Valuation of 60 billion. And caught on camera the u. S. Has just five weeks to rip out banneity equipment d security equipment. Launching an investigation into frances tax plan potentially leading to more tariffs, but first, lets get to our markets close. U. S. Equity markets really lifted throughout the session. At one point, the s p 500 topped 3004 the first time ever, although we did get a pullback from those Early Morning gains with financials and also industrials weighing on the index, but of course, and narrative today was all about testifying with the House Financial Services committee. Investors pretty much focused there, but we are not done just yet. Chairman tomorrow, powell testifying in the senate. Not to mention that we get ecb minutes and u. S. Inflation numbers. We are seeing u. S. Futures unchanged. Lets see how we are setting up for the markets in asia. Sophie asian stocks are set to broadly track wall street gains, they areigher even as one of her broad trade battle with japan. The benchmark edges closer to a fresh alltime high. Checking in on currencies with the u. S. Dollar on the back foot. The one holding on to overnight gains and the kiwi dollar is steady. It was one of the top performers overnight. Check out the aussie loonie pair, holding that a nineyear low. All thanks very much. Lets check in on the first word news now. The European Commission is cutting its eurozone growth and inflation projections for next year strengthening the ecbs case for further stimulus, releasing its latest quarterly forecast, the eus executive arm trims 2020 expectations from. 4 to one point 5 the Trump Administration has been rebuffing its attempts to ramp up pressure on iran. Wednesdays meeting at the international saw the eu, russia, and china pushed back at washington and blaming the u. S. For saber rattling in the u. S. For saber rattling in the middle east. President trump claims the Islamic Republic of iran has been imaging uranium for some time. The u. S. To investigate planned attacks on big tech, which could potentially mean the u. S. Imposing retaliatory tariffs or other trade restrictions. Robert lighthizer will have a year to decide if the digital levy would hurt u. S. Firms and outline any reaction. The u. S. Has lobbied aggressively to stop eu nations taxing the revenue of companies such as facebook and google. Russias ambassador to the u. S. Has quit after his leaked criticism about the Trump Administration sparked fear he in washington and likely new borisoreign minister johnson did not offer support. He said the white house is dysfunctional and in chaos, causing President Trump to say he would not deal with him anymore. Johnson declined to back him and would not commit to keeping him in his job. Hong kongs leading broadcaster is under attack for alleged prochina bias in its coverage of recent street protests. Its accused of favoring beijing urgingmpaigners advertisers to pull their commercials. At least one has done so. After what it calls a review of its advertising budget. News twitter four hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Paul thanks. Jay powell left no doubt after three hours of testimony to congress the fed is gearing up to cut its key rate for the First Time Since 2008 in the face of a cooling Global Economy and consistently low u. S. Inflation. Kathleen hays is here with a recap of his remarks as well is minutes from the feds june meeting. Leave any room for the fed not to cut this month. Kathleen i would say most people did not see much of any kind of room at all. He was pretty clear when he gave his prepared remarks, when he answered questions from the House Financial Services committee focused on the fact that the Global Economy is slowing. That poses risk to the u. S. With the trade war continuing. Inflation has fallen further below target. He said since the june meeting, manufacturing, trade, investments have all weekend weakened. The representative from new york asked a question i was on everybodys mind. Lets listen. Did the june jobs report change your outlook for if a reduction in Interest Rates is appropriate in the near term . The straight answer to your question is no. The bottom line for me is that the uncertainties around global close Global Growth and trade continue to weigh on the outlook. In addition, inflation continues to be muted. Those things are still in place. Kathleen what about the generally strong labor market which he mentioned in his report . Cause inflation . He had an answer to that, too. Like 3. 7 is a low unemployment rate, but to call something hot, you need to see some heat. We hear lots of reports of companies having a hard time finding qualified labor. Nonetheless, we dont see wages really responding, so i dont really see that as a current issue. Kathleen i love what he said, the link between inflation and unemployment is now like a faint heartbeat. Window how the markets react to that, they surpassed 3000 for the first time ever, but does this mean that traders and economists are all on board with this . Say 100 . I would not traders are more than ever july 31st. A cut on Morgan Stanley and ubs are still sticking with a 50 basis point cut while barclays cut their forecast to 25 basis points. The president of the st. Louis fed speaking today said what he said before, the fed should cut the key rate in july even though it may not do much. It will serve as an insurance cut, the kind of insurance you dont want to use, and basically, the fomc minutes backed up what powell said today. Many saw stronger rate cut case as risk group. Thats the bottom line. Thank you so much for that. Our