treasuries.u look at the private sector balance sheets in the u.s. and the rest of the world, they have grown in relation to the economy whether it is assets related to gdp or debt related to gdp. what that means is that those assets are producing less and coming to take gdp as a proxy for the economy which means you need lower interest rates to justify and validate the asset valuations. on the other side, on the debt side, you need to make debts more sustainable. that has been the gradually declining feeling over 30 years. every cycle, we have seen the maximum interest rates well below the previous cycle. that has not changed. though the household sector has not leveraged the cycle, corporate sector is high. you can look at the m's places, leverages i. caroline: that cannot go on if an item -- infinitum. srinivas: no. could china force the hand? i want to make a link between what is happening with china and the u.s.. many feel china is a big buyer of u.s. treasuries. could they have the u.s. --

jon: we are getting that risk offset and treasuries.inally this week they are doing what we think they are meant to do. do you take comfort from that? priya: i do and we had a significant amount of auctions this week. this was a technical selloff and that is always hard to draw a line in the sand. we did not have a great to bill report rates sold off. rates have managed to rally and i think the front end is very interesting. it has a lot of value here because the markets are so well priced for the fed and as financial conditions tighten, the fed becomes a little less excited about raising rates significantly above neutral rate. jon: that is going to be the basis of our conversation later. i want your view of what is happening in credit. there seems to be little room for error. investment grade, you have seen the leverage being put on by a lot of companies in that segment of the fixed income market. are you concerned by what is happening at the moment or do you take any comfort from what you are seeing? >> when you look at it, you have a

we are going to get that treasury department report and the reports ahead indicate the treasury couldsaying no, they are not a currency manipulator. if they were labeled one, what would it mean to you? priya: it is extremely risk off if they were labeled one, you wonder what does it mean for risk assets -- does it mean more tariffs? not, ourif they are view is if you look at the data, do not satisfy any of the criteria. if they are not labeled, korea is next. if they are not labeled, it is still interesting that cnh is unable to rally. china is weakening before the tariff affect. in 2019, how much can the u.s. continue to grow with the world economy slowing? iain?an: iain: i would like to see what is going on in italy over the next week. we have the budget and we have got concerns regarding the levels that are likely to be announced for next year that has been pushed back. i think that would be a very interesting to see how that plays out over the first few days of next week. jonathan: are you confident that we will not cross that 400 basis point line in the sand? iain: from where we

volatility in the treasuries market.he global market of volatility as well. from the bond market perspective, it says to us that the spike we have seen in yield is somewhat behind us. the market is not pricing expectations. equities after we saw a big europen the vix, also in the track equity, they have all come down now. most of below the average. that is speaking to an idea that maybe going into the back end of the year, we might be in for a little. ofcom. during the turmoil, we saw the chinese equity markets being one of the worst hit. what happened? kong and onin hong the mainland in china have done some reporting on the way to the national team is responding. it is different than what has happened in the past. the national team is generally considered to be state backed funds that would come in and buy equities during times of stress. what has happened this time around seems to be more about regional teams rather than a national team. up in different places. it has been a lot more tailored and localized with officia

treasuries. >> we are going to watch more credit than treasury because if we still continue to see ratesising, what we may see is people bail out of certain sectors of credit. we think that means you ought to be conscious in fixed income, particularly high-yield, high-grade. >> there is no information that came out. i think that's the market issue. it starts point when biting really hard and we see these corrections, you see the implications of these corrections in real economic data. the fed probably has to back off. but that's not today. it's probably in the first year. jonathan: joining the around the table, the head of global rate strategy, chief investment officer of fixed income. plus from london, fixed income portfolio manager at jpmorgan asset management. i want to begin with you on risk assets and fixed income. high-yield finally started the fracture. what do you see on that? >> the move in the treasury market really caused that. the market was happy with the yield curve. at 320 plus puts fear in the system that rates could move higher. that leak into equities. not rally immedia

