A 5 billionwith fine off it scandal. Shery lets get you started with a quick check of how the markets closed in the u. S. To recordor indices saw a highs with the s p 500 topping 3000 for the first time. The dow gained. 9 . Tech in industrials leading the gains. The Energy Sector saw some gains as we had crude rallying on the potential impact of Tropical Storm bailey very. Barry. \ we had Producer Price inflation looking affecting the outlook of the Federal Reserve. Witht seeing record games the s p 500 gaining for a second consecutive week. Lets see how the markets are setting up as japan is away on holiday. Sophie investors wanted to contend with a stronger yen, which is below 1. 08 against the greenback. Eased theirhave earlier advance. Marginally higher. Could be set for another day of gains. Could see another day of close record closes. Tested as the be japan and korea spat wears on. We were expecting a cautious a data dump await from china, economists predicting the slowest annual growth in 30 years. We have trade numbers from india and indonesia this monday. The lets check in on first word news now with su keenan in new york. Start with a new survey that says the threat of recession in the u. K. Is at the highest in more than a decade. They use Government Bond yields is a measure and shows that the chances of a dramatic slump are greater now than the financial crisis. The report warns of weakening sterling, widening current account deficit and poor economic growth. Protests in hong kong continued throughout the weekend. Including violent clashes with police at a Shopping Mall late sunday. Demonstrators are maintaining their demand for chief executive carrie lam to resign and for an independent inquiry of Excessive Force by police. The Financial Times has said beijing has refused lams offer to step down, saying she is to blame. Tropical storm barry has weakened to a depression in the u. S. It moves slowly inland across louisiana. Airline saying flights are returning to normal, but there was the temporary shutdown of more than 70 of u. S. Oil and Gas Production in the gulf. Still has winds gusting up to 100 kilometers per hour. It is expected to drench louisiana with more than half a meter of rain. To turkey, where president erdogan is promising lower Interest Rates by the end of the year. It week after firing the governor of the central bank. He says the aim is to bring inflation down to Single Digits and cut borrowing costs at the same time. About cuttingined the rate of 24 . India has postponed a mission to the moon. Exploree other plans to the southern regions of earths nearest neighbor. It was canceled just a few meters before liftoff. It was because of what the space agency called a technical snag. It would have added india to a unique club that includes the u. S. , china and ussr for making a soft landing on the new moon. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. Is bloombergs bloomberg. Shery reuters reporting that u. S. Firms could be restarting sales to huawei intofour weeks we did see tensions at the g20 sank with with President Trump saying he could see relief for a while way. Huawei. They were added to a blacklist in may and there hadnt been any efforts to loosen the strings on huawei. Now were hearing from reuters could bee sales restarted and as fast as two weeks. Thats according to a senior u. S. Official. In the meantime, we will get a feel for chinas trade war wounds. We will have gdp, Industrial Production and retail sales data released. Our china correspondent selina wang is watching this. What are we expecting . We are watching this very closely. It will give investors a better idea of how to parse out the slowdown domestically in the eternal external shock from the trade war. Froma . Moderator 2. 62 2. 64 . At this bloomberg terminal chart, you will see the set steady downward trend in gdp growth and other factors such as manufacturing and the Services Sector slowing. The activity data side is expected to show a little but up in weakness. Let up in weakness. Lets look at the data that has been released to show why this weakness is expected. Showeds trade data imports and exports very weak. There were also slow readings on fixed Asset Investment in Industrial Production for the first two months of the second quarter. Supply and demand indicators were wobbling and they get worse in may. We saw the Producer Price index falling as well. A not very pretty picture leading up to these gdp numbers. Tohis might open the door some more easing. What kind of measures might we see . Selina the Chinese Government is trying to walk a fine line here. They are trying to manage this downward slowdown for the doubledigit growth days while keeping the debt level stable and fending off changes in unemployment. When it comes to the monetary side, i want to bring up this chart. It shows an array of tools at their disposal. Cuts rates, it will take a targeted approach and not touch the benchmark lending rate as you can see in the white line that has remained steady. The fed cutting rates, this would give the pboc more wiggle room. In addition to the monetary side, economists are expecting significant stimulus from Infrastructure Spending and to boost Consumer Spending with other taxes. Remember there is an existing fiscal stimulus plan. Economists are watching to see how those play out in addition to these out of stimulus numbers. Shery at least when it comes to huawei, they could be getting some relief in the u. S. We had heard from the president that he wanted to give relief to them. We are finally hearing from reuters, breaking the story that u. S. Forms could be returning intofour weeks. 24 weeks. Interesting that that is coming as President Trump complained that china was not buying enough agricultural goods. Selina the timing is definitely interesting. Wascultural purchases was was one point of tension. Huawei is obviously a bigger deal. Its something the china site is pushing for to move ahead with the discussions and perhaps even used as a bargaining chip to increase agriculture purposes purchases. I dont think we can read too much into it yet. We dont know if huawei is still on that blacklist or if it is being removed. The china side is crafting up its own blacklist. These thisf reengagement of sales will be a longterm shift or if huawei remains on the blacklist and this is temporary relief. It is a good sign regardless. We shery will ultimately have to see how congress reacts. Selina wang in china. The other big story we are tracking, it ab inbev has listed its asian unit, citing prevailing market conditions. We will send it back to sophie. It seems a valuations were too rich. Sophie too rich for investors. Plenty of signals they believe the ipo was too lofty and lawfully too lofty an offering. The competition there with heineken may have kept investors wary. Last week, ed jeffries told us there are better places to be invested in beer such as heineken and carlsberg. Budweiser bring valued to a more sober 45 billion. Paul what does this mean for the climate for ipos in hong kong . Sophie their decision does leave hong kong with just half the ipo volume it would have had if the listing had gone ahead. Frompo would have doubled 79. To say, this year is seeing less momentum that we saw in 2018 point 202 companies raised more than 37 billion. That was more than 2010. The ipo gained listings. More than 32 billion in the bag based on tech unicorns. For hong kong, that highly anticipated alibaba are alibaba ipo will be more closely watched. Paul still to come, facebook reaches the 5 billion deal to resolve the cambridge Analytical Data scandal. Will that is the scrutiny of regulars and privacy groups . Shery asian stocks are striking a cautious tone at the start of the week after u. S. Equities closed friday at a record for second straight day. This is bloomberg. R second straight day. This is bloomberg. The entire market rally has been about discounting with the Central Banks are doing. Is a fed reacting to a downshift in sentiment. The one thing that hasnt rallied is long dated bond prices. The ecb remains darvish. We did see a reversal some of the weakness. Had better data recently. A pretty positive environment for yields. Shery shery some of our earlier gas. Some of our earlier guests. Lets bring in pacific Life Insurance director of Asset Allocation max gokhman , overseeing 40 billion in assets. Great to have you with us. How much is already priced in . Max i would say it is overpriced. There is a great function on the terminal. We have seen it walk back from 50 basis points to 20 basis points. It was a bit naive of the market to expect 50 basis points to be cut. There is no reason for the fed to do that instead unless we are in a new situation. That is where you get to the dynamic that bad news can be good news. We are going to cut rates, it will be 25 pips. Markets are accepting that is the reality. Shery shery especially for the banks. Citibank kicking off the earnings season. When it comes to a fed cut expectation, this gtv chart showing that the one rate cut has been placed in for july. 2. 