the globe. bond markets all over are dropping and dropping quite a rapid rate on the yield front, which again, gets back to this concern around global growth. is it slowing to a level of recession? are we going to have some hard landing in emerging markets? are we going to have a fairly response in europe? europe is starting to show signs of strain. all of that culminates in the idea of what is actually going to be the method to get through this. central banks are coming into play. the rba cut rates last week. the bank in new zealand has done it throughout the year. the fed could possibly do it twice in 2019. it is quite a different scenario than what we faced this time last year. shery: if they do it twice and it comes to the fed, when would you expect them to do it and what happens if they don't?

evan: yeah, again, getting back to that question about right now, it is hard to argue against history. what i mean by that is the bond market is clearly flushing the recession idea. next week, you will get a fairly big change. do not expect them to do it. september looks pretty likely. and probably you will say december if things start to snowball and slow down quite dramatically. that will give themselves a timeline to start moving the markets that way. you cannot get past what is going on between the fed fund and futures and the two-year bond. they are priced again at least 60 basis points by the end of this time last year. it is coming. again, you want all of the fed members to come out in unison. there will be a little bit of a run on, but it is clearly coming and that is what the markets are pricing in. shery: we also have some takeover deals.

united technologies and raytheon. we have had some big merger mondays just this month. will these takeover deals be able to sustain some of the rally we have seen in u.s. markets going forward, or will the trade uncertainty dampen that? evan: look, m&a is always a good indicator there is still corporate activity. it is indicator of that. overall growth in the space is there. not just looking at that, you look at the economics. the u.s. economics is still pretty rosy. you look at the employment data, the best we have seen in the 1960's. wage growth is still strong. as you alluded to m&a. what i have at the moment with equities, they are reacting to stimulus from central banks. they have been running on this all the way through since basically february when you saw weakness coming into the economics and the bond market.

whether or not that is sustainable is a different question. do you actually start to see quality earnings-per-share grow? maybe in the u.s. you could argue it is ok. the rest of the world is not that strong. yes, that is an argument and a way of positioning itself to say things are reasonably good and structurally good in the corporate space. there is no doubt, markets are disproportionately priced whether you look at equities over bonds, or the other way around. one of them is right and it usually is the bond market. paul: i want to get your thoughts on the australian picture. i can see over the shoulder, seven construction cranes on the melbourne skyline. you think the picture is shaping up locally? evan: you will actually see even more. there is no doubt construction is on the way up. one thing, it is into production space. there is not actually anymore on

construction than it was a few years ago. it has been a boon in melbourne. you look at the australian market on the employment front, it has been moving at a rapid rate for almost 2.5 years. employment growth has been very good. the issue is we have not seen the market in a long time. underemployment, underutilization. we have not had ways to increase that you would expect with that kind of jobs increase. that is a problem. it is what the rba is alluding to in a tight itself to employment and seeing unemployment fall. on fleming also increasing wages. until that happens, you are going to have this disconnect. at the moment, the on appointment rate is going the wrong way. it is a spec to fall back to 5.1%, but not at a level that will move the dial. the rba probably be on the dovish look and will be on the cut front.

shery: evan lucas, thank you so much for joining us. we have some lines crossing the terminal. speakingident pence with fox news saying the u.s. is in a very strong position on china. that the u.s. is going to continue to stand firm on china. president trump has just threatened to raise tariffs on the remaining $325 billion of chinese goods to 25% if president xi jinping does not be with him at the g20 in japan. he signaled an eventual trade deal could involve huawei. vice president mike pence coming out and saying the u.s. is going to continue to stand firm on china. still ahead, we will continue discussing trade. not just president trump's tweets moving markets. talking to bloomberg about his role in the trade war. t, david atkin talks

about managing risk. this is bloomberg. ♪

shery: japanese pension funds have gathered in tokyo for two days of discussions of the future of the industry. one of those attending is a $47 billion fund representing over 790,000 people working in the construction and building sector. stephen engle is standing by with the fund's ceo. steve? stephen: that is right. we have david at can with us. thank you for joining us this morning. we will talk about what the industry superfund in the construction industry. we know the australian economy that showing signs of weakness right now. how do you see that affecting your fund? david: it is true we are seeing the housing market start to pair

