♪ >> ok good ministers prepared to meet in algiers. saudi arabia is ready to cut production to january levels. clinton and donald trump prepare for their first debate. ohio, florida, and 12 states are now too close to call. in warnings of contagion rely ands small banks more than ever on each other for funding. pricesound in resource

helps competitors. is -- thissia" this is "daybreak asia". after 7:00 p.m. sunday night in new york. asian stocks are coming up a little mixed right now. oil prices what we are focused on so far. >> we have that algiers meeting this week. also, the first presidential debate. >> q the popcorn. let's see how things are kicking off in the region. new zealand, the kiwi taking a dip after a trade deficit widened to 1.27 kiwi dollars. some downside to start things off. australia, oil gaining after that tumble on friday.

let's talk about japan. having a good week, the best rally since july. think thechs dollar-yen will rise to 108 five the end of the year. now unchanged at 101.02. as you mentioned, we are talking about oil today. it looks like there could be an end in sight when it comes to that client with algiers industry minister saying saudi arabia is willing to cut production. they are meeting this week with the hopes they will agree to a freeze on output. house saudi arabia promised to do? are going to cut back to january production levels by

500,000 barrels a day. whatis different from when they on friday said they did not think these talks would come to a likely conclusion on a freeze. we then saw the brand price fall in friday's session. have a look at this chart on the bloomberg. it shows the monthly changes in bars,eduction, the blue as well as the capacity of production that opec is at. we are seeing producers under pressure to act because surplus has tripled, more than 800,000 barrels have flooded this market alone. libya and nigeria have resumed production as well. all of these playing heavily into the glut on the market. the market does not believe

there will be a freeze. how likely an agreement will be reached? is itsensus from analysts may not happen. our own team says it is unlikely. these are just words. the commodities trader at citigroup says it is difficult to tell if a freeze would be credible or doable. the algerian energy minister himself is saying things are different than they were three months ago when the opec members last met. he also said this time a very important member is coming to the table as well. iran was not present. in algeria. present it is easier to discuss with those around the table. everyone will be here.

hopes tot these talks habs another member at the table that they could come to some agreement. last hope for the a freeze even if these talks fail, right? >> absolutely. they are an informal ok meeting, but we have the official meeting in november. algeria's energy minister saying don't write oh park -- opec off just yet. at least he is quite positive there could be some kind of move towards a freeze by the end of this year. >> thank you so much. biging about of course the topic for the market, which will be oil. ,tocks close the friday session lower energy producers, apple leading declines, so what about this week? what is su keenan watching for? >> we have three stocks in the

spotlight. a fresh round of economic data and a new round of fed speak ahead. let's start with the economic data, investors watching this closely. personal u.s. lending, a big number, rose at a slower pace. also, august durable goods, fellry orders, it likely for a third out of four times. that another indication of the economy and mixed data there. will bee, janet yellen speaking at an economic for him on thursday. a lot of focus on what she might say and some other fed members fedable to speak after the made its announcement that it was not going to raise rates for now. in terms of stocks in the , it's at, wells fargo ceo heads back to capitol hill.

he was in the hot seat last week. new information that current and former staff at wells fargo have filed a multibillion-dollar lawsuit saying they are the biggest victims of the fake account scandal now plaguing the bank. pepsico reporting earnings on thursday, shares of 7.5% year to date. on monday,uise lines recently entering into a joint venture in china. they will have the first cruise ship with more to come in china. >> plenty of fireworks ahead. in a series oft televised debate between trump and clinton. what is expected? have markets price this and yet? reacting toill be the perception that one side versus the other perhaps is pulled ahead. memory, this late into

a presidential election with a virtual dead heat between the two contenders. 14 states are regarded as tossups, including ohio and florida, considered pivotal states, both up for grabs. else,ing to someone clinton is leading by a electoral votes 198-165, but if today, aion were held virtual dead heat, and that makes monday's first of three debates huge for either contender and the reaction on tuesday will also likely be significant. >> yeah, that's for sure. thanks. first word news. >> good morning. the japanese parliament returns after its summer recess with the tpp a high on the agenda. remains a supporter amid growing resistance at home and abroad. feels the tpp will

benefit the japanese economy. hillary clinton and donald trump are against the deal. the former thailand prime minister has been told she must pay a $1 billion fine for her offer to farmers of above market rates. she says the program was intended to raise people out of poverty. the bank is says injecting 5.3 billion dollars into the system is lender struggle with cheap oil. the saudi monetary authority will give the banks of funds and deposits and introduce seven-day and 28 day repurchase agreements. plunge has force saudi arabia to draw down on deposits, squeezing domestic liquidity. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. share,top story in a

more fears of the financial health of china's banks. are warningagencies that smaller lenders have never been more reliant on each other for funding, and that is ramping up contagion risks. let's bring in tom mackenzie. what more do we know? this time it is moody shining a spotlight on this part of china's banking system. what they are pointing out is for also funds accounted 34% of funding for small and medium-sized banks in china. that is a record. that was towards the end of june. that is well above the 29% we saw in january. moody's focus is on shanghai develop and bank, which it said over the last three years has seen its reliance on short-term

borrowing increase 75%. that compares to 24% for depositors. of concernlevel there highlighted by moody's. we know officials keep the rate over the last year around -- the short term repo rate around 2.4%. barteringto encourage to cushion and support the economy, but some of that money is flowing into risky loans and shadow banking products. that is a level of concern for some here. >> it certainly is, but this is the latest in a long list of warnings. how concerned should we be here? that's absolutely right. some thatring from risks are rising. there is a greater risk of contagion now. moody's for their part as well says it is a growing risk of a

liquidity crunch. i was able to catch up with one influential professor here on friday from china's institute of finance and banking, part of the china academy of social sciences. here is what he had to say about the health of china's banking system. >> the slowdown of our economic growth, the downward pressure on the economy, this background is a macro trend. it will not change in the short-term, and the mid this situation, a banking sector faces a lot of pressure. the bad loan rate is rising, profits are failing. this trend is very obvious. >> it should be pointed out that oc say their short-term goal is to curb leverage. >> thank you so much.

