coming up next, rio tinto c.e.o. us from the international mining and resources conference taking place over the next couple of days right here in melbourne. lots to talk about. he's been spending time in china. we'll be picking his brains about whether the tone of things has changed given the domestic slowdown and given that we may see a doubling down in this trade war. this is bloomberg ♪ . >> it's 9:30 a.m. here at the international mining and resources conference here in melbourne. markets open for trading here in australia in just 30 minutes' time. it was a whipsaw session. the dow swinging 900 points in the overnight session on wall street. we are looking at early declines when it comes to the sydney trading starting in 30 minutes' time. certainly this volatility and the wild ride continues in the equity markets. >> i'm in new york. where it's 6:30 p.m. you're watching day break australia. let's get the first news. >> thanks. sources in washington say the u.s. is preparing to slap tariffs on all chinese imports

we hear from the ceo of rio tinto diamonds. that is next.s is bloomberg. ♪ caroline: a quick check on the latest headlines. tencent music is the latest chinese company to file for ipo. it was china's largest social media company. that amount is likely a placeholder and may well change. on u.s. exchanges, china-based businesses have raised $7.4 billion in ipo's. toys "r" us may be going for a comeback. the same lenders that have been taking heat for liquidating the company are working on reviving the brand. they canceled plans to auction off intellectual property. they want to reorganize the assets. it has been a rough year for some home sellers in manhattan and it doesn't look like it will get easier soon. the number of homes on the market has risen according to a report from miller samuel. and that is your business flash update. this is quite a global team. in london, prices are falling. >> and they are finally falling here. when you look around the world, it is not all the same. singapore is rising. you see it in other parts of asia. joe:

anna: that was rio tinto's ceo speaking in australia.tes from the start of equity trading. 12 minutes, in fact. next, stocks to watch at the open including b.n.p. paribas, joining deutsche bank in its bond trading gloom. gloom over london as the share price of bnp. we will keep an eye on that in 12 minutes time. this is bloomberg. ♪ anna: this is "bloomberg markets: the european open." let's talk about the banking sector. bbva has posted a third-quarter profit that beat estimates as its mexico business offsets the currency crisis in turkey. the spanish lender, posting numbers this morning. let's speak to the cfo of the business. jaime saenz de tejada joins us now. good to have you with us this morning. is it correct to characterize your results as being boosted by strength in mexico, and if so, how long-lasting, how sustainable is that? jaime: good morning, anna. thank you for having me. clearly, the good performance in mexico has driven the overall beat. 22% in are up by over mexico versus last year, but not only mexico. -- extremely we

haidi: rio tinto iron ore output missed estimates. it revised its forecast for the full year. david stringer has the details for us. we have had reduction data out ironthe top to iron -- two ore producers. do we have a good idea as to what the broad outlook for supply is like? haidi.absolutely, we really do. as we heard late monday from brazil, the top iron ore exporter, we heard from rio tinto, the number two, and what they both confirmed is despite the fluctuations in the last three months, the big picture story is they are on track for record annual shipments, both expected to increase production and cargo through 2018, adding to supply in the market. it is the further demonstration inthe really big suppliers this sector, extending market share, and extending that dominance. fore are forecasts australia and brazil to continue to squeeze marginal players. a weakerough they had three-month in the nine-month this year, they are up 4% in the same level period last year and on track to meet the upper guidance range around -- there is more supply coming. haidi: in terms of the de

rba meeting minutes seriess morning plus a of quarterly production numbers for minors including rio tinto, whitehaven, and saracen. rio posting a drop for the third quarter. we're keeping an eye on virgin australia after the australian newspaper reported that chinese conglomerate hna rejected a bid of 17.5 on the sense -- aussie cents. taking an additional after-tax hit of 314 million aussie dollars. this came after we saw anz and westech top about the higher financial cost as they clear up their bad reputations. haidi. haidi: sophie kamaruddin checking the markets in hong kong. let's get you first word news from new york. jessica summers. budget deficits. grew to a fraction under $780 billion, in donald trump's first full fiscal year as president. higher spending made at the biggest shortfall since 2012. the budget gap through september was 17% wider than the same period a year earlier. spending rose more than 3% while government revenue rose. citigroup believes china no yuan to the seven dollar as a psychological redline that must be defended. beijing has run to accept the currency may

rio tinto is brushing off the drama in the aluminum market as supply concerns world price,000 year. they have enough of the aluminum ingredients. haidi, shery? >> thank you so much for that, sophia, in kuala lumpur for us today. let's get more on what we should be watching as trading gets under way in asia. bloomberg's cross asset reporter is with us. japan coming back online after presumably exercising and doing their health activities yesterday and treasuries resuming after columbus day. what is asia bracing for? >> i think asia is bracing for a lot of uncertainty. japan is certainly coming back to a lot of uncertainty this week. you had the china reserve requirement cut yesterday that was not very good for the yuan. it plunged to its lowest since march last year and didn't help stocks as well. there was a heavy sell-off there. and of course wuven the main things is what treasury yields are going to do. the yield closed on friday, the 10-year u.s. treasury yield just above 3.2%. and we've got a chart that shows increased volatility in the bond market. and not only that, you high sc