off. it is not from oversupply of buildings. there are other factors that are driving that. construction itself is remaining reasonably strong in the commercial market. stephen: but not residential. david: in the commercial market, 11 projects in melbourne for example that are coming through. we are seeing civil construction with all the infrastructure that is being built around australia also taking up some of that employment from the housing market. you have to look region by region, city by city. we are confident about the future. we are just going through a period of a downturn in the housing market that we think will come through reasonably soon. stephen: you are saying this is a cyclical down cycle but there are significant headwinds in the global economy. either your industry employs

almost one out of every 10 australian worker. you fund is in excess of 60 billion australian dollars. how do you see the headwind affecting sentiment? david: it is true on a global scale. we are reasonably comfortable about the current strategy of the fund. it is slightly on the downside in terms of risk. there are some competing forces. the numbers out of china have been more positive than we had expected, on the others of that is the trade war impacting sentiment. we're probably working on the basis that the sentiment in terms of the economy globally, we will be going through a difficult period. but, you could also make the counter case. we are not putting all the eggs in the basket that we are hitting recession, but that is one of the scenarios we are working around. stephen: give us size and scope as far as the true size compared

to other funds globally. you are one of the largest public offered funds and exit is a 50 billion australian dollars. and this time of turbulence, i think about 50% of investors are domestic. are you looking abroad or does it make you stay at home more? size: the funds double in every five or six years. to put that in context, the industry is $2.1 trillion. the fourth-largest capital pool in the world. we are not the fourth-largest economy. there is this concept of cash flow that needs to be invested. for our fund, we will continue to invest in australia, but over time, that ratio of 5050 will increase towards the international. we need to be very much looking for opportunity for how we can allocate that members' money internationally.

we are building up to make that call. stephen: in what form with that investment be and where? david: it will be infrastructure, in equities. it will be in debt. so -- it will be across all of the regions. we're obviously very well invested already in the u.s. and in europe, increasingly in emerging markets. i think demography tells us that it is emerging markets which is where we need to be applying our attention. obviously, there are a lot of factors to consider when you are investing in markets that you have not had a lot of presence in. there is obviously a lot of risk you need to work through but there is no doubt that is really where we need to go. stephen: do you shy away from belt and road? david: it is something we need to be conscious of. most of our property investment is in australia. again, we are looking to go

offshore and five partners we can work with who have expertise in the property markets internationally and who can deliver our expertise. stephen: how is the fund dealing with increased rhetoric, now that the government of scott morrison is back in power? the liberal party come a lot of rhetoric against the union's. are you seeing that or are is it lessening? david: in terms of equity funds, we are equally represented by unions and employers. an equal representative model. it is true we have been through difficult times but we are positive about the government's being reelected and the messaging that is coming out of the new government and the minister. saying they want to work with the sector. that is all we want, the opportunity to work constructively with the government. we have all this capital we need to invest. it makes sense to us that we are

sitting down with government and working out what is the best way to create a healthy economy and create strong employment market. stephen: we did see the protectively commission and royal commission ended up unscathed. seeing funds starting to come towards you and what kind of size and scope, because the australian superfund has seen that? david: not to the same extent as the australian super, but a 60% increase in inflows over the last 12 months. it is very much as a result of the royal commission, focusing on the misconduct of the retail funds, and consumers walking with their feet. we are seeing the volume coming through is quite extraordinary and has been ongoing. it is not like it has been for a week or two.

it has been several months of very strong cash flows. stephen: david atkin, thank you so much. we will have continued coverage in tokyo of the 2019 japan world pension summit. lots of great guests this morning. paul: thank you very much. a quick check of the latest in business flash headlines. thomas cook took off after a bid from its tour operating unit. shares rallied as much as 24% but analysts from citigroup says they are worthless. shares were effectively worth nothing on may 17. at the time, that prompted a 40% selloff in one day. shery: salesforce slumped after announcing plans to buy tableau software, valley that more than $50 billion. the takeover will be salesforce's biggest acquisition

to date as it chases the annual revenue of $28 billion. tableau turns raw data into more understandable dashboards and charts. it has almost 90,000 customers, including verizon and netflix. paul: audi is recalling its first all electric car in the u.s. over fears of battery fires. a voluntary recall of 450 e-tron suvs because moisture could seep into the battery cells because of a glitch in the wiring. audi says it has no knowledge of any fires or injuries. it went on sale in the u.s. in april amid a wave of new contenders challenging tesla. shery: coming up, the governor of the bank of japan tells bloomberg they have plenty options on monetary stimulus if needed. our exclusive interview with governor kuroda is next. this is bloomberg. ♪ we're the slowskys.

