haidi: very good morning. i'm haidi stroud-watts in sydney, alongside david ingles in hong kong. facebook is on track -- phase one is on track. the top u.s. trade negotiator says he feels good about china despite rising tensions. wall street snaps a winning streak and falls the most in two weeks on concerns the recent rally has gone too fast.

treasury yields rise as u.s. jobless claims drop. is creaking aine mile-long allegations of cheating. saudi arabia moves forward with a volatile deal. david:david: and amidst those headlines, we are just getting -- a kind reminder was, i don't know if it is early, 50 right now, but it has been a relatively good week, even considering the pullback we had. gold, 1721. let's put it this way. a moderately soft start to the session, a third of 1%. , give ores trading take, a 10th of 1%. jobless claims were below 2 million. we are looking ahead to the jobs report later today, 19% unemployment rate is what we are

expecting. have a look at the currency markets with the dollar, the weakness in the dollar up about 12, 18 hours back has really been your top theme as well. strengthe seeing some coming through a lot of these asian assets. have a look at where we are on euro. 90.ling back up about we are up eight days on the euro until right now. the ecb outlook increasing the that roughlyending until about this time next year, haidi. haidi: and dave, you can see the setup in asia looking more muted . we keep talking about this most frustrating rally in history, and it seems like investors are starting to wonder if this has gone a little too far. we have seen weakness across japanese futures at the moment. we are watching australia in

particular, as we have the asx trading still at the highest levels we have seen since early march, but in terms of technical is theors, the 14 day highest since january. we are also looking at, since breaking that 100 day moving average, we are about 6% away from the 200 day moving average. this does not seem like a session where we are going to get there, but still watching it very much. when it comes to new zealand, we have seen the biggest drop in five days for that market. david: good stuff. -- as weill poised speak, we will see what happens in the next few hours or so for the best week going back to 2016 . despite the recent ramping up of tensions, the u.s. trade representative says he feels very good about the phase one agreement with china. the robert lighthizer says beijing is honoring the pact, making what he calls significant

progress in recent weeks. let's get the latest from selina wang come out of beijing this morning. tell us, what more did mr. lighthizer have to say? werea: he said there significant purchases of real estate over the past few weeks, adding that on monday and tuesday of this week, china bought 185 million dollars worth of u.s. soybeans. that commentary is counter to our reporting actions that the chinese government has told state-run agricultural companies of u.s. farmases goods, including soybeans and pork. despite all of these tensions, we are getting some positive commentary from lighthizer. he also added that the pandemic will change the trading relationship between china and the u.s. as other countries in the u.s. tried to reassure its

supply chain, particularly in the medical space. he says in a future crisis, u.s. needs to be able to manufacture at home all the things we need. he says, quote, we need subsidies, tariffs, whatever it takes. we need a policy where we never find ourselves in this position again. in the meantime, on the same day as the tenement square massacre anniversary, we an onhis b disrespecting the chinese national anthem. what did we eventually see in hong kong despite the ban on the vigil? selina: that is exactly right, it increases the relief tensions of hong kong. the national anthem law had actually prompted protests in hong kong. this law was first introduced in early 2019, and the measure

imposes a sentence of up to three years for people convicted of insulting the anthem hours singing it in a "starving or derogatory" manner. it is part of a broader perspective efforts by china to curtail dissent. the national anthem has become a symbol of beijing's interference among pro-democracy supporters, and last year, the protesters had created their own anthem called "glory to hong kong." the passage of this bill also came on the june 4 anniversary of china's crackdown in tiananmen square. authorities have banded for the first time in three decades, citing social distancing .easures related to covid despite the bands in hong kong, we still see people gathered where the event is normally held, but people were clustering

in small groups to follow social distancing rules. there were several smaller rallies and online vigils as well. the amount of people who came out for this vigil really pales in comparison to events in the past, but it is still large given there was a ban on this. beijingelena wong in with the latest in terms of these tensions. we are going to get a lot more on the outlook when it comes to china-u.s. tensions and hong kong relationship ahead with a reporter along with us from washington in the next hour. still ahead, the market outlook with wealth management erin .ibbs she will be with us next. plus, an exclusive interview with one of australia's biggest online retailers. we will be joined from melbourne to see how that business has