on, much more ahead "daybreak asia". good opec and russia be for an agreement on oil output ar or are they just talking up the market? toup next, we speak marriott's asia-pacific head and find out what its megamerger with starwood means for customers. this is bloomberg. ♪

>> you are watching "daybreak asia". i am betty liu in new york. in hong kong. man goldman sachs may cut a quarter of investment banking jobs in asia, 75 jobs across the region because of the slump in deal making goldman sachs faces. it is its worst issuances since 2008.

it is also under scrutiny for underwriting $6 million. closing at singapore trading desk as part of a global shakeup. they are focusing on quantitative research and continue to add developers. dismiss 15% of its workforce last month. marriott's year-long pursuit of starwood hotels and resorts is finally over with a $14 billion takeover, the largest hotel operator in the world. the deal increases marriott's market share outside the u.s. and gives them more luxury and lifestyle hotels. marriott had to fend off a whichnge from china, triggered a bidding war in march before walking away. a lot to talk about. we have to discuss what it means. marriott international's

asia-pacific resident joining us live here in the studio. congratulations. guys,onth journey for you and this deal had a three-month delay because of a regulatory hurdle with china the last one to go. some suggesting this might be stemming from fears of marriott-starwood taking competition away from the domestic players. >> we are still on target. were over bullish on the timing. the chinese regulatory with thees came in three phases they have outlined for us. it is a three-month delay, but we are moving -- running to the starting line now. processto us about this . how are you guys feeling about this right now, this integration 200 $50 million of

synergies you could be sharing in the next two years? what is the first step? >> there are synergies on the top line and bottom line, so we are now the largest loyalty program in the world, 85 million reward members across the world. linking these accounts. we offered on friday as the deal closed an opportunity for members to link their status. an elite with starwood, you became an elite with marriott overnight. within the first 10 minutes of doing that, we had a gold member go online, change their points over, and book a stay in okinawa. right away, instant gratification, more to come. >> how much interest do you expect in the asia-pacific region from some of these star what assets? >> a lot. assets themselves or reward members? >> growth -- both. >> we saw comments from owners

of starwood hotels and marriott properties. they see the upside of it from top and bottom line also. the clients themselves were a little nervous. we brought them together for a party on friday night, just fantastic. they love linking the points. have, with marriott, customers stay with a 60% of the time, starwood members 40% of the time. so this is an opportunity for tuesday in a hotel of choice, earn points for future vacations anywhere they want to spend them. you are right. there is handwringing among loyalty members about what exactly happens to them and their points. that withanding is the linkage, marriott members have to use three points to get one starwood point, is that

right? i think there is grumbling about that, right? >> the points are different. it is like two different currencies in some ways. we went back and matched currencies and said what is one marr one marriott point worth. that is the overall strategy. changingyou consider it if you continue to get negative feedback on it? get negative feedback, we would take a look at it, but so far it has been positive. 90% of comments on social media have been positive. they have been surprised at how easy it has been to link accounts and share points. >> you are now this behemoth in the hotel industry. of thousands of brooms, a huge amount of inventory, 30 brands under the marriott flagship, so is there

any concern about the messaging to customers at all that maybe there might be some brand confusion because there are so many brands, or do you plan on consolidating any brands at all? >> know, right now we will keep the brands now as they are. people have preferences for brands. so what we have now is 30 brands on a platform. so if you are a w client and love w, we still have w. tohave a w that sits next the ritz carlton in hong kong. they both compete for different customers. they may go on a family vacation and choose one brand. if they go on an anniversary trip, another brand. business trip, another brand, so we see this it is crossing brands. what about the inventory?

now that you control so much inventory, as i understand it, this deal was in some ways to counter with the online sites like expedia here in the u.s. and travelocity and others, how they are controlling the booking of the rooms. how might this give you a leg up even in asia? >> i think it has put us on an even footing most of all. the onliney with travel agents is about being on the shelf wherever our customers want to buy. we have great relationships with them. we have customers that want to book your online travel agencies, and others who want to book direct through starwood.com or marriott.com, so there is a benefit on both signs. there has been a lot of rhetoric about the battle, but when we sit in the same room with the online travel agents, we get along well. >> when do expect this to

benefit your bottom line? >> quickly. again, the synergies that the top, twice as many people selling, twice as much marketing. forcing synergies on contracts and a lot that we are able to do. we have more people, hotels, and opportunities. >> great to have you here. congratulations. craig smith joining us in the hong kong studio. the ratings game, the battle to maintain its press corps. this is bloomberg. ♪

>> this is "daybreak asia". i am yvonne man in hong kong. >> i am betty liu in new york. fighting for the overall resources sector. credit rating agencies are turning more bullish on many of

the biggest miner's, so what is going on. >> good morning. that is right. we have seen the likes of the biggest iron or producer, ratings upgraded or the outlook boosted, but not so for bhp. they remain on negative outlook. ranked at the sixth and seventh highest rating by s&p in moody's. ust those agencies have told is they expect bhp's credit metric to fall short of existing ratings in the coming year. they see metrics challenged by a number of factors, week oil prices, bhp has a large oil division. they are are also concerned over financial policy of bhp, looking for any sign of higher returns

to shareholders. most importantly, there is still bhpg cloud hanging over from the dam failure in brazil where 19 people died. it's not certain what the total cost of liabilities will be. those are the factors weighing on bhp, marking it from its peers who received better ratings and better outlooks. those agencies -- >> real quickly. is reaction from investors? do they share the same concerns? >> some of the debt investors say it is a concern if they will breach the threshold. they say they are still pretty comfortable with bhp, happy to hold the debt, and it is still the top-rated miner from the ratings agencies. year, have rallied this though slightly less than the bloomberg world mining index.

