paul: we are under an hour delay from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin. welcome to "daybreak: asia." paul: our top story this tuesday, asian stocks face a againstart, stimulus concerns over growth.

oil delivers mixed messages as the u.s. seeks allies against iran. rising almost 1%. shery: let's get a quick check on the markets. fluctuations. investors are conflicted because they saw -- they have expectations. at the same time, there is so much uncertainty coming out of theg20 and what to expect meeting. xi jinping energy andks and health care weighing on the index. the nasdaq is down .3% while the

dow was unchanged. let's see how beer shaping up the asian markets. up in theare shaping asian markets. gold is pushing further and began is holding steady. we are seeing kiwi stocks halting eight a today rise. two day rise. governor --be ok bok government -- governor meeting. thank you very much. let's get to first word news. >> another factory gauge

beginning this month. the dallas fed meeting felt a three-year love. it is the fourth straight monthly decline and the outlook also indicates further deterioration in the economy. to steel tariff has failed secure a hearing. the president used it to justify tariffs. 25% steel tariff in march of last year. the u.k. opposition leader has indicated he is warming up to the idea of a second referendum on brexit.

he said that once dan made the choice, they should have the confidence to put brexit to a second vote. huawei are calling on the canadian justice minister to intervene and stop the extradition request. she said she would not have been charged in canada for her budget crime of fraud and lying about dealings with iran. her exhibition case is set to begin in january. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. president trump ramping up the pressure on iran.

iran hasdent saying exhibited hostile conduct. president trump: this follows aggressive behavior from iran, including the shooting down of u.s. drones. everybody's -- everybody saw that one. you saw the tinkers and we know of other things that were done. shery: we know that most of the economy is already sanctioned. >> it will cut off the supreme leader from using the international banking system. it is rather unlikely that they are keeping substantial assets

or using it for transaction. there is a fair amount of symbolism there, directly targeting the leader of iran. another era tent. they have other targets for sanctions with about 80% of the economy coming under sanctions from the u.s. as the administration tries to clamp -- iran's economy. it is another escalation and the fact -- in the fight. it is sure to be another it your intent and whatever relationship there is. if the intention is to force iran to the negotiating table, will this tactic help? some experts think that this

is not likely to bring the irradiance -- the iranians to the tape. they have been under sanctions for quite some time and have not yet submitted to any negotiations or talks with u.s. said thereative s.uld be no one-on-one talk shery: a trump administration official saying that the art trying to manipulate u.s. public opinion ahead of the 2020 elections. how exactly would they do this question -- do this? >> they use conventional means. inmate --advertising in newspapers.

they tried to bring their point of view to another nation. russia and iran are using social less in ways that are transparent to influence u.s. thisdid not lay out a nice -- any specifics. a researcher for the cybersecurity firm told haveberg that the iranian conducted attacks on u.s. financial institutions, seeking for ways into computer networks to gain access. the official said that so far, there is no indication that there has been a breach of the security system by any of those countries or others.

they are continuing to monitor that and take countermeasures, as they can. paul: thank you very much for joining us. on the bottom of your screen, we are getting an alert. president trump will discuss iran and syria at the g20. still to come, we will get to the top because. is --g us in sydney, this that is coming up later this hour. that is next. this is bloomberg. erg.

♪

shery: we have an alert on bloomberg. we're hearing from the trade we knowtative office

that president trump and president xi jinping our meeting on the sideline of the g20. the u.s. and china are discussing arrangements for the meeting. we have not heard of a specific date for when it will take place. markets have been a leading the g20 and what could come out of those negotiations between president trump and president xi jinping. looking for lower interest rates. su keenan is here with more on the latest moves that we saw in today's sessions. su:su: pretty volatile. what was -- su: investors looking ahead to an action-packed week.

notice the dollar below a key level on friday. you are noticing the treasury almost 58.ropped futures relatively flat going into the tuesday session. let's take a look at some of the big movers. reaction to bernie sanders. a democratic front runner and one of the top contenders on the mechanics side. he wants to make college free for americans. it was not well-received on wall street. merger.ting the getting ready -- getting rid of a key drug.

notice it getting a boost. beanalyst thought this would helpful for sales. white is shows us, the the broadest measure of the market. since not hit a high august 2018. this normally foretells a negative downturn for the s&p, but not yet. they are monitoring, but it does not necessarily play out poorly, just yet. pretty of action on the commodities front. the relic of gold is having its moment in the sunshine again. realhe gold rush is according to the latest data. let's go back into bloomberg.

the gold etf with the biggest inflow on record. inflow. is above 1400. it had its biggest close and a lot of funds piling in. oil is also reacting in a different way. it was higher on a lot of the conflict, but brent crude was lower. are concerned about the supply outlook. we might see supplies creeping up. we had one big mover after hours. su: deborah information about its skin treatment. it is a lot better than 14%.

