♪ angie: further to fall. bearish speculation on gold at its highest and's records began. futures faced their biggest monthly loss in two years. new budget terminal is cracking up, and galaxy that's as -- bets on monte carlo. welcome to "first up." good morning.

but go to markets in asia this morning. bending things in the red. the new zealand starting things off in the red, a bounce of .2% right now. seeing slight strength at $.65. we have seen commodities in this route really take a hit. we are also counting down the opens in australia, japan, and south korea. japan, we are expecting service numbers this hour. friday, dropping less than a percent on the nikkei. chicago futures pointing to a lower open. d thisld be seeing more re week. point-yen right now, 183 33.

starting things off, breaking news. beat.oks to be a net income at $1.12 billion. a lot of people were expecting this was going to be a good quarter. in fact, some were expecting and rising 10% from a year earlier in the second quarter. $1.12 billion. $1.07 billion. we will continue to watch this here at dbs. certainlyities rout deepening with copper falling to a six-year low and gold at levels not seen since 2010. weak manufacturing data from

china on friday and demand is declining. juliet has been watching this for us. let's talk about copper really quick. ,t seems like what is going on this ban on selling stocks, people are going to the metals. we saw a rash of measures by chinese authorities to stop the equity rout. --tead, we are ceiling seeing traders selling out of copper. china consumes 40% of the worlds supply of copper. that manufacturing number coming through on friday exacerbating the selloff. there will not be as much demand for it. that is why we have seen the copper price flat. futures are down 15% year to date. you can see most of the weakness coming through in the last couple weeks as we have seen the rout in equities.

down 1.5% to the lowest level since 2009. yvonne: if you cannot sell stock, cut your losses. --will look at goal later gold later. but what is making it lose its shine? >> we are seeing investors go the first time, declining for the fourth week in a row. the problem with a weaker gold price, under $1100 an ounce, if it falls below $1000, that will curb the profits of miners. barclays saying you need gold around $1000 to become an attractive investment. a lot of other people saying, gold is looking useless at the moment because it is not giving interest act. -- back. look at the bloomberg

commodity index, it is falling to 13 year lows, down 10.5%. let's go back to copper for a second. a couple different outlooks. goldman sachs saying the could worsenout and in citigroup saying it could climb by 15 by the end of the year. a few differing outlooks, but it will really impact and followthrough into the markets today. japan willng in probably be under pressure. yvonne: you have copper and oil in the mix. juliet, thank you. can get more on all the top stories at our digital business,n, bloomberg bringing together the best of business week and digital content at one address. also at bloomberg.com, recovery worries. forecasters that say japan's economy shrank last year.

and how hong kong is feeling china's pain as an anticorruption campaign hits shopping and tourism here. that is on bloomberg.com. check it out. checking other stories this morning, galaxy looking beyond slop,to offset the betting on monaco. neither the seller or the price have been made public. his 34% owned by the state of monaco. times, nowancial pearson is selling the economist. it was not included in last week sale to nikkei group, but pearson is disposing of its 50% holding to continue its transformation into an education company. the economist has been edited in london since 1843. 47% stake in penguin

random house may be up for sale. buyback of 3000 is on top of $300 million in delays in the largest penalty ever imposed, topping hondas $70 million fine last year. chrysler fiat recalled millions of ram trucks for steering and airbag problems. documents show a litany of recall problems dating back to 2011. wto countries have clinched a anticipated tariff on goods. shery ahn, how do they make this happen? shery: this deal builds on a previous agreement that did not

cover products that became popular after 1997. that can be concerning since we have so many new tech products. on 201 products are expected to be listed from computer chips to videogame consoles. after three years of to members agree to cut tariffs. the director is calling the deal a landmark agreement and saying trade in these 201 products is valued at over $1.3 trillion per year and accounts for approximately 7% of total global trade. look at the timeline. it is quite tentative. nothing set in stone. by september, they hope to discuss the schedule for tariff cuts. by september, they hope to conclude an agreement at a ministerial congress in kenya-nairobi.

by july 2016, they hope the deal will enter into force. but we will have to see how the negotiations move forward. yvonne: we talk about this on and off, how there has been a divide, obviously. china and taiwan have contested certain products. how is that looking? shery: taiwan has been a big issue because they have had to talk it out with china. eventually, they could not persuade china to include some products. taiwan has opted out. we also have columbia and turkey opting out. said theycial has have expressed willingness to join at a later date. flat-paneled displays because they are key in the industry but could not persuade china. -- two officials are

hopeful they will join at a later date. yvonne: how significant is the deal? how happy is the u.s.? shery: very happy. they are saying it wilson worked 60,000 -- will support 60,000 jobs in the u.s. the deal is estimated to be worth as much as $190 billion to global gdp and will help companies like intel, ge, and others. yvonne: trade officials in the u.s. saying it is a breakthrough. shery: for many countries. yvonne: now, the battle for the boardroom at a chinese cement maker. the company is pushing ahead with a shareholder meeting this week, which may determine which of the rival holders takes control.

