thousands of mattresses to those in need. live healthier, live happier - by resting deeper. get 15% off, and 2 free pillows. go to leesa.com today. paul: welcome to daybreak australia. i am paul allen. shery: i am shery ahn in new york. sophie: i am sophie kamaruddin in hong kong. we are counting down asia's major market open. ♪ here are the top stories we are covering in the next hour. u.s. stocks reach a new high as havens resume their gains. oil slumped after opec allies backed further output curves. a record-setting quarter. deliveries through june smash forecast on demand for the model

3. from new york to frank for, christine lagarde heads for the euros of's slowing and the need for fresh stimulus. shery: let's get a quick look at how the markets closed in the u.s. stockmarkets removing with between gains and losses throughout the session before moving decidedly higher in the last hour of trading or so. we have the s&p 500 falling to session lows when we heard from cleveland fed president loretta mester talking about the fact she could not support a rate cut. we saw a estate, utilities, communication stocks pulling the market higher. the s&p 500 closed 3/10 of 1% higher. it was a session of low volumes. we are headed towards a july 4 holiday and not to mention that trading will help only during the morning session. we have seen a little bit of light volume in this session. not to mention that we have a lot of eco-data coming around

the holiday, including the labor report on friday. take a look at tesla. this was one stock that moved with a surge in late trading, gaining as much as 9%, at the moment gaining 7%. tesla withn record deliveries. more than 95,000 vehicles liveried in the second quarter. a very good signal given the fact the stock plunged about 30% this year. let's see how we are setting up for the markets in asia. sophie: this wednesday, we are likely to see a straight session in asia after the action on wall street. stock futures pointing lower in sitting as well. over at wellington, kiwi stocks opening in the red. we will be watching for tracking a rally in treasuries as the governor warned of protectionism

for a move into haven assets. for the governor at the rba, more data to consider today. trade and building approval which will offer the australian economy after the central banks cuts. paul? paul: thank you very much. let's check in on the first word news. subsidiesg-running dispute between airbus and boeing have dragged more eu products to a risk of potential tariff targets. washington has identified $4 billion of eu goods ranging from fruit and cheese to tubes and pipes. $21 billion of product that the u.s. published. the eu has a similar case pending against boeing and has tariffs of its own. imf boss christine lagarde is set to become the first woman to leave the european central bank after being nominated to succeed mario draghi. she is such a takeover in november.

eu leaders have nominated the german defense minister to become the european commission's next president. she will be the first german to hold the post in more than 50 years and will have more reaction to christine lagarde's new role in a moment. oil had its worse reaction to an opec meeting in four years despite it tumbling after the allies agreed to extend the production curve into 2020. russia and other independent nations back to saudi arabia's plan, although divisions remain against the curve. the decision came with shale surging in the u.s. close to being an exporter. it has the lowest market share since 1991. >> in order to help maintain the current state of the market and avoid the buildup of inventories, we have decided to keep the level and the magnitude of the cuts intact. died and thehave

financial capital to a halt. and ledublic transport to the city declaring a holiday. plane overshot the runway. the local department recording 45% of rain in 24 hours, the second heaviest downpour on record. global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks. the nomination of christine lagarde to leave the european central bank followed a european union selection process but leaders seem to be on board. >> i have known madam lagarde for many years. i'm absolutely sure she will be very independent. >> christine lagarde this somebody we know very well in ireland, heading up the ecb.

she will continue the policies of mario draghi, keeping interest rates low. >> we believe she has all the necessary skills to head the central bank. i do believe christine lagarde experience. she knows how to cautiously address issues. she will be very committed and engaged. shery: the markets seem to be on board as well, even if cautiously. if approved, she would arrive at the ecb at a difficult time for the euro zone economy. here to size up the pick and what it means or policy in the markets is financial chief economist chris. great having you with us. i saw in your notes the first thing that stuck out was if i were her, i would not want this job. it is a challenging time for her, isn't it? chris: yes. the ecb, unlike the fed, does not have much power. they have negative rates already, of course.

