>> good morning. we are under one hour away from the australian market open. shery: good evening from new york. welcome to "daybreak asia." paul: our top stories, back on track. the u.s. and china are talking trade once again as president trump throws huawei a bone that they can zoom to -- resume sales. and the president is the first u.s. leader to set foot inside north korea, saying it is an

honor to cross the line. and goodbye g20 and time for summer davos. we are live at the world economic forum at this hour. shery: let's get you started with a quick check of the markets. u.s. futures rallying about 1% at the moment, this, after the s&p 500 saw its best month since january. we have optimism over potential easing trade tensions between china and the u.s., not to mention the huge photo op president trump got at the dmz meeting with kim jong-un. take a look at asian futures. we are continuing to see a risk on moves ahead of trading. if we can switch up the boards, futures, nikkei futures up 1.5% as we get the japanese yen weakening for a fourth consecutive session. great asets not doing we get risk on sentiment. as korea starts trading on so-called peace dogs

as we saw that unprecedented meeting at the dmz. hyundai engineering and other stocks like korea gas and so forth. also keep an eye on chipmakers, especially samsung, as we saw president trump giving some relief to huawei, allowing some u.s. companies to do business with them. sydney futures at the moment up .3%. we are looking ahead to the rba decision tomorrow, expecting a cut to 1%. kiwi stocks falling .3%. paul: thank you. president trump says the u.s. is willing -- on a visit to south korea following the g20 summit in japan, trump said america is doing well despite the lack of any help from the fed. >> we are not playing on a fairfield. the fed has not been a help at all. despite that we are winning big because we created an economy

that is second to none. greatest in the world. paul: our bloomberg markets man tom mackenzie joins us now. what are the key takeaways from the weekend meeting? it is a truce between the u.s. and china, and maybe a little more that we expected from president trump, has some analysts we talked to said when it came to the huawei issue. but yes, we were expecting things to see -- to be the same as buenos aires then when both sides did not add additional tariffs and would restart talks. no concrete talks on when they will be actually meeting and discussing the issues again. when it comes to huawei it was actually quite interesting. some say president trump was backpedaling and scaling back the restrictions on the chinese company, allowing u.s.

businesses to do business with huawei. reporters there reportedly asked if huawei would be taken out of this export blacklist and he said no. here's more of what he had to say. >> u.s. companies can sell their equipment to huawei. i am talking about equipment where there is no great national emergency problem with it. but the u.s. companies can sell their equipment, so we have a lot of great companies in silicon valley and based in other parts of the country that make extremely complex equipment. we are letting themselves to huawei. -- letting them sell to huawei. yvonne: a lot of questions on whether president trump is giving up on this technology race in exchange for a handful of soybeans, according to our bloomberg economics economist. what we learned from president xi was they were going to buy more u.s. agricultural products. notice the -- no word on how

much they would be buying. this move from trump on huawei already drawn criticism from republicans and democrats. chuck schumer saying that backpedaling on huawei is undercutting the u.s. when it comes to getting them leverage in the next round of talks with china. so, a lot of questions on what came out of that. shery: senator rubio also calling this a catastrophic mistake. tom, every time we have one of these big meetings we hear from president trump. this time he called it back on track, better-than-expected. every time it seems that china's response is more measured. what was it this time around? inaccuratek that is representation. an accurate representation. going from the papers this morning there was a stress on the fact that u.s. would restart talks quote, based on equality and mutual respect.

this has been key for the chinese, they want to come away with any kind of deal that shows it was a two-sided agreement. they were concerned what they originally worked on with the u.s. would come out and look like a one-sided deal. that is something that is being stressed. you referenced marco rubio, editorial in one of the more hawkish newspapers saying china must remain vigilant. it must continue to plan for a and drawn out trade war in case the hawks in washington get the upper hand. there was a warning as well from the global times editorial. also this backdrop of continuing weaker data in china. that is a reality policymakers have to contend with. pmi was out over the weekend and manufacturing data continues to weaken. 49.4. it was below forecast, it remains in contractionary territory. exporters weakening

continuing. as wellnt softening which would be a concern to policymakers. nonmanufacturing remains in an expansionary zone but did weaken slightly in june. economist saying the trade war is only part of it. weaker the mystic demand, global economy is softer. things probably will not turn around until there is more aggressive policy measures from officials. there is all of that to contend with. something of relief in the editorials we are looking at a warning as well all around the economy and a warning that this is a truce and not a full-blown deal. paul: those pmi's do tell an interesting story. but they are backward looking. reactions,ediate what has been going on with the offshore yuan? tom: leading into this meeting volatility was very low.

now you're looking at the offshore yuan it is up about .5%. in terms of the s&p futures, those are looking stronger as well, up about 1%. there's an expectation chinese markets will open stronger. there is the view there will be short-term relief at the very least. again, as yvonne was saying, huawei seems to be a surprise for many analysts looking at this and that may provide positive momentum in the short-term. some others are warning that, again, this could just be short-term relief. long-term you still have those very fractal issues the size will have to work on. -- sides will have to work on. tom mackenzie, thank you so much. and yvonne man. let's not get the first word news with su keenan. su: we start with opec. opec and its allies are closer to extending production cuts in

the first quarter of next year. this is in the face of weakening global demand and surging u.s. shale output. russia and saudi arabia it reached a deal in the sidelines of the g20. from six to nine months and later producers agreed that the so-called opec -- an extension. i think that is needed for the current condition of the market. so, i am expecting another easier meeting and hopefully we will see the numbers. my expectation on the conformity level also to be higher than 100%. be the two men fighting to u.k. prime minister have reiterated their willing to take the country out of the european union without a deal. --is johnson and germy hemp jeremy hunt said they want an agreement with brussels but

would be prepared for or no deal brexit if negotiations fail. both candidates also promised tax cuts to boost the u.k. economy. eu leaders are deadlocked on the bloc's top job. supports onerkel man, but is facing opposition from other european conservatives. they include -- other potential candidates include the top eu brexit negotiator and imf chief. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. shery: still ahead, trade tensions continue to dominate the headlines. we will be live ahead of the world economic forum. amy xie patrick joins me in sydney to discuss the impacts of the trump/xi

meeting in osaka. this is bloomberg. ♪

shery: this is "daybreak asia." i'm shery ahn in new york. paul: the outlook for china's manufacturing sector continue to deteriorate in june. manufacturing pmi data released on sunday stayed at 49.4, a little worse than what was foreseen in a bloomberg survey. let's discuss the implications of this with amy xie patrick. thank you very much for joining us. we saw the pmi weakening's. it is really not just the impact of the trade war on china, is it? is there a domestic story also going on? amy: yes, definitely. earlier in the year you saw some recovery and activity due to the stimulus they injected at the end of last year. that degree of stimulus is highly limited about their