5 cuts for the full year. Still expecting hikes or a pause in the cycle. Need to bring down their expectations for profit . Max they probably will. Banks can function with a flat yield curve. They are at a real danger. The curve may steepen. Banks will likely need to taper back profit forecast. In terms of equities, i know you like what you called the goldilocks stocks, the midcap stocks, not to big, not too small. Explain your reasoning. Max midcaps are not so large they had this complex overwrought supply chains where them. Ont reposition the flipside, they are not so small they are beholden to one or to suppliers who are in china and therefore, any tariffs can in termsat a huge loss of cost of goods sold. Midcaps are better positioned there. Their sources are easier to readjust. Midcaps benefit of comes from regulation. On the regulation front, it is evident in the tech space. They would benefit from increased scrutiny that we have seen on the mega cap names. Facebooks 5 billion flat on the rest, that is a shot across the bow. Opening fore an smaller firms to get market share. Side, a lotulation of the rollbacks we are expecting to see and we already see it in part, that should help regional banks a lot more. It is a more bipartisan issue where you have the Smaller Banks lending to small businesses. The fed seems to have eased their stress test retirements. Requirements. Go bulk of the benefits will to midcap regional banks. Paul i want to talk about bonds, because if youre looking for yield, it is not easy to find it. Unless you go to em. Returning em bonds 9 . Not too shabby. This is something you would like. You still want to be selective, dont you . Max absolutely. We have had some warning signs with moodys downloading downgrading argentinian debt last friday. Atsee it more as a nearterm wind headwind. Some of that gets. Back. When we look at brazil, relay brazilian sovereign, because of the pension reform that bolsonaro looks be able to pass looks bigger than what the market expected. That should be another boost for brazilian debt. If the fede broadly, does ease more aggressively, we can use it should create a tailwind for em debt. That is why we like it more than emergingmarket equities. Debttoday, we have seen em outperforming equities by 1 . Shery howry much do you like the domestic story in china . Max i think there is a decent chance we will touch 6 this year. I dont think that will come out in a couple of hours. There have been a lot of headwinds and a lot of this focuses has been trade issues. Difficultpart in a journey of transitioning from manufacturing to a service economy. That will bring a slowdown. Manufacturing pmi, we would expect it to slow down significantly as they are on that transition. Weve also seen a lot of Industrial Production and factory output take another like down. That is related to the tariffs. Paul pacific Life Insurance director of Asset Allocation max gokhman, thanks for joining us. You can get the roundabout the stories you need to know to get your day going in todays addition of daybreak. Bloomberg subscribers go to dayb on their terminals. It is also available on the mobile on the bloomberg app. You can customize the settings ceiling at the news you care about. This is bloomberg. Shery this is daybreak asia i am sarah shery ahn in new york. Paul i am paul allen in sydney. A quick check of the headlines. Jeffries has named Jonathan Sloan as its new chairman of asia. He will be burst based in hong kong and oversee the banks trading throughout the region. He comes with three decades of experience where he was a chairman. He has purchased more than 30 employees which is being restructured by its chinese parent pacific security. Shery samsungshery et cetera having secured emergency supplies of key components that have been cut off by japan. It doesnt indicate where the parts will come from, nor how big the inventory is. It is said to be enough to avoid a samsung production crisis. The vice chairman was in tokyo last week, trying to find alternative sources of semi conductors and other components. Paul ab inbevs decision to suspend the hong kong listing of its asia unit has cut the stock exchanges spitted ipo volume and half. The new 10 billion share sale of double the amount from 79 other listings this year. It dampens momentum generated in 2018, when more than 200 companies raised 37 billion. A 5 facebook reached billion settlement with the u. S. Federal Freight Commission to resolve the cambridge Analytical Data scandal. Company has set aside more than 3 billion in anticipation of a fine and may not stop the scrutiny of privacy advocates and lawmakers. We are joined on the line now i david. We are talking about the settlement breaking about the highest at the ftc. Will it make a material dent on facebooks operations . Be no. It seems to money, it is a lot of is the largest privacy fine in the u. S. By far. The last big privacy fine was against google for about 20 million. This is huge. For a company like facebook that represents a 10th of their annual revenue, the criticism of this settlement was sharp on public,when it was made a lot of people said this doesnt do enough to punish them. Question would be, whether there are restrictions on what facebook can do with peoples data. That may have more of a. Onsequence paul what will happen next for facebook . There will be testimony coming up. Companies of the tech are in washington. Particular, on the cryptocurrency, libra, which has gotten a lot of criticism from regulators. They are appearing before another committee relating to antitrust. The tech sector, google and facebook, amazon will be there. They will be testifying. A good week for them. Paul bloombergs david mclaughlin. Thank you for joining us. President trump facing a backlash after his latest twitter attack. Will be live with the details next. This is bloomberg. Rg. Su this is daybreak asia. Approvedanies may be to start sales to huawei in four weeks according to reuters. The Commerce Department is currently evaluating all licenses. Meanwhile huawei is going to cut jobs at its u. S. Subsidiary. The wall street journal says this will affect employees at future technologies and R D Companies that employ 250 people per this follows President Trumps position to blacklist huawei over National ConcernNational Security concerns. More job losses in the u. K. Societe generale has started cutting in london with sources saying 30 have been dropped in commodities alone. The move is part of the ceos plan to restructure. And arm for equity derivatives. In april they announced plans to cut 1600 physicians around the world. The u. S. Federal positions around the world. The u. S. Federal trade commission is being criticized for not going far enough in its settlement with facebook. The ftc approved a record 5 billion deal but prompted an immediate outcry from privacy advocates are the agreement still needs approval from the justice department. Facebooks reported revenue of 56 billion last year. Is clearing upia after a strong, shallow earthquake caused widespread panic but no immediate reports of injury. The 7. 3 magnitude tremor struck than this northern province with a depth of 10 kilometers. There were several aftershocks, no concern of tsunami. With one million people, it is one of the least populated areas. Tropical storm barry has weakened in the u. S. And it is a depression as it moves slowly inland across louisiana. Airlines say flights are returning to normal but very force a temporary shutdown of more than 70 of u. S. Oil and Gas Production in the gulf. The system has wins gusting to more winds of 100 kilometers an hour and will drench louisiana with half a meter of rain. