tv Bloomberg Daybreak Australia Bloomberg May 31, 2018 6:00pm-7:00pm EDT
>> rising tension over trade, and the s&p 500 lower. investors had for safety. >> and tariffs are to blame. the trump confirms penalties on steel and aluminum for the u.s.'s closest allies. they say they will fight back. haidi: the u.s. and north korea moving closer to a summit after high-level talks in new york. progress is being made. >> and friday is a very big day
for investors in china. more than 200 large-cap mainland stocks join emerging-market indexes. haidi: fourth time a charm. it is just past 8:00 a.m.. we are two hours away from the open. just past 6:00 p.m.. over the next hour, we will be looking at the action on wall street and how it will play into your asia-pacific trading day. with regards to the trade tensions, these tariffs, who needs enemies when you have friends like the united states? canada, mexico, a lot of headshaking, a lot of people saying what is going on here? some folks i have been talking to say maybe this is donald trump trying to set up something better when it comes to over ross going to beijing -- to wilbur ross going to beijing.
haidi: that is a very interesting strategy. high risk, high stakes strategy, this posturing. what we are seeing so far is these alley -- these allies are not taking it lying down. after a few days of calm, putting trade to the sidelines, the trade war seems to be back on. remy: let's take a look at how u.s. stocks ended on the day. down, up yesterday by about 300 points. we lost most of that, 250 or so. 10was a broad-based decline, out of the 11 sectors for the s&p fell. consumer staples as well. it was a flight to save haven. let's take a look at the board's. -- let's take a look at the boards. you see the safe havens happening in europe. by threes were falling
basis points. the u.s. two-year rose. and had been hugging the flatline. the u.s. 10 year was also unchanged, but it had been lower for most of the day. haidi: taking a look at how we are setting up across europe with european stocks, they are heading into that tailspin just before we had the u.s. open. the euro seeing a bit of respect. the italians -- seeing a bit of respite. it looks like the italians will get their government. that.uing to watch we saw investors shrug it off. the spanish pm with a no-confidence vote today. he is likely to be replaced. taking a look elsewhere, the biggest moves in risk currencies, dollar-peso seeing a pretty big move. a 14 month high.
highestty spiking the since january 2017. we see in bad decline for emerging markets. the looney also off the gains, gdp also missing expectations. this is how we are setting up going into the asian open. new zealand trading at about 0.2% lower. we could go weaker. look to any strength as opportunities to sell from here on in. a marginally lower open when it comes to sydney and the aussie dollar trading at 75.68 this week. let's get the first word news. courtney collins for us. a populistirst, power will sweep to power on friday with a spending program that is a direct challenge to european union rules.
the new prime minister will be sworn in after the five-star league -- the five-star party and the league agreed. without abeen government since the election in march. upheaval in spain where the prime minister is headed to defeat in a vote of no-confidence. the parliament will vote friday and opposition parties are joining forces against him. the socialists have the backing of two groups and a catalan party. basquety and the nationalists are also expected to vote against the prime minister. he says he will not run -- he says he will not resign. --bts remain over whether gdp rose 7.7% in the fourth quarter of the fiscal year through march, driven by manufacturing and agriculture. of thekes india one
fastest expanding major economies, but it is threatened by a slump in the ruby and fast -- in the rupee and faster inflation. president gambled his career on a series of trades using inside information about the bank's clients. a south korean national was arrested in san francisco on friday, accused of using private information involving a dozen customers. he allegedly made $140,000, although one trader just netted $362. global news, 24 hours a day on air and tictoc on twitter, and powered by more than 2700 journalists and analysts in 120 countries. on courtney collins, this is bloomberg. remy: thank you very much. let's take a closer look at how renewed trade tensions roiled u.s. equities and added to demand for those safe havens. but there were bright spots.