they could go deeper negative but it is not clear that would help anything. easing, of quantitative they have already done is massive. there is not a lot of room left to do policy moves. even there, i was thinking about it on the way to the studio and she is a good pick for that reason because having a central bank head with the credibility to push for fiscal stimulus in europe, i think that is absolutely critical. there are not many people better suited to do that than she is. shery: because she could be bringing that star quality of a politician more than economist. chris: right. she has finance minister experienced so she knows what it is. what the hurdles are to spending. she also knows what needs to be done to clear those hurdles and for europe to move forward with fiscal stimulus which central bankers have been talking about

for years, but obviously has never happened. paul: chris, you said that you wouldn't take the job if you are offered it, but christine lagarde is a choice. if you turned it down, that would send a dreadful message. she is a politician. how useful is that going to be in bridging divides and relying on her star power to help her with some of the critical decisions that lie ahead? chris: i think she will be absolutely terrific at that. i have no doubt she will take the job. she has risen to challenges like this before. when she came into the imf, it was not exactly an easy time either. of course, she acquitted herself very well in that position. i think coming in, what she will do is get to know the staff, build support. at the same time as others have said, insisting on the independence of the central bank.

working with mario draghi to continue policy rather than striking out in a new direction. i think she is going to do terrific. paul: what is the first order of business for christine lagarde as head of the central bank? chris: i think to reassure, as mario draghi has done, that the ecb is committed to doing whatever it takes to meet the mandate of the bank, which of course is stable prices. dr also, it is becoming, as aghi sort of suggested, there is somersault ability for growth. there is the need not to chase inflation to low. i think she will do a good job of articulating that message. that is the first order of business. letting people know what needs to be done. things could those be european banks which are in a rough shape. how well-equipped is christine

lagarde to handle them? chris: coming from the imf, this is something she is well-versed in as well. abilityhas a response and has been active in europe for years helping to keep things going. when the greek banks were in trouble, the greek sovereign debt was in trouble, the imf stepped in and was part of the package. i think in a way, compare her not to draghi going out the door who obviously is a pro at this but compared to draghi coming in. i would say she is more qualified than he was when he .ook the job she knows all of the challenges the european banks face which are pretty significant. shery: as we were speaking, this news breaking on the bloomberg. president trump saying he will be nominating christopher waller

to the fed board. we have seen the president really not too successful in those nominations for the fed board. what can we expect in terms of fed policy as we see the rest of the central banks around the world following suit and easing policy? just to elaborate more on the breaking news -- president trump tweeting "i'm pleased to announce it is my intention to nominate waller, phd, executive vp of the federal reserve bank of thing lewis to be on the fort of the federal reserve. " chris: this of course following on the news, the recent news that he had looked at james bullard, the president of the st. louis fed and bullard declined. shery: as dovish as they get. chris: and happy with his job. i think this is a nice way of leveraging the st. louis fed influence. waller as head of research has been working closely with

bullard for years. i expect they see i july. a solid choice and by choosing a fed insider and a phd, i think the president has addressed the two biggest objections. as to what the fed is doing now, i would not pay too much attention to loretta mester. i know she moved markets today but she is very much an outlier and has been for years. one of the most hawkish on the committee. the rest are leaning towards for half of them are leaning towards rate cuts. the others are more open to the idea than they were before. but ik they will ease, think they may not realize the urgency that the markets really are counting on that first rate cut coming at the meeting at the end of this month. be a doesn't, there will selloff in equities. there will be a further drop in interest rates. paul: all right, chris low, chief economist at ftn

financial. still to come, oil takes a hit as major independent producers commit to opec's extended outlook curves. shery: we ask what the fed can do to keep the bull market in these uncertain times. a former financial intelligence vp ryan allen joins us next. this is bloomberg. ♪

paul: we are counting down to the sydney open this wednesday morning. we have futures pointing slightly lower right now, down about a state under 1/5 of 1%. i'm paul allen. shery: i'm shery ahn. you are watching daybreak australia. investors rushed to havens as the s&p 500 had a new high. treasuries and gold surged. our cross asset reporter sarah ponczek has the market action.