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. This is bloomberg. Japanese markets are closed for the long weekend. Lets look at this with sophie. Sophie we have Tech Companies like samsung in focus and we observed an uptick in memory chip prices. Samsung has secured emergency supplies, according to a report, but it is bracing for the curbs to be extended to other products like materials used for mobile phones or electronics. Raising a red flag saying semiconductor and display panels are at the most worrying sectors this year, even without the trade spat with japan. Lots of winners and losers. Paul it is a big week of market moving data kicking off with chinas secondquarter gdp report. It will be followed in rapid succession by the indian trade deficit. Our Global Economic editor Kathleen Hays is here to unpack all of this. Lets start with asia, the trade war impact will be hard. Kathleen the trade war is the big dark cloud over china. One of the issues into this, there is more weakening in the economy than the trade war itself. The global economy, manufacturing pmi down around the world. Number in thegdp historical perspective. To gdp, expected to go down 6. 2 . You cant find a number that low of theas 1992, the year system set up for National Accounting and calculate the gdp in the way you see over the years. At one time double digits 12 , in the distant past. We know the trade war of course is in the economy. The blue line exports down 1. 3 in june, they are down three of the last five months and you have imports down, down more than 7 . Weakconsumer ties to imports. Auto will be watched. The gdp report is expected to show there is a clear weakening trend and it will raise the call for more stimulus from the federal government in terms of targeted spending from the pboc, not just in rrr cuts but bigger rates as well and the fact the Federal Reserve has signaled it is ready to cut rates as early , gives the meeting peoples bank of china more room to move if it wants to do so. Paul as i mentioned, chinas gdp one of a number of big numbers out today. What else are we bracing for . Kathleen the Monthly Economic activity indicators are out with china. Production is on that list, seeing weakening, but it will rise. Retail sales got a little bit weaker, down to 8. 5 . Going from exports to consumer led economy, you will see weaker sales. It will be seen as a fairly steady stimulus got any of these important indicators moving stronger again . The trade deficit is streaking they are grappling with weaker domestic demand that pulls down imports, not the u. S. Narrow trade deficits. New zealand inflation, japan treated inflation, australia unemployment, g to policy key to policymakers. Still uncertainty about the fed and what they are going to do. They are expected to hold key rate steady. Shery we are expecting a torrent of fed speakers. That will be tricky. Kathleen eight. Twice, them are speaking john williams, rafael bostick. Read us retail sales, u. S. Production u. S. Retail sales, u. S. Production will be important. It is fun to twist it back to asia, the governor of the bank of japan will be in a big conference from with people from all over the world. Libby on a panel with the president of the boston fed he will be on a panel with the president of the boston fed. Shery thank you so much for that. The Global Economics editor. President trump is accused of lawmakers thinks four should return to places where they are from. Accusations of racism against the president are nothing new, but these are taking it to a new level. Ros they do seem that way and a was taking a very small Group Sometimes known as the squad led by alexandria ocasiocortez and her cohorts. Go back to where you came from is a incendiary piece of rhetoric often been used in American History and other countries against immigrants. As we pointed out in the prior segment and others have mentioned, three of these women were born in the united states. The common feature is they are women of color. Outrageous statement from President Trump. Some saw this as his attempt to promoteexploit and discord in the party because the squad has had issues with House Speaker nancy pelosi, there is been conflict. If the aim was to kind of exploit those differences, it might have backfired because democrats have condemned President Trump over this. Also expecting u. S. Sanctions on turkey within days over his choice of a missile supplier. Have we heard any more details . Reporters,ing to our u. S. Officials have figured out what to do. We dont know whether they will go with small, medium or large actions against until later this week. With the u. S. Ultimately does will be up to President Trump about a plan that has been developed or will have to go through the president office. Trump indicated he would like to go easy on turkey. And the turkish president said today President Trump could overturn anything that is divided by his under decided by his underlings. Destabilization on hopes this will be a minor deal, a slap on the wrist. One thing we dont expect is for the measures to be taken until later in the week, monday is an important anniversary in turkey. U. S. Officials will get through that, then see what, how hard to sanction turkey. Paul thank you very much. The dow plans to move as much as 30 dale plans to move as much as 30 of its notebook production away from china. This is bloomberg. Counting down to asias first major market open. Japan away on marine day holiday. Kospi futures unchanged. We are expecting the Rate Decision from the bok thursday and we will watch the latest developments on the japansouth korea spat over tokyos export restrictions to south korea. Wall street did manage to end on a record high for a second session prewe will see what asian markets do session. We will see what asian markets do when they open. I am shery ahn. Paul i am paul allen. The nikkei news says hp and dell plan to move as much as 30 of notebook production away from china to avoid tariffs on u. S. Bound goods. Lets get over to singapore and the cfo and executive vice president. Lets start right there. Can you confirm the report that you plan to move up to 30 of your notebook production out of china . It is good to be with you. I cant, i am not going to comment on rumors or speculation. I will tell you it we have a Global Supply chain that has flexibility, 25 manufacturing facilities around the globe. We are balancing the needs of our customers with the environment we are in. We have done a nice job balancing the tariff dynamics and we will work our way through that. Hopefully the governments will come to an appropriate agreement at the right time. Paul you described the report as a rumor. Is that all it is . We have not commented on that. We are continuing to run the business and from our perspective, it is something that people like to speculate about. We will continue to focus on our customers. What does that mean in terms of adjusting your supply chains . You talk about 25 manufacturing sites, but when will you have to start adjusting prices . Or have you started doing so already . If you recall, it is a great question, there has been three tariffs lists that we have been able to navigate so far. By far we have been able to mitigate the impact through shifts in the supply chain, working with the supply base. We have adjusted certain prices on small minority of products as the inability to mitigate. While we have done some price adjustments, we have been able to offset the impact to date. Shery what products are taking the biggest hits from the tariffs . If you look across our global product line and set, we have had to work our way through some of the storage devices and network devices. The ones where we adjusted pricing and small elements of the networking product line. You also say you have been well expressing your views on the tariffs to the government. Could you give us some idea what you have been expressing . When you are running a multinational Global Company like dell technologies, uncertainty is an issue on how you plan your supply base and production. Our comments to the administration have been around what is the framework we should be working towards . We have expressed our point of view we would like to see a trade framework agreed to, that lies out the rules so Companies Like ours concerning navigate the environment we are in. We believe in free and open trade, and we are hopeful that the administration for the respective countries will come forward with agreement. Paul given the rhetoric around the trade war, have you detected any change in sentiment