david here with details. run us through here. it is quite the battle. complext is a very struggle for control. it is china's fourth-largest maker. you have several layers of ownership. employee lawsuits. shareholders wanting and so forth. you have the largest shareholder, 28% owner of the company, increasing its stake in april. that is why we have shares halted. yvonne: for three months, right? david: three months back in april. this is the group. ,hat is the portion in yellow which called for the removal of seven board members. on the other side the portion in green combined with the portion in blue. they are basically opposing the

proposal to remove the seven board members. thely because you look at company board and what it is saying. if you have a change in management or the board, it would trigger some debt covenance, and it would need to repay half a billion in debt at 101%. it has basically said, we do not have money to repay the debt immediately in case of losses. there is a twist. the vote takes place on wednesday, july 29. tuanri has withdrawn its proposal to remove the board members, meaning we may be able to get a vote between the two camps. will get more clarity, certainly.

the big question for shareholders is when they get the shares up and running. yvonne: quite a long time. as they obtain legal counsel on these developments. david, thank you. coming up, trade ministers making a final push for the transpacific partnership. we will assess arguments for and against the deal. stay with us. ♪

yvonne: checking stories making headlines, china has called for talks with japan over joint development of oil and gas reserves in the east china sea. this comes days after tokyo released pictures of what it says are platforms close to the median line between the countries' maritime interests. china and japan agreed seven years ago to develop reserves. discussions broke down amid a

dispute over islands in the east china sea. the greek bailout has been delayed with officials arguing about the format of discussions. the troika has been due to fly for -- to athens for meetings on monday, but they will start on tuesday. capital controls are still enforced, and the stock market is closed. the new agreement must be beat -- in place by july 20. and an animated flightpath of pluto based on images gathered by new horizons earlier this month. you can see temperatures as low as -229 celsius. much of the ice is frozen nitrogen. trade ministers from 12 pacific countries getting together in

hawaii this week to push for an agreement on the transpacific partnership. the deal and to create a broad pact accounting for 40% of world trade. but as paul allen explains, it is attracting plenty of criticism. reporter: the setting looks idyllic. negotiations probably will not be. , the five years of talking u.s. hopes for a breakthrough this weekend in hawaii. the 12 countries involved are keenly focused on reaching an agreement on the transpacific partnership. of the is a crucial part ,.s.-china trade deal accounting for 40% of the world's economic output. >> it will open up markets that currently are not fully open to u.s. businesses. reporter: but there are sticking points, many of which have been causing concern for a long time.

the united states is pressuring japan to open up its heavily protected agricultural market. its autohas predicted market will suffer to japanese made cars and trucks. there are concerns the deal was being done in secret. payments may be lengthened, which means for the general public, a longer wait for generic medicines. details are secret. defenders of the tpp negotiations say the text is not agreeable -- available because nothing has been agreed. once the text is settled, it will be presented to all 12 countries in a take it or leave a deal. public opposition is likely to reach a peak. paul allen, bloomberg. yvonne: coming up, it will be a busy week on wall street. earnings season continues. which companies we are watching and why after the short break. ♪

yvonne: welcome back to "first up." a busy week ahead with 200 companies reporting earnings. here is a look at what to expect the next few days. >> this week on wall street, earnings season powers on with 240 companies reporting. canonday, baidu and

released earnings. hosting trade ministers for five days of meetings on tuesday. dupont and twitter reports earnings. in asia, we will be react -- watching reactions to the philippines president and his 2016 budget, three chilean pesos -- 3 trillion pesos. clso in washington, the fmo ending is meeting to end monetary policy. on thursday, profit reports from samsung, sony, and colgate. may haveumer spending helped the economy rebound in the second quarter. sharp,ay, exxon mobil,

mitsubishi will report earnings. japan's cabinet will hold a conference on the country's economy. the imf warned last week that japan's debt could triple by 2030 if they do not change their economic approach. yvonne: a lot going on. for more on the week ahead, we are joined by mike accardi -- mccarthy, market strategist. thank you for joining us this morning. as we just saw, a lot going on in the u.s.. we have a lot of economic data coming out. second-quarter gdp numbers coming out. we have seen a mixed bag in terms of earnings in the u.s. >> we certainly have. some disappointment there. growth, that is very

disappointing. it tends to point to the idea that some of the weaker macroeconomic data we saw in the second order is feeding into earnings. if that is a slowdown at the corporate level, i do not think it derails too much of the thinking about the u.s. economy. but it has been a mixed bag for most of the year. it is a concern that will likely see some improvement. nonetheless, a concerning picture at this stage. having said that, we have only heard him one third of companies so far. yvonne: a lot of the big ones are tech and commodities, taking a beating with the rout. what sectors are you looking for for a little strength? the most disappointing are industrials and tech. keytech result dominated by companies.

industrials, very disappointing, down 10% in earnings. that is the area we look to for the overall health of the u.s. economy. the stronger dollar has had impact. but i think the 10% slip in earnings is very concerning. the worst fall, commodities. energy sector down 24% since this quarter. that does not speak well. supply side response. yvonne: in terms of strategy in investing, you say it is time for a contrarian view. we saw a crazy falloff in commodities. >> it is time to start thinking about that. in particular, the dominant theme is the u.s. dollar. that write-down in september is

almost a given. that seems to be a done deal. my concern would be that is already in the market. we saw the dollar index rally by 25% from the middle of last year to march of this year. one rate hikeast is in the pipeline. that strong dollar is clearly one of the impacts in the commodities drop. it does not continue to strengthen over the next quarter. we easing of pressure on the sector. on the flip side, a view that the stronger dollar flows away from emerging markets and into the u.s. a lot of that flow has already occurred. one area for potential undervaluation is the global emerging market indices. valuations in u.s. stocks seemed a little on the top side.