treasury route that lack of foreign buyers at these levels lead to lower treasury prices.is comments come at a tough time for bond bulls. yields are searching to multiyear highs on ten-year treasuries. the concession to the european union for 2.4% gdp in 2020 and is in response to the coalition spending request from the european union. -- italianent government says details will come today. u.s. senator public have started the proceeds for a -- process for a make or break test vote tomorrow for brett kavanaugh's nomination. the fbi has not interviewed him ford, accuser, christine because it does not have clear authority from the white house to do so. prices have jumped this week over concerns on targeting markets, with the worries of losing another customer, the uae russia's energy minister says the market may be overdone at current levels. >> current levels maybe a little -- may be a little bit high. ae market is trying to reach balance that is stable and acceptable for users. president has spoken about a range of $65-70 five dollars -- $65-$75. global news on air, 24 hour

treasuries. the value in terms of u.s. treasuries dropped by 30, 40, 50 basis points in terms of yield. we have the employment report, powell talking about three hikes going forward. at these levels, with the 10 320 plus ory at minus, it is hard to sustain if fed funds are going to be at 3%. vonnie: we just had john saying it that we are close to the longest expansion in history. 4.08%. forecast is that is this economy running hot? bill: it is. statisticwkward because of people that may want to work but are not listed. it is hard to know whether that 3.7 is indicative of wage inflation. we saw the numbers at 2.6%. that is controlled. because of theot deficit and corporate tax cuts, etc. terms of gdp may be reflected in terms of the heat of equity prices and potential asset bubbles because of the trillion dollars being thrown into the economy suddenly. vonnie: can i ask you for your outlook on where the yields are headed here in the u.s. and in germany? year,the u.s. treasury 10 i do see much damage potential there, perhaps

treasury, the u.s.ment of treasury is that it extended the deadline in which companies can do this. that means we can wait until after midterm elections to deal. it seems to be something that will likely lead to an outcome because these optics of potential political fallout from a u.s.-russian company deal is now no longer weighing down that potential of a deal. we see a deal likely. that will probably keep aluminum prices where they are. if the market is surprising to the shock, we could see a tencent rebound in alameda like we saw in april. that is something we are keeping for.llies out it does not seem to be a factor right now. yvonne: we are really watching oil as well, given the recent controversy over the missing saudi journalist. how powerful weapon do think oil is for the saudis at the moment? how serious do think they are in firing it if we get evidence on exactly what happened to khasho ggi? >> this will be the big factor right now. when we talk about saudi arabia, we talk about 10.5% of globa

take a look at treasuries.his is a safe haven bid if you ever someone and treasuries -- if you ever saw one in treasuries. investors buying the paper and pushing the yield down, 3.16% is where we see it and safe haven bids and assets from japanese yen to gold as well. but if you got in the gmm? anna: we have seen safe haven moves into treasuries. selloff is continuing and we do not have that relentless push on yields. let's have a look at equity markets, perhaps we are worried about chinese debt and msci mate is the asia weakness story. the chinese equity market snapping a two day gaining street. was of the confidence expressed by the central bankers or was it the national scene laying on china's behalf? this is the weakness we saw. on the foreign exchange markets, those currencies under pressure and the japanese yen catches a bid. money is going into havens. let's look at the gmm and the sovereigns and we want to talk about italy. ongoing story as we continue to watch the italian government. they want more dia

treasuries. matt: i agree with kathy, u.s. treasuries. jonathan: great to catch up with you all.special thanks to guy lebas, kathy jones, and matt freund. from new york city for our audience worldwide, that does it for us. i will see you next friday at 1:00 p.m. new york time. that's 6:00 p.m. in london. this was "bloomberg real yield." this is bloomberg tv. ♪ ♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we're joining you from bloomberg headquarters in new york. carol: this week, the future of retail. e-commerce giants amazon and walmart are after global expansion. next stop on the battleground, india. jason: plus, sears files for bankruptcy. why ceo eddie lampert couldn't keep the retail giant afloat. carol: first, to the politics section. it is a story that has dominated