it is a good return from bhp. there is some concern. >> all right. we will leave it there. thank you so much. more abou

♪ 7:30 on a beautiful sunday evening. after markets closed lower on friday, a mixed session in asia. looking at that meeting in algiers with a beautiful rainbow sunset. are now just 30 minutes away from the start of trades in the first major markets in the region. >> you are watching "daybreak asia." lsu to the first world news. algeria says saudi arabia has

offered to cut oil out of this week's meeting. they would reduce production to january levels when a prompt 10.2 million barrels a day, about 500,000 barrels fewer than in august. they gather on wednesday with a. calling for selective cuts of one million barrels a day. copies are worried about contagion risks among china's smaller lenders. also funds accounted for record 34% bank financing as of the end of june. one lender has seen its short-term borrowing surged by 75% in the past three years. donald and hillary clinton face-off in the first presidential debate on monday. a new survey shows ohio, florida and 12 other states are too close to call. real clear politics says clinton has 198 look for college votes compared to trump's 165.

270 are needed to win nationwide. clinton leads trump 46% to 43%. bloomberg will be live broadcast in the debate on twitter. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> let's look at how asian markets are shaping up. >> very good morning. as we get started on this new does not suggest any risk appetite. these three markets are opening in about 25 minutes from now. the clocks changed on the weekend, so that as really been up and running. seems to suggest we are going to get a slightly softer open. a 10th ofly to open 1%. a strike down about half of 1%.

that is a nowhere gauge of what you have in south korea. we look at bond yields as well, early indications are we're getting a decent bid there. the 10 year yield, we are clearly below 2%. 198. commodities, smooth. copper, oil is also a little bit higher. big week for oil prices. a few bits and pieces of data coming up. factory output and exports coming out of thailand. not a lot of risk events out there, at least for the equity markets. >>factory what about currency m? how about the yen post-boj? >> we are seeing a little bit of strength come through the japanese yen. 194 on dollarelow

yen. we will get more clarity later on. currencies, the kiwi dollar falling to a one-month low off the back of a surprise large tradegly deficit. we are also following the lira. 299. >> whereabouts stocks, specific stocks you are watching? two groups ofg stocks. 26 minutes from now japanese banks will be reopening. a 6% spike on wednesday, things were shot thursday. declines on friday about 1.4%, that is natural. 1.5%. lots of downs at the moment on

the ability to bend it when you look at the yield curve. the other group i'm walking -- let me shift the chart. we're looking at more home purchase restrictions and china. a city announcing several rules that will come into effect today , so we are watching the property shares very quickly. that is how we did on friday. real estate, 1.5%. >> thank you so much. week was a big one for central banks around the world. the fed give us another eight by a rate rise by year's and while weaken the yen. kathleen is looking at what markets there watching around all of these plants. let's start with the fed which moves the dial on hike expectations.

what will we look for to confirm this? teame bloomberg bond running a great story talking about maybe the bond market is getting ready to leave the fed. the hike forecast, the odds for december at 55%. that has not moved very much. the yield curve, if you look at the -- if you jump into this bloomberg chart, the weekly changes in the yield curve going back to january in turquoise, the circles point out when they were fed policy meetings. last week on the far right of your screen, you see that line going down, the yield curve shrank to 1.6 percentage point. i flatter curve can mean that traders are buying longer-term bond because of a good hike rate that could curb inflation. when you see the shift in the

yield, maybe bond traders are leaving the fed. all of us watching consumer spending, that is all due on friday. our intelligence team say the onus is on the consumer to december -- to deliver the december rate hike. also, 12 fed speakers this week. 12. [laughter] expect any clarity at all? >> we will see. she wants to clarify her veal -- her views from last week when she had her big long press conference, she could use that opportunity. but not a lot of jobs reports, so maybe no new insights. , governorn banking power, president evans -- i'm watching on wednesday.

the kansas city fed president, she is a hawk. loretta messer, the cleveland fed president speaking on the economy also on wednesday, she is a hawk but this is her first dissent. i want to see if she gives any hints as to what she is watching. statement.a policy he said if the fed waits too long to raise rates could jeopardize economic recovery. he talked about the possibility of inflation. >> that is the one speech to watch closely. a lot of boj commentators say the beatings are now as closely watched as the fed. can we expect anything new from the boj? we have the governor speaking in osaka. presidentve the ecb addressing the european parliament. he will be speaking on monetary policy and the economy post-brexit. is expected to provide

more stimulus. , think everybody wants to hear you're targeting the yield curve, inflation when onto 2%, you did not go negative. people are going to hang on every word to hear if governor kuroda gives us any more insight into this shift from the boj. say toll the governor reassure markets and investors that this new strategy can work. >> thank you so much. struggling economy does not seem to have hurt shinzo abbe's leadership. publicill have strong support from despite failing to meet the goals. we are joined live from tokyo. the most recent promise or's have seen their population fall -- popularity fall drastically within months. what is different this time? >> this is all a bit of a

conundrum. what was our last week was a movement within his own ruling party, which could wind up for him being the longest-serving prime minister since world war ii. we have been wondering why is he so popular that this is possible and even quite likely? we look at his economic policy. not all of his economic policies have succeeded but it think one thing most analysts point to is employment. you look at employment in japan, it is the lowest it has been in 20 years. it has gradually been going up for six years. safe inple feel pretty their jobs, and that is important, especially in japan. that is probably the biggest reason. seen a lot ofsly negative factors and he seems to overcome those. the yen is becoming stronger than it was. we have seen his defense policies have not always been popular. >> what are the chances he will actually stay on another three

the chances are almost 100%. the question remains, does he maintain his current levels of popularity for another two years, which allow him to be in the position to do that? that depends on the economy again. now that we are seeing the yen improving end, that could hurt the jobs market, could hurt play for his support rim. some are saying it is all you about 50-50 that he will get into that third term as president of his party. >> thank you so much. much more ahead. back on oil, this makes meeting in algiers has been much-hyped but we will deliver -- but will deliver or disappoint? ♪

