Trump Accuses Xi of ‘Conspiring Against US’ With Putin, Kim; Global Bond Selloff Deepens

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1:30Bloomberg Audio Studios. Podcasts. Radio. News. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin this morning in China, where President Xi Jinping is asserting his country's power and growing influence with a once-a-decade military parade. The event marks the first public appearance among Xi, Russian President Vladimir Putin, and North Korea's Kim Jong-un. Speaking through an interpreter, President Xi said China aims to stand self-reliant and that his country remains unshaken by threats. The Chinese nation is the great nation that is never intimidated by any bullies and always values independence and forges ahead.

2:19In the past, when faced with critical struggles between good and evil, light and darkness, progress and reaction, the Chinese people rallied together to defy the enemy. Chinese President Xi Jinping spoke through an interpreter there after Russia's energy giant Gazprom said it signed a legally binding agreement to build a major gas pipeline to China through Mongolia. On social media, Nathan, President Trump is responding to China's military demonstration, writing, quote, Please give my warmest regards to Vladimir Putin and Kim Jong-un as you conspire against the United States of America. The president did not elaborate on his accusation.

3:02President Trump recently told reporters in the Oval Office that the parade did not pose a threat to the U.S. power and publicly expressed confidence China would not aim its military at the U.S. But Bloomberg's Stephen Engel is in Beijing and says the message from China is clear. This is the 80th anniversary of the victory in World War II, that China really wants to tell the West that, yes, China contributed to that victory over the Japanese as well as the Nazis in Europe to probably a lesser extent. But again, it's also a great chance for China to roll out its latest modern weaponry. Bloomberg's Stephen Engel is reporting from Tiananmen Square, where the parade took place.

3:44Well, back here in the U.S., Karen, the focus is on tariffs. President Trump says he's going to ask the Supreme Court for an expedited ruling to overturn a federal court decision that many of his tariffs were illegally imposed. The president says it's essential to keep his trade policy intact, saying it would be a devastation for our country, in his words, if the appeals court rulings left in place. The U.S. Court of Appeals for the Federal Circuit ruled President Trump wrongfully invoked an emergency law for the tariffs he imposed on imports from dozens of trading partners. Let's turn to the Fed now, Nathan.

4:14And Treasury Secretary Scott Bessent is planning to interview candidates this Friday to replace Jay Powell as Federal Reserve chair. The Wall Street Journal says Bessent will talk to candidates either in person or by video conference with 11 people in the running for the role. Robert Kaplan, vice chairman at Goldman Sachs and former Dallas Fed president, says it's to be expected. Jay Powell's term as chairman ends in May, and so it makes sense that they should start the interview process. I think the main thing for the leader, the next leader of the Fed, has to be somebody who has strong grounding in economics and can make independent judgments about the economy.

4:52Robert Kaplan was speaking exclusively to Bloomberg from the Goldman Sachs Asia Leaders Conference in Hong Kong. And we have an update, Karen, on President Trump's move to oust Fed Governor Lisa Cook. Her lawyer says the president's actions are based on nothing more than cut and paste allegations of mortgage fraud in social media posts. The lawyer argues the president lacks valid grounds to fire Cook for cause that she did not commit fraud. Cook's lawyers are seeking a temporary ruling to preserve the status quo and allow her to continue performing her duties while the legal fight goes forward.

5:23Let's turn to the markets now and the global bond to sell off. Nathan, the yield on 30-year U.S. treasuries rose close to 5%, and long-dated European and Japanese bond yields also rose, with Japan's 20-year note climbing to its highest level since 1999. Eric Lonergan, discretionary macro head at Calibrate Partners, tells Bloomberg he's concerned about the slump in long bonds. We're starting to get something approximating panic. A lot of this has got to do with bond markets breaking through levels and the market being de-anchored in terms of how to price them. I think there's two things to be aware of.