if it is not the u.s., where are you seeing alternatives? >> i hate to bring it up, but europe. we are seeing growth numbers and corporate earnings. this is not one of our favorite areas, but for the investors that are nimble and will get in and out quickly, europe may be the best short-term valuation. in particular, the french index looks low. numbers coming through despite a weak reading last week. yvonne: we have to leave it there. mike, thanks so much. that is all the time we have. thank you for your insights.

yvonne: good morning. it is 7:30 in hong kong, half in our from the open of trading in australia, japan and south korea. beautiful view this morning to start the week. ."u are watching "first up ♪ yvonne: top stories this hour, a gold dropped to five year lows shows no sign of ending.

hedge funds taking a short position for the first time as expectation grows the fed will raise rates this year, making other assets profitable. broader slump. a wto has sealed the deal to lift tariffs on 201 tech products, including medical products and gps, worth an estimated $1.3 trillion per year. tariffs are excited to be fully eliminated within three years of the start date, july 1 of next year. sui cement is going ahead with a shareholder meeting amid a fight for control. the largest investor wanted to sack the chairman and shake up the board but has withdrawn its position. i shares have been halted

for more than three months in hong kong. let's check in on markets in asia and see how things are going. probably the worst global rout last week. seeing in new zealand, down one third of a percent. new zealand dollar pretty much flat at $.65. we are counting down to the open in japan and korea. japan, ending things in the red on friday. continuing to point to a lower open in tokyo. nikkei closing down less than a percent on friday with the dollar-yen he much flat. goldman sachs is saying the commodities rout could worsen in the face of china's slowdown. copper levels have fallen to levels not seen since two 2009

wow gold remains a five-year lows. at this point, no light at the end of the tunnel. >> a lot of factors weighing on commodities. -- thethem actually manufacturing gauge in friday at a 15 year low. the likelihood of a rate rise in the u.s. all of these are playing a massive part in commodities. we have seen oil enter the bear market and are looking specifically at copper and gold. prices have been falling significantly. the copper futures project falling down to six-year lows. routan sachs said that could worsen, but copper prices are getting a bullish outlook from citigroup. if you look at gold, holdings

have declined for a fourth straight week. gold has been under pressure with barclays saying, if gold is below $1100, it is not an attractive holding for investors. there is a lot of pressure on commodities at the moment that will hurt miner profits as well. yvonne: not looking good on the commodities front. juliet, thank you for that. let's get a closer look at the with ju yi from bloomberg intelligence. you have really been in the field. what is the sentiment like in china in terms of performance? week andin china last i found the operating performance diversified between large-scale producers and small-scale producers. large-scale producers may have some margins. might gole producers

out of the market because they have to incur high operating costs applied by the government to implement environmental protection provinces -- policies. we may see leading producers regaining market shares and pricing power. have been blaming a lot of the commodities rout with the slowdown in china. are there any signs of demand improving? >> unfortunately today, i have not seen that yet. in china, demand is mostly driven by government projects. this year, local governments may not have funds to match central government standings. the central government sets up the investment amount. local governments match investments through their own

funds. realyear, due to a weak estate market, local governments may not have money to spend for investments. they may have lower tax revenues from tackling overcapacity asian. overcapacitation. yvonne: a lot of people have been selling metals. where do you see the outlook for metals? >> i would think metal prices may stay pressured in the remainder of the year. supply is still increasing. demand, we do not see a recovery. we have seen increasing which we seeck, being exchanged eventually. going forward, for the metals market, we still see an

oversupply, which may pressure prices. yi, we appreciate your insight. thank you so much. time for a look at other stories we are following. . shery ahn. gome is being purchased for $1.5 billion. it is owned through a holding company. the acquisition will give wong 55% of company shares. schedulesting flight to cut costs. they will double service to london and frankfurt. the struggling carrier has 50 unprofitable routes and plans to

transfer sure hold operation to its budget brand, thai smile. the company says changes are temporarily -- temporary. hoping to raise its soccer game in asia, opening a shop on alibaba. they are selling official uniforms and memorabilia. it gives real madrid potential access to 600 million customers. those are your top corporate headlines this hour. echoe: australia's entertainment as a new casino on the way in brisbane, and wants to make sure highrollers are there. jeweler toing on a lure tourists with your cruises and truffle tastings. david, explain this. what is the logic in this?

if you're willing to spend money on blackjack, you might as well do some shopping? >> there are two parts. one is spreading development risk. ubs estimates it will probably cost $2 billion to build the whole thing. they need partners on board. haveiggest project they undertaken is this casino in sydney, and this is more than twice the size. the second reason is to bring in vip gamblers, people who invest upwards of $2000 an hour. they want to attract as many of those people as possible. yvonne: certainly, jewelers may get benefit out of the partnership. how will the relationship help with more gamblers at the casino ? the vip gamblers they are

going for, maybe 30% of the revenue, it is an incredibly small-market. the echo ceo said there are only 250 players in the world. if you can target people in that region already spending a lot of program hasoyalty 1.7 million programs across china and macau. if you can target those people, you have done a big part of the job already. as far as their partners, dorset, ritz-carlton. they have a loyalty program. a lot of what is driving it is using loyalty programs to bring high spending customers to your casino, not your competitors. yvonne: david, thank you so much.

