thephilippines still have best performance in the market in the last five days or so. but we snapped those gains. moree seeing manella down than 1%. we have been talking about how we are treading water when it comes to equities here in the region. board and seethe what we are seeing across the board when it comes to the bond market. it was that slide in yields that people are saying is relentless and crazy. we are back up and some of these yields. we actually did hit the lowest level since december of 2017. .e saw the 10 year yield lower .e are back up to about 2.09 price int starting to these fed cuts. the question is when and how soon and how much. version --ll in an inversion. this brings us back to the most inverted it has been since the global financial crisis. we are not even close to those lows yet. australia also in focus here. we are seeing that slide in yields. to note that almost all the yield curve in australia is now below the cash rate. perhaps not one and done when it comes to the rba today, cut.y they will we mentioned that note about the dollar. it seems intuitive to say the fed is going to cut soon. we have seen the dollar make some gains in the past. but it might be different this time around. if we are seeing morbid dovish tens around central banks. that might actually be stronger for the greenback. we will continue to count down decision with the forecast of a cut. we will also be live and exclusive at the morgan stanley summits this hour. david: down under. i think that is a fairly good description for where rates are. we talked about the reserve bank of australia. they are expected to cut today. official says rates might need to be cut -- cut soon. >> let's get down to the nitty-gritty. a cut is seen as a slamdunk here. also one expected out of the indian central bank. can these cuts save the world from recession if the trade war drags on? question. a very good you have to look at it asymmetrically. continues, they will get behind the curve. another reason why this is expected is you have home prices falling. not as fast as they were but they are coming down. inflation is jumping. look at the rate in the bloomberg library. will more be expected? you can see that turquoise line showing that since 2016 the rba has been able to hold that rate at 1.5%. it has been a goldilocks economy, but now it is getting chased by one of the pairs that is nothing at its heels. economists say that australia's economy is not quite as vulnerable as some of the exporters around the world. but you cannot ignore this. another reason they are expected to cut by 25 basis. modi once growth, he wants to help farmers. david: if i recall correctly, it was a rod stewart song, the first cut is the deepest. we might get the first cut out of the fed. what is he worried about? what is worried about everyone else is worried about. that is me singing if you mentioned popular songs. that could spell trouble for all of us. that is one everyone is talking about. a couple of months ago, he was not in the rate cut camp. he was dovish. but he is looking at weaker inflation and how a cut could help solve. the inflation problem. he is worried about the impact of trade on the global economy. here's what he said in a speech earlier today. if we ease now, we can help receptor inflation expectations of the 2% target. that could be a good thing for fed credibility. >> manufacturing is getting weaker. a steady loss of momentum. isorgan's global pmi dropping below 50. that signals global contraction. it is been a sharp boost in expectations. we will see who validates that next. the chicago fed conferences today. rishaad: in tokyo, fed chairman jay powell will speak later. you can catch that live right here on bloomberg. joining us to talk more about where the fed goes from goesand where the economy is a prominent economist. do you think the fed engineers a soft landing? that is what they want to do. until recently, i don't ticket was an alarming situation. in january, the federal reserve said we have done enough for now. the economy looks slightly softer than we thought it would be. i think the trade situation is turning pretty quickly. look at areas to not just the trade impacts directly on the u.s. economy and u.s. companies. on tech companies a particular. this is much more about a global finance contagion than a steal and soybeans problem. risk premium in the capital markets will have an inflationary effect as well. i'm not saying the expansion is about to end. but given what we have seen with industrial production, there is a vulnerability there which we have not seen in the last couple of months. yvonne: the market seems to be pricing in. how soon could we see that that cut?- fed george: i will tell you at the end of the month. at the g20 in a soccer, it is my hope that president trump and will shake hands and say let's keep talking. keep talking. if that happens, i think the markets will be given a little bit of a lift. i think there will be a relief that worst-case outcomes may not happen. if they have a frosty atmosphere and they walk away from each other and there is no suggestion that negotiations will recommence anytime soon, i think grim.is graham -- i think by the fall we could see a rate cut. you need more on the fiscal side. this reminds me of what is happening with other financial institutions. being more pessimistic about the u.s. economy. i think artist hemingway ask someone how they went bankrupt and they said two ways, gradually and then suddenly. 