prepared amid the pandemic. ♪

the european central bank is stepping up its response to the contraction in the euro zone with a bigger than expected increasing its bond buying program. the ecb will expand purchase finance to a total of 1.3 billion euros through at least june of next year. italian bonds rallied on the news while the euro reversed losses. christine lagarde simply says actions have to be taken. meanwhile, the world's biggest lockdown has cost india tens of millions of jobs, resulting in .ecord low economic activity around two thirds of members

have reported so far that communications, energy, and industrials are the sectors worst hit. tokyo has reported 28 new coronavirus cases. that's 128 new cases in the past week, the biggest seven-day rise since mid-may. singapore is warning of an urgent challenge from covid-19 over the coming months, with sweeping job losses on the horizon. malaysia has reported its biggest daily rise in do virus cases since the pandemic first erupted. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haidi? stocks slumped in the u.s. on thursday with concerns the recent rally has gone too far. promisingerns amid

economic data. joining us is erin gibbs. ray to have you with us. is there a sense that the market is finally deciding to look at the dislocation we have seen, essentially what is going on with the real world and with valuations in the markets, or is this just a pause to yet higher levels? erin: i think today is somewhat more of a pause. we had the longest streak since february. it is certainly overdue. are creatinge valuations that we have not seen in almost 20 years. -- based.certainly we are not trading on a rational market, when you look at some of the economic and earnings expectations over the next 12

months, whether you are looking , economicyment activity, it is really about the coronavirus news, particularly in the u.s., and the reopening or lifting of lockdowns also within the u.s. you think, given how far up we have come since march with the recovery in the markets, do you see kind of a more range bound set of gains plateauing? what would be the catalyst for pushing this market higher? erin: i still think there is more room for pushing the market higher. regimentill in this based environment.

i think ultimately it is going , particularly within the states and see more cities reopen and we start creating a new normal of daily activity and people go back to work, i think that is when the real reality is going to hit, and they are going to start how these businesses are possibly going to recovery and actually make money. that is when we are going to see somewhat of a pause. there is also the potential for fear to come back in the market. lookcularly when investors at valuations. but i know in the money-management world, and a lot of us are scratching our heads saying, why does the market keep going up when we are

looking at 812 to 24 month potential recovery? it really does not make sense that it shot up so quickly. i think that sentiment eventually does and typically does catch up and rationality starts coming back to the markets. particularly as you see -- wesed bankruptcies have already seen big, famous names file for bankruptcy within the u.s., and not just your typical retail and apparel, food, and so on. we see increased bankruptcies as the fed potentially winds down any stimulus programs that have been propping up the markets. that can be sort of a reality check to investors and create a happenbut it may not perhaps even until the fourth quarter of this year. david: david here in hong kong.

thank you for coming on the program. before we know it, we are going to run into the second quarter earnings season in a couple of weeks. do you think the market is prepared for that, or are we going to run into a wall? erin: it will be largely ignored, like they did in the first quarter. there has been such a discount with economic activity. many companies have stopped giving guidance, since we are unable to return to business as normal. we are still in the process -- and certainly the protests we are going through currently in the u.s., with the widespread protests, they are even delaying some of the reopening's of several major cities. when we look at the end of second quarter and companies start

already. i don't think there is going to be a big penalty for companies making particularly big attractions in the second quarter as they simply refused to give third-quarter guidance. i think what is propping up the market is -- particularly the u.s. market, is, one, it is still one of the safest markets globally, particularly when you take into consideration the federal reserve stimulus program. and it is still the place where most money managers have over asocated because it is seen one of the least risky large-cap equity classes. alternativesee an in areas that look more attractive or have more of a risk-reward opportunity, i see the u.s. markets continuing to

be on an upward trend, rather than looking -- and withholding it rather than looking at fundamentals. david: jobs reports coming out tonight, is that going to tell anything new? yes or no. erin: i doubt it. when you see that preliminary jobs report, that was a big surprise. they are generally pretty tied together, so i think we have already digested the surprises and it will be less than expected. david: lovely to have you on the program. you are welcome back anytime. erin gibbs, gibbs wealth management president and ceo. coming up, we are talking oil. opec-plus set to extend cuts. we will have the latest on that story coming up. ♪

david: friday early morning in the asia-pacific, oil is doing this. we are dead flat, a third of 1% higher over two days. let's talk about opec's loss. we might see an extension of after atput curbs breakthrough with iraq. an agreement may actually happen this coming weekend. su keenan is on the story. up until now, there were some doubts over where the -- over whether we could get an agreement, so-called cheaters being the primary reason. what has changed? su: certainly the discord between the cheaters and leaders as it were had caused a big since aprile seen to falter a bit. at the breakthrough with iraq, which was one of the countries

