Page. Boris johnson will suspend parliament next month to limit debate on a no deal divorce. Joining chinas internet leaders to discuss the future of Artificial Intelligence. This trip threatens to annoy President Trump. Marketset a check of and how they closed at the end of the u. S. Session. The dow adding 258. 12 s p 500 was down. 7 . Everyone was in the green except for utilities. Energy shares beating utilities. The u. S. For more than expected. The volatility was low. Not volatility, but volume. Trading was around 15 below average. And lets look at how we are setting up in asia. Nexta we are set for a open in asia. We are waiting for the latest on the trade headlines as investors are held captive. But we did get positive news that chinese negotiators are talks. D to come for it looks like nikkei futures will open a bit lower, down about. 1 right now. That is going to be reversing the gains of two Straight Days. Futures like half the have little change and we saw it open up around 1 . Health care leading those games. Switching boards here, we want to take a quick look at the yuan that has weakened by almost 4 in august. Of course on the continuing trade the celebrations. Decelerations. While theing trade pboc is setting the fixing stronger than expected. It is still above that psychological level that leads to concerns that it could be used as a tool in the trade war. Is notasury Department Going to be intervening in the dollar, but there is still pressure on the yuan given the weak Economic Data we have seen out of china. Lets switch boards one last time for some of the important Economic Data we are expecting today. We have australias private capital expenditure. Have risen. 4 in the Second Quarter. The strong report will allow the rba to hold the benchmark at 1 for the rest of the year. That is the expectation. We have trade retail data and economists expecting inflation is slowing slightly. And we had the japan super Confidence Index consumer Confidence Index. Paul lets check in with first word news. Argentina is banking on the imf to save stave off default. Than 5package of more billion, adding to a record bailout last year. Than 10ve had more billion in the last month as policymakers try to shore up the peso after stunning political defeat. Brexit drama has turned another page with Prime MinisterBoris Johnson securing the queens admission to limit parliament ahead of debate. Forill shut down comments months, severely restricting. Pponents of the no deal brexit he said a hard brexit would be manageable but there would be a hit to the economy. Is undemocratic at a time of national crisis. A Parliament Must be able to account to represent constituents. It is undemocratic to shut parliament down and stop it from doing its job. The italian Prime Minister has been given a mandate to form a new government. Talks. After start stop the coalition collapsed when the antiimmigrant league withdrew its support. Markets welcomed the news but democrats are maned unhappy remained unhappy. 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. Paul thanks very much. The top story. Treasury secretary Steven Mnuchin has told bloomberg that the possibility of ultralong bonds is under very serious consideration. In an exclusive interview, he anticipates taking advantage of favorable conditions to borrow longterm. Between the fiveyear and tenyear treasury is widening. Josh joins us. News from mr. Mnuchin, but its not a new idea, is it . It is not a new idea. It dates back as far as 2009 that the u. S. Has consider doing this. This administration has rekindled the idea. Secretary mnuchin first raised it in 2017. It has been on and off with the treasuries since then. With the yield curve inverting as everybody is talking about and showing signs of recession, the u. S. Has started looking at this again. But again, its hard to know how serious the administration is about this. They said they are very seriously considering it, but at the same time, they have talked about this in the past. A very tepid response from investors. We want to see if they actually follow through. The intervention in the currency markets, what did the secretary have to say about this . Josh the secretary said a pretty high bar for what it would take for the u. S. To intervene and weaken the dollar. He said that basically they would need global allies to go along with the u. S. And doing it and the Federal Reserve as well. Neither of those two things seem very likely. Things thatill President Trump could do, to act on his own. Steven mnuchin says that they want others to join them, the likelihood seems relatively low even though the dollar has been quite strong recently. Thank you so much for that. Our white house editor joining us from ec from d. C. To thet the comments me international community, lets turn to the president of the peterson institute. A former member of the bank of england Monetary Policy committee. Always great having you with us. Lets get started on the secretarys comment on the dollar. He is saying that they dont intend to intervene right now, but even if the u. S. Were to directly get into the currency markets, how effective what it to thee if it comes president s concerns about a stronger dollar and everybody else undervaluing the currency gekko that is the right question to ask. That kind of intervention is unlikely to succeed. Even if the fed were to go in on this, which they shouldnt but even if they did, youre talking about a total reserve pool of well under 200 million 200 billion, excuse me. And a daily turnover in the exchange markets. It is not going to work. The president keeps attacking Asian Countries including china and paris. And