daybreak to account australia." paul: the dollar weaken, the key factory gauge fell the most on record. china cools on u.s. treasuries, its holdings fell to a two-year orders take, airbus

off leading rival boeing $13 billion to zero. we'll hear from boeing's boss. kathleen: and the trade war. it doesn't sound too great when it comes to iphone demand in china. how u.s. stocks, there were small gains across the board. of course facebook, news that it is getting ready to launch a crypto currency helped stocks apple and google moving ahead. you can see the dow jones frill average down 22 points for the s&p 500. again about three points for the s&p. the nasdaq was the biggest gainer. %, you can see the futures point to strength there. another big story today, deutsche bank getting ready to cut back on equities trading. this is something that didn't

help the banks much. why are we showing the 10-year note yield? it is holding in around 2.09%. news from china, did have a dampingening effect in the foinl few hours. mostly people are positioning for the federal reserve meeting. how dovish will the fed be. bank of japan meeting this week. bond markets of the u.s. and around the world. could not do much today. let's see how things are shaping up for asian markets now. sophie? sophie: futures not doing too much here. pointing to a mixed session, could be had after a mixed monday session. we are look far turnaround in tech shares after losses for that sector in asia. it's been one of the worst performing groups in asia in that time as analysts become more cautious. on the ecoagenda, prices from

australia and high nafment and the aussiee dollar holding around 68.54 after rebounding from a five-point -- five-month low on monday. paul: let's go to jessica for the news. jessica: thanks, paul. iran will breach the 2015 nuclear deal on uranium stockpiles within days unless europe helps ease the pressure of u.s. sangs. tehran says it will exceed the cap on low grade uranium june 22.on europe is urge iran to stick with the agreed deal despite u.s. pressure. a federal reserve gauge of factory output in new york state fell last month by the most on record. that's a sign that president trump's sanctions are hurting manufacturers and the wider economy. it fell to 8%, the lowest level

since 2016. it indicates respondents feel business conditions are worsening. and opec still can't set a date for their next production meet, leaving the oil market increasingly uncertain with jut put restribs set to expire within weeks. iran says it's willing to meet on july 10 through 12, later than the original june date. opec is struggling to lift oil pices amidst falling global demand. >> i want to make surey continue to work together closely, not just bilaterally but with members of the coalition. and the good work we have done over the last 2 1/2 years of inues in the second half 019. jessica: the london shanghai

stock enjoyed a positive first day, closing almost 4% higher on debut. they the fist to tevs the new link and success could serve as a template for projects between china and other exchanges. the london-shanghai connect gives companies the opportunity to raise capital in the largest equity market in europe. global news on air and online. i'm jessica summers, this is bloodberg. paul: thanks, jessica. this month's g20 in osaka may still see a sidelines meeting between presidents trump and xi. however, wilbur ross said the summit isn't the appropriate forum for the u.s. and china to resolve trade differences. >> i think eventually we'll have the deal with china. i don't think it'll come directly out of the g20. the main thing that could come

out would be an agreement on principles for how to move forward. that's the most that could come. paul: let's go to beijing and our correspondent, selena wang. does this dampen down expectations? >> what we just heard from wilbur ross is his attempt to temper expectations but it doesn't dampen expectations since we don't know if trump and xi will meet at the sidelines of the g20. on the bright side he said he expected negotiations to resume which is a big deal since talks broke down in early may. it was reported he had stepped in to ask fonske lay a harsh speech he was supposed to give on june 4 about china's human rights record and we reported that trump is realizing the political and economic costs if he doesn't start to deal with

china ahead of the 2020 elections. an he's also facing a lot of domestic tensions at home this week. his -- the opposition to the tariffs will be on full display, there are week-long hearings where hundreds of companies and stake holders are publicly speaking out against these tariffs saying they're bad for business, bad for america and not good for the american economy. >> there's plenty of evidence of that, isn't there? we just got news of the dramatic fall in china's holding of u.s. treasuries down to 6%. do we read anything more into this other than china is having to do a lot to keep its currency stable, to stimulate its economy with various moves it's making? selina: if you look at the numbers themselves, they look enormous. billions and billions of dollars, the treasuries nearly the most in two years. i wouldn't say we should look too much into the numbers. for one, the latest number were

