rio tinto was selling iron ore to china at an annual benchmark price. stayed the same for a year. but during that time, it was a booming time for the chinese steel industry. the actual market price rose steadily and dramatically throughout the period. rio tinto was selling large quantities of iron ore below market prices. it was helping the chinese industry make a profit. when rio tinto wanted to move away from that system, people in the chinese steel industry realized that would cost them a lot of money. carol: a big element of your story is when things started to go wrong between rio tinto and china, it involved spying by chinese authorities. kit: in about 2008, rio tinto became concerned that it had been hacked. it was concerned and went to mi5. that is the british spying agency. the company was told that yes indeed, communications were not secure, and one of the countries that was accessing emails, confidential documents, and phone calls was china. and the story tries to follow what the impact of that breach was on the company. jason: one of the thi

in 2008, rio tinto became concerned that it had been hacked.med enough to go to the british spying agency. yescompany was told that indeed, if communications are not secure. the countries who is accessing emails, confident of documents, and phone calls, with china. the story tries to follow what impact that had on the company. jason: one of the things he point out and as i read it, any executive who is doing anything complicated in china and elsewhere, cybersecurity comes forward in a big way. told,ly was rio tinto they're looking into their communication in every method, it felt like they were friendly countries monitoring them as well. what i think sent a chill of the spine of any ceo trying to understand how to do business heard. >> i think the reason that the other states could see what was coming out of rio tinto was the position of the chinese breach. other states are monitoring what the chinese hackers were doing. do not see any evidence that other states were specifically targeting rio tinto. is, these --int understood that there is suc

carol: but we start with a feature on rio tinto. jason: an amazing story here.ing giant, several executives jailed by the chinese government. carol: it gets into the complicated relationship of a foreign company operating in china. jason: they $1 billion hack at the center of it all. carol: we have more from our reporter. of thetinto is one world's largest mining companies, and its biggest customer is china. we are talking about vast quantities of raw material, hundreds of millions of tons of fromore being shipped up australia to china. 2008 weres back in billions of dollars. the stakes were very high for both sides. tensions began to rise, and rio tinto found itself in serious trouble in china. the story,ou say in relationships were good, then all of a sudden it wasn't good. what happened? kit: there were several pressure points, but the main pressure point was by a historical quirk, rio tinto was selling iron ore to china at an annual benchmark price. the price has stayed the same for a year. but during that time, it was a booming time for the chinese steel in

the news on the iron ore front, rio tinto announced it will hit the upper end of the target range for at around 340 million tons for the year. ramy: what are the risks for rio in the second half? is one of its strengths and weaknesses. it is more exposed to the iron ore price rivals. we had a report last week saying seeing the scope slipping below $50 per ton, a drop in demand. we are seeing lower grades being hit. another potential risk area is cost, particularly in aluminum from energy prices. there has been industrial action in canada and south africa. then there is trade. the trade were between the u.s. and china is something john sebastian is watching. those are some of the potential clouds on the horizon for rio. ramy: paul allen, thank you very much. let's switch gears area bloomberg learned the u.s. and china have been trying to restart stocks to avert a trade war. representatives of stephen mnuchin and the chinese counterpart have held private discussions. the next wave of tariffs may hit as early as wednesday. cut -- joining us now is joe. a game changer? >> these are talks

rio tinto reporting a 14% increase in second-quarter shipments. due to trot activity -- productivity. a strong set of output numbers from the top to iron ore producers. what is the forecast for the full year? late monday heard from the brazilian producers, the number one exporter from iron ore an earlier today from rio tinto. both reporting pretty strong andterly shipments predicting a pretty strong outlook for the rest of the year. they expect to have a record year, expecting to produce about 390 million tons of iron ore. rio tinto also expects shipments to hit the top end of what it guided as the range. it seems to be close to 340 million tons, which would also be a record. among those top producers, we are seeing a continuation for the past couple of years. they are continuing to add more supply. to prove toit going be another squeeze on the iron ore price? it is interesting because what we are seeing is a differentiation in the iron ore market. of these two companies, not only the biggest producers but also producers of high-quality, premium g

yesterday.l bouncing we will hear from rio tinto's ceo next. bloomberg. ♪ phones have made our lives effortless. streaming "must see tv" has never been easier. paying for things is a breeze. and getting into new places is even simpler. with xfinity mobile saving money is effortless too. it's the only network that combines america's largest most reliable 4g lte with the most wifi hotspots and it can be included with xfinity internet. which could save you hundreds of dollars a year. it's a new kind of network designed to save you money. click, call or visit a store today. guy: stocks stabilizing, europe following asia higher, but not by much. the chinese market up 2%, europe up .2%. u.s. futures are pointing higher after yesterday's performance. president erdogan suggesting rate cuts are coming. should investors prepare for capital controls? sky, higher. comcast raises its offer. the stock is trading north of 15 pounds a share. welcome. you are watching "bloomberg markets: european open." i am guy johnson in london. 30 minutes into the trading da