25 basis points or 50 basis points or 75 basis points, it will soften what we think might be happening to the u.s. economy. i don't think it will bolster confidence. a this is fundamentally about kind of deflationary impact from of theirification trade war or tech war or however you want to describe it, and this is what is going on in the background. it is marginal. we should not get too worked up about it. yvonne: stick with us. we will have more about china after this. but for now, let's get the first world news. >> we start with singapore. the countries purchasing index slumped last month. this as trade tensions on the global slowdown weighed on the economy. the pmi dropped below 50 for the first time in almost three years. the data are in line with the general trend across asia. slumping inorts are japan and south korea. gdp shrinking in south korea. the domestic economy should expand this year in line with its projection of 2.5% growth. inflation hit higher in may from a long-term low two months earlier. the president is in the u.k.. he has waded into brexit politics. he called on the country to throw off the shackles of the european union and hinted at a big trade deal with the u.k. if brexit goes through. brexit critics say a trade to with the u.s. could propel the national home service by increasing the number of private american companies in the u.k. sector. and mexico have begun talks in washington after president trump's threats of tariffs. he is proposing putting duties on all imports from mexico. could causetariffs a severe economic hardships. the government's attempts to stem the movement of margaret's -- migrants heading to the u.s.. bloomberg. ahead, we are asking the question, what is next for tech? we will look at the foundering faang and ask what the future holds for apple. rishaad: china might be in jeopardy and what president trump's target next could be. you are watching bloomberg. yvonne: let's bring back our guest. you were just in china last week. tell us more about what you are hearing at the correct -- on the ground at the moment. i think there are three abiding senses that i picked up last week. times, it is a peculiar because politically, it is an interesting week. the atmosphere is having. people are generally speaking and not being enamored with help the economy is. a big downturn in the fourth quarter of last year. big fiscal stimulus. the economy stabilize. but the numbers through may have not been brilliant. car sales are still out to lunch. was bad. heavy industry is under pressure. light industry is a little better. but sales of consumer property are ok but not great. the trade picture could make a really great difference. if president trump's threat to extend tariffs to the other half of imports from china comes about and the targeting of companies on both sides really comes to fruition, that is pretty serious. athink that will take percentage point or more of china's gdp in a year. watch that space. the third thing is about what companies are doing. we have had a couple of surveys recently including one from the american chamber of commerce about companies moving some of their supply chain operations out of china. that is happening. people are not waiting to hang around and see what happens. this breakdown in trust in the believe that this trade and tech war is digging deep roots and having a real impact on corporate behavior. david: the toolbox that president xi has to deal with the economy, how do you get them to provide some pillar for growth? george: that is the big problem. i thought we were going to talk about the next six months. part of the issue is the constraints on consumption growth. that the consumer share of gdp is very low in china. or relatively low. to get that ramped up, you need to do a lot of work on the social security side. you have to start extending benefits to migrant workers. you have to reform the tax system because it is too heavy. there is much more the government could do in terms of income transfer. but it is not focused on these things at the moment. it is much more can send with stability -- concerned with stability. gdp per capita has gone up and many people have been raised out of poverty. i'm interested in the whole issue of -- one of the questions many people will be asking is will china be stuck in a middle income trap? they're right about at that level where many countries have been start. but they have full control of the economy. they have more tools than others. george: there are two things here. that is an interesting chart about income per head. it is about the same as brazil. but consumption per capita is no higher than it is in thailand or peru or's el salvador. there is clearly an issue there about the structure of consumption. the other issue is it is all very well to say you have total control of the economy and lots of tools. rich, as we know empirically from loads of emerging countries over the last years, very few countries make it is all about institutions. it is about whether you have flexible, adaptive, inclusive institutions. i think the government system in years hashe last 5-6 changed in a very material way that will make that less likely. yvonne: it seems like they are finding more confidence in this mode of governance under a surveillance state. wondering, to what extent can the u.s. can actually suppress that? can stop it from becoming a global superpower? george: to the extent that the u.s. agenda or western agenda is to contain china's state oriented, party oriented system, we are chasing shadows. it is not going to happen. it from becoming a global superpower, you could have a big discussion about that. what happens if in the next few will goe exchange rate and we will be doing calculations about china's gdp to show that it is not relatively different from the u.s. parity isurchasing even bigger. that is one way of looking at it. before this trade war really became a trade war, why was your book entitled china in jeopardy? what was the basic argument you had? george: it is not a political prediction about the party or xi jianping himself. i was more concerned with the governance system and how apt and suitable it is to address the fundamental economic problems. , thek about the debt trap aging trap, the middle income trap. we talk a lot about trade as well. the issue is about whether the government system shifts. it is material. it is different from the china that we knew. whether that governance system is well suited to addressing these problems. my conclusion is that it is probably more brittle than you think it