collected before the latest tensions reached to new heights in may. furthermore, there's been much speculation that china could use treasury holdings as retaliation. most have dismissed that as improbable. it would be very hard for chi in to find another place to park its cash in an area that would be as liquid and as safe. also china did massively dump treasury holding, that would cause the prices to drop and it would cause whatever holdings china still has on u.s. treasuries to devalue. it could also spark a dollar rally. the view really is that the benefits don't outweigh the risks when it comes to china using this as retaliatory boost. though it is a large number we shouldn't look too much into it at this point. paul: selina, thanks for joining us. still to come, turning on tariffs. companies that were once proponents of trump's tariffs

are now arguing against them. kathleen: and don't forget the fed. don't focus on the central bank, worry about making money in an era of low rurps. where he's putting his dollars to work effectively. this is bloomberg. ♪

♪ paul: we are looking down to the sydney ope. i'm paul alen in sydney. kathleen: things will brighten up as the day goes on. i'm kathleen hays. you're watching "daybreak

australia." tech helped lead the nasdaq high , we saw the dollar briefly weaken. what's going on here? a tepid monday but between the surface there's a lot going on. >> many traders will take a tepid monday given the rock 'n' roll ride we've been on. charts are suggesting higher on the record. head to bloomberg gcb. does the s&p hao 0 find a new record before the potential big drop? a convergence of technical factors say that may be the case. we did have weaker than expected economic tai ta which caused his edollar to weaken a bit. we did see the nasdaq powering higher, that's important given the fact they this -- that the fangs were back at the head of the pack. not by big margins work the exception of facebook but big enough given the pounding the

stocks are taken. take a look at other stocks in the spotlight. target not suffering too much. down less than a percent there. but what's important is that they had some kind of cash register glitch over the weekend that could cost the company $50 million. boeing actually in a fight with airbus for business. actually rising higher and tess la coming out strong. that's another stock that's been badly beaten. paul. speaking of things getting badly beaten, oil further into the bear market on lower than expected data. su: the weaker than expected housing data goes to the demand question. there's a question about supply glut as well as the trade. look at the five-day. it's been a real wild ride where we sunk hard last week. looked like we were briefly higher in the monday session. look at the bigger picture, down more than 18% from the peak back

in april. we are firmly in a bear market now and there are many traders that say the struggle of the opec plus nations just set a date for the next meeting, we'll show you that there's been a lot , crude has doubled. kathleen: the oil market has been in a big focus for the last several days. let's talk about the trade war. what effect is it having on the federal reserve as policymakers prepare to meet. here with us now is brook financial strategies -- burke financial strategies president john but. hanks for coming in. everybody knows, i think, that the federal reserve is like an ocean. you're going to be tossed around by it. however you do have a tiller, you have oars, whatever, to mouff your boat across the lake. how can you ignore the fed at a

time like this? john: you look at what happened, we had the empire state manufacturing index was reported today. biggest decline in history of the index. lowest it's been since 2016. so the bad -- the bad news today was that the empire state manufacturing index went down. the good news was that the empire state manufacturing index went down. people think if there's more bad news the fed will come to the rescue. kathleen: if the economy slows down enough, the federal reserve will cut interest. now they're trying to figure out whether to cut or not. if the dead starts cutting interest rates are you saying that doesn't make a difference for the stock market? john: of course it makes a difference. the bond market is there and is telling the fed what to do. you look at where the short-term treasury rates are, they're too high. the bond market is there of course the fed will follow.