5:58One is that the prevailing narratives really don't add up. So most of the narrative is about public sector debt levels and debt issuance. And that really doesn't stack up because if you look at this, it's a global phenomenon. And yet the public sector debt issues isn't a global phenomenon. Now, something has changed in Japan, however, and I think that has kind of been the catalyst for very considerable levels of contagion. What's changed in Japan has been inflation. Eric Lonergan with Calibre Partners says traders are also contending with a range of concerns from public debt, inflation tariffs, and an assault on Federal Reserve independence.

6:34In Hong Kong, Karen, Bloomberg News is reporting that authorities are probing allegations of insider trading involving at least two individuals at the stock exchange and the city's financial regulator, as well as brokers and social media influencers. Authorities are investigating if regulatory staff tipped off traders and others to upcoming announcements involving dozens of listed companies. Sources tell us the probes have been ongoing for months, with unexplained price spikes having long been a source of concern in Hong Kong. In company news, Nathan, a major win for tech giant Google. A federal judge ruled yesterday Google does not have to sell its popular Chrome web browser.

7:12Mandeep Singh of Bloomberg Intelligence says the decision was surprising. Judd Mata was in favor of divesting Chrome, which is the key asset here that everyone is looking at. And in this case, I think the ruling clearly states that they're not required to divest Chrome. At the same time, there won't be any exclusive contracts. So that means the Google Apple thing won't be at least allowed anymore. Bloomberg's Mandeep Singh says Google is required to share online search data with rivals and cannot dictate that device makers take all its apps to access the Google Play Store on Android. In a statement, Google praised the judgment for recognizing how AI has changed the search industry, but said the company continues to disagree with an earlier ruling that it monopolizes online search.

7:58And checking shares of Google this morning, they are up almost 6%. Elsewhere in big tech, Karen, Meta Platforms has poached more AI talent from Apple. The iPhone maker's lead AI researcher, John Zhang, has departed the company to join Meta's competing effort, the Meta Robotics Studio. Bloomberg News has learned that three more AI researchers are also leaving the iPhone maker's large language models team. Apple shares in the pre-market are higher by 2.8 percent. Well, back on Wall Street, Nathan, Jane Street made more trading revenue in the second quarter than any Wall Street bank in history. Bloomberg has learned the firm netted$10.1 billion in trading more than double that figure from a year earlier.

8:41It pushes Jane Street's first half trading revenue to an all-time high of$17.3 billion.

8:50Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. The White House has its eye on Chicago for its next deployment of federal law enforcement. Even though a federal judge just ruled the Los Angeles deployment back in June was illegal. President Trump says he is expanding his crime crackdown and will soon send the National Guard into Chicago. Well, we're going in. I didn't say when we're going in. Illinois Governor J.B. Pritzker says, though, Chicago does not want troops on our streets and says President Trump just wants power.

9:27Sifting fact from fiction has been increasingly difficult because Donald Trump's administration is not working in coordination with the city of Chicago. This comes after a violent Labor Day weekend in Chicago. At least 58 people shot, 8 people killed. Still, local officials say violent crime is down nearly 22 % this year. President Trump says that U.S. Space Command will be located in Alabama. It reverses a decision by former President Joe Biden's administration to keep it in Colorado. The House Oversight Committee says thousands of records from the Justice Department on the Jeffrey Epstein case have been released.

10:07Hours before the release, the committee met with some of Epstein's victims. Republican Congressman Thomas Massey says things will change this morning. When we have the survivors testifying in public, some of whom have never spoken publicly, and they've already met with the oversight committee, and it was allegedly a very emotional meeting, and that's all behind closed doors, but it's going to be open to the public. However, House Speaker Mike Johnson is still blocking a vote on any full release of the Epstein file citing victim privacy. Jim Walden, an independent candidate in New York City's mayoral race, announced that he was suspending his campaign.

10:47Walden is urging his fellow candidates to unite against the Democratic primary winner, Zoran Mamdani. According to Walden, Mamdani, a Democratic socialist, would represent a Trojan horse taking over City Hall, Adding that time was slipping away for an alternative option to gain momentum in the crowded field. Global news, 24 hours a day and whenever you want it with the Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stanchauer. Thanks, Karen. It's a three-team race in the AL East and all three won last night.