a lot of anticipation year. now, great to us have you with us. let's talk about what we can expect. investors are pricing in 100% cut when it comes to the july fed meeting. what are year expectations, given that they are pricing in more dovish banks around the world? >> it has been aggressively priced in cuts by the fed. he talked about expectation for july. 85% showed that there will be a second rate cut. there is a chance for a third rate cut in december. they might disappoint some. cuts asviews the rate an insurance against deteriorating situation. inflation gives them the perfect

out. and declining, as we speak. will wait and watch on the third one. we know how quickly trade issues can change. they can change on a dime or a tweet. shery: not to mention a rocky g20 meeting could also force the fed to move faster. >> but by the same token, i think the market has come to grips with the whole idea that unlike in the first quarter of 2019, they are clear. there will be no magical resolution of the trade war. this will be a long drawn, protracted situation.

the stakes have changed. this is no longer about trade imbalances. just get used to it. the market is looking for incremental process -- progress. gradually making their way. i do not think we will have resolved the really sticky issues of intellectual property and transfer of technology, but we will wait and see. if it does drag on for years, if not decades, what does that mean for the global economy? seen the yield curve invert a couple times. this chart that we have on small caps and transport proving quite reliable

in the past and it comes to predicting bad times. what do you see the odds of a recession as? in five or squeezing six questions in that preamble, but let me take them quickly, one at a time. the market will have to get used to these flows. there will be bouts of risk on and risk off. becausepected returns valuations are quite full. this has huge implications. in terms of whether this continued back-and-forth will actually precipitate a recession , i do not think so. let me focus on the u.s. for just a moment. we know that the economy is driven by the consumer. is so much good news on

this front. all of the vatican ups and downs, the jobs, data notwithstanding, we are averaging over 150,000 new jobs per month in 2019. income is rising. unemployment is at a low. consumer confidence is high. it is so hard to imagine that in the backdrop, there is a recession around the corner. even more comprehensive data of economic activity. i will resort to the purchasing manager index. manufacturing is at 52. healthy -- it is a very 66. the composite is around 54, consistent with the growth rate. hard to see a recession.

paul: we have seen gold performing well, so why is it catching a bit? because it is anti-? -- willollar will begin be beginning. central-bank has now agreed or indicated that they will do whatever it takes to keep the expansion going. --they get a good result this is a strictly lateral issue. if this somehow gets resolved, you will see a pickup in global growth. gets s where the dollar weak. -- will see more economic

economically cyclical sectors. emerging markets, value stocks. they will begin to go up and i do not think that is the backdrop that goes very well. issuede remains a chronic , the tariffs will trigger inflation. the trade war will suppress economic activity. with inflation and strong is a veryelays, gold attractive safe haven and that could be the backdrop for gold to continue its line. shery: if that happens and u.s. economy starts weakening, are investors going to be looking to trump constantly

being focused on the level of the equity market? work here.two that think it came into play. it was about three weeks ago at this point with chairman powell, where he made a statement that he would act to save the economy. the effect on the market is june. it is mainly based on that one statement. tied to the election cycle. president trump needs a strong economy and a continued bull market to enhance his chances of reelection. to let the trade issues linger on may not promote that outcome. he has an incentive to put an end to it. there is a wildcard scenario. if he goes with the trade war

tend toed, people rally. if you were to ask me a binary yes or no question, i would say yes. notink it does get resolved to everybody's satisfaction, but there will be a trade deal that will be a compromise. it will talk about intellectual property. trade imbalances will get rectified. that seems to be the most likely scenario. shery: we will know where we are headed in a few days. thank you for joining us. we will have an exclusive interview in the early hours of wednesday. we will bring you -- we will

bring it to you tomorrow on daybreak asia. paul: you can get a roundup of the stories that you need to know to get your day going. daybreak subscribers can go to dayb on their terminals. you can customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪

shery: let's get a quick check of the asian markets. we are seeing kiwi stocks unchanged right there at the bottom after two sessions of gains. it is a confusing picture for investors, as was trading on wall street. we are still waiting for the g20 to happen. a lot of things happening, including new iran sanctions.

cindy futures down. nikkei futures are gaining. , president trump facing bipartisan pressure to stay tough on huawei. this is bloomberg. ♪ i don't know why i didn't get screened a long time ago.

i kept putting it off... what was i thinking? ok, mr. jones... we're all done. i told you it was easy. with life line screening, getting screened for unknown health conditions is so quick, painless and affordable, you'll wonder why you hadn't done it before. so if you're over age 50, call now and schedule an appointment near you. for just $149- a savings of over 50%- you'll receive a package of five screenings that go beyond your doctor's annual check-up. ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. after all, 4 out of 5 people who have a stroke, their first symptom is a stroke. so call today and start with a free health assessment

to understand your best plan of action. so why didn't we do this earlier? life line screening. the power of prevention. call now to learn more. >> this is "daybreak: asia." the trump administration has put sanctions on the supreme leader of iran, further raising the pressure on the islamic republic. they are designed to deny them access to resources. .ashington is promising action the u.s. indicated similar financial sanctions against him would come later this week. secretary of state mike pompeo is in the middle east to rally a coalition of support.

