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tv   Bloomberg Markets Asia  Bloomberg  July 2, 2018 9:00pm-11:00pm EDT

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>> is not :00 a.m. here in hong kong. i'm david ingles. you're watching "bloomberg markets: asia." david: stocks across the asia-pacific paring early gains despite renewed optimism on wall street. the dollar is up yet again. turning to hong kong's return, they were pummeled over in the new york session.
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and the tennis superstar quiz nike after 24 years, reportedly worth 300 million u.s. dollars. better, but were coming off highs of the day. singapore closed at the lowest level since october of last year. malaysia made that correction in june. australia continues to , that story later on in the show. keep in mind where talking about the worst starts to a quarter and the common denominator is the weaker currency. the top story the trade spat between the u.s. and the chinese intensifying with donald trump taken aim at beijing yet again. now moving to block china mobile here.
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our guest is here to talk about the top lines on the story, why china mobile? >> the trump administration trying to block the deal going to the federal communications commission and saying they should denied on national security grounds. interestingly, the application was first brought in 2011, so this is a seven-year-old application, but they are now using this as a way to try to make the case again that china has widespread theft of u.s. intellectual property and therefore china mobile and other applications like this should be denied what are called unacceptable risks for international security. david: i have to ask about gge because it is a similar company. jodi: congress has been saying not enter thed u.s. market, which has been the trump administration's policy at one point, that was the case they were making.
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then president trump, as he often does, shifted, saying he has made a deal with the chinese president to allow cte to invest aszte to invest in the u.s. long as it change its management structure and paid a large fine. congress is saying they don't want to shift, we need to stand firm and they should not be allowed to do this in the u.s.. congress has been trying to get president trump to stop this escalation in the tariffs, they are trying to rein him in on the tariffs but they've been unsuccessful on both fronts. now the midterm elections are coming up in november, congress doesn't have a lot of working days, that will be campaigning a lot, so it is unlikely they will be up to do much in terms of changing the president's policy on trade matters. david: nor wanting to look week ahead of those elections. how does the wto figure into this entire debate? what are they saying?
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is makingident trump the case that the dove is unfair to the u.s. on trade matters. weaken them as trying to the u.s. position in the world. in this case, the facts actually show something different, according to data we have compiled here at bloomberg. the casesins 87% of it brings at the wto and does well relative to other countries in cases brought against it. president trump was making the case that the u.s. is unfairly treated there. when asked about whether he would suggest the u.s. leave the body, he said we are not at that stage yet, but if this continues, he would suggest that the u.s. pullout of the wto. this is how he has reacted on other situations like this, around nuclear record, the paris trade talks, he said well, we will see, and then in the end gone ahead and said this doesn't work for the u.s..
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so this is one to watch because of the comments he's often made before he suggests leaving a body like this. david: we've seen it before, july 6 it's a day to look forward to. jodi schneider, our senior international editor. of where we'rese headed for the china open to get a sense of what that is. >> were seeing futures pointing higher for chinese markets. it's unlikely we will see smooth going from here because on monday we did see the asian index futures slide in singapore, the steepest loss since january 2016, a day that saw the china, fall 2.5% and grumble.biggest stocks among analysts, were seeing different views across the spectrum. datarzbank threatening to saying the selloff is far from over but socgen is finding reasons to be optimistic. sharesr and financial
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the most favored. paying thathares playing catch up after monday's bloodbath on the mainland. gaming revenue missed estimates and the hang seng lost 3.8% last quarter, the fourth quarter lea thompson's 2015, this as the yuan appreciated. since fourth quarter 2015. dropafter the steepest since january 2017 on monday. david: thank you so much for that. , are go over to beijing asia editor is there for more on the china story. looking at chinese stocks on friday, a massive rebound there.
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why are these assets under pressure right now, i under so much pressure -- or under so much pressure? >> the general consensus is that was a dead cat bounce on friday. the fundamentals are very much in place. we had the slowing economy which has been talked about for a long time. it's now taking a hit from the trade war. you got the china mobile news today which does seem quite technical to reject a seven-year-old application in the same week that you were onut to impose 25% tariffs $30 billion worth of chinese imports. that trade war overhang still in the markets. i really do think despite the index futures pointing up today, we are going to see further losses this week. on friday,of course we're looking ahead to that, not because of the jobs were or, but the 25% tariffs on china, beijing set to retaliate, i would imagine.
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are we likely going to see this way on the market further? >> i thought it was baked in, but the new seems to be intensifying this week when it comes to trade. i really think investors may thought there might have been last-ditch talks are some sort of detente, or china would -- china would be pushed into a corner and would acquiesce on some front, but it doesn't appear as though there are any talks going on as far as we can tell. appear as though the tariffs will come into play on friday and china will retaliate, and that will ignite more anxiety in the marketplace. i do think we will see some losses on monday and into next week. david: not exactly the place to be at the moment. thank you, m a. emma.ank you, paul: u.k. prominence are theresa may has held one-on-one meetings with ministers to win their support for her revised reckitt plan.
