Billions more if trade talks do not progress. Osaka and japan. H2o plans to wash its hands of toxic debt. In a bloomberg investigation s employees have worked with the Chinese Military. Less than half an hour away from the start of european trading. Want to draw your attention to treasuries. Yields have floated higher since coming down. Now, this as Goldman Sachs joins jp morgan slashing forecast. Indicating a risk in session is ahead. Futures, same impression. Dax futures up 0. 6 . Paris, a quarter percent. Gains of 0. 2 . What do you see in the gmm . Asian equities going higher. Yields higher. Despite President Trumps talking about how he has a plan b . Has been captivated by reports may be a truce could be on the table if we see some restarts. Hong kong up 1. 2 . We do see money coming out of the yen. Lets go to the other side. You can see coming out of treasuries, and going into debt. Watchinging to be mining stocks in the european section. Prices, and focus in brazil and china. Concern about supply. Those are interesting features to the story which could influence the trading day. Lets get to the markets. Good to have you with us. Lets talk about the mood in the markets. Protectingvestors themselves around what could weekend, intoe the weekend. What is your expectation for success. Markets are in a different mood from where they were. Hoping for some sort of truce ifry a it doesnt seem as trumps talk about a plan b plan a, no increase in tariffs. About whatbe talk great friends he and mr. Xi are. The fact both sides have gone into the weekend lowering the bar in expectations again and again. Now we have talk of some sort of truce. Markets are picking up on that and going, we are not about to get a bus stop. At the worst, we will get the status quo. Stocks hitting a record high couple of days ago. It is not so bad. About what is going on with treasury yields. Flashing backe up. Why do markets seem so complacent . Much likey looks very quarter and positioning. Three straight quarters of 25 basis points or more down in yield. The only two times that has happened is at the beginning of 2008. Grim times. Ome how extraordinary the mood is and concerns about the Global Economy. Amongst all of that, they have gone so far, so fast. Theonly risks do seem to be upside. What if there was a breakthrough and you saw a serious move to price up one of the three rate cuts . You could see some further backing up in nields. Tois probably a good time take the money out of treasuries. Been less in has rewarding. You have a chance to reenter at better levels that offer you more yield protection. On that note, i saw comments talking about how emerging markets could get some sort of relief. Looking at the second half of this year, if we are expecting progress. Which assets would produce the best assets. It is hard to see risk assets doing that well. Done well amid some of the gloom. Up look at chinese stocks, more than 20 . That is a pretty good performance. You want to be a bit more selective. Stocks offer potentially greater gains than bonds. These sorts of times. Reits and utilities, offering a superior yield. Other government bonds. Having borrowing costs come down. With the risk there, a competition in rate cuts. There is the potential for it to be a double hedge. I do think. Trading over 1400 a trade ounce. Debate on thehe question of the day. Which assets will produce the best returns in the second half of 2019. Reach out to us. Lets get the first word news. While ways ties to the Chinese Military looking to be closer than previously acknowledged. This includes a joint effort to classify emotions. Goldman sachs has joined jp morgan. 1. 7 . Ee the 10 year at down from 2. 8 . As recently as last sunday. The new figures price in expectations of a prolonged trade war. The nuclearbreach deal for the first time today. The Atomic Energy agency says it will exceed a cap in a stockpiles of lowgrade uranium. Spiked asave sanctions were upped against iran. This is bloomberg. Thank you very much. Plan b promises additional tariffs if his talks with president xi fail. This is bloomberg. China trade tension is the dominant economic theme. I am expecting a positive to be more than the negative. Risk for us. Jor potential thethe investment will accelerate. This tradeication of war and weakening Global Economy in the form of exports, going into a negative zone. We know we have to build this so such externalities will not have a major impact on our economy. Guest talking about the potential impact of the u. S. China trade war. Trumpomes as president warns of substantial additional tariffs in china there is no progress on a trade deal. The pair plan to meet at the g20 summit saturday in osaka, japan. For more, Stephen Engle joins us. Know donald trump could put additional tariffs on the remaining goods imported from china. We know he might hold off, if the meeting does go well. What is the new news we have learned . We know xi jinping has arrived. They are going to meet facetoface saturday. 11 30 in the morning. Sandwiched between bilateral with the crown prince of saudi arabia and the president of turkey. All eyes really are going to be what will be discussed and what kind of concessions if anything are going to come from xi jinping or donald trump to get this trade war on friendlier terms. Seven months ago, they agree to have a truce for 90 days but it fell apart. We are sitting at the impasse. Are they going to be plotting out a roadmap going forward, or as donald trump willing to go to plan b . The implementation of the threatened extra tariffs on 300 billion . Fits and starts before in the last year. Interesting to ask what will success look like, what will beachwood look like. Does that just mean they agree to restart talks . Out highery rule tariffs. This are a lot of ways could play out. That is right. What is the definition of success. That the chinese coming back and saying, we agreed to and ago . K out 1. 