towards American Products in companies such as china in companies . Tom we have been worried about that but to date we really havent seen any impact to our domestic china business. We have quite a large domestic business in china, secondlargest market. It has shown good growth the last number of years. We have been in china for over 20 years. We are hopeful the tensions will reside and allow Companies Like ours to continue to work in the respective markets but we really havent seen an impact to our local business. You are seeing impacts from the cycle itself. You have talked about softness in china markets. How is still planning to navigate . Dell planning to navigate . Tom it is a great question. We are coming off an extraordinary strong fiscal 19 in terms of Technology Investment and spin. We are in a longterm in technology cycle. Having said that we have seen softness in parts of the globe on servers as we have moved into this year. Our balance of what we are driving is we have built the company to grow under various market circumstances and we are focused on taking share and whatng revenue, despite the circumstances might be. Right now our focus is but strive growth where we can get growth, balance profitability, delivering the right results for our investors and that is what we are focused on. We had a strong q1 from profitability perspective. We are well poised to continue to take advantage of conditions that exist. Shery where would the biggest opportunities be and what are you seeing in terms of corporate i. T. Spending . Think corporate i. T. Spending has slowed. It is still growing. But it is clearly not as strong as it was a year ago. Companies are continuing to invest in new, modern infrastructure, cloud environments, private clouds. We are wellpositioned with multicloud and hybrid Cloud Solutions we have rolled out. There is clearly investment happening if companies are thinking about advanced analytics, Data Analytics to help drive insight. As you both, clearly with the data explosion happening, companies are continuing to invest in Storage Capabilities and Data Center Capabilities to handle the Enormous Growth and data that is happening. Data is projected to grow, to double every two years in terms of the size of data pools that are out there. Shery thank you so much for your time. Dell technology cfo executive vice president. If you missed any part of the conversation, tv is your function. You can watch past interviews, watch us live. Dive into any of the functions we talk about and become part of the conversation by sending us instant messages. This is for subscribers only. Check it out at tv. This is bloomberg. Asia. This is daybreak i am shery ahn in new york. Paul i am paul allen in sydney. The boeing 737 max 8 is expected to Stay Grounded into 2020. The wall street journal cites sources in the the faa and pilots union and said there is no firm timeline for the return. American airlines and united have removed this from their schedules to the beginning of november. The plane has been grounded worldwide following fatal crashes that killed 346 people. Shery australian wealth manager amp said the sale of their license unit will not proceed because of challenges meeting conditions required by new zealand central bank. It was targeting a 2. 3 billion sale to u. K. Based resolution life. It has been unable to agree to rbnz requirements on the new zealand assets. It has been a key part of amp restructuring plans. Paul the rescue of a struggling alitalia could be weeks away despite the blooming deadline looming deadline for offers. People have offered including delta arms Delta Airlines and a state owned railroad company. Some of them want the plans redrawn. Italys government has relaxed the deadline and will accept expressions of interest instead. Shery Douglas Flynn sat down with bloomberg tvs haslinda in t the aiib meeting they discussed a new deal brexit. I hope it doesnt happen. It would be a very adverse outcome. Both the candidates for the leadership of the conservative party would become the Prime Minister and have to leave the final elements in the process. It is the outcome they dont want to happen. Both are saying it is possible it could happen. There is going to have to be a huge amount of effort with our friends in europe to see what can be done to avoid a new deal brexit. It would be a bad outcome. If there is a no deal brexit, people like sterling would slump. Parity versus usd is a real possible possibility. I dont think anybody knows. Would it be surprising . There have been so many projections of doom and gloom if certain things happen. They havent occurred so far. I think the human race is good at reacting to adverse events and finding ways to mitigate what could happen into what is best. Endedure in the event we in a new deal brexit, on both sides of the channel there will be actions taken to make sure it is not as bad as it could be. Whether it i dont know. The responsibility should be to avoid it. You seem to be more optimistic than most. What is driving the optimism . Brexit is a possibility. I am not optimistic it is a possibility. I am hoping it is not going to happen. I am hoping we find some way of reaching an agreement with europe that enables the u. K. Government to agree to the terms of withdrawal and discussion of future relationships it in a positive frame with european counterparts. That is what both sides want to achieve. The challenge politically is how to achieve that in what is a short timeframe. Shery aberdeen chairman douglas flint. We have south korea and australia coming online at the top of the hour, japan offline. What are you watching . A mixedsetting up for session in asia after stocks halted a kiwi stocks are rising for a fourth straight session. The asx bracing for a retreat and korean investors will have concerns to navigate around japan. The kospi has swindled. The lowest level of the year. Likely searching for more clarity. Watch for the korean won to face more punishment ahead of the bok policy meeting thursday. Governor lee compelled to cut problems facing the export dependent nation. There could be more problems on the one. Won. This is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Paul good morning i paul allen sydney. Asias major markets are about to open. Shery im shery ahn. And im Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Paul our top stories this monday. Tradeis set to reveal its war wounds. Gdp, industrial, and retail sales will show how much the tariffs are hurting. Dozens are arrested as demonstrations continued in hong kong. Ms resignation was rejected by beijing. Major ipo has indications for the hong kong market. South korea and australia getting underway. Sophie checking in on the mood comingey, the 200 index off pressure of a 10th of 1 . Bhp plans to restaff platforms in the gulf of mexico. Rising with a fresh record close. Start of cash trade in so off to 10th of 1 . Samsung out of the gate falling there. Theres a heavy focus on the japan spat with south korea export curbs. Those will be discussed at the wto meeting next week. Checking in on aussie bonds, continuing to selloff, traders will be watching for the sale of 2041 notes from australia this morning. In the commodity space, prices coming under pressure, brent off 1 10 of 1 , barely holding onto last weeks game after Tropical Storm arey shut down three quarters of production in the gulf of mexico. Tropical storm barry. On futures in singapore, losing ground on chinese gdp data. Bolster the case which would lifted in commodities. Paul sophie thank you. Asia starting on the back foot as key gdp numbers from china are weighted along with a string of other economic data. Live, strategist mark cranfield. Housing nick it will these numbers be today . How significant will these numbers be . Very. Not just gdp, but Industrial Production and retail in the mix. People will be focused on whether china gdp can retain the 6 handle which has been talked about in relation to chinese growth. The forecast is 6. 