tech shares edged higher, and an investment from softbank and general motors on a record rally. for all of this, our reporter is here. let's start with the trade concerns, those trade frustrations. reporter: there is a real concern about the tit-for-tat, that trumps actions will cause repercussions in multinational companies. you take a look at the snapshot. the s&p 500 is down for the fourth time in five days. this trade war is weighing heavily. bullsis a lot of gold with this demand. also the russell 2000 has fallen off its record. let's go to the multinationals. important to point out that companies like kimberly-clark sell to all kinds of countries. they get about half of their revenue from abroad. throttle and gamble, clorox sells its products all over the world. we did see some positive
throughout the market. general motors on its biggest one-day gain ever, getting a big infusion from softbank. -- weo saw other stocks have another chart of stocks here. again, there were a number of stocks that moved higher. let's take a look at this chart. are.s where our charts this is an indicator of market stress near its highest since february. this is the banks -- this is the vix. it has been seemingly low, but when traders get a break, we are back again. bigi: we also had two financial names taking the spotlight. has troubled lenders and goldman sachs is a mixed bag. reporter: there was a report that deutsche bank has been added to the list of troubled vendors.
but go into the bloomberg, because this adds to challenges or its new ceo, which is trying to restore profitability. deutsche bank had been lagging. you can see it is much lower now. let's go into the stock chart. it is at a record low. if you look at the 10 year chart for deutsche bank, you can see the challenge ahead for this troubled bank. let's take a look at goldman sachs. two pieces of news on goldman. a vice president, which is a lower-level employee, is charged in insider trading schemes where allegedly information on a number of investment banking clients was used in a scheme that netted about $140,000. there was news out in the afternoon that goldman was set to exceed its revenue in commodity trading four months into the year for energy and metal trades. haidi: thank you for that.
nothing can help the oil price at this point with negative closestt for america's allies, who plan to slap the onds of dollars on tariffs american crude after the trump administration make good on its threats to impose tariffs on steel. it was aggressive action on major trading partners. they have been fighting to get permanent relief. joining us now is our bloomberg national reporter. as remy mentioned, with friends like these. but the backlash has been swift. reporter: it has been quite a backlash. that the eu, saw canada, mexico, the countries that are recipients have retaliated. but that was not unexpected. the administration said they were awaiting what response they would have. they all bowed to impose -- they all vowed to impose tariffs in
retaliation. for what was surprising was the depth of response from the u.s. business economy -- the u.s. businesses. there are groups that have spoken out against the tariffs. they warned that consumers would bear the brunt of any increasing costs from retaliation, the type of retaliation we saw today. you also saw a lot of responses republican lawmakers. paul ryan said this was a move he disagreed with. republican senator been sass was quite vocal, saying protectionism caused the great depression. not a lot of support in this move -- for this move in the business economy. haidi: these tactics, are we talking about posturing as it goes into the conclusion of nfata -- nafta? reporter: that could be part of
it. commerce secretary wilbur ross when announcing the tariffs said he is eager to continue negotiations, and he expressed disappointment over the eu for not making concessions on trade, and mexico and canada not coming to an agreement on nafta. that could be an element here. he pointed out that trump can tari -- cane reduce the tariffs. amidst ais comes hardening toward trade by the administration. they are now considering tariffs on imports of autos to the u.s.. it shows the in menstruation is definitely hardening its stance on trade. remy: the question is to what end? while that is going on, mike pompeo said that real progress
was being made during talks with the north korean delegation here today. what happens next in the lead up to june 12? it seems like we are still on for now. reporter: the on-again off-again summit, it is still unclear when exactly that will be. the secretary of state speaking earlier today, when he made comments that there was progress being made, he referred to it as an expected summit. the administration has been tightlipped about what was accomplished, if any differences were bridged over the issue of denuclearization. if any broad agreement could be reached in a potential summit. but what happens next is the north korean delegation comes to d.c., they will meet with trump. the former north korean spy chief leading the delegation has a letter for president trump he will be delivering. we will see what comes out and any developments in this
upcoming summit. remy: looking forward to the next few weeks to see if this does get off the ground and if donald trump and mr. kim do meat in singapore -- do meet in singapore. coming up next on "daybreak: australia," escalating trade tensions between the u.s. and its allies do not bode well trade talks between washington and beijing. we get the outlook from kumar global strategies. haidi: later this hour, we are live from shanghai as they get set for their first day of trading on key gauges. this is bloomberg. ♪
trying to work out tariffs are some of their major allies. our next guest used his bloomberg opinion column to war n that train related uncertainty -- trade related uncertainty should have two major effects, an increase in volatility and enhanced attractiveness of low risk investments. komal sri-kumar is the founder of sri-kumar global strategies. i had not even read that before. what i have written in my notes was goodbye yield. talk to me about this. guest: i think that is very well put. what is happening here is we have the volatility measured by the big indexes coming down from earlier in the year. that is slowly starting to reverse. it started to reverse initially because of uncertainty at the beginning of this week. i think that trade tension will take over even as the market