treasuries. matt: i agree with kathy, u.s. treasuries. jonathan: great to catch up with you all.special thanks to guy lebas, kathy jones, and matt freund. from new york city for our audience worldwide, that does it for us. i will see you next friday at 1:00 p.m. new york time. that's 6:00 p.m. in london. this was "bloomberg real yield." this is bloomberg tv. ♪ alix: the weaponization of oil. disintegrating relations between the u.s. and saudi arabia raise questions about volatility and higher prices. and diamonds are forever, supply is not. pink diamonds are rare and supply could get tighter. we speak to rio tinto, one of the main producers. and crystal ball for earnings. we break 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

treasuries as well. pushing the yield to a fresh seven-year high, european next city -- equity indexes are trading water with 30 minutes to go till the start of stocks trading. ♪ anna: the imf cuts its global growth forecast for the first than two years citing trade tensions and turbulence in emerging markets. morgan stanley's mea culpa, calling for a flat yield curve as 10 year treasury yields reached the highest level since may 2011. time to buy, hsbc says now could be the time to get into core european stocks as u.s. growth is expected to slow early next year. less than half an hour away from the european open. take a look at equity index futures. in certainht gains areas and slight loss in others but just unchanged, hovering the level watermark. euro stoxx 50 futures gaining .0 -- 106. we did hit that magical 3.25% level in the early part of the section, trading at three point 2.ur -- 3.44 investors have sold treasuries and some may buy back in as the yields get juicy enough. what do you see in gmm's

treasury yields, around where we are now.e really expecting any sizable breakout of yields now. the thinking at the moment is we have gone through that uptick in volatility and we may be able to sustain that for the foreseeable future. shanghai composite losing more than 20% this year. so where is the national team? >> that the question we always ask during times of volatility and turmoil. in china, the national team has been known in markets as an extension of the state authority apparatus there. they come in and support markets like they did in 2015 in times of distress. what we have seen this time around and are reporting has shown is a lot more of a localized regional field and a national feel. in beijing, what we've seen is that officials have helped their locally listed companies to really give them some support. that is very different from what we saw in 2015 when it was a far more national effort when brokerages were asked to pledge money to a market risky find, and there were many critics of that kind of approach. yo

treasuries. matt: i agree with kathy, u.s. treasuries. jonathan: great to catch up with you all.kathy jones, and matt freund. from new york city for our audience worldwide, that does it for us. see you next friday at 1:00 p.m. new york time. this was bloomberg "real yield." this is bloomberg tv. ♪ 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 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. manus: you're watching the best of "bloomberg daybreak: middle east." mike pompeo has to riyadh. for the gulfmean largest economy? ken -- and the tel aviv stock exchange becomes the latest company to put its ipo plans on hold. the ceo tells bloomberg why. ♪

i'm reporting around the treasury.ks as if advisers steven mnuchin are not manipulating their currency. we expect the report next week. in the u.s.futures indicating a positive start. let's look at the bond markets. day that features, a looks very different. yields going higher. u.s. bonds falling. that is part of the story. much more to do with his relationship with the u.s.. we will keep an eye on this one. we just heard from philip hammond, declining to comment on the currency. let's put a big picture around this. asian equities. david ingles joins us with the latest. ok.d: we are doing and a lot of ways doesn't mean a lot. pretty low set coming out of the thursday session. china closing up shop right now. massive swings. down as much as in the morning session. 2.5% into where we are now. overall, up by just over 1%. we clawed back about a third of the losses. we are getting a massive rally. thatd example, south korea market finished 1% -- 1.6% up. give you a quick sense of the movers. large caps, completely hammere