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pro-and anti-brexit figures are split on the two possible options. upicials say they has drawn a third plan that combines the best of earlier models. friday was a crucial meeting at theh they need to agree on future relationship with the e.u.. the white house said secretary of state mike pompeo will visit north korea for three days from thursday to continue nuclear disarmament talks. you questions are being asked about kim jong-un's intentions. the report say north korea is increasing production a building more missile launches in expanding a key rocket engine facility. saudi arabia raised oil output for the most in five years last month, yet it was only enough to keep overall production steady. 330,000 --utput by 330,000 barrels a day, the biggest monthly johnson's july 2013. however, disruption in libya
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plus ongoing supply losses in venezuela and angola, and the cartel rose only slightly. one of the great tennis partnerships has come to an end, roger federer has quit nike for niqlo. glow -- u he will continue to wear their wear --s they don't don't make footwear. they are held by strong growth in china. sales topped the missed numbers for two straight quarters. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. david: thank you, paul. he was mentioning, welcome to un iqlo, roger federer. we'll have more on how they learn him away from nike. next, the battle of the currencies. why the resurgent dollar may still prove no match for the
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mighty yen. laura fitzsimmons joins us from sydney. this is bloomberg. ♪
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david: this is "bloomberg markets: asia." let's get a quick check of currency markets, the dollar strength overnight, reverse partly this morning. we had a scare, german politics on monday, the fight within angela merkel's coalition seems to settle. if anything we should pay attention, have a look at joining us now to talk more about where we go from here , laura fitzsimmons, jpmorgan executive director there, and also joining us from singapore
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to talk about this, mark. your broad thoughts this morning, what is top of mind? mark: overall this week is dominated by trade. backdrop for a lot of investors. many people expected there were be some kind of compromise reached before the july 6 date, and that appears increasingly unlikely. so it's hard to get enthusiasm about buying risk assets right now in the next day or two, especially with the july 4 no liquidity coming up. asiasaid, valuation cost is looking good and fundamentals have not been eroded too much. but it ise slowing still solid. corporate earnings are still good. most emerging markets have good fundamentals, but they do need to differentiate more. we're looking for sentiment to turn, but it hasn't turned yet. laura fitzsimmons joining
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us from sydney, jpmorgan executive director. what kind of opportunity are we looking at here, if i'm a believer that this rally in the dollar might be about to turn? that: i have to say philipp probably could extend a little bit further. some of the things we are witnessing in markets are indicative of much greater fears perhaps among investors at the moment. trade has been escalating over the last few months. we're probably not going to get a reprieve and for that reason, we're watching very closely, our economists are starting to take more note, even know fundamentals look ok globally, unfortunately, this is casting a dark out across markets and we still think there is probably room for markets to react more negatively. right now it has been relatively isolated and in some ways only the most obvious traits, but it could spread a little bit wider. week, theg this
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market opportunity, but i would probably challenge that given the probably strained liquidity it well, it may not be the right time to get into a trade. exactly what kind of point do you think will start seeing a bottom, and what are you looking to us a bellwether us a sign that things are improving? what is your best indicator for a turning point? hitherto this year it had been a lot of focus on the u.s. 10 in terms of yields, what they were doing everything think that is change a little bit and markets have become more range bound generally in rates. it's probably not as indicative, is more toward other asset classes. it represents not just the hawkish fed but is happening with trade and protectionism.
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for that reason, that's something i will continue to watch closely. againste we been seeing the euro -- the moods we have been seeing could have further to run. also dollar yen has been off the radar for a lot of investors. normally we would look for that to trade lower in the risk off mood we have had in markets. but there has been some concerns that the dollar move could see that ratchet higher in price over the next few weeks. i think that is probably a move that could be quite interesting for markets in terms of what it means to correlations for rates, etc. pboc, 665m the against the u.s. dollar. mark, china in on this. are we over assessing over dollar china? when you look at the basket, what do you think? i always think the basket
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is much more relevant. it's important to note the quick shift in regime in china. up until a few weeks ago, the yuan was one of the best-performing currencies in the world. the second strongest performing currency in the world over the previous 12 months. this puts back to the average of the last year against the trade weighted basket. overall, still outperforming a lot of currencies that were seeing a clear change in regime. i think i'm with a lot of the broad market that it probably ins pretty soon. this is just a little bit of easing of the margin for chinese corporate. it's not the start of a major depreciation shift. control of it a little bit at that time and they don't want to risk it again. overall it shows the yuan against the trade weighted basket, only average after last year. cannot let you
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go without asking my favorite question. asx 200 has been the outperform or, the safe haven for markets. is it going to go up or down? laura: it's probably going to continue to trend up in this environment, as you say come outperforming the other markets and probably surprising for local investors, but right now that yields are attractive and maybe one of the last traits in terms of kerry and better yield overall. it's probably still relatively safe in the global environment right now. david: lovely having both of you on the program, laura fitzsimmons and mark cudmore. have a look at our live readings there, and for future reference.
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this is bloomberg. ♪
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david: this is "bloomberg markets: asia." let's get a quick check of the bloomberg business flash headlines. a downgrade in stock from interest to sell. analysts say share price has been supported but downside is likely from that of slowing revenue. the price target lowered on the same stock to 3500. that's where we are at the moment. five years after leveraged buyout but bernadette, the world's largest private tech company will return to the cash andacking a
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shares what deal valued at 22 we dollars. michael dell took the company private back in 2013 with investment arm silver lake. the race to be the first trillion dollar company has two front runners. apple has held the lead for and came within $50 billion of that number back in june but amazon is hot on the trail. it's market by he was 50% less than apple but the gap has shrunk substantially, to about 10%. ofing the equivalent walmarts total value. speaking of value, have a look at casino stocks at the reopened and hong kong. it's not very good, in g.m. down over 6%. look at the damage there that we are seeing. on top of the broad sentiment we've had which is on the negative side, data out for the week much slower than expected
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in june. may figures also disappointing. what is causing the slowdown? our bloomberg intelligence gaming analyst is here with more of the bad news. how bad is it? >> let's take it in context. june was a tough comparison month on its own. it's usually a softer month. you had analyst underestimating what came in from the world cup. we saw volumes down significantly, the luck factor on its own was below average, and if you take a step back, that segment makes up 56% of the gaming revenue. any impact could swing the entire month. onn you talk about just june its on, he really was an isolated situation. david: so what should i expect
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for the second half of the year? margaret: july is going to be a tough month. a between i percent last year, so get another tough comparison. own, it's very challenging. for the rest of the year, comparisons will start to ease and we will anticipate and start tracking more of the vip segment as well. david: based on what you're saying, a lot of it -- what should i be watching, are there any sustainable drivers? monthly numbers will be a rough ride. we have already anticipated that , it is a market and the business itself is very volatile. for analyst, it will be tough to predict. if we look at the overall competitive landscape, it is
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still healthy. we are still seeing recovery of premium gamblers, and they're still going to be more developed coming through. we believe galaxy sans as well wynn a row prepare for any sort of vip of site. we say isg formula being able to capture that swing on the upside. it is still growing. having the capability to capture that for an operator is going to be the key driver. ,hat still something we track that's something we should be looking out for. david: we have to leave it there, thank you so much, margaret. this, 340 points to the downside. get anffshore, will
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update on the rates. one thing to do if your long in the markets, close your eyes. this is bloomberg. ♪ what's a gig of data?
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david: a hot and humid margaret -- hot and humid morning there in victoria harbour. we were close yesterday so there's an element of catch-up. markets overall are in good shape. is looking slightly better as the day progresses here for hong kong. on dollar cnh a few moments ago. let's see where that goes as well.
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is starting to become a problem, about tennis -- two minutes from now will be talking about the rise there in china. lots of things to consider especially on the back of the weaker currency. markets open in shanghai and hong kong. >> it looks like chinese investors may be taking stock after the selfless on monday that's all the shanghai composite leave -- lose two-point shot -- 2.5%. seng, itye on the hang did cap it's worst quarter since december 2016. in the currency space, the officer rate around the 6.71 handle against the dollar. the in a nine on psychological level to see if the pboc will move to intervene.