Global Economics and policy editor there. Lets turn to someone who knows what it is like in the fed board room. The former president of the where he served for more than three decades. Great to have you with us. We have heard from mr. Powell now. Not putting too much emphasis in the latest jobs report, saying that that has not changed his expectation. Is the july rate cut a done deal, and how many more could we see in the later half of this year . Yes, ithort answer is is a done deal now, and i think kathleen summarized it well with from the testimony today. At the june fomc meeting, there was a strong expectation the fed might cut rates in july, but then we got that strong jobs report, and that raised some doubts, but in his testimony today, the chairman i think erased those doubts and said thats not going to stop them from dropping the rate. I think it is a done deal at this point. Hard to imagine what would turn it around. Course its all about the inflation. It struck me as interesting when mr. Powell said the fomc is looking at the issue of the symmetry of the 2 target. How important will this be Going Forward . Thats a very good question. In the course of his testimony and over recent weeks, the fed has given a lot of rationale for dropping the rate. The Downside Risk in the economy, the trade situation, emerging weakness in manufacturing and so forth and all the things that have been mentioned, the inverted yield curve, but for me and im just speaking for myself here i think a number of other fed observers would agree, the really strong rationale is the persistent weakness in the inflation rate and the need for the fed to do something to shore up the credibility of its inflation target. Inflation has been below the 2 target for a long time. That was mentioned by the chairman, but i guess i would like to see more about that Going Forward because it seems that is the most valid reason for doing something at the july meeting. Paul lets talk about that link a little bit more. Jay powell did mention it and kathleen mentioned it a moment ago as well. What is happening to the phillips curve . Is it flatlining . Is it time to pull the plug on that piece of economic theory . It could be. It certainly has not been nearly as useful recently as it was in the more distant past. I will not get into a long academic explanation. For me, the real reason that relationship is breaking down is that over a long time, the fed established credibility for keeping inflation down. Now, the issue is really the opposite. We have been inflation target that came into being in 2012, and recently, that has been for a number of readings. The fed, in fact i think needs to put that front and center. I think they will drop the rate at the july meeting and offer a rationale. There will be some economic justifications for it, but i hope they will highlight more than they have to date the persistently weak inflation as the main reason. Very quickly, it is worth pointing out, that goes to the feds mandate. Price stability, keeping inflation stable and steady and on target is one of the feds mandates, so they have all the good reason in the world to do that. Rates,oes cutting though, actually achieve that . That is the mandate for the bank of australia as well. The bank of japan has had rates at incredibly low levels for a very long time, and inflation is still missing in action. Is it time to do something unconventional to spur inflation . It may come to that at some point. I do not think we are there yet, but it makes a good point. The link between rates in the short run and the longterm is not a tight one, but that is the way the fed operates. I think if the markets see a cut and also see the fed emphasizing this rationale, the labor market is tight by almost any reasonable measure, i think approaching it that way and emphasizing that as the rationale will do a lot to the feds credibility and hopefully at some point they will get some better performance. Kathleen we have had a whole generation now of people, younger generations, who have not seen prices rising. What difference will it make to them if the fed says they want to hit that 2 target and exceed it . Can you change expectations . That is a very good point, and i think one of the risks that the chairman or others have cited is if you let inflation keep coming in with no response below the target, that can get built into expectations. Part of the reason for doing this would be trying to get expectations moving back up so that inflation will follow. Kathleen lets take the other side of the coin that maybe the fed has moved a bit too slowly, that they could be pushing aside the 50 basis point cut. Is there a risk with investment not only the fed, but all the Central Banks are behind the curve . It certainly is a risk. The Global Economy is weak. Economy and Global Financial markets are well integrated now as you know. That weakness adds to the Downside Risk in the domestic u. S. Economy and i think the fed is giving plenty of attention and wait to that looking at the situation. I think that is part of the reason why we are likely to see a cut in july. Richmond Federal Reserve chairman, thanks for joining us. Up next, u. S. Stocks rose as Jerome Powell cemented market bets for a rate cut this month. Abimbev set to become the biggest ipo of the year. We will gauge investor appetite. Shery you are watching daybreak australia. Gives stocks al shot in the arm. This. Nan has more on we are taking back some of those losses. definitely a boost from the big pullback on friday. Very interestingly, when you hit , ite big round numbers tends to be a pop