does he agree with some of the dire scenarios as outlined by carmen reinhart. >> there' a type we caniate that somewhat was ea as we look into the implications. he's there today. tomorrow, going into the end of the week. and also why he says cutting china's u.s. treasury holdings would be a good weapon to use. will they go there? that's about it for "daybreak: australia." the action next on daybreak say sha is next. this is bloomberg. mom, dad, can we talk? sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. here int is 7:00 a.m. hong kong, we are live from bloomberg's asian headquarters. i am david ingles. welcome to "daybreak asia." stocks in asian-pacific set to rise. treasuries pushing higher, yet again. the s&p 500 popping it

steve: that was interesting, your section on carmen reinhart was fascinating.n some way similar to donald trump's -- america first. they are worried about the u.s. they say, our mandate is to do what is best for the u.s. economy. if the rest of the world is hurt by that, well, that is life. you saw jay powell, the fed chairman, give a speech last week saying, that is not part of our mandate. he also said, we do not think it will be a big problem. the comments by carmen reinhart suggested this is something to watch, and it would be a big warning sign for the fed. what is impact is, happening for global growth and synchronized global growth around the world? that has been a real tailwind of for the head -- the fed. that could change the outlook a bit. david: that is life, a page out of sinatra. thank you. machine orders, forward-looking indicator, not good indication, falling 3.9%. steeper than the 3% decline we were expecting. year on year, 2.4% drop. the estimate was barely flat. dollar-yen, 110.36. .utures pointing higher lots more to talk about. stay with us.

how concerned is china with apparent instabilities as carmen reinhart alludes to?they very conscious when it comes to capital flows and the strength of currencies. they saw one trillion wiped off their own interest over 2015 at 2016. they got burned badly when they tweak with the exchange unit of the u.n. i think they will enforce the capital controls as quickly as they can build up their reserves in advance of perhaps the dollar taking over and putting downward pressure on china's currency. china is in an ok position right now, but they will be nervous around sentiment and the risk associated with capital outflow and the weaker yuan. tom: what is so fascinating is it is not 1997 and 1998. bring up the chart. this is malaysian ringgit. i could've brought up the thai or indonesian currency. this is a log so the movement matters. thescope and the scale of 1997, 1998 crisis is unfathomable now. it is a better, deeper system. what does china do to assist these emerging markets across the pacific rim? enda: as you know well, they played a key role back then but they sti

you have fundamental warnings from carmen reinhart.on e.m., major pullback in absolute and relative terms. you look at cages like eem, relative to broader market or developed global, you can see oversold condition within a long-term uptrend. also signs of short-term downside exhaustion within the pullback. at a minimum, we see a relief rally in relative terms in em. does it mean a lower high after that but we should assume the uptrend is intact. david: katie stockton of fairlead strategies. thank you for being with us. more retail earnings coming up. jcpenney's result is next. also ahead, the future of cybersecurity. securing u.s. infrastructure from cyberattacks. live from new york, this is bloomberg. ♪ . . . alix: this is "bloomberg daybreak." i am alix steel. check where markets are heading. to me, the interesting story is what is going on in europe, particularly in italy. up early in the day, now reversed, now down .3%, the ftse. continuing to undersell pressure, the yield of up percent, moving higher by about six races is despite