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we a close eye on china mobile, that stock in the spotlight. the stock gaining ground in hong kong, even as donald trump moves to prevent them from entering the u.s. market. china mobile maybe less vulnerable as its revenue is mostly to nested -- domestically derived. gaming, in on macau world cup fever sapping gaming demand. take a look at the hang seng, you see casino stocks, leading losses down over 7%. sending china down almost 5% there. we hasn't chinese developers continuing to decline. when you look at the leaderboard so far on the hang seng index, some hong kong real estate players are gaining ground. saying it willre
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be too much of a meaningful impact on the space. 2.7% drop right now on h shares. guest,ring in our massive losses 80 can see it would you be a willing buyer of anything in hong kong today? >> there's a lot of uncertainty. for the moment we have to keep an i on the market. lots of things you have to be , renminbi depreciation, you see that actually is continuing and you can see the depreciation is higher than any other day.
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david: is it a dollar strength story are a yuan weakness story? weakening,it is think it's a competency issue in the market. you see the trade tariffs in china, they been hit hard in china. we've not seen anything on the china side to bolster the economy aggressively, actually put the people's confidence back there. i think the most important thing is to stabilize the renminbi. david: we were just showing dollar-renminbi. .t's a massive mover is that a stable move? do you see the pboc come in in directly or indirectly to alleviate some of the upper pressure we are seeing here --
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upward pressure we are seeing here? banny: market right now is quick that's quite big. i think the market right now is very sensitive to the issues on the trade tensions. are you can wait for the stability to come back and then you buy back. you see lots of fluctuations in the market. david: what do the pockets look like in the equity market as a function of the weakening currency? a high interest rates, if the renminbi depreciation is more more, there's a big burden in the second half. it could be bad for corporate earnings in the market right now.
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that's the reason the valuations maybe going down. david: they got to be cheap. are you seeing earnings downgrade in hong kong from the research that you do? earnings growth may be more than 10%, maybe 12. i think the outlook for trading tensions are up and affecting china growth and earnings growth is affected by the renminbi. all these factors put together make the people more pessimistic in the second half. david: good buy for people who bought into the ipo, it's hardly the best time to have come into the market on this year's shares. what is your sense of where those are going to head? i think in the mid and
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longer-term, they will perform quite well. the good thing for the investors correction and then advertise your shares. david: i think you're telling us -- a few, we've got to leave it there. a look at first word news with paul allen from sydney. all: thanks, david. the trump administration says it discuss leaving the wto, although the president has repeated his warnings about bad treatment. commerce secretary wilbur ross as is more important to impose reforms and simply walk away. it was reported the white house has drifted a bill to allow the president to ignore fundamental wto rules. >> the wto has treated the and i face very badly, and i hope they
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change their ways. they have been treating is very badly for many years, and that's why we were at a big disadvantage with the wto. anythingt planning now, but if they don't treat us properly, we will be doing something. >> a's book faces a tough time regaining user trust after the cambridge analytic a data scandal. the company told a new it's been hard to convince a user's and it has been problematic. for dodgingiticized the toughest questions. judge has ordered pricewaterhousecoopers to pay the fdic or than $625 million for negligence. the case relates to artists of colonial bank group they collapsed during the financial crisis in the sixth largest bank failure in u.s. history. pwc blamed colonial employees. the judge said the accounting
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firm was not designed to detect fraud. 12 boys and their soccer coach were found alive in a flooded more than ahat's week after they went missing. the danger is not over. the team entered the cave on june 23 but were trapped at -- trapped by rising water after heavy rains. rescuers from worldwide helped with the search. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. program,ming up on the default downgrades. five china may see a record year of corporate failure. that is next. this is bloomberg. ♪
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david: this is "bloomberg markets: asia."
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we talked about weakening currency in china and what it bonds, andorporate data compiled by bloomberg that tallied the first half of 2018, by more on this were joined our guest. natural,faults are natural progression when you have a weakening currency. do you think when you look at the rating downgrades that we will see more of this to come? >> good morning, david. as you mention, $2.5 billion of domestic bonds have defaulted this year, and that's about three quarters of the 2016 tally, which was a record, and a lot of analysts are expecting the number this year to surpass the record in 2016.
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you mentioned the downgrade, there have been about 13 downgrades this year versus 10 upgrades. downgrade-upgrade ratio, this year is the worst for china's domestic bonds. therefore if the government doesn't ease liquidity in a major way for china's corporations, were going to see more defaults and more rating downgrades. it's alive a scenario that the government comes in and bailed out some of these depressed companies -- a likely scenario. they are allowing some companies to fail but the lasting many is for everything to sort of go down the toilet. it seems from our observation, the government will only step in when it comes to a a bigmpany that has impact on the local economy and local employment. the government has said bank should report -- support hna,
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which is a huge company. in that case the government will step in, and again, even if they step in, the method is more of play more of a court in aiding role rather than injecting cash directly. they are taking more of a market oriented role in general. if it comes to a smaller company, they probably will be more likely to let the smaller companies fail or sort out the restructuring by themselves. david: some of our viewers might be wondering where we are getting does data. we will get enough for of years to see credit rating strength. we put it to the credit-rating agency interesting that upgrade, but the ratio is skewed toward the red. how does this progress for the rest of the year? how is the default rate in
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china? lianting: the default rate, and we talked about the amount of defaulted bond seems to be approaching a record high, but in terms of rates, it still at a very low 0.39%, according to the pboc data. to put that into perspective, the default rate for asian high yield bond fund could in the first half is 1.9%, according to goldman sachs. even though the default rate in china is set to rise, right now is still at a very low level. you, our asian credit report or joining us. let's look at movers in let's get a sense of what the biggest damages p micex the biggest damage is seen in hong kong as well as shanghai. boeing the most since february 2016.
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the company has been seem to be vulnerable to trade tension. i want to highlight china mobile , that stock has reversed its moves toains as trump prevent the chinese telco from entering the u.s. market. check in on some other movers in hong kong in particular, i want to highlight image jim china, citing as much a 7% after macau earlier.venue missed measures are being implemented to cool the property market. today were learning that shanghai tightness rules on home purchases by companies. i want to highlight this, green chemical spill maker sliding, a report that samsung has selected a chemical company to provide component first new phone set to be released early next year. david: thank you so much for pointing what is down and down a little bit.