stabilizes for a while. it will be trade related tensions that will increase it. keep in mind that we are not fighting on just one front, but three different fronts. canada and mexico on the one side with respect to nafta, the european union is the second, commerce secretary wilbur ross starts his talks in beijing on saturday. i have no idea what he is going to talk about. is he going to say i am going to take them off? it is very unclear what the negotiating strategy is. it has been compounded by confusion among the various parties, treasury secretary mnuchin said in a tv interview on may 20 that the trade war with china was on hold. and then yesterday, the trade advisor to the president said that it was an unfortunate soundbite. it was something very much on. so the administration itself
doesn't seem to be sure whether the trade war is on or not. remy: it is clear there is some sort of internal conflict within the administration. but what degree -- to what mind isn donald trump's this posturing, leveraging to get something better, trying to do a fake out with rivals in allies? question.t is a good it started out initially as a negotiating ploy. it was said that the fact that the tariffs were imposed on $50 billion of chinese goods. even as secretary ross was on his way to paris and beijing, it was a way of pressuring the chinese to come in with easier terms. of what has happened now is that every time he makes a concession, he also loses out in his base. chinesens with zte, the telecommunications giant. when he spoke about giving them some exemptions, both democrats
and republicans came out against it. i think the administration is putting itself in a corner. its negotiating position will be hurt by domestic political considerations, as much as by having china, european union, canada, and mexico joining together in a united front. that is our worst nightmare. haidi: the great majority of analysts we have spoken to say that you put trade aside because by and large it is not an investable ride. do you think they are emphasizing the trade war? guest: i think trade cannot be set aside. trade used to be a sleeper in the u.s. economic front. the markets were much more dependent on what was happening to tariffs. before that's, what was taking place in respect to the tax cuts and the company's bottom line,
that is going to be the place with the adverse impact of the tariffs, because slowly the willt of the tax cut run out and tariffs will take a more important role. i think you will see a switch. as far as your question is concerned, i think it is very timely.i think you will have a situation where the tariffs are going to increase volatility and it will become a big issue. , i am goingu think to throw out this chart that asks the question whether it plays into policymakers' thinking. we know that volatility in italy has driven some traders to really pay back their -- to pare back their expectations for the fed. you see that in dollar features and bund futures. looking ahead to the main jobs report, what would you need to see from that report in order to
move the needle for the fed to become significantly more aggressive or dovish? guest: i think the big thing that happens that i am looking for tomorrow morning is what happens with rates? if you are going to see a pedestrian increase, 0.1% month-to-month, 2.5% or 2.6% year-to-year, they would both be very much within expectations. they are not going to move the needle with respect to what the fed does. the more important thing that i see in terms of influencing the fed decision, if they do decide to increase rates on june 13, you are going to see the two and 10 year treasury yields spread. today it was at a very low 41 basis points, oh for the year. it -- low for the year. it is likely to go down even further. it will invert the yield curve
and we will start to talk about the recession in the second half of 2019. that is what frightened the fed. remy: very quickly, some people are saying that does not presage a secession. there is so much volatility. how can we say that what has happened in the past will happen in the future? guest: the reason is the fact that note recession has ever happened without an inversion of the yield curve. it is generally a necessary condition. and quite often, it has been a sufficient condition. people make a distinction narrowing because of the 10 year rising or coming down -- of the two-year rising and the 10 year coming down. the spread is important in and of itself. i believe it continues to be important and the fact that the narrowing has been coinciding with low wage growth, low labor
force president -- participation, it shows it is still an important variable to look at. remy: you are giving me a not in my stomach talking about this -- a knot in my stomach talking about this. we will look at the number when it comes out. komal sri-kumar, thank you. you can get a roundup of the stories you need to know to get your day going in today's addition of daybreak. subscribers can go to dayb . this is also available on the bloomberg app. this is bloomberg. ♪
a group of troubled lenders that it monitors. deutsche says it is overhauling the investigation and has no concerns about it financial stability. it is already on the fed's list of problem banks after three years of losses. deutsche is refocusing on europe. the ceo says the u.s. will remain an important market. another top executive has been replaced and a move that may signal u.s. demand. china is trying to convince the trump administration to lift a seven-year ban on american technology that was imposed in april over sanctions in iran. resume if zte could they paid a fine and change their management. coming up, american allies have responded to the latest tariffs and some of their hargis -- some of their harshest criticism.