omaine: aesop a lot of havens into treasuries.ng we really had a while and it tells you how important the geopolitical issue is for this market. for the last field months, a lot of the market has been driven by not just trade concerns in terms of goods going back and forth across the border, but the relationship between the u.s. and china and now apparently the u.s. and saudi arabia. guy: it started falling at about 4:00 london time, 11:00 your time. what caused that? romaine: we were already seeing because i'm some fundamental factors related to earnings reports, but there has been a lot of attention on what has been going on with the issue in saudi arabia. not just about the political aspects of it all. it is a huge amount of money it comes out of saudi arabia that flows into a lot of this market, whether it is directly into equities or investments in the companies themselves. there is concern a breakdown in the relationship could threaten that financing and that is what investors are worried about. vonnie: why are we not seeing

treasury continues its issuance.ay 25 billion dollar auction drawing a yield of 2.17% with a bit to cover ratio of 3.13. amid the political turmoil, turkey attracted over $6 billion in a sale of dollar bonds. a yield of 7.5%. incorporates, uber increase the size of its bond offering as orders swelled. it included $1.5 billion of eight-year notes and $500 million of five-years. guy lebas and is kathy jones. matt freund is also here. deal going to start looking a lot like that tesla deal from 12 months ago? >> i don't think so. the uber deal, as you described, there is a large equity cushion below it. it was priced very well and placed well. we have seen the bonds outperform over the last couple of days. -- wenk the uber story like it from an equity side, risk reward, but there is a lot and positive fundamentals there, especially on the shorter piece. jonathan: another example of the equity like attractiveness being captured in the debt market when it should not be? >> we are seeing people on the fixed income side take

francine: what is your take on treasuries?ames: i don't think we are anywhere close to this big a perfect storm. i think yields will had higher ad higher. i think the fed funds rate itself is going to 3.4 in the next 12 months. global investors look at u.s. yields and say that is fantastic in the context of yields we can pick up either in japan or in euro land. that pressure i think will keep yields lower than they probably should be. francine: james, let me bring you to my chart, a treasury positioning chart. you can see speculators in short treasury positions at record levels. james: everybody accepts yields heading higher. i regarded yields heading higher as good news. to yen butoing back also japanese yields, they have been rising to levels when the boj began negative rate policy. how much of a nightmare is this for governor kuroda? have already seen that the bank of japan has not really been able to influence the outlook for inflation with the policy actions they have taken. they are to -- more dependent on what the rest

treasury yields ticking higher. u.s. markets open in 30 -- european markets open in 30 minutes time. clark's -- stocks bounce back. in china, the u.s. treasury department is said to think not not a currency manipulator according to the treasury department but steven mnuchin could issue a different ruling. european start of stock trading. could be a happier friday. if you still underwater are a european investor. the dax, down more than 10%. at treasuries. i saw yields coming back up. huge we will not see gains. anna: some of the lower forecasts for yields on the street and he is not too worried. the indian -- getting the best of the game. 300.si offshore remenbi. waiting for decision around currency manipulation. it seems they are not manipulating. commodities, it looks very green. don't be fooled by what you are seeing. not retracing the losses. the biggest weekly drop since july. expecting weekly numbers to be down. the biggest selloff showing signs of easing. from singapore, good to have you with us. -- put ito contex

treasuries are trading. ecb are still in accommodative monetary policy. bank of japan still in accommodative monetary policy. one quarter of global debt is still in negative rates in that environment what will you buy? high-yielding risk-free assets, that's u.s. treasuries and asset allocators are looking at that and saying in this environment of high interest rate yields and perhaps better funding conditioning, the best funding conditions that we've had in a while, it may be time to take some money out of equities and redeploy them back into the bond curve. we've had a big move it's been 50 basis points in the last month or so people are saying it may be time to take some chips off the table. that said, you want to keep a close eye on what happens to those ten-year yields. nancy hungerford spoke to one of the best known bond market participants earlier today, that's mohamed el-erian, who was at the barclays asia forum in singapore. he predicted that u.s. treasury yields will actually continue to rise >> the fed continues to march up the yield curve -- to