is. rishaad: chemchina of get rich before it grows old -- can china before it grows old? george: it's age structure will change the next 20 years as fast as a has in the west in the past 70 years. it is getting older faster and with much lower levels of income per head. and a much more immature social security system. it is a growth stop. it will be very expensive to address that. someone will have to spend more money on social security systems. rishaad: always a pleasure. thank you for joining us. david: there is plenty more ahead. this is bloomberg. rishaad: looking at business flash headlines. regulators say the components may be replaced in 10 days. david: much more coming up. japan is entering its lunch break. we are also talking qantas here. and a preview of the reserve bank of australia. yvonne: plenty more coming up with that. as well as the morgan stanley australia summit. this is bloomberg. at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. ♪[music] >> 10:29 in hong kong. as well in new york, p.m. of course. local media reports saying two aslion pigs have been culled african swine fever spreads. reports in the newspapers saying ministry of agriculture continue. spread will vietnam has the world's highest consumption of pork per capita, accounting for thing like -- something like 70% of meat consumed in the country. >> we now know it's an election biggest not only the democratic exercise in the world, also the most expensive. 900 million voters, 8.7 bill dollars, more than twice the the last edition back in 2014. u.s. track of spending in politics since the 2016 presidential and congressional expenditure of about $6.5 billion. >> all right. marketseeing equity actually sliding a little bit now. we'll take a look at this story. a swedish court has ruled that not need toge does be extradited there as part of a rape investigation but should still be questioned in the u.k. assange denies any wrongdoing in the case. fighting extradition to the u.s. on the charge of documents.secret >> italian prime minister says that he may resign if senior coalition his government don't stop their policy.ng over he has been under pressure in the year old populous attempting to, mediate between the deputy leaders. law professor and had no political experience before minister.d as prime >> all right. at marketsa look now. we are going to continue to see a letup here when it comes to equity markets. now.e seeing a downtrend we're still kind of close to those bottoms, session lows here to asian stock. new zealand is the outlier. seethe philippines, we are extending those losses, down more than 1%. well, down about 3/4 of 1%. guess it's the bond market that we have to contend with, continuing to head lower, up togh we're back slightly here in the asian session. of course, it's all about the rba. >> even if you don't agree with the outlet for the economy, it's hard to bet against it. at this chart. the top is your cash rates. your bottom is chinese producer prices. the reason we put those two things together is the last time embarked on aty elm a 100 base easing cycle was during the global financial crisis and also in chinese factories entering this period of deflation. watch that closely, two hours from now. >> well, ok. up, silicon valley is bracing for sweeping investigations into business practices. on anti-trust heat coming out of washington. we're looking at that and more. that's on the way. this is bloomberg. ♪ ♪ ♪[music] >> welcome back. you're watching bloomberg markets. let's head back to the morgan stanley australian summit in sydney. both a road operator and also a company here. >> heidi is standing by for an c.e.o.ve chat with the of transurban. what's going on? >> hey, great to see you guys. nothing more exciting than talking about electric vehicles the future infrastructure evaluate. we're at the morgan stanley inaugural australia summit where the theme is decoding disruption. c.e.o.ined by the great to have you. we had a great conversation. some of theck up on strands. as a c.e.o. of the company, here the u.s., whatn does disruption mean to you? what are the implications? >> it's pretty exciting for us. i think we're pretty lucky in that everything we're seeing, mobility, electric vehicles, to us they're all going to mean more kilometers being driven. that's going to be great bringr cities if they can it together. it obviously means for opportunity for us as well. is a netn, we think, positive. >> so it's funny, isn't it, when of range anxieties, that'srobably no place more prominent as australia when you think about the expansive nature of this country. you actually think that's a misconception? >> absolutely. range anxiety is an issue because of the big distances. the average distance in the city is 38 kilometers. 12 days without having to charge a vehicle. really, it's a capital cost. the capital cost is the same as a combustion engine, i very quickl see a adoption. >> the last federal election, a campaignat election was being fought on a coherent climate change, electric vehicle part of that. you actually see it doesn't matter, that it won't stop it adopted?g >> whatever the rest of the world is doing, australia is a it's alace to live, but very small economy. we don't produce cars and we're the worldake what producers. the manufacturers are all building electric platforms. i think over time, whether the government incentivizes electric what theor not, that's country will adopt. >> it's interesting, when president trump came to power, looking ahead to the roads and bridges upgrading package. then, there's political dysfunction. do you expect a deal to be reached by 2020? >> for 30 years, i've seen these u.s.s in the every new president comes in, talks about an infrastructure agenda. driven by thelly states. we've seen road usage charging, a pilotvolved in program along the east coast. i think the states are looking way, places like virginia, texas, colorado, california, looking to sort of because of they levels of dysfunction at the federal government. >> transurban, would