under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. haidi: time for some breaking
news. an australian lender being affected. the australian consumer commission confirming it. the bank says it is investing the cartel investigations against the australian and new zealand raking -- banking group. we heard the story breaking yesterday. theralian prosecutors and director of prosecutions said thursday they intend to begin proceedings against it. concerning -- this is concerning an allegedly tell -- unelected alleged cartel.
the banks as they understand that the prosecutor will bring proceedings against the investor -- against the ceo. bad comes as the latest news story for an australian lender. the us trillion banks have been reeling with negative headlines. withve had this commission what appears to be a culture of misconduct that has been the result of calls for greater penalties and oversight. we will get you more on that story as the details come to us. in the meantime, the first word news with courtney collins. courtney: first up, america's closest allies will impose tit-for-tat penalties after the u.s. confirmed tariffs against them. wilbur ross announced duties on steel and aluminum on the european union, canada, and mexico on grounds of national security.
the eu says it will retaliate immediately. mexico promised to scrap tariffs on a range of u.s. goods. canada says washington's decision is baffling. us.hey will deny the worst case scenario was imposing tariffs. announced today that we will take action. >> canada could be considered a national security threat to the -- of that canada could be considered a national security threat to the united states is inconceivable. courtney: a north korean delegation is expected to visit washington on friday. the trip would follow talks with
a north korean leader and mike pompeo. pompeo insists things went well, and they are still planning for the historic summit on june 12. >> this is a difficult challenge. there remains a great deal of work to do. asmade progress here as well at the same time made progress in the other venues. we had all the time we need to today to make the progress that was achievable during our time. courtney: facebook is under fire again, this time from its own shareholders. there was criticism about the handling of user data come up with one shareholder comparing it to a violation of human rights. some warned the scandal could hit facebook in the wallet. mark zuckerberg has declined to be questioned by especially critical lawmakers in london. the world'sg tracks
wealthiest people and says president trump is slipping down the list. his net worth fell $100 million to $2.8 billion over the last year. the bloomberg estimate is the lowest since they began tracking trump's wealth in 2015. global news, 24 hours a day on air and tictoc on twitter, and powered by more than 2700 journalists and analysts in 120 countries. collins, this is bloomberg. check let's get a quick of your markets as we get the spring new trading month. we are starting off in june on the back foot. kiwi stocks off by 0.4%. sydney also looking weaker, trading at 75.70.
the risk currency as well as energy heavy markets will get that double whammy of the trade story and the oil selloff continuing.let's get more into the tariffs story. we have america's closest allies hitting back after the confirmation of tariffs on steel and aluminum. it comes ahead of the g7 meeting in canada. the international economic and policy correspondent is in whistler. the trade war is on, it is off, is it a negotiating tactic? where are we at now? nobody really knows, and that is part of the problem. there is not a real clear view of what the administration is trying to accomplish, because nobody thinks the tariffs will improve the u.s. economy. they are a threat to the global economy according to the ministers who arrived here for the g7 meeting. steven mnuchin is going to be the object of a lot of criticism
when the minister's get together at dinner tonight and in their meetings tomorrow. the question is where do we go from here? ? is this a negotiating tactic? what does the trump administration want? you mentioned the retaliation coming quickly. the canadians publishing a list of things they might put sanctions on, including maple syrup and barbecues and beer kegs. the mexicans talking about steel products and agricultural products. the europeans reverting to their list we have already heard about, with harley-davidson motorcycles, bourbon whiskey from kentucky. there are a lot of sanctions floating around, and it looks like we will have a trade skirmish if it does not blowout into a full trade war. remy: it seems on behalf of the canadians, they say they want to do a dollar for dollar retaliation. they are not trying to do anymore. if you push us this much, we will push you this much. are trying --e
but they trying to keep diplomacy at some level? what happens next? countries that are affected are trying to play by what they see as the wto rules. the unitedry to take states to the wto, filing complaints. but those take years. if they feel they have been injured, they are able to propose proportionate sanctions. the dollar for dollar aspect is how much they think they will be injured by the tariffs. it is about $48 billion worth, which is a fair portion of the annual u.s. trade deficit. the countries involved say it is only fair and it is permitted. whether that leads to further negotiations is an open question. the administration says it is willing to continue talking, but not under the threat of sanctions, which is exactly what these countries.