concerns over financial stability. so they continue to pump more credit into the economy, increasing the debt and financial fragility for the future. that limits the extent to which how much they can inject more stimulus into the economy. to me, the pmi print you saw over the weekend for china shows that is definitely here. just a matter of how deep the double-dip goes. paul: the trade war and the tariffs are of course on hold. does this mean for the time being the stimulus will be on hold as well? amy: it is difficult to say. one of the most concerning things from the pmi over the weekend is the employment index and china has hit lows. we have not seen levels like this since 2009. for the chinese government, labor stability is key. it is integral for keeping the social and political system in check and china. allowing the employment situation to deteriorate further is something that is definitely

a no-no for the chinese government. i think what you will see coming out of china and the coming months, even if the trade war progresses in a seemingly benign way, is policy will continue to be supportive, but in a reactive way. the slowdown will continue but you will see more infrastructure spending most likely, and the implications of global e.m. even for australia is commodities will continue to be relatively well supported by this. shery: i really find the employment part of what you are saying very interesting. it is very hard to get transparency when it comes to labor numbers in china. what are we seeing in terms of consumption and spending by chinese people, and what this could mean for policymaking? amy: the chinese economy has been weakening for quite some time. the consumption side of the economy is actually not that much different from what you are seeing in the global economy. for example what you are seeing in the u.s. as well can feel relatively tapped out.

so, the chinese economy is about the household debt load. properties that have been booming for a long time in china, and more and more average households have been channeled into debt or debt servicing for the apartments. so, the consumption feature in china has been weakening and policy has been aimed at tax cuts to try and stimulate more spending there. the weakening outlook for the chinese economy will not be turned around in a heartbeat. even if you see a trade truce or meaningful trade agreement between china and the u.s., i still think for the global economy to turn around more meaningfully you need both a full on trade deal and also continued support for policies by global policymakers around the world. and that is a quite difficult thing to do. shery: part of the trade truce we saw over the weekend was those restrictions for huawei being delayed a little bit. this gtv sharp showing how asia

chipmakers has gained ground this year on essentially more optimism aboard this sector. given how reliant chipmakers are for not only china but also global supply chain connections, how will this new development in the huawei saga affect them? amy: it should be slightly supportive on the margins. but one thing i think that is quite important to highlight is even though we have a trade truce of some sort, an agreement cease-fire, an agreement for no further immediate escalations, and donald trump has hinted that there will be some listing of the -- lifting of the bans on huawei and the restrictions, but this is not an end to the trade war or tech war. as far as the u.s. side is concerned, this stick that hangs to beuawei will continued

wielded out if they see the china side is not sticking to the negotiations and the plans as they would like. paul: you mentioned the trade war and tech war. there was discussion in the g20 we might see a currency war as well. if we look at this chart on the bloomberg we have seen the offshore yuan strengthening quite impressively. least one less thing for the u.s. side to be upset about. amy: the strengthening of the yuan is actually not isolated. many currencies have been strengthening against the u.s. it is more of a weakening of the u.s. dollar. thes the market pricing in chances of a deeper cycle. weaknesses in the u.s. economy and escalations in the trade talks. so, i think it does alleviate some short-term pressures, but as i said earlier, i think the double-dip for the chinese economy is here. there will be more policy easing on all fronts. one of those easing measures should involve the currency being allowed to depreciate further.

so, i think when we spoke last time i mentioned ic dollar china breaking seven dollars. probably in a fairly smooth and gradual way. but none of that should preclude the fact that as far as trump is concerned, any weakness in the yuan versus the u.s. dollar will be seen as another excuse to escalate as he sees fit. paul: we will get another read of the chinese economy soon. what are you expecting to see from that? amy: the thai shing pmi is weighed more towards the exporting than smaller and medium-sized parts. more towards the private sector. what we saw on the official pmi over the weekend is the larger corporate fares better. there is a chance the thai shing pmi helps price slightly to the upside. the flipside of that is you are seeing new export orders being dragged down further and dragging down the thai shing pmi further.

on the whole even if we see in line with expectations or out performing, trajectory is still very much downward for the chinese economy. shery: you mentioned the stimulus measures out of china including infrastructure spending. the shape of stimulus this time around has been different than the past few years when we saw it really all around stimulus cuts, benchmark interest rates. so, how will this carry over to other asian economies? when the shape of this easing is different? amy: yeah, that is a really good point. the shape of this easing as you rightly point out has rightly been about controlling the extent of the downside rather than the engineered total reflation of the chinese economy. as far as chinese policymakers are concerned, there is a huge problem waiting for them in the near future due to the sheer amount of debt load china has built up through two to three rounds of large stimulus you

have seen over the last decades. they very much want to avoid making that problem worse. now, for the rest of asia, so, putting aside australia for the time being, for the rest of asia the trade cycle is still very much dependent on china's own demand and the strength of their own economy. to the extent that china can keep sucking in things from the rest of the world, the trade cycle is hardly dependent on that. as china continues to weaken, asia will weaken alongside it. because the stimulus package will involve some stimulus packaging, some exports will continue to be supported by this infrastructure spending at the margins. if china and the u.s. continue to talk along the lines of china agreeing to buy more from the u.s., for me this is further negative made for the global trade cycle as you see it, because chinese economy is weakening so the pie shrinking. if they agreed to buy more from the u.s., that means they will

be buying less from other economies such as those exporting nations inside asia. so, the outlook from our perspective, especially for economies like south korea and taiwan, is not looking great at the moment. paul: ok, amy xie patrick, thank you so much for joining us. you can get a roundup of the stories you need to do to get your day going in today's edition of daybreak. bloomberg subscribers get it on their terminals and it is available on mobile on our app. you can customize your settings so you only get the news that you care about. this is bloomberg. ♪ oomberg. ♪

shery: let's get a quick check of the latest headlines. deutsche bank may cut more than 1/5 of its global workforce and what would be its biggest shakeup in years. we are told the ceo may approve the loss of 20,000 jobs when he

presents his latest restructuring plan. although the ultimate total has not been finalized. toldgs for sure will -- he shareholders he has and working on tough cutbacks after dropping merger talks with commerzbank. paul: it has been revealed that much of the troubled design on the boeing 737 max was outsourced to people paid as little as nine dollars per hour. it was at a time when boeing was laying off experienced engineers and was pressing suppliers to cut costs. software often went back-and-forth between boeing and contractors before being accepted. the chairman and president of the asian development bank says the global economy is facing more issues than just the u.s. china trade war. he spoke to bloomberg on the sidelines of the g20 in osaka. issues whichmany are discussed and are important for the global economy.