5 months we are willing to talk about that again. Is it a roadmap of future talks . The best Case Scenario is continue to talk. Given the fact as well, donald trump is going to be preoccupied with other issues. Iran, sanctions in turkey. The senate has voted about blocking arms sales to saudi arabia. He has a meeting with Vladimir Putin tomorrow. A lot on his plate. Engle is our chief north asia correspondent. We will have indepth coverage live from osaka. Important to these markets, especially what comes. In hong kong. Mao facebookuckerberg says was too slow to respond to a video of nancy pelosi. It made it look like she was slurring her words. Zuckerberg discussed the incident at the aspen ideas festival. Improve execution. We dont want to go so far saying a private company prevent you from saying something it thinks it is factually incorrect to another person. Elliott management and advanced talks to buy qep resources. Could reachned they a deal and weeks. His wall street losing its lucrative spot as corporate max maker matchmaker . The bank traditionally brought together funds and businesses and charged of bux for doing so. The start away from of equity trading. We will look for stocks to watch at the opening. Including bayer. Size of its stake in the german business. This is bloomberg. Just under seven minutes to go until the start of trading. Lets get your stocks to watch. Covering h m coverage today. Larson focusing on the texas netexis. Elliott management disclosed more than one billion euros stake in the company. Once they put to rest the upigation regarding ground weedkiller, they saw h m this morning, what is the latest on the swedish global retailer . Second quarter as negative as expected. A number of positives people might focus on. The inventory is improving. That will lead to a reduction. Expansioneducing plans by 45 stores. Even though the results do not point to a positive performance, you may see some upsides. Do you have in h2o story . The opening will be a test of how well the damage control has worked out. They have refinanced some of the most controversial assets. Money flows have improved. See if investors are convinced they have turned around. Investors have no problem connecting the fates of the two. They may have to respond themselves at some point. A lack of liquidity, putting this issue front and center. Get all theto enzymeual stock stories, specifically. We will watch all of those closely. Coming up is the market open. Futures pointing higher. It could be a risk on day and europe just as it was in asia. Anna a minute to go until the start of cash equities trading. Markets in asia focusing instead ,f plan b from President Trump focusing instead on what seems to be plan a come which is the a, which is the aim to come to some kind of truce on trade. Lets talk about iron ore. Developments in brazil pushing iron or prices iron ore sessions up iron ore prices up. The u. S. 10 year yield was stuck around to present and seems 2 and seems to be higher now. We are expecting a bit of a bounce at the start of the European Equity session. Expectation building as we head towards osaka and the g20. Some of the important stuff around osaka and the g20 is still a couple of days late. Saturday is the day when we see meeting. Ump plenty of a geopolitical news to come the markets weiay. This is the picture for European Equity markets as they open up. We have seen some money coming out of the yen. 0. 1 . Se 100 up by spanish and French Market are up. Modest rally in expectations. The head of the g20 coming through in equity markets in the asian session. I mentioned that basic resources , the materials sector might be in focus today because of what we see in iron ore prices. The materials sector is in the green, quite bright green, was suggests there are some decent move which suggests there are some decent moves. You get a bit of a risk on sense from the sector perspective. What do you see in the individual movers . Up, first off, 365 stocks 206 down. It is almost 2 to 1. As far as the big gainers today, hsbc is adding the most points to the stoxx 600. Rio tinto not far behind in terms of point additions. If you take a look at the losers here, British American tobacco has gone ex dividend. Down. Ll see a few stocks yesterday was the last today you could buy the stock and get the current dividend. We have 10 others. Andalso see nestle glaxosmithkline following, as well as unilever. Some of the defensive stocks are down this morning. European markets in general higher on optimism for some kind of trade trees, as president ce, as President Trump said substantial additional tariffs will be placed on china if there is no progress with president xi at the g20 summit. Joining us now is daniela russell, head of u. K. Rates strategy at hsbc. Are you pricing in a truce . Do you continued do you see this continuing to drag on past the weekend . Daniela markets have rallied a long way recently. It is only right we stop and take a pause here. Clearly in markets are waiting for the g20 summit and what that means for fed response and whether perhaps they move by zero or 25 or 50 in july and what that then subsequently means for longerterm rates. Right here, the markets pricing in the kind of, you know, there is some trade relief may be in the near term. That is reducing some of the tail risks to the downside that markets have started to fear. This is a little bit of a pause in the rally that we have been seeing of late. A chartwant to show you that shows how volatility markets are pricing in a premium around g20. Rise that volatility markets are nervous ahead of a significant meeting. What are the stakes for you for the Global Economy . 