rio tinto slightly flat.s up in australia on for record shipments of iron or, but third-quarter exports dropped 5%. stronger numbers in copper and aluminum. the mixed report, especially given softer iron ore numbers. british american tobacco also to the downside, noting currency shifts and fx headwinds impacting earnings, as well as debt reduction. they warned that smoking alternatives will miss their goal this year. that stock under pressure this morning. three downers, matt. matt: all right. thanks very much. hopefully we can get a little more upbeat news later in the day, although actually drops in stocks are interesting. imagine, if you are short those investments, you would probably be happy to see that. speaking of drops, let's talk about what's going on in saudi arabia. the tadawul, sinking more than 3%. the country is planning to say jamal khashoggi died during a botched investigation at its embassy at istanbul, at least according to a cnn report citing unidentified people. u.s. secretary of state, we

including the rio tinto c.e.o. speaking to us exclusive.he higher grade continuing as we get into the northern winter there. he also spoke about a greater desire to look for opportunities for more partnerships within china which is a fairly bullish indication and also one of the themes of this year, which is we're starting to see the upstart of the cycle. and investors willing to invest. take a listen to what some of our investors had to say. >> i was with rio tinto. we spent some time in china and met with any suppliers and partners. the model was pretty good. lots of talk about trade wars but if you look on the ground. ook in terms of aluminum, iron ore and copper, they are full. so the chinese machine is still working very well. what is absolutely clear and it's no real surprise, the chinese government is putting more money into the system, providing infrastructure. we didn't expect it but they're utting more money into the pro individuals rble sector. china has the highest demand for steel. and looking forward, which is more important i

matt: john sebastian shock, rio tinto's, really appreciate you talking to us. a company, great to get your thoughts. we are still eight minutes until the open of stock trading across europe and the u.k.. let's get your stocks to watch from around the newsroom. morningat lloyds this and schroders as well. joe easton from our equities team is covering european airlines for us. annmarie hordern is looking at norsk hydro. lloyds schroders. lloydsoders and confirmed they are in talks about combining wealth management business, which is a becauseng for lloyds banks around the world have been hit with no interest rate that have been squeezing their margins. asset and wealth management is one way into it. it should be a good thing for lloyds and also schroders. it should help both companies in terms of the share price performance. what about airlines? what is the story today? from --y bearish note this morning. quite a lot of profit warnings. that is largely due to rising capacity ind extra seating. profit warning was a lot worse than it usually seems. they have downgr

we speak to rio tinto, one of the main producers. and crystal ball for earnings.eak down what to watch. capncials, execution and ex. alix: i'm alix steel. welcome to "bloomberg commodities edge." it is 30 minutes focused on the companies, physical ass

we heard from rio tinto. said they are on track a record annual shipments which follows the industry leader as well. what you can see happening in iron ore in china is it has been diverging with chinese equities. it looks like it is being shielded from the drop in china. this may mean that iron ore is able to shield itself from the border complex and can really shake off these drops we have seen in china and any volatility we have seen. i wanted to look at what is happening in saudi arabia. droppedange traded fund 9% in four days. after we, it sank 2.6% heard from the report that the saudi's are preparing to say khashoggi'sst jamal death was the result of an interrogation that went wrong. ,his story will be a focus especially with mike pompeo headed to the kingdom. manus. manus: good to see you. ,ood analysis on the markets from markets news flow. your first word news with deadly humphrey, right here in dubai. says he isrump uncertain whether his administration will participate in a saudi investment conferenc

francine: that was the chief executive of rio tinto speaking to bloomberg.ll trying to get a chart that you asked for, but overall, commodities are extremely linked to emerging markets. can you decide which are going to do well or badly depending on whether their commodities are importers or exporters? >> that is something we follow closely, also focusing on the type of commodities. the metals and mining complex has underperformed. in the meantime, oil has stayed resilient. we think about russia or the gcc and gulf countries, that had it popular run. they so it was happening and bond markets as oil prices declined. we anticipate a much lower issue . the point is all of a sudden with oil at $80, their budget balance is much closer to being closer to surplus or deficit to shrinking. a lot of the haves and have-nots at the end. the general census is oil is ing the markets. francine: do you have to be country specific? yacov: i say we are trying to figure out who are the winners with the current oil strengths, and at the same time who is suffering? i think turke