of course the dispute between the u.s. and china, but also issues of climate change and taxation issues to the new reality of a global economy. there are so many. but the sense of corporation discussions at the g20 meeting. >> do you feel those other issues like climate change, which are important, were kind of sidelined because of the incredibly important bilateral that was happening saturday between trump and xi? >> of course the media is paying attention to this issue and it is natural. but it is unfair the other issues. the other issues are also important. discussions in g20 was other countries. it also provides an opportunity to discuss between countries. there are so many bilateral meetings. >> do you feel there has been

enough consensus on the other issues, whether it is climate change, trade issues? what we're are hearing from anonymous sources is there has been a lot of individual goals various delegations and there has not been a lot of consensus. unilateralism, if you will. >> of course countries pay attention most to their own country's national interest. they must answer to the voters of their country. at the same time they want to reach a consensus. of course there are different -- i haven'tain received it yuet. but there is a consensus. there is a consensus to work together. nakao speaking at the g20. next, live with stephen again

for a preview of the world economic forum. and in 20 minutes we will get you japan's hong kong survey on how japan think feels about their current business environment. ♪ ♪ the latest innovation from xfinity

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asia.is is daybreak i am su keenan. we start with the u.s. and china, the two countries agreed to a trade tour -- trade war truce and said it will revive stalled negotiations. said he is also delaying component restrictions on chinese telco huawei, letting american companies resume sales. he said his meeting with xi jinping was far better than expected and would not proceed with additional tariffs. >> continuing the talks which had been interrupted for a while , it is a big deal. that is the banner headline from this. everybody is going to be pleased

at that. no promises. there is no deal made, no timetable. want to emphasize su: that. the latest reading of the chinese economy shows continuing fragility and the need for a deal with the united states. manufacturing pmi 49.4 last month. and it highlights the effect of the trade war. similar reports of the euro area come out later monday and expected to provide better -- more reasons to worry about the global economy. ore exports are set to fall for the first time in almost two decades. a perfect storm of bad weather and production setback reproductions cut to 814 million tons from 867 million and prices have climbed to a five-year high area department of industry said it expects exports of iron ore to be worth $55 billion u.s. in

fiscal 2020. the corporate news hsbc started a lobby campaign against china that it is not responsible for the arrest of the huawei cfo in vancouver. -- they say the bank wants to distance itself from the diplomatic road. hsbc provided information that helps u.s. prosecutors build their case against huawei. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. paul: we have live pictures from downtown hong kong. you can see protesters gathering , police as well. this is ahead of a speech by the embattled chief executive. every year at this time there is a flag raising ceremony to theblish or celebrate

establishment of the hong kong special administrative region and the chief executive does intend to give a speech. the traditional appearance is a lightning rod this year given the protests over the extradition bill. we are expected to hear carrie lam speak for the first time in a week and we will see protesters gather, they will be data ring in areas similar to the marches that happened earlier last month. we are waiting on carrie lam to speak at the flag raising ceremony at 8:00 hong kong time. you can see the police data ring in advance of more expected protests in hong kong -- protease -- police gathering in advance of more expected protests in hong kong. upry: nikkei futures are 1.5% on the back of more risk on mood across the region with the

japanese yen falling for a fourth consecutive session. kospi futures unchanged by keep stocks, sohe piece three and gas with the unprecedented meeting between trump and kim jong-un at the dmz . watch out for the chipmakers across asia, samsung electronics, sk hynix supply to huawei and uf -- u.s. futures. paul: let's check in on new zealand, now flat after trading weaker today. futures in australia pointing higher .25%. president trump the first sitting u.s. leader to step foot in north korea. he met kim jong-un at the demilitarized zone and a hassle the -- he said it was a great honor and invited jim to visit the white house -- kim to visit the white house next year. strong, great

relationship and we will see what can happen. we want to get it right. we don't, we are not looking for speed, looking to get it right. paul: let's get back to yvonne man to discuss this more. how significant is this photo op between trump and kim? it was a sight to see, for love symbolism, the first sitting president to enter into north korea and step into north korean soil. it is interesting how quickly this came about. we saw that surprise treat -- tweet while trump was still in osaka asking jim if he would meet him -- kim if he would meet him at the dmz just to say hello and it caught everybody --

that got everybody by surprise and even kim jong-un himself. we saw quick response on the north koreans saying interesting suggestion. it came together really quickly, almost last minute. you can tell the cameras in the room moving from move -- room to room, seeming disorganized. they thought it would be a two-minute handshake but it ended up being more of a bilateral meeting as well between the u.s. and north korea. south korea is on the sidelines. moon jae-in was there to engage in these talks but he kept toward the back for most of it as well. a lot of questions what it actually means. was it just a photo opportunity for both sides playing into perhaps politically speaking a win for them especially kim jong-un after the talks broke down in hanoi which was a devastating blow for kim jong-un as well. a lot of questions what it means , if it is just the ethics or can we restart negotiations --

theatrics or can we restart negotiations? shery: let me interrupt for a second because we are looking at trump now arriving at joint base andrews after his trip to osaka and south korea as we talked about. one,s gotten off air force joint base andrews in washington, dc, looking at live pictures. lots of symbolism, great photo the president. anything on denuclearization? that is the thing. visit, we one-hour didn't hear trump say anything about denuclearization. there seems to be more on relationship building types of meetings between the two sides,

four months after that hanoi summit. and it seems like president trump was trying to say this was a good meeting. it was an honor to meet kim jong-un. he was saying he couldn't imagine they would be meeting here at the dmz. a lot of questions whether this just adds legitimacy to north korean dictator here at a time when the u.s. isn't getting much in return. in february these broke down because north korea's were asking for a listing -- lifting of sanctions because the u.s. was asking for a more bigger bargain. does it bring us back to the talk of the nuclear arsenal ? scussion it is still a key concern with a lot of watchers out there. politicians,ds of

