>> we are ending this trading week on a pretty mixed note when it comes to equities and commodities and currencies. we are still awaiting that trade data out of china. we are still adjusting to inflation picture out of the u.s. overnight after we saw a surprise uptick in prices. can the fed still cut this month? potentially yes, some say, but perhaps the market continues to reprice how aggressive these fed cuts will be going forward. csi 300 up half of 1%. the thai baht continuing to see strength, flourishing around six-year highs. to south korean won -- the south

down from yesterday. we can see the glaring red in australia, that is what is following the u.s. treasury move we saw overnight. 10 year aussie bonds up 10 basis points. they yelled at the moment. -- yield at the moment. take a look at treasuries. yield, we areear well above 2% at the moment. we are slightly lower in the asian session. 2.13% for your 10 year yield. with the japanese 10 year, jjb at -10 basis points. speaking of the trade data, it hasn't looked pretty in china. china,prise index for emerging markets, and the world. at this point, we are seeing all of that in negative territory. this traded at we are about to

get doesn't look like it is changing that story. rishaad: 43 minutes before the indian session gets underway. we have u.s. inflation data. we are looking forward to indian inflation data. looking at the bond market again, it is on a tear. yields falling below 6.5% on the 10 year. ,ooking at the ruby, -- rupee another move up for the currency. let's get over to beijing to selina wang and the first word news. selina: fed chairman jerome powell has reiterated policymakers have room to cut rates as the link between inflation and unemployment has been broken. he stressed the u.s. economy is in good shape and that the fed "will use our tools to keep that there." pointors expect a 0.25

cut by the end of the month. >> central banks around the world are seeing more accommodation. we are signaling we are open to doing that. you are seeing that in the curve. you are seeing that indebted in the united states - embedded in the united states interest rate curve. exportssingapore declined and gdp fell 4% compared with the march period. forecasted growth in a bloomberg survey. france is refusing to u.s. threats and plans to move ahead with big tech. a 3% tech was levied on companies with digital sales of about $30 million inside france.

washington says it's examining the tax to see if it targets u.s. companies and has hinted in tariffs in retaliation. and we should solve our differences without threats. will make its own decisions and it will carry on making its own decisions. selina: resident trump is -- president trump tweeted the libra virtual currency will have little credibility and facebook must be subject to normal regulation. facebook has yet to respond, but has faced questions from lawmakers and regulators ever since it floated the idea of a cryptocurrency. china is throwing its. or before -- its full support before carrie lam as protesters continue protests. the mainland trusts her to

"govern effectively in the interest of the law." they believe hong kong police are capable of protecting the public and violent protests were the result of foreign interests stirring up a threat. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. wang, and this is bloomberg. rishaad: after two days of testimony to congress, fed chair jay powell's message is clear, the old laws governing inflation appear to have been broken with policymaker implications if they consider a rate cut as soon as this month. >> the neutral interest rate is lower than we thought. the natural rate of unemployment is lower than we thought. monetary policy has not been as accommodative as we had thought. rishaad: tha that is why unexpected ju in consumer prices -- that is why unexpected jump in consumer prices as investors wondering what is going on. kathleen hays has the inflation

report and what it means for the fed. we are talking about this phillips curve. as an economic student many years ago, i thought the phillips curve had been thrown into the dustbin in the late 1970's. on top of that, it was replaced by than on accelerating rate of inflation, what gives? kathleen: because it never really went away. there was this basic sense, not just in economics, but it seems intuitive. unemployment is low, okay, i will buy more, that will fuel inflation. jay powell says it doesn't work that way. inflation can barely get to target. -- let me start all over, paulo was dovish. dovish.powell was the cpi we have on the bloomberg

index. see that number on the far right hand screen? up 0.3%. this number takes up food and energy. jumped over 1% after falling sharply for two months. their uglys rear head. we saw an outsize gain in furniture and related items. now on to the bloomberg library. this is the chart that will show you core cpi, which moved up to 2.1% year-over-year. the one that is key is the turquoise line. that is the fed preferred index. look how far below 2% it is. it is at 1.6% year-over-year. that is why the fed is concerned. bloomberg economics takeaway is the core cpi got stronger, but

it won't stop the fed from cutting the rate at the end of july, and they expect another at in the fall. investors don't want to get involved and buy 30 year bonds, or they are wondering more about what is going on with inflation. >> you could say that is why two other fed bank presidents indicated thursday they are not as ready to cut rates as powell seems to be. how divided is the fed? kathleen: it is not that they are not with powell entirely, a lot are not sure yet how they are going to vote. look at the president of the richmond said. he was at a conference in idaho said herepared remarks does not see inflation expectations as a trigger for a rate cut. that is not ruling out.