u.s. once support for better safeguards for commercial shipping. washington accuses tehran of attacking oil tankers, charge that they deny. sources tell us brussels may impose a fine as soon as next month and what would be the final antitrust penalty from the commissioner. she steps down later this year after hitting google with $9,000 in fines and ordering apple to pay back taxes of 14 billion. considering a law that would bailout cabdrivers who say that they face when by competition sparked by other ride-hailing companies. they say their businesses have been broken by city policies that encourage an inflated market.

global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. here is sophie. with gold ascending, making it the flavor of the month, i want to bring up new christ, which has climbed to a 2012 hi. morgan stanley has downgraded the stock and raised the price target, implying a 25% drop. brightners are shining and outperforming gold. that could mark the start of a new, bold gold market.

weighed.s have been this morning, gold trading around 1424. the next level would be 1425. u.s. and chinese officials are discussing a range of arrangements. said that theer aim would be compromised on both sides. let's look ahead to the meeting with our policy team leader, sarah mcgregor. sides ready for compromise? >> --are both sides ready for compromise? and hist lighthizer counterpart spoke by phone today. they are agreeing about what the leaders will talk about during their meeting. we know that there is no

expectation that they will come at the g20, but what they will probably decide on is a past -- a path forward. shery: remember when the president lifted a ban because of xi jinping's request? could there be a similar move this time around? >> there are a lot of similarities between this meeting and the last, when they agreed on a temporary truce. those talks have broken down and here we find ourselves again. trump is using that maybe he could go easier on huawei as part of a trade deal. the talks are directly part of a negotiation. is a justice department

issue and an issue of it being added an entity list. trade negotiations are something entirely separate. if presidentto see xi jinping asks for reprieve and whether president trump will grant it. , is the terms of huawei genie out of the battle -- the bottle? some members of congress may not be keen on concessions when it comes to huawei. how can president trump climbed down from that rhetorical position he has built? being assue of huawei security threat has been on the minds of a lot of people for a long time. if president trump asked down, he could get a lot of pushback

from people in his own party, and from other lawmakers. i think these are long-standing concerns against huawei. invest inw them to our infrastructure in the states, it could be compromised. these are long-standing to learn that have been brought up. there are other restrictions. it would be hard to imagine how donald trump could justify it, but we saw him backing down from sanctions last year in exchange for them shaking up their management and little more management. shery: thank you so much. joining us from l.a. one way to find out where the money is going is to watch etf. rise, large-cap with the

in a bullish fed. joining us now is equity reporter. how are they positioning now ahead of the talks? they are rising. that a 10%esting against losses is the lowest since early december. that is exactly when the previous g20 meeting took place. it is interesting that it was then when president xi jinping decided on a 90 day choose. what is going to happen right now? are we going to see the same situation where some kind of agreement between china and the less could trigger a further rally? how did they get on when

things broke down with the trade talks earlier this year? >> it was quite a bit of a route. it was a rally early in the year. deal and it did not happen. we saw a decline of about 14% after that. 5% they have rallied about and they are in year a high. it is interesting that it can all come crashing down. on bad debt.de biggest debt. tois what investors go to make huge bets on gains or losses in trade negotiations. shery: is that why it is so important options traders?

>> exactly. it is the most liquid etf and one of the oldest. it is an easy way for investors to go in and out. it could be easily traded. is 29% invested in china. now it is a pure bet on trade negotiations that will take place later this week. paul: bloomberg equity markets reporter, elena, thank you for joining us. coming up, we get the top calls. nick joins us right here in sydney. this is bloomberg. ♪

shery: this is "daybreak: asia." paul: i'm paul allen in sydney.

the dollar touched the lowest level in three months. our next guest says there will be no dramatic appreciation. thank you for joining us today. if you have a look on the bloomberg terminal, we had a chart showing the greenback is dipping as the fed turns dovish. you do not see it staying there for long? >> no. we have seen a good depreciation in the dollar. last month's fed meeting confirmed whether or not the market was expected. maybe that is a little bit overdone. i think that is firmly price and that we will see a cut. i think all of the data is pointing towards that many further cuts.

from there, we will probably see the dollar getting back to levels that we were seeing earlier in the year. with my view. we have probably seen an extended view. maybe we will see a return. dollar-yen, the yen will probably outstrip the dollar that scenario. we will see the dollar appreciate. shery: you are seeing the g tv charts there. let's talk a little bit about the euro. strongare expecting a seenr, you have already mario draghi saying that more stimulus could becoming. >> yes.

that goes in line with the theory that maybe we have overdone the amount of dovish is that we have seen priced in from the fed. there will be further stimulus. they might look to cut. -- putll start to push pressure on the euro. seeink we might start to that fading off. betweent meeting president xi jinping and president trump, if it looks like there will not be a conclusion soon, i think we will start to see the dollar depreciated. hit with auld be lowering of expectations. more -- shery: more pressure for the sterling as well, especially if you're johnson is the next prime minister.