♪

we're counting down to asia's first market open this morning. let's take a look at japan future, seeing some upside. we could open lower this morning. ."u're watching "daybreak asia of our latestck business flash headlines. twitter said to be stepping up its search for a buyer. sources tell bloomberg the company has held informal talks with several potential suitors as the receiving interest. twitter has hired goldman sachs to solicit potential buyers. the stock has followed following several quarters of slowing growth. there said to be looking at the assets of hedge in shipping with a view to buy. -- the have asked them

if they want to acquire them. they declined to comment. they fell 7% on friday, leaving a market value of $240 million. than a decade after quitting saudi arabia, citigroup is quietly planning a comeback. targetold the bank has opportunities in the kingdom and his holding calls to coordinated push. it is keen to profit from a potential economic shakeup. -- month >> let's return to this week's much anticipated opec talk with ig are you saying saudi arabia is willing to cut protection -- production. our next guest says failure to agree this time could agree in a

boy who cried wolf situation. joining us from singapore is richard. if you were a betting man, wouldn't you say this may be a boy who cried wolf scenario from the scuttlebutt we're hearing on algiers? hearinga gossip we're over the weekend i think this time there's a good chance they do agree something. agree has anyhey impact on the market in the next year is a different question, but i think they will be weary of the boy who cried will syndrome if they do not manage to get something this time. earlier this year we had a similar situation where we had the producers meeting with the -- of course it fell apart and it left the market very disappointed. if they do it again, it does not look good for them. maybe this time with have a better chance of getting something done. the gossip or the speculation

is that saudi arabia may agree to cut back on their production to january levels. is that significant at all? mean, it is significant in that it shows the saudis are softening and their approach. they adopted a different strategy in the fourth quarter of 2014, which is that they would produce at whatever level they wanted to do in that regard it is them saying they would freeze or cut production and then ultimately agreed to do that, it definitely shows a softening and their approach. if you look at the actual production levels, these tell a slightly different story. if you look at january, the saudis were producing somewhere at about 10.2 million barrels a day. there are the summer they ramped up production to about 10.6 million barrels a day. the 10.6 would be a record-high production. if you look at saudi production during normal years you would to 10.4 go from 10.2

then back on again. i can kind of see what they are doing here. they are saying will go back to the levels we were at it from an analytical point of view, that level was already very high and gave them enough market sheared -- market share that they should be happy. i think their strategy is good a physical impact i do not think they are going to shortly markets in anyway. the market will still be very well surprised -- well supplied. >> it will not make a huge physical difference globally. what about wildcards or whoppers. what about iran? iran, when you talk about saudi arabia and iran, there are many political issues that are on the table. iran at the last meeting was very hesitant to sign up for any

freeze because the sanctions were just lifted and they were ready to get production deck into the market. they have since gotten production back into the market and we do not see that much upside to iranian production, at least in the next 12 or 18 months. growing market share a lot of you, i do not think the iranians can do that much more. from a clinical's perspective, you do not know what is going on behind the scenes. from the iranians perspective, they cannot increase perspective -- production that much further. >> that seems to be the key difference between the meeting in what to expect in algiers is the iran has a seat at table. terms of market pricing, what are we expecting? been around $40 to $50 a barrel for the last six months. how do we break out of this? breaking outee us

of this within the next seven to nine months. if you get an announcement later this week that the oil producers are going to freeze, maybe the saudis have even agreed to cut back to january levels, then of course you might get a spike in the price where it goes up. but then the market will increasingly listen to the oil bears like ourselves where we say hold on, this is not really change in the market. we have an agreement here, if you look a different projects throughout the world we actually have a lot of new oil coming into the market that will not be affected by this agreement. it will come on in west africa, come on in brazil, come on in central europe. you have lots of different supplies coming in. this is going to give you plenty of availability. the realization that the market is not going to be short, the price will come back down. i think the announcement of a freeze would give a little bit of a boost, but i think over the following weeks the market will

start to come back to normal because people will be listening more to the facts and he will understand there is plenty availability of oil. i do not see us breaking out of this $50 range. who could say what happens in one day we might see some strength, but i think it will be a very tough seven to nine months for the oil markets. said wequickly, you might stay around this range, but could we break below $40? >> we're not that bearish on the market. he first quarter will be oversupplied, very strong the facty because of we are coming out of the higher demand fourth quarter into a lower demand fourth quarter. it is always the weakest quarter. at the same time you have more supply coming in. his obitould test below $40 but we do not see it going significantly below that you or going below $40 for any

long period of time. until the second half of next year, that is when we start to see the market really rebalancing. $55 we could start go above , maybe a little higher during the peak summer period. just ahead, rolling stone magazine changes his tune by opening out to outside investors for the first time. ♪