they will keep driving of the dollar anyway. Shery secretary mnuchin not putting an exact date when it comes to the negotiations with china. Not even confirming that the meetings in september will take place. Tariffsthe additional are coming up on sunday. We have talked about the direct impact to what these would mean for the u. S. Economy. I know you have extensive research, making the u. S. A less attractive place for foreign investors. Tothank you for referring that. It is something that leaders are looking at. You see people doing flights to other currencies, not just the u. S. Dollar when there is trouble. You see direct investment in the u. S. Declining and that is even before they started blocking Chinese Investment directly. You will see technology flows and access to markets go down. Proportionately, people will have less reason in the u. S. Exact but you want access to markets, which is why you invest in a place. It used to be that it was a great place from which to export. That is less true now because of the Trump Administration. Back at the start, the president said that the trade wars were easy to win. Who is winning . Somewhere care from Bloomberg Economics analyzing 700,000 data points to figure that out. Buyers or placing made in china products as not easier. What is your estimation . For a while now is that the trade war is trumps afghanistan. It is openended, costly, fruitless, and there is no clear victory. He doesnt know what winning would mean. He cant tell anybody because he has no coherent strategy to do it. Afghanistan, it could take a long while to get out and it will cost the u. S. Blood and treasure. I respect your colleagues for doing that kind of work but i would not frame it as who is winning. Both the u. S. And china are losing. Other small countries are picking up some trade from u. S. And china. , but thewin environment is going to get ,orse if it becomes political whether you align with china or the u. S. Most people are losing, including the u. S. And china. That is pretty much the conclusion that the economics report comes to as well, that everybody loses. I just want to talk about deficits as well. The president is very concerned with trade deficits, but is he worried about budget deficits . Pointing out 100 billion in terrorists, but a trillion dollar deficit that the u. S. Is steering down. Staring down. Adam he and the congress are a bunch of hypocrites that were talking about austerity or conservatism during the need for stimulus in the financial crisis , and now that we have an economy doing extremely well, they still go out and cut taxes and blow spending. This is complete hypocrisy. It is probably wasting money that could be used for better purposes at a better time. Is stickingosen around because ahead, we are discussing brexit and elon musk. He risks President Trump sire by talkingrumps ire about Artificial Intelligence in china. Shery and Boris Johnson suspending Parliament Days before a crucial eu summit on brexit. Critics say it is a constitutional outrage. This is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. And on paul allen in sydney. U. K. Prime minister Boris Johnson has taken a controversial step suspending parliament ahead of brexit. Still with us is head of the peterson institute, adam posen. He spent three years on the bank of england Monetary Policy committee as well. Take a look at the political side of this. And in someoutrage way, a subversion of democracy. But if you look at it from the er side, there has been does Boris Johnson have no choice. But think he has a choice you have put your finger on something. Remains no effective majority in parliament. There may be a majority of people that dont want a hard brexit but they are unable to come together on a coherent proposal on how to end it. To agree whether it is Jeremy Corbyn from labor or whoever has to be the face of it. Johnson is taking a page from saying, im and just going to be as disruptive as possible and see if the arees aligned against me going to fall apart. A lot of people are spinning about strategy but i think it is that simple. Paul one thing parliament managed to agree on is that nobody particularly wanted a no deal brexit. We hear a lot of doomsaying. But we dont hear examples. Can you give me a few . Adam there is a lot of work out there thinking this through, but there will be shortterm shortages in medicine and foodstuff. There will be huge queues at the border whether it is the Northern Irish border or euro star. There will be breakups of scientific networks, including in the u. K. You will lose some of your best people, shortages of personnel of medicine. Bank of england is probably going to have to cut rates and the pound will crash. They will have to reverse cutting rates for too long. Let me expand on one of those points. Cable crashing. Rising,seen volatility the twomonth cable volatility the highest since brexit. We see the pound crashing more than 1 against the u. S. Dollar today before paring back some of those declines. What does it mean for the notder economy when you see just the crashing and collapsing framing the pound . The pound is overvalued if you look at the macroeconomics of it. They have very large, though shrinking, public deficits. Growthve productivity which has slowed more than the rest of the g7 and g20. Tables, asad ranking it were. They will be throwing up a bunch of trade barriers for their services and the financial sector. In an would expect irrational world, the pound would have go downward to compensate for some of that. Aere will be a bit of counterforce because people will want to buy London Real Estate cheap and pick up companies