and then a as the psychologically important barriers broken. Lets take a look at the market snapshot. Steepeningtice bonds under the comments from powell. You also had the nasdaq 100 showing strength, nasdaq closing out a record high, and lets take a look at the bloomberg. Tgv isnto the bloomberg where you can find our library of charts. It looks like we could go higher according to the technical charts. Lets take a look quickly at some of the big movers. You will notice pg e is there, very interesting move. The wall street journal out with a story that they knew might causeines wildfires. A judge ordering them to respond to the story. Equity up on a strong review from citigroup and tesla having a push forward to do production out of california. Oil jumpingso had to a sevenweek high. Is this the usual culprit . Sue we did have a drop in supplies from the latest supply data and a brewing possible hurricane in the coast in the , and that has oil off to the races. Meanwhile, we have gold also popping on the fed comments, and we have copper coming off a downturn. It was actually up much higher. There you go. Highest since february. Paul quickly, we were stunned to hear from hedge funds on the first half returns. For some of them, it has been the best firsthalf in a decade. Whats the story . It n griffin has been has been a big winner. Terms offar behind in beating the average market. However, griffin coming through as a very strong first half, and noticeably, one of the biggest microstrategy startups this year , disappointing of it with just a 3. 3 half year gain. Strategy, the macro plays, those have been up about 6 on average, not significant because this is that is significant because this was a sector hit hard in the past three years and apparently starting to make a comeback. Thanks very much for that wrap up of the markets today. You can get a roundup of stories you need to know to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals. Its also available on mobile and the bloomberg anywhere app. You can customize settings so you only get news on the industry and the assets you care about. This is bloomberg. Paul this is Bloomberg Technology global link. Bloomberg technology anchor emily chang joins us from san francisco. Lets check in on the top stories of the day. Emily walmarts takeover of indias ecommerce pioneer has emerged in several surprising ways. The Digital Payments business phone pay is spinning off aiming to raise 1 billion at a valuation of up to 10 billion. Volume of transactions have quadrupled over the last year. The switch is now even more portable. Nintendo is launching a smaller, cheaper version of its handheld gaming console called the switch light. It will cost 100 less than the original, come in three colors, and will be released september 20. Nintendo sold 17 million switch consuls last year helping shares to search. And lurio is teaming up with amazon for a lord of the rings gaming title. Those are the top global tech stories we are watching. Shery thank you. The white house will investigate a french plan to impose taxes on technology companies. Such a move has been a prelude to new u. S. Tariffs under the Trump Administration. How likely is it that this investigation will lead to tariffs . Sarah the clues we have so far on this investigation that was launched today is it is a socalled 30 one investigation, which is the same power the Trump Administration used to put these tariffs on china. We have seen in the past at the Trump Administration really does use tariffs as a way to gain leverage. That said, the u. S. Trade Representatives Office has a year to conduct its investigation. France has not yet but the tax into effect. It is set to look at it tomorrow and the president would even need to sign it into law, so theres still a lot of moving parts before an action could take place, but its a pretty serious move that shows the Trump Administration is not willing to leave any stone unturned where it sees unfair Global Trading practices. Emily other European Countries have started their own digital tax plan, started to pursue their own regional tax plans. Could this lead to similar disputes on other fronts . Absolutely. Im sure it is sort of sends a bit of a chill, and im sure the Trump Administration intends for it to say we have some levers over here, some cards in our back pocket to stop this because it affects big companies. It will affect google, amazon, taxes, sotal service it is pretty significant, and i can imagine the Trump Administrations hearing from them. We do hear some bipartisan support for the Trump Administration taking action to stop france and potentially other countries from implementing these taxes. We have the two top senators on the finance committee both saying applauding the action today and saying this is really the type of thing that the Trump Administration should do to try to stop france from implementing this tax. Shery quickly, 20 seconds or so, will congress be able to curb the president s trade power . They have not been able to so far. Some legislation has come through, but again, this 301 gives the president the authority to impose tariffs on his own. Shery thank you so much. Bloomberg technology at 7 00 a. M. In sydney, 5 00 a. M. In hong kong and 5 00 p. M. In new york. Next, we will ask if theres still room for more gains. This is bloomberg. I dont know why i didnt get screened a long time ago. I kept putting it off. What was i thinking . Ok, mr. Jones. Were all done. I told you it was easy. With life line screening, getting screened for unknown Health Conditions is so quick, painless and affordable, youll