new budgetr's terminal has suffered more unfortunate headlines. delays in construction and a billion-dollar cost overrun. thatow there are claims the taxiway is sinking. how bad is it sinking? some photosok at that illustrate the extent of the problem. you can imagine an airport runway or building that is uneven is a major problem. airplanes need level services to take off. airport --the oh airport, the weather has big impact. take a look at the soil and the pavement. in some cases, you see puddles and rivers near aircraft. this presents a problem for pilots. it is an inconvenience for passengers.

and it is a threat in terms of debris on the runway. punctured tires. you will recall the concorde crash in paris. that was the result of a plane hitting debris as it took off. no one is suggesting there is dire danger, but it is something airasia is looking closely at. the ceo says they are working with malaysia airport to figure this out. he is a big issue at a billon dollar terminal that was already late and over budget. again, not a welcome sign. the state is not alone in battling mother nature at airports. what our problems we have seen at other airports? zeb: what we have seen in , oneeast asia and bangkok airport in 2006 was beset by

problems because it was built on a swamp. you see things like fractured runways, a runway shut down for repairs. that led to extensive flight delays from month because of the volume of traffic into the airport. in jakarta, the international airport until last year was unable to accommodate the 7ongest range jet, the 77 because the pavement was not strong enough to handle the takeoff weight. kansai in osaka, waterlogged. a landfill underneath sinking as well. yvonne: scary development. thank you for breaking that down for us. coming up, we will check on the weather. we are feeling the heat. el niño putting the burn on asia's economic outlook. ♪

yvonne: checking stories making headlines around the world, the president of syria has admitted years of civil war, he is running out of soldiers. televised address in more than a year, bashar al-assad said they no longer have the manpower to defend the country. he issued amnesty for deserters and denies the army is collapsing. the remarks are a rare public acknowledgment of a conflict that has killed 200,000 people. praisedt obama has africa's economic dynamism but is warning its leaders to tackle tribalism and discrimination holding the continent back. the president stressed the availability of opportunity to private enterprise and saluted kenya as a tech hub.

economy grew 3% last year. torrential rain drenched pakistan over the weekend, threatening to drive up food prices. monsoons have forced hundreds of people from their homes. beenres of farmland has inundated in one province. the downpours will continue for most of the week. the effects of el niño are starting to be felt across asia. some scientists say it will get stronger and may overtake the one in the late 1990's, which is blamed for 20,000 deaths and $30 billion in property damage. take a look.

yvonne: our next guest says el niño will be stronger and last longer. joining me now is an hsbc inclceterre.seph you say this year is different. what is different? >> last year, we were getting information el niño was dying out. all the keyat models by u.s. agencies and japan, they are pointing to a strong el niño. last week, we had an update from

the australia meteorology board. they said key monitoring's across the pacific, water temperatures are a degree warmer than usual for 10 consecutive weeks, beating the record of eight weeks in 1998, which was the worst in recent memory. yvonne: we are already seeing signs of drought conditions and monsoons in india. how worried are you? droughtre seeing conditions in provinces like vietnam. in india, the effect is different because of the monsoons. the monsoons have been normal bus far. that said, food price inflation is picking up. yvonne: we have seen a commodities rout. inflation pressures could be offset.

is there much to be worried about? when el niño started to be realized a few weeks ago, oil prices were heading towards $70. there was a risk of inflation. couldod price momentum create substantial gains. oil prices have declined and you are not seeing inflationary pressures. if you look at the balance of risk of growth and inflation, it is tipping towards growth. rural households, rate of consumption. it has a persistent impact. now that we are seeing el niño left into next year, there is an 80 percent probability it goes into next year. and soybeanseat

could be affected. yvonne: will we be able to -- excuse the pun -- weather the event? >> there will be some issues for central banks, like target inflation. with indonesia, indonesia -- india and the philippines. the central banks may have issues reaching their target inflation forecast, even with lower oil prices. exacerbate any pickup in food. the indonesia and philippines, this is not a self-sufficient market.

they should prepare for negative consequences. yvonne: increasing pressure with this strong event forecast for the year. joseph, thank you for joining us and giving us insight on this forecast from agencies. coming up, shares of a retailer could be seeing a fall after seeing a full-year loss. looking at potential market movers coming up. ♪

yvonne: welcome to the stock exchange. we are looking ahead to the opens in australia, japan, and south korea. it is getting ugly, this competition, i have to say. juliet? ugly.is a little japan.oking at kabu in

up 86%. first-quarter profit of 88%. above expectations. rise 6.7ncome may times what was expected. it should do well. yvonne: what about you? picked the company being booked, so i'm looking at wakabe. it directs wedding services in hawaii. if you're looking to get married there, it may be worth it. is going to be acquired with a 34% stake. >> i'm looking at jasco. first-quarter profit doubled almost 90%. territory lastht

week. we will see what it does. yvonne: that is the verdict from the stock exchange. stocks are based on news events. we will be back in an hour to see how they have done. stay with yvonne: further to fall.

bearish speculation on gold at its highest since records began. futures based their biggest monthly loss in two years. wto eliminate levies on a wide range of i.t. products. and a new budget terminal cracking up. ," coming tofirst up you live from hong kong. good morning.