and once they do follow, you've got to figure out what's going to make money for me. you look at the world we live in today, we invest in today, there are $11 trillion of government bonds that have a negative yield. another twisted logic. why would you give somebody money when you know you'll get less money back? returns are terribly low right now investors have to figure out, where am i going to make money? cash will be trashed. they'll bring short-term rates down. short-term bonds will be trashed, they'll bring those yields down. you've got to find a place to actually make some money. >> to your point, we have a chart on the bloomberg that -- paul: to your point, we have a chart on the bloomberg that show what is you're talking ab. i'll throw your rhetorical question back at you. where do you go right now? where are you looking? john: the opportunity is in value stocks. that's somewhat synonymous with

high dividend stocks. look at the value stock index, underperformed the growth index for over five year. that means you've got plenty of opportunity to find stocks are nice dividends. it's not hard at all to find stocks that have dividend yields bf 3% and look if you're -- if your 10-year treasury is at a little over %. the dividends get the % with growth to it. they increase dividends other time. there's a place to make money. paul: when you talk about value stocks, how closely do you monitor the development in the trade war? what i'm asking, are you concerned about what earnings will be like in the coming quarter? john: no question about it this etrade war is bad. it's probably here to stay. if you ask democrats and republicans alike, they don't agrow on much but they do agree on one thing. china is really not playing by the rules. when it comes to trade. when it comes to corporate

espionage and things like that. so it's going to play well. you've got about a year and a half to go to the leks. i dent see trump bending over backwards for the chinese because it plays well for his people that are going to vote for him. >> i appreciate your message. there's a lot of things you can't control. you can control picking good stock to make money. let's look at chevrons. john: you saw -- you mentioned that energy, oil prices are down. chevron is not just crude oil it's also natural gas, they just completed last year a massive project out in australia. gas project. and so if you look at chevron today, their free cash flow yield is about 7% that have pay a dividend around 4%. they've got plenty of room to pay the 4% dividend. you should not only get that 4% dividend, you should be getting some increases in it over the next few years. kathleen: we want to pick up on

another big pick, cvs. i go to one in my neighborhood all the time. john: we're all getting older. kathleen: i don't go for health care. i go for snacks and things. go ahead. john: they don't actually make that much money as a percentage of revenues at the front of the store, the bhig deal now with the merger, it's all about health care. again here's a stock image, in the precash flow yield, our favorite statistic, cvs is between 8% and 9%. a little lower dividend than chevron but closer to 4% than 3%. paul: john, very quickly. it's fashionable at the moment, do you like gold? are you holding any gold? john: the thing with gold, gold tends to be the anti-dollar. you mention china with the treasuries, maybe selling some treasuries. you would think if they're going to sell treasuries, what are they going to do the money, one place they might think about

putting the money is gold. if you think china will be going to continue to sell treasuries, gold should do well. we -- at my firm we don't invest in gold. it doesn't pay a dividend. we prefer to make some yield on our investments. but gold could do well if the chinese are going to sell the treasuries. paul: all right. john burke, we'll leave it there. thank you for joining us. john burke, burke financial strategies president. much more coming up on the monetary policy front. later on tuesday, mario and it is rade's keynote address in portugal, 6:00 p.m. tonight for viewers in australia. this is bloomberg. ♪

kathleen: this is bloomberg technology global link. so let's take a look at the top global tech store throifs day.

emily? emily: thank you. ali baba planning a 1-8 share split as it prepare farce stock sale that could be hong kong's biggest since 2020. ompanies po posing to increase the shares sold to 8 billion. if i a praufed the split should take place no later than july of last year. software company slack is bucking excitement ahead of its initial offering on thursday. they may have an enterprise value of more than $20 billion. that's almost trip they will valuation it secured in its last private funding round back in august. slack is following spotify's lead and doing a direct listing in new york rather than a traditional inch p.o. and a rare downgrade for disney. shares fell from record levels after imperial credit cut the stock to a hold.

said the d the they sat liss for the share had already happened or were already priced in. those are the top level tech stories we're watching. paul? paul: thanks very much, emily. analysts warning that apple faces weaker than expected demand for its iphones ezz personally in china as the trade war drags on. ales of bloomberg -- drags on. bloomberg tech reporter mike joins us. mike: as has been happening, investors and analysts alike are concerned about how the trade war, how the situation involving huawei and the war between the u.s. and china will imneakt iphone, one of the most successful products of all time. what investors and analysts are continuing to say is there's going to be some impact on the iphone whether due to terrorists or rising prices, nationalism,

people in china electing not to purchase iphones because it comes from american companies or because of that same rationale because of the situation with huawei in the united states. kathleen: talk to us about what's driving this? how much does this have to do with what's happening in china specifically and how much does this have to do with the smartphone market in general? >> i think both of those are in play. the trade war situation, how huawei come into the picture and because people are buying phones less frequently. the redesign cycle, major upgrade timing has lengthened. there was a time where every two years, apple could come out with a major new design. for the past two cycles or so they move to a three-year. the iphones coming out this year for 2019 is going to look very similar to the iphone 10 that came out in 2017 and the 10s and