wonder why you hadnt done it before. So if youre over age 50, call now and schedule an appointment near you. For just 149 a savings of over 50 youll receive a package of five screenings that go beyond your doctors annual checkup. Ultrasound technology looks inside your arteries for plaque that builds up as you age and increases your risk of stroke and heart disease. After all, 4 out of 5 people who have a stroke, their first symptom is a stroke. So call today and start with a Free Health Assessment to understand your best plan of action. So why didnt we do this earlier . Life line screening. The power of prevention. Call now to learn more. Paul its a 30 a. M. Here in sydney. Market opens half an hour away. 8 30 a. M. Here in sydney. Im paul allen in sydney. Shery im shery ahn in new york where its 6 30 p. M. You are watching daybreak australia. News. Get to first word fed chairman Jerome Powell has made it clear hes preparing to cut rates the first time in a decade due to the slowing Global Economy at a stable labor market at home. He told congress that data supports the view that manufacturing and investment are week around the world. Facing a double flood threat with the Mississippi River at its highest level in 90 years. Flood levels approaching the city from the midwest which has suffered months of heavy rain. At the same time, a storm in the years after the city was devastated by hurricane katrina. The combination means the river could reach its alltime highest 1922. Recorded in u. S. Senators seeking to punish saudi arabia for the death of Jamal Khashoggi and its wider record could deny visas to the saudi royal family. Pressureigned to put on the crown prince, although he would not personally be denied a visa since heads of state and the saudi ambassador would be exempt. Online casinos employing thousands of workers are set to call centers as manilas top users of commercial property, expected to take up 80,000 square meters of office space by the end of the year. More. S 30,000 select locations are expanding faster than call centers. Global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Quick checkhave a on how markets are shaping up in the asiapacific. It is surprisingly quiet at the moment. We have new zealand very slightly higher right now. L looking thef seou best of the bunch. Nico futures also flat, similar story here in australia. Despite, as i say, all these dovish words coming out of the Federal Reserve australias benchmark index has surged this year despite a sluggish economy and the housing slump. Now about 2 shy of a record. A strategist Garfield Reynolds is with us. If its likely to go past that, how can the rally continue . There have been signs the economy is stabilizing a bit. There was more good news on the housing front, with some tweaking of the guidelines from mortgage lending seen as potentially expanding how much people can borrow. With all of that going on and the rba has put rates at a record low, that stimulus should feed through into the economy. Plus, Commodity Prices, in particular iron ore, have been on a bit of a tear. Mostly, australian Commodity Prices have been going much better than some of the others out there. Look at the chart, you can see theres no sign of a blowoff top. It has been mostly gradually moving up. There was a little bit of a breakdown in june, but that 2 trillion Australian Dollar mark inside, it would probably take Something Like perhaps a breakdown of the trade talks between the u. S. And china or some major global breakdown i think, to snap the aussie stock index out of its happy space. Happy space. It has been a different story for the Chinese Market. What is next for them . The Chinese Market very much approaching something of a pivotal point, both when it comes to local sentiment and when it comes to foreign sentiment. One of the things that helped to drive china earlier this year was the flood of foreign money as the msci inclusions. Ncrease as you see the chart we have up shows screen, it is it the way the two spikes that occurred earlier this year and then back in june or so, they were both accompanied by strong inflows through the hong kong connect to hong kong connect that allow foreigners to buy the Chinese Market. Stillhe trade situation very iffy and also some extremely alarming gurgles coming from chinas Monetary System you look at repo rates overnight, shot up, there have spreadse strange occurring there, so this a lot of concern the pboc monetary stimulus transmission is not working, so we are looking for perhaps the idea of lower fed rates will help to create a little more optimism, especially among Foreign Investors going into china, and very much looking for some progress on the trade talk front that would help china to pull back from the others, as it were. Is ready gtb library to go. Take a look at those charts we talked about. You can find that on gtb go. Tv go Budweiser Brewing could raise as much as 9. 8 billion u. S. Dollars. For a gauge of investor appetites, lets go to sophie in hong kong. Reportedlyook oversubscribed, but a recent poll indicates it will likely price at the lower end of the range. Is the valuation a little frothy . It looks like some investors believe that to be a case. Investors playing it cautious. Wednesday afternoon, we reportedly saw the institutional order book was reportedly at least 1. 