paul: welcome to daybreak australia. i am paul allen. shery: i'm shery ahn. we are counting down to asia's major market open. ♪ paul: here are the top stories. wall street rises to another record from the tray truce with china but stops amid signs the economy is swelling. oil on the rise as the opec and allies extend the curves into next year. there is concerned of weakening demand around the world.

hong kong protests take a violent turn. police fire tear gas and pepper spray and the government condemns vandalism. shery: a quick check of how the markets closed in the u.s. the u.s. -- s&p 500 closing in a record for the first time in 10 days. chipmakers leading the gains. the semiconductor index closing at a three week high after president trump announced in easing on that band on tech giant huawei. we have the dowd gaining 4/10 of 1% but industrial shares did underperform the bottom market. we have the u.s. ism manufacturing gauge showing the orders stall the last month and that is coming on the back of factory reports across the world showing weakness in the manufacturing sector on the particular sector of the market. the nasdaq gained 1% in u.s. futures at the moment unchanged. we will see how we will set up for the markets in asia. on sentimentk

seems to be persisting so far. we have new zealand trading in the past couple of minutes, up about 1/5 of 1%. futures and city pointing higher by one third of 1%. looking a little weaker and futures for the nikkei trade out of chicago turning flat as you can see. let's get a check in the first word news. bank isuropean central singling more stimulus is on the way amid continuing worry about feeble euro zone inflation. philip lane says recent measures have been affected and more can be done if needed. investors and economists predict the ecb will cut interest rates in the coming few weeks with the deposit rate almost at the record low of -0.4%. european union leaders have failed for a second time to agree on the makeup on the blocks top jobs. amid growing concern about

division and gridlock in brussels. 18 hours of talk produced no agreement on naming dutch socialist as head of the eu commission. he is backed by chancellor angela merkel who was opposed by the center-right group and the eu parliament. opec and its allies are to extend oil production curves into next year amid concern about weakening global demand and the rimless rise of u.s. shale. agreed to prolong restrictions by nine months to drain the balance of the market. the curves began in 2017 and repeated extensions show opec challenge in the eight of shale. the cartel share of the market is at its lowest since 1991. iran has graced the terms of the 2015 nuclear deal, exceeding limits on enriched uranium and raising the stakes in the standoff with the u.s. to move undermining support from european powers who also signed

the deal for years ago. they have been trying to find a way to salvage the deal using a trade mechanism to sidestep u.s. sanctions that tehran says more must be done. >> the europeans have not done enough. the islamic republic moved ahead with plans that were previously announced. we are in the first phase both on increasing our stockpile of enriched uranium as well as heavy water reserves. we have already announced our second phase of action which will be surpassing the iranian -- uranium enrichment limit. day,obal news 24 hours a on the air and on twitter, powered by more than 2700 journalists and analysts. this is bloomberg. shery: thank you. hong kong's embattled leader is condemning demonstrators who stormed the legislative building and protests against the government escalated. for the latest, we are joined in

hong kong by her senior reporter. and by our chief north asian correspondent david ingle. let's get target with you because earlier in the evening, we saw a riot police retreating but the came back with force and then we had some traumatic pictures out of hong kong. what happened? david: a lot of questions exactly what happened in terms of police tactics. we heard two things going on in hong kong. abouteful protest of 180,000 to 500,000. all streaming past the legislative council. at the same time, a much more aggressive group of protesters who were beating down, bashing down the windows of the legislative council. around 9:00, the p lease -- police fell back which allowed those protesters to flood inside the building where they were ransacking. pulldown portraits, spray-painted slogans all over

the walls. flag on the desk of the mexico president. they basically trashed the place. around midnight, the police came back and they fired tear gas. the effectively clear the area. david, the chief executive held a very early morning press conference. how did she respond? david: pretty unprecedented that she would do that. she pretty much condemned the violence of these more aggressive protesters. listen to what she said. >> the extreme use of violence and vandalism by protesters who have stormed into the time -- this is condemng that we should because nothing is more

important that the rule of law in hong kong. talking at her 4:00 a.m. cap press conference. and a lot of questions that have been raised. , they are asking this question -- why does the police pull back? was there some sort of track that allowed the protesters to go inside? carrie lam could come out and asked -- condemned the extreme guidance and change public opinion. and see how it sways against the protesters. she defended the government's actions in the period after the protests. she says the tradition law has been withdrawn and will die after the current session next year. in her view, the protesters have nothing to be protesting about. the final question is why did the police pull back?