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bitcoin, the price of a five data. still of 7% for the week. it has rallied since the start of july and the second half of this year. the do's recording market had lost about half its value since early may. market hadtal coin lost half its value since early may. a simple question, is this rally for real? >> that's a question we've been tossing back and forth all throughout this year. we've seen multiple times where bitcoin has fallen off. it will hit a resistance level and then it bounces back and treads along at that price level and then comes back again. the price were talking about now is the level we saw reached after were dropped past 7000 couple of weeks ago. it were talking about getting back to 6600.
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understandably, investors are little skeptical. her waiting to see if this one is for real. the answer is, we simply don't know because bitcoin has been so volatile this year. david: some of that mages have to do with changing regulations. grexit really has been the year of regulation. obviously were not want to see coordinated regulation around the world. we've been hearing over the past week south korea and japan have made moves on exchanges. dust event put up the orders last week talking about exchange operators there. we are hearing that the swiss are looking at over the next couple of months, opening up access to traditional banking services for cryptocurrency companies, which would be pretty positive. people don't necessarily know this, but sometimes it can be difficult for a cryptocurrency company to even open a bank
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account. these are incremental steps. later this week we will hear some evidence from regulators talking about the risk and opportunities in terms of cryptocurrency as well, so that will be interesting as well. kind of continuing incremental moves. david: we have to leave it there, eric. let's pivot and look at some of the other stories trending across the bloomberg universe and that are subscribers are reading. world'ster is the and it hedge fund firm was up $15 billion at the end of 2015. social media, tesla said to be taking a production break after exceeded production targets for the model three. fed, the sporting icon there
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, check out this trending stories on the bloomberg online and also at the terminal. plenty more coming here on the show. this is bloomberg. ♪
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david: welcome back. you're watching "bloomberg markets: asia." check of theuick latest business flash headlines. bloomberg sources say macquarie group is close to a deal to buy agreement --e, in an announcement could be made this week. the sell by iron for -- iron point partners. ufj saysof mitsubishi
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he wants to end workplace harassment. telling bloomberg it would be a fairly difficult job but employees have risen through the ranks. he would not comment on individual cases but said he is where incidents in the equities division and also across other departments. >> i am aware of quite a few harassment cases from the past. but we can no longer ignore them because harassment issues are in the media spotlight nowadays. i believe it is time for us to get serious and eradicate this behavior from our workplaces. david: a push by the distributor of jim beam to persuade more indians to drink is bourbon has left the company with a massive hangover in the united states.
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agreeing to pay more than $8 million to settle claims that he bribed indian government officials for years. saying the distiller made illicit payments in the highly regulated sector to secure space on the shelves of stores. one of the greatest -- great tennis partnerships has come to an end, roger federer has dropped the iconic nike swoosh after two decades. his blockbuster deal with uniqlo is reportedly worth $300 million. asia conglomerates editor joins us out of tokyo. he's 36 or so, isn't that a bit risky for the company? >> that would be one of the big .isks here people have been asking about roger federer's retirement every year for the past four or five years and he keeps proving them
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wrong. not only is he remaining on the tour, but he's winning. as of a couple of weeks ago, he was number one on the tour. yes deathly got a lot of momentum, at least for this year. obviously any injury could sideline him for an extended play and he does already reduced schedule. he didn't even play in the french open, but he is pledged as part of this deal to brand at the uniqlo all tennis tournaments this year. that's sort of a hint that he is planning to finish the year out for sure, and why wouldn't he, he is doing great. he's one of the favorites to do very well at wimbledon and possibly win it. ninth wine a record for him. it's kind of his tournament, where his archrival rafael nadal kind of owns the french tournament. now he's ready to play at wimbledon with his new uniqlo gear. thato said in a statement
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he was going to be a partner on and off the court for innovation. projectingviously this, and as you mentioned, it was reported as a 10 year deal. they are looking at him as a legend to represent the company, even post tennis. david: it's a fair amount of money, $300 million over 10 years. that brings me to the other endorsements of uniqlo. have those actually paid off? there are others that come to mind. >> the economics of these endorsements are very hard to parse out. exactly how much publicity they get, even analysts are generally reluctant to put an exact figure on it. one thing you can look at is how the athletes performed after uniqlo gave them the endorsement, whether or not they lost out or not.
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these sports, tennis and golf, they are extremely competitive. even the top players, it's not unheard of for them to just drop and drift away once the game gets a little bit off. but uniqlo has developed a very good track record, after they did an endorsement deal with novak djokovic, he continued to dominate and remain a number one for many weeks. i believe he actually set a record for weeks at number one, then just dominating the tour wearing uniqlo. he would even be playing in matches, semifinals where he would play against another uniqlo endorser. they did get a lot of exposure from that. measuring economics is difficult, but they have a good track record of picking players that are going to be in the spotlight and players who are likely to stay in the spotlight over an extended time. dave mccombs, joining us
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live out of tokyo. us to talkin joins strategy. this is bloomberg. ♪ retail.
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. david: hong kong drags the markets down. the hang seng is extending june's 5% fall. within that market, casino stocks the biggest drag. their american peers were pummeled in new york. the house doesn't exactly always win. looking at china mobile. another lose for the markets today. -- said trump wanted it was a threat.
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david mplet one of -- david: one of the biggest stories, we'll be breaking that down for you. chinese currency, 670 right now, offshore, 672. the pace of weakness in the currency. banny said this was not about the dollar story, it's about weakness in the currency he said the market is a little too big for direct intervention but the thought of it, i guess, will put a to the stop to a lot of this. now some more on this from ophie. sophie: we are seeing hong kong stocks, seeing extending losses after june turned out to be the worst month for the hang seng since january, 2016.
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as you pointed out, casino stocks dragging heavily in hock congress. chinese developers also under pressure given concerns about bonds as well as overall measures to cool the market there. and taking a look elsewhere, i want to highlight what's going on in japan. the nikkei 225 swinging to losses. now in the red as banks and trading companies are on the decline. the nikkei 225 off by a third of a percent. we are also seeing gains in seoul and sydney. in ma lay shah, stocks under pressure. is down over there 6%. last look at oy prices. you have nw gaining ground here. just about 77.68.
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david: 10.3 million. thank you so much sophie. brent, at the moment, let's take you to sydney, paul allen is there for the news. paul: thanks, david. the european losses as angela merkel defused a spat with her political rivals over migration. it marks an end to a political crisis that threatened to topple er daughter. c.s.u. mazz taken a hard line on migration, taking a -- risking a split with merkel's c.d.u. may holds brexit talks, there are two plans and she's drawn up a third that combines the best of earlier models.