he says the fed does not need to "step on the gas." does that mean a 50 basis point cut or at all? on rateshe message from powell hasn't changed since the june meeting. >> he said the same thing yesterday we said in our last memo, wages we don't have forward guidance -- which is we don't have forward guidance anywhere in the memo. we are watching the data and we are looking at upside and downside risks. at this point, they are more tilted to the downside. kathleen: sounds pretty middle-of-the-road to me. the memo he is referring to is the policy fed statement at the end of each meeting. another official is not sure there is a need for a july rate cut, because employment looks pretty good.

inflation isn't as bleak as people have been making it out to be. i have to throw in one for the other side. of the new york fed president speaking, the third in the fomc says the the target for easing policy has strengthened. an official from the board of governors, an right hand mend to to jayell -- man powell saying the case for the rate cut has strengthened. ate is talking about r management, something to do with insurance. you are always trying to cushion it. >> that is kathleen hays, our policy and economics advisor. we are awaiting that trade data out of china. should be out sometime today. we are expecting exports and imports to decline. seeing more affect from the

trade war -- effects from the trade war. be?s, how ugly could this james: china has not been looking good recently. if you look at pmi data, export orders is weaker recently. there is no expectation that chinese exports are going to pick up in the near future. that will lead through to imports. a lot of what china imports is raw materials and parts that are manufactured or re-exported. you will see import data getting worse -- unless there is a big pickup in global demand and trade with the u.s., it is unlikely are going to see a rebound of any size in china's trade in your future. >> i know you are combing

through these soybean imports, particularly from the u.s.. whether president trump's tweets have value on whether beijing is delivering with their promises. given this complaint from the president, should we be concerned more tariffs are on the way? james: i don't think there will be more tariffs on the way. the negotiations have not started yet. there was a call earlier this weekl betwee lighthizer and liu he, the chinese chief negotiator. from what we hear from the ministry of commerce yesterday and who used to be a former official, they say a call is not negotiations. from the chinese perspective, have not not even --

even resumed yet. it is not the soybean season right now. it is summer in the u.s.. you will not be seeing an increase of supply for months. it is unlikely the chinese could massively increase their purchases of soybeans and other agricultural products after those talks last month in japan. the talks are ongoing. may will be coming to beijing sometime soon. we will have to see how those pan out, but i don't think we will see a return to tariffs anytime soon. rishaad: james, thank you very much. still to come this hour, president trump saying facebook's cryptocurrency will not be defendable. one thing that certainly is, facebook's poker playing robot. find out how it is a world

beater later on in the program. >> next, the latest u.s. data undermined one of the fed's main reasons to cut. this is bloomberg. ♪

yvonne: you are watching bloomberg markets: asia. rishaad: our next guest says the u.s. economic data does not warrant aggressive rate cuts. let's get to singapore and bring in a multi-asset strategist at east spring investment. your thinking behind that? because if you look at the inflation print we have and you look at the u.s. in aspect, perhaps there isn't any reason for their two be any easing. it is the case that what is going on outside the u.s. that is responsible -- that

responsible, surely? >> that is what jerome powell has been saying. if you look at the u.s. more broadly, the economy in terms of the consumer side, that has been pretty robust and pretty resilient. if you look at manufacturing, we have seen a deceleration fleshly on the back of the fact that the global economy as a whole is slowing down. it is trickling into the u.s. economy, but the fed does not know how much further this could potentially go and the impact on the consumer. so far the labor market data has been robust. we got one spike in inflation overnight, but it is not enough to warrant the fed to pullback. our view, is to spring multi-assets, -- eastspring multi-assets, the fed cuts once to prevent future slowdowns in