you be open roads for sale? >> we're very interested in virginia and in montreal and be very interested generatingat are cash. we're hoping the capital tookling initiative which off in australia might eventually gain traction in the u.s. be looking at another equity raising? >> not at the moment. are -- our shareholders have us. super supportive of longer term, we've got lots of growth opportunities. as long as we spell out to our security holders what our strategy is, they'll continue to be supportive. term.thing in the short >> where do you think the most opportunity to the growth in terms of within australia? our currentok at roads, they're going to need lots of expansion. m7, new south wales, brisbane, we've got expansion doortunities that we need to over the next decade. there are big projects. be done.s to so we see opportunities in the short term in australia but term i, north america really has to be the bigger opportunity. of theseke about some new technology projects. i'm keen to get your view, because you're clearly an adopter of electric vehicles. waiting list for another one. how long do you think we'll be not justinstream, electric vehicles but autonomous driving. think electric vehicles, by the mid-2020's will start having a big impact. talking about having 50% of new sales in australia, being electric vehicles, i think that's probably a reasonable assumption. cabs, a little bit longer. mid-20's, 30's, you need 20% to 30% of the total have that level four, level five aye autonomy. at every european car, it has level three autonomy. think it's coming quicker than people anticipate but it will probably take another decade. term, it will have a massive impact on how it changes move, transport, who owns assets and open great opportunities. summit is obviously disruption, technology, looking for those new sustainable growth drivers, not just based on mining or trade. technology, though, is really one of the big battlefields between china and the u.s. and a countries.ther how willing do you think investors and entrepreneurs are given thats risk, there are a lot of policy uncertainties on that front? >> look for us. working with a lot of the different companies, sort of providing platforms to help them test their technology. i think that's probably above or outside of my pay grade. we're in the infrastructure space, partnering with a lot of those companies, partnering with data players. how the different investors look at their opportunities, i don't ofnk there's a shortage capital out there, that's for sure, for a good opportunity. have to leave it at that. >> all right. great to have you. to.o., speaking exclusively us here at the inaugural morgan summit.australia i'm going to throw it back to you. >> absolutely. speaking exclusively with, as the transurban c.e.o. >> now exclusive coverage of stanley australia summit does continue tomorrow. thoseop guests including that you can see right in front of you. >> just to let you know about of these lines out of huawei. this is the interim c.e.o., speaking with a reporter, a couple of lines to tell you about. if the u.s. supplies, huawei says it will obviously to find other options there. in terms of the -- some of these allegations, which i'm guessing refer to the allegations from the u.s. side, that a state on -- allegations on a state agent are at most guesses, they say. also preparing for over 10 years of an extreme situation. inprolonged and extreme terms of the conditions there. more coming up on this later on. meantime, your latest headlines. we'll talk about apple. breaking upis itunes as part of the series of at theategies unveiled conference. the audio platform will be split new apps called music, podcast and tv. apple is also introducing new systems, a new desktop computer and a new augmented features. it's also letting developers run on mac apps to computers. >> and the control of the he'sny, the fact that still chairman of the board. result from last week's meeting, showing that many of the s intended to limit his if notould have passed for his voting strength. were ultimately defeated due to his near four billion votes. >> back to one of our big stories here. big tech is bracing for sweeping investigations in their business practices by top anti-trust lawmakers.nd and raising the prospect of a drawn-out fight with the government. let's get more. we are joined from new york, with more. investors had a pretty strong reaction to the news. what's a worst case scenario that they're forecasting? >> well, as one strategist said, the days of the wild, wild west for big tech appear to be over in that they've been largely unregulated. damage that could result to these companies, if damage is use, from the to federal government's oversight to applyhey may intend regular scrutiny to these tech correctiveincluding measures that would limit their monopolistic power. facebook has been looked at for for the wayrs now they deal with privacy, and charge for some of their services. some are saying that this probe was kicked off by spotify that complained to the e.u. that apple charges a 30% fee and that government has really shied away from scrutinizing these companies in the same way that the e.u. has. so the trump administration now stepping up and appearing to very large scale investigation. it looks like, if we can take a apple, google, major stocksthe performed, they were all down as 5%, 6%, 7%. one strategist is saying that that thedanger is regulatory overhang could be -- long-term and widespread. many tech related stocks were as well, and a big black eye to the sector. back to you. >> thank you for that update. guess.et on to our next apple pushes its >> at the time when it's hardware is kind of less what competitors are offering, it's kind of a shocking thing how it's not just the hardware but it's the whole package which is the compelling proposition for the apple products. >> machine learning was one of be things you said would very important to watch from this developer's conference. hear anything that excites you, because