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paul: 8:30 a.m. tuesday morning in sydney. markets due to open in 90 minutes. the first trading day of the week after the monday public holiday. futures pointing higher by one third of 1% following the rally we saw in the u.s. i'm paul allen. shery: i'm shery ahn in new york where it is 6:30 p.m. let's get the first word news with jessica summers. jessica: president trump is ramping up the heat on china. he is threatening to raise tariffs again if president xi jinping declines to meet at the g20 summit. he told cnbc that duties on about $300 billion of chinese imports would be imposed immediately should the leaders not talk in osaka.

the president added that the chinese side will make a deal because they have to make a deal. nokia is remaining bullish about its expansion into 5g networks. the ceo dismissed concerns from some analysts the company is falling behind in the next generation wyler's race and told bloomberg he is winning contracts "quite handsomely" against his main rivals, huawei and erickson. >> we compete quite favorably with huawei with or without the current security concerns. we have taken some 23 contracts from them in the last two years. we win two thirds of the time against our nordic competitor. we win quite handsomely. jessica: the world's most expensive work of art is said to have resurfaced after its whereabouts were unknown for 18 months.

salvadorda vinci's monday is on a super yacht owned by mohammad bin salman. the 500-year-old painting fetched $550 million. art experts question its prominence, contribute to get to da vinci's workshop, rather than him alone. global news 24 hours a day and on tictoc on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. shery: thank you. australian markets coming back online after a long holiday weekend. let's turn to sophie in hong kong. what are you watching? sophie: after the asx 200 cap a third weekly gain in four, futures are pointing at a positive reopen with contracts near a record high. the benchmark could be towards its 52 week high.

have the business confidence survey on top. maybe a soft spot after iron ore exports jumped to a record in the month, adding that signs of global demand is rebounding. back above $100 a ton. woodside on the radar after the company reported an issue of plant maintenance, resulting in the delay of the restart of production to the end of june. 2019 output is expected at the lower end of guidance. raise reportedly seek to 400 million australian dollars in a partial sell down with city said to line-up climates with a deal. speculation continues over potential buyers. not swooping in with takeover offers until the company has offloaded its troubled units. we also just got news coming in aat vocus has received

nonbinding offer from agl at 4 $4.85 a share. we will watch that closely later this morning. paul: thanks very much for that. more on that vocus story. agl offering to buy vocus for $4.85 a share. this is from after last week, eqt infrastructure. that company withdrew his proposal but still some questions over whether there would be a more focus. agl energy offering to buy vocus cash.for $4.85 a share in a stop to watch when trading begins in 90 minutes. let's get more on what we should be watching as we wrap up for another trading day in asia. papuc is with us.

asian futures pointing to another day of gains but is it more of a relief rally and unknowns? andreea: that is right. it is very much a relief rally. this trade war is slowing but not going away. it is still lingering. one thing that is worth pointing out is investors are keeping an eye on volatility. we have a chart that shows volatility has been relatively stable but the vix index is hovering around the 16 level. in recent years when it has been around there, it has been when equities are weakening, not rising. we also have strategies continuing to come out and warned of these perils from the ongoing trade tensions. as president trump continues to take a hard line, among the latest essay despite mexico -- to say despite mexico, there might be a selloff of global assets from these trade

tensions. even with mexico, we have gotten details from this deal. that is underscoring concerns amongst investors. again, you have president trump come out again overnight talking about increasing tariffs if china does not sit down with him at the g20. a lot is riding on the g20 meeting later this month. for investors to work out where we are at. things continue to be in flux. investors will keep reacting to positive and negative news. shery: the markets seem to be coming around that the yuan is on its way towards seven to the dollar. that because of all the trade headlines and the pboc governor that threshold is not important? andreea: yeah, that is right. the onshore yuan broke through the 6.93 level. it has not been at 7 since the financial crisis. that is right.

that is after the comments from the pboc governor last week that no specific level for the yuan is important. also, there is tremendous room for monetary policy if the trade war deepens. trade data yesterday showing a imports, chinese underscoring this weakness in the economy. again, this meeting between trump and xi, if it does go laterand osaka this month, it could be the catalyst that pushes the yuan through seven. shery: thank you so much for that. don't forget to check out our gtd library. you can find her charts on the gtv function on the bloomberg. bank of japan governor kuroda left the meeting confident of economic growth in the second half even if trade tensions linger.