what were their tactics? it was trashed by a lot of unruly and aggressive protesters. it is going to be a pretty couple of dave's -- days. shery: those images of vandalism have seriously grabbed the media's attention. let me turn to steve. we are now expecting chinese premier league to address the world economic forum. is he expected to mention hong kong or would this be seen as airing dirty laundry? yeah, first off, very few people could actually watch the proceedings in hong kong last night. the blackout on these kind of news in china. premier talks about it, it would show the level of

confidence that beijing has in how the hong kong situation is being handled the perception game. if it is perceived that the business community and many of the peaceful protesters have fractured or perhaps against that violence and that the beijing authorities could use this as an example of lawlessness in hong kong, there is a chance he could mention this today in this speech to the world economic forum. i don't think he will. i have covered china for a long are not protests something that they want to necessarily talk about or allow to spread in china. absolutely not. this is an address to an international community and addressed primarily to an economic community. the chinese believe that hong kong is a sovereign affair and not an economic one. the thing that is missing is the audience is the financial community in east asia.

many tied to the financial capital of hong kong. people will be talking about it today. paul: steve, what has the coverage been like in china? the coverage of the last round of protests was fairly thin. how are people getting their information? of course, it is not on the tv stations. you have to find out through your own channels or either through a vpn, virtual private network. it is not broadcast widely but it is talked about. the masses know about what is softening -- happening in hong kong or the real reasons behind it. not necessarily. as david said, this will be a perception game by the hong kong government and the chinese government. it wants to see -- excuse me -- it sees hong kong perhaps as the colonial path and ruining the

dream that xi jinping has for hong kong. it is going to be a battle of narratives right now. it is not necessarily something that state media will be broadcasting and talking about given the violence last night. the protesters want that tradition bill to be withdrawn. beijing is not giving in. carrie lam is not resigning either. what is next? ,tephen: in the short-term there was going to be a battle of narratives. david: we have seen this sitting elites put an editorial out saying he is condemning the violence. going to happen is this extreme violence gets to be cleared up. how do the police going about doing that? can they identify the perpetrators of the vandals we saw in the legislative council. it is going to be this battle of the narratives, how we are going

to change perceptions of the public towards what is going on. there is a big risk from the point of view of the protest movement that the government is going to be able to take the itlence in a way such that -- the public opinion turns against the protesters. therefore, takes a lot of the energy out of the sales of the whole movement. paul: chief north asia correspondent stephen engle in china and david tweed in hong kong. we will have more on that situation in hong kong throughout the show. the author of the coming collapse of china will join us to discuss with the past 24 hours say about the chief executive carrie lam. shery: investors wave a trade truce on one hand and a global slowdown on the other. we look at one investment

playbook next. this is bloomberg. ♪

paul: counting down to the citi open, about one hour and 40 minutes away. futures pointing higher by one third of 1% after a very positive day in the u.s. markets. i'm paul allen. shery: i'm shery ahn. you are watching daybreak australia. stocks rallied to all-time highs after the trade truce with china but they finished well off highs on the day on signs of slowing growth. su keenan has more. who can blame them given the global factory numbers were great? su: manufacturing numbers a focal point. it underscores what one strategy said which is there will be a rally off the trade news that we go back to regular concerns of the market. what you will see is bonds will lower as was gold which was down

most of the year. also notice the semiconductor stocks which is very much related to huawei and the government, or i should say, trump's administration decided to ease restrictions. take a look at how of the chip stocks did. soaring off to the races. they get a lot of the revenue from huawei. some of these are direct suppliers of huawei. let's take a look at the semiconductor index. chip stocks have had a rough ride of late that they are back as we go into the bloomberg. gdp is where you can find the library. they are back in the green, taking the top 2019 spot as one of the momentum stocks. they have done real well this year and the s&p except for may and they are back strong in this latest session because of the trade optimism. paul: let's take a look at commodities.