that was not their quotas, angola, kazakhstan, and nigeria were others, but iraq was viewed as the big offender. russia and saudi arabia had been wrinkling with them all week and finally appeared to reach a tentative agreement that they will abide by the quotas. the pressure on oil was a big deal because the huge rebound in oil prices certainly helped to revive the fortunes of major energy companies like exxon and royal dutch shell. the agreement, which still has to be ratified, means opec-plus will extend its record production curbs for another month. these are unprecedented limits on production for the group. these cuts will now go into effect until the end of january. there had been talk about a tentative meeting on june 9 and 10, and there were concerns that no meeting was being discussed, but now it looks like

they are discussing the weekend as a possibility. failure to reach an agreement this month could have brought billions of barrels out of the dumping eight tentative recovery just as the coronavirus lockdown starts to ease. meantime, bullish news from -- all right, that was su keenan with the latest on what we are seeing across the oil story. staying with oil, the iaea has spoken about challenges to the world's most vulnerable crude producer, even as the market broadly seems to recover. the executive director tells bloomberg that some countries are better positioned than others to meet any supply cut extensions. recovery ofgradual the oil markets for three reasons. likely better than in the previous months.

agreements opec-plus comply with that. , not much talked about but very important, is u.s.,decline in the canada, and other countries where the markets are run by private companies mobile companies. virtual recovery, if we don't see demand, recovery continues. if we do not see opec-plus agreement is not fully complied ,r not extended for some time this may be a "shower" on the gradual recovery of oil markets. i would not say do this, do that, but the current three

factors need to continue in the next weeks, months to come if one wants to see a recovery of global oil markets. going into this meeting, it seems like saudi arabia and russia are actually on the same side, and they really want to clamp down on the teachers, most notably iraq, nigeria, kazakhstan, but a country like iraq is going to be very hard in terms of these production cuts. is it possible for countries like iraq and nigeria to really start to cut production and not cheat? >> i cannot, again, say they should do this or that, but not are in the same category. some of the producers have much stronger reserves and stability,

while others are politically and economically much more fragile. hit by them were pandemic more than others. you mentioned iraq. , aq has a new government very promising government, and a government, and i hope that they will deal with the problems they have in front of us under very difficult conditions. one of them, to give you a budget,80% of iraq's government budget comes from the oil revenues. at the current price levels, they are only able to pay half of the government. living aside money for education and others. therefore, those countries, iraq, nigeria, angola, algeria,

i should say -- algeria was hit twice, one because of the low .oil prices different countries with different challenges in front of them, and iraq and nigeria are definitely at the top of that category. that was the iea executive director speaking at the bloomberg life event earlier. coming up next, we are talking health care in coronavirus with change health care, harnessing tech and hedge fund investors in its bid to help disrupt the agency. -- neil deson so

crescenzo joins us coming up. ♪ you say that customers make their own rules.

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haidi: you're watching "daybreak: australia." let's get you a check of the first word headlines. an activist in hong kong defied an unprecedented ban to mark the anniversary of china's crackdown. thousands gathered with school groups generally adhering to social distancing rules amid the coronavirus restrictions. the numbers paled in comparison to previous vigils. the event is notable in that the police have banned the gathering for the first time in three decades. the people's bank of china is bowing to ensure stability in hong kong amid rising tensions of abating control of the city.

the pboc says it "firmly supports hong kong as a global financial center and recognizes that the city is accustomed to territory separate from the mainland." the news comes as the u.s. reviews hong kong's financial centers as china imposed sweeping new security laws. applications of the u.s. unemployment aid rose again last week, a slowdown in numbers, but showing the economy is still being hammered by the virus shutdown. jobless claims fell below 2 million for the first time since below -- since mid-march, saying month.peaked early last u.s. trading goods and services plunged in april to their lowest in a decade. fears are growing that the u.k. will crash out of the european union at the end of the year with no trade deal. sources say the sides remain far apart on crucial issues with the deadline for agreement looming at the end of this month. final negotiations on current talks with leaders on friday.