the u.s. economy. rishaad: what is the bond market telling us about all this? ifit a situation -- it is as the fomc worth listening to what -- was listening to what markets were saying, turned dovish. will that force them into a 25 basis point cut rather than 50 basis point cut? where does that leave us with the old adage, don't bet against the fed? mary: our view -- the bond markets reacted yesterday to the cpi print. they probably reversed course because they got the fed will decide not to cut rates just because of one cpi print. the fed does not operate by one month data, it looks at the trend. cpi has been weak. inflation data expectations have been well. -- have been low.

we think we could get a 25 basis point cut. we think the fed will deliver in july. a 50 basis point cut seems extreme. we don't understand why the market was pricing in a 50 basis point cut. we think that is a reaction to the economy being worse off than it is, which is not the case. yvonne: if we get an insurance cut of 25 basis points, is it enough to weaken the dollar, or does forward guidance suggest we will see more on the easing cycle before the dollar strength story rolls over? mary: for the dollar, you will need a lot more aggressive cuts than just one cut, especially when global rates in places like the eurozone and japan are in negative yield territory. switzerland.th japa here you have the u.s., where

rates are positive. based on yield differentials, it is hard to see the dollar losing momentum in that sense. yvonne: what will be a more effective way to lower the dollar? the president has been fixated in regard to currency manipulation. is intervention the most effective way, or should they scrap the strong dollar policy altogether? mary: that has not been the u.s. dollar policy in general. we saw the dollar weakening significantly when we saw monetary policy quite aggressive in terms of qe and forward guidance being established. that is what set the dollar off into a weaker position. the rest of the global economy is much weaker than the u.s., the u.s. will have a really tough time trying to weaken the dollar. theaad: i just want to end

interview with a look at one of your contrarian market views, and that is to get invested into the european cars. you are suggesting people go along on that. -- go long on that. if you look at the basic valuations, they are screaming. daimler mercedes trading at seven times. we have bmw with similar multiples. they are cheap for a reason, surely.give us your thesis as to why. mary: our main argument has a lot to do with valuations. as you noted, it is screamingly cheap. it is hard to see things getting worse from here. if there is any surprise to the upside, it would come from the eurozone. the market has been so negative on eurozone autos, on the eurozone economy in general. the potential upside surprise is

massive, especially in europe. we see this as an opportunity to take a contrarian view on something we think can't get worse from here. rishaad: ultimately you have great dividends with them as well. of 5.3%.end thanks for joining us. it was a pleasure. nicola joining us from eastspring investments. bloomberg subscribers can catch all of our interviews by using the function tv go. you can also chat by sending instant messages to our team during live programming. do have a look at it. tv . this is bloomberg. ♪

yvonne: wants to a quick check -- worldwide shipments of

personal computers rose 1.5% in the second quarter, lifted by business bids upgrading to the latest software from microsoft. lenovo held on to the main spot ahead of hp despite the ongoing trade war and shipping 16% more pc's. demandhers say corporate offset its decline in laptop sales. rishaad: china's strengthening ties with airbus, buying wide body jets to be delivered over the next coming years. this is after president xi sealed a $35 billion order for 300 aircraft during a visit to paris in march. china kept a balance of airbus and boeing jets, but boeing is struggling after the grounding of its 737 max. yvonne: consent is pressing top app stores -- tencent is

pressing top app stores and vendors in china for a greater share of brevan howard. it is seeking 70% of revenues, of from 50% now. that would bring its portion in line with what it sees from its apple ios store and google play. rishaad: getting to the last lunchtime of the week in china, 90 minute break for mainland markets. this is the situation we are seeing. shanghai composite up by one tends -- 1/10 of percent. some uncertainty as to what happens next. more noise from donald trump with u.s.-china trade policy. feelingshow sensitive are with regard to anything trade related. let's have a look at the shenzhen composite. 4/10 of 1% to the upside. csi 300 is outperforming with

2/3 of 1% gain. temperature in shanghai about 31 degrees celsius. that is the scene we are leaving you with.