♪ watching "daybreak asia." minutese just a few away from the open in japan, korea and australia. is founder of rolling stone

selling a 49% stake in the magazine to singaporean investor. has -- t time investor let's get details right now with our southeast asia correspondent. tell us about the story. is, you have to stay relevant, and that is what rolling stone is trying to do. 50 years on, it is no longer the brand it used to be. it was founded way before your time. [laughter] 1967 it was the academy of pop culture in the u.s., no longer the case. advertisings down, revenue is down. everybody is going online now. most -- the magazine is no longer that relevant anymore. what they are doing is to get a ,ew investor to get a 49% stake

a singaporean, 28 years old. very deep pockets. an online community of musicians which can share music and ideas. what he wants to do is make this brand and international brand. this acquisition will help it do that. interesting,s very but how exactly are they going to do that, how are they going to make magazine more relevant? >> what it will not do is contribute to the editorial aspects of it. what it will do is expand the brand. -- thelity, life events idea is to grow the brand. not just her the magazine by other events. what they can do is help expand in asia. it is something more than half the population of the world.

having a significant part of asia is very important. right now, rolling stone does not have that branding and that probably world. it has 65 million readers. 20 2 million online readers. if it can garner more of china, more of indonesia, that would be a great deal for the brand. >> thank you. let's stay on entertainment because before we go, sony's the magnificent seven topped the box office taking in $35 million. the remake of the steve mcqueen western earned mostly positive reviews, beating warner bros. intimated film storks. -- animated film. warner bros. so far is ranked fifth among the six major film companies. yet another movie to add to the list of ones to watch. >> we have so much time.

i still have to watch bridget jones baby. markets in

♪ >> opec ministers prepare to meet and algiers. there is the claim saudi arabia is ready to cut production to january levels. warnings of contagion and china, smaller banks reliant more than ever on each other for funding. becomes japan's longest-serving leader since world war ii. liveme to "daybreak asia" in hong kong and streaming on a mobile and bloomberg.com. happy monday to you.

of the majorirst markets in the region getting underway. how is it looking in early trade? david: quiet, soft. had a drop on wall street and europe. have a look at the early goings. .3% on the nikkei, not a lot on the asx 200. let's wait for south korea to get warmed up. currency markets, dollar strength this morning, retracing a little bit in the last 30 minutes as we see dollar weakness come through. 129.79 on cable. some other currencies i am following, the kiwi dollar, one-month low, surprisingly large trade deficit, the biggest

in two years. currency, big news on the weekend, moody's downgrading. we are seeing some weakness and dollar-lira. at dollar-yen. strength is well across majors against the u.s. dollar, 100.86. 2:30 p.m. local time in japan, the speech out of the boj governor, the first since the policy twist the boj announced last week. there is a lot of focus on what he will say about their ability to bend the yield curve. there is a lot of doubt.

board, adate my topix 6% pop on wednesday. the market dropped on friday. have a look at financials. topix down a fifth. even split almost between the banks. what else are we following? have a look at the bond markets, another measure of a risk appetite. the aussie 10 year yield below 2%. year thise 10 morning. your japanese 10 year, negative five is where we are. it looks like there could be an end in sight to the algeria'sith

minister declaring saudi arabia is willing to cut production. we are following this ahead of that meeting. saudi arabia saying they could go back to january levels. how big of a deal is that? >> this is according to the algerian minister. were producing of7, so that possible cut $500,000 -- 500,000 barrels a day is big. have a look at this chart. it shows the monthly changes in opec production, the blue bars. algeria once the collective group to cut its output i one million barrels a day, but more than 800 thousand barrels have

flooded the market this month alone compared with august. russia is pumping at an all-time high. libya and nigeria has resumed, and crude has dropped half its price from the 2014 feet. algeria's saying saudi arabia may come to the table, different from what saudi arabia themselves said on friday. yvonne: we have seen a change in language. wti today.side in it seems to suggest the markets are not convinced. analysts,poken to 23 21 think there is not going to be an agreement on a freeze output at this meeting this week. they are meeting on wednesday. bloomberg data fly saying it is just words. -- gadfly saying it is just words. energy minister is

fullng at it as glass half and says the difference between these talks and back in june is that an important member will be at the table this time. yvonne: which is iran, right? iran was not present. be present in algeria, so it is easier to discuss with those around table than those who are not here. the differences everyone will be here. iran at the table could make things different than june. fail, is ithe talks the last hope then? >> no, we have the november official opec meeting. these are informal talks being held in algiers. minister is energy miss m

confident these will lead to a freeze in output. yvonne: thank you. now let's get to first word news. >> the japanese parliament returns today after it summer recess with the tpp high on the agenda. shinzo abe remains a vocal supporter of the trade deal. feels the tpp will benefit the japanese economy. both hillary clinton and donald trump are against the deal. the former thailand prime minister has been told she must pay $1 billion in fines for her controversial rice buying scheme. offering farmers above market rates was an abuse of power. the program was intended to raise people out of poverty, critics say a huge amount of money disappeared. saudi arabia and central-bank

injecting $5.3 billion into the system. the saudi monetary authority will give the banks the funds in the form of time deposits. oils plunge has forced saudi arabia to draw down on its deposits in the banking system, squeezing liquidity. donald trump and hillary clinton face-off in the first presidential debate on monday. a new survey shows ohio, florida, and 12 other states are too close to call. clinton has 198 electoral college votes, compared to trumps 165. 270 are needed to win. tonton leads trump by 46% 43%. bloomberg is broadcasting the debate live on twitter. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you.