we saw this move to risk off. sarah: pretty boring day. we really didn't see much movement but if you look underneath the surface, we clearly saw a shift towards safe havens. within equities, you look at the sector breakdown, you get real estate, consumer staples all top the leaderboard. you look at the bottom and it was much more cyclically oriented areas in the market. whether it is energy, materials or financials. even outside the equity space, we saw a bond rally paid 10 year treasury yields at 1.97%. gold rallying once again back above $1400 an ounce. even though we are not seeing much i of big movers, we are seeing progress for safety. paul: oil plunged today, that is considered the worst reaction to an opec meeting since 2014 so what is the sinking prices? sarah: it is an interesting take away. falling 4.7%.

this could be pretty counterintuitive because opec did agree to extend output cuts for another nine months so you would think ok, less supply, that means we could see in order rally but the fact of the matter is we are seeing concerns regarding demand. think about the week pmi numbers we got earlier this week. the fact of the matter is it is very difficult to balance the oil market when you have demand worries. going forward, we will see what happens next but clearly in the near term oil under pressure. that also weighing on energy stocks. if you look at the 10 worst performing stocks today, every single one of them. shery: you are putting out a story looking ahead to earnings season and forecast getting worse by the week. what is that telling us? sarah: if you look at the index level, already for the second quarter when we start to get estimates -- not when we get estimates, when we get actual results in a few weeks, we are

expected to see a decline in earnings of 2.5%. if you look in the recent weeks, we have already seen companies begin to get more pessimistic and analysts get more pessimistic as well. on the analysts side, in june alone, we saw analysts downgrade 160 more stocks. the most since 2015. for companies as well, those that are revising their guidance going forward, more than 80% have actually been cutting guidance. that just warns that things could potentially be worse than expected as we do start to get into the depths of earnings season. paul: bloomberg news cross asset reporter sarah ponczek, thank you for joining us. . llet's brother the market moves with ryan. i know you have not had too long to digest this news but we have had this tweet from president trump saying he is intending to nominate christopher waller to the board of the federal reserve.

christopher waller has a phd. i wonder if that is a sideways dig at jay powell who does not. what will this mean for markets? ryan: that is a great question. hasll know president trump been on the fed's case to ease rates and ease policy. we know that james bullard is one of the most dovish participants in the fed, so president trump i think is just trying to get as close to bullard as possible. picking or choosing one of his colleagues, hoping that dovishness will pay off and the fed might ease the remainder of this year. is with the markets certainly expect as we take a look at this chart on the bloomberg. the market betting on more than 50 basis points of cuts this year. if it does not come through, there is going to be quite a

correction, don't you think? ryan: i complete the agree. i think there is a big risk when expectations are high for the fed to cut rates or what we saw in may, when expectations come of market expects a trade deal to get done. whenever there are high expectations for something that is somewhat unexpected or uncertain like the fed cutting 50 basis points, that is a risk to markets. i could see if the fed does not could basis points, that come back and we could see another selloff. shery: we see this risk rally not only in the u.s., but also in europe. this chart on the bloomberg showing you have cyclical's gained against defenses, even when you see the lining move. the german bond yields falling to new lows. what is it telling about where equities can go from here? ryan: that is such a great

question. the bond markets, whether that is overseas or in the u.s., it is a completely different story than what the equity markets are. that gives me pause and caution. i think it really depends on wherever the fed goes, that is going to have a lot of weight and how equity markets move forward. the bond market is telling us there is a slowdown and be concerned. easingmarkets, they are and accommodative policies across. shery: these markets seem to be pricing in more dovish central banks around the world and potentially with christine lagarde, becoming the president of the ecb. does that mean we could see more support and central banks coming to the rescue? any idea at this point what a christine lagarde presidency would mean for rates or qe?

ryan: great question. i really don't think there is going to be a whole lot of change. i do know she is in a very tough position. i don't think she is going to change policy from what draghi has set for the remainder of the year. i think she will continue to be dovish and cut rates, as well as move forward with qe. i don't think she is going to change anything there, but i have to wonder how many more arrows does the ecb have and it's quiver moving forward? they have been trying for some time to stimulate the economy. as we just recently saw earlier this week, the eurozone pmi's continue to show contraction. so, it is a tough spot for her, but i assume she is going to continue easing through this year. paul: i know you still like a u.s. stock, what is your outlook for earnings in the next quarter ? ryan: i think earnings are going to remain soft.