1s max and 10sr that came out last year. new design sales. that's what people are awaiting. there's also 5g, apple won't do that until 2020. emily: how much does huawei have to do this with? you think huawei sells into the chinese mark, has a lock on the china smartphone market where aple is a maul player there. how does what's happening with huawei impact what happens to apsnl >> huawei is absolutely a factor. in china, people want to buy products made by homegrown companies. huawei has been referred to by many as the aple of china. now chinese people in china are seeing the -- what the u.s. is doing to huawei, this upcoming ban in august and that could be a reason to spur sales of huawei. if they're sell manager huawei in china, something has to give, that's likely to be on apple.

people will buy fewer american-made devices over devices made by china. paul: bloomberg tech reporter mike gurman in los angeles. kathleen: that was our bloomberg technology global link. we're watching autobig news, all the big headlines of the day for you. wanted to share a very important one, crossing the bloomberg terminal now. to us send an additional 1,000 troops to the middle east. this is after the whole world has been debating how much veracity to put on the video the u.s. released of what looks like the iranian national forward putting -- revolutionary guard taking an unspent explosive off of the tanker that got hit. the japanese say they're waiting for more details to verify this. reuters reported earlier about the u.s. preparing to send more

troops to the middle east. that's the latest. let's move to our next topic, bloomberg technology. 7:00 a.m. in sydney, 5:00 a.m. in hong tong, 5:00 p.m. in new york. more coming up ♪. 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: 8:30 a.m. on a cold, wet tuesday morning in sydney. i'm paul allen in sydney. kathleen: i'm kathleen hays in new york where at 6:30 p.m. you're watching "daybreak australia." let's get to first word news with jessica somers. jessica: new satellite images released showing two oil tankers apparently attacked in the gulf of amman last week. the pictured were released monday. they show the ships, the state department released more photos of the tankers, showing what

they say is damage from an attack they say was carried out by iran. china's hold offings two-year treasuries foal a two-year low in april. the total fell by almost $7.5 billion to $1.1 trillion. that's 7% of total u.s. government debt, the lowest shares since june, 2005. china's ownership of treasuries peaked at 14% in july, 2011. the numbers were collected before trade talks collapsed in may. chinese president xi gin ping ill travel to -- -- xi jinping will travel to osaka. this marks the 70th anniversary of ties between the two states and it will be xi's first as chinese leader. a year after president trump first met kim there's no evidence that north korea is ready to give up its nuclear weapons program. some of the top banks in china

including icbc are demanding more than $2 billion from embattled indian tie can embani. his alliance communications went bust earlier this year, owing the bank $1.4 billion. they're seeking $180 million. a rescue plan from his brother fell through on regulatory issues. global news 24 hours a day on air and atticing to be on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm jessica somers, this is bloomberg. kathleen: australian futures hinting at a flat open. here's sophie in hong kong. sophie: sydney is in view after announcing a refresh strategy. a revenue group in line with market growth and the company is targeting roughly $1 billion in cost savings by fiscal 2023. we're watching gold mine wers resolute mining set to list in

london on thursday, would be the biggest gold listing since 2017. r.b.c. doesn't see a.g.l. looking at other similar takeovers. paul: thanks for that, sophie. let's get more on what we should be watching. we have our inline editor with us. treasuries shrugging off an awful impyre manufacturing are we in a prefed holding pattern? >> very much so, paul. markets a little deer in the headlights right now. both bonds an stock went a long way very fast. amid this rate cut speculation frenzy in the fed futures market. now when they look around and