scholars and business figures gathering in northeast china for the world economic forum. stephen engle is at the event which is known as the summer davos. the u.s.-china trade truce will be dominating discussions there. gab fest.his is a it is not a place for actionable decisions. it is talking about pressing issues on the global economy. on the heels of the g20 it is the u.s.-china trade truce. it is a truce. that is what we will have to dissect and the markets will react somewhat positively in the beginning part of this week. how long will this truth give the optimism to the markets? have gone from autozone on the best possible outcome given the circumstances, another said they were just delaying the

issue. how much does this assuage the more immediate fear? -- ata complete breakdown least they are talking. that is a positive thing. most participants gathering here. i want to highlight the newspaper here. this is the front page of the china daily. donald on the front fold and back fold, not surprising given the high-profile meeting he had with xi jinping and kim jong-un yesterday. what is interesting is the stories they highlight. the main bar is about the trade truce. only one reference to huawei in deep1th paragraph buried into the article. it shows you the sensitivity around the away issue. that is an interesting one

because it was one of the most important developments to come out of the g20. pretty low down in the article as you point out. shirley it has gone down well. surely it has gone down well. stephen: it is a major concession the u.s. could give an rankled people within trump -- and rankled people within trump's own party like marco rubio who said it could be a catastrophic mistake on the part of the president if it goes, if basically huawei is taken completely off the blacklist of washington. we need to know the details of why the pledge -- how far it goes. there is backlash from washington, dc including within his own party. but xi jinping was pleased to give concessions on his own. let me just say the bottom

corner of the china daily talks about china's negative list. it has a number of industries they prevent -- starting at the end of this month july 30, the number of entities on their .egative list will also shrink at least on paper they are making steps to open up the market. paul: chief north asia correspondent stephen engle, thank you. opec and its independent allies moving closer to an agreement on production curves with most appearing to support restrictions until early next year. iraq says it is not a done deal just yet. >> [indiscernible] i am supportive of that. i would not say supportive on the conclusion, not yet definite. , as there are other ideas

cut of 1.2 [indiscernible] likely with the glut. paul: for more on this let's bring in -- how significant is this agreement? [indiscernible] stealing the thunder of these opec meetings, not the first time they have agreed to a personal deal before opec has had a chance to check itself. unix you wonder -- it makes you wonder the rest of the block and what they feel. sounds like the rest of the block will move in july and we will get cuts at the end of the year. russia is keen for the nine months. part of the reason behind that is [indiscernible] extend into the first half of next year and with they can have

another look at the supply outlook and would have more scope to increase production. you can see where you -- where russia is coming from. there are problems with contamination and the pipelines which cut production this year. not like they have had capacity to increase production anyway. you can see what russia is keen to get this act in great we will have this opec meeting in vienna and there are discussions there but it is the two biggest producers have agreed it will end up falling in the line. that will be supportive for prices in the second half of the year. shery: is that all we have to look towards and how will a slowing global economy factor in prices? it is not the only factor. looking at prices mid-60's brent , the global benchmark, that is a sweet spot. if they didn't extent cuts, it wouldn't undermine confidence,

given a very finely balanced supply and demand. they really do have to make this commitment in order to keep prices well supported. the trade dispute between the u.s. and china remains a key factor for the market. g20ad the truce between the -- it is uncertain how we move forward with that. attentions --he the tensions with iran. headlines have died down, but not to say it could rear its head sometime in the future. don't think that has gone away. back -- opec buy is happy with where prices are but given the extension, it will independent -- underpinned them. paul: thank you for joining us.

still to come we will look ahead withpan's tankan survey some guests. this is bloomberg. ♪ this is bloomberg. ♪

shery: let's go to japan and bring in the former boj governor. great to have you with us. we are expecting the tankan survey second-quarter results. let me ask you about the state of the japanese economy and how businesses feel about the environment. manufacturing doesn't seem to be doing great but nonmanufacturing could see some positive numbers out there. i think i agree with you. for several months [indiscernible]

industrial production has been weak area but same time [indiscernible] pretty good shape. fairly resilient consumer spending. [indiscernible] solidis also quite particularly for the need for mitigation. i think the overall [indiscernible] but not on the verge of recession. shery: what does this say about inflation trends and candies changes potentially help get us closer to that very, very high 2% inflation target from the boj? speaking therey is more link between the economy activity and inflation and the fundamental issue in japan is [indiscernible] this can't be changed so much because the economy is strong. the not critical about approach to 2% anytime soon in

the foreseeable future. david: what about the october -- shery: what about the october tax hike we are expecting? it doesn't have much impact on inflation at all but actually this is something the boj is already aware of your they will be patient to wait for more -- aware of. they will be patient to wait for more momentum. paul: we are getting the tonkin numbers. the large manufacturing index worse than expected. nine buty had been for the outlook is better. seven and the survey was for eight. the larger industrial reading 7.4%. that was a miss. the survey was expecting 8.1%. perhaps on the disappointing side a mixed bag.

i know you have only had a few minutes, but what are they saying to you? what is your read? kazuo: it is mixed, but we have to be careful that tankan survey was implemented through june, the worst moment for the last several months because very hard [indiscernible] for the global economy. g20, the weekend event of i think the sentiment in the survey might be a little bit pessimistic what is really going on. paul: we did have the g20 in osaka, not breakthrough but a truce is encouraging. for the next survey would you expect things to look more optimistic? kazuo: it is probable but at the same time there are other things

going on go by economy, not just u.s. and china but also other geopolitical tensions. the economy has been great for several months. at the same time we don't know how u.s. economy is going forward. there are other factors including federal reserve attitudes towards inflation and economies of united states. there are other things ready much from now. i had don't -- i don't know where we are exactly but situation is a little bit better than now. 7.4%. considerably higher than the 4.1%, a little bit of a miss, but what do you think in terms of capital expenditures doing forward?