rio tinto and its japanese joint venture partners are to spend around $1.6 billion on two iron ore projects the investment will help sustain production capacity at the projects in the mineral—rich pilbara region. it comes as the british—australian mining firm sells off its coal assets, to focus on core commodities, including iron ore. the usjustice department has sued the state of california after the state's governor, jerry brown, signed legislation to restore internet protections known as net neutrality. thejustice department said it would take california to court on the grounds that the federal government has the exclusive power to regulate net neutrality. net neutrality advocates worry that without the rules, internet providers could create fast lanes and slow lanes which favour their own sites. tesla's elon musk has told employees that the company is on the cusp of profitability. the electric car—maker is expected to release third—quarter production this week, and investors are watching to see if it hit targets for the model 3. mr musk agreed over the weekend to relinquish the role as

globalfirm, you wa nt to you are a blue—chip globalfirm, you want to be in the same index as hsbc, rio tinto some government ministers might spin thatis some government ministers might spin that is a brexit or no brexit, london is the place to be. brexit or no brexit, but let's talk about brexit, because we have to. theresa may at the tory party conference this week, did she do enough to allay concerns and make people feel allay concerns and make people feel a bit more confident in the brexit process , a bit more confident in the brexit process, and did she do enough to get you dancing? i was get you dancing? iwas in get you dancing? i was in the newsroom when it happened and there were shrieks of various different kinds, people going god no, people going good on her. i think on balance it did more good than harm. it was her best speech for ages, i think it was her best moment since the election. 0bviously she had the spectre of borisjohnson he was saying chuck chequers and what have you, she said stick with my plan, backed me and if you back me on brexit i will end austerity, which is an as

the chief executive of rio tinto speaking exclusively to bloomberg earlier on.er and anna edwards. vonnie: metals are weaker right now and so are equities. they are beginning to really selloff. new session lows in the u.s. index is down 1.3%. let's bring in bloomberg macro strategist cameron. more of the same? cameron: i think that is right. so bond market is closed, you can necessarily say that rates are screaming higher to put pressure on. bond futures are open. the curve is steepening a little more in future space. that is one catalyst. number two is the aftermath of the china trip story, which i think is not going to play out in one day. denials, but not quite in existential threat to the tech sector. denials, but not quite in existential threat to the tech sector. it is something that is still not totally resolved. number three, chinese markets we havetraded poorly, evidence china is losing fx reserves. they are having to sell dollars to defend the currency. it, it ishow you cut positive for volatility. and implies more volatile conditions in china and pote

we will be speaking to a top lineup, including the ceos of rio tinto, the chairman of devolution miningothers, next week. -- commoditiesrs or one of the industries hardest wars. the ta tariff shery: and coming up next, we are speaking to one of australia's strongest performing super funds which managing best which manages nearly $6 billion. this is bloomberg. ♪ haidi: it's 9:30 a.m. here in sydney. we're seeing a breath of life sentiment through the picture here in australia. the market has fallen into correction territory. and upside of about 1% when we get trading here in sydney. i'm haidi stroud-watts. shery: and i'm shery ahn in york. that's get the first word news with jenna dagenhart. ministerpanese prime seeking to bolster warming ties with china. he marks the 40th anniversary of the peace and friendship treaty and will hold formal talks with president xi later friday. but have were strained improved as a consequence of president trump's trade war. to be put oni said hold with theresa may cabinet unable to agree on how to advance talks with brussels. sources say no new british pr

rio tinto and bhp give updates on tuesday and wednesday. that is almost it for daybreak australia.aland is getting underway. we are a few minutes away from the start of trading. not as optimistic given the recovery rally in asia and in u.s. with the tech rebound. we are seeing upside when it comes to kiwi stocks area they have root relatively resilient throughout all of this. the kiwi dollar 65.01, seeing a record number of shorts betting against the greenback and kiwi dollar, bearish sentiment on the aussie dollar as well. sydney futures looking off session lows but looking at weakness in the open. shery: investors will be watching economic data out of asia. we have china's ppi and gdp numbers. japan as well, so we will be discussing all of that with a chief asian economist. this is bloomberg. ♪ . ♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to g

matt: everywhere we look at we at rio tinto. see that there are not any demand issues across the metals sector as far as the majors are concerned but you say there is a supply problem with kobold and lithium. to keep mining too much that price equilibrium in line with demand? i am glad that rio sees no issues with demand. he is well-informed. there are constraints on supply but that and lithium has been resolved, we are seeing a very strong surge in supply particularly for lithium, it is almost a competitive push out of australia and chile. they have political constraints and that is a risk around supply. we do see enough supply coming through for cobalt. for from materials, we think the supply is ok over the next couple of years. anna: thank you. the rio team listening to this morning. we are minutes away from the open. we take a look at the stocks we are watching including aviva. what will investors make of mark wilson stepping down? more on that next. this is bloomberg. ♪ matt: welcome back to bloomberg markets, this is the e