5 times covered while the retail position was at least the times oversubscribed. That is fairly tepid demand for what is likely to be the worlds biggest ipo. With sin bank rates in the city move lower over the past week. Comparing budweiser asia to its market set valuation at 22 times, generally above multiples, surpassing even heineken or roughly in line with china resources, so could this mean it is pricey or beer stocks are broadly undervalued . When you take out performance of their operations in asia, it does get a little trickier. The west asian side, which includes china, vietnam, and india, that number was at 23 , and after relations, jeffries estimates the operation with about 15 million, about 10 fors, but what that means the whole business, the western segment needs to be valued at about order 9 billion or almost 30 times 49 billion or almost 30 times ebitda. Some investors suggest this is reasonable. That can be helped along by investing in nuclear breweries. To find out if investors actually believe in the potential. Shery we will be watching that closely. Thank you for that. Turning to another story, u. S. Federal agencies ripping out banned chinesemid surveillance cameras, but the task is proving nearly impossible. Thousands remain in place despite a ban imposed by Congress Last year. Imia, ive got to say, learning a lot about these very little known chinese firms. I believe a few weeks back, there were reports they could be added to a blacklist along with huawei. Why are u. S. Authorities so concerned about the equipment . I think it is important to talk about. These are Global Market leaders in Video Surveillance. They actually control 1 3 of the Global Market in this area and their cameras run Artificial Intelligence for advanced facial recognition software, 3d people counting, and they use technology to produce sharp images in rain or near total darkness. Thesenversation of companies actually stems from if they are a potential threat for espionage. A few years ago, a device was found to have a covert backdoor that allowed an unauthorized person to access the camera and send information offsite. The reason why this is frightening for america is that these cameras are everywhere. They are in u. S. Banks, technology companies, army bases, indices, police departments, hospitals, and federal agencies. How difficult will it be devices, especially within the fiveyear timeframe . The problem stems from teen of different areas. Original companies that buy the cameras, rebrand them and resell them as their own, so you may walk into your local bodega or your bank and see a camera in the corner and its labeled panasonic or honeywell, but actually, its a chinese disguise. A further complicating factor is federal agencies dont have the software to see what kind of devices are connected to the networks, how many there are or what type they are. They will have to remove them manually one by one. Paul the Trump Administration has been clamping down on Chinese TechnologyCompanies Like huawei as well. Why Video Surveillance firms in particular . It was because of this growing the fact that china is being seen as this growing threat economically, politically, and technologically. Initially, it was huawei and huawei powers the chips behind a lot of these cameras, 50 of Video Surveillance cameras worldwide, so these companies have been throwing in with huawei at the same time. Operatives could be identified as someone watching federal agencies, for example. Right, tech reporter olivia carville, thanks for that. Of next, we will speak with ciscos vp and Global Innovation officer about a recent acquisition and push into 5g. This is bloomberg. Paul you are watching daybreak australia. Cisco makes equipment that is corporations and has announced it will make a purchase in a deal valued at 2. 6 billion, so lets discuss all of this with their Vice President and Global Innovation officer who is in hong kong for the rise conference this week. Acquisition that right away. Can you run us through what the synergies are in this acquisition . Absolutely. Is exploding. Were seeing connections like we have never seen before. By the end of 2030, we will be connected to 500 billion connected things. Being able to capture and , its going tota be around speed, so getting the ability to quickly disperse that data, and then its going to be around low power consumption. All three of those boxes are ticked by acacia. Paul in a technological sense, sounds like a pretty good marriage, but how about a business since . A lot of acacias existing our competitors of cisco. Can you identify potential difficulties their . That is not the rationale behind the acquisition. We are a global company. We operate in 120 countries around the world. I run a program called Country Digital acceleration. It works directly with 30 countries and their leaders to help them digitize faster. The acacia acquisition will help us serve them better. Also help you sell to big giants like amazon and google . We certainly believe so, absolutely. It is a bit of a game changer for us from the standpoint that relevance. A it gives us a technological advantage moving forward to the the needs of our customers as we see this massive explosion in the digital age. Had youust before we on, we were talking about these concerns over surveillance cameras made by china. We have ongoing tensions when it well betweenei as the u. S. And china. Have any of these issues had any impact on your business, especially when it comes to the deployment of five g networks . Know, and the reason is because we are in the infancy of 5g. People keep referring to it as a race, and we take exception with that. Its really not a race. Notes it is a sprint, there will be one winner, and its going to happen quickly. In fact, we are in the infancy of 5g technology and evolution, and its going to be much more like a