say if you put -- what these countries say. we will not negotiate with a gun to our head. remy: michael mcgee in canada trying to make heads or tails of what is happening with the g7 summit later in the next few days. when the fed governor talks, investors. as well as bloomberg listens as a new crop of board members and bank presidents take their seats at the policy tables, the words carry more weight than ever. our policy editor is here with more. why does this governor terry so much weight? therter: it is interesting, second longest serving member on the board of governors. when they are in full force, there are seven of them. they always vote on policy.they are an important group. they have not worked -- they know the fed. but she has been setting at the
table -- sitting at the table. in a speech in march, a month after powell was sworn in as the chair, she gave an important speech in new york about the economy, headwinds turning into tailwinds. she seemed to be joining the center, saying yes. getting on board with powell, looking for graduate hikes. -- for gradual hikes. she is such a respected economist. is first among equals in a way. what did she have to say? reporter: she cemented the june rate hike. let's take a look at one of the important phrases from the prepared remarks. gradual increases are likely to strongistent with
conditions and inflation around targets. a policyook suggests path that moves from modestly accommodated today and neutral. that maybe looks a little hawkish because something beyond neutral would be slightly tighter. she is also positive on the economy. higher spending will boost it this year by 0.3%. she also downplayed the flattening yield curve as an indicator of fed policy. day --speech and you and and q and a, she went to lengths to explain the targets and why it is important. after seven years of low it target inflation, it will be important to see it come around target to be confident that the underlying trend in inflation is running at 2%. september rate hike it may be so, but the december rate hike, that kind of caution is
something that suggests she will that be pushing for that unless it is absolutely necessary. finally, she did talk about italy's developments, trade uncertainty as something the fed is watching very closely. when you put it together, gradual rate hikes continue, but i don't see any green light from lael brainerd that four hikes is more likely than three. haidi: thank you. let's take a look at what we should be watching us trading gets underway in asia this friday with our sydni deputy bureau chief. the end of may was a return to trade wars. what are we looking for? reporter: any factoring pmi will probably be the most closely looked -- most closely looked, with australia being such a big exporter to china.
the markets looking for a small uptick to 51.2% from 51.1% in april. investors will be looking at the trade tensions with the u.s. feeding through to business and tensions and confidence. any weakness could be a negative for risk assets. south korea is going to pull rapid data today. we have may consumer price inflation. that will tick up a notch according to economists, looking at a 1.7% annual pace. that will be seen as a smoking gun. it will confirm a respectable 2.8 percent annual rate growth .there is no evidence of that feeding through , so there is little pressure to act. firstdata is japan, quarter capital spending, and in australia the cba releases its
later manufacturing gauge. remy: it is definitely a very busy day today. we will get a south korean numbers in 15 minutes time. you touched on risk assets. it has been a bumpy ride. down for the last five days. -- four of the last five days. i think it is fair to say we will see a little bit of hear particularly across equity -- a bit of a soggy start. although it probably will not be huge. the markets are taking a look at it. investors will also have one eye on the u.s. payroll statement coming up later. that may keep a subdued tone across a lot of markets. dollar's rally has positive little bit in relation to this
trait story that broke overnight. dollar-yen is languishing close to its lowest levels since late april. if we can pull up this chart, the dollar performance on a monthly basis, it shows that may has been the strongest -- seen the strong as rise to the dollar since december 2016, the month in which donald trump emerged victorious from the election. we could be seeing a bit of positional play. the dollar has been strong, had a good run. investors may be looking at a good opportunity to trim those positions in the short-term, but not changing the overall trend for the dollar. we are keeping a look at the trade tensions come up at the moment it is not having a huge impact. remy: a lot of analysts saying they should be sticking along u.s. dollar. we will see how that goes. james thornhill. don't forget to check out your
haidi: i'm haidi lun in sydney. remy: i'm ramy inocencio in new york, and you are watching "daybreak: australia." let's get a check of the business flash headlines. to take 25% of an lng project in canada. this is the strongest signal that the plane will be built. hold 40%, while subsidiaries of mitsubishi will have 15%. petronas abandoned its own onposal in british columbia
spiraling costs and opposition from environmental and indigenous groups. apple is preparing to a bend years of tradition and launch software to cure people of device addiction. toutedpany has enhancements that tight users closer to iphones and ipads. this is a series of tools to matt -- to monitor how much time people spend looking at screens. remy: in the meantime, a little-known hong kong department score skyrocketed in the final days of thursday's trading. lifestyle international holdings jumped 63% before closing more than 40% higher. that added 1.5 billion u.s. dollars in value on what was one of the biggest trading days of the year. lifestyle joined the small-cap index after the close.