>> the sterling has managed to stay out of the news for the last few weeks. it was a highlight for the first half of the year. we know what his mandate is what they regard to brexit. it does increase the chances of a hard brexit. we will see the sterling decreasing. i know that you the aussie yen pretty quick -- closely. >> what we are seeing across the equity market, the aussie yen is looking pretty well-off. accelerate iflly we see a big downturn in global growth. the aussie yen could be one of

those currencies. >> this is something i have been curious about for a while. it is not doing well against the kiwi. >> is an interesting play. is a big focus. gets hitets hit, it hard. it came all the way down. it is one of those things. especially with that dovish term, we have seen cuts from both central banks. the kiwi is one of those strange currencies. shery: let's turn to the chinese yuan. morere going to expect depreciation of the renminbi against the dollar. how much more? if we get a rocky meeting, does

that mean that we could reaching the level soon? >> yes. it all depends -- that is why we are so focused on this meeting at the end of the week. turn into a nonevent for nothing gets resolved with no indication that there will be a resolution. i expect it to be weakening further. back to that level. i do not think anybody is going at it to move quickly. a lot does depend on what happens at the end of the week. shery: dear buying into the governor's comments that seven is not a crucial level for them? has -- i think it

is a fairly strong level for them. above seven. push maybe they will not be too unhappy. we were looking at seven as a crucial level. for me, it is still a pretty crucial level. paul: tomorrow, we have a central bank meeting. where do you see it heading? >> it will be very interesting to see what they say. i think there will be a lot -- they will be very dated dependent. if we see international aspects

starting to weaken. we keep going back to this meeting and how it comes across. even if it is in the next few weeks, at the moment, i think it will stay. paul: thank you very much for joining us. do not forget our interactive tv function. you can watch us live and catch up on past interviews, diving into any of the securities or functions that we talked about. become part of the conversation by sending us instant messages during our shows. check it out at tv . this is bloomberg. ♪

paul: let's get a quick check on the latest is ms. lasch headlines. up toet labs is teaming invest almost $1 billion in developing new in toronto.

biplanes and a power grid. up.y: news of a tie just over $4 billion. the combination move result in almosta $20 billion -- 20 -- 250,000 employees. a 22% premium the closing price. this will enable it to expand its software and engineering network. bts is pop's mega band part of a cell phone game. they have unveiled a game that lets players build and manage the band from auditions. it is the first major mobile game exclusive -- focus exclusively on a kapok band.

band.pop $38 pot was popular. the price will quadruple to nearly $190 if proposed tariffs go into effect. they have appealed to the u.s. trade representative, saying they have no viable options. latest minute of the april boj policy meeting. that was when they voted 7-2 to policy. the most members are saying that it is appropriate to continue with easing and that it will take time to hit the 2% price target. really not surprising. one member saying that they should decisively add to easing if momentum is lost. what thechoing

governor said in the past saying they had enough ammunition and could deliver more monetary stimulus if necessary. one member has said that there is need to pay more attention to the side effect of this massive monetary easing that they have been carrying out. in's preview the market open japan and australia. we are looking at a risk off session. risks are further eroding the year's gains. not much in the way of surprise there. flipping the board when it comes to stocks to watch. -- we are watching and evaluating offers to buy the chip yard in the philippines. board. is slipping the

we are watching asahi. is due today. we are keeping an ion nippon and its peers. let's get a quick check of the asian markets. kiwi stocks at the moment are unchanged. investors are struggling for direction. we had wall street fluctuating between gains and losses in the evening session. we are headed towards the g20 meeting between president trump and president xi jinping. futures are down about .3%. kospi futures are losing ground. a lot depends on what happens at the g20 meeting at what happens going forward. paul: still to come on the next hour of daybreak asia, we will inkswhy a sense just

stalemates is the base case for the trade war. we will talk sanctions and security with roger stone hand. the market open is net -- shanahan.

i don't know why i didn't get screened a long time ago. i kept putting it off... what was i thinking? ok, mr. jones... we're all done. i told you it was easy. with life line screening, getting screened for unknown health conditions is so quick, painless and affordable, you'll wonder why you hadn't done it before. so if you're over age 50, call now and schedule an appointment near you. for just $149- a savings of over 50%- you'll receive a package of five screenings that go beyond your doctor's annual check-up. ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. after all, 4 out of 5 people who have a stroke, their first symptom is a stroke. so call today and start with a free health assessment

to understand your best plan of action. so why didn't we do this earlier? life line screening. the power of prevention. call now to learn more. >>. i am paul allen in sydney. sydney's major markets are about of a portrait. shery: good evening, i am shery on. sophie: welcome to daybreak asia. >> our top stories this tuesday, the trump administration is seeking allies to the fund iran. mike pompeo is in the middle east. any conflict would hurt supplies. the cost of insuring gulf oil

shipments is sorry. singer puzzles -- >> senior officials are discussing an arrangement for a presidential get-together at the g20. we are watching very closely what could happen coming out of that summit. let's get to the market action with sophie. sophie: after u.s. talks slipped in a lackluster session, cash trade is kicking off in tokyo, seoul and sydney. kiwi shares are set to snap up to the events. banks inore central focus. this is edging slightly higher this morning. over all we look to be in a holding pattern ahead of the g20. assets thisk across morning, taking a look at gold, about -- its client