to our top story and asia, more fears now over the financial health of china's banks. ratings agencies are warning that smaller lenders have never been more reliant on each other for funding. mackenzie. in tom he has been looking into the story for us. what more do we know on this? in the travails of china's banking system coming from moody's. wholesale funds, including those raised on the interbank market, now accounting for 34% of financing for china small and medium-sized banks at the end of june. that compares to 24% in january. it is a record high. moody's points to one case study, shanghai development bank. in the last three years, their

reliance on short-term funding has increased 75%, where as customer deposits have increased just 24%. context, the authorities have kept the seven-day repo rate at a relatively low around 2.4% over the year. that is to try to support the economy. some of that liquidity ends up in china's murky shadow banking system as well. the latest in terms of a long list of warnings about china's banking system, so how concerned should we be about eight possible liquidity crunch here? absolutely right. we heard recently from the bank of international settlements warning about the risks around china's banking sector. a, which from clf gdp of 320% debt to

by 2020. there is a risk of a liquidity crunch. toen that context, i spoke china's institutional and financial banking institution at the chinese academy of social sciences, and influential body that has an advisory role with the government. here's what he had to say about the health of china's banking system. >> the slowdown of our economic growth, downward pressure on the economy, this background is a macro trend. theill not change in short-term, and amid the situation, how banking sector faces a lot of pressure. the bad loan rate is rising. profits are failing. this trend is very obvious. the people's bank of china are not blind to this. they said recently that their short-term goal is to curb leverage in the banking system.

china does have something of a cushion, $22.3 trillion of savings. yvonne: thank you so much. tom mackenzie live from beijing. just ahead, our next guest is still looking towards december, but says the fed has damaged its reputation. we get j.p. morgan's take next. this is bloomberg. ♪

yvonne: a quick check of the latest business flash headlines. goldman sachs make cut a quarter of its banking jobs in asia outside japan. 75 jobs across the region will be cut because of a slump in deal making. goldman sachs does faced its worst asian equity rating in also undernce 2008, scrutiny and its role of underwriting $6 billion in bond sales. investment corp cuts

jobs. it will close in singapore desk. it dismissed 15% of its workforce last month as hedge funds have struggled. china's biggest state-owned aluminum producer will pay a 32% premium to buy their stock at its hong kong listed mining unit. the move to privatize will make it easier to raise funds to support the copper mine in peru. the project has seen revenue squeezed by falling prices, inefficient operations, and worker strikes. we have governor haruhiko kuroda speech this afternoon. officials commenting later this week.

let's discuss that. great to have you. we're talking about a dozen fed speakers this week. the floodgates are open. are we expecting confusion or clarity? >> i hope clarity is the overriding case from what we have seen. there has been so much confusion over central-bank policy over the last nine months. towards thet points fed lining up the market for a rate hike later in the year would be welcome. we have seen september pass without too much market turbulence. towards that goes indicating they are on pace for a rate hike in december in our view would be very much welcome in terms of adding to that stability and helping markets adjust. another very gradual rate hike from the fed. yvonne: we saw that last week. chart i willt a

show to our viewers, we have seen stocks and bonds rally together. that unusual correlation is at a record high now. it seems to me we are in the risks out there, showing the love investors have four cheap money. how do we break out of this vicious cycle? >> it is a case where they both sold off, and now that is just reasserting itself. there were some fears that the would withdraw liquidity, tapering from central banks. that is not the case. weis more blunted than thought it would be a few weeks ago, and therefore we have seen bond markets move. we have seen equities move positively on the back of that as well. a lot of that risk has faded a little bit. when we think about the markets,

we think about investment allocations. you have greater stability run currencies, commodities, and were not talking about recession risks in the u.s. adding to towards a positive story in equity markets that has started to show through in the last week or so. you're saying the market will be driven by fundamentals as we look towards the end of the year, growth, earnings, inflation. how do you position it yourself -- position yourself? enit more towards the u.s. or does thed him story continue to shine? >> it will be a bit of both. the relative i wish an argument there in emerging markets is stronger. story,out the commodity the currency story. you are seeing some demand come

back and inflation under control, allowing central banks to cut rates to stimulate growth. we still think about the that side more than the equity side given the demand for income and yield. the earningsg recovery story come through in the equity space. i think when you think about the marginal growth, it's definitely and that side of the market. however, the u.s. is still in a strong position because of the health of the u.s. economy. inhave seen a pause consumption and the housing market, but we think there is enough growth there to see it rebound to be positive for more positive over the second half of the year, and that will support markets even though violations are looking higher than they were. we still expect earnings to come through as well, and that should see the u.s. market perform

better than most around the world in the last part of this year. most people are thinking double digit upside when it comes to u.s. earnings for profit growth. you mentioned oil stabilizing, a little upside when it comes to results. when it comes to this algiers meeting, what are you expecting out of this? howave a lot of talk about this is more of a consultation. now they are saying they could be cutting output back to january levels. are you expecting any kind of upside? >> not really. think you will see a lot of talk before you see any action. talk to comet of before you see production cuts come through, even though saudi arabia says they want to cut production. you have iran saying they want get back to post-sanction levels. thenything, it will move

marginal outlook on oil and the fallen stocks. mores is where you are likely to see stabilization and output rather than these talks. from the talks in the past, they seem to come up any time you see the oil price fall too low and therefore provide a bit of a floor without taking any action. i don't have any high expectations that something will come out of the meetings, but i do think you will see production slowing down over the next year and a half. therefore the price will be a at $50 or $55 a barrel for oil. that is what will matter for markets around the world. yvonne: all right, appreciate your insight. up next, shinzo abe could be an line to become one of japan's

longest-serving prime minister's despite a lackluster record on the economy. this is bloomberg. ♪

yvonne: welcome back to "daybreak asia". shipping sinking again amid reports that 40 of its ships have now unloaded. there is a view to buying their assets. hanjin declined to comment. china has released pictures of warplanes flying near okinawa, patrolling what it calls its air defense identification zone. 40 planes tested the air forces open c capability. ministryese defense

says it scrambled a fighter jet to monitor the chinese planes as they approached okinawa. however, there was no infringement of japanese airspace. the philippines and u.s. have a scheduled military exercises next month after the president says his country does not need american forces in the south china sea. 2000 troops will conduct a live 4-12.rills from october hasphilippine president sent conflicting messages about the philippines relationship with the u.s.. japan's struggling economy does not seem to have heard shinzo abe's leadership. he still enjoys strong public support. go to our bloomberg asia government reporter life from tokyo. haverecent prime ministers actually seen their popularity fall drastically within months. what is different this time?