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rishaad: beautiful pictures of manhattan this evening, just coming up to 11:30. taking a look at what we have in prospect. we have meetings, up 19% at the moment. s&p 500 indicating positivity. the nasdaq was marginally lower by the end of the session. we had a move of 8/10 of 1% higher for the dow thursday. the s&p was one quarter of 1% to the upside. that's a look at manhattan. let's get over from here to beijing and the first word headlines. here is selina wang.

selina: the u.s. is holding off imposing sanctions on an iranian foreign minister, at least for now. the treasury had been expected to punish him as part of a wider crackdown on iran amid rising tensions in the gulf and the shooting down of an american military john. -- military drone. it is not clear if sanctions will be imposed in the future. the opec forecast says the oil market faces tougher charges. the cartel admits it is producing half of one million barrels per day as the continuing surge in u.s. shale threatens another surplus. of excess oil supplies from independent producers will grow more than twice the global anticipated demand. a powerful weather system in the gulf of mexico may put 70% of u.s. lng exports at risk. tropical storm barry is

threatening facilities. american lng exports have surged with three planes coming on since december. -- plants coming on since december. president trump has abandoned his attempt to insert a question on citizenship into next year's u.s. census after being defeated in the supreme court and will seek the information through other means. immigrant rights groups challenged the administration over the citizenship question, saying it could frighten immigrants and noncitizens and stop then from responding. president trump: today i am here to say we are not backing down to determine the citizenship status of the united states population. i stand before you to outline new steps my administration is taking to ensure that citizenship is counted so we

know how many citizens we have in the united states. makes sense? selina: north korea has revised the constitution to make kim jong-un officially head of state, having the title representative of the country to the duties he already has. the amendment gives new legal foundation to kim's status and could normalize relations with other world leaders. he growing collection of titles is seen as fending off -- as evidence that he is fending off any internal threat. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm selina wang. this is bloomberg . yvonne: let's take a look at markets at the moment. we have talked about how mixed the picture has been following records in the u.s. session. the nikkei coming back from the lunch break. we are slightly higher by 1/5 of

1%. kospi up as well. low-level talks with south korea and japan have started as well. perhaps there is optimism to those talks. asx 200 is pretty much flat in syndney. take a look at some movers. fast moving retails. we are seeing the stock moving up 2.5% at the moment. we have been talking about a record when it comes to other segments. was beat, these are three-year highs. japan display looks like they have been able to find some bailouts when it comes to this shortfall. the company says backers will cover the bailout shortfall, up 2.5%. fosun tourism, a potential deal

when it comes to them buying a travel agency in the u.k.. that is leading the stock to have a little pressure. rishaad: let's have a look at indian markets. this is the prospect with 12 minutes to go. flat afterlso recent gains. 650 yield on the 10 year sub earlier, moving just above the psychologically important level as money has been pouring into sovereign debt in india. i think we will look at one equity market which is on the verge of becoming a bull market. yvonne: we will head to manila to talk about that. duterte'sdent rodrigo term almost through, investors expect a bump in the second half of his reign. a bit of a history lesson.

>> we have data that goes back to the 1990's, going back to the early 1990's president. we made our way into where we are now. have a look at this graphic. we have taken the index. we have measured it since the start of each presidency, a six-year term by the way. so three years in, how does the current admin stack up compared to past ones? there are other things at work. the case of president duterte, it so happens that he came in when the fed was tightening rates. yearave come off a four bull run when it comes to the philippines and timeline. he -- and thailand. he did quite well for his first

three years. that is benchmark return. our next guest is going to point 26%.e did much better, up have a look at some of these charts in terms of our setup. we are currently under the bull market level, give or take a few points, about 8200. it also how happens -- so happens that this next technical resistance, it is on our chart for the clients -- it happens to be on that level, 20% from the bottom. the yellow line is where strategist see the index over the next 12 months. they are expecting we will eventually enter a bull market. valuations takes you all the way back to the early 2000's. we have done a blended moving average pe.

