Tone of his statements may tell us a lot. Rishaad 8 00 a. M. In the emirates, this is Bloomberg Markets middle east. Markets dive into the and show you the landscape across the asiapacific region. Gmm is the function on your terminal and you can see that the leader on the board today is australia after that surprising retail figure coming up to the upside. Were seeing a rally on the asx 200, with Retail Stocks and macro funds reportedly selling into the rally. But we are seeing the rest of the market with a little bit of a mixed picture, including hong kong and china. And theres down, really is this anticipation ahead of that communist Party Congress in the fall that we arent going to get a lot of policy guidance, so perhaps investors will be staying on the sideline. What are you watching . Yousef there are quite a few other asset classes, the energy has quite a bit of movement. That is taking a bit of a breather, halting gains after the longest winning streak this year stop it is down over half of a percent and the culprit is the countries that are exempt from the opec costs, increasing productions. 5. 7 striking on the drop in u. S. Crops. It is drilling expectations, dollarrant at 13. 19. That is the weakest since may 22, infighting plaguing the National African congress. Yous cross over and show andri stocks rebounding 1 , our clients like to use this index. Overall across it a positive picture, driven by utilities. There is some weakness coming through in consumer staples, health care as well is a key looking atyou are abu dhabi banks. Lets check in with the first word headlines from around the world. President trump has denounced north koreas latest initial initial launch. The u. S. Command says it was a landbased intermediate ballistic weapon fired over the east sea toward japan. Pyongyang has carried out saysal such test, and it is close to a rocket that could attack the u. S. Mainland. Xi jingping has arrived for talks of president putin. Moscow and beijing will find dozens of agreements. Putins Foreign Affairs advisor describes their relations as the best in history, and said officials are seeking a window for putin and trump to meet on the sidelines of the g20. A milestone energy deal for and, a contract with total China National petroleum to develop its share of the worlds biggest natural gas deal, the First Investment in iran since sanctions were eased last year. We are the First International company to come back to iran, and its a great source of pleasure and pride to continue the story and to have the opportunity to sign this contract. The first will be signed under the new irani and petroleum framework. Ceo met with the iranian president after signing the deal, defying u. S. Pressure. Invest 1 firm will billion initially as part of a consortium. Indian Prime MinisterNarendra Modi will be in israel today on his first visit. Discussions are expected to focus on security and economic ties. Israel is becoming a significant defense partner for india as the Modi Government takes to reduce dependence on russia. New delhi has traditionally downplayed ties with israel and has supported the palestinian cause. Global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. Im debra mao. This is bloomberg. Yousef thanks. Qatar has given its response to the demands. Its not known what the letter contains, nor if the monthlong crisis is anywhere near being resolved. Support for the leader remains strong, with images of him showing up throughout the country in support. The saudi led bloc will meet to plan their next move, likely a contentious and bizarre meeting. Lets go to delhi. To doha. Give me a sense of what the healing is on the ground as we can down to the second deadline. Good morning. Same mood of defiance on the ground, qataris gathering together in the evening, carrying the images. There are big posters where they writ messagese of support for their ruler, but there is also tension. People dont know where this crisis is going to go, how it will end. We dont know what the conference of the response is. Qatars foreign minister is meeting with his german counterpart later today. We might get insight into that. In, itst me jump angie in hong kong. How does Washington Play and this . We have learned that President Trump has been in close contact with all the main leader is, uae, saudi arabia, qatar, over the last few weeks. We also know the state department is actively involved. It seems that washington wants to broker a deal, but it is also split where the president has spoken a bit harshly and perhaps o taking sides with saui arabia, whereas Rex Tillerson has tried to be more of a mediator, and the state Department Also criticized the saudis for not presenting its case more clearly. In qatar, they dont really have a clear view of where the u. S. Diplomacy is thatat, but it is definitely active. Yousef thank you very much for joining us. Lets bring in our executive editor for the middle east and africa. He came in this morning, bright and early. In terms of the saudi reaction and the latest lines from the Saudi Foreign minister, another clue as to where this could go . Careful, noty giving anything away. They are going to look at the letter and make a decision tomorrow. You have the Foreign Ministers meeting tomorrow. I suspect we will hear an answer after the Foreign Ministers meet. He did stress qatar is a friendly, neighboring nation. Seem to of his remarks be conciliatory, not as hard line as he was on saturday when he said its not negotiable. Angie it seems that its about stretching the timeline. As long as there is room to maneuver in negotiate, to