1. 2 trillion could be knocked off the Global Economy, taken out of global gdp by 2021 if we see escalation in these trade tensions. What is at stake for the Global Economy . Daniela it feels that we are at the crossroads here. For various other reasons, other than the traded tensions, the fed is looking as though it is going to start to ease policy soon. Thats relation of the trade tensions raises fears about recession risk. That escalation of the trade tensions raises fears about recession risk. Matt i want to point out that we are looking at buyer shares rising more than 5 in germany. We have been shares rising more than 5 germany. It could on mock 30 billion in germany. It could all mock 30 billion once30 billion in ups round of lawsuit lawsuit finishes. Which assets will produce the best returns in the second half of 2019 . Incredibly important question for anyone investing in these markets. Daniela it is. To me, the big area of focus is on the bond markets. I think if you look at kind of the long ends of the curve, especially in europe, there is still attractive yields on offer. Even if there is some sort of relief in the nearterm, it seems very difficult to see the lower yield environment changing and whether that be from the fed and you know, taking the traded tensions to one side trade tensions to one side for the moment, we are still seeing a gradual shift in the feds framework. That should be consistent with a bullish environment for bonds. Anna thank you very much. Daniela russell, head of u. K. Rate strategy at hsbc stays with us. We will certainly put those together and talk more about your rate expectations, in particular in the wake of what we have seen from the likes of Goldman Sachs, just overnight changing their treasury call. Up next, we will bring you the stocks on the move so far, including h m. It is surging after it posted Second Quarter earnings. There were things not to like about the earnings, but there were a few things to really like. 9. 4 thisup by morning. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are open higher this morning. The dax up 0. 5 . Changed,nd ftse little just treading water. Getting mib in italy 0. 5 . Look at our individual stock stories. 6 this up more than morning. A 1m discloses more than billion one billion euros stake in the company. They see returns coming in from bayer after the roundup lawsuit. H m also up more than 9 . They said they have a strong start to the summer. June sales up 12 compared to a year earlier. The biggest loser on the stoxx downas to be chr hansen, nearly 14 , the biggest drop for the Company Since their 2010 ipl. They deal ipo. They deal in the bioscience world. Goldman sachs has joined a jpmorgan in pulling down his forecast for u. S. Treasury yields. They expect the yields on the 10year note to fall to 1. 75 by the end of 2019. Expectationsrating for a prolonged hit from the u. S. China trade war, along with the dovish shift by key central banks. Daniela russell is still with us here from hsbc in the studio. I am want to try to bring up a chart which illustrates where the thinking of the market is around 10 year yields by the end of the year. To 2. 34. Currently, yields are lower than that. Where are you . Hsbc has been, for quite a long time, below the consensus or at the bottom end of the consensus. Where are you . Daniela absolutely. We have typically been right at the bottom of the spectrum. It seems we have lost our sledgehammer. What seems to be happening is t the market is clearly has clearly rallied a long way. Bankers have a followed market expectations. It seems that economists and strategists have followed that in turn and are moving behind. Right now it seems a lot is in the price. We have to paint a pretty gloomy outlook for the Global Economy in order to warrant kind of revising down our yield forecast. We are still forecasting 10year gilts to end the year at 2. 1 10 year yields to end the year at 2. 1 . For us to kind of revised that down, we need to be kind of looking at the more some more adverse recession scenarios. Anna you are still talking about insurance cut. That is interesting. Matt what kind of growth and inflation are you expecting . I look at the u. S. , i think we are getting a gdp figure today. They are expecting 3. 2 . At 2 , at the core cpi unemployment at 2. 6 . It does not seem like an environment 3. 