not this, guys, can we get the other one please? this is the other one i was mentioning, the fibonacci retracement level. fibonacci in 10, if we have that, please . we will show it when our guest comes on a bit later. oh we have it. live tv. [laughter] rrmean -- is you rm mean, generally speaking. it is hard to see the index returning. the performance is the same performance you saw from 2012 to 2015, but it is an emerging market. rishaad: we will ask our next t funds in the philippines doing quite well right now and predicting a 25%

jump when it comes to stocks. asset of equities at atr management in manila. that chart about technical resistance that philippine stocks are facing, it seems likely we will enter a bull market, but what will it take to break above those levels we are seeing? it will take a very strong fundamental growth story to bring the market to new heights. that is what we have. most importantly, based on the demand we are seeing on the ground, domestic driven demand, we are getting strong indications. corekes a lot of sense for corporate earnings to grow by double digits over the next three years, at least over the

next three years. net income growth at about 14%. core income growth at 19%. we think there is growth momentum being generated. it is visible in certain sectors of the economy. earnings growth will grow double-digits over the next three years. you have this supported by a very strong economy, strong domestic consumption driven economy that is going to enjoy lower interest rates and is on the brink of a massive infrastructure spending program by the government. that plus low levels of foreign ownership -- foreign ownership levels have dropped significantly compared to the only part of the decade -- early part of the decade. aboutwas talking valuations earlier. the chart shows you are at the trough, you are at the place

where the philippines was before we got upgraded to investment grade. a lot has happened since then. a lot of those fundamental factors support our view that the market should reach 10,000 by year 2021. i don't think we are the only one sharing this optimism. if you look at corporate action, arebig list companies increasing capital expenditures over the last three years. aside from that, you see corporate buybacks up over that same period of time. yvonne: you mentioned double-digit earnings growth. which sectors look the strongest to you? julian: real estate still looks very strong. banks look strong.

construction and industrials look strong. consumer, obviously we anticipate big things. even the telecommunications companies, which have been growing by 3% to 5% in the past, are now growing double digits. i think that is pretty strong core group of main industries that are growing significantly and will continue to do so over the proceeding years. rishaad: this is a construction -- 5%. financials, 8%. that includes real estate. it is an infrastructure play. looking at your top holdings, eei corporation up 37% year to date. eagleson at is one of -- eagle cement is one of your worst performers. 28% growth. another up 26%.

it is quite something. has this run out for these view, got in your ahead of themselves a bit. the run up in these countries, you know how much your in for structure -- your infrastructure holdings have been growing. move sinceeing, this the start of the year has been so break, do you expect -- so big, do you expect there to be a breather? julian: i can tell you where it will be in the short-term, but in the long-term, those companies are still trading way below at steep discounts to our

intrinsic value estimate. i would assume pretty prudent order assumptions. one company will benefit from the manila metro subway project. those other companies you mentioned are growing very fast. the common thread with all of these companies is it is not rocket science, we are simply investing in the fastest-growing companies in the market based on our long-term projections. rishaad: you also like pizza. is pizza going to be a big thing? a company is up 18% year to date. i should also note they have chicken on their menu. julian: yes, we like our pizza. it is a very iconic brand, very high equity.

it is only in the big early stages of its regional extension and we of metro manila, think will provide a further boost in terms of core earnings and shareholder value creation. yvonne: before we let you go, i'm just wondering given how bullish you are, how contingent is that on whether we will see a budget in the second half? julian: i think the budget has already been approved, yvonne. spending will accelerate in the second half, whether it is the third or fourth quarter. the bigger projects have been awarded. the overseas development assistance projects are on the way. i live very near to one. it is not a powerpoint station

anymore. it is not anecdotal evidence anymore. we are seeing shovels in the ground. we are seeing people building stuff already. it is real. it is happening. for bigger and better things for the philippine economy. it there, will leave has a great weekend. portfolio manager and head of equities from atr asset management. i want to check the thai baht, what we have seen from the bank of thailand. the assistant governors saying they are introducing measures to gain.he baht's we are seeing quite a bit of reaction when it comes to the thai baht weakening on that statement. we are reversing some of the earlier gains, but this currency has gone from strength to