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saudi arabia raised oil output by the most in five years last month. yet that was only enough to keep overall production steady. camden raised output to 10.3 million barrels, the biggest monthly jump since july, 2013. disruption in libya plus ongoing supply losses in venezuela and angola meant overall output from the cartel rose only slightly. they're said to be pulling some mod el83 -- model 3 production, the line will resume on thursday, this will allow the company to carry out basic maintenance work. some analysts questions whether tess la would be able to sustain higher production rates. global news, 24 hours a day, on air and atticing to be on twitter. powered by more than 172
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journalists and analyst. david: let's get become to the top story. chinese currency weakening past 6.7, a key level for when they're seen to step in to defend currency. we have our managing editor chris to talk about. this i'm scratching my head now. should we expect the tboc to step in? chris: yeah, really fascinating battle here in the currency market. so just last week our china markets grew survey traders and strategists and they thought the pboc would step. in no sign of that yet. just on sunday, morgan stanley was saying that if we see declines in the yuan get to .6, .7, they would again see the pboc stepping in. but we're seeing no evidence of that. so this is going to just feed speculation that china is happy
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to see this depreciation given the trump administration's aggressive actions on the trade front and it's going raise questions tooze whether china is using the exchange rate as a tool in the trade battle. obviously a weaker exchange rate would help chinese exports, chinese's -- chinese economy is slowing swhasm the movement in the market right now is going to feed that speculation. david: speaking of movement, we're going to get a chart up to show viewers the movement we're seeing today. we've taken a look at the daily percentage change of china-u.s. collars, the inverse if you will and you're seing a fairly sharp move here. this part of the chart, really some downside pressure on chinese currency which begs the question right now, chris. is this now more about china's yuan weakness story than about a dollar strength story?
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chris: i think, you know, if you look at when the yuan started dropping, it was about mid june. and it was a day after we had a slew of indicators that showed that china's economy was weakening. so certainly there is a, you know, there's a china factor involved here. there's also, you know, the broader concerns about emerging markets that have propelled demand for the dollar. there's kind of two sides of the coin here. but if you look at, you know, the wcrs function on the bloomberg, you'll see that the yuan's intra-day drop is bigger than anybody else's in asia. so really what we're seeing here is that the yuan is leaving these declining, it's no lorninge an anchor for other emerging market currencies as it has sometimes been in the past. and the speed of the recent drop is essentially, you know,
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arguing in favor of china essentially kind of testing the tripwires here. they've put capital controls in place, they've embraced foreign investment into their bond market, and the question is, are they seeing just how far the yuan can go before things get disorderly. ? david: yeah, i don't think they want to get to that point. it's almost an after the fact conversation there we'd likely have. chris, thank you. chris, our asia asset manager. let's have a look at the news behind all of this president trump taking aim at beijing, looking to keep china mobile out market for om security. steve is here. another shot about the tariffs that take effect in three days.
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steve: yeah, those tariffs take effect in three days, unless there's a last minute reprove, but it doesn't look like it. this latest salvo is from the branch of the u.s. commerce department recommending to the f.c.c., the federal communications commission to reject the application that was put in in 2011, by the way, by china mobile to offer international voice service, presumably the chinese citizens, those who want to call back to china or elsewhere in the world. they were not applying for mobile services. so for smart phones or data and all that. generally they're -- generally the u.s. intelligence community cited national security concerns. they said, quote, in the filing to the f.c.c. china mobile approval would pose unacceptable national security and law
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enforcement risks and basically citing as well the potential for malicious activities the chinese government could use china mobile for economic espionage and intelligence collection. this would be a little different than the crackdown on z.t.e., the telecommunications equipment maker, china mobile is primarily a domestic mobile phone operator. so the direct economic impact on china mobile will be far less being rejected from the u.s. market but again the stock today in hong kong down 2%. david: it is. we've got to leave you there, stephen engle our chief north asia correspondent. coming up, we have a look at a commodity market continuing to ise. and a round table later on in the show. coming up next a week of risks. michael levin of credit suisse
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tells us how the first wave of tariffs from the u.s. to china could be affecting all your investments. that's coming up next. ♪
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david: this is bloomberg markets asia. now this, when you look at the treasuries market, big conversation happening there. long end of the curve stalling. the u.s. 30-year kwleeled after struggling to break some critical levels. today could bring a key number of risks. you have tariffs kicking in on china. latest payroll numbers as well. let's put all this into context. have a look at this chart. it takes the 10-year all the way back to the late 1970's. we've seen a bull market in that span as well. you have the full averages. you have the 30-year average in green. 20-year, 10-year average, we're
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a little above that, 2.5% is the past 10-year average. what does an investor do when t's started to turn. what should an investor do? we're not used to this. >> i think investors need to think differently about their asset allocation strategy. in an environment where credit spreads are tight and the curve is flat, you don't get compensated for credit risk or duration risk anymore and i think some of the tradition safe haven allocations like treasuries and investment grade bonds of longer duration may be safe from a credit perspective but they're interest rate risk instruments. there are still opportunities with higher yield and flat curve. to the go shorter end with higher quality and generate attractive yields. we've been able to put together ortfolios for our clients.
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can generate yields of about 6%. we like secured bank loans. we have a number of characteristics. >> what kind of yield there? >> about 6% as well. they have a number of characteristics i think are relevant. the yields attractive, around 6%. so most importantly their floating rate credits. you're protected in a rising rate environment and in fact seen so doing well in a larger environment. david: shorter rates. >> but i think there's attractive yields in shorter rates and floating rates to protect your portfolio or diversify your portfolio. david: i look across the world, rising rates, when you have the 10-year on 30 basis points and look at the u.s., something has got to be wrong. one of those things is wrong.
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at some point that's going to correct toward each other. which one do you think? where is the mispricing there? michael: risk is being mispriced. for all the discussions about the inversion of the yield curve in the u.s., 10-year treasuries are still above italy and portugal. they're double that of spain. four times the yield of france. nine times the yield of germany. i would have to say it's europe that sets price in terms of not getting the risk correct. so i think again sovereigns are probably a bad place to be in this environment. david: why do you think that is? the distortion from the e.c.b.? michael: policy divergence. you have the seven rate hikes in the u.s. e.c.b. is still in a quantitative easing cycle even though we anticipate that end big the end of the year. i think you'll see a normalization of yields in europe, which will be negfive for -- negative for sovereign ate holders in europe.