6 . It does not seem like environment where you would cut rates, even for insurance purposes. Daniela the other thing going on and one of the reasons why the markets rallied so far already, even if we take back six months ago, we were still expecting the fed to raise. Part of the rally has been driven by what has kind of been mistaken tiny expectations been taken out tightening expectations being taken out. There is this inflation undershoot. Various had there is fed members talking about that. Over the last decade or so, on core pce, the fed has really missed the target to the downside much more often than not. It is this recognition of this persistent inflation on undershoot which is inflation undershoot, which is why they are adopting this easier stance towards monetary policy. Anna and something maybe President Trump will be pleased about. He has been critical of Jerome Powell and the fed. Recently, positive about mario draghi, saying maybe the u. S. Needs mario draghi instead of Jerome Powell. Mario draghi quite like independence for the ecb and that would be something that would not please President Trump so much. You dont have to take this question very seriously. Can the fed learn anything from what the ecb is doing at this point . Seems, well, the ecb it mario draghi has kind of been able to surprise the market when they least expected it. The ecb has tended to act more aggressively. It is this recognition that one policy rates are at the lower being more aggressive preemptively in boosting policy and boosting stimulus is perhaps the way to go. Thats one of the things that Jerome Powell has talked about. Aboutis some debate whether the first fed cup would be 25 or 50 basis points. Would be 25d cut or 50 basis points. See in terms you of the dollar euro rate this year . There has been some back and forth about the possibility of a currency war. We asked the question yesterday if the g20 would be the ideal place to kick off this currency war. Clearly, each side would prefer to have a weaker currency to boost exports, right . Where do you see that . 1. 14. Back at where do you see that rate at the yearend . Perhaps one ofs the reasons why mario draghi came out with his comments last week. He has obviously watched Inflation Expectations in europe trending lower. There is relatively little ammunition in the toolbox. By signaling this distinct willingness to ease further, that therefore puts downward pressure on the euro at a time when the fed is looking to cut rates. That would otherwise put upward pressure on the euro. It becomes even more important for the ecb to adapt its stats stance asd become well and become much more dovish. That is what we have seen and as been effective for the exchange rate. Anna daniela russell, head of u. K. Rates strategy at hsbc. She stays with us. We will get to the u. K. Let me tell you about some of the commentary we see coming out of the minister of commerce in china ahead of the g20 meeting. China is calling for a favorable environment for the xitrump meeting. The spokesperson saying china urges the u. S. To immediately remove measures against huawei. You wonder how likely that is to come from the white house. They hope they can all Work Together to close to make progress. We will keep across all of these lines coming out of moscow. T we also see a line from saying that any additional tariffs will not intimidate the chinese people. Clearly, the u. S. Has an operating on a carrot and stick pr policy over the last couple of days. We have heard the president out, saying that maybe he will not raise tariffs on additional goods if the meeting goes well. We have also heard him say if the meeting goes poorly, he is going to raise tariffs on the additional 300 million of imports. It is interesting as we lead up to this meeting on saturday. Also interesting as usual, Boris Johnson. Has he gone soft . Heap of the chances of a no deal brexit at one million to one. We will have to how much risk that puts off the table next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Minutes into thursdays trading day and the ftse 100 is entirely flat, but the stoxx 600 up by about 0. 1 . Lets talk about what is going on in the u. K. Politically. Boris johnson has softened his stance on a softer brexit. He says the chances he would be with no deal are one million to one. Daniela russell is still with us. Daniela, you listen to the twist johnsonsof boris responses around brexit. He says one thing, then another to different audiences. This is very difficult when trying to work out where you cant assets will go. Daniela absolutely. It is extremely unpredictable and expect the unexpected. There is still a variety of options on the table, which is posting difficulties for both the bank of england and investors alike. What do you think the chances are of the u. K. Actually getting out of the eu by the current deadline . The chances of a hard brexit are one million to one if the chances of a hard brexit are one million to one, what are the chances of an actual brexit . Daniela it looks difficult at the moment. Theresa may try to get her deal through on several occasions to no avail. It seems jeremy hunt and Boris Johnson think they can renegotiate that deal with the eu. It remains to be seen whether that will be the case. Time is ticking away. A no deal, perhaps is more likely. Mark carney was asked about yesterday and what could be the possible policy response in that scenario. It is something you cannot take off the table. Therefore, in that scenario, you are potentially looking at a bigger easing package from the bank of england. If you were to see a no deal, we would expect, faced with the possibility of a recession, that the bank of england to be cutting rates again perhaps down to 10 basis points or below that now. Anna i like your reference to the pallets on when it comes to peloton when it comes to central banks. The bank of england showing signs of fading into this dovish peloton. Is the risk of rates going higher nonexistent now . Or could it still be there . Daniela in a smooth but the case, they have every it up smooth brexit case, they have reiterated that rates need to go up. They have done a good job of keeping their options open. On the other side, they have really highlighted some of the Downside Risks which are building. A kind of says to me that they are gently kind of retreating into this Global Central Bank peloton. It would not come as a great surprise if over the next few weeks and months that they really kind of did away with their slightly hawkish bias and a risk could go up or down from here. Matt to gilts are trading at gilts are trading at 85 basis points now. What is your yearend forecast . 