2 . It could be a touch below that. Theainly after we saw import data that came out late friday, which was extremely weak. Though chinas trade surplus slightly increased. There was a big string Court Shrinkage and imparts, which has indications across the rest of the asia reason. Region. At the chinese economy is not drawing and resources it affects everyone who trades with that. The Industrial Production has been a better gauge of where china is really going so we have another low number on that side, it will set off concerns. Overall, the china data has become much more important, especially since the old tariffs from last year have not been taken off. You can see that in the gdp , with afrom singapore contraction on friday. It shows the trade war is really deep, and it is across the region. The data today is very key for asia. Shery what about indonesia. We are now expecting a rate cut there. Will this save equities . What we are expecting their is that the trade numbers from indonesia will show a modest surplus. They are heading in the right direction. Indonesia was very early to raise Interest Rates last year. It worked. It stabilize the currency. It had a good effect on the economy. Now, the president has been reassured of a second term, and he has a lot of expansionary measures that he wants to put in place. He wants to increase foreign income as well to the country. So all of this will help the essential bank the central bank be in a position where they can start to take away some of those rate hikes from last year. This will obviously give a boost to local equities, but that taken has to be taken into context with the wider picture. China, which is such a big play within asia is not looking so hot. This will help to offset indonesia. It may look like a relative value case for some people in asia. In terms of the absolute direction, china really is the key for everybody, including, even if indonesia doesnt Interest Rate cut. They will still have to put that into line with what is going on in the rest of the economy, the rest of the region, and the world, from that point of view. Right, strategist mark cranfield. Can follow more on that story and all of todays trading on our markets live a blog. And you can go to mliv on the bluebird terminal. There you can get a market run down bloomberg terminal. You get a market run down and commentary by expert editors to find out what is affecting your investments right now. Lets check in with first news with sue kanaan. Hong kong protest continue throughout the weekend, including violent clashes with police in a Shopping Mall late on sunday. Demonstrators are maintaining their demand for chief executive carolann to resign. Carrie lam to resign. And claims of Excessive Force by police. Beijing refused her offer to step down, telling her she is to blame for the situation. Now, the turkish president is promising get lower Interest Rates by the end of the air. This, week after firing the governor of the central bank. He says the aim is to bring digits,n down to single and cut borrowing costs. Last month, erdogan complained that while the u. S. Is moving toward a cut, turkeys rate of 24 was on acceptable. A new survey says the threat of it recession in the u. K. Is at its highest in more than a decade. Independent think tank the Resolution Foundation uses Government Bond yields as a measure, and says the chance of a dramatic slump, get this now greater than since before the financial crisis. Weakening warns of sterling, a widening current account deficit, and poor economic growth. Meanwhile, the u. K. Banking industry is seeing more job losses. Societe generale has started cutting positions in london. Sources say 30 people have been dropped, and commodities alone. The move is part of the ceos plan to restructure the investment arm, to preserve its leading status and equity derivatives. In april, the Company Announced plans to cut 1500 positions around the world. Local news, 20 for hours a day, and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am su keenan. This is bluebird. Bloomberg. Shery protests in hong kong turned violent again. And will ask why there seems to be no resolution in sight. Awaitingst, we are chinas gdp numbers. And whether efforts to stabilize the economy are working. This is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. Paul and im paul allen and sydney. Chinas trade war wounds will be on display later on, when gdp, Industrial Production, and retail sales data are released are china correspondent selina wang is watching this in beijing. What can we expect from the data . The gdp numbers are expected to show week domestic demand, exacerbated by tariffs, with growth slowing to 6. 2 percent from 6. 4 a quarter earlier. I want you to take a look at this bloomberg terminal chart which shows the composition of that slowing chinese economy. You will see fluctuating Raw Materials and the Services Sector have been on the downward trend. And the activity data we are expecting is likely to show weakness with policy support taking time to kick in. The data leading up to this point points to that weakness with the friday trade data showing imports and exports much weaker than expected. Onyre also poor ratings fixed asset Industrial Production in the first quarter. That was showing wobbly signs in april and got worse in may went around of 200 billion iteris kicked in. Of 200 billion of tariffs kicked in. The Chinese Government has a fine line to walk when it comes to easing. They are trying to manage this economy which is slowing from doubledigit growth. They are dealing with an aging labor force but do not want to increase on a plumbing or debt levels. Policy toolsng at the pboc disposal on the bloomberg terminal. This provides more wiggle room after the fed is levels. Their motto the expectation is that theyre not going to touch that lending rate but will take a targeted monetary approach. The consensus is that on the fiscal front there will be significant boosts to consumption through cutting auto taxes as well as increasing infrastructure investment. Earliernd we discussed media reports that the u. S. May approve licenses for companies inrestart sales to huawei as little as two weeks per what do we know . Suggest thatdoes trumps earlier statement that he was going to ease restrictions on huawei are actually moving ahead quickly. This bodes well for the trade negotiations. It is been reported that it is a precondition for beijing that this issue needs to be resolved for there to be a deal. This could also be a reflection of chip industry lobbying combined with political pressure from china. This does not mean that huawei is being removed from the blacklist. We heard a spokesperson say that they would prefer the company be removed from the entity list entirely, instead of individually having these temporary licenses apply to u. S. Mentors. We talked about this earlier, u. S. Vendors. Theres going to be significant backlash from congress. We have heard from lawmakers that they do not want this National Security issue at the trade negotiations to be mixed together. And they do not want trump letting up on huawei , regardless of what it means for trade. Shery especially being used as a bargaining chip. Thank you, selina wang, air china correspondent in beijing. Fromre correspondent merrill lynch. She joins us from hong kong. Lets talk about monetary policy. On the bloomberg showing what the pboc has been doing. You see that rrr cuts, the targets of lending facilities, mediumterm or longterm, but one of these tools, the oneyear benchmark lending rates, where they have not moved since 2015. Will they have to touch that, given that we are expect a potential continuation of the slowdown . Sure. Fund the pboc will introduce more policy easing as the growth weakness, as more sides of growth weakness emerged in the coming months. The pboc will likely keep the interbank liquidity to boost credit growth, and partly we think that pboc is likely to cut its benchmark Interest Rate in september and december, after the u. S. Fed starts a new rate cut cycle. Viewsf the popular currently are that once the fed starts to cut rates, the pboc does not have to follow, because the pboc can cut or introduced Interest Rate reforms. It is important for the pboc to send a clear policy easing signals by cutting Interest Rates. We had talked about that extensively come about the pboc going its own way, right . What is it mean if, as you say, they actually move on the benchmark Interest Rate. What is it mean for other policy tools, like the fiscal side of things, were we have seen extensive tax cuts, and other support for the economy . Right. So, for example, the fiscal policy easing measures like the vat cut which came into effect in april, is supposed to help costorporate to lower burdens and to regain margin growth. However, the data it has yet to be quite notable. For sample, manufacturing and investment for example manufacturing and investment growth has lowered from 12 last year to now just 3 . So the data on growth continue to weaken. Government and policymakers probably need new tools to put sediments and to move sediment sentiment and cushion the growth slowdown. One consideration behind a potential pboc Interest Rate cut is that the global easing cycle has already started. We are going to be likely to see july. D to cut rates in and more Central Banks are going to cut our bank of America Merrill lynch expects 26 out of 33 Central Banks would have , and haverest rates lowered policy rate forecasts for them by the year 2020. The pboc may not want to be perceived as the last man standing. Enoughbeing proactive amid the current world slowdown. Paul i want to return to the number of the secondquarter gdp. We are expecting a 6. 