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michael: the world is flat, yield curves generally are flat. i'm not certain about an inversion. i worry more about the pace of rate hikes than the shape of the curve. in particular, the reason that inversions typically result or have been predictive in terms of recession is that it reflects an aggressive monetary policy that may not be consistent with the long-term economic health. so you have negative sentiment on the long end othey have curve. the curve inverts. and it tevends to constrict growth and over time. but not for a period of about 12 to 18 months result in a recession. david: the allocation toward that country is the biggest risk. where does allocation come from?
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michael: global investor. look at china. if the second large -- it's the second largest equity market in the world, third largest bond market in the wold, third largest contributor to global growth but global investors are significantly underinvested in china. so they represent only less than 3% of the a-share market and the bond market. china is attractive but as the markets become more accessible, clients will want to access those markets. david: what are you telling ients on the rinmbbi right now? michael: we're seeing it softening. i don't think it's reflective of pboc intervention but i think they're allowing the currency to weeken. it sends a clear message that trade wars can become currency wars so i think the potential for some softening r&d is there. however it also reflects a good entry point for accessing
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chinese r&d and chinese equity which is sold out substantially and get in at a weaker currency level. david: is there a comparison to be made? michael: i think investment grade, short duration credits are pretty attract i. typically we try not to time the market. we say it's more about time in in the market than timing the market. i think that's the same with cushions -- discussions of china. if you try to predict things in the short-term it becomes difficult. over time, if you say should i be invested in the chinese bond markets and the r&b credit -- r&d credit markets, fundaments are atactive, default rates are low. we have initial indications of relative accommodative minnesota tear policy out of china. it provides diversify case. that's a place investors want to be long-term.
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david: on that positive note, michael, thank you. head of asia asset management at credit suisse. in case you were wondering, that was his first ever tv interview. what you're looking at here was the conversation we had with laura fitzsimmons. awyer is from j.p. morgan. lots ahead. see what's happening across your money. this is bloomberg.
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david: you're watching "bloomberg markets asia." the big talking point, tess la, the company halting some model 3 production days after reaching
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the target of 5,000 cars a week. this comes as analysts questioning the company whether it can sustain high output levels. we'll see. joining us out of singapore with more on the story, the question i have, can the company, tess la, afford to do this at such a crucial time for the company? >> hi, david. yeah, um, the production pause tess la has taken right now in california shouldn't be a major concern for shareholders. it shows that elon musk has confidence in his company. it's pretty typical for carmakers to take a break at some point in the summer. facilities need maintenance. their employees need a break. obviously that said, you know, the company needs to come back from its pause and make sure
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that operations continue without ny glitches. david: is that why? elon musk sent an email congratulating workers, but the numbers are not encourage, what are investors concerned about? >> might be a case of sell on the news. the company hit its production target, that's a relief for a lot of shareholders but at the same time we didn't get must have -- much new information about their future plans. so the same concerns and risks that have been there in recent months and years about their production ramp up are still there. so you know, the company's manufacturing level is still low compare to -- compared with established players like g.m. and ford. now they need to ensure investors that they can
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consistently improve and they actually set themselveses a target of 6,000 units for august so that's the next major target for tess la. -- for tess la. -- for tesla. david: how does elon musk do that? >> he can't afford any mistakes. he needs to ensure the quality of current output is good and then he needs to be -- keep showing that the numbers can improve from here. david: thank you for coming on the program. now let's have a look at the latest business headlines. start with earnings, goldman sachs saying growth will decelerate from 2019 as it downgrades its stock from neutral to sale. its analysis says the share price has been supported but downsize is likely from slowing revenue. canon price lowered from 4,000 to 3,500.
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del technologies is going public yet again. five years after a leveraged buyout that left it more diverse but also burdened with debts. the largest tech company will return to markets with a share swap deal valued at almost $22 billion. michael dell took the company private in 2013. now the race to become the first trillion dollar company now has two front runners. apple held the lead for years, came within $50 million of the number in early june. amazon is coming up on the rail here, at the beginning of the year, its market value was 50% less than apples, but that's gone up. share prices, big movers in japan as we head into the lunch break. sophie is here with us to have a look. sophie: a morning of swings for japanese stocks. little change as we look to the lunch break. et's look at key movers.
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yamaha corp has been cut to sell at goldman sachs. kaou too has slid. t's look at tokyo, fujitsu xpected to grow. there's a report that the japan f.s.a. is considering regulatory cryptoexchange businesses on under the law on financial instruments. a bit of a move there for cryptorelated stuff. so overall we're seeing swings for japanese stock today as this halfhearted retvry is derailed by yuan contagion overall.
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utilities and industrials are weighing on that benchmark. that's a snapshot of the japanese markets as we go into lunchbreak. this is "bloomberg markets asia." ♪
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off, and free shipping, too. go to today. you need this bed. david: you're watching "bloomberg markets asia." let's get the latest on markets here. bad day for china, the rest of region so-so. sophie is here. so fee: a so-so day for the rest of asia. check out losses in hong kong. the worst month since january, 2016, i believe so this retvry being derailed by yuan weakness. with the currency above 670 for the first time since august. very much in catch up in mode. chinese developers in casino stocks hardest hit. housings concerns about
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curves. we do have some bright spots in the region. a.s.x. 200, utilities on the up. let's check out what's going on in the commodcies complex. we do have prices, print and w.t.i. rising today. this as saudi look to assess output boost in june. you have trading above 74 bucks a barrel, dave. david: thank you so much. let's get an update of the news, paul is with us in sydney for an update there. paul: thanks, david. the trump administration says it's a little premature to discuss leaving the world trade organization, though the president repeated his warnings about bad treatment. commerce secretary will burr ross says it's more important to impose reforms than walk away.
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axios reported that the white house has dropped a bill that would allow the white house to ignore fundamental w.t.o. rules. president trump: the w.t.o. treated the united states badly. i hope they change their ways. they've been treating us badly for many, many years. that's why we were at a big disadvantage with the w.t.o. we're not planning anything now but if they don't treat us properly, we'll be doing something. paul: and the trump administration is taking aim at beijing again, moving against allowing china mobile to enter the u.s. telecoms market on the grounds of national security. officials say the f.c.c. should deny the 2011 application. the latest spat over china's growing influence. washington is to impose tariffs on chinese goods on friday and beijing promised to respond. the producer of the wolf of wall street is to be questioned by malaysian investigators looking into the missing billions at the one mdb investment fund.