i am yvonne man. let's get the latest on markets. japan, australia, and south korea start trading. here is juliet. let's see how everything is opening after a bad week for asian markets last week. more weakness coming through. the nikkei down .75% in early trade. australia down by .2%. likely way down by commodities. new zealand off by .4%. no update from the kospi. let's look at commodities, the big story of the day. a lot of traders bearish on gold. the copper prices under significant pressure. on fridayt of china adding to a selloff. there is also speculation that

chinese traders who have been banned from shortselling equities have been selling out of metal, cobbler -- copper in particular. it is down 16% year to date. a lot of the weakness coming through in recent months. it is down by 1.5% to the lowest level since 2009. we also have been looking at gold. -- gold price is below $1100 an ounce. barclays saying, if we see it fall below $1000, it is not a commodity worth holding onto. it is down 7.5% year to date with a lot of the weakness coming through in the last month or so. the oil price continuing to expand into their market 48.1, down almost

10% year to date. throughness is coming in commodities and will likely have an impact on stock markets later. yvonne: all eyes on the fed this week. countries have clinched a deal to eliminate tariffs on a wide range of goods. shery ahn has the latest on the agreement. what is scheduled to happen? shery: we have a tentative schedule. we know that it builds on a previous agreement that did not cover product that became popular after 1997, which is crucial given that many tech products were invented after the. -- we are seeing members agree on 201 products including game consoles, gps devices.

the general director calls it a landmark agreement. the annual trade in these products is worth $1.3 trillion a year. that is why he is calling it a landmark agreement. he says the trade accounts for 7% of total global trade. now that we have a tentative schedule, they are saying in september, they will begin discussion on the tariff cuts. december, they will have discussions in kenya. they want to conclude the deal by then with a ministerial conference. many hoping the deal will enter into force by july 2016. yvonne: the deal has met with criticism. not everyone is on board. why is that? >> the deal has long been stalled. many blame china for not wanting to include many items because they want to protect their industry.

taiwan is a player that has opted out of the agreement. ia ando have colomb turkey. this confident other countries will join later on. >> yvonne: you talk about the significance of the deal, more than $1 trillion. shery: the u.s. is hoping this will support 60,000 jobs. the deal is estimated to contribute as much as $190 billion to global gdp. are all expected to benefit. yvonne: other stories making news this morning, ministers from 12 pacific countries meeting in a white this week -- hawaii this week for the transpacific partnership. it does not currently include china but would permit it to include -- be included later.

dbs with profits up to $816 million. domestic rates at seven your highs have allowed lenders to increase charges to borrowers. the bank features weaker loan growth this year as the economy contracts in the china slowdown. the fed accidentally released projection rates next -- last month. they were inadvertently made public on june 29. the projections are usually released with a five-year lag. under fire from congress over the way it safeguards information. 5000 rambuying back

pickups and paying $105 million in the largest penalty ever imposed, topping honda's $70 million fine last year. the chrysler recalled trucks for steering and airbag problems. documents from the company show a litany of recall problems dating back to 2011. let's go to the battle for the board room at shansui. ahead with aushing shareholder meeting to determine which rival stakeholder takes control. david has details. the stock has been suspended for three months. what is going on? david: it has been suspended since april. its biggest shareholder basically increased its stake.

it fell below the threshold needed to keep it afloat. it is a very complex struggle for control of the company. you have the largest shareholder in yellow. 28%. it basically called for the removal of seven board members, including the chairman. of other side is asia cement and china national building. putting them together, you're talking 37.6%. board opposedny's ruil, saying of tian changes in the board would trigger repayment, 101% repayment, of half $1 billion. they do not have any money for that.

is that wetwist nrui hasnd that tia withdrawn its proposal to remove the majority of the board. they will no longer be voting between the proposals. yvonne: a lot of questions remain. thanks so much for that. let's go back to juliet and see how the commodity rout is affecting mining players. >> we are not seeing a great start in asia due to the weakness from wall street and of the commodity rout. we have gold at five-year lows, koppers at six-year lows. bhp billiton down by .8%. rio tinto weakened by .7%. forescue is bucking the trend by

.3% in the early session. the gold price is what we have been watching. a lot of traders quite bearish particularly in the hope seven an interest rate rise in the u.s. this year. australia's largest gold miner is up 3%. we are seeing some positive moves coming through. northern star up 4%, evolution up 4.5%. a lot of the selling already priced in with investors getting more optimistic about some of the gold players. in japan, some reports that some of the megabanks have reported gains in fees and overseas lending. here are some of the big banks. yokohoma down 1%.

chiba down 1%. quite a selloff in japanese banks this morning. yvonne: just ahead, as the commodities rout continues, our next guest says there is too much pessimism. ♪

yvonne: checking headlines around the world, china: for talks with japan over joint development of oil and guess reserves in the east china sea just days after tokyo released pictures of what it says are platforms close to the median line separating the countries' maritime interests. china and japan agree seven years ago to jointly develop reserves, but discussions broke down over disputes over the islands. the greek bailout has been

delayed with officials are doing over the format of the discussion. the troika had been due to fly to athens on monday, but sources say it will start tuesday. aretal call -- controls still enforced and the stock market is enclosed. a new agreement must be in place by august 20. has released an animated flightpath of pluto based on information gathered by the new horizons spacecraft this month. it reveals i'm -- in norma's ice flows and temperatures as low as -229 degrees celsius. it is similarnk to glaciers here on earth. look at the a stories we are watching in asia. minister will make his first state visit to china on tuesday. he says he will raise the

gurs.ment of ur quarterlyia reports earnings on wednesday after controversy over the safety of its noodles. it recalled a product in may after finding substantial levels of lead. and we will get the latest picture of who is winning the smartphone war when samsung reports on thursday. 6 handset may miss expectations. on friday, the limbic committee's executive board -- olympic committee board meets to decide between a shang and -- beijing and albani.