get that empire state was awful but it was perhaps influenced by the mexico tariff, back and forth. i think one thing that started to get into peoplest -- people's head and we've got a chart to show that, the fed doesn't have anywhere near the amount of wiggle room that it used to have in previous recessions. it can't cut as far before it his to resort to presumably yet more quantitative easing. that's a reminder to investors and traders that they might want to be a little cautious about expecting powell to start being patient. so far he says he wans to support the expansion but he's going to be patient. so with a lack of alarm signals going off the wider economy, wednesday's meeting for the fed looms as potentially nasty event. that also shows up in the gauges of treasury volatility at very

high levels right now. i think there's a lot of nervousness out there. kathleen: the aussie dollar at its lowest close since 2009, what's driving that? garrfield: that's an expression of the global concerns out there, the angst levels are still very high. the hong kong situation, although that has calmed down is still there to poke people about potential volatility, then there's whatever is going on in the middle east, not close to any sort of good news on the trade front that concern that the fed might not be so quick to move to an easing schedule is perhaps refocusing things a bit on the r.b.a., r.b.a. minutes out later today, that might give us a better clue as to whether or not they'll cut rates next month after this month's cut.

as you can see in the chart we've got up there, the 10-year yield gp between australia and the u.s. has come back down. with that coming back down, in absence of other factors, the aussie dollar comes back down. so i think we could expect more aussie dollar weakness here as we see perhaps a greater likelihood that the r.b.a. will be active than the fed will be. paul. thanks very joining us. don't forget to check out gtv live for more on what you saw the next stage of the overhall of deutsche bank is taking shape. the c.e.o. is zeroing in on another round of deep trading cuts that could result in a complete exit from its u.s. equity business. we've seen restructuring for some time now. less than a year ago this

started under the relatively new chief of the bank. what are they doning now? it seems like it's getting thunder emarket's nerves. what's different. >> there's deeper cuts this time around. we saw maybe 25% cuts in head count. but this year the conversation is more like let's eliminate this whole unit entirely as it pertains to exy thes. equities is a lot mauler. fixed income is double the amount of revenue. but it's still a significant cut. there's still some discussion about whether it's the right thing for me bank given that if they do this, how do they stay pertinent to some big, large global clients. >> do investors think this is the right thing for the bank? how have they been reacting so far? >> analysts have been saying it might be too late. the question is will this be enough to turn around the trajectory of the bank or sit

trimming at the margins like we've seen the last couple of years, a little cutting here, a little cutting there, or is it enough to turn around trajectory. kathleen: too little, too late. >> that's what i meant. kathleen: the big question, the future of deutsche bank. more in bonds than stocks. how will this help restore it to some of its glory? >> that's the question. if you're cutting, that's not creating a growth trajectory. there's two element. s here. the one we didn't talk about is the creation of a bad bank. that sounds like a lot of money but if you think back to 2012, boich dank -- deutsche bank had done this with 100 million euros and noncore assetsle this is cleaning up problems not creating a growth strajectry. the bath here will be focusing on the transaction bank. more on the retail unit. that hasn't been sold yet in

these stories. paul: investment banking reporter, thanks for joining us. boeing says it's open to dropping the max branding for its troubled 737 plane as it tries to regain the trust of ages -- airlines and travelers after two fatal crashes and global grounding. speaking to bloomberg at the paris air show, c.e.o. den necessary monoberg says he sees -- planes back in the air by in 2019. >> we're focused on safety. that's the tone for the entire show. we are making good, solid progress to on bringing the max back up. working on the certification simulation flying this is week. thope ski july a flate test, certification flight shert shortly and get the planes back up in the air. all this is being done through the lens of safety. we will take whatever time is necessary to make sure the airplane is safe. >> 2019? 2020? >> it's something we expect to happen before the end of the