marathon. We have to 5g remember this is around inclusion and connectedness. That is what 5g will bring to the world. It will require a slower rollout and some very precise, dedicated investment and good strategy. Inclusiveness and conductivity sounds great, but criticism around trying to monetize 5g. Challenges . They said the same thing about the internet in the beginning of the information age. The concerns were about how we were going to monetize and is it going to drive jobs away . And were not going to be able to replace those. I think what you will find is there will be very good monetization strategies moving forward as new technologies are developed and layered on top of 5g networks. Paul you mentioned a moment ago that its not really helpful to characterize this push toward 5g as a race, but even if it is collaborative, have all these difficulties with huawei and the u. S. And the trade dispute lowed progress to a crawl . I dont believe so. That no oneertainly wins in a trade war. That is just a truism. Weneed to acknowledge that are at the stage where hopefully, calm her heads heads will calmer prevail and they will be able to reach a resolution to some of the issues they are facing. Shery what about some of the corporate i. T. Spending environment. Have you seen any dampening in sentiment there . We have not. In fact, there is a bit of excitement around the new opportunities. Cisco has spent 30 billion on innovating our Core Network Technologies over the last five years to establish a whole new range of possibilities for the future of the internet, 6. Luding 5g and wifi we Just Announced another 5 billion that we will be investing in our customers are more than 100 5g customers that exist around the world and more than 40 Service Provider partners. It really is a brave new world in that sense and people are very excited. On. Lways great having you if you missed any part of that conversation, tv is your function. You can watch us live. Also watch past interviews and delve into any of the securities or bloomberg functions that we talk about. Also, become part of the conversation and send us instant messages during the show. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. Paul you are watching daybreak australia. Top media, tech, and business moguls are in sun valley, idaho, for an annual conference where major tears major deals have been struck in the past. Earlier, my can of brooks told us what kind of reception he has had so far. I think fine. Nobody disagreed with our about the m a process. Generally, i think it has been pretty well. I think its the legal firms that like it less than the bankers. You put out this timesheet thats free to use. Has there been any uptick as far as you know so far . Not as far as we know so far. E have done 20plus deals we are experienced in doing this. We have put down a set of terms that we think are very reasonable, fair to both sides, and if anything, if anything a little bit buyerunfriendly, which is the way we think they should land. The problem with the process is you end up kind of almost hating each other by the end of this bludgeoning, and then you have to work together, and there is this negative environment created, which is similar to what you see in earlystage financing, convertible notes around the world. People have opensource documentation to make the process easier. Lets talk about that. Vc is another area particularly in Tech Companies where you have to get that stamp of approval. You yourself took money back in 2010 that you did not necessarily need, but you needed it to get the comes up. Show the same thing happen where the vc is a model more friendly to the company and gives vcs less power . It is confusing from abc perspective. For them, that is an exit event, so they are trying to maximize getspeed with which they their money and how much money they get. They are not necessarily incentivize at that point to be entrepreneur friendly until the end of their journey with the company. I think they should see it as these entrepreneurs have built something great, continuing the process on and having it find a good home. Obviously, people are going to pay what they are going to pay, but i think they should look upon it favorably. It makes their world easier and more frictionless. That was our discussion with mike cannonbrookes. We have breaking news. Were hearing from the wall street journal that u. S. Authorities are investigating Deutsche Bank over the 1mdb scandal. We are hearing that the Justice Department is looking into if or bank violated corruption antimoney laundering laws, and this includes helping the fund raise 1. 2 billion in 2014. This is according to sources talking to the wall street journal. This coming at a time when Deutsche Bank is going through a radical overhaul exiting their business and cutting about 15,000 jobs. Paul certainly has been an eventful week for Deutsche Bank. We do have trading in new zealand under way after a rather sluggish start. Region around the looking reasonably quiet, actually, despite what we heard coming out of jay powells testimony. A lot of what he said appears to have then priced in. We will have all the action coming up in a moment. We checked the markets on daybreak asia next. This is bloomberg. Paul good morning. We are under one hour away from the Australian Market open. Shery good evening. Sophie welcome to daybreak asia. Paul our top stories, got down to a cut. The fed is ready to lower rates for the first time in a decade as the global slowdown overshadows a strong u. S. Jobs market. Pressure on paris. Washington launches an investigation into plans to