above. keeping an eye on treasuries after the 10 year dropped closer to 2%. at it holding steady so far the start of the asian session. the u.s. dollar is trading near three-month lows. paul: let's get the first word news. >> another u.s. factory gauge monitored by the fed weakens this month, adding to signs of waning growth and de-escalation trade wars. manufacturing and texas fell to a three-year low. more companies saw business conditions worsen. this is the fourth straight monthly decline. the six-month outlook indicates further deterioration in the economy. an industry group and two producers say the presidency -- president used this section to

justify tariffs on national security grounds, it is so broad that it by which the constitution -- by which the constitution. the u.k. opposition leader jeremy corbyn has indicated he is wanted to the idea of a second referendum on brexit. they moved to elect the new leader and prime minister. he says once they have made that choice, they should have the confidence to put brexit back to a second vote on october the 31st. are calling huawei on the canadian justice minister to intervene and stop the u.s. extradition request. the case has become politicized and she would not have been for herin canada alleged crime of fraud and lying about dealings with iran. her extradition case is scheduled to begin in january.

global news, 24 hours a day. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: u.s. and chinese officials are discussing arrangements for estimating between president trump and xi jinping at the g20. we are hearing from the ministry of commerce and china. they say that the trade teams are agreed to keep medications open. they have exchanged opinions over the phone. this is confirming what we have. saying that the ambassador has spoken with this on monday iphone. this is actually coming after china's congress minister said the meeting of would be compromise on both sides.

is editor jodi schneider joining us now. it seems communications are open but at the same time, this g20 is coming at a time when the u.s. has added five more tech companies to its blacklist. we are getting some conflicting signals on where the atmosphere is at right now. jodi: that is right. lots of conflicting signals. we had president trump tweeted that he was optimistic about the talk. he ended these talks in may what he said china reneged on thomases. the same time, we saw more companies added to that list as huawei was earlier added. we are hearing china say they are willing to talk and they hope that compromise is on the agenda. at the same time, they are wanting the u.s. to basically be

and to discuss huawei loosen restrictions there. they don't want the u.s. to bring up the situation in hong kong. it is hard to say that we will get a big trade deal out of this but people are saying maybe they will be able to talk more and cool these tensions. that is the most that people are really expecting out of this meeting. mentioned huawei, is that the only corporate issue that should make the agenda? jodi: that will be a big one. china is concerned about that the most. there are other related issues. they want to talk about fedex. the company based in tennessee said they were not delivering shipments. china does not want to talk about hong kong. the u.s. may bring that up. there are more demonstrations planned for wednesday.

this is the extradition, the very controversial extradition that china had backed that spurred these demonstrations. these are the kinds of issues on the one. they want his trade and how you get some kind of agreement out of these tariffs and the counter tariffs that have been going on. >> congress is getting more vocal about huawei. there is not much consensus and washington but when it comes to china, they seem to be on the same page. jodi: there is bipartisan consensus and pressure being put on the administration from congress.

they do not want to see those restrictions eased. they want to see president trump remained tough there. earlier last year he had come down on another chinese corporation. that took some of the restrictions on. congress does not want to see that happen again. president trump would almost certainly veto it. they are doing that in advance of the g20. paul: eightcommanders here.

he tweeted, asking why we are protecting the shipping lanes to other countries. that prompted mixed messages from the oil market. wti rose in new york. let's bring in our energy reported. explainou expand -- oil's mixed reaction? >> the military did call back from the confrontation. the report was that trump decided just a little while before. as you mentioned, they imposed new sanctions yesterday. mike pompeo is in the region trying to drum up the coalition to support and a potential move they might do against iran. there is a lot of incentive there. fire in termsding

of selling oil. it will probably be well supported. in terms of that break you discussed, slightly different dynamics at play between those two great hash marks. we had a pretty major refinery fire over the weekend. that sent u.s. gas prices soaring. that lends a bit more support to wti. we are seeing that rebalance a little bit this morning. that, the supply outlook is a bit more favorable. >> we have the opec meeting coming up as well. what are we expecting? the usual scenario is playing out ahead of that opec meeting. russia sounding somewhat lukewarm about whether they will extend those production cuts. james: that is the question everyone is asking in the market.

no decisions have been made before the meeting. i believe that is due to happen in the early part of july or the first week of july. they struggled to reach an agreement about want to have the meeting. until we get it in ink that the production cuts will be extended, i think the market will be uncertain. there can be more volatility. what is clear is that the saudi's will be pushing hard. my guess at the moment will be that they will ultimately succeed in doing that. confirmed, they will be volatility. paul: there are a lot of things driving the oil price at the moment. what else are you watching at the moment? james: that is right. has been discussed, the highlight in japan will be how trump and xi get on. in the immediate term, that will

be the focus. we don't know what will happen in iran. drone attack last week. before that, it was the blasts on the tankers. will there be any more this week? there will be risk. >> thank you so much. that was our bloomberg energy reported joining us from sydney. nissan shareholders said for the first annual meeting in the post carlos ghosn era. we will have a preview waiter in the shower. paul: the next guest sees more -- the next hour. the next guest sees more problems to come. this is bloomberg. ♪

paul: this is daybreak asia. i am paul allen in sydney. shery: i am shery ahn in new york.