treasuries retreated. edged lower.d oil european stocks start trading in 30 minutes time. >> treasury yields down from a seven-year high after donald trump repeats his view the fed does not need to hike so quickly. the selloff continues. oil drops from a four-year peak as the u.s. president attacks rising prices. -- fourry hurricane hurricane approaches florida. brexit talks zero in on a fix. u.s. threatens to a $2 trillionfrom marketplace. >> less than half an hour away from european cash trade. let's take a look at where futures are going. no change on dax futures. at treasuries. the three-day chart. a flat line because of the celebration of christopher columbus, discovering our great continent. touching a seven-year high. giving up some of the what do you see? >> you are controversial. the function that shows the moves in the marketplace. korean, caution. picture, a slight move to the upside. chinese stocks rallying. currency market, the pound is higher. it surged on reports of a deal as early as monday

of the treasury curve.een pounding that and introducing new maturities on the front into the curve. bond has been a spectacular performer until lately. i think now the performance spot is between fives and 10's. at this point, it may be too early for 2's. if you look at the last rate hike cycle, they peaked with the last hike. if the last hike is going to be close to or above 3%, 2's may have some downside. at that point, you will probably be inverted. jon: we have to wrap it up with the rapid fire round. quick final questions with quick answers, if you can. will credit still lead equity going into the next downturn? yes or no? rachel: yes. marliyn: yes. robert: yes. jon: have we seen the post crisis hike on high-yield? rachel: yes. marliyn: no. robert: i don't know. jon: is the fed put a thing of the past? >> no. >> yes. >> no. jon: interesting stuff. thank you for joining me over the last 30 minutes. my special thanks to marilyn, rachel, and robert. that is it for us this week. we will be back in new york

treasury yields did overnight. the deepening selloff in the treasury market.o available on the mobile in the bloomberg anywhere app. you can adjust the settings to get the news on industries and assets that you care about. this is bloomberg. ♪ haidi: this is "daybreak: asia," i'm haidi stroud-watts in sydney. shery: i'm shery on in new york. let's get a check of the latest business flash headlines. is that abased maker foreign month high after they announced to invest $300 billion. two of the key moving averages have climbed as much as 60%. -- 16%. billy billy jumped more than 17%, despite the added headwind of tariff tension, they are still up 25%. haidi: hp is offering a profit forecast for 2019, indicating the leading personal commuter maker sees robust demand. the stoxx jumped after the net income would be two dollars, 12-22 a share, and projected $2.15. they climb to the top of the market by overhauling their lineup. shipments rose more than 1% in the second quarter after years of decline. shery: there may be a ray of sunlight through the clouds over maca

treasury note. 3.17%. so a slight tick higher. the two-year note yield, 2.87% now, turning overseas. we are seeing action in asia as well you can see there that the nikkei in japan, 1.25% gains there helped along in part by a stronger u.s. dollar and a weakening japanese yen

treasury. let me tell you about amayus and then we'll hear from him. he's partner right now of qed investors, a venture capital firm based in alexandria. from 2009 to 2016 he held a number of different offices in the treasury department finishing as the president's nominee and as acting assistant secretary for financial institutions. in that role, he was one of the lead advisers on the secretary on approximatepolicies with dom institutions. amayu we are delighted to have you here. >> pleased to be here and participate in this. i'll play the role of the skufrpg in the garden party. i want to harp on something that, alex, you said which is the financial system is an emergent system and i know, obvious to you, but maybe worth calling out for those in the audience who don't follow complex systems theory or sort of advanced mathematics and complex emergent systems as alex is referring to are a well-studied field in mathematics and computer science and they have very interesting properties. there has

treasuries retreated.lower.d oil european stocks start trading in 30 minutes time. >> treasury