and still waiting for numbers from rio tinto. and the index of metals, the bloomberg index of these industrial metals, again take a look at the bloomberg and you can see the one-day changes. this was the spike in april, this is the spike we see right now. and lastly, i will quickly call on audible. and we see a spike in those a-shares, as well as adco. shares spiking by about 3.7%. there is a report from politico that the trump ministry should plans on announcing today billions of dollars of aid to farmers come into this could be what is causing the spike, although i think the shares were already climbing earlier and now are further spiking. we will take in and bring you - - dig in and bring you more on the subsidy story. vonnie: julie hyman, thank you. global trade imbalances showing no sign of diminishing for the moment, it is a trend that could inflame tensions and curb the global growth. the warning issued by the international monetary fund. for more, we are joined by maury obstfeld, director of research at the imf in researc

ceo of partner rio tinto said he is keeping his options open.st has increased its takeover bid from sky. escalating a global standoff between the media giants. a deal foroffering the sky. juliette: it already owns a stake in the european broadcaster. that's your bloomberg business five. manus: thank you very much. this battleck to for sky between fox and comcast. david, good to see you this morning. comcast comes back at 14 pounds, $34 billion. , it's hardly what butwould call a knockout, he expected 18 pounds. what do you make of the bid? that comes to just a little more than 5% above the previous thread. so it is more to the story. than twomore work companies competing for an asset. you have the interlocking wardrobe issues. they are bidding for that as well. giving comcast a chance to pick up this asset in a certain way sort of undermines the position. the 23 million alsoribers, it would bolster their position should they decide to raise their bid. they told us they are still considering what to do with that in the bidding war they are having

elsewhere, mining companies including bhp billiton, rio tinto, and glencore all gained around 5% on tuesdayion that they would benefit from higher chinese demand for metals. those trade tensions remain in focus ahead of a meeting between the us and european commission presidents. all eyes will be on the meeting between eu officials, and the us president in washington later. paul blake has the details of what's ahead on wall street today. well, earnings continue to dominate in the us. while tech has largely been in the spotlight, it will be sharing it with transport today. at the top of the agenda is facebook which wall street is expecting to post a rise in profits off the back of ad sales on its mobile platforms. of particular focus is video ads, which are very popular with advertisers at the moment. transportation companies will also be driving the day, with boeing, ford, gm and fiat chrysler all reporting their earnings for the second quarter. wall street expecting good news from boeing of the back of increased demand for air travel. traders will have a keen ear out for any comments from

rio tinto, we heard from them earlier this week. they had production numbers out. ng tinto for its aluminum is higher this half than it was in the same period of the year earlier. to be doings seems particularly well because it had a lot of premium products. in terms of china, trade data out last week showed the first half of the year china exported more aluminum than it ever had. we are not seeing a curving of exports from china. shakeout iswider that it is something we still have to look at and monitor. it is not clear-cut what the impact will be yet. ramy: we have new production numbers. energy producers coming out with numbers. what are the main takeaways? dave: that is right. a flood of data this morning. it producesun off, all manner of commodities. one of the key highlights, they reported a 44% drops -- drop. that is largely the result of a mine outage it had in australia earlier in the year. for investors they will be warmed by the fact those problems seem to be behind it. production ramping up in a particular operation. we have heard from a couple gold and

bloomberg spoke to rio tinto c.e.o.uan sebastian in sydney. >> there are two keys in the business, not only rio tinto but the mining business and g.d.p. growth is strong across the graphic at this point in time. the other is about trade. if i jirio as a proxy, 99% of the product will go from one country to another. so we're watching the trade issues very carefully. kailey: that's your bloomberg flash. jonathan: thank you. the winding up of the nato summit in brussels. we've heard from president trump who gave his remarks in a 45-minute news conference. right now president macron of france is talking and this is a bit of what president trump had to say a few moments ago. president trump: i let them know i was extremely unhappy with what was happening and they have substantially upped their commitment, yeah. now we're very happy and have a very, very powerful, very, very strong nato. much stronger than it was two days ago. jonathan: we welcome now from brussels, the senior deputy. you heard what president trump had to say

we are seeing a lot of cash being returned to shareholders of both bhp and rio tinto, expected to payf the expected $27 billion australian out of the earnings season, looking healthy. haidi: reporting earnings later this week. what about companies against the grain? matthew: what is good for bhp is bad for fortescue metals. cutting over a quarter from this time last year, because the low-quality iron ore has persisted. they are putting -- trying to build a new mine to get up the great ramy them their iron ore, so bad news for the shareholders . toaster as well, cutting their dividend from the same time last year. this was flagged last year. they have a lot of issues. they are building a fourth wireless network, and a management restructure happening from including -- stemming the massive restructure they announced in june with job cuts. ramy: how does australia compared to other markets? -- compare to other markets? matthew: they are income happy. we love cash payouts from companies. australia is the third highest yielding market, developed market in the world, behind the u.k. that is