our next guest sees weakness for asian markets. joining us now from singapore is our strategist. is your outlook potential support from banks around asia? thank you for having me here. i think we are generally ready to preface this. passed to the g20 meeting, we could be having two different conversations depending on what the outcome is. we are looking for more updates coming through. talks comingitive in. there are some things missing at this point. we're looking at the situation.

we are waiting just see what happens at the g20 meeting between president trump and president xi. i think right now, we could be seen the market getting a little more. this is very sentiment driven. shery: that optimism is huge. we have seen u.s. stocks at record highs. the chinese markets are in a bull market right now. there is a huge rally we have seen in the csi 300. yet, other markets around asia, japan is close to a raising their years gain. their years' gain.

google get hit? will it be japan -- who will get hit? will it be japan? other markets around asia? jingyi: there are a lot of hopes in the market. the market is seeing a lot of repeats. in may, we had weakness in the market and then after the market, an institute came through from the g20. in a sense, they are trading a little bit more to the favor of the central banks. i think that in the sense, the we are doing a little too much. ones thate are the could actually be the ones that can see a little bit more of the adjustments.

it is not going to be the roads. -- the road out of this. yuan seems to have fallen. we were having a discussion possibly pushing through seven. that was pretty far from the case. that since the aligning, the trade war will continue to escalate. surprised -- i there are things we

should be more cautious of. what we are seeing is the baking and of this optimism. -- in of this optimism. gettinget in china is bad news. that is why we are seeing that reversal. thatld not be surprised the sentiment itself would be the one getting hit. seems to bet overruling what the fundamentals are doing for the markets. i think that given what we are this seems toow, , rather thanll end a peaceful situation coming from the g20. we are seeing a higher dollar.

i think this is something worth watching at this point. the market does seem to see some psychological resistance at this point. i want to get your -- paul: i want to get your opinion on gold. do you see more upside? i'm glad you mentioned this. this is one of the surprises we are seeing. this could be a full on makeup from the trade war. what we have is the expectation for the federal reserve. a formal shipped coming through expecting the u.s. dollar to weaken. the gold price is shooting up.

it is no doubt a little overbought. market --ink that the we could see prices going up. we will see a burst for code prices in light of the tensions. also, the dollar weakening. paul: thank you very much for joining us. you can get a roundup of the stories you need to know to get your day going. oft is in today's edition daybreak. it is also available on mobile and the bloomberg anywhere app. on the on thews industries that you care about. this is bloomberg. ♪

benjamin:benjamin: -- -- -- paul: what are investors washing for, david? david: the main point of the meeting is to reform the structure. up for vote will be a three committee structure which is designed to basically salute the power of individuals so that a power-play executive or board member would not be able to push through their own initiatives without the full support of the board. that what you have an audit committee and a compensated -- compensation committee. that is the key to the

structure. on anill be voting entirely new slate of directors. that will include slates for the ceo and chairman. that is a key point. the support of renault. shery: should the nissan ceo have reason story about this meeting? david: yes, i think the nissan , there is a lot at stake for him personally. here.le is at stake quite naturally. his seat is on the ballot. to proxy advisors have recommended against voting for him. still, you have the fact that he has that 43% stake. it might be difficult to imagine that he would not be reappointed difficultdifficult --

-- the difficult situation that would put the carmaker in. those could be very uncomfortable questions for him to answer. just yesterday, at the pretrial hearing for carlos ghosn, some of the toughest questions came to him. the question is why haven't prosecutors put him on trial? why have they given him immunity to indictment? that a a question shareholder could ask. that could be very uncomfortable. once the question is up, it creates a narrative about his role in the scandal and whether or not he will take responsibility for it. we have reported that he has already accepted a 50% pay cut. placesre also probably

for a moment of apology. it will be a tough day. no question about that. >> thank you for that. joining us from tokyo. now, a quick check of the business flash headlines. >> all allegations dismissed. it raised concerns about financial reporting, claiming that shares are worthless. the stock was suspended in hong kong after dropping the most on record. training will resume on schedule today. paul: petroleum is seeking a stream.r midwestern we are told that occidental offered half for the stake. western midstream rose on the

ending on a market value of almost $13 billion. china startups are turning their back on ibm in favor of homegrown technology. that is next. this is bloomberg. the latest innovation from xfinity

isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. >> this is daybreak asia.

we had the first word headlines. the trump administration has put sanctions on the supreme leader of iran. the pressure on the islamic republic. the penalties are designed to deny access to financial resources. washington is promising action against the prime minister. the u.s. indicated similar financial sanctions would come later this week. mike pompeo is in the middle east to rally a coalition of support against iran.