francine: i'm looking at the treasury markets. are dropping after what wears perceived as hawkish fed minutes. the dollar extending some gains. the treasury department stop short of declaring china a currency manipulator in its semi-annual report on exchange rates, but steven mnuchin says his apartment will watch closely. joining us now is our bloomberg china economics editor. you on the to have story. talk about what this means for china. is it a ratcheting down of trade tensions or a standstill? two things are separate. this report has been through many additions and has yet to declare china a currency manipulator. strongly. is rising on the other side is weak confidence in china. the chinese authorities are trying to stop the yuan from depreciating quickly. we are getting uncomfortably close to that seven per dollar level now. francine: what worries you about china, or what should the markets worry about china, shadow banking, trade tensions, something else? we are seeingt over all in china is a very weak confidence reflected i

the two-year treasury note yield, 2.88% let's discuss the markets further.the chief economist over at stifel are these rates, as the drivers of the market the reason why we could be due for more volatility ahead? >> i think that the economic conditions of the u.s. are driving a lot of is that volatility as we saw earlier this week the ism nonmanufacturing number came in well above expectations but the jobs report is scheduled to show more moderate conditions in terms of the labor market. so we're seeing this back and forth between market expectations driving a faster pathway for the fed against the backdrop of moderate conditions falling below expectations and keeping the fed on a more gradual or patient track >> you used the words moderate and gradual it seemed like that's how rates were moving over the past several months, yet in the past few days they've skyrocketed and gotten new life. what's behind that what's the driver of that besides a record high nonmanufacturing and a hotter read on private employment in the u.s. >> think about the recent comments

i started in 1984 and the 10-year treasury was around 11.5%. so there are different things that can affect rates over time but the fed has been pretty transparent. >> joining us to discuss this is david zervos, chief strategist at jeffreys who is live in mexico city this morning and at post 9 is the chief market strategist at kanter good morning to both of you. peter, david mentioned the treasury yield he said it's not about the

treasury yield just above 3.2%.ve got a chart that shows increased volatility in the bond market. and not only that, you high school have increased volatility in -- you also have increased volatility in the equities market with the vix trading around its highest since july. plus you have all this stuff coming out of europe with italy, you know, bond yields there soaring again. so a lot for investors to digest as this week progresses as japan returns. >> we've seen investors foreign and domestic dumping chinese stocks as fast as their legs will carry them. we talk about the trade story but what is really the confluence of factors that are scaring them away? >> that's right. it was the worst october start for chinese stocks in a decade after that week-long holiday. it is the tensions between china and the u.s. as well as a lot weaker economic data. for example 1.4 billion of shares through exchange links with hong kong on monday and that was just short of a record in february. you know, the stocks that were most hit w

the want to buy some treasury? do you want to buy u.s. treasury as a potential haven for you?ig auction today. 30 your paper is coming to the market. have they cheapened up sufficiently? my guest said it is hogwash to say that these equity markets can survive at 3.2%. that's the view from goldman sachs. is, boom futures are rising. we are seeing a haven flow there. there are more lines coming through about a bottle -- battle royale between the italians. red flag by up a saying this spread won't break 400 basis points? let's get to our reporters around the world. juliette saly has the latest on the asian markets in singapore. we are actually seeing asian stocks having there were session since after the brexit vote. csi 300. on the we had that huge following monday. this is even worse today. the japanese market closing lower by almost 4%. australia not hit as hard. it doesn't have as many tech stocks. down by a most 3%. you are seeing taiwan, one of the worst hurt. it is so heavily made up from tech stocks that were hit hard. the taiex down the most in 10 years. the worst day fo