haidi: a nice payday going into the end of the month. -- a decadeional update -- a decade of good times may be over for airlines. are expected to go up. we are looking at turbulence. reporter: the world airline chief executives are gathering for their annual meeting. the industry is looking precariously balanced. they have had a run of nine consecutive profits, but the real threat is the field price -- of the fuel price. it is for many airlines the second-biggest expense and you can only hedge for so long. the oil price has climbed the last 12 months, and that is the
biggest threat. and the head of ir said theerday that we are at peak of the cycle, the biggest reason being full prices -- being fuel prices. there is a laundry list of concerns. aviation is a complicated business. there are dozens of industries wrapped in one. in this part of the world, it is infrastructure. some would call it a crisis. more than half of new flyers in the next 20 years will come from asia. there just isn't the infrastructure to deal with them. we are talking points, airports, terminals. that is one big problem. the other is trade. protectionism is never a good thing for the aviation industry. as you saw overnight, that tit-for-tat tariffs placed on metal and goods around the world
remy: welcome back. friday is a big day for china, with more than 200 mainland stocks making their long-awaited debut on and this he i -- on msci's emerging markets index. that will open it up to global investors and tie china to the global economy. tom mackenzie is in shanghai for this historic moment. what is it feeling like there? it has been a great deal of anticipation leading up to this event.
we had the decision originally made in june after three straight years of the msci rebuffing china. investors here, people we have been speaking to, are excited about what this means. stocks see big name included in the msci emerging markets index. there will be 5% market share of these included in the index, making up a about 0.4%. it is a two-part process. partly at the end of play yesterday and at the end of august this year. it is significant and ties the market more closely to the global financial infrastructure. we saw the government here increasing the quotas for ssing thets act ace chinese market this year.
when you take this into consideration with the opening up, the reform process, what is the longer-term picture an impact likely to be for the markets in china? we are expecting a pickup in inflows. citigroup has put out a number suggesting we may see as much as 48 billion u.s. dollars in inflows as a result of this move. when you speak to the heads of research like we did yesterday at morgan stanley, they bi ulked of their research teams to focus on these shares. they say it will lead to a bigger focus on fundamentals. this is a largely retail driven market still. 80% of the trading is done by retail investors and day trading investors.
there are more investors getting involved in the chinese market. that dynamic is changing, but slowly. the next step is the end of august this year, and the key test will be when we see a sharp shares.in chinese the next time that happens, will china's government hold back him up that happen without the national team propping up the shares? that has been a concern. that was one of the reasons why the msci took so long to make the approval, because they worried about government interference. another important step on the trajectory toward more open markets in china, but he steps lie ahead. haidi: thank you so much for that. tom mackenzie in shanghai will be with us throughout the day. msci inclusion for asia starting today. that is it for "daybreak: australia," the yvonne and remy are up next for "daybreak:
asia." yvonne: the federal reserve bank president characterizes himself as one of the most cautious members of the committee. he is speaking this week about how he thinks the fed should go slowly or not at all on raising rates. yes had concerns when it comes to inflation expectations. he says it is still quite low and the yield curve flattening, if it inverts, sending a bad signal o whether we will see a recession in the u.s. remy: a lot to speak with for sure. an hour from now, we will talk even more about the ms the eye inclusion, with ubs head of china inclusion. aboutay it is all symbolism because it only counts for about 0.4% of the index. with that said, this is a very big day. haidi: a very big day indeed.
yvonne: it is 7:00 a.m. here in hong kong. i am yvonne man and welcome to "daybreak asia." asian-pacific markets set for declines amid rising trade tensions. the s&p fell for the fourth time in five days. tariffs are to blame. trump has metal penalties against america's closest allies. they say they will fight back. ramy: i am ramy inocencio in new york. the u.s. and north korea move ever closer to that summit after high-level talks right here in new york.