if the trade war clouds darkened, he is ready to step in with stimulus. he spoke inclusively to kathleen hays who joins us now from tokyo. they have really done plenty. can they actually do that? needed, governor kuroda says he has the tools. he will employ them, not now, let's make that clear. he sees the japanese economy showing many signs of solid growth, even picking up more in the second half, but he realizes as the g20 community said, that the downside risks are rising. the trade tensions are weighing on the global economy. i asked him specifically about what would you do? everything would be on the table. he basically said yes, we would consider cutting the negative rate to be more negative. widening the band for yield curve. even purchasing more etf. in the event it is needed,

that is what he is willing to do. let's hear more about our conversation. gov. kuroda: the economy as a whole is doing well, but it's populations,m the the number of companies. thisl banks faced with growing trend. have -- we might have potential risks. , we have tomoment carefully monitor the situation. our control.e orn if we expand our --

strengthen the easing further. saying youo you are are willing to take on this riks sk of these rising costs of its ordinary stimulus if you need to do so to keep inflation going? gov. kuroda: yes. at the same time, avoid as much combineble -- we may various monetary tools to reduce that sort of potential side effect. kathleen: sounds like a very interesting recipe. so many central bankers right now are saying they have ammunition and they can do more. china made that very clear. saidhairman jay powell has we can do it. mario draghi this week or last week said it could cut the

negative rate further, buy more bonds if we need to do so. you talk to people in markets, the boj cannot do more. you mentioned earlier in this conversation, or maybe we could do something else. we have these tools, maybe something else. do you still have the capacity to show all those people that say boj cannot do anything that you can do something big or something new? gov. kuroda: i think so. kathleen: what will it be? [laughter] gov. kuroda: four options. further reducing the negative interest rate. and further increasing the amount of assets purchased. committing to increasing the monetary base and so on and so forth. those four options, i think we can still utilize, if necessary.

how could wee, and on the, that depends economic conditions. like mario draghi, i think we can do these things if necessary, yeah. shery: the question i did not ask governor kuroda is do you summarized sort? he is saying don't worry, we will go all out if we have to. in the next hour, we will hear more of this conversation as he talks about managing the negative side effects of maintaining extraordinary stimulus for a long time. the negative impact on banks. that is something he rbc has on his radar screen.

we will be playing part of this interview throughout the morning here. if you would like to hear it in its entirety, go to bloomberg.com. we have the entire interview posted. in the next hour, you will hear interesting cautionary comments from governor kuroda, bank of japan. paul: global economic and policies editor kathleen hays in tokyo. we will have more from japan coming up. neil slater will tell us why he sees opportunities in the land of the rising sun. this is bloomberg. ♪

shery: i am shery ahn in new york. paul: i'm paul allen in sydney. you are watching daybreak australia. japanese prime ministers shinzo abe has said his real economic objective has been achieved, even though 2% inflation target

remains out of reach. istephen engle. stephen: thanks. of theet a pulse check japanese economy. neil slater is with us. thank you for joining us. we just heard in the intro, shinzo abe saying the japanese economy is doing really well. we also had comments from our colleague who had an exclusive interview with avro peak to kuroda yesterday, saying he has more firepower if needed including going further on the negative interest rates. how do you assess the japanese economy right now? the first quarter was fairly strong, but there are some weak signals, especially exports. neil: i agree. from our perspective, the japanese economy has been very stable. we have seen very good growth over the last 24 months. in the first quarter, the growth

was a lot stronger than most people anticipated. however, we are seeing consumption coming down a little bit. weakening on exports. what's our biggest concern is if trade tensions play on. we expect that will have a larger impact on economic growth and we will see a bit of shaving on the growth aspects. it could take 20 bits off. stephen: what should the boj do? they say they have more firepower, but they do until they maybe don't really. neil: you are right. they are in a very difficult position. a lot of discussion around can they do more in a monetary policy discussion? you are seeing a large impact on that in the equities side. if you are a large stock investor, you are seeing large movement into the nikkei that are not fundamentally related. related to both trade tension assets and perhaps boj action.