potentially -2% would not surprise me. with all the uncertainties, the stronger dollar, the uncertainties around trade, there are a lot of things out there that are affecting earnings. as you mentioned earlier, analysts are downgrading earnings and i also expect similar to quarter one earnings where it is very soft, -2%, to flat moving forward. paul: all right, ryan nauman, former financial intelligence vice president. you can get a roundup of the stories need to know to get your day going in today's edition of debris. bloomberg subscribers can go to their terminals. it is also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪

paul: i am paul allen in sydney. shery: i'm shery ahn to new york. let's get a quick check of the latest business flash headlines. deutsche bank is sounding out potential buyers for a wide range of unwanted assets as it prepares for its most dramatic overhaul in years. it is gauging interest for both performing and sour loans as well as equity, data securities and interest rate derivatives. the ceo is excited to announce a new strategy this week after a

series of turnaround plans failed to lift profits. paul: saudi arabia is re-signing preparations for the anticipated ipo of oil giant aramco. the world's most profit company has held talks to discuss potential roles in the offering. aramco putting the ipo on hold last year and brought a $69 billion stake in a local chemical giant. the kingdom says aramco could be worth $2 trillion. shery: a unit of air india is beginning its bond sale to refinance some of the ballooning debt. thans framing more $10 billion. just over half of that will come through notes carrying a guarantee while the government will fully service the remainder. the airline is carrying total debt of more than $8 billion. paul: coming up next on daybreak australia, it's delivery time.

tesla jumped after announcing it has been a record for vehicle deliveries. we will have all the details in a moment, plus a check of the markets. this is bloomberg. ♪

paul: it is 8:30 a.m. wednesday morning in sydney. we have the market open 90 minutes away. 1%ures off about 1/5 of despite another positive day on the u.s. equities markets. i'm paul allen. shery: i'm shery ahn in new york where it is 6:30 p.m. let's get the first word news. >> fithanks. president trump has announced his latest nomination to the fed board. he named st. louis official christopher waller as his next pick. earlier this year, trump advanced to supporters to the fed board. both withdrew their names after

they came under criticism. the trump administration has plans to add a question about citizenship next year's census. the supreme court blocked attempts to answer the question last week. the admin attrition has now dropped the fight. the justices said the question was contrived and did not meet legal requirements. the stay is set for april 1. its fourth of july sneakers after facing criticism that the design was offensive. a local of an old u.s. flag with 13 stars. an emblem embraced by white nationalists. the arizona governor doug ducey said nike ordered all financial incentives for a new manufacturing plant be withdrawn. faceron ore miner may

criminal indictments for 12 current and former executives over january's dam disaster. a brazilian senate committee is proposing charges after investigations into the collapse that killed almost 250 people. it said its risk and compliance control. vale disagrees with the report and the potential indictments. global news 24 hours a day on air and on twitter. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks very much. there is a lot of oil news around today. tesla shares jumping in late trade after it's been a record for quarterly deliveries. tesla has over 95,000 vehicles in the second quarter and that easily be forecasts. let's bring in our detroit bureau chief david welsh. how did tesla manage it? david: ceo elon musk has been

telling his entire staff to pull all the stops, go for it. get them delivered. get them to consumers. there is something else at play. earlier in the year, he told investors they were having logistics issues, getting vehicles delivered to china, to europe. because they diverted some production to places and having trouble delivering cars, they might see sales go down in the first quarter. a lot of people took that as an excuse and they thought maybe the second quarter was going to be bad well. there is just saturated demand for ev 's. elon was right. it was not a matter of no one wanting ev's anymore. they just cannot get them to market. now that they did, they have huge sales numbers and the shares are rocking. shery: what about the fact investors were concerned about cannibalizing of demand because of the cheaper model three? david: that still is a concern

going forward. they sold something north of 17,000 models of s and x. both sell for higher sticker president the model 3. most of those go out around $35,000 but the model s and x are $100,000 vehicles. so, the margins are much higher on those. as those vehicles get older, it is going to be tougher and tougher to keep sales up. tesla will have to refresh those or redesign them entirely. all car cavities go through these cycles. been on thehas market for years and now people have a cheaper option with model 3. even the model s and x sales have been all right in the second quarter, they still need to push those vehicles because going forward they are not going to be the new thing. you will have model y at some point, the smaller suv. there'll be other options from