treasury to label the scrutiny countries as currency manipulators. to talk about all of this, our next guest, philip, thank you for joining us. we talk about seven being the line in the sand, seven as though we have a currency which is entirely managed. there are elements that are not. is this reflective of something going deeply wrong within china? draw aink we should not line in terms of the leveling china. but the psychological, real thing we should be focusing yuan is nohinese heavily managed. it is more flexible so in that regard, it should be open to the prospect of dollar-china moving above seven, especially the current account remains weak, monetary policy divergences continue to favor more reductions in the reserve ratio versus rising u.s. rates. as far as i can see, at this point relative fundamentals should be the one dictating dollar china. if you look at the currency report, one big change i feel is that it is no longer about buting a currency, discourage them from allowing a rapid depreciation. ishaad: at what point, and intolike throwi

treasury yields shaping up as follows. treasuries receiving a bit on the front end. 10 on a 10-year. down to 332 on a 30 year. still ahead on the program the , final spread. the week ahead featuring two major central bank rate decisions and payrolls report around the corner. from new york, this is "bloomberg real yield." ♪ ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." it is time now for the final spread. coming up over the next week, we will have a pair of central bank rate decisions. one from the bank of england and the other from the bank of japan. we will get another round of earnings, of course. the brazilian election and the u.s. jobs report to close out the week next friday. payrolls friday around the corner. still with me to discuss is rachel, marilyn, and robert are -- robert. speaking of blackrock, the front end has been a story, the big repricing we have seen on treasuries. are we getting to the point where we are seeing that move and we could be close to the peak? marliyn: we still like the front end of the curve. we think it might be fro

year treasury yields hit a 10 year high. morgan stanley throws in the towel. a imf cuts the global forecast. stresses in emerging markets leads them to gut the global growth forecasted two years. risetion in venezuela will . the italy italian -- italian finance member -- minister defends their policy. david: i am david westin right here with alix steel. we are not in the panhandle of florida. you can see this is the satellite photographs of how the storm is entering the gulf of mexico. it is going to take a right-hand turn and go at cross -- across the panhandle. natural gas hit an eight-month high yesterday. north, it's more not going to hit the citrus crop. it could hit the cotton crops in georgia. they haven't done a lot of picking yet. that could be a significant issue. david: it's going to come up short wednesday, about 4:00 in the afternoon grid they are warning this could become a category 3. the gulf of mexico, the water is warmer and more shallow. don't the bottom, this is where we are starting. it's going to curve around and go up the east coast. ali

treasuries also got a boost from a 30-year option. -- auction. we did get the dollar reacting to u.s. inflation missing expectations. gold was higher. right now, flat. a slight -- flight to safety. crude at $70 per barrel, but still flat after sinking the most in three weeks. let's see how all of this will play into the markets in asia. sophie: after thursday's bloodbath, the shanghai composite fell to a four-year low. the taiex fell. we are looking for asian stocks to end the week mixed after the worst week since february. losses looking to revert for the tokyo session. nikkei futures in chicago pointing higher. futures indicating the kospi could break out of the doldrums. september unemployment data is on tap. that will be closely watched. over in sydney, aussie futures pointing lower before home loans approvals for august in new zealand. pmi falling for a fourth month. kiwi shares continuing to slide. keep in mind it is the only asia-pacific market that is still in the green for 2018. we have indian inflation on tap later today. to report trad

these are your headlines treasury yields jump to the highest level since 2011 and pulling up rates on german bunds. >>> i tatalian deputy prime minister mateo salvini says there will be no backtracking on the debt target. >>> and bank of finland governor ollie raines says he wants to stick to commitments and praise the rules as he looks at the ecb's forward guidance. >>> and danish authorities order danske bank to reassess its capital levels >>> let's look at the european markets. a lot of red on that board the stoxx 600 down almost half of a percent at this stage of the morning. let's hone in on the individual markets. all four of the major indices in europe are in negative territory. the ftse 100 is down more than a half percent the xetra dax is down a third of a percent. the cac 40 is down 0.66% the ftse mib in italy down 0.40%. let's check in on the sectors across the continent oil and gas is up 0.62%. household goods down almost 2% at this stage. utilities down 1.5%. the italian deputy prime minister, mateo salvini, said the ruling coalition will not backtrack on the spending tar