2 but if we jump into the bloomberg terminal and take a look at this chart, the variance between the estimates and the actual number we get is zero. So, something that often comes up with the gdp numbers, doesnt really give us a true picture . Are the forecast are super accurate . Or is this number predetermined . Or is it better to look to other data to get a true idea of the state of the chinese economy . Growth does look a little bit smooth in the past few quarters. Down majorbreak trends coming from industrial sector growth, it is showing weakness especially manufacturing amid current u. S. China trade tensions. In the Services Sector, you will probably see a mixed picture, for example an i. T. Services which has been going as a very fastpaced at a fast pace and the fat past quarters they show signs of moderation in the current u. S. China trade tensions. Sectors likec financial may be holding up and doing ok. I think the details will give us more hint of how the current economy is being affected by various factors. Paul i just want to care thoughts as well on how the yuan fits into all of this. We have seen a strengthening recently. Tochinas data continues decline, how long do you think policymakers would tolerate this strengthened you on . Summit sent g20 more positive signals on the progress of the current u. S. China trade negotiations, the iss for very shortterm probably going on the appreciation side. Forecasting dcny 7 by the Third Quarter and 6 by the end of the year. Would have to introduce more of the easing measures on multiple fronts in order to drive the can the financial conditions more favorable when the chinese economy continues to slow. So, for example, cutting Interest Rates will be very important signal for them to do that. Because when the other Central Banks globally are cutting rates, then cutting Interest Rates by the pboc would win some strengthen for the want not to strengthen too much against other National Currencies for that yuan not to strengthen too much against other National Currencies. Shery how healthy is a Chinese Consumer now . The imports data, the imports have been contracting a couple months. It shows that it is being affected by two factors. Softer domestic demand and weaker demand for processing as during the current u. S. China trade tensions. In terms of domestic demand, we are going to see more weakness as well. If you look at the import breakdown, it shows that imports of hightech and also agricultural products, all inwed notable constructions june. So when it comes to notable contractions. Sluggish. Been pretty negative because of its growth rate because the bases are to become very low. But the policymakers probably need to introduce more measures to stimulate consumption, and for example like smartphones and Home Appliances et cetera. Thank you so much. Marta, on daybreak asia. This is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. Paul and i am paul allen and sydney. Samsung has secured emergency supplies of three key components cut off by japans export restrictions. Joining us now is our Asia Technology reporter. How is samsung preparing for the impact of these japan curbs . Vicemsung electronics chairman lady convened an emergency meeting over the weekend after his visit to japan. After the meeting he shared the outcome of his japan trip and ordered the management to come up with contingency plans. It was also reported that samsung has secured emergency supplies of the three key materials that could help preventing a grave and factoring deadlock. So, do we know where these components are going to be coming from. What are the indications for the Global Supply chain . Implications for the Global Supply chain . Samsung has been dependent on key materials important to produce semiconductors and displays. So we do not know how much samsung secured for emergency supplies yet. But samsung could be able to avoid a major disruption in the tech supply chain if the issue gets resolved in a shorter. Still, the uncertainties over the supply chain, and the growing protectionism may accelerate south koreas efforts to boost local suppliers and find alternatives. Shery we know south korean officials and japanese officials met last week for several hours. Has there been any progress . Say that wed to have found any progress yet. Because the two sides held a meeting on friday. And they briefed the media that they have not concluded to remove just restrictions on the export materials. Onthe next progress would be a white list. Japan has said that told the south Korean Ministry that they would remove south korea from the socalled white list. And the korean government called for additional talks by july 24, to explain about this matter. Fridayblue house on proposed an investigation and japans claims that south korea allegedly exported sensitive materials to north korea. The issue should be tackled at the wto. Kim, thank you. Expectedg 737 max 8 is to Stay Grounded into 2020. The wall street journal cited sources in the and pilot fusions pilot unions, and said no firm timeline for the return has been established. United and American Airlines have both removed the plane from their scheduled through november. The plane has been grounded worldwide following two fatal crashes that killed 346 people. Attackinghansa is cheap fares in europe as a burgeoning price or squeezes earnings. The offering of flights for 10 euros are ecologically, and economically responsible. This is bloomberg irresponsible. This is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. This is daybreak asia. I am su keenan with first word headlines. We start with u. S. Companies which may be approved to restart sales to huawei within four weeks. Writers is saying the Commerce Department is currently evaluating all licenses, after huawei was blacklisted over National Security concerns. Is said to bewei ready to cut jobs edits u. S. Subsidiary. Of 850. L affect a staff Eastern Indonesia is clearing up after a strong shallow earthquake caused widespread panic, but fortunately no immediate reports of injury. Tremor struckude north maluku province, at a depth of 10 kilometers. Authorities say there were several aftershocks, but no concern of a tsunami. People,ut one million north maluku is one of malaysias least populated provinces. Storm u. S. , tropical barry has weakened to a tropical depression. Airlines are starting to return to normal. Barry forced temporary shutdown of more than u. S. Oil and Gas Production, which is located right there in the gulf. The system still has wind gusting to more than 100 kilometers per hour, and is expected to soak louisiana with more than a half meter of rain. And the u. S. Federal trade commission is facing criticism for not going far enough in its settlement with facebook, to revolve resolve the Cambridge Analytic a data scandal. The ftc approved a record 5 billion deal five billy dollar fine on facebook 5 billion dollar fine on facebook ,. Facebook reported revenue of almost 56 billion last year. Now to india. India has postponed a mission to the moon, halting plans to be the first to explore the southern regions of earths nearest neighbor. Just 56ch was canceled minutes before liftoff, because of what the space agency calls a technical snag. The scheduled landing of september 6 what have landed added india to an elite club of the u. S. , former soviet union, and china in making a soft landing on the moon. Global news 24 hours a day and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am su keenan. This is bloomberg. Thanks very much. Lets check in on what is happening on the markets in the markets. Sophie we are seeing tepid moves across asset class that. The market halted a fiveweek advance on friday. Markets stock and bond are closed on this monday. Treasuries looking little changed after that 10 year yield ended last week nearing one month year high. The Australian Dollar is steady nearing one make high ahead of the rbas meeting. And ahead of the boks policy to decision, the korean won is little changed, after capping a second weekly decline. For 2019, should governor lee cut rates on thursday. Samsung is holding a fourday gain amid this trade spat with japan. Tosung reportedly managing secure emergency supplies for three key materials targeted by those restrictions. Among soft numbers of note, the capital in sydney sliding to a record low after a 2. 