the u.k. prime minister and eu commission head are due to hold talks later this month. ok.d: just an update to tell you about. this one coming throughout of the nikkei newspaper concerning japan and when they are planning to lift quarantine for business travelers. that is what we have so far. we are getting more -- if we get more details, we will let you know. have a look at futures. the last trading center -- treasure of the week. relatively muted compared to the upside we've seen. global stocks on track for the best week in about to give or take, two months from now. it is looking like it will be quiet. be thankful for what you already have. we have come a long way since last friday. let's talk about the story a little more in the virus. a rush to find solutions through

the pandemic has driven investor interest in biotech companies. . one of the companies is change health care. shares fell 10% overnight after reporting guidance for the coming quarter that actually missed estimates. analysts are not too worried due to the short-term impact of covid-19. a string of recent acquisitions and partnerships. joining us from san francisco is the ceo. thank you for coming on the program. before we talk about the company and your earnings, just to establish a base, i want to first ask you to briefly explain for the benefit of our buick -- of our viewers of how using data specifically on medical and pharmacy claims, how does that bolster their response to the virus? neil: david, one of the things that has been critical in this crisis is getting timely information, and also detailed

information. trillion inver $1.5 health care transactions per year in the united states with -- which is over one third of all u.s. health care expenditures with over 15 billion transactions just in the last year. as people are trying to track what is happening with covid-19, this is data that is very unique, and also allows them to get information, not only the kind of information that is also -- of that is often self-reported, but diagnoses, issues, and other aspects of their health outside the health care system. and timely data is proven to be very important in trying to understand the project -- the progression of the disease, the efficacy of different treatments in the impact it is having on the health care system. we are talking about the overall response, we heard from the cdc director overnight. i want to play the tape for you quickly and get your thoughts on this. let's run this guys, thank you.

>> you think you we weren't prepared for this, wait until we have a real global threat for health security. neil, is the u.s. still underprepared? what has improved and what hasn't? neil: i think, as dr. redfield mentioned, is something that is important to think of now, not only in the midst of the crisis, but over the course of how we handle more disaster and pandemic preparedness in the future. thatyou look at the data is now being generated by us, and we are not working with at least 40 research academic and public health initiatives. this is the kind of thing that needs to be in place for the future, both in terms of prevention and in treatment. i think doing so at this point in the crisis is giving us a lot of experience in how to do this

better in the future, so that we can hopefully avoid some of the issues we've seen with the apache data, the regionalism, what is happening in some areas versus others, to allow the economic issues we have obviously seen with the shutdowns, for that to be handled in a more dynamic but appropriately -- from the medical community's view. , as well as the opening. i think that is what dr. redfield and others are thinking about for the long run, given most people don't expect that this is the only virus or coronavirus or public health emergency we will face in the years ahead. haidi: you talk about regionalism. i'm wondering if globalism comes into this as well. a lot of the criticism has been that the apache or lack of data sharing between different countries, between china, which obviously had the initial place of data, do think that is problematic in a global handling approach to a pandemic like this? neil: i think it is important to

understand, you just mentioned some of the changes in japan and all the ways countries have been dealing with this in different ways. the collaboration around academic researchers a think has been nothing short of amazing. some of it, is you are implying, a bit more informal than it needs to be. what we are going to get out of this are far more structured ways to take data, to use it proactively, and in the midst of a crisis in a timely basis, to provide researchers, pharmaceutical or biopharmaceutical companies valving vaccines or treatments, and of course the care patterns. . i think you saw a lot of that. the professionalism and dedication from the medical professionals really overran any other issues that might have existed politically or geographically as people are struggling to understand the progression of the disease, and the issues around developing vaccines and treatments. think -- how do

things get done differently? do you see a return to the way this part of the business was run before the pandemic? or has things changed so permanently? neil: i think something's, certainly in the u.s., have changed permanently. there will be a continued provision of telehealth, telemedicine services. i believe both providers and patients have gotten used to that method of getting care. and they have gotten use to it on a much more rapid timeframe than anybody anticipated. that is when to stay with us. i think the administration and commercial payers and others have been clear that they expect to keep some of the changes they made in reimbursement, which has been critical to support that type of care continuing in the future. i think that is going to be with us for quite some time. the other thing that everyone is grappling with and comes back to the availability of data and managing data is the sheer volatility. the health of the population is something that changes typically quite slowly, and over a period