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aziz is the former step -- is he stepson of the former manager of the fund. rescue teams have found 12 boys and their soccer coach alive in a flooded cave in northern thailand, more than a week after they went missing. the governor of the province said they're being brought out but warns the danger isn't over. they entered the trade on june 23, but were trapped by rising water after heavy rains. rescuers from china, the u.s. and great britain helped with the search. global news on air and at tictoc on twitter. i'm paul allen, this is bloomberg. david: paul, thank you so much for that. let's have a look at the commodities page. we've been talking about oil with sophie here.
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let's first have a look at copper. this is from our guys on the team, they may not actually be solid but it's one of those things people will look at for any sign of global slowdown and if nothing else when you look at technicals on this the support has been 2.94 a pound. have a look at this, on your bloomberg live feed. from copper, we'll have a look, road kill. futures in fact right now are recovering slightly but we had the biggest drop there in prices in 2011. you have these import tariffs from donald trump weighing on demand. it's mostly used in devices that cut harmful emissions from dee dee sell cars. have a look at that all the way back here to 2008 on prices. that's also on your g.t.v. feed. the other thing i want to mention is we're looking at gold. let's have a look. it's going to come up there we
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go. slumping to its near lowest level this year. but must be a buying opportunity when you look at price and positioning here. blackrock and franklin templeton have come out in gold's defense. the lead management of franklin's gold tund fund said prerble metals could rebound. let's go to david with our bloomberg opinion team. i got to ask about gold. what's your sense, safe haven or not? buying opportunity? >> well, i think there's a tendency whenever something alarming happens in the market to assume gold must climb because of the safe haven demand. but i think it's not quite as simple as that because of course the classic thing anyone who is trading gold is it's affected by the u.s. dollar. that's the greatest safe haven of all. look at the second half of 2008. gold during that period fell about 5% despite the start of
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the global financial crisis. or look back to something more similar to what we've got now, the 1997 financial crisis in asia. where spot gold of course fell substantially in u.s. dollars. tokyo gold rose a fair am. it was really very much a dynamic relationship to what was happening with the u.s. dollar. i think one other thing relating to that is when you think about what's actually happening, i mean, my view of gold is that it always, it buys the facts in the financial market rather than the rumor. later in the week later in the we'll see roughly $70 billion -- tariffs on roughly $70 billion of trade with the u.s. that's a step up of what we've seen before. but the tpwhrobal economy is $70 trillion. we haven't seen the shock moment you'd see with something like
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brexit that tends to drive that sudden safe haven demand into gold. >> and you hope we don't get to that point. let's bring in justin, what zphuning gold, safe haven or not? love : not a big fan, i'd to disagree with david on that argument but he's very correct, it is very much a u.s. dollar story. we have a much stronger view around the u.s. dollar in thinking that the current strength in the u.s. economy and what we're seing in terms of higher rates will continue to support the u.s. dollar. we can't get exite about gold. but from an australian point of view we can get excited about gold from that point of view we can expect the dollar will underperform in a strong u.s. dollar environment. like we saw in japan with gold price and japanese yen can outperform. it's a currency that's more important.
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that's what can benefit some traders. >> what's your thoughts, justin, on other aspects? they were pointing out the charts on platinum, we've seen that, i think the other interesting thing is what we've seen happening with platinum and palladium. back to 2009, you could buy five understands of palladium for one of platinum. now palladium is priced higher than platinum. is that going to be a persistent feature of the market? justin: seems like the pressures have shifted. i guess overall we'd have to be careful how we talk about this because gold we see as not being the risk asset it used to be. but you are seeing movements in other commodities around industrial which scran a play at that. i would be very cautious about bunching all the preciouses into one and saying how they're going
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to behave in this environment linked to the u.s. dollar. it's more broad with commodities as well. you were talking about copper as well. but it's a play on he relative demand, which we expect to be slowing but there's still situations. >> jeff, i want to pivot to oil. a lot of us are trying to parse what donald trump meant in the tweet over the weekend, was it that they agreed that prices were too high or did the saudis agree to increase output? the white house pushed back early this week on that, what do you think? david, chime in. david: i think the fundamental thing it goes to is a view of the market that's -- oil market that's getting tight at the moment. if you look at how much oil prices have risen over the past year, i mean one thing i think we've not talked about very much is the way we saw the recent run of trucker strikes in brazil. you've seen various emerging
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markets looking at increasing their subsidies. we are seing a lot of characteristics of an oil shock globally. some of that may be currency related but this is the sort of thing you'd expect to see in that circumstance. and the supply side is very tight. for one thing because president trump is trying to force all countries to stop buying iranian oil. that's probably going to knock two million barrels a day from the market straight away even if china finds a way to do it without upsetting that. that's very tight. the one place where there's a great deal of oil at the moment is in the u.s., coming out of the permian basin. there it locks up on shore. the infrastructure is not managing to get it offcher. even where we've seen the spread tightening over the last few weeks, i would suggest that's probably more to do with what's been happening in canada. it's not really that there's an
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arb trimbingsgambings e happening that w.t. simplet finding its way to global arket. david: justin, the other big piece of news overnight was the saudis who increased their output in june by the midwest in -- most in five years. we have a chart to show our viewers how it looks. but if you look at the overall output that barely moves the needle. should we expect the saudis, maybe the russians, to continue coming on and offsetting losses wrells within the group? justin: i think it's safe to say they'll be lifting production over time. there's some reason where they'd want to do that with the high price environments and take back some market shares. i guess the main constraint is how much capacity do you have to do it? how much can they bring online? there are some question marks around that.