3 billion plan to sell its Life Insurance unit to the u. K. Resolution life. Is unlikely to proceed. Plans to overhaul business and the scandal. And p does not expect to pay a dividend for the first half. So in bshares have slumped in the past years. Cutting is market cap to 5. 8 billion aussie dollars. Shelving of the years hottest offering has taken the wind out of the sales of the Hong Kong Ipo market. And even its own plans to clear its debt. Kong, how from hong important was this deal for the exchange . Importance. Y it could have doubled or almost doubled the first time. It was at 9. 4 billion u. S. Dollars. At why is so was looking at. 3 billion to 9. 8 billion u. S. Dollars fundraising. So from a number perspective, it is very important for the exchange. Shery how much of it was down to the comedies positioning and the chinese beer market . It has a lot to do with its chineseposition in the are market. It has been selling the story to investors. But it has a lot of competition there, including from heineken and client China Resources beer. And also something to do with the shifting taste of Chinese Consumers. Some of the younger consumers are going with more premium craft brewing and cocktails. That said, ips are also about Market Sentiment and whether investors are buying shares in the ipo. So it is a mix of the china story as well as valuations in this ipo. More broadly, what are the implications for ipos in the pipeline for hong kong . It might be too early to tell, but i would say there are doubts whether hong kong can attract. Thatsia is an mmc name hong kong is keen to attract to the city. Some names are coming to the list. We would have to see what is the real impact on hong kong markets. Asia deals editor fion li. Were arrestedle as people demonstrated in hong kong. Amid reports that beijing has rejected chief executive carrie lams offer to resign. Our managing editor, dan cates. Are there signs that the protesters will be dying down . Have beentesters keeping up the momentum quite well. Have tens of thousands in the suburban area hong kong. And they have been trying to mix things up with the protest. They are not occupying one location. There going around to different vicinities all over hong kong, each weekend, and managing to get a very sizable crowd. They tended to kind of end in violence, little scraps every night. We saw that again last night. Two policemen had their fingers bitten off, which were some gory scenes over there. But generally, these sorts of clashes have happened and i down. They settle for the week have happened and then died down. Protesters are right down there the next weekend still attracting size will crowd. Shery the Financial Times says beijing will not accept carrie lams resignation. What do we know . That is what we have been hearing. By all indications, it looks like her idea. And beijing, it is terrible timing for them to happen while the 10 anniversary took place men onth tm the anniversary last month. If she does step down, it reflect badly on them. And it provides an example where massive street protests can remove a leader that they have, essentially, it appointed. For them, that is aligned that they cannot really cross. We saw this in 20 theory 2003. There were mass protests against the former chief executives for the National Security belt. He end up leaving two years later, which was National Security bill. He end up leaving two years later where there could be another excellent nation for him going. Paul there are signs that the Business Impact of the extradition bill might be felt regardless of the fate of that bell. We have a report on the bloomberg terminal today that some very wealthy millionaires in hong kong are looking at moving. That is correct. While they are not seen at money there are not significant money flows out yet. Those in that 10 to 20 million range are now looking at channels and assessing, how can i get my money out if i need to. That is what theyre asking now. Not pulling out, pathetic, but just creating a channel to be butlable per se, creating a channel to be available if they needed. China is one of the key beneficiaries of this. The people we spoke with have said interest is up four times compared with normal. Singapore is one of the key beneficiaries. There urging their own community not to gloat about this. Hereo say, come over publicly. They didnt want want to look like they are benefiting off of what is happening in hong kong. Shery thank you to our asia government managing editor. To torre frontw runner boriss threat to suspend parliament to forster in odell brexit. The you to force through a no deal brexit. Parliamentary mains dead set against the plan. The arithmetic in parliament is parliament is dead set against no deal. Deposition of the European Union remains exactly the same. The challenge for the new Prime Minister is to try to work with the same cards that the previous Prime Minister had, but to play them in a different way, that hopefully gets to an agreed deal and the u. K. To leave smoothly from the European Union, in an orderly brexit, that allows us to continue to work very closely with our european neighbors. Shery but chancellor would you be prepared to vote down to prevent a no deal brexit . I have always said i think a no deal exit would be a very bad outcome for the u. K. And it is an outcome that parliament has made clear it will not agree to. We are a parliamentary democracy, and we have to find a solution that parliament can agree. But that means what . If there is a noconfidence motion. That was the last option. Would you second that . That is a hypothetical question at the moment. Theres no such motion. It depends on the circumstances at the time. I take comfort from the fact that both candidates are saying that they will seek to negotiate a deal, so we can have a smooth and orderly exit from the u. K. That is very much in the best businesses,workers, and the entire society in the u. K. And i will do everything i can to ensure that that is the outcome we get. Leaving is no deal, in a disruptive and disorderly way, will be very expensive for our economy, and potentially very damaging to the united kingdom. What would be more expensive to the economy, a conservative Prime Minister for sinker in odell brexit, or there may carbon as Prime Minister . Forcing through a no deal brexit, or Jeremy Corbyn as Prime Minister . We do not have to make that choice. The best thing would be a conservative Prime Minister, a conservative government, negotiating eight deal for the European Union. So the you negotiating a good deal. There is investment that is been held off waiting to see what the outcome of brexit is. Once business and consumers are comfortable about our future relationship with europe, that we will be able to continue trading effectively with our biggest turning partner, then that investment is going to pour into the u. K. Economy and will provide a very strong background for economic growth. Was our exclusive conversation with u. K. s philip hammond. Plenty more to come on daybreak asia. Stay with us. This is bloomberg. Shery this is daybreak asia. Im shery on in the ark. Paul and i am paul allen and sydney. The u. S. Dollar continues to weaken the expectation that the fed will start to cut Interest Rates at its next meeting at the end of the month. Now. Look at currency lets start off on the u. S. Dollar. You have a chart on the u. S. Terminal that shows these short positions continuing to build. How much more downside you see for the greenback . Quite a lot. The key driver of the weakness we have seen in the past couple of months, partially reversed in the course of june, has been led by the precipitous decline if you like that we have seen in u. S. Yields and differentials between the u. S. And the rest of the world. Historically, those things clout with a bit of a lag. The onset those things play out with a lag. Also the onset of every easing cycle, the u. S. Dollar has always fallen initially. So it is expected unless the fed surprises the world by doing nothing. That means that by the end of the month there is scope for the u. S. Dollar to weaken further from here. Paul lets talk about that fed easing cycle. We might get 25 basis points in june, in july, possibly 25 more before the end of the air. Is there more to come . That is the question. The chicago fed head was out on friday talking about how 50 basis points should help get Inflation Expectations up. Im not convinced, looking at the feds preferred target of inflation. It still looks to us as though it is stuck around 1. 