year, certainly. we're making good, steady progress. ypt to give you a specific timetable. we'll take the time necessary. >> could be 2020. >> we expect it to happen this year. >> are regulator going deep entire the system, a more for roe examination of the aircraft? >> it's a thorough examination and we encourage that. we're working with inspector around the world, f.a.a., yasa, chi in, can tasm the f.a.a. hosted a forum in dallas a few weeks ago. it's important do this in a thorough way. >> you emphasize the thorough. is it going, are the regulator going further in than you would have expected initially? >> i think we're going even deeper than normal. i think that's good. we encourage that. we're looking at every dimension of the max. the software update we're making. not only the airplane itself, the training and education

materials and overall design certification process. it's a holistic effort. >> are the regulators on the same page? >> they're well aligned. i see growing convergence between regulators. questions we're answering. detailed work on certification. we're encouraged by the collaboration between the regulators and seeing growing convergence. >> do you think the aircraft will fly first in the u.s. and then europe or will it happen at the same time? >> i think there's an opportunity to do it together. the f.a.a. and yasa are having meaningful discussions. we want to support whatever they want to do. >> but you think they're getting closering that the, not further apart? is there a gap between where f.a.a. is and others? >>ic there's work to do but the trend is they're converging. i think that alignment adds strength to the process. >> and the chinese regulators? >> they're part of the discussions as well. if i look at regulators around

the world, i see convergence around the whole group. our focus will remain steadily on safety. kathleen: up next, u.s. companies flocking to washington to push back against the next round of proposed tariffs against china, including some companies that previously backed the idea. this is bloomberg. ♪

paul: i'm paul allen in sydney. kathleen: i'm kathleen hays in new york. you're watching "daybreak australia." many companies who supported president trump's tariffs are now flipping an and say he's gone too far. mark there's been big names it looks like flipping. what about the hearings planned for the coming week? who are we going to hear from and what are we going to hear?

mark: we're hearing from many company executives signed up to testify against the proposed $300 billion in tariffs the trump administration is considering. we focus on new balance, a domestic shoe manufacturer proupped of making shoes in the u.s., supported tariffs in the past as a way of leveling the playing field with imported finished goods but as a domestic shoe manufacturing went offshore so did supply chain. new balance is relying on imports from china that would be subject to tariffs and is urging the trump administration not to mouff forward so it can continue making shoes in the u.s. paul: we have no confirmation of a meeting with trump in osaka, there's total radio silence? mark: the president will be at the g-20.

the expectation he's going to have a side meeting with the chinese president xi but it's not been con filled. the president has been making noises that if there is no side meeting, he might go ahead and impose these tariffs. we heard other talk from the secretary of commerce, wilbur ross, on sunday, not to expect too much. even if there is a meeting the leaders would agree on frameworks to continue talks. agreeing to continue talking is the most he'd expect out of the meeting. so at this point, we're sort of on hold waiting to see what will happen at the g20 meeting and then that will determine, i think, what what happens with these proposed tariffs on the block. kathleen. maybe talking would be better than paul's radio science -- sibles, we'll see what happens there. in terms they have next round of tariffs, what kinds of products? one reason people say it didn't hurt the tuste badly yet, it's mostly not on goods front and

center for consumers. what's going to happen now? mark. there were three earlier rounds of tariffs. the trump administration tried to exclude consumer goods, the thinking being, if they could limit the impact on u.s. the better. but now we've tariffed $250 million worth of chinese goods and there's not much left. so this last is the remaining goods from china that don't already have a tariff. we're hitting consumer products like laptops, tablets, apparel, footwear. we're seeing a range of products not even considered before like fishing tackle and eyeglasses and baby and even art carriages. so these hearings going on starting this week, you're seeing a whole range of companies coming forward to say that their products should not be subject to tariffs.

niquette.mberg's mark thanks for joining us. and now we have nicole, mark was talking about u.s. consumers and farmers, but of course this trade war is hurting china. so do you see this as turning into a bit of a war of attrition, who can take the most pain before they crack? nicole: i think that's a great question and it's good to be here with you. our clients look at this and process about the uncertainty that the trade war has created with their businesses and the outlook for investment and the like. think that the harm will bolt with the united states and with china. i think that one of the things that u.s. manufacturers are going to have to look at is moving their supply chains out of china.