1 , whicht is still is looking at little bit high. That was the lowest forecast out there for some time. Much of the move in gilts has been very much part of this global rally you have seen and has not really been much of a brexit related phenomenon. Fears rise further into the autumn, or if some of the Downside Risks to the u. K. Economy stopped manifesting, i think yields in the u. K. Can go even lower. Anna thank you very much for joining us, daniela. Daniela russell, head of u. K. Rates strategy at hsbc. She will be speaking to us on bloomberg radio. , a chinese a china spokesperson says they are not aware of the south china warnings posed by a potential trade deal. We will talk about the latest on natixis an h2o. This is bloomberg. Matt 30 minutes into the trading day. Top headlines off the terminal, trumps friend be. Plan b. The president warns of billions more in trade talks if tariffs if trade docs dont advance. We are live in osaka, japan. H2o plans to wash its hands of toxic debt. Controversial holdings in a new deep value fund. After elliottges management discloses a 1. 3 billion stake, sparking hopes of a settlement for the roundup lawsuits. This is the european open. Im matt miller in berlin, alongside anna edwards in london. Anna half an hour into the trading day and making gains across European Equity markets. 347 of the stoxx 600 moving to the upside. By far, the biggest mover. The clothing retailer up by shy of 10 on the back of numbers. And there were some specific elements that distracted from may be what and been some recent disappointments and the market is surprised. From a points perspective, the biggest addition to the stoxx 600 is bayer and of the story around Elliott Management taking a stake, the stock up 6. 3 . To the other side of the ledger, what is moving lower. The biggest dollar in percent hansen, a packaged food business in denmark, down 12 . They announced weaker guidance to the market around the revenues. That stock is on the wane. Weve got exdividends making their impact felt. Lets get a first word news update with debra mao. a bloombergs group, huaweis ties to the military looks closer than it knowledged. Several of huaweis employees have collaborated on Research Projects with armed forces personnel, including a joint effort to classify emotions in online video comments. If trade talks with china fall through, billions more in tariffs. President trump promised on fox business if he is not happy with progress after the g20. The white house announced the president s are set to meet at 11 30 a. M. On saturday. The time. Goldman sachs has joined jpmorgan in slashing its forecast for u. S. Yields. The wall Street Lender sees 10 year down from a 2. 8 projection as recently as last sunday. Expectations of a long trade war and a dovish shift by key central banks. Is said to have breached the Iran Nuclear Deal for the first time today. The Atomic Energy agency says it will exceed a cap on lowgrade uranium. European powers are trying to salvage the agreement. The u. S. Have up sanctions. , the kingdom has are moved and ownership capital publicly traded companies for foreign strategic investors. This page the way for International Bankers to take controlling stakes in listed companies. It ends the previous maximum limit of 49 ownership. Global news 24 hours a day, onair and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much, debra mao in hong kong with your first word news. H2o plans to dispose of the nonrated bonds that traded billions of dollars worth of withdrawals this week. Investorsmanager told it already sold some of the notes at or above their quoted price. Mark carney has hit out at funds with illiquid assets. The governor said these funds are built on a lie which is that you can have daily liquidity and that for assets that fundamentally arent liquid. We joined by ross lives i ross larson. First of all, what are we hearing about this new deep value fund . Wind horsehe large funds that will go in there . Thats right, these are the ones directly tied to the controversy that set off last week and caused such an amount of outflows from the fund. Natixis shares. Beenwill be in a separate that will reduce the exposure of the Retail Investors to deal with any problems like that. That is directly addressed. Whether there are other assets to worry about is a different matter. Anna now on this issue with h2o, mark carney pointing out there are some products out there that seem to be built on a lie were investors seem to think they can have daily access, daily liquidity when actually, the assets arent that liquid. There seems to be a Bigger Picture story that needs some investigation. Yes, very strong words. Definitely. That is the