he spoke with the crown prince before headed to the united arab emirates. discuss theto strait of hormuz. this would be the final antitrust penalty and -- she steps down later this year after hitting google with $9 billion fines and ordering apple to pay back taxes of 14 billion. new york city council is considering a law that would tell out cabdrivers. ruinedy they have been by competition from uber and other ridesharing competitions. this was have been broken by city policies that encouraged

and inflated market that was shattered by the unregulated growth of the ride-hailing industry. local 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. this is bloomberg. paul: time for a market check with sophie. point of the markets board. asian stocks are trading mixed but they hired. the topic is extending with materials leading pictorial gains. in sydney, we have gold miners tracking this. the benchmark in sydney is being weighed by financials. looking at all of the markets flipping the board, we are seeing continued divergence after wg i jumped. that could indicate that new

york crude to be a better bet going forward due in part to rising crude exports. a quick check on currencies. this is living against the dollar this morning. the offshore yuan is edging higher for the first session. 6.80.s moving back toward goldman says it is time to rebuild hedges. thank you very much. the trade war rumbles on and so china las vegas startups are ditching u.s. tech in favor of homegrown software. why is china concerned about the likes of oracle and ibm? >> as the china and u.s. trade

war were on, this narrative to buy china tech is really escalating. they were trying to revamp these industries and connect them to the internet. when you think about the data that could be involved. that is why all of these companies are thinking about whether they should replace oracle and ibm with this company. >> tell us about this company that has no become the plan be in china. lulu: if you look at their database manager, you might wonder what that actually means. from everything from ride-hailing location to user transaction numbers and user for financial institutions, all of that data can be stored on the database and traditionally, oracle and ibm have rarely dominated the

space. right now, a cohort of chinese startups, they are all looking at them and saying maybe we should be migrating some of our data to this database. one thing that is going for them specifically, that is traditional database managers. you can think of them like water cap. you would have to replace them with a large container. what pink cap is specializing in his database servers. you can link as many cups as you want together. cost efficient way to save money for startups. that is why they are learning so many chinese startups. paul: how competitive is this industry? lulu: it is really competitive in the sense that open source databases are really trying to

abandon the industry that has been dominated by oracle and ibm. pingcap is trying to compete with many others. their competing with many u.s. founded open source databases. competitive.his is they don't start generating long towardl very establishing themselves in the industry. they will be more prone to work with pingcap as an experiment and helping them establish successful case studies. his would make --

>> to answer those questions, this is our chief economist, tom. questions, how much has this cost so far? the trade war has been going on for over a year now. how much could it cost if president trump goes ahead and puts 45% tariffs on all of the chinese exports into the u.s.? what have you found? those are indeed the questions. to answer the first one, we look at a very granular and this aggregated data fair on u.s. imports. what we found was that around 26% of chinese sales to the u.s. in the tariff categories have disappeared. there has been a very significant drop in chinese exports to the u.s. in the

categories where president trump imposed those 25% tariffs. my answer to the second question, what is the outlook? that is more difficult. that involves forecasting. what we have done is plugged the tariff shock into a large scale model of the global economy. if we havels us is an escalation, if we see tariffs go to 25% on all bilateral trade , eventually is a market shock, we would be looking at a blow to global gdp in 2020 and 2021. paul: are there any countries benefiting from all of this? from the we can tell very granular u.s. import data is if there have been any diversions, any revert things of

supply chains.f made in china is very difficult to replace. china is really big. they are great at producing things with demanding specifications. there is no one that can quickly fill the gap. for some products and countries, there is a slightly more nuanced story. we are seeing exports from taiwan, korea, vietnam in those categories that faced tariffs, they are rising pretty sharply. when we think that suggests is supply chains started to adopt, starting to work around china to keep goods flowing into the u.s. market. year, there was a warning of a economic current coming down. what are your expectations given that we are just ahead of the

g20 meetings this week? >> a striking phrase. that economic iron curtain fall in between china and the u.s.. if we go back to the buenos aires g20 bank at the end of 2018, president trump and president she sat down -- president xi looked at each other in the eye. tariffs stayed on hold. as we approached the g20 of osaka, that is the best we can hope for. enough theot been negotiation between the two sides. there has been no contact at the official level. trump and she -- xi our meeting. offon't see tariffs coming but we won't see them going up either. shery: thank you so much for joining us. bloombergom,

economics chief economist. 's pressure onp iran is not supporting any coherence -- coherent strategic outcome. roger shanahan joins us in a moment. this is bloomberg. ♪

-- : -- targeting roger shanahan is an expert on the security issues. he joins us now in sydney. thank you for joining us. of net some pressure,

will the spring iran to the negotiating table #is is it just as likely to have the opposite effect? >> they were the only work if they are multilateral. you need a strong coalition behind you. the u.s. approach has been unilateral. there were lots of people outside of iran. paul: can you explain to us the u.s.m between europe and on the nuclear deal? roblem? the u.s.'s p >> that is what everybody is asking. president trump said it was a bad deal. why is that? i think there are two aspects. president obama had negotiated that and president trump really wants to get rid of any legacy that president obama had and the other issue is i think he is very confident that he can get a better deal. the problem is that iran was