a setback for gold today. su: we saw two different moves. oil drifted a lot but it ended higher. biggest -- oil, i should say. nate is rising as opec extends. there was a lot of different undercurrents in the market. a lot of surge on the optimism that opec, which has been bickering for months, finally agreed to extend production cuts into 2020. the first put into 2020. just about 2019. now people are getting a bit restless is what one oil analyst said. announcement, there is a bit of anxiety. that was a big drop and that has to do with the trade truce. it is not good news for gold which has done well of late because of all the tensions,

including with iran and this was a big hit to the gold bugs. shery: su keenan, thank you for the latest on the market. tradee end of the g20 and talks come investors money is going and what are the biggest risks. brett ewing is chief market strategist and joins us from tallahassee florida. great to have you with us. treasuries really seesawing in the session today. it fell with the all caps going higher and going back with a numbers. just for yields to rise again. where would you find the opportunities where if you are looking at where rates can go from here? short-term, on the on the short end of the rate curve, we do expect rates to go down in the longer and to start creeping up. we saw a little bit of that long and rising today. of we do like the interests

lending right here, specifically in the housing market. look at what 30 year mortgage rates have done since november. five .3% to 4%. i know hives think -- housing has started slow but we think the second half of 2019 is the place to be. shery: this gtv chart on the bloomberg showing how fed fund futures are still pricing in two cuts in 2019, four in 2020. when you are playing potentially more rate cuts the come from the fed, how do you do it and what vehicles do you use? brett: we are a bottoms up research firm. we like to look at small to mid-cap companies. in the housing market, we like floor and the core which is one of the fastest growing reach retailers. they are expanding their operations tremendously. revenue growth over 20%.

we like that equity as a way to play it. clearly outperforming this year. we like alarm.com. those are specific names that we do like in the housing market. we also like names associated with the lending market as well. and material companies that help build those type of vehicles. su was mentioning the semiconductor index which was up pretty healthily delay. do you think that rally was appropriate considering what we got out of the g20 which was not really a great deal apart from the news on huawei? is it sustainable? brett: i do think it is sustainable. i think what we saw today is perhaps the beginning of the end of this long-awaited consolidation period that the u.s. equity markets have been in since january of 2018. we need one more piece of this

puzzle to come together. i think with the jobs report this friday, we could get it. that the jobs report comes in very strong, i think we will have a little bit uncertainty from the fed and that will increase volatility in the short run with these markets. if the jobs report comes in week, i think the fed is in play in the markets will be very pleased. to follow along with your sense of optimism, i want to jump into the bloomberg. it shows that gold, negative yielding debt is both on the rise. do you think these defensive trades are getting overcrowded? brett: i do. i really feel like they are overcrowded, especially consumer staples, utilities. right after the g20, the very first day, i like how the market ended the day with a little rally in the closed. what i noticed most about today's action was that you had

a rotation from the overcrowded spaces into those risk on areas. i think again, this is the beginning of a breakout of the s&p that could be sustainable. if the fed followthrough. shery: has the g20 changed at all your view of the market, where we are going from here? brett: i think what we got out of the g20 meeting was a level of uncertainty with this dispute with china and the united states on the trade war issue. is it resolved, absolutely not. we know where we are. makeesses and ceos can't some decision right now. i think it will free up business activity that was really present in the headlines because we had no idea where we are going with this. now i think we have some clarity on that one issue. shery: are you worried about the global pmi's we saw overnight

and in the u.s. as well, or is this data that is being collected before the weekend beginning? brett: i think that is certainly concerning information. and what we do believe that a lot of flowing town and growth that we are seeing in momentum is coming out of these trade tensions going on between china and the united states. , ithe trade tensions go down believe on a relative basis, we will see some outperformance out of europe and emerging markets. if this trade war starts at slating again, i think the u.s., u.s. markets is the place to hide out. trade,rett, in terms of $64,000 question. at of the g20, we consider the can kick. how long will it be before we have a meaningful resolution? brett: that's be realistic.