thing. We have the immediate damage control of the texas over this issue but we have th. Atixis over this issue this is clearly on the radar from carney and other regulators in britain are arguing over who is more responsible, who should be monitoring this better and there is a question of whether companies can make it look like they are more liquid than they can. I think this will be on the forefront for a while involving a number of other funds. Ive never thought of a mutual fund like an atm anyway. Is it more likely that we see now consumer warnings from these kind of funds . You are not typically supposed to withdraw the money on a whim, are you . Ross right, but you can. Is you what you see dont see money coming in and out that fast but when there is some sort of concern that you might be frozen out or unable to remove your money, like in the and woodfords funds, that can easily start a panic and make people overreact to something that maybe is not a huge risk or huge threat to the company, which is the way h2o is portraying it. It is kind of a cause and effect thing. If people worry they can get stuck with their money in the fund, they are likely to panic and you can see that people are very willing to panic for the amount of money they have pulled out of each deal h2o in the past few days. For joining us, ross. A fascinating story we will continue to cover. Ross larson, joining us from rome. Up next, who will take on donald trump . The latest from the first democratic debate. Who will the u. S. Democrats pick eventually . This is bloomberg. Who is this economy really working for . For theing great thinner slice at the top. Not everyone is sharing in this prosperity and donald trump sits in the white house about what is going on and gloats while you have people struggling to afford college. This economy has got to work for everyone and we know it isnt. It will take all of us coming together to make sure it does. Isjust by the fact that this an economy that is hurting Small Businesses and not allowing them to compete. Matt some of the highlights from the first night of debates for the 2020 democratic candidates. There are a lot of them, so theyve had to divide it into a few different sections. Here for more is Annmarie Hordern. Field of candidates is so large, more than 20 candidates. The debate last night was split up and there will be another one this evening. While you are thinking do i need to start memorizing all these names and policies, i would say hold off. We are still more than six months away from the iowa caucus. We get the first vote february whout if you want to know to maybe focus on, lets look at the top five candidates at the moment according to recent polls. We have former Vice President joe biden. He is up 34 . We have vermont senator Bernie Sanders at 27 followed by a elizabeth warren, rising in the ranks recently and californias Kamala Harris and south bend mayor pete buttigieg. Bloomberg has been tracking the king thed stal twitter accounts. These are the issues they have mostly focused on. Jobs, economic inequality, and the environment. Lately, more hot button issues like immigration have been coming up across their twitter accounts. I would say as it stands, we have to remember things could change dramatically before the dnc in july of next year. Anna thank you very much. Bloombergs Annmarie Hordern with the latest to watch in the democratic race. Bring you more coverage from the second night of the debates tonight with frontrunners joe biden and Bernie Sanders. The field is so big they have to do this twice. Will have previews, analysis, and reaction of the second debate tonight on bloombergs balance of power, live from miami. Lets talk about geopolitics between the current u. S. President had china because huawei has worked more closely with the Chinese State then previously believed or huawei has led the market to believe. The telecoms giant has collaborated with the armed forces on at least 10 Research Projects in the last decade including analyzing satellite images. Joining us, bloombergs asia tech editor. Good to have you with us. Fascinating deep dive bloomberg has done into the links between huawei employees and their Academic Research along side part of the chinese government. This is significant because huawei has suggested they dont have previous links to the chinese government. At least several times since january. Executives have asserted strongly that huawei have no business ties beyond some civilian cooperation. The sensegnificant in we now have publicly Available Evidence that huawei employees have collaborated with the pla on numerous occasions. There may be closer ties between huawei and beijing. You quote a Chinese University of hong kong professor who points out that in the u. S. , they have similar arrangements. Isnt every National Telecom working with their respective military forces . Isnt that a normal arrangement . Edwin as you mentioned, yes, it is a common global arrangement. In fact, that kind of create somehelped of the technologies that underpin the modern internet. Significant in this case for big hasons, which is huawei consistently socked to play down any ties any suggestion of ties it may have with the Chinese Military and that is that they accusations are collaborating with the military in some way. A lot of that stems from the fact that the billionaire founder was a former senior officer in the military, a former army engineer, and accusations have come from capitol hill amongst other to closert partly led cooperation between huawei and the p. L. A. And they would have us believe. Necessarily a fact that they are happening but a lack of transparency about them that is the revelation. Tech,chan, Bloomberg Asia joining us. Up next, we will bring you stocks on the move back to markets including kingfisher, ceo hopes fornew fresh turnaround efforts at the retailer. This is bloomberg. Anna welcome back to the european open. Equity markets are picking up a little through the first 50 minutes of the trading session. The stoxx 600 up. 3 . Retail the highest. Higher onurces 1. 