that takes indonesia's stake to 51% and rio tinto, the other partner, will cash out its interest for5 billion. ramy: steady overseas growth lifted third-quarter earnings, hitting $6.9 million through may, comparing to estimates of $524 million. they've invested heavily abroad for signing of brand ambassador and opening new stores in europe. it acknowledge is threat of a trade war but says it faces limited damage. paul: reliance industries is back in the billion dollar club. michel barnier's company jumped, pushing market value over the mark. reliance is the second giant to suppress $100 billion. barty reaches the richest man. still to come, trade tensions are easing slightly but our next guest says we are seeing the effects of tariffs. a former member of the trade team is joining us next. this is bloomberg. ♪ sydney,'s a: 30 a.m. in markets opening up in 90 minutes time. futures looking bright in the low and trade disputes as steve mnuchin is calling it, up on this front morning. ramy: i'm ramy inocencio in new york. you are watching daybreak australia. let's get first word news with

commodities rebound may give rio tinto a boost later. we expected strongest interim profits

numbers crossing the bloomberg right now to we have rio tinto production numbers for the second quarteripments coming higher than expected. 88.5 million tons. the estimate was 80.4 million. a slight be to. as for outlook, rio seeing shipments in 2018 to be coming in at the upper end of the range. no shortage of that. this comes a day after valley announced record shipments. maybe we see pressure on the price. bite.x suffering a nasty this is bloomberg. ♪ ♪ 8:30 a.m. on another beautiful blue crisp winter's day. 12 degrees in sydney. markets opening and 90 minutes time. features off 2/10 of 1%. i'm paul allen in sydney. ramy: i'm ramy inocencio in new york where it is 6:30 p.m. and you are watching "bloomberg daybreak." let's get to first word news. several top republicans have criticized president trump's comments after his meeting with vladmir putin. must ben said russia held accountable for like -- four election meddling. john mccain called the summit a tragic mistake. trump question whether russia interfered in the 2016 election. he also suggested he trusts putin as much as his own n

you have different qualities of iron or and rio tinto is producing high-quality iron ore.t is the order they want. they mind their own or but it is that quality. you need a lot of pollution to create the same amount of steel. you can deal with much less pollution. it is not one that is counterintuitive, that should the bad for the economy parameter but that is not happening. there is a good logical reason why not. the rio stocks, a great deal in the australian session. we are minutes away from the start of our session. we will take a look at the stocks we need to be watching going into the open. more management woes at thyssenkrupp. we will talk about car stocks as well. the market open is eight minutes away. this is bloomberg. ♪ matt: minutes away from the open. let's get your stocks to watch. joining us from our team. i was looking at thyssenkrupp and guy will be looking at the auto trade. let me start with you, what is the story with tom-tom, the navigation equipment maker? albertina: lots of good news in their statement this morning. forecastny raised its for four-year

rio tinto is also lower, the worst performer on the stoxx 600. keep an eye on the mov function.opean stocks have opened today aftered chinese equities followed a three-day rally. matt: i want to bring in our guest for the hour. joining us now onset is stephen say well, senior multi-assets strategist at b.n.p. paribas. kick it off with stocks because the market has just opened. session, but we saw some decent gains yesterday and have seen some great games around the world the past few days. what is your view on equities right now? speakd morning, nice to to you again. i would actually go back to the last time i was on the show and spoke about this topic, to remind you. constructive view at b.n.p. paribas on equities. our energy we like and financials and the key point we would focus on that are driving these sectors. think we will increasingly see higher yields in the eurozone from a steeper curve which will help financials and also with this strong oil price recovery we are seeing the last few months, we think that will help the energy sector. overall, a fairly positive -- two b

looking at rio tinto bhp, fortescue metals, with their machinery which will be coming on hopefully int-too-distant future. they have got dealerships in china as well. betty: our asian equities report in sydney, thank you very much. we will assess the outlook for property in china and hong kong. our exclusive interview with ronnie chan is next. this is bloomberg. ♪ ramy: welcome back. this is "daybreak asia." i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. mainly due to declining property sales. 59%. down with -- let us break this down with ronnie chan. always great to see you. let's talk about this drop in property sales. are you disappointed? how are you reading what we saw in the first half? ronnie: not at all. a is transitioning from being property investment and property sales company to become basically property investment company. yvonne: what does it tell you about the property demand in hong kong at the moment? i think starting to slow down or could things revive in the second half? ronnie: in the long run, there is always a shortage of land. yvonne: you

bloomberg sources have said rio tinto is ready to accept $3.5 interest.r its look at this, elon muskompany. they hit their interest. model three production targets, and the ceo says the company produced 5000 last week and could hit 6000 this month. a meet target, tesla built third production line under a a movement described by others as insanity. all right, let's have a look at oil. the tweet indicating president trump, his administration has backed off look -- all the claim he has made that saudi arabia would pump to maximum capacity. he said that the king agreed to increase to 2 million -- increased 2 million barrels per day. house officials say the pair discussed the need to balance the oil markets but did not set any targets. joining us live out of singapore, our oil reporter, cho on what the reaction should be as week. last friday,rices was off to a good start. a closed at more than a three-year high, but today, oil prices have fallen as much as 2% after president trump's tweet that he wants saudi arabia -- he actually said, saudi arabia had agreed to come to million barrels pe