i do not believe you could possibly get a solid conclusion, especially on the ip and enforcement mechanisms prior to the 2020 election. it could happen. however, i will bet it is probably something that would occur after the election if it occurs at all. i am not expecting much on that front over the next 12 months. ewing, chief market strategist for first financial -- first franklin financial services. thank you for joining us you can get around up of the stories you need to know in today's edition of daybreak. bloomberg subscribers can get it on their terminals. it is also available on mobile in the bloomberg anywhere avenue. you can customize your settings so you can get news on the industries and assets you care about. this is bloomberg. ♪

shery: let's get a quick check

of the latest headlines. a facebook site was evacuated monday after an item tested positive for a nerve agent. four buildings were cleared after the package was delivered. no reports of injury but serin is highly toxic. one drop to cause sweating and muscle twitching, while exposure to larger doses could result in polaris is -- in paralysis and respiratory failure leading to beth. -- death. paul: one of the biggest investors is concerned an additional stake in the subsidiary of industrial and visor could spend the equivalent of $86 million to raise the holdings by 3%. shares rose strongly but well below octobers ipo price. it has struggled to convince investors it can transition from a niche carmaker to a ferrari success. shery: breaking news -- the u.s.

now proposing adding more tariffs to $4 billion of eu goods. we know there is still aluminum tariffs in place. more details later in the show. this is bloomberg. ♪

paul: 8:30 a.m. in sydney. the reserve bank of australia making its decision on the couch rates later on. futures pointing higher by one third of 1%. it does not take into account the news we have had across the terminal. i am paul allen in sydney. shery: i'm shery ahn in new york. you're watching daybreak australia. let's get more on the breaking news. the u.s. proposing adding more tariffs to $4 billion of eu goods. we don't have more details at the moment but we do know that steel and aluminum tariffs are still in place on european goods. not to mention that president

trump has threatened auto tariffs on top of those as well. this is coming from that u.s. trade representative's. proposing these additional products for tariffs countermeasures on response to harm caused allegedly by eu aircraft subsidies. this is coming from the u.s. trade representative's office. we do know that europe and the u.s. are trying to come to an agreement on trade. they have been negotiating the eu has kept agricultural goods off the table. president trump has not been happy with the latest developments. now we are hearing from the office that they are issuing for public comment, a supplemental list that could be subject to additional duties in order to enforce u.s. rights in the wto. this in dispute against the european union and threatening member states regarding the eu subsidies a large civil aircraft.

in the meantime, we are not seeing that much movement in the euro-dollar at the moment, holding at 112. for now, the first word news with riddick a group that. >> hong kong's embattled leader is condemning legislators who stormed the legislative building as protests against the government escalated. tear gas and pepper spray as hundreds of people flooded into the building. the chief executive announced the protesters, saying they used excessive violence. they say they failed to respond to their demands. violencetreme use of by protesters who stormed into the legislative council building over a period of time. this is something we should cheer seriously condemned because nothing is more important the rule of law. fomce fed says many

member chr case for each easing. the vice chair said the chair would act as appropriate to sustain the u.s. economy, uncertainty about global growth and trade. president trump has criticized that policy and calls have been amounting for so-called insurance cut. i am baffled by this notion that an insurance cut is 100 basis points. one, you don't want to use of all your ammunition now. secondly, if you really need to cut by 100, it is well beyond insurance. there is some thing wrong with your economy. >> the reserve bank of australia is walkabout with its latest policy decisions. in the first meeting for the city in five decades. the rba is excited to announce a second success of rate cut on tuesday. the first time since 2012. it last time the rba,

adjusted policy to encourage saving. 51 years later, it wants to persuade australians. president trump says he has taken tariffs against mexico the table after the country stepped up efforts to stem the flow of central american migrants attending to reach the u.s. president says mexico's is doing a great job and has a big impact on migrations. after theonths plants government said it would do more to help. global news 24 hours a day on air and on tictoc on twitter powered by more than 20 70 journalists and analysts in more than 120 countries -- this is bloomberg. shery: a quick look at how markets are trading at the moment. first look at u.s. futures because they are taking a hit. after the latest news that the u.s. was proposing adding more tariffs to $4 billion of eu goods.