talk, that is the positive upside to all of this. The fact that they extended the deadline today was significant because it suggests there is an expectation that the content of the letter would have something substantial, something that they could work with. Having said that, the Saudi Foreign minister david said they dont want to extend beyond the deadline tomorrow, so they are should ber the letter something that they can talk about and reach a final conclusion. Yousef great to have you on the program. Lets get you a preview of whats to come on the show. Will the federal reserve, or the reserve bank of australia, join in the hawkish harmony we have seen for the strong aussie . We will break the right decision in less than 20 minutes. Next, theing up safety trade seems to be losing steam as the dollar revives. We will speak to todd elmer about his outlook for the greenback. This is bloomberg. Angie the dollar currently easing after it rose to a fresh high on strongerthanexpected growth. The treasury stalled after the jump in manufacturing with twoyear yields touching the highest since may 11. Were joined with more. It really seems that fx traders could be focused on treasuries today. Absolutely without question. Even though the u. S. Markets are closed, when it went to levels not seen since 2009, that is making an impact, and yields move higher, and back and have an impact on the dollar. Yousef talk to me about the upcoming rba decision. Its in about 15 minutes. What is going to be the catalyst . What are the people you are talking to looking for in this announcement . After last weeks hawkish rhetoric out of the ecb, and even the bank of canada, we want to follow through with that. The rba has inflation data which is coming out later on this month, so it makes it debatable whether they want to appear hawkish. If the data is weaker than expected, its not a good sign to sound hawkish. They will wait till next month based on the data, and certain people are looking to sell the aussie dollar into that move, with options expiring today at about the handle. We will see option traders defend those positions so even when it is a hawkish rba you will find assistance from traders, selling to the upside. You could certainly see some selling quite quickly afterwards. Yousef fantastic reporting. Good to see you. ,ets bring in our next guest he leads Global Policy convergence. Hes the head of g10 fx strategy at citigroup and he joins us now from singapore. In terms of where the greenback is headed from here, obviously it is still in full swing. Where does it go from here and how much does the data on friday determine the direction . I think you are right that the data is taking on some increased important because it has been several months of weaker dataflow in the u. S. , both on the real side and on the price side for the way i look at this in terms of the flow of data is that we did have some stronger news overnight with the strength, but it will take more the isolated strength in isn or payroll to shift Investor Expectations and even under a best Case Scenario where the data turns higher it is going to take some time. I think that provides a window in which the dollar is likely to sell off. We are receiving much of a boost you fiscal policy and when combine that with the expectation of increased convergence from global Central Banks, which are turning more hawkish, that points down from the dollar against safe havens like the euro and riskier havens like the Australian Dollar. Angie i want to pick up on that point because we are hearing a lot of hedge funds are becoming a lot more bearish in the performance of the greenback in the first part of this year really tells that story. Another way to tell the story, if you dive into the bloomberg, what we are seeing or what we have seen is this trend toward risk on again. Gold weakening, yen weakening. How do you think this trend is going to play out as we head into the second half of the year . I think that trend probably has legs and we wont just see outperformance from the higheryielding currencies or the currencies where it looks like the Central Banks are going to be at the leading edge in terms of action. I think the Canadian Dollar stands out in that respect. Thisnk what lies behind trend is that investors dont have many other options at this point. The data in the u. S. Has been softer which means the fed is not viewed as threatening, and when we look at dataflow across the rest of the globe it is clear that the earlier weakness we saw around the turn of the year, there has been stabilization since then. It presents a fairly positive picture for Risk Appetite and i think that will be the trend over the course of the summer. Briefly, we are getting some breaking from one of the larger firms on the dubai exchange. This is a contract from the Abu Dhabi National media comes, a company that has come under massive rusher over the last few months over concerns of a longterm rose prospects. Two out of three executives in the role left in a year. If you take a look at the total return of the stock, its down 45. 3 so far this year compared to the benchmark Real Estate Construction index. Company,news for the we will break that down later what i want to get back to what we were talking about in terms of the u. S. Dollar and the other majors as well. Of euro strength, which is what we are increasingly hearing, how do you best play that . With a euroyen pair . Where does it go . I think the trade is to be long eurodollar and as we look into the end of the summer there is potential we will push above 1. 