kazuo: [indiscernible] partly there is strong demand for office spaces and demand for automation for this program. also in the first place there is still relatively benign corporate earnings. those factors are combined, contributed to fairly solid growth. at the same time we have to be careful about the heightened uncertainty of the economy and how it will affect the andstment going forward something we should be watching very carefully. shery: thank you so much. former boj assistant governor and current mizuho research institute executive economists. this is bloomberg. ♪

david: paul: the quick check of

the business flash paul: headlines, boeing facing more official scrutiny with the government demanding records from the factory and staff of south carolina. the subpoena involves the 787 dreamliner and signals the investigation into the 737 max 8 is widening. the new york times reported allegations of fraud at work but threatened a compromise safety on the 787. shery: a taiwanese carrier will tuesday after on failing to agree to a term with its striking fled attendance. they were withdrawing measures against kevin crew and -- union says action will continue. this could cause the cancellation of 2000 flights by july 12. let's look at how futures are trading, needed futures gaining 1.6%. unchanged butures

look at the defense stocks -- kospi futures unchanged but look at the defense stocks. sydney futures gaining .9% while stocks here are down 2.1% but paring back earlier declines. we are watching stocks and they move on the trade truce from the g20, korean chipmaker samsung and sk hynix supplying both quality and u.s. companies they could be set to benefit. chinese surveillance company -- could also game. it was facing a ban along with huawei but the chipmakers -- they may slide on monday including this one. paul: shares of japanese carmakers seeing upside from agreement on the sidelines of the g20. trump's brief meeting with kim jong-un at the korean

tokyo.ps stocks in coming up next we will look at the macro data. this is bloomberg. ♪ ta. this is bloomberg. ♪

quick good morning. we are under an hour away from the australian market open. >> welcome to "daybreak asia." >> our top stories, the u.s. and china talking trade again as president trump -- but the white house says there is no deal yet. the first u.s. leader to set foot inside north korea and says it is an honor to cross the line.

the boj's report sees a tumble. shey: breaking news out of korea. exports for the month of june falling 13.5% area -- 13.5%. month ofd consecutive declines after exports fell previous months by more than 9%. than themuch more expected 9.6%. also much more than the previous month. we continue to see south korea reeling from an economic slowdown, not to mention a slowdown in the semiconductors industry. exports to china decreasing in the first 20 days of june. exports to china falling, so the atde balance coming in $4.168 billion export numbers.

falling 13% in the month of june. exports to china falling 24.1% in june. exports dropping 21.5% year on year. you can see the pressure on south korea at the moment. let us get a check of what the kospi is doing. trading getting started. we have to focus on chipmakers. when it comes to trade tensions between china and the u.s., we saw some relief from huawei. suppliers could see upside for this session. you are seeing the kospi up 0.7%. the korean won is threatening at the moment -- is -- we are seeing the nikkei up as the japanese yen continues to gain for a fourth consecutive session. risk on moves after we saw trade

tensions these between china and the u.s.. just a few moments ago we had japan large manufacturers coming in at seven, it was below themates, but the capex for 2019 fiscal year is expected to rise 7.4%. let's check on what is happening in australia and new zealand. about an hour from the open, we do have a staggered open. a few stocks up and running. the asx already up better than 0.3%. some stocks rising are interesting. an of the best performers is exporter of vitamins and other health products to china. that stock up 2.5% right now. china related export stocks reasonably good on the back of the good news we had out of osaka, the trade truce. taking a look at the aussie

dollar, that is a popular risk on trade and the aussie has cracked against the dollar. the 10 year yield -- one of our regulars on currency wondering if that is a typo. no, the 10 year yield at 1.37. make of that what you will. to our tops get back story. president trump says the u.s. is winning the trade war after reaching a temporary truce with xi jinping. on a visit to south korea, trump said america is doing well despite the lack of any help from the fed. pres. trump: we are not playing on a fairfield. despite that, we are winning and winning big. we have created an economy that is second to none. greatest in the world. yvonne, we are seeing the markets reacting positively to what happened between china and the u.s..

what are your key takeaways? they have hit the pause button for now. one key question is whether this trade truce can last. it seems like what we got out of osaka was a little more than what we got out of the g20 back in december here. they agreed they were not going to add additional tariffs. the current tariffs still in place. they have pledged restart talks between the two sides. perhaps a bit of a breakthrough when it comes to huawei as well with the president's adjusting u.s. companies are now allowed to do business with the chinese company. reporters ask pointedly, does that mean huawei can be taken out of this blacklist? >> u.s. companies can sell their toipment to while away. -- huawei. u.s. companies can sell their

equipment. we have a lot of great companies in silicon valley in different parts of the country that make extremely complex equipment. we are letting them sell to huawei. yvonne: what exporters have been saying, does president trump giveaway technology over some handful of soybeans? the chinese did agree they would be buying more of u.s. agricultural product, but when it came to the core issues that led talks to break down in april, it does not seem we got concrete details, whether it is concessions on intellectual property and tech transfers, we did not hit those. this is leading a lot of market analysts to say that this trade truce will be short-lived. let's move onto that surprise meeting between president trump and kim jong-un. here is what the president had to say after those talks. pres. trump: i can only say the

meeting was a good one. very solid. great relationship. we will see what can happen. right.we want to get it we are not looking for speed. yvonne, that certainly made for historic pictures, but is there any substance? yeah, can we actually get talks to resume once again? can we get the topic of denuclearization? it seems like at this point it was more about a relationship building type of meeting here. it was a surprise tweet we got saturday when president trump was still in osaka, reaching out to kim jong-un to meet him at the dmz. shaking hands at the border, then kim jong-un asked president trump whether he would step across the north korean side. there you have it. he took about 20 steps into the

north korean side before asking kim jong-un to head to the south side. this seems to be more of a handshake as president trump has sold the earlier. he actually ended up being more of a bilateral meeting that lasted for about an hour or so. it did not seem like they mentioned denuclearization during that time. it seemed like this was a very last-minute gathering that was set up here. you can see with the cameras moving back and forth, there to be to be -- it seemed hastily arranged. we will see if it leads to any resumption of talks. perhaps a third summit. president trump did extend that invitation for kim jong-un to go to the white house, which could be another good photo op. shery: thank you so much. yvonne man joining us from seoul. we are now seeing chief executive carrie lam giving a speech. this is to mark the city's

anniversary of return to chinese rule in 1997. it is the first public comment from the embattled chief executive. ms. lam has seen her popularity plunge after we saw those protests in hong kong on her extradition bill. protesters and police facing off outside the hong kong convention center at the moment. where the ceremony is taking place. markets around the world are responding to the resumption of trade talks. risk seems to be on and traditional havens are we getting. mark cranfield joins us now from singapore with the latest. we see this risk on move, whether it is japanese yen or just the chinese yuan. >> indeed. it is clear from the early moves on that data. people like the idea the u.s. and china have started talking to each other again.