u.s. futures down to the tense percent. this is the u.s. is adding products and certain metals to those proposed tariffs. we know that the trail negotiation continues with the eu, although the eu wants to keep as approachable -- agricultural goods off the table and the president has to order tariffs as well. nikkei futures down to tensile 1% despite the fact we saw again weekend for two consecutive sentients. now despite the fact we saw wall street close at a record high. paul: that is right. we have not seen any impact on new zealand. continuing to rise reasonably healthy, up 4/10 of 1% after the rallies sword. as for i.s. x futures, still higher by one third of 1% but those numbers do not reset until

about 15 minutes before the open. we will keep an eye on that one. right now, pointing higher. let's get more on what we should be watching us trading get underway. we have garfield reynolds with us. you did not see that relief rally over the g20 outcomes but the question is, is it sustainable. garfield: it is doubtful it is sustainable especially with the latest news about eu tariffs that reinforces the message there was no progress as far as trade goes. the main progress is that trump in the lead up to the g20, if xi does not be with me, i will add tariffs. xi met with him so we did not add the tariffs, but trump created that appearance of there being a danger. a lot oft with mexico, what he ended up agreeing with mexico is being worked on for months.

it's a little bit of reality television for the market's benefit. if you look, we have a chart. you can look at what is going on in the real economy. that is a very dire picture. unwisemes difficult stocks rally. i know the fed will cut rates but there is a limit to what the fed can do. i call this the coyote run. pmi whicht the global is contraction territory for the first time since 2012. you can see the way bond yields have tracked that pretty closely. stocks on the other hand move more or less in line with the fed until this year. wile e.r later, coyote, will start crashing down. shery: that has not been the case recently. we are seeing more safe haven

moves as we see more uncertainty, perhaps not over china but now europe. garfield: well, i think the u.s. dollar movement is not a safe haven. that was a recalibration of debts on what the fed is going to do. up until the weekend, we had a very strong certainty in rates market that the fed would cut three times this year. now, it is looking like to cuts is the base case with a third a potential option depending on how the fed goes. that is driving the u.s. dollar backup and things like gold which does not yield anything. paul: garfield reynolds, thank you for joining us. you can check out our library for some of the charts we have been talking about. you can find that on our bloomberg terminal. we will have more on the reserve bank of australia decision later on this hour with the head of australia fixed income, franklin

templeton. shery: let's turn to the oil market. allies extending production curves into the next year as members fret about weakening outlook. the minister says nine months should be fine. >> i think nine months gives us enough runway to wait for the markets to balance before we deliberate for an extension. most of thepent day lower as it was in the green. joining us now is jessica summers. we do not really see that strong of a rally in the oil markets. is this because of the really weak factory numbers we have been getting worldwide? jessica: exactly, quite interesting for that reason. we were expecting a strong rally. earlier in the session, about 3%. we saw this rally fade even after opec agreed to extend. why is that? aked fears about

demand. this extension may not be enough to support a market, oil market that is facing growing u.s. shale production and a weak demand outlook. aboutso, jessica, what the growing u.s. shale production? is that part of the reason it needs to cut output? jessica: u.s. shale is unstoppable, above 12 million barrels a day on the u.s., near record high levels. it is forecast to grow even higher in the permian basin. crude production is to jump 50% by 2025. opec knows any to keep cutting because of u.s. shale, but is interesting because we have the saudi minister coming out saying that u.s. shale will decline. he was optimistic so we will see what happens. shery: take a look at this chart on the bluebird showing the level of saudi arabia and production. we have seen them tapering off it saudi arabia really cutting even more than required.