while that will be expensive for them in the short run, they may have to do that. that's one of their alternatives. to the extent that they do, when the trade war end and i hope it does, they aren't going back to china. they're going to other areas, every regions like southeast asia. i think there's harm for china too. the question is, who can outlast hom in this trade war? paul: it's an interesting point about supply chains. the longer this goes on, does the supply chain increase the chance of this becoming permanent? nicole: absolutely. and it's an issue for u.s. farmers. as china reduces reliance on the u.s. because of tariffs on toy-so-beans, there are reports that they are looking at brazil now as a source and once they start buying soybeans from some other country, it's very unlikely that even when the trade war ends all of that

volume will come back to the u.s. i think there's harm on both sides. i think that an expeditious resolution of this trade war is in the interest of everyone. kathleen. nicole, i'm wondering about the sticking points for the china. why a deal that looked like it was going through clearly wasn't. the one that's most interesting to me, trying to get a commitment from china to change domestic laws to back up their promises. as someone who looked at trade deals and trade negotiations, is this a step too far? in other words, it's ok to say you have to meet a certain standard, but can one country tell another or ask another country to change its laws to make that happen? is that a common thing to happen in a trade deal like this? noy coal: that's a great

question. i don't think it's not common -- nicole: that's a great question. i don't think it's not common. in the emerging world, as trade issues are -- as trade deals are worked out and they address environmental protections. but here i think you've identified a sticking point in the negotiations. china will have to, in order to live up to some of the promises that we hope they'll be able to make, have to ensure that laws are changed not just at the federal level but also at the local and provincial level where often market access barriers are pretty significant and are verlooked. so i think that while it's not -- it's not unprecedented that a country will have to change law i think it's sticky in china and something that may explain why there's been a little bit of a cooling off. kathleen: how do you reach the

pushback from some constituents that xi jinping has to answer to trade war. of the when people look at the chinese drop in u.s. treasury holding, they've been doing a lot to stabilizer that currency, but should we start reading into this another sign that hey, you know, we can fight back? what do you make of the resistance and how it's being ecks pressed? noy coal: i think that's absolutely what's happening. china has a number of levers it can pull as well. just as we do i'm concerned for global stability, economic stability. that trade war doesn't just affect the united states and china, it affects the global economy. it's a little bit of a tit for tat. i'm hoping that calmer approaches will be -- will

manifest themselves in this rocess so we don't go too far. a bridge too far would be an all-out war rather than a happy medium to solve problems that companies in both the u.s. and china have. paul. thank you very much for joining s today. kathleen. thank you so much paul. you can watch us live. you can see our past interviews on our interactive tv function, tv go. you can dive into any securities or bloomberg functions we talk about plus become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv go. this is bloomberg. ♪

kathleen. i'm kathleen hays in new york. paul: i'm paul allen in sydney. you're watching "daybreak australia." ali because ba planning to -- planning a 1-8 shift split as it prepare far stock steal, could be hong kong's biggest since 2010. china's largest company is planning to increase shares eight fold. it will be put to a vote on july 18. if approved the submit should take place no later than july next year. kathleen: deutsche bank planning for cuts. there'll likely be less u.s. equity trades and a plan to wind down unwanted assets. this after the c.e.o. took over last year and included a 25% reduction in exquestion wiities trading paul: sotheby's sold the

most ever on news it's being bought by french telecom's billionaire patrick drery. it will result the company going private and make the top two auctioneers french owned. sotheby's has had issues even as masterpieces and contemporary works hit auction records. kathleen: airbus locked in orderses for $13 billion of new jets. the announcement encludes an $11 billion for air lease for new anes such as the longer hall xl3ren which can cross the atlantic and is raising pressure on boeing. irgin wants eight twin-aisle a-330's. coming up in "day break asia" we'll talk to the head of u.s. equities.

paul: that's it for "daybreak australia." this is bloomberg. ♪ the latest innovation from xfinity

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paul: i'm paul allen in sydney. we are under an hour away from the australian open. kathleen: good evening. i'm kathleen hays. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." paul: our top stories this tuesday, a muted start for asia as trade awaits the fed. chinawall street managed calls on u.s. treasuries since holdings hel