when a good reminder that asked about what was the thing that held markets back last year, the trade war kept coming up. anything which goes toward trying to remove that has got to be a good thing from an investment point of view. as yvonne has been saying, there are a lot of details before we can say the united states and china are making a proper deal. in the case of the yuan, over the weekend we had the manufacturing deal. 50 forarp number, below another month. the chinese government cannot afford to take their foot off the stimulus pedal. the yuan is getting help. toy expect china to do more help its economy this year. that could be a good thing for the equity market, even if the trade talks are not going too smoothly. at least china is doing some

thing to boost its economy. there are signs it is beginning to work with demand even though the gdp numbers are going to be lower in china. least the government starting to do something. that is good news for investors in asia. paul: also potential good news was the partial reprieve for huawei. is there after see a rally in tech stocks? is it still wait and see what happens given the volatile history of talks? mark: it is probably better than people were expecting. i do not think anybody thought huawei would get any break at all. once again, there is so much going on in the background, particularly with an official investigation going on in the united states. even if the u.s. president wanted to give concession, there would be limits to what he can do. his hands may be tied by the courts in america.

people will be taking that is a good sign, but they will not say that is the end of the story in terms of the tech battle between the u.s. and china. there are enough other things going on as well. they're going to be talking again. china is doing stuff on its own front. started to produce good things here. growth numbers will not be as bad. the fed is going to cut rates almost certainly in july. a number of things are starting to move in a positive direction. it will not be plain sailing. there are a lot of pickups on the way if the u.s. and china cannot get things really rolling on the talks. paul: bloomberg m live strategist mark cranfield, things for joining us. let's check on the first word news. >> the latest reading of the chinese economy shows continuing fragility and the need for a deal with the united states pain

-- united states. manufacturing pmi slightly weaker than forecast, highlighting the effect of the trade war. similar reports for the u.s. and the euro later this monday are expected to provide further reasons to worry about the global economy. allies are closer to extending production curves in the first quarter of next year in the face of weakening global demand and surging u.s. shale output. russia and saudi arabia reached a deal on the sidelines of the g20 to roll curves over for six to nine months. producers later agreed. the opec plus group meets monday and tuesday to coordinate strategy. extension. an i think that is needed for the current condition of the market. an easierting meeting. hopefully we see the numbers.

high expectations also to be higher than 100%. u.k., the men fighting to be conservative party leader and prime minister have reeded there will -- reiterated there will to take their country out of the european union without a deal. orest johnson and -- boris promisednd jeremy hunt tax cuts to enrich the u.k. economy. eu leaders are in deadlock over merkel -- as commission president. they include the successor to mario draghi at the ecb. others include the top eu brexit negotiator and the imf chief,

global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. still ahead, the latest reading of manufacturing in china. views for an economic century next. ♪

paul: this is daybreak: asia. the latest reading of the chinese economy shows continuing fragility and the need for a trade deal with the united states. manufacturing pmi data, 49.4 last month. slightly weaker than forecast and highlights the effects of the trade war. we will have more insight into how the economy is faring with the release of the manufacturing pmi later today. let us take a look ahead to that.

great to have you with us. let's get started with those numbers. how much of the slowdown we saw was a direct consequence of the trade war? >> we deftly saw that within the index. experts did slow as well. that would be the impact of the trade war. also we have doubled trade decline generally. interestingly, we also saw the numbers within that index quite soft. that is going to be a concern for the domestic authorities. we are most like the going to see stimulus to support the domestic economy facing increased protectionism. shery: we have seen more targeted efforts to support different parts of the economy. this chart on the bloomberg large companies. pmi is slowing as a you can see in the yellow line.

we are seeing small companies' pmi's very much in contraction territory. how challenging will it be to tweak these policies so you get more support for small and medium-size businesses as well? right.are absolutely small and medium enterprises have been impacted more not only by the trade war, but also earlier tightening. they're going to build a more targeted trying to make sure there is liquidity available. tax cuts as we have already seen. they are going to remain just so. they're going to soften the impact of trade war for these companies. we have seen the offshore yuan strengthening as well. i'm sure that pleases the u.s. to know and. it is more a story of u.s. dollar weakness, i guess. how is that going to impact the thinking of chinese policymakers? many of themselves

are going to be pleased they are no longer experiencing that depreciation pressure. beenusly the currency has -- before with the u.s. and china, but also domestically, they do not want to see a week yuan. they do not want to see weaker capital outflows. i think this is not going to be causing any kind of problem. the authorities won't be seeing this is any problem. paul: outside the borders of china, we are going to get manufacturing pmi's for a number of southeast asian nations today. how far do you expect to see collateral damage from this trade war having spread? sian: we have been seeing that already in the export numbers. most have seen negative territory, the exception being vietnam. we are going to see softening on the manufacturing side. we are expecting the

manufacturing sector in general to remain week. shery: thank you so much for joining us today, senior asia economist at oxford economics. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." also available on mobile in the bloomberg anywhere app. customize your settings so you only get the news on the industries you care about. ♪

paul: the candidates fighting to be the next u.k. prime minister are sending a message to voters. they are both going to have a no deal brexit. let us cross to our ethics and rates reporter. and rates reporter. how likely is that they are going to be able to negotiate a new deal? >> that is the key question.

both have said they would rather negotiate. indicated ave technological solution which will solve the issue. by that, they refer to the irish border. that doesd repeatedly not exist at the moment. it is very unlikely they can change the backstop. sayingback at square one , this withdrawal agreement with theresa may is going to stay. it will not change. johnson,ill be hunt or the odds negotiations will fail definitely rises. shery: what is the difference in the rebel -- the level of the pound whether it is hunt or boris? gets in, he said the

october 31 deadline, he will pull out by that time. he is a slightly more negative impact on the pound. jeremy hunt has said, hey, i definitely will pull out, but i'm open to an extension. both will be think negative for the pound, boris johnson's impact will be more negative. we are seeing european leaders gathering in brussels on sunday, jockeying for the top positions at the eu. depending on what happens, working with the level of the euro and also bear in mind we are expecting perhaps more stimulus if the economy slows down there. own issues their right now they are trying to work out the top positions. negotiation has been harder than anticipated.

we have our own baggage we have to deal with. the key thing is who becomes ecb president? how hawkish or dovish will they sound? that is the thing the market is focusing on. i think that will be positive. having said that, if there is a hard brexit, not only does the u.k. economy get impacted, but the economy is impacted as well. to that would also lay -- weigh on europe. maybe not as much as the pound, but it would have an impact on the euro. paul: thanks for joining us. let's get a quick check of the latest business flash headlines. deutsche bank may cut more than a fifth of its global workforce in the biggest shakeup in years. the ceo may approve the loss of 20,000 jobs when he presents his latest restructuring plan, although the ultimate total has not been finalized.