strength, flirting with a six year high. as what we are getting at the moment with the bank of thailand, introducing measures to stem the baht gain. we will see how that follows on the policy front. they are reluctant to cut rates. rishaad: coming up, we are looking at the indian open. we are seeing the nifty opening butigher, but -- up higher, woundse assessing their after an indian cricket fight. inflation data could cause headaches, missing the target for the 11th straight month. we will head to move by ne -- mumbai next. ♪

rishaad: positive start to indian markets already turning

negative. we have a look at what we can expect out of the session. tell us about the open already showing volatility after yesterday's rally. >> that is right. there is supply coming in at higher levels. that is the trend we have seen in the last four trading sessions. nifty has already slid into the red. right now nifty trading at the market around 11,580, just about flat. the bank nifty, which will be in focus as we will be getting the numbers, that is showing a downtick of 27 points. looking at the broader markets, the nifty 500 index is not doing too much on this friday morning. it is seeking a flat start. if you look at the market breadth, the international stock exchange, 1:1 is what the ratio

is indicating sectorially. indices are trading in the rent. however -- trading in the red. marginal gains are also up from yesterday's session. yvonne: tell us about some of these nifty companies you are watching trading i had of -- ahead of their june quarter numbers. what are you expecting? >> one earnings has 5% rating on nifty. that would be something to watch for. we are expecting margins to decline, going to higher ranges. rupee appreciation costs. the dollar revenue growth is expected to be around 2.5%. stocks opened in the positive territory, up 0.5%. be an important quarter for indusind banks.

loan growth up 33%. the stock has been showing some negative ticks this morning. yvonne: thank you, joining us from mumbai. inflation in india is seen rising further when we get data later today. thatitting just 3%, but is well below the r.b.i.'s official target of 4%. our guest joins us now from mumbai. we have seen inflation below the 4% target for 10 straight months. talk us through what you are expecting today. >> my expectations for inflation, headline inflation to stay flat for the month of june. broadly this shows structurally inflation has been low over the past few years. i expect the strength to continue in the year ahead. the key details of the inflation

number to watch out for will be one, food inflation is expected to move up slightly. gold inflation, which tells you about the broader inflation trend of the economy, is expected to slow down further. core inflation is excited to dip down. core inflation would have come down last year by 190 basis points. what this means for the r.b.i. going forward is the rbi will have more room for further rate cuts. rishaad: how did they look at this? they have their upcoming august review. a lot will be contingent on more data associated with the monsoon, which is later in part in the country. when it did arrive, boy did it arrive. >> there have been some concern

in the month of june. close to 40% deficit rainfall. however that situation has changed very rapidly in july. rains have progressed really well. there has been a good distraction of rainfall so far, bringing the rainfall deficit to justin percent. -- to just 10%. we think the reins are progressing well -- rains are progressing well. the rbi august review, i expect a 25 basis point rate cut. that seems to be the broader market consensus. broadly, one must thing from my end, the august review will be an officialn that will no longer be part of the monetary policy committee. we will see who is appointed as the new deputy governor, and

that could have a dovish tilt to what has already been dovish this year. up, we get ang look at facebook as it produces it is theat says hi best player in the world. this is bloomberg. ♪

rishaad: a quick check of the latest business headlines. one company doing better in china than at home in japan. quarterly profit admitting the effort estimate by $50 million. revenue in japan was down, but sales growth in china soared by double digits. they have a budget brand as well. it also performed well with profit more than doubling. the stock surged 20% this year. a 5% gain for the broader topix.

yvonne: interesting news, a 22% stake in the nba oklahoma city thunder is up for grabs. we are told the sale will be made by inner circle sports. the stake has been held by chesapeake energy co-founder, who died in a car crash years ago. the thunder franchise is worth about $1.5 billion according to forbes. rishaad: facebook saying it may have created the world's best ever poker player. it is in the form of an ai program. the assistant beat five poker pros in a texas hold on tournament. it made profits of $1000 per hour. ai has been beating humans at poker for a couple years, but famous programs could only compete with a single player at a time. yvonne: before we go, here is

what we are watching for next week. the massive data on out of china. well. to watch as this is bloomberg. ♪

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