11:25Toronto, 12-9 in Cincinnati. George Springer, Homer twice. The Yankees 7-1 at Houston Jazz. Chisholm homered twice. And the Red Sox with 18 hits, 11-7 over Cleveland. The Blue Jays lead the Yankees and Red Sox by two and a half games. At the U.S. Open, Novak Djokovic, a four-set victory over the American Taylor Fritz. Djokovic into the Grand Slam semifinal for the 53rd time. He'll play Carlos Alcaraz. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Bloomberg Daybreak U.S. Edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space, but unsure where to start?

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13:47Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. China has reasserted itself on the global stage with a massive display of firepower with the leaders of Russia and North Korea by his side. President Xi Jinping said his country does not fear power or intimidation as he oversaw a once-in-a-decade military parade through Tiananmen Square. For more, we're joined by Bloomberg News Chief Asia Correspondent Rosalind Matheson joining us this morning from Singapore.

14:22And, Ros, to see the image of President Xi side-by-side with Vladimir Putin and Kim Jong-un, what is the message that Xi is sending to the world? Good morning. Good morning. Well, certainly these parades are always about optics and projection, and this one was no different. A large military presence, quite a few interesting weapons on display, some more modern versions of weapons, nothing too startling. But it's all about the pageantry and who's attending and Xi Jinping in the minute, as you say, projecting power, both internally and externally. So sending a message at home that he's very much a strong leader, he's in charge.

15:02Of course, that's important for his standing at home at a time the economy has still got some challenges domestically, but also sending a message abroad that China, alongside other countries, are increasingly looking to form these alternate power blocks to the Western-led global order. And certainly you saw that early in the week with the meeting of the Shanghai Cooperation Organization. You've seen it with BRICS and so on. And with the leaders who were there alongside him, particularly the leaders of Russia and North Korea. But you also had newcomers who were attending, Iran, Cuba and others, and some South Asia and Southeast Asian leaders who were there.

15:42So certainly demonstrating to the world that Xi Jinping is very much in charge at home and abroad. Well, we certainly saw a pointed reaction from President Trump, though he wasn't mentioned by name. During President Xi's speech, the president said on social media that he basically accused the three of conspiring against the U.S. Where does this position China when it comes to the United States now? Yeah, it was interesting to see that Donald Trump making that slightly pointed remark about giving warm regards, even as you conspire against the United States of America. He didn't really elaborate on that.

16:18But also, you know, he was saying earlier in the day that China doesn't pose any kind of serious threat to the US from where he sits. And perhaps, you know, having had his own military parade early in the year, he might be looking with a little bit of envy at just exactly what was on display in China today. But it's a message that even as the US and China both have an incentive to try and keep their ties on a better footing. and certainly the question of whether there's going to be a meeting between their leaders this year, that there are a lot of underlying tensions between these two big powers, China and the US, not just on the trade side and the investment and business side, but also on the geopolitical and power side.

16:59And, you know, that was very much an unwritten message coming from this parade. And certainly, you know, as you say, Xi Jinping didn't name check Donald Trump with the US in his comments, but it was clear that there was a nod there in some of the things he was saying. Just 30 seconds left, Ros, but where does this leave matters like the trade pause between the U.S. and China and the war in Ukraine to see Putin and Xi once again together with this, you know, strong friendship that they've talked about in the past? Well, it's a lot that's very uncertain about where Ukraine goes from here. I mean, Donald Trump seemed to be thinking that he'd managed to get the leaders of Russia and Ukraine to meet sometime soon to discuss directly a solution to Russia's war there.

17:40And that doesn't seem to be happening. Vladimir Putin doesn't seem particularly inclined to go there. And so the question is, does Donald Trump try and turn the screws on Russia further on energy, for example, to try and get that to happen? But a real message, obviously, that North Korea, which has supported Russia heavily in the war, China, to some extent, perhaps tacitly or not, that there's not a lot of energy necessarily in all of that to be finding a solution to Russia's war in Ukraine and a message to Donald Trump, perhaps, in all of that. So it feels in a way like all of this is back in Donald Trump's court in terms of whether he will be willing to pressure Vladimir Putin directly.

18:40Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app, now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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