let's go to markets in the asia-pacific. nikkei down .8%. down .3%. down .3%.0 continuing with all eyes on the fed with that statement coming out. says ifguest commodities do not find a bottom soon, the fed may need to abandon plans for a writ lift off. allocations. asset morning.od you talk about the come oddities route potentially affecting the liftoff. when we see a rate hike?

>> if prices do not find a worse, growth is a lot than what janet yellen is forecasting it to be. if the u.s. closes their eyes by titans rates, just focusing on employment data in the u.s., that would be a big mistake. time, this pessimistic sentiment towards commodities has gone too far. ,ommodities will find a bottom or we are talking about deflation. comes to tooit much pessimism, are we still in panic mode? >> it seems that way. if you look at oil prices, for year,e, earlier this

there was a 30% rally. typically, when markets are bottoming, recess creates panic. that is what we are seeing right now. a lot of panic. a lot of gold stocks. you are seeing strong indication of climax selling, which is what we see at the bottom. mean, you do not want to pick a fight with a strong trend, but it looks like the trend is way too extreme now. yvonne: you said you initiated long positions in energy and gold sectors. quite a contrarian view. what is it? is it equities, futures? overall commodity currencies you are looking at? futures.es and

looking at the energy sector in the u.s., for example, the evaluation is merged with what analysts have been forecasting. there is a strong tendency for mergers and acquisitions. i think corporate activity in the energy sector will pick up strongly. another big driver of share prices. with gold futures, there is typically a lot of coverage around gold doing badly if the fed lives right -- lifts rates. but that has not always been the case. in 1999, world prices benefited. gold at these levels provide a great hedge at a time of real volatility expected to increase.

yvonne: you are long on some of the metals. at europe,o looking japan, and china. we have seen a 16% rebound in the shanghai composite. continue to legs see things green in some of the reforms the government has in place? it seems to be working for now, but some people think it will go down again. the case for china's reform will not be a straight line. it will be volatile. a healthy chinese sharemarket is required for reform. you'll always have government support. strengthme time, the is unlikely to be the type we saw earlier. the underlying theme of policy

support and improvement in company earnings as interest rates fall further short drive china prices high. , thatg at china h market is very cheap. again, it is one of those cases where investors have gone to the pessimistic on prices for asia. yvonne: definitely seeing extremes. talk about japan real quick. we are expecting retail sales this week. you have been long on the yen. is this commodity-led? >> either commodity prices will find a bottom or the fed will have to reevaluate. if prices continue to head down and push up inflationary pressures and we're still

talking about a rate hike, that will be a negative environment. yenhat environment, typically performs. looking at valuation for the yen, it is extremely cheap. provides a great hedge in the portfolio in case volatility picks up. in the facetightens of inflationary forces. yen-pound and euro provide a good hedge. late cycle tightening, yen provided a great hedge. yvonne: we appreciate your insight. amp. from

could this week the more positive? more headlines after the short break. ♪

>> welcome back. it is monday, july 27. exchanges continue to diversify holding. ag signed an agreement

over the weekend to buy the foreign exchange trading 76 million dollars. exchanges diversifying into other asset classes as prophets inaccurate -- profits evaporate. has had itserling worst week since may, falling against the euro as retail sales shrunk in june. the pound fell 2% against the euro. traders are hopeful of a bounce back in the pound with expected economic growth at a faster pace in the second quarter, boosting the case for higher borrowing costs. option traders making a bet on brazil's currency as it hits a 12 year low. currency strategists see it weakening against the dollar,

declining by as much as 30% by next july. it tumbled 5% last week. the most up against major currencies worldwide after the government said it would not meet physical goals. those are the stories driving the fx markets this morning. up next, malaysia's new billion-dollar terminal has troubles. how deep they go and what threat they pose. stay with us. asian stocks continuing a lost from last week. we will see how things go throughout the morning. ♪

mom has always been one of those people who needs to keep busy. if she's not working in her garden, she's probably on one of her long walks with bailey. she was recently diagnosed with a heart condition. i know she's okay, but it concerned me she's alone so often. so i encouraged her to get a medical alert button. philips lifeline offers the best options to keep her doing the things she loves in the home she loves. if she ever falls, or needs help, i know we can get to her quickly, and with her condition that can be critical. and even though she doesn't typically go far from home, the button always goes with her. these days, she's still as busy as ever. just the way she likes it. innovation and you. philips lifeline. lifeline is america's #1 medical alert service.