tesla itself and other carmakers in terms of electric vehicles. they will have to get the vehicles sharpened up or the cannibalization will be a problem for them. paul: i just want to interrupt you briefly -- we have some breaking news. broadcom is said to be in advanced talks to buy symantec. that is what we have crossing the bloomberg. broadcom said to be in advanced talks to buy symanetec. you did mention -- all right, david welch in detroit, we believe it there. shery, over to you. shery: a little bit more details on broadcom right now. bloomberg learning is is an advanced talks to talk -- buy symantec, according to some sources. broadcom could reach an agreement to buy this california-based company within weeks according to those people. no deal has been finalized and the talks could fall through. let's go back to the u.s.

market. wall street hit another record, even as investors moved to safety. let's see how that will play into the asia session. sophie is in hong kong. sophie: i want to highlight stocks we are keeping in focus. watching japanese auto stocks on the back of that drop of u.s. sales as david gestic slain. carmaker is to wrap up its capacity or fuel cell cars by tenfold. suzuki is also on the watch at their to was upgraded. oil producers will also be in focus. wti did recover a touch this morning. also, origin energy may move after being upgraded at credit suisse. iron ore miners in view after prices and the raw material to a fresh five-year high above $120 a ton in singapore. it closed at a may 2011 hi on tuesday.

reports in australia that a u.s. pe fund is considering a buyout of the aussie company which is said to have jp morgan and ubs as investors. trading at levels not seen in 2014. there also watching underlying guidance for fiscal 2019. paul: sophie, think you very much. let's get more on what we should be watching as trading gets underway in asia. adam hague with us. markets seem to be more divided than ever about the future state of global growth and how to allocate investors. needs to keep some cash on the sidelines, right? adam: yeah. one of the notable moves overnight was the increased lowering of treasury yields. bonds are continuing to find a bid. and fixed income seems to be for a lot of people a place they want to allocate more and more money to which is interesting when you have a look at this chart on your bloomberg terminal.

you think of credit spreads being pretty tight. yet, the probability of a recession that people are kind of highlighting at the moment has been increasing. certainly for the folks at pimco, they want to continue to be mildly underweight equities. they say they are more liquid credit. they are keeping cash on the sidelines ready to buy any dips that become available in market. a couple of other notable interesting news and fixed income overnight where the two-year italian yields which went 0% and now the cash trade in the u.k., that 10 year yield now below the official boe target. that is how mark carney particularly was flagging real vulnerabilities around global economic growth. this continued upon rally got another emphasis overnight and we will probably see the effects of that ricocheting to asian markets through the rest of today. shery: we have breaking news at the moment.

we are now seeing president trump tweeting again saying he will nominate judy to be member of the fed board. he is now saying it is his intention to nominate judy shelton, phd, u.s. executive director of the european bank of rig instruction and develop it to be on the board of the federal reserve. she is a founding member of the board of directors of empower america and has served on the board of directors of hilton hotels. this coming on the back of another announcement earlier this evening talking about nominating christopher waller to be the fed board. he would be the executive vp at the federal reserve bank of st. louis. we have seen the potential, judy shelton, in the past talk about seeing lower rates as fast as possible. dove,s been known to be a making dovish comments in the past and we are now hearing she will be nominated for that position but this all depends on confirmation from congress. we have seen some of the other

nominees from president trump for those positions not being able to get confirmed in congress. let's move onto the markets because this will have big repercussions in what direction the fed will take. we are seeing an unusually high amount of companies altering profit forecast right now. is it being underplayed at the moment by some bullish equity investors given they have so much support coming from more dovish central banks? adam: of course, there is a great deal of uncertainty about the fed policy over the next six to 12 months. in its current form and any changes to its warm in the future, whether or not we get real dovish and aggressive movement from the fed will depend on how the outlook materializes in the u.s. going into the next reporting season, it is clear cuts and profit outlooks are the second-fastest pace since 2015.