what level of prices do these countries newmont to see as a result of this deal? jessica: when it comes to saudi arabia and russia, two powerhouse producers, they are coming from different places because saudi arabia needs $80 a barrel to balance its budget. russia only needs prices in the 40's. that is why saudi arabia has been doing the heavy lifting in terms of making db cuts and the industry measure said they will take the lead, constrain production and russia is a bit of a wildcard. we will see if they will stick to their pogos. shery: thank you so much. global reporter on the latest on opec. a closer look at the opec plus decision and the group's path forward in the next hour with doctor will join us at 7:30 a.m. in hong kong, 7:20 p.m. eastern. paul: we will have more on the escalation of protests in hong

kong. speaking to the author of the coming collapse of china, gordon chang. this is bloomberg. ♪

kong where to hong antigovernment protests turn violent on monday night. right police fired tear grass after demonstrators smashed their way through the legislative council building. joining us now is the author of the coming collapse of china, gordon chang. great to have you in the studio with us. when will the optics of what happened overnight duper protesters? it cannot be helpful. gordon: the graffiti does not good. throwing snow but the policeman is not going to get support. also, with the withdrawal which was inextricable -- shery: around 9 p.m., they retreated and came back. gordon: protesters stormed into the legislative council chamber.

carrie lam is either going to looking covenant or duplicate us, like this was a trap it although the protesters will get a certain amount of blame, i don't think this will help the chief executive. i think she is going to be hurt by this. shery: will she need to be resign as it happened in 2013? gordon: you would think so. before this, there is a talk there would be a year or whatever, but that she would have to go. this is going to be probable because you have a number of these violent protests. these kids are leaderless. any single kid can create a headline. that means people are going to say at some point that they do new leadership and i would guess she would not serve out her five-year term. paul: gordon, do you think the protesters to some except may have overplayed their hand? carrie lam says she was willing to shelve this

and very likely she would have been quietly removed at some point in the future, thereby set two keyying demands. gordon: great question. situation analogous because we have the million person protest on june 9. on the 12th of, there was that violent clash that the legislative council building. you would have thought the 12 protest would have really hurt protesters but it did not. because teargas, overreaction. all of that is not -- this very well could be an upside down situation where there is so much related anger across the political spectrum in hong kong that's the kids might get off easy. say: is it possible to where is the threshold when facing might intervene? gordon: yes.

videosre all of those circulating around hong kong suggesting that hong kong soldiers are already on the street interspersed with the street because there is the line of hong kong policeman being yelled out by policeman and some of those policeman do not understand cantonese in a cantonese speaking city and we cannot produce the hong kong police identification cards when challenged. i don't know if it is true or not -- probably not -- this is what people are thinking because there is this heightened concern about what is going to happen to the garrison. shery: because the key question is how question -- dangerous it it for beijing to allow protesters to get their way? gordon: although people in the mainland are not going to sympathize with hong kong people, nonetheless, when the people in the mainland see that hong kong protesters can push around the chief executive,

people will say i have got complaints. i have grievances. , maybe i can push around the local party secretary. i think there is a certain that of inspiration on the part of leaders of beijing where they are worried people in china will be inspired. shery: president xi jinping is essentially leader for life how much of the blame will fall squarely on him? gordon: he no longer has the hong kong portfolio but i think everybody knows what we are seeing today are his hardline policies. the policy line he sets. i imagined there is a lot of people out there in beijing who want to get at him for a number of reasons. they could use this along with other grievances that they have. thank you so much for joining us today. gordon chang, the author of "the coming collapse of china." this is bloomberg. ♪

having stood on the sidelines for three years, the reserve bank of australia is set to move again. two thirds of those surveyed by bloomberg, expects the rba to fall off the june rate cut with another quarter percentage cut later today. the last time we saw back to that cuts was back in 2012. ofrew kenobi is director franklin templeton and joins us from melbourne. thank you for coming in. another cut. where getting pretty low which happens when we are down at 1% so when do we reached the limits of effectiveness of these rate cuts? andrew: sure. good morning. i think there is something that fall through today at 25 basis point cut. iny have indicated clearly the communication.