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in this current environment you have this tightness which is likely to me. you would -- it's not unreasonable to expect slower level over the next year and growth coming out of china and the u.s. and on the back of this sort of listing supply that prices can ease through coming into 2019. but for the short run network medium term, they're trying to push on a bit of a string here. for the near term it's going to keep prices tight. and there's going to be that also lurking in the background that move for the shipping oil to move into low sulfur. they're trying to get more of that low sulfur crude to bring that into construction too. so they'll be much more stressed as well. it is around the near term going to remain for upward prices. david was right. we've got the feeling of a potential oil lurking in the background. david: i think it's often talked that saudis have 1.5 to two million barrels and that seems
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to be behind some of that trump tweet but i've seen estimates suggesting it's lower than that at the moment. and i know the e.i.a. is suggest og peck's entire capacity will be heading below one million. which is historically extremely tight. david: we've been looking for that to come online. even if the reserves have been there it's either the saudis and opec are playing a really, really good tight game wit or we are seeing something real, and that is that there isn't the capacity people thought and it's difficult to bring it online. and while you can sort of talk about potential capacity over the next few years being more in balance it doesn't fix the short run. i think that's where the stresses lie. >> gents, thank you so much. justin there and of course david joining us live from our
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bloomberg opinions team. coming up here on the program, key elements in speaking of resources here. we dig into why nobody wants to fund lithium production. that is coming up next. this is bloomberg. ♪
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david: you're watching "bloomberg markets asia." let's have a look at electric car production. that could face a roadblock in years to come if a supply of key element in batteries doesn't keep up. we're talking about lithium and a lot and to grow by by 100 tons.uction why the aversion from the bank
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here's? >> as you say, that supply story is quite dramatic in terms of scale. by some estimates the lithium sector a relatively small sector, needs to invest about $12 billion by 2025 to keep pace with demand as it's projected now. that's vastly more than the industry's raised in recent years. so the big question is where is the money going to come from? one place it looks like it isn't coming from is traditional bank the kind of places that typically have funded iron ore, coal, copper projects don't seem to be interested in lending for lithium project developers. for a couple of reasons. banks are unfamiliar with this space, it's an emerging commodity. it's not even a commodity at all but more of a chemical. and they have some specific concerns. pricing is very opaque. they have a real difficulty in hedging risk. is this -- lithium isn't something at this point that's traded on the l.m.e., etc. and they really don't have
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experience and expertise in this field. there's also continues on the outlook for lithium. where's the supply-demand balance. can some of the bige players really deliver new supply and disrupt the finds of some of the smaller companies and where are prices headed? that's still a point of debate. all those concerns mean banks do remain cautious. david: if credit officers are looking the other way and loan sharks are off the table for miners, how are they looking? where are they looking for funding here? what's the impact when looking at prices ahead? >> the company talked about no traditional, not loan sharks, i guess but the point similar. they're looking at more expensive debt. whether that is from a hedge fund, more expensive debt
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instruments. credit funds. sources of capital that comes together to lend to projects. and also the end users. the carmakers. the battery producers. they are stepping into this space. they are to some extent filling that void and helping out by funding some of these projects, but of course that comes with strings attached. lots of caveats. one developer said they want all the trimmings, including getting supply at a cheaper price. it's not quite as palatable for those developers of the project. it means also that it's a harder task and is taking companies longer to put financing in place. what does that mean? new supply is pushed further out. it means there's a constant shifting of the balance and the market outlook for lithium. that's again another factor that's putting into question those projections of prices. we know from people like morgan stanley, they are particularly bad choices in the market. they do see prices through 2021.
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issues like financing and supply coming on, they put those projection into doubt. david: fairly fluid situation. david, thank you. david stringer live for us. now a look at the latest headlines. a unit of australia's mccory group is close to a deal to buy a majority stake in t-5. we're told an agreement could be announced as soon as this week. valuing the u.s. data center operator at about $800 million. the state sale by iron point -- let's try that again. requires approval from the committee in foreign investment into the united states. now a push by the distributor of jim beam to persuade more indians to booze up has left them with a hangover in the u.s. they've agreed to pay more than $8 million to settle claims it bribed indian government officials for years.
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they say the distiller paid to have their -- to secure prominent placement on store shelves. to banking. the meds -- head of mitsubishi's deal with morgan stanley says he wants to put an end to workplace harassment he said it will be a difficult job but many employees have risen through the ranks of what he calls a sports jock culture. ihe wouldn't comment on individual cases but says he's aware of incidents in the equities division and other departments. let's get a sense of what's moving across markets. sophie: amid funding challenges mineralsum, we do have gaining ground after credit cisse made it its top pick in the sector given that it's looking to deliver above-market
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returns. iron ore sinking into the 50's. energy rising after it was raised to neutral at j.p. morgan and cigna health care sliding with pharma stocks in australia. this stock getting hit hard by price target cuts as further regulation makes life difficult. in greater chinese markets, want to highlight chinese carriers continuing to sink in shanghai and hong con. chinese developer getting knocked down among concerns. macau ka sigh noah operators seing a day of red, m.g.m. china off nearly 7% after revenue getting hit hard last month. david: thank you. breaking news wherever you are, bloomberg on twitter launched tictoc by bloomberg, the first network designed for social media. this is bloomberg.
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david: all right, here we go. it's that time of the day for battle of the charts and in the blue corner you can see of course garrfield, our not so friendly neighborhood cat /grizzly bear reynolds. on the other corner, mark "the ull" cardmore.
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it's the founges have a look at the charts. let's get started with mark. mark: my chart is just a simple panel showing the best p-ratios of the shack high versus the s&p 500. there's always didn't count for inese shares but chinese shares have cheapened significantly more than u.s. shares. the chinese economy is growing comfortably above 6% while the u.s. economy struggles to achieve 3% growth. the chinese economy is growing twice as fast. on top of that, not only are p.m.i. ice strong, but the satellite information and p.m.i. data is valid. there's real activity in the chinese economy. i do not understand why chinese shares have cheapened so much i think there's a great relative opportunity there. david: great chart there. that's a great question there on the top. which one is growing faster than
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the other. you done see it from the chart. garrfield, i want to bring you in now, what's yours? >> mine is also about china, it is the topic of the moment. it poses some of the same questions in fact. the -- that mark is posing. what's going on with the disconnect between the economy and the stock market? especially relevant with china where they're not necessarily all that aboved, a lot of participants are retail investors. so sometimes in emerging markets they turn out to be a lot smarter than foreigners. and if they're telling, which -- selling, which they must be, it's a warning. speaking of warnings, you've got the chart up now. the white line is bloomberg's china g.d.p. monthly tracker. that tracks where we think the chinese economy is going at an annual pace. that's been holding up quite well. and yet the stock market has divorced from it. it's fallen off a cliff.
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and the great thing going forward is -- the question going forward is which line do you believe? will growth slow down more to fit with what the stock market is saying? or is the stock market going to come back up? i tend to think actually in the long term, the stock market will come up but i think a breakdown this serious is going to mean going forward the outlook for the economy is not so great. david: garrfield, great chart, my producer tells me cudmore takes it today. thanks so much for coming. more coming up next, this is bloomberg. ♪
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♪ >> and brad in for emily chang. this is "bloomberg technology." in the next hour, we became a regal car company, those are the words of elon musk after reaching his goal of building 5000 model threes in the final week of june. we have reaction and analysis. plus, dell is going public again offering a cash and stock deal with 2


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