bullish investors are prepared at the moment to look through to this because they are looking through the numbers and saying with the central bank that is cutting policy, the solution, the economy will be able to handle profitability and they are prepared to lean on that side of the fence at the moment. that is winning out with the s&p 500 hitting fresh gains. it is important to watch these numbers because they are being adjusted in an unusually rapid pace heading into this next quarter of earnings. it could be key as we start to hear from what companies are selling us. paul: thank you for joining us. our gtv library is the place to go to pick up the charts we haven't talked about. you can find that on the bloomberg terminal. shery: we are seeing oil now plunging. worse reaction to an opec meeting in more than four years. futures closed down nearly 5% in europe after the cartel agreed to prolong production and fears

of the global economy mount. let's bring in mike mcglone. you would have's expected more support for oil prices but we are really not seeing that at the moment. demand concerns seem to be overtaking the market. mike: the key thing to remember is oversupply of markets come down a lot easier, particularly when they get resistance. that was the key thing i was watching. crude oil bumped up to $60 this week. $60 is near the 52 week average. we all know what is oversupply. it ran up into opec meeting and now it is reverting back to the trend. i was saying a month ago it has three problems -- oversupply, lack of demand and declining economy. now it has one more. good resistance likely to head back down which i don't see near 50. paul: to what degree is this opening the door to u.s. shale?

mike: exactly. the only way that i can see to really reduce this substantial increase in u.s. production is what it did last time, the prices had to collapse. shery mentioned the biggest decline since 2014 and that is when the market declined. it went from over $100 down to 26 or so. u.s. production dropped way off. that is what i think it is going to take. otherwise, u.s. liquid crude production including crude oil and biofuels is too strong to make up for what opec is cutting. paul: all right, blumberg intelligence commodities strategist mike mcglone, thank you for joining us. still to come, australia central bank takes the cash trade to a fresh low. the door is open for more to come. we will get insight from a senior economist. this is bloomberg. ♪

paul: australia's reserve bank cut the official to a record low of 1% to boost lackluster growth and a weakening job market. governor phil low says he will now gauge the impact of the cuts and prepared to adjust rates again if needed. predicted the latest cuts and a senior economist joins us now. felicity, thank you for joining us. and hoping iting washes out but you are seeing that it would be out of character for the rba. not just to go three times but also surprise. felicity: it would be out of character to do three times. it is a long time since they have done twice back to back since 2012. i think in this case, they theyy had the outlook and

realized they need to get unemployment quite a bit lower. case, theythis realized they would need to get the cash trade lower. once they have made that decision, they can be very pragmatic about making the move. he has said they will watch how things will evolve but i am not sure that will necessarily mean that they don't move in august. paul: when rates get this low, don't you get into a counterproductive kind of scenario where people see terrifyingly low rates and do not follow or spend because they think there is some kind of crisis around the corner? felicity: i think there is a little bit of a risk that people become spooked, but when we look at some of the indicators so cutting,e the rba flag we are seeing some signs of life in housing which is the most interest rate sensitive sector. we actually had a bit of a spike in consumer confidence. it does focus perhaps they might be working the matching the rba

wants them to be. i think if the rba is able to explain their story relatively well, i think that they could avert that sort of reaction. shery: when it comes to housing, we are seeing this chart on the bloomberg. just shows that prices continue to slide, but since january, the pace of the decline has this graph -- progressively slowed. does this mean at some point in the future, we could return to some of those boom times we saw in the past? felicity: i think that is unlikely. you are right. we are seeing this pace of moderation really slow. in june, we saw a very small rise in prices in sydney and melbourne which have been hardest hit by the price decline. even though we are seeing rate cuts, we are seeing some regulatory easing and the election result, which removed some uncertainty around taxation arrangements, i don't really

think we are going to go into some recovery for housing. that is really because credit is likely to remain constrained. even though they have announced to these changes to the slow rate for mortgage assessment, there have been so many measures implement it over the past few years that have effectively tightened up credit availability that it will remain the case that it will be more difficult to get a mortgage than was the case a few years ago. i think while we might see a stabilization in housing, we are not likely to see boom times come back. shery: we also get the trade balance out of australia in a few hours. the excitation is for the surplus to top 5 trillion -- right. for the excitation right now. it is $5 million aussie. my mind is just floating right now. that is big. how well is that sector doing right now? felicity: yeah, it is doing