visit philipslifeline.com/caregiver today or call this number for your free brochure and ask about free activation. yvonne: it is a: 30 in hong kong. happy monday. we are one hour from the open of trading. you are watching first up. top stories, the slump shows no sign of ending, hedge funds tending a net short position for the first time as expectation grows that the fed will raise rates, making other assets more profitable. the price route is part of her broader slump which has seen a

wide range of commodities fall out of favor. 50 organization countries have sealed a deal to lift tariffs on a range of products covering 201 items including semi conductors, medical products, and gps systems. estimated $1.3 million a year -- $1.3 trillion a year. the started is expected to be july 1, next year. in the second quarter, cbs with the process of 608 million u.s. dollars on higher interest. domestic rates closed near seven-year highs. faced weaker growth this year. markets in the asia-pacific looking like this.

continued pressure close to 1% right now. kospi pretty much flat on the board right now. australia stock seeing pressure, as well. lumpur, their new timer no has suffered unwanted headlines after delays in construction and a billion dollar cost overrun. there are claims the taxiway is sinking. we saw the pictures earlier. it is unwelcome for pilots and passengers. zeb: disconcerting. this new terminal at kl international airport is welcome wheree the old terminal is bare-bones. now there is an attractive terminal but the issue for airasia is that the taxiways maybe buckling because the soil is shifting.

there are further issues like standing water -- big ponds when it rains. in we know it rains often southeast asia. these problems at airports in southeast asia are not unique to the region but they are a concern for safety. buckled pavement, debris, not a safe combination. blown tires, debris sucked into the engine, nobody is suggesting it is that dire but airport authorities say they are working .o address the issues for airasia, it appears it is not fast enough. they refused to move into the terminal because they believed it was not ready. the airport forced them to move in. yvonne: when you look at those pictures, it seems like they are

not the only once going through challenges especially in the southeast asia region. zeb: this battle with mother nature is not unique to malaysia. it happened in bangkok. continues to suffer with swap issues -- swamp issues. last month, the runway shut down prepare -- repair work. it significantly impact of the economy. in jakarta, they just completed upgrades so that the 777 can take off. purchased those planes poker recently not able to fly to london because they could not achieve takeoff performance. yvonne: these risks are heightened here.

zeb: aging infrastructure. yvonne: thank you. time for a look at other stories . thai airways is adjusting its a schedule to cut costs. from october 25, it will scrap rome and los angeles flights. the carrier has about 50 unprofitable routes. they plan to transfer operations to his budget brand. the company says changes are temporary and they will be reviewed. says they have no plans to reduce production in china despite slowing sales. the company was considering cutting output numbers and worker hours in china. salese, passenger vehicle fell for the first time in more than two years as growth slowed.

beyond macauking to upset the continuing slump. it is betting on monaco, taking 5% of operations. prizer the seller nor the has been made public. partially owned by the state of monaco. those are your top corporate headlines this hour. yvonne: australia's echo entertainment has a new casino on the way in brisbane. with chow taied fook. david choices live from sydney. an interesting story here. they talk about the casino vipstry dropping in the

thanks to the anti--- campaigns. what is a larger care -- what is the logic here? stephen: it is about spreading the risk of development in brisbane. they are building out a substantial portion of the downtown. about $2 billion will be spent. that is a big spend. spent isecho has ever 900 million. to thist to get access network of high-value customers that chow tai fook has. there is a ritz-carlton hotel in the development. these are opportunities to get people into programs which is something that casinos are keen for. yvonne: he sent these hong

kong-based companies will take 25% stakes in this resort. how will this help with more gamblers? stephen: the key thing is the .ip game, being a small market globally, there are only about 1500-2000 people that they are targeting. you have to make sure you get a foot in the door. chow tai fook has a loyalty program that offers lamborghinis,with truffle tastings, yacht cruises to people who spend a certain amount per year on hong kong jewelry. if you can get your foot in the door with those people, there is a better chance you can get them to your casino rather than your rival. yvonne: are there risks involved in this partnership? david: you mentioned the story

with galaxy. casino development in asia is not looking as positive as it was 18 months ago. down gaming revenues are over the past year. operators -- in the first half of the year -- seemed to be a pretty well. the crackdown in macau seems to be driving gamblers abroad and that seems to be helping people further afield. there is a lot of development going on here. they plan for casinos in japan. you have impressive casinos in singapore and here and australia, there is the plant casino in sydney. edned is a hotel plant up up in cairnes.

years.an change in seven increase see revenues sixfold. a lot can change during that time. they are putting down the money now. it will be interesting to see how things turn out. yvonne: seven years ago. we appreciate that, thank you. week ahead with more than 200 companies reporting earnings. we look at what we can expect the next few days. earnings season powers on with 240 companies reporting, the busiest week yet. on monday, canon released earnings. free trade has been the focus of the transpacific partnership in hawaii. days oft for five

meeting. on tuesday, twitter and ford will report earnings. economists think -- in asia, we will be watching the reaction from the philippine president as he submits his budget. on wednesday, panasonic, singapore airlines, and facebook earnings are ones to watch. in washington, the fomc anticipating to set monetary policy. economists think they will raise rates in september. more consumer spending may have helped the economy rebound in the second quarter. on friday, exxon mobil, sharp, and mitsubishi will report earnings. japan's cabinet will hold a conference on the country's economy. japan's debtd that

could triple by 2030 if the government does not change its economic approach. more on theill have tpp after this break. then, why cleaning up pollution in china is having a costly affect the nations energy sector. ♪

yvonne: trade ministers get together in hawaii this week to push for an agreement on the tpp, the transpacific harner ship. the deal aims to create a packed accounting for 40% of world trade. it is attracting plenty of criticism. reporter: the setting looks idyllic, the negotiations probably will not be. the united states hopes a breakthrough will come this week in hawaii.