caroline: rio tinto takes and 40% of its revenue from china. that is your business flash update.we stay on china. can china support its economy during the trade war without resorting to major spending? this is bloomberg. ♪ caroline: it is time for asia and ahead. china is trying to avoid stimulus spending during the trade war but with the u.s. considering putting tariffs on all chinese imports, the situation might be too dire to handle on their own. what is the deal here? we already hear about them talking about helping autos and the like. what can they put into play? shery: they have put in measures but they have all been targeted. not like 2008 or 2015. it is not that approach anymore, it is more targeted. we talk about fiscal measures to stimulate consumption so tariff cuts, and poor cuts, tax cuts. we all see stimulating exports and giving them rebates given the trade tensions. monetary policy as well, not in more targeted measures. joe: are they going to have to capitulate eventually? shery: that is a big question, but analysts are saying they did they do have more firepower

>> i think all the major miners like bhp, rio tinto, glencore, have done well. bhp is the standout.t a hard rock mining company. it also has a significant oil and gas component. and of course that can be a positive and a negative. at the present time with oil prices where they are, and if you look at the key minerals the company is exposed to, it is generating very strong profits indeed? last week it came out with a strong quarterly production report. iron ore sales to china were up 8%. domestic iron or in china is still very strong. a very compelling case for bhp. haidi: that high grade is going to continue? >> i would think so. given the chinese authorities' determination to reduce pollution and that sort of thing, it does present a compelling case for higher grade premium quality iron ore. the net effect is that it does reduce pollutants. haidi: coronado lists today. is this the right time for a coal producer to go public? >> i think so. market sentiment has been very strong in the coal sector, whether we are talking about for steell or coal mills. a lot of that is to do with sup

the ceo of rio tinto, the world's second-largest miner, this talk about trade wars, current demand in the mood is pretty good. a lot of talk about trade wars, but if you look at the ground, in terms of aluminum and iron ore, they are full. the chinese machine is working very well. ebra: philip hammond has promised an end to tax cuts and -- has promised tax cuts and an usterity. they promise money for schools, and roads. and 500 million pounds in case the u.k. leaves the eu with no deal. along with an increase in duty on internet gaming operators. >> i can report to the british people that their hard work is paying off, and the era of austerity is finally coming to an end. data from the lion air -- according to data compiled by flight radar 24 of flight tracking system, it was carrying 189 people, and all are feared dead. shortly after leaving jakarta a pilot requested permission to return to the airport. that indicates the crew may have been struggling with a failure. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 12

. >> the rio tinto ceo.y are saying, if you look at prices in china of some of these metals like copper and sink and aluminum they are all up today. it is hard to blame a selloff in the commodity market on base metals on china. there are high premiums in china. the underlying fundamentals support demand holding up well even if the rhetoric is negative. the fundamental show it has not had an impact. that is what ceos are saying. oil also getting hit this morning. bloomberg had a interview with the saudi crown prince on the country's ability to talk oil. saying as much as we export to barrels -- two barrels per everyone barrel that disappeared from iran. if the saudi's can add 1.3 millions -- joining us from andi is bloomberg's mideast african executive editor. strong words from saudi arabia, are they true? that they can add 1.3 million barrels? that's what he says. his point is basically that we have done our job and it came in the context of him praising donald trump. he said he loves working with donald tru

later today, the rio tinto person will be up on bloomberg markets europe. this is bloomberg. ♪ . built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. the following paid presentation is brought to you by dr. ho. is pain making it hard for you to play? try the pain relief system for your back pain, tension in your shoulders and knee pain. >> i was amazed. the pain disappeared. announcer: imagine everything you could do without the pain. >> are you taking pills, or wasting time and

speaking exclusively to bloomberg, the ceo of rio tinto, the world's second largest miner says despiteks about trade wars, current demand in china is strong and the company's audibles in the country are full. >> the mood is still pretty good. lots of talks about trade wars, but if you look on the ground, if you look at aluminum, iron ore, just in copper to name a few, they are full. so the chinese machine is still working very well. data from the crashed indonesian airliner shows it hits the sea at hundreds of miles per hour. it plunged from 4800 feet in a flightsmpiled by tracking system. it was carrying 189 people and all are assumed debt. shortly after leaving jakarta, a pilot requested permission to return to the airport. that indicated the cruise may have been -- crew may have been dealing with a failure. the u.k. government has announced americans are allowed to use the electronic passport around the country. citizens of other countries are also to be afforded the same right as the u.k. aims to open up beyond the european union. global news 24 hours a day, on-air and tictoc on tw