4 the back of iron ore prices. Stocks to watch with him reporter and. With Annmarie Hordern. Annmarie team fisher up more than 3 as they have coming from an aging you the asian unit. Probably some optimism for kingfishers turnaround plan. Plg to the downside, down nearly 10 as they sell shares. More than 8 million shares being past, itp but over the has climbed 4 . Natixis up after being battered. H2o will bent firm involved. Investors like the news. With Annmarie Hordern stock movers in an up market today. ,ot many are as up as bayer surging after Elliott Management announced a 1. 1 billion euros stake. It sparks hope of a settlement over roundup, its weed killer accused of causing cancer. Bloomberg now is business managing editor benedict. What do we know about the possibility of a roundup settlement . It is not looking great for bayer. Theyve had three cases in california and they lost all three of them and that has spooked both Company Management and importantly investors. You can see it on the stock, down substantially this year. Management had a tough agm where they got a vote of noconfidence. They are trying to move forward thanse they have more 13,000 cases pending and there is no way to pay out this kind of money if they lost a substantial amount of them. Do ishey are trying to look beyond this and see how can we settle this and this is where elliott comes in to some degree. They said they would like to see bayer settle this. They think a realistic number would be 4 billion to 6 billion. Some investors say it may be as high as 10 billion but how can bayer get out of the rut they have been in for a year now . Anna good to see you. On the subject, Elliott Management, how significant it seems to be what has been driving the stock higher, this news. Benedikt elliott is always good to spook companies. Weve seen them fairly aggressively enter europe and specifically germany, and that usually has been a catalyst to change. Another interesting thing that happened recently is bayer has hired a highprofile lawyer to help them through this. Track recorddeep in helping Companies Get out of these kinds of situations. Hes worked with johnson and the merck co. Type of person they want as a quarterback to get them out of where they are now. Weve talked to some people who know this person well and hes considered a fighter rather than a peacemaker, so we might see things get worse for bayer before they get better. Matt thanks for joining us. Benedikt kammel, bloomberg businesss global editor. Ana the latest leg of stellar run that has seen bitcoin search this year. Is this a repeat of 2017 . Joining us, bloombergs crypto reporter. This mostparked recent move, because it has been quite stunning, even by bitcoin standards. Year, increase for the pretty dramatic numbers. A number of things are behind it. In contrast to 2017, which was a retail driven rally, people are talking about institutionalization. On the one hand, you have the facebook initiative, libra puts a stamp of credibility and legitimacy on the whole idea of cryptocurrencies and then you have Financial Institutions like regulated financial institution. Ofl street, london, lots firms might be interested in bitcoin because it is volatile but because of the criminal aspects and lack of the risks of money laundering, but perhaps anna interesting the libra affect because some argue it is not a proper crypto, but perhaps a subject for another day. Matt you also have a global Liquidity Pool growing and negative rates everywhere. That makes bitcoin more attractive. What are you hearing about the possibility of this going for the further . Alastair i have heard a target. The most bullish i have seen is a fund out of the u. S. , a known crypto bull. He has suggested 100,000. That is by the end of 2021, his target. That is bullish. There is a lot of euphoria at this point. People might be getting ahead of themselves because yesterday during the rally yesterday when we hit 14,000, there was almost immediately retracement to around 12,000. 12,500, which is some way away from 100,000 but who knows . Alastair marsh. That is it for the european open. Up next, weve got surveillance. European equities making modest gains ahead of the g20. Matt absolutely. It looks like the risk on rally is going to continue in the u. S. , as well as futures up. You and i are headed to radio, sticking on Bloomberg Television is bloomberg surveillance with francine lacqua. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Francine the u. S. President warns of billions more in tariffs if trade talks unravel at the g20. Slashes forecast on tenyear year treasury yields to 1. 75 . Will we see more weakness . Democratsata, and tussle on health care, the economy, and immigration. There is a second debate tonight to face donald trump at the president ial election. Good morning, everyone and welcome to bloomberg su