really well. these are massive records for australia and really that is commodity prices. the iron ore priced at around $120 is really helping to support our resources export. we also had a big increase in supply over the past few years as a result of that earlier mining boon that has really increased capacity. yes, we are recording these massive trade services and that is helping the fiscal account and why the government is very excited because they are hoping to get the budget into surplus. paul: australia getting lucky again, the iron ore priced. the aussie dollar barely flinched when the rba cut rates. do we expect to see that from the central bank soon? felicity: i think there will be disappointed by the aussie dollar. when they first started on the rate cutting cycle, i think they thought they would get most of

the impact on the currency, whereas what we are seeing is the outlook really deteriorated, particularly because of these trade and technology tensions. and because of that, other central banks are now looking at easing. the fed looks as though they will go. that has meant we are not really getting much impact on the currency and that is quite disappointing. said earlier,low they don't want to get into a race to the bottom for currencies but they really do want that stimulus from the currency. felicity,or economist thank you for joining us. you can watch us live and see our past interviews on the interactive tv function. you can also dive into any of the securities or bloomberg functions we talk about. you can become part of the conversation by sending us into messages during our shows. this is for bloomberg subscribers only.

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paul: let's get a quick check of the latest business flash headlines. kick off the year's biggest ipo so far, with a near $10 billion share sale. the asia-pacific unit set to top earnings in may. the ipo offers 1.6 billion shares of 40 to 47 hong kong dollars a piece. the market value of $64 billion on par with the world's second-largest, heineken. trading is excited to start on july 19 shery: shery:. tencent is teaming up with jpm to invest about $100 million in streaming service. we are told talks are in the final stages and terms may change. tencent has invested heavily in movies and tv shows and launched

its first overseas video streaming service last month in thailand. the e-commerce platform recorded more than 5 billion transactions in the last fiscal year. australia's energy grid suffered blackouts last summer as extreme teva tears caused power stations to break out and renewables were unable to build the gap. now symptoms troubles facing australia, let's bring in our asia energy reporter. james, what are the big generators doing to ease the bumpy transition?/ james: first and foremost, i stressed the need of reliability for a company that transitions. i have been speaking to origin energy, one of australia's biggest generation companies. they have told me they are generally based low which means it provides a general, steady flow of power during the day. but when those older turbines that provide the power are breaking down, they are taking

them out and putting in brand-new, superfast arrow turbines. they sort of worked like a jet engine. they are superfast and could create power to the grid within five minutes. that is a lot quicker than the old ones can. this will have backup one renewables are not producing the power that is necessary in the grid. they see that as a crucial steppingstone to making that transition. obviously, hydro storage and batteries also performed in the function and they are origin and other companies like that are putting those things as well to ensure reliability. coal plants are coming out of service but the companies are saying for that transition to happen, they have given a lot of notice. energy australia and other companies is coming with -- they are giving a decade notice. it is also managing the transition. shery: how much is the

government doing to facilitate the shift to cleaner energy? james: well, there has been criticism of this coalition government that they have not a joint up policy on energy. you can see why. they have this patchwork of policies aimed at facilitating that transition. the focus is very much on getting prices down for the consumer. they see that as a bit of a vote winner. in terms of what they have in place, they have a retail reliability obligation that they are bringing in which basically forces the generators to ensure they have enough power at their disposal to supply to the grid when their argument. the other initiative they have is investment in underwriting new power and that is focusing on gas and hydro storage which can provide that backup power they need for renewables. shery: we will have to leave it here. bloomberg asia editor and reporter.

coming up in the next hour, we will be joined by roberto hartley and wells fargo asset management global cio kirk hartman. lindsey moore still ahead in the next hour. this is bloomberg. ♪ hey! i'm bill slowsky jr.,

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sydn i am paul allen in ey. shery: good evening from bloomberg global headquarters in new york, i am shery ahn. sophie: and i am sophie kamaruddin, in hong kong. asia." to "daybreak: paul: our top story, u.s. stocks reach new highs, but oil slumps denies further cuts. president trump names two new members to the