been a bit of a conundrum for shinzo abe. it's hard to work out why he is so popular. he said he would focus on the economy and repeated that over and over again, yet growth has been lackluster, the economy shrinking at certain points during his prime ministers ship. , theen has become stronger profits from exporters that have bolster the economy could be starting to shrink. analysts point out is one area where he can say he has succeeded is in employment. unemployment is 3%, the lowest in 20 years. employment rates of graduates have been going up for several years in a row, so basically everybody feel secure and their job, a great bolster for shinzo abe we think. she goes steady as

mantra. when it comes to the chances of staying in office past three years, or another three years, what is the likelihood of that? has begun to party discuss this formulae. it would involve a change in the rules of being president of the party rather than being prime and mr.. at the moment, you can only do two consecutive terms of three years each, so they might expand that to give him three consecutive terms. him the longest serving prime minister since world war ii. whether that will happen depends largely on the economy. if we see that yen continue to rise, then that employment situation may not remain as healthy as it is now, and i could play into his support ratings, so we will have to wait and see. yvonne: obviously he has weak opposition helping him as well. thank you so much.

we will stick with japan in the next segment. latesternor prepares the policy moves. we will talk about that next. this is bloomberg. ♪

it is a 30 a.m. in singapore, half an hour away from the open of trading in the lion city. where expecting production figures for august, likely to have risen .5%. those numbers come out later this afternoon. you're watching "daybreak asia". ♪ yvonne: now let's get to first word news was stephen engle's. algeria says saudi arabia has offered to cut oil output ahead of this week's informal opec meeting. energyerian

minister says they would reduce to january levels, that is 500,000 barrels fewer than august. opec and russia together on wednesday with algeria calling for a collective cut of one million barrels. warning aboutes contagion risks among china's smaller lenders. moody's says whol pozo funds accounted -- one vendor has seen its short-term borrowing and repurchase agreement search by 75% over the past three years. could face a battle to hold onto its current credit score with s&p and moody saying they will be below the threshold for an a rating. as a number of bhp's rivals have had their own outlooks upgraded as the resource price come back is in

place. global news 24 hours a day powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. thank you so much. in,ets now, 30 minutes pretty much negative on this monday morning. david is watching the early movers in asia. david: we are seeing a negative tone. -- we will talk about movers in a moment. an update on the japanese len, session low, as usual. 100 point 75 is your level for dollar-yen. have a look at some movers across the region early. let's get started with fast newspaper the nikkei says the company is planning to brand, the low cost brand of fast retailing.

it is half the value. they are trying to expand to 1000 stores within 10 years. display, news that the company is basically calling its banks, looking for financing, tens of billions of yen. no specific amount was given to shore up their cash position. inistop shares down 1.5%. ,hese three are fairly obvious changes in ratings from analysts. i love this is getting a downgrade, and tdk a downgrade from credit suisse.

a look at south korea, these two are related here. mitsubishi looking to buy some assets from hanjin shipping. hyundai motor down 1.5%. news that we could be looking at a full strike tomorrow, and a partial strike three days after that. it is almost as regular as my birthday. 1.5% down on hyundai motor. yvonne: thank you. we will see how this plays out on wall street this week. producers and apple led declines, so what is in store this week? let's bring in su keenan live from new york. >> a fresh round of economic reports are front and center.

u.s. personal spending likely rose in august at a slower pace. we will get the latest data on durable goods. that likely fell in august. part of a trend economists say that tells us the economic picture still a bit mixed. plenty off fed speak, it, mainly janet yellen speaking on thursday at an economic forum . other members will be making various speeches. dhis follows the quiet perio the fed had meeting up to its last week.t wells fargo continues to be one of the stocks to watch as its ceo returns to capitol hill on the hot seat over the account segment, and now an update. current and former workers at wells fargo have sued the firm, saying they are the biggest victims, many fired in the wake

of the scandal. 7.5% year to date, so it is one of these stocks working well in this environment. we also have carnival cruise lines reporting monday. they have recently entered into a joint venture with china and will be making cruise ships were china, so perhaps an update on the conference call about that. from the feds speaking. the big event today, the first in a series of televised debates between donald trump and hillary clinton. what are we expecting? >> we are expecting a lot of viewers. this is the first real-life face-off between the two, and what a match it is setting up to be. going into this first of three debates, it is a statistical dead heat by most polls out there, and perhaps unprecedented this late into the race. many americans to simply can't believe that 14 states are

including tossups, two very important ones that are pivotal, ohio and florida. some analysis that if you look at the electoral college, the way the u.s. elects the president, not by the popular vote, that clinton at this point leads, but again, if you look at the popular polls out there, it remains to close to call, and that's why these debates have so much riding on them. a victory in one or the perception of victory could alter the game from here. yvonne: many analysts think the u.s. election risks are still not priced into markets. meantime, the boj may be preparing for life post governor haruhiko kuroda. the boj decision to ditch cornerstones may mean it is ready to wave goodbye when his

term ends. good to see you. i think we are the just thing the boj's decision to target that you'll curve. is it going to work? to say thatis fair most economists don't think it will work in terms of bringing 2% inflation, in terms of getting the japanese economy out of this pattern that it has been in for a long time of going between expansion and contraction from quarter to quarter. the bottom line is that most economists don't think the central bank can do the job on its own, regardless of what the framework is. you have demographics that are very challenging for japan. the population is shrinking, and there is a reduced appetite among japanese companies and households to take on new debt. we just had some numbers this

morning in japan showing that corporate cash remains near a record at $2.4 trillion worth. what just a question of can policymakers do outside the central bank to persuade japanese companies and households to spend more. yvonne: we were just talking possibly seeing another couple of years in office, at least taking some kind of leadership role. what about haruhiko kuroda governor then? where does he go from here? >> that's right. has got about a year and a half left to go. what he has done in the latest policy decision is in the view of boj watchers is positioned the boj for the long haul.