5 . Though we saw those slight upside surprises and Producer Prices on friday and Consumer Prices earlier last week, the readthrough from ppi and cpi to that deflator measure is almost nonexistent. We do not think that there is any evidence as yet that inflation is starting to track higher. So even if we get 50 basis points between now and year end, which is what we expect, and it is a consensus, we are far from convinced that it will be the end of the cycle. So if the economy looks like it is benefiting from that, the key will be whether we see any signs of inflation picking up. At the moment, inflation is hardtofind. Shery what is it mean for the u. S. Dollar long term. You see some weakening. The initial fed rate cuts. What happens afterwards and it seems as if the rest of the world is also weakening acke . The rest of the world has far less scope. Of the world, there are scope for the nominal raised come close to zero. In mont terry and monetary theory it is hard to see how the bank of japan and the main the bank of england and the ecb can come close to what the fed can do. Differentials will continue to play out negatively for the u. S. Dollar. We also look at the dollar structurally and from a longterm cyclical perspective. There is no denying that the u. S. Dollar is significant he overvalued. That figures more into our longerterm or mediumterm forecast. Foot if the fed ends up only needing to do 50 basis points, and we see easing elsewhere, the u. S. Dollar will stay strong for longer. Shery we continue to hear chatter about the u. S. Potentially getting into the fx markets, with the president being so focused on the strength of the dollar. To give toedibility those people . Not very much. Except we have a trump presidency. And the fickleness with which he has tended to operate. This obviously means we cannot dismiss out of hand the risk that he does actually instruct the treasury that he wants the fed to intervene. The history of intervention is only effective when it is correlated with oh g10 partners. It has to work with monetary policy, and if the feds easing that would be supportive. But the risks of this sort of threat, and a lot of banks are talking about the risk. We hear that President Trump when he was interviewing his perspective fed nominees was sounding them out about the strength of the dollar. So it is a threat we cannot dismiss out of hand. But i still think the chances of that threat turning to reality anytime soon are still pretty slim. I would put them at no more than 10 . The big theme of the day paul . Paul we are going to be getting out of china gdp, Industrial Production, retail sales. In the face of a weakening chinese economy, we had seen the yuan strengthening. How long do you see that trend persisting . For as long as there is not a breakdown in the resumption of talks between the u. S. And china. I think while those talks are seem ongoing, they do not to be hopping facetoface or with intensity at the moment, china will not inflame the situation by, socalled, weaponizing currency. Youre pretty comfortable with the cmi ranging below seven for the moment. If there is a breakdown in talks and china or the u. S. Decide to go to the next level, and have a currency to weaken, all bets are off, sores how that filters through to the as to how that filters through to the aussie and kiwi and so on. Confidencecreasing we will see more easing measures. Stronger than the trade numbers. Today i will look at the Industrial Production uppers in particular. That down to 5 year on year spooked markets a little bit and we need to see recovery there is that principle of four handle today. Temporarily we could see that you on weaken. But i think the authorities will be sure that it will not depreciate on anything can scale anytime soon. Much, thenk you so head of fx strategy. You can get more analysis on chinas dated up on todays edition of they bake. Bloombergs daybreak. Bloomberg subscribers go to db go on your terminal. You can customize your settings so you only get information on on the assets and industries you care about. This is bloomberg. Of the quick check latest business headlines. Samsung is said to have secured emergency supplies of three key components that were cut off by japans export restrictions. The report does not indicate where the parts will come from, nor how big the inventory is but it is said to be enough to avoid a samsung production crisis. Samsungs vice chairman was in tokyo last week, trying to find alternative sources of semiconductors and other components. A be in bed decision to suspend has stuck the stock exchanges expected ipo volume in half. It would have doubled the rates for 79 other Hong Kong Ipo listings this year. Previously more than 200 companies raised 37 billion dollars. Hong kong is now relying on talk of a 20 billion offering from alibaba. Struggling alitalia may be weeks away despite a deadline for offers. The planus involved attracted investors such as Delta Airlines and italys state owned railway company. Some of they want the plan redrawn. The government has relaxed the deadline for binding offers, and will now accept ex russians of interest instead. Expressions of interest. Shery the earnings season kicks off this week. We will be watching u. S. Banks. We have concerns over job cuts, plunging revenues in investment banking, and Market Sentiment. Well get data monday. That will be followed by jp morgan on tuesday, bank of america and Morgan Stanley do to report later in the week. Netflix will be the first on wednesday, with analysts expecting robust results on a strong line above shows. Microsoft follows on thursday along with apple manufacturer tsmc, which will give us more insight on how the trade war is shifting supply chains around the world. For now, lets get a preview for the market later this morning. Sophie . Chinesethe nerves of stock investors will be put to the test with chinese data dump and new tech support listings that may drain liquidity. To thes are also adding picture which saw the shanghai composite cap its worst week on friday in two months. We are data deluge expecting from china on out, retail sales, and gdp, which is expected to show the slowest growth for three decades and china, indicating the economy is struggling to stabilize. That made bolster the case for policymakers to boost to millis. Heads up for aussie bond to boost stimulus. 400 million aussie worth of 2041 notes to be sold at 9 00 a. M. Hong kong time. Recent issuance has been focused on the 10 year sector. That could be a signal of investor demand for the longer tenure. It from daybreak asia, where market coverage continues as we look ahead to the start of trade in hong kong, shanghai, and Schengen Paul standby for bloomberg markets. The china open for a big day for data coming out of china. This is bloomberg. Xfinity mobile is a Wireless Network designed to save you money. Whether you use your phone to get fit or to find the perfect gift, youll use less data with a network that automatically connects to millions of wifi hotspots and the best lte everywhere else. So you save hundreds of dollars a year on your wireless bill. Xfinity mobile has the best network. Best devices. Best value. Simple. Easy. Awesome. Click, call or visit a store today. 9 00 a. M. In beijing. I am tom mackenzie. Welcome to Bloomberg China market open. i am david and less, lets get to your top stories. Markets are flat. Massive data dumps on china. Likely prices will also how much cherubs are hurting. Major implications for the hong kong market. Dozens arrested as demonstrations continue in hong kong