of time, whether for good or for bad. we have clearly seen an extraordinary amount of disruption and changes on a very short timeframe, and now going in the other direction, is the united states, many providers are opening up to elective procedures, and more of the things that were not happening during the depths of the crisis over the past couple of months. that volatility, especially given the uncertain trajectory of covid-19, is going to remain with us. we need to have operating systems that allow us to operate successfully even with that volatility. david: trajectory of your company, let's talk about that. analysts love your stock. hedge funds, i would imagine as well. david einhorn took a stand in your steak. they see solid growth over the coming years. if i was to ask you what is your projected growth rate for your company, say over the next three years? neil: we have talked about how we are going to reach a sustainable growth rate in the

mid to single digit on revenue and even more, in terms of earnings. because of the strength we have, and the opportunities for expansion in such a large system which still has a lot of fragmented parties. helping providers and payers in u.s. health care. just in the last month, we took advantage of a golden opportunity to raise additional financing on favorable terms that was oversubscribed. that has allowed us to really make some very attractive acquisitions in the pharmacy space, obviously a keys -- a key part of not only what is happening in treating covid-19, but the future evolution of the health care system as more and more care is distributed among the more historical hospital settings. i think the strength of our company and the strategic options that gives us and allows us to continue to suck -- to accelerate our growth and take advantage for the continued need for data and solutions to improve health. really appreciate your

time. neil de crescenzo, ceo of change health care with us. coming up next, online shopping in australia is booming. we speak exclusively with one of the country's biggest e retailers next, founder -- the founder is with us shortly. this is bloomberg. ♪

more retailers are testing the confidence of shoppers as stores reopen around australia. retail sales plunged by 17.7% in april for underlined demand. that is according to nap. our next guest has seen the benefit of the retail shift. rustan kogan joins us now exclusively from melbourne. great to have you with us. we appreciate your time. tell us how the company and the businesses really benefited, or the trends you have seen over the lock town periods -- lockdown period. rustan: i think what we are seeing is australian commerce has advanced several years within the space of several months. we have been talking about the benefits of e-commerce and online shopping since 2006, and finally we are seeing that is -- it is -- it is expanding in

australia. we are seeing a huge trend of shoppers coming online and that is a very good trend for us because we are seeing people make their first-ever online purchase and then quickly after that, they are making their second, third, fourth purchase. they are realizing that they used to travel to the shops, used to go to the shopping malls. now they can go online, they can compare prices, read reviews, click a few times and the item arrives the next day. seeink we are going to online retail penetration in australia significantly improve in the years to come as this flood of new customers switch to online shopping. typically, you look at the e-commerce landscape in australia and it is pretty woeful. that is why we have seen the big retailers really struggle to make the transition. do you think as the economy opens up, people are back in the streets, in shopping centers,

that the trend toward online will continue? been a few weeks now where we have seen shopping centers full of customers. there are still lots and lots of customers online, and we are seeing that growth because we have had a lot of new customers. -- customers switch to online retail. that i thinktrend is very exciting for our industry. launched the we company, we were one of the only companies out there talking about the benefits of e-commerce and the efficiency and convenience it can bring, while a lot of the bricks and mortar retailers were saying that e-commerce will never be significant. all of a sudden, you have got the biggest retailers in the country, the bricks and mortar retailers, running tv ads and talking up how good e-commerce is an getting their customers to switch online.

we are loving that trend because the more people that come online, that start their purchase decision with a google search, they do their research, read a few reviews, we think will continue to win huge market share with that happening. david: i want to get your thoughts, and i hope you don't mind me getting into the operation side of things, because a lot of companies in the supply shock in china is an example, many companies face customers needed something, they didn't have inventory, nor did they have the parts. how does that affect you? way you arenged the now approaching what an ideal inventory level looks like to prepare for this, and maybe the next supply shock that is about to come? ruslan: there definitely has been supply chain interruptions. we have been able to achieve more than 100% growth in gross sales year on year, while going through those disruptions.

part of the reason is that we have been able to handle the scenario really well because of how diversified supply chain is. we have a strong private-label. we have a very strong third-party brand retail, that we deal with distributors all over the world. on top of that, we have the marketplace which is a relatively new area of our business, but it is growing like wildfire and growing very quickly. because of the diversified supply chain, we have been able to suffer some of the impacts of the disruptions. but we have been able to weather that storm and risk pretty well. numbers, terms of the the back half of the last calendar year, 220 million aussie was your top line. we are almost done with the