the 12 countries involved are keenly focused on reaching an agreement on the transpacific partnership. the tpp is a crucial part of the pivothit it to asia -- hav to asia. the deal does not include china. >> it will open markets that are not currently fully open. reporter: there are sticky points which are causing concern . for example, the u.s. is pressuring japan to open its agriculture market. the u.s. has long protected its auto industry with tariffs on japanese cars and trucks. opposition is rooted in deep suspicions the whole deal is being done in secret. one leak suggests pharmaceutical payments may be lengthened, meaning a longer wait for cheaper medicines.

copyright legislation is likely to be tightened. defenders of the tpp negotiations say the text is not available because nothing has been agreed. once the text is settled, it will be presented to each as an all or nothing deal. at that moment, public opposition will likely reach its peak. checking stories making headlines, the president of syria has admitted that after four years of civil war, he is running out of soldiers in his first televised address in a year, he says the army no longer has the manpower to defend the country. he issued an amnesty for encouragednd people to sign up. his remarks are a rare acknowledgment of a conflict that has killed more than 200,000 people. president obama has praised

africa's dynamism but has warned leaders to tackle corruption, tribalism, and discrimination. thepresident stressed opportunities available to private enterprise and saluted kenya's status as a technology hub in africa. their economy grew next year. torrential rains drenched pakistan over the weekend causing flash flooding and threatening to try for up food prices. 42 deaths have been reported. thousands of people forced from acres ofes, 173,000 farmland has been inundated and job province -- punjab province. what are some of the

problems facing the energy it is in china? guest: considered a risky sector by .nalysts the overcapacity issues in china and the global commodity flow and also the shift toward a more .fficiency economy to make matters worse, we are seeing up record amount of debts in the sector coming during this quarter. analysts are saying we may see default. yvonne: in terms of risks for default, what are subsectors we should look at? lianting: we are talking about renewable sectors like coal miners. sectors facing serious problems of overcapacity. coal prices, slumping 21% this year after a tumble last year. the premier has talked

about how pollution is a problem in the nation but it looks like things come at a cost. we are already seeing defaults. lianting: indeed. we are seeing a number of them. several companies have default it. analysts are looking at another startup company to pay their bonds. yvonne: we could see the stocks taking a hit. thank you. in other news, the financial -- the magazine was not included in last week's sale to the nikkei group.

it will continue its transformation into an education company. the economist has been headquartered in london since 1843. housen's stake in random may also be up for sale. onlinedrid is opening an store on alibaba's mall selling club merchandise. it is the first deal of its time and gives real madrid potential access to 600 million alibaba customers. clung clung up -- antman onto the top spot at the box office this weekend. million.24.8 box office.com has predicted pixels would take the top spot.

coming up, one of our reporters is counting on catalogs in today's stock exchange but will it be happily ever after? find out when we return. ♪ yvonne: a quick check of the

markets around the region. seeing asian stock continuing its loss on the worst week for global equities this year. tumble here down one half of a percent in sydney. downward pressure out of south korea, town one third of a percent. we are also expecting chinese industrial profits coming out

this morning. trading starts in just under 15 minutes. welcome to the stock exchange. do you take it? kabu down 2.7%. it is an online broking service. yvonne: we are just going to blame the commodities. watabe unchanged right now? >> not unchanged, not unchanged, not unchanged. it hasn't matched yet.

the company is offering ¥700 per share. on friday.e close jafco down 4%. it has been an overbought territory since last week. before that, down 6.5%. analystood recommendations. but with so much gain, it was bound to follow. yvonne: tough times. thanks guys. ♪

yvonne: trending business is up next. we saw weakness across the board in the u.s. and europe. out. commodities are there was an uptick on gold since trading started. the most amount of base metals, not so hot when it comes to gold. we will be looking at gdp out of the u.s. and that all-important fed meeting taking place. yvonne: a lot of economic data. rishaad: and the movie pixels. yvonne: it was supposed to be antman, but it didn't. rishaad: they blew up the great

wall of china in the original, but the taj mahal was spared. and so was washington, so there you have it. yvonne: thank you. trending business is up next. ♪

mom has always been one of those people who needs to keep busy. if she's not working in her garden, she's probably on one of her long walks with bailey. she was recently diagnosed with a heart condition. i know she's okay, but it concerned me she's alone so often. so i encouraged her to get a medical alert button. philips lifeline offers the best options to keep her doing the things she loves in the home she loves. if she ever falls, or needs help, i know we can get to her quickly, and with her condition that can be critical. and even though she doesn't typically go far from home, the button always goes with her. these days, she's still as busy as ever. just the way she likes it. innovation and you. philips lifeline.

lifeline is america's #1 medical alert service. visit philipslifeline.com/caregiver today or call this number for your free brochure and ask about free activation. rishaad: it is monday, i'm

rishaad salamat, and this is trending business. here is a look at what we are watching. commodity crunch. copper at six-year lows. gold is under pressure again. oil declining for a fourth day. the galaxy heading for monte carlo over talks about the in