it looks like they are going treasuries. this is a three-day chart and you can see that the yield has come down a little bit as they buy into this. this is the yield, the yield is coming down. 3.15%, only two days after we breached the 3.25% level. it looks like yield is coming down as investors look for a safe place to hide. what are you seeing on the gmm? anna: if you are long these markets, you have to have a strong stomach for the a's at chess and -- asia session. gmm, showing us outside moves to the downside in the red colors. south korea, down. we started in the united states, our mliv team telling us, but rolled into asia. at a headline level, but when you ask deeper questions about what the diversions means between the rest of the world and the united dates, they are coming from different places into this route. --s is the picture and mark across emerging-market currencies, getting a bid as we see the dollar sell. let's put up the other side of the gmm and show you on sovereign bond rates, asking where the havens are

with treasuries, two-year treasuries with vey lit interest rate risk and little credit risk offering 3%, now is a good time to shift some of the portfolio from the riskiest part of the market to the safest part. >> ee cn 101, continue financias are a good place, is that where you look? what about technology? still g clobbered these days. >> let's talk about technology first because we'll get the bad news over with. i just came back from -- i just came bac from an extended due diligence trip into asia and the undeniable conclusion is that china's losing a trade war. what h that got to do with technology? well, everyone is now realizing that it's too risky to source all oro yourction from china. i mean, 90% of pcs shall maare china. 70% of phone hand sets. suddenly you can be denied products or have to pay a tariff on your products if the pres uent of theted states signs a certain act. >> okay. >> so what companies are re hgnizing is theye to diversify out of china. they have to find new supply sources. they have to build new supply . chai that's incredibly expensive and it's going to

treasury secretary and the u.k. trade minister they say no we're not going until there's some more information or do you think it's just sort of it's just words at this stage though i do think it sent a statement a loud statement that we are all waiting and working on this unanimously other countries and other investors as well taken a stance with us helps our cause you heard i you know i wish there was more interaction like this this in the middle east but unfortunately will what we're seeing is more for our foreign countries taking a stance with us and saying hey we need answers. do you think that's a great thing ok do you think saudi arabia can i'm going a bit bigger picture here do you think saudi arabia can reform so much was made about mohammed bin someone about being a reformist and changing and allowing women to stop driving things like that and other countries were willing to go along with that do you think long term this actually can be some sort of change there or will an event like what we've seen with j

up next, treasury secretary steven mnuchin backs out. he joins the growing list of business executives who already skipped away if the davos in the desert event. joining jamie dimon, christine lagarde and more. charlie gasparino says wall street may not totally turn its back on the saudis, even with the cloud of a possible murder of a saudi-born man. he breaks it next. kevin, meet your father. kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. liz: after days of questions, the trump administration has finally deserted davos in the desert. treasury secretary steven mnuchin had been scheduled up until about 11:29 a.m. eastern for weeks to attend, but then a minute later via twitter, he abandoned plans to attend this saudi conference. of course, he follows, doesn't lead, he follows this who's who list of withdrawals from the country's premier financial event after questions swirl about the crown prince of sa

treasuries especially it wasn't that long ago where we had the highest yields for the ten-year treasuryn seven to eight years. how would you allocate money given the opportunities that seem to be presenting themselves for investors? >> i think you can look for selected opportunities in emerging markets i wouldn't go all in on emerging markets or overweight yet. part of the problem there is with the dollar continuing to be strong, it is certainly weighing on some of those emerging markets. i think it's probably still too early there. places like japan look more interesting. getting really hurt overnight last night but there's good reason. cheap market as long as the global economy continues along, they should do well that's a place where if you look internationally that looks attractive in terms of bonds, i'm not overly excited about bonds i don't know whether it's good news or not, i think you don't have to worry about as much a spike in yields because we have the global economy outside the u.s. cooling off i don't think it's going into recession. but that should help keep the yields fr