you mentioned competition and it seems android, as far as that's concerned, they're leading on that front. >> yes. so as far as more than learning of a.i. is concerned on devices, it's kind of leaping ahead. likeof the competitors android, they are much ahead in favor of apple. it's still doing quite well in terms of general communications. it's a voice assistant or -- it lacks behind some of its competitors when you have to do some of the more advanced between the advice and the assistant. there was not a lot of talk in the -- sorry? look,'s just have a though, at the operating system itself. android system, because if huawei is banned from howg android, let's say, far are they away from bringing up their own os here as well? this is not something you can build overnight. we've had people on the program saying that perhaps we need more than two os's in the world. we need maybe three or four. ones based outside the u.s. what's your view? >> i think building up the plane system, it'sing not that difficult. we've seen that with blackberry, with microsoft in the past. build up already a solid operating system. but building up the whole around it, that's the more difficult task. even if huawei has started on that path, it will still take a long time. i don't know if it's even going of buildsible to kind the same kind of ecosystem that apple or even android has been to base globally. 5g ecosysteme a without chinese equipment? >> it's going to be difficult. it's going to be a long journey. huawei, for example, it's one of the leading portfolios in standard essentials is concerned. so if huawei is out of the going to be a more tedious task for everyone else in.ome and fill >> in fact, as you were just speaking, we're right now huawei chairman that, well, huawei saying that of all5g leader because the investment it put in years back. the next -- the alternative then for those countries that might side with the u.s. and choose not to use huawei equipment? >> huawei is definitely in the leading position. but then there are a lot of players. there's a couple more that come and fill in the gaps that are left if huawei is not able to kind of provide the thosetructure in countries. >> thank you. singapore.from we are also counting down the opening of the session in india right now. let's check on how futures are performing. of course we had a pretty stellar session yesterday, to that rba decision. slightlytures just over, down about a third of 1%. reporters go our compete for our votes. >> it's going to be singapore today.g kong that's next. this is bloomberg. >> icit's the battle of the charts. singapore and hong kong, going to be pitting their best charts each other. >> a couple of seconds, there we go, bottom of your screen for that function that you see. that takes you to our library where you will see their charts in a couple of minutes, after of course we see their presentation. to kick that off, stephen? >> great. today i'm going to be talking to you about natural gas in the united states. henry hub, or as the trump it, freedomon calls gas. if you look at my chart here, on the top of the chart, you can see the price of henry hub natural gas in the united states basis.tures the price has dropped to a near three-year low. at ain november, it was four-year high. so this is quite the tumble. at the market indications, for example, inventories in the united which is the bottom sort wavecillating sound looking chart, you would think perhaps there's a lot of bullish country, in the because stockpiles are lower than in the last few years. enormousg said, the output in shale gas plus tepid really kind of made a bearish sentiment in the u.s. and has pushed down prices. i sort of wanted to highlight that, despite there are some bullish elements, it's really a bear market for freedom gas in the united states. >> steve, does this chart have any predictive qualities? i always ask.ion >> the predictive quality is may continue to stay around this level or fall. unfortunately, i may have mislooked that one element of the chart today. >> ha ha! >> so that's a point against you, in other words. all right. morning. i want to talk about the fallout tooke bank seizure that place on may 24. smaller banks, since then, if you look at the chart, i'm looking at the bond smaller banks. those debts are also known as additional bonds. about the likes of banks. their prices are plunging since may 24. the turquoise line plunged even harder, because the bank on friday said its owner quit because of lending practice inconsistencies. takeaway is that if the prices for those 81 debts keep funding conditions for those smaller banks will become even harder. and those banks are very in lending to chinese sme's. so eventually, the chinese hit if could take a their funding crisis is not fashion.in a timely >> yeah. i guess so much for saying it's an isolated case. ofre is a little bit spillover here, against some of well.small per banks as >> yes. this is a real talking point. >> i think that -- [laughter] a normal basis, i would have picked her chart quicker that way.p, put it but i think the freedom gas gets to me every time. >> oh. all it took? >> that's cheap. >> sorry. i'm still the judge. ha ha! right. >> i went for you, stephen, as well. so it's unanimous. >> ok. you got my vote as well. let's see what yvonne thinks, just in case. going with leanne. just saying. but my vote doesn't really count one since you two are the majority. all right. we're going to go and check out those charts. catch up there. and of course we are counting down to the rba decision now just about 90 minutes away. bloomberg. ♪ ♪[music] >> i'm emily chang in san francisco. this is bloomberg technology. tech in the firing line of the u.s. government. andabet, facebook, apple amazon may be set to face anti-trust probes. apple as itny over rolled out its new software and hardware plan. key takeng you the takeaways. and the u.k. may not agree with everything president trump says, but could the

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