15 and it could have room to run beyond that level the reason i think we will see an extension is that many investors have been caught behind, where they were slow to jump on board, and that reluctance may have reflected some concerns on european politics, but those concerns have largely been cast aside. Combine that with the fact that the ecb looks likely to continue gearsow changing of and i think that presents a positive picture for the currency and i think it will extend. Angie i want to bring up a aussie dollar, writing a fiveweek high against new zealand. Theres a lot of question as to whether or not we will get that inkish guidance at the rba 10 minutes from now. Think that will drive the aussie for the rest of the year . We have seen surprising strength in the aussie dollar. I think when it comes to the meeting itself, they hit the issue on the head. We dont have a specific catalyst for the rba to shift away from its neutral bias, awaiting that price data we will get at the end of the month. I think that is probably giving rise to some risk, that investors who have been responding to this global search of centralbank hawkishness and extrapolating it are probably getting ahead of themselves. On a relatively unchanged statement today, the aussie may selloff as investors are disappointed in the degree of hawkishness. Selloff as anthat opportunity to continue to build long because i think the barter trend is toward aussie strength. Theink it will be one of currencies that benefits from this mediumterm dollar weakness and i think that will probably take us up in the months ahead. Yousef we are keeping you for anothers take meant. Hes the head of g10 fx strategy at citigroup. A quick reminder of an amazing function you can pull up on the bloomberg, tv. You can watch us live and are able to see previous interviews. I have scrolled back to show you the conversation we had on the latest around the gulf crisis and the expectation as to where it goes. In the bottom left you can send us a question, and in the right column you have the key factoid neatly summarized,. This is for bloomberg subscribers only. This is bloomberg. Angie lets get you a quick check of the flash headlines. Headliner is plunging today on a potential 1. 2 billion share sales. Shell stock is jumping on the news as they are facing opposition rofrom the founding family. The share sale would dilute it below what is needed to block a merger. Saudi aramco is its secondlargest shareholder. Four former barclays executive told the court they will deny conspiracy to commit fraud over a 2008 fundraising with qatar. Mostormer ceos are the senior u. K. Bank executives to Face Criminal Charges since the financial crisis. The case relates to these and loans they made available to qatar. The emirates says they are hopeful to join their nei ghbor and rival on banning laptops. They say they are talking to u. S. Authorities and is confident they will be exempt from the ban. Yousef lets continue our conversation around the markets with todd elmer. He joins us from singapore. I want to go to the other majors we had the u. K. Market pmi data sell more than expected, raising questions about the integral health of the u. K. Economy. What are your thoughts on that and how do you navigate the cable trade now . I think it is certainly a concern if we see any trailing off in terms of u. K. Data because i think this is something the market has been looking or for quite some time in terms of greater drag from brexit that hasnt materialized as of yet. Until we get that evidence i think the bigger concern is going to be the direction on Monetary Policy and to some extent that means the trade on the pound is going to be contingent on which direction the wind is blowing in terms of the commentary from governor carney, who has been back and forth in recent days. Would this shift toward hawkishness we saw the pound was able to capitalize on dollar losses, and if we continue to move that direction, while it wouldnt be my favorite currency, there would be some upside. Angie we did see carneys recent hawkish resource strength in the sterling but when it comes to the second half of the year, Goldman Sachs is sticking , hsbc is still seeing a deep appreciation how about you . Extent that is going to be a function of which direction the u. S. Dollar goes. Probably better played positioning for sterling underperformance as opposed to outright weakness versus the dollar, particularly over the course of the next couple months. I think we have long eurosterling positions as more attractive. Stay with us, you will join us in a bit. Juliet has more of whats coming up. Juliette the hawkish rhetoric of the major peers, we are counting down to the latest policy decision from Australias Central Bank as the aussie continues to be stubbornly high against the greenback. It has reached a fiveweek high against the kiwi. The latest rate decision, sales set to in may and are remain at a record high for the 10th month in a row. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Angie you are watching Bloomberg Markets middle east. The latesting decision from australias rba. It is on hold at 1. 5 . In a rowhe 10th month we have seen the rba keep the official cash rate at these record lows of one and a half percent. A meeting ind generally, the 11th month in a row. We are waiting to hear what we hear from the rba. It is starting to sound a little bit like a broken record. We have heard this from the rba. Analysts saying it was set between a rock and a hard place. Not a lot they can do at the moment. ,he ecb, the bank of england the fed is talking about tightening Monetary Policy.