i think they are in a very difficult place. in my opinion, it probably comes under fiscal policy as well. it could be used should things become more complicated in the next 12 months. stephen: that is something they will do in the run-up to the olympics, right? tumultuous. we also have it scheduled for october. is that something they could pull off the agenda if the economy goes south? neil: theoretically, for sure. if things turn south. for example, the u.s. puts down tariffs on japanese carmakers. i think the reality is there is a lot of political capital behind the hike. a lot of preparation going on to make sure that happens. holiday in public october for the new emperor and

movements into the olympics, it has to be something substantial to prevent that. stephen: what is germane investment strategies to avoid the trait noise? neil: it is simple. we do both large-cap and small-cap. a lot of noise on the large-cap side. trade tensions, the yen. it is all sentimental based. we see really good fundamentals in small caps. we like medical implementation, medical technology. we like robotics. there are some fantastic companies in japan that have great strategies, that are outside that larger cap environment with a lot of volatility. that place in the domestic issues. stephen: you're talking about health care and robotics. neil: two elements. one is demographics. people are really negative on

the impact of the economy. from an opportunity perspective, there are a lot of services and aspects that run demographics that provide economic proficiencies. because of japan's position around robotics, that is also an international aspect. you see robotic requirements in china. they need more robotics to help with their own demographics. that is a strength of japan that should increase. stephen: how is your confidence in the japanese economy and the prospects here reflected in boots on the ground? you are going to double your hiring, that is still on pace? or has the uncertainty made you be cautious? neil: we have continued. we have hired about 15 people in the last year. plus, we have recently have a small niche real estate manager that is focused on the demographic asset.

this is not just public markets, it is also about private markets and looking at opportunities across both sectors. stephen: neil slater, thank you for joining us. aberdeen standard investments japan ceo. coming to you live from tokyo from the japan global pension summit. shery: thank you so much. looking forward to all of the interviews coming up. you can watch us live and watch our past interviews. the function is tv . you can dive into any of the securities of bloomberg functions we talk about and become part of the conversation. if you have any questions for our guests, the lower left side of the screen, ask the guest a question. this is for bloomberg subscribers only. this is bloomberg. ♪

paul: i am paul allen in sydney. shery: i am shery ahn in new

york. investors looking for insight into what china is planning in the trade war might do well to pay attention to a key source of information -- the global times. entered in chief has uses twitter feed to forecast several government moves, including the investigation into fedex and the official warning of travel to the u.s., and markets are taking notice. one tweet last month about a potential drop in billing orders sent shares to the lowest close in four months. what kind of access he has with beijing and what china might do next. access to some accurate information for the nature of my job, but i cannot say i'm authorized by government to release the information. >> it is fair to say that officials will be passing you information, passing you tips and the knowledge that you are very likely to tweet about them.

know.be honest, i don't the officials and i have a tacit understanding. as i have access to those information, i think some of them no i will publicize the information. >> chinese officials have been talking up the economy by the economic data shows we are facing a continuing slow down in the chinese economy. so, ar e officials exaggerating the potential for china to whether the trade storm? loss is bearable for china. people believe it does not matter to have some losses. the chinese economy is still growing. we don't have any negative growth. we are still advancing. the size of our growth is still remarkable in the world. >> if trump goes ahead with additional tariffs on all of china's exports to the u.s., what tools do you think policymakers are most likely to

reach for in terms of retaliation? u.s.hina may target the services sector operating here. trade and services is not the same as trade in goods. the u.s. has barely talked about services, but china knows this is a fast-growing area for the american side. paul: that was global times editor-in-chief hu xijin talking to tom mackenzie. a quick check of the latest business flash headlines. credit is said to have to lead its plant share sale in hong kong. it is talking to other investment banks and aims to file a formal listing up relation -- application. the offering could raise as much as $20 billion, although alibaba has not set a precise target. it will be hong kong's biggest sale since 2010. shery: shutterfly jump in news

offered of $51s a share. $1.74 billion based on the outstanding shares of the end of march. it will assume more than $1 billion of debt as it aims to move shutterfly with a rival. the deal is expected to close in the fourth quarter. paul: foxconn's boss is shaking up his inner circle, appointing his chief financial officer to a new operations committee. the decision to promote the cfo and to foxconn's senior decision-making body shines the light. he's excited to stay back from day-to-day business if the contents and the presidential election next year. still to come, we will have more analysis on the markets. we will be joined by whittier onst manager and checking in

futures pricing. we will have news for you in the next hour of daybreak asia. stay with us. ♪ hey! i'm bill slowsky jr.,

i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. paul: good morning.

i am paul allen in sydney, where we are an hour away from industrial in market opening. shery: good evening from new york, i am shery ahn forget sophie: i am and hong kong. welcome to daybreak asia. ♪ our paul: top paul: stories this tuesday come up next session i had for asia as investors weigh trade war headlines. oil holds near a three-day close on fears of recession. president trump is ramping up th