abiding by this. they do see any need to renegotiate a deal that they were complying with. >> we have been seeing some conflicting signals coming out of the white house. president trump tweeting today questioning america's interest in the region, talking about how china gets 91% of its oil here. many other countries likewise. why are we protecting this region. -- region? time, the president is applying sanctions on iran. what does this tell us about the strategy that the white house is employing here? >> the question of whether there is a strategy seems to be incoherent at the moment. mixed signals are being sent. i think that is a reflection of the lack of good procedures and

positive element in washington. we have theand, president saying that there is no conditions. -- iranyear ago, i ran said no vision change. the john bolton has been heavily forward about that regime change. he has taken money to speak at iranian opposition groups. it is this lack of coherence that makes it difficult for this maximum pressure campaign to work. shery: would it make sense to see what happens in the 2020 elections in the u.s.? rodger: they have a few options at the moment. iny have fired a few shots terms of the attacks on shipping in the strait of hormuz.

shooting down the unmanned aerial vehicle from the united states. probably pushill the envelope of the nuclear agreement by opting out of certain sections of it that maintaining certain other sections of it. --hink they will use those that tactic as a negotiating tactic, saying that if we are going to have talks, we will come back to what we originally signed. there is a possibility that there might be a different administrations in washington, then they can go back to the agreement. has not much incentive at the moment to renegotiate. >> does iran have any incentive to continue pushing ahead to develop nuclear weapons? is that pushing things too far? rodger: i think the iranians understand about incrementalism,

the thresholds they don't want to breach. the one thing that is really in their favor is the lack of coherence or multilateral coalition against them. if they were try to announce it, if they were to try to gain nuclear weapons, i think we would see that coalition coalesce. i think that is too far for the iranians. there is no need for it for them at the moment. they can continue to turn up the temperature in small increments to gain attention and the next political move. in terms of political moves, president trump has offered unconditional talks. why should the iranians be resistance to that? rodger: two aspects. they say that there is nothing to talk about, we have signed the agreement, we have done all the talking that needs to be done. visited ander abe

said we will not talk to president trump because we don't trust him on -- trust him. on the one hand, he said he wants to talk. just prior to prime minister abe arriving, there was the announcement of sanctions on the petrol industry. it is this notion of mixed messages. the iranians see no incentive. they have nothing to negotiate with. they can't trust washington's ability to deliver. paul: thank you very much for that. don't forget, interactive tv function tv , you can watch us live and catch up on past interviews and dive into any of the securities or bloomberg functions. we can also become -- you can also become part of the conversation. you can check this out at tv , this is bloomberg. ♪

paul: this is daybreak asia. i am paul allen in sydney. shery: i am shery on in new york. has takenation bts the world by storm. they had their own smartphone game.

i find this whole thing very unusual. world? bts > this is the first mobile game featuring k pop stars. it is a marriage between gaming and kapok. that is bridging off to millions of fans around the world. not even the u.s. and japan, --ia, south america, it is it feels like i'm interacting with a fan personally. that is a new thing for gaming.

paul: one of the implications for the two joining forces in south korea more broadly? >> the gaming and kapok industries, they are the two most well-known of south korea right now. we have seen the k pop music industry have grown so fast. it is reaching out to fans around the world. they are trying to regain their momentum outside of south korea. when samsung is facing industrial downturn right now. shery: will this be profitable? i believe it will make some money at some point. i talked with some of them already and they were willing to

$40.d about they could ended without paying any money. the question is whether it will last long if it will be profitable when it is released when the game is released tomorrow. paul: we will be talking to the i am sure that topic will come up. on the latest business flash headlines, pressure cookers are feeling the pressure of the trade went. the maker says the price will if thean quadruple $290

tariffs on chinese imports goes into effect. they have appealed to trade representatives, saying to have no other options. >> more backing from shareholders, they wanted to be thrown off the board. the ceo was reappointed at the annual meeting, along with nine other nominees. he has been under fire following that informationweek and recent -- information leak and recent losses. there has been a stock buyback of $1.4 billion. >> impression gold letter blocked by bachrach. they may team up with partners including a minor to make a joint offer. sources say transaction good value gold at one billion u.s. dollars. they operate min the inside. have doubled output since 2016.

preview of what to watch. one of the world's largest integrators of battery materials. in price two invest for china. the has been down. on the morning call roundup, they have lifted their price targets for chinese auto player hui group.oup -- yong flightsellation of 202 happened due to a strike and it has caused lost revenue.

paul: before we hand over to bloomberg markets: asia, let's take a quick look at how we are standing right now. mostly higher across here. the cost is up by .25%. up .10%.s you can see it on the screen but .2%. up by our market covers continues as well to the start of trade in hong kong, shanghai and shenzhen. this is bloomberg. ♪

>> it is 9 a.m. in beijing, singapore.d welcome to "bloomberg markets: china open." >> we're counting down to the of trade in hong kong and mainly markets. the u.s. and china are talking discussing the presidential get together after g20. -- at the huawei, though, could be a sticking point. >> the trump administration allies to confront iran. mike pompeo is in the middle takes a coole approach. >> and nissan is holding its the era. of decisions taken could reshape ties with renault.