he told shareholders last month he has been working on cutbacks after dropping merger talks with commerzbank. shery: much of the software sign on this owing 737 max 8 was outsourced to contractors paid as little as nine dollars per hour. the code was being written when boeing was laying off experienced engineers and pressuring suppliers to cut costs. software often went back and forth between boeing and contractors before being accepted. new: apple is to make its mac pro desktop in china, moving production of its only major device assembled in the united states. the decision comes as the u.s. threatens new tariffs on goods exported from china. pleasant -- president trump has slammed apple for making products in china. for ane are live

interview. stay with us for that. ♪

>> this is "daybreak asia." the u.s. and china have agreed to a trade war truths and say they will revive stalled negotiations after talks on the sidelines of the g20. president trump said he is delaying component restrictions on chinese telco huawei. he also tweeted his meeting with expectedg was -- than and he would not proceed with additional tariffs. >> it is a very big deal. i think that is the banner headline from this. everybody is going to be pleased.

there is no deal made. there is no timetable, i want to emphasize that. >> the president also became the first sitting u.s. leader to set foot in north korea, meeting kim jong-un at the demilitarized zone in a photo op. he said stepping across the border talk about 20 steps was a great honor and invited kim to visit the white house next year. the leaders agreed to resume nuclear talks. to australia now. iron ore exports are set to fall for the first time in two decades on a perfect storm of bad weather and production setbacks. forecasts have been cut to 814 million tons this year, down 867 806 he 7 million -- million. $56rts will be worth

billion until 2020. hsbc is said to have started a .obbying campaign wants to distance itself from a diplomatic dispute . the paper says hsbc provided information to help u.s. lawmakers. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: we have a series of pmi numbers out of the moment. let us start with south korea. the south korea pmi manufacturing data has come in at 47.5. this is below that number we got for the month of may. , the bankpan numbers

of japan pmi manufacturing coming in at 49.3 from 49.5 in the month of may. for both countries, it is a deceleration. keep in mind, we just saw south korea's exports year on year falling 13.5%. it is not surprising that we are seeing this deceleration. had a large amount of pmi's. we have four numbers from southeast asia. indonesian manufacturing pmi for june, that is the biggest mover, down to 50.6 from 51.6 back in may. it is still in expansionary territory. vietnam pmi rose. thailand, that was a little weaker. the philippines a little higher at five point -- 50.3. quite a mixed bag. shery: let us take a look at the markets. they are all in the green.

the nikkei up 1.5%, led higher by tech stocks and health care stocks. we continue to see the japanese yen we can for a fourth consecutive session. japan's survey which was not that positive, but when it came to capex numbers, they are expected to rise for 2019. topix up. tick a look at the kospi up 0.4%. keep an eye on defense stocks. we had that unprecedented meeting between president trump and kim jong-un at the dmz. keep an eye on those companies like hyundai engineering and korea gas, ebbing the relief we got -- given the release we -- the relief we got on huawei. the asx 200 at the moment gaining 0.5%. we have the rba policy decision

tomorrow. paul: the world economic forum annual summit meeting is underway in china. stephen engle is there. what can we expect from today's events? toa lot of people are going be talking about what happened at the g20 on saturday between xi jinping and donald trump. coming up with a truce. probably the best case given the low expectations for dialogue after that collapse in may. we want to discuss this further. tim stratford, former assistant u.s. trade representative, also current chairman of the chamber , thank you fore joining us. was this the best case scenario for this truth happening? >> it was the best case

scenario. the way the sites have been positioning themselves, it was possible either side could walk away. we were hoping they would say they were sending negotiators back to the table and that they were not going to be increasing tariffs. we were very pleased. >> are we back to where we were in december when the g20 summit ended and trumpian she had a had a-- trump and xi truce, but it fell apart? >> i think we are ahead of that. they did get some agreement on some areas, but both governments have been able to test the other side more. one thing that has become apparent is this is not just a trade negotiation. it is the context of a broader negotiation between the two countries. theall of those are in negotiation, but they have an effect. stephen: you have had your hand in the government side and the

business side. how do you see different entities reacting? from the business community, we are pleased with the outcome, but we have uncertainties. let us suppose you are a company like while way. you know how vulnerable you are and you are going to be everything to minimize your exposure to the united states. if you are an american supplier, you are going to be trying to find ways to reduce the american content in your products you are selling to huawei or similar companies because you do not want to be caught by the next round of sanctions. even if you don't do high-tech tariffs, the threat of would cause you to rejigger your supply chain. stephen: there is a possibility a bifurcation of supply chains

as we head into 5g. timothy: absolutely. whoever controls 5g has tremendous power over how a city or country operates. flows. information it will permeate every aspect of society. if a foreign company and government have the possibility of intervening, it presents great national security risks. every country is going to have to think through those issues carefully. stephen: as the head of the truce in china, does this morey by more time -- buy time to eventually move sourcing out of china to places like vietnam? timothy: i think it does. the risks are now demonstrated to be real. we don't know whether an

agreement will be reached. if each country has to agree to things they don't necessarily want to do, a be there will be problems with them limitation. all these things create uncertainties. companies have to have risk mitigation. that is what they have to be busy doing right now. stephen: it is already happening. how difficult are those final 10 yards going to be? is a deal possible? timothy: i think a deal as possible. -- is possible. stephen: what does it look like? timothy: part of the problem is even if we solve the economic issues, there are differences between the economic development models of the united states and china. china has more state led innovation and development of some of their industries. know,s creating -- you there is not an even competitive approach. that is creating problems.

even if we solve those problems, we are going to have to deal with national security and other concerns. i don't think anybody believes the u.s.-china economic relationship is going to be the same. hopefully it will still be robust, but it is not going to be the same. stephen: who is winning so far? there is a lot of debate on both sides as far as this latest truce. china needs to buy soybeans. that serves their purpose, to buy more from the united states. did trump give away too much on the huawei front? timothy: we don't really know. the new rules still have to be formula aided by the department of commerce. what i am hearing is there will still be some restrictions. there may be purchases and sales blocked at the moment. these things have to be worked out. i think the people who are winning are the ones who think our countries should not have as -- closelysely

integrated economies as they have in the past. people are having to make adjustments. it is hard to say he was losing the most. you generate sub optimal results if you cannot deal strictly on the basis of markets and a competitively neutral environment. stephen: how do you see this playing out? we are heading into an election cycle. when theit may be political factors are brought to bear, there will be reason for president trump to want to have a deal before the election. that could be a big positive for him. on the other hand, the chinese might say, maybe we should see if we can get a better deal from another president. there aren't a lot of factors -- there are a lot of factors that come into play. whether we get a deal or not, we are involved in a larger