the conditions that cause them to begin the process. it is possible that is said to hold off until they can make it outside the market with the quarterly forecast. figure picture, we see them going below the 1%, probably .5% level in the coming period. a particular challenging period for the australian economy. paul: how challenging is it, really? i want to have a look at this chart. you can see the top line ofustrates the 27 yields un-break expansion in the extremely economy. it is getting weaker but we are still in positive territory. the balance includes services which is looking reasonably healthy. are things really that bad or is the rba getting off a worsening picture? andrew: that is quite right.

there are some bright spots. we had a long period of expansion. there is a household sector which is the largest part of the economy which got near record gdp on a global basis. very high debt to income level. it is the shift in momentum, we argue that is important as the absolute. not many people would be necessarily calling for a recession but the downward shift at the moment of the australian economy is quite significant that is what is causing them to act how they are at the moment. shery: how much will inflation?g weigh on andrew: it will certainly weigh and we think it is which is why inflation is running at a soft pace. ouraustralian household in opinion has to go through a period of renewing savings and

slowing down the borrowing trend to continue to buy houses and cars and so forth. that takes time. we know that from other experiences with other economies around the world that this is not happen overnight. we are at the stage we need to begin that process. and make a want for some time but there are other good things going on and we know australia still has good levels of immigration. we know the federal government to act tentatively quite decisively in terms of fiscal policies. and so forth. negative for australia, there are good things going on but there are some adjustments that we think needs to happen that will take some time for the australian household. shery: we are seeing the tenure all the yield around the rba all the rate as we can the on the g chart on the bloomberg have any rate cuts are you factoring in

and what will it do to the government bond? we certainly feel -- i moved today for a second time which is taking things around halfway in to the current easing cycle. we will be looking for the terminal cash rate to potentially get to .5%. in terms of the bond market response, the bond market has already started to factor all of that in. henc, you have seen the short end in the long-end move my quickly. there is still further to go in terms of yields. we are not necessarily thinking yields plunge lower there is probably upside given that we are likely to see the rba continuing on and potentially given what the second half of the year brings, and brings some of those further rate cuts closer rather than further away.

said it hits aas one percentage point on the cash rate and reaches the lower bounds of what it reaches. there has been discussion around unconventional talks. likely isppens, how that and what will the do? andrew: good question. world withund the the experiences of other economies, arguably unconventional policy is not conventional. it is untested territory for the reserve bank. they have indicated that i don't think that is around the corner but if they get down to what they consider logical endpoint for traditional interest rate policies, they might have to look at other measures. the form and shape they take is open for debate. but we have the view they will be thinking about that now and

potentially working through some small alternative measures that they may take, whatever form that is so if they get to that point where additional stimulus is needed, they could act fairly way. paul: franklin templeton director andrew kenobi, thank you for joining us. we will have more on reserve bank of australia decision with moody's analytic economist katrina alv. the rba holding study today. she joins us on 11:00. shery: that is on daybreak australia but get a check of the markets trading he vstoxx up 4/10 of 1% but we are seeing futures also gaining 3/10 of 1%. the key news this hour has been the u.s. proposing adding more tariffs to $4 billion of eu goods. take a look at what the euro is doing against some other crosses likely euro-dollar at the moment

unchanged after it took a little bit of a hit on that news. the u.s. adding eu daily products and metals to propose tariffs. we will have much more in the next hour. this is bloomberg. ♪ hey! i'm bill slowsky jr.,

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

paul: good morning. i am paul allen in sydney. we are under one hour away from the australian market open. shery: i'm shery ahn. welcome to "daybreak asia." ♪ paul: our top stories this tuesday, washington ramps up the pressure on brussels. the administration proposes slamming on $4 billion of e.u. products new tariffs