cheap. Bloomberg has reported on a little bit of that. It will not be straight down. Cable to move and the pound to move more against the euro than against the dollar. Shery we expect the new governor of the boe soon. What are the challenges he will have to face . She, not to be politically correct, but some of the key candidates are female. Predecessors of the 80s. D it in the early they will be unable to kind of pursue the domestically oriented policy and focus on domestic inflation and growth. Are going to have to keep one eye on the Exchange Rate and Market Conditions in terms of basic stability. Whether its Prime Minister johnson or whoever his successor picks, it should be someone with effort into combing markets. Into calming markets. Shery always great to talk to you. It you can get more on brexit and around the story that you need to know around daybreak. Terminals,o on your also available on the bloomberg app. Customize your settings so you only get the news on the industries and the asset that you care about. This is bloomberg. Paul this is daybreak asia. Im paul allen in sydney. Shery im shery ahn in new york. Leadersk joins chinas at a major summit in shanghai this week. The event will showcase the countrys achievements in Artificial Intelligence, even as they draw u. S. Scrutiny. Tom mackenzie joins us now. This is quite a moment for elon musk to be heading to a tech event in china. Tom for one of the most high profile u. S. Corporate leaders, one of the most colorful Corporate Leaders to be in shanghai. Chinas financial hub. This is days after President Trump says he wants American Companies to pull out of china. And elon musk will be headlining an event at the ai world conference. They will be talking Artificial Intelligence, and area drawing greater scrutiny from the u. S. This is an area where the u. S. And china are pushing ahead to see who can lead. China else comes close to to what china and the u. S. Have. This is an event, a key event to unveil some of the advancements. You have officials along with Business Leaders and academics, getting an indication of how much state support there will be as well as private enterprises stepping up in this space. We will be listening to elon musk when he takes the stage with jack ma from alibaba. Also listening for advancements on technology, getting a better sense of how much money the Chinese Government is going to be putting behind some of these advancements. If you lead in ai, you can lead theilitary, technology, and industrial space. Paul the are other reasons for elon musk to be in china, some more boring ones. Forgive the pun. Tom lovely pun, paul. Elon musk will be also unveiling tunnel transport company as well. We expect to get more details on that. He is likely to visit the Giga Shanghai thate of will be producing model threes by the end of 2019. Tesla is pumping billions of dollars into the facility. It is the First Car Company to have a fully owned majority car company in china. He is expected to meet with local officials. He is really doubling down on the Chinese Market where tesla gets current revenues at about 11 , but recently hit by a retaliatory tariff. On all cars40 manufactured in the u. S. And shipped to the Chinese Market. But there is a lot of demand for tesla in china so he is doubling down. Tom mackenzie in beijing, thanks for joining us. Lets get a quick check of the latest business flash headlines. Billion investment in crown by the australian regulator. A planned purchase for 20 stake in crown is on hold and will now wait 60 Business Days after the completion of the regulatory process. Crownsy is a blow to biggest shareholder that has been trying to exit the company after a series of setbacks. Shery apple is under increasing cabin pressure. Qantas is the latest to ban macbooks from checkin luggage over concern the batteries could catch fire. Says the computers must be carried in the cabin and switched off. Others have banned all apple laptops from the hold. Is said to be in talks to invest in an indonesian ridehailing company to boost its presence in southeast asia. Enjoyed thees latest funding round and sources say one scenario would see amazon make a meaningful payment for a stake in the start up. Ptt is looking for partners in the middle east to tackle growing competition in asia. We are in bangkok next. This is bloomberg. This is daybreak asia. I have first word headlines. Cathay pacific was the target of the latest protests in hong kong, demonstrators supporting the hiring of workers were fired for supporting democracy. Demonstrators are pushing back at Cathay Pacifics largest shareholder. Cathay pacific has fired at least seven people since the protests began. They asked me to leave. I was hurt that i couldnt help my colleagues. Confident that i can still continue. I will tell the truth. Anchor argentina is again banking on the imf to stave off default. They are in buenos aires to decide on a new package of more than 5 billion, adding to the record bailout of last year. Economy has plummeted more than 10 billion as policymakers try to shore up the peso after a stunning lytic cold defeat for the marketfriendly government. Ed lees secondmost famous tocano has come back to life the north of sicily, the home of mount etna. It has been sending huge plumes of ash and smoke into the sky. Elaines were deployed to drop water on wildfires spark by burning lava. It is one of the most active volcanoes in the world. The blast comes almost two months after interruption killed a hiker. Global news 24 hours a day, and on tictoc and 20, powered by journalists in more than 120 countries. This is bloomberg. Sheri thank you. We are a halfhour away from