current half. do you think remedies will clear to 50 million aussie for the half that ends in a couple of days and you think we will see 300 million for the half that ends at the end of this year? we have just recently given a trading update. obviously, it is a very dynamic trading environment at the moment. we gave a trading update in april saying we are tracking at 100% up year on year. we just gave a trading up that includes may, saying we are still 100% up year on year in terms of gross sales for the quarter. we are also more than 200% up year on year for the quarter. we are very happy with trading momentum and very happy to see that. online retail in australia is getting the attention we thought into thousand six it should be

getting. we are well set up to help our customers with distribution centers around the country. we have got more products located closer to the customer than anyone else. we have got very fast delivery, we have a trusted plan -- brand that has been delivering on its promises day in and day out for over 14 years. so we are very happy with how things are tracking. haidi: right. but at the same time, you can't cite the macroeconomic environment. i just want to throw up this chart for the benefit of our viewers showing that deep plunge we saw an retail sales in april. the biggest decline on record. this was also the week where we saw the australian economy entering recession. then almost certainty, for first time in almost 30 years. canerms of how you potentially continue to see those sales as the economy restarts, but people without

jobs and seeing the government spending 180 billion u.s. dollars to try and get money into household bank accounts. the spending is pulling back. market your business and your product to ensure that continues to go into your business? look during those periods of huge decline in those,sales and compare you will get a good idea of how our business is performing and where it is out -- where it is at. even historically, we always want the economy to be doing as well as possible. historically during periods when people have been tightening their belts, have also been periods where more and more people switch to online shopping. because our cost bases are lower. especially at our company, we have the lowest costs of doing business in the world.

comparing us to even some of the u.s. juggernauts like costco and walmart. and we have a lower cost of doing business than them. so we are very efficiency focused which ensures we have very good prices on our platform. and whenever people start to tighten their belts and do more research and compare prices and read reviews, we will win more customers. so we don't mind that sort of trading environment, especially given that even at our size now, we are only a few percent of online retail in australia. kogan's 3% and e-commerce in australia. e-commerce is 8% of all of retail. we are a tiny speck of overall retail. given the structure of our business, even our infrastructure -- given our infrastructure and position in the market, we feel that no matter what the macroeconomic environment will do, we will be

well-placed to win market share. itid: we have to leave there. thank you for making time in coming on the program. that was ruslan kogan, the founder and ceo. coming up on the show, we have another exclusive interview coming up. tal group is one of asia's biggest apparel makers, manufacturing one out of every six men's dress shirts in the u.s. he joins us later in the show. later, we will hear from hong kong finance secretary paul chan that says the city has nothing to worry about from this ongoing friction between china and the united states. this is bloomberg. ♪ this is bloomberg. ♪

david: a quick check of your latest business flash headlines. lvmh is reviewing its plans of a takeover of tiffany as luxury traders in the coronavirus pandemic. the louis vuitton owner has ruled out buying shares in the open market, even though they are trading at a 15 discount to $135.reed price of tiffany's relies on the u.s. market is making it more vulnerable in the face of the covid-19 follow, in the ongoing protests in the united states. shares in american airlines soared as much as 54% as they announced capacity will increase dramatically. american says it will lose

flights by 74% in july. that is up from 2300 back in june. about 40% of what it was a year ago. the move signals that passengers are keen to get back in the air after the coronavirus lockdown. toer airlines are planning offer more routs through their hubs in abu dhabi and dubai after they lifted their suspension on transition flights. by june 16, the world's biggest long-haul carrier will add 29 cities to its schedule across asia, europe and north america. they will add 20 cities by june 11. for now, all foreign citizens are still banned from entering the uae itself. let's look at markets. we see u.s. futures sitting in positive territory. this as we saw the rally hit

pause, perhaps investors starting to look at this dislocation that we see between valuations on the market and the dismal eco-data that continues to flow through. still, potential for an upside from some of the people we've spoken to. when it comes to japanese futures, downside as well. australian futures, sitting lower. this despite stocks in this part of the world trading at the highest since early march. we are seeing a number of indicators looking like we are entering overheated territory. new zealand has now flipped into positive territory, set for gains for a fifth straight day. we will get more on the markets across the next hour, where george from an asset management will be joining us. he says the recent rally is "the most frustrating by far." he is looking for a correction. the outlook pretension -- potentials between beijing and washington, claire reid will join us from washington with her thoughts in the next hour as well. plenty more to come in daybreak

asia. this is bloomberg. ♪

>> well-built -- welcome to daybreak: asia. to the lasting down hour before the markets open in australia. let's get to the top stories. phase one feels good. the top u.s. trade negotiator is happy. rising tensions