negotiation of the rules of engagement. stephen: what would you say is the next chess piece to move? timothy: the negotiators are going to get back to the table. we will see whether the material the chinese side lost from an earlier draft is going to be introduced. we will see what new rules come from the commerce department on trade with huawei. the departmentt of commerce comes out with, because these are going to be changing the calculation on both sides about what the economic relationship will look like. stephen: i wish we could go longer. we are going to have longer coverage from the world economic dalian the rest of this morning. shery: stephen engle with the amcham china chairman. oil had a good june. can the rally continue? the opec plus meeting and what

it means for food prices. ♪

asia."this is "daybreak movingpec and allies are closer to an agreement on production curves, with most seeming to support restrictions into next year. iraq says it is not a done deal just yet. >> i am supportive, but i would not say it is a foregone conclusion. not yet, definitely. plus, there are other ideas. a cut may not solve the issues. paul: joining us for more is a

senior commodities strategist. thank you for joining us today. we had that agreement between saudi and russia to extend cuts or six to nine months. you wonder why the rest of the opec plus members would show up. iraq says not a done deal. perspective, russia has taken a much bigger influence in talks. i suspect members like iraq just want to bring back some of the authority in this agreement. point, we arethis quite adhesive to that type of agreement. the fact it was already essentially agreed to by russia and saudi, they want to have more say. see a broad will agreement at opec. the timing and the extent of that extension, whether it is

going to be just to the end of the year or into 2020. paul: it does not speak to a great deal of optimism around the demand picture, does it echo daniel: true. the has always been an issue. over the weekend we saw u.s. and china agreed to restart talks around conflict. that, i suppose, presents upside to the weakening economic scene. shery: what does it say about the supply risks out there if we continue to see this extension of curbs? -- curves? daniel: that has been the big issue opec has to deal with. as we for oil is rising, see declines from venezuela. iran in particular. they are to negate or battle those. the weakening economic backdrop has been a balancing act, a fine

balancing act, to walk along. them, it is going to be certainly something they closely follow. maybe in the background you might see saudi gently increase their output to make customer requirements. definitely a constraint on output while there is this conversation about how growth and demand -- in demand is going to go. shery: we are now hearing that opec plus could be close to finalizing a charter for a long-term alliance. is this a significant shift when it comes to the world oil order? or is this a continuation of what has already been happening? suppose it is

formalization of that agreement. certainly opec's market share has been declining, certainly bringing other members gives say in thea bigger direction of oil prices. i think it is partly protecting the voice and certainly formalizing the agreement they have come to over the past 12 months. shery: let's talk about dollar movement we have seen recently. we continue to see a weaker u.s. dollar. this chart is showing how it has broken through the moving averages. how has this had an impact on oil prices? where do you see the direction going from here? daniel: certainly an interesting topic. over the longer term, the inverse correlation between the dollar and oil has been quite strong.

we have seen the supply-side issues really dominate. that is when you find periods of disconnect between the dollar and oil. at the moment, i think the concern around -- up to this point, concern about the trade war has been clouding that picture even further. forward, it is less headwind for oil markets. we expected to support oil prices over the medium term. in the shorter term it is going to be driven by geopolitical issues. shery: what about gold? does your same reasoning apply to gold, which is seeing this huge rally the past month? daniel: i think even more so there. that has certainly been something that is holding back gold for some time. we see that shift in recent weeks. gold has benefited from that. we are seeing some weakness on

the back of that. the resumption of those trade talks. the outlook for rates, the u.s. in particular, has been a driving force. we are quite positive towards gold. we think this abatement in the strength, rate cuts in the near term, will boost investment demand. shery: thank you so much for joining us. that was anz senior commodities strategist daniel hynes. you can catch past interviews on tv and dive into any of the bloomberg functions we talk about. become part of the conversation on the bottom left side of that screen. you can ask our guests questions. this is for subscribers only. this is bloomberg. ♪

shery: hong kong's chief executive has given her first public comments in more than a week. proceedings were moved indoors as a storm clouds and protesters gathered. bloomberg china government editor caringly joins us now. take us through what is happening today. >> we have another day of protests in hong kong. protesters gathered as early as 4:00 a.m. this morning to theupt a road leading up to usual site of a flag raising ceremony to commemorate the handover of hong kong back to chinese rule. today, it was moved inside because of rain. we missed seeing her first public appearance in days and days. she has been in hiding since all of this started happening. shery: we know the extradition bill has been suspended. why are protesters still on the

streets? >> it has been suspended, but not withdrawn. people are still coming out in force. today there is scheduled to be a march that is going to follow similar routes to what we have seen earlier this month during mass protests. people are very much wanting this bill withdrawn. they are calling for carrie lam to resign. they are calling for things that have not been addressed. when she spoke, she said she would try to be more open, but she did not say anything concrete. it is unlikely to allay anything that is going to happen later today. shery: we know carrie lam's popularity has plunged. how much longer does she have as chief executive? what about the protest movement? has been going on for weeks. plummeted,larity has it is down to 23% support. at the same time, she is appointed by beijing.

it is unlikely she is going to resign. the protests have had incredible momentum. or than anybody thought they would. today is going to be a great gauge of how much they have left. shery: thank you so much. a quick check of the latest business flash headlines. boeing is facing more official scrutiny within the government demanding records from a factory in south carolina. the subpoena involves the 787 dreamliner and signals the investigation into the 737 max 8 is widening. back in april, the new york times reported allegations of failures in quality control. a taiwanese carrier will hold the new talks with unions on tuesday after failing to agree to terms with flight attendants. negotiations broke down over the airline's are will to withdraw punitive measures.

the union says action will continue. estimates the cancellation of 2000 flights by july 12. a quick look at how markets are trading right now. every market in the green right now. the nikkei gaining 1.4%. tech stocks leading the rally as we see the yen weakening for a fourth consecutive session. keep an eye on chipmakers after we saw trade tensions ease, some relief for huawei. hong kong on holiday today, but other markets open. the china open is next. ♪

:00 a.m. inot beijing -- 9:00 a.m. in beijing. welcome to the china open. tom: we are counting down to the open of trade in chinese markets. here are the top stories today. markets rise as the u.s. and china resume talks. president trump throws huawei a bone, but the white house says there is no deal yet. the latest look at manufacturing in china shows more fragility and the need for a trade deal. we have the private reading this hour. and history at the dmz. president trump is the first u.s. leader to step foot inside north korea, saying,