the problem before last wednesday was by focusing on a bond buying target over the next few years. ofy were going to run out bonds to buy, so shifting to a yield curve target allows the policy to be much more sustainable. it is something that any successor could take over and much more easily than shifting away from the bond buying target. he did so without causing a surgeon the yen, a tanking in japanese stock markets, with a bold new idea of overshooting inflation, pledging to keep .timulus for years to come he has managed to make that shift without causing damage. yvonne: any idea who might succeed him and what policy change might be imposed? >> you were alluding to prime likely to bezo abe

in office through 2020. the view is that it is really going to depend upon the group asadvisers around shinzo abe to what happens with the boj governorship. do they retain their influence? eveney push for someone more radical, willing to look into direct financing of debt, willing to look into permanently keeping the bank of japan's balance sheet at this massive size? or do they start to lose influence over the next year and --alf or so and do they go does the prime minister go for middle of the road candidate like the current deputy governor? that is what we will be reporting out over the coming year. yvonne: all right, great stuff so far. it seems like a bit of a legacy.

meantime, marriott's year-long pursuit of starwood hotels & resorts is finally over. takeover makes it the largest hotel operator in the world. earlier, we spoke to craig smith and ask him if regulatory hurdles in china could hinder the company's asian expansion plans. we were over bullish on timing. the chinese regulatory authorities came in well within the three phases they outline for us, so i think we are fine. it is a three-month delay, but we are running to the starting line right now. yvonne: talk about this process. aboute you guys feeling this right now, this integration process? $250 million in synergies , what are the next steps? >> there are synergies on the

top line and bottom line, then synergies across. we are the largest loyalty program in the world, 85 million members. what we are seeing right away is that we are linking these accounts. on friday, just as the deal close, we offered opportunities for members to link their status. the opportunity to link your points. the first 10 minutes, we had somebody from starwood go online, a gold member, book a in oh soccer.tt they saw instant gratification. there is more to come. do you how much interest expect in the asia-pacific region from the starwood assets? >> a lot. we saw really great, positive comments from owners of starwood hotels and owners of marriott

properties in anticipation to build more hotels. behemothou are now the in the hotel industry, tens of thousands of rooms, a huge amount of inventory, 30 brands now under the marriott flagship, so is there any concern about the messaging to customers at all that maybe there might be some brand confusion because there are so many brands, or do you plan on consolidating brands at all? brandst now, we keep the as they are. people have preference for different brands. those brands existed before and each worked well. as we have 30 brands on a platform, so if you are a w client and love w, we still have w. it is still the same. seen isg that we have that customers cross the lines. they choose one brand for a family vacation.

if they go on an anniversary trip, another brand. another brand, so we see visitors crossing brands. we make sure those brands state various a sink in their space. -- sustained in their space. counter online sites like expedia and travelocity and others, how they are controlling the booking of the rooms, how might this give you a leg up even in asia? >> i think it has put us on an even footing. our strategy with the online travel agencies about ink on the shelf anywhere their customers want to buy and be able to negotiate. we have great relationships with them. we want to be able to negotiate on an even footing. we have customers who want to book online, others want to book direct through starwood.com or marriott.com, so i think there is a benefit on both sides. there has been rhetoric about

the battle, but the truth of the matter is that when we sit in the room with the online travel agency, we get along well, because we need each other. yvonne: that was greg smith speaking on "daybreak asia". magazine opens up to an outside investor. the details on the publications new backer. this is bloomberg. ♪

yvonne: a quick check of the latest business/headlines. -- is this flash headlines. unionized workers staging a full strike before hyundai. month, the unions rejected a wage deal which might affect hyundai's efforts to reverse 10 consecutive quarters of slowing profits. that was the first time that unionized workers have put down

a pay deal. twitter stepping up its search for a buyer. sources say that company has held informal talks with potential suitors after receiving interest from salesforce. twitter has hired goldman sachs to solicit other potential buyers. the stock has fallen following several quarters of falling growth. more than a decade after quitting saudi arabia, city group planning a comeback -- citigroup planning a comeback. the company is targeting opportunities and kingdom and holds weekly calls to coordinate the push. profit from ato potential bonanza as saudi arabia undergoes an economic shakeup. the bank won a lead role as an advisor on saudi arabia's first international bond sale. the founder of rolling stone selling and 49% stake in the magazine to a singaporean investor. jann wenner, the first time he has allowed outside investment

in the publication in five decades of history. glad to have you. this is a big moment for rolling stone. haslinda: this is a huge moment for the company. it is something it has to do. it is no longer the brand it was 50 years ago. it was the academy of pop culture, rock 'n roll, and was used to launch the careers of creative writers. 50 years on with the onslaught of digitization, people are no longer referring to magazines, newspapers, so it has to change strategy. what it wants to do now is get a new investor. a 28 year old singaporean with deep pockets is one of the richest families in asia. what he intends to do is make it relevant, a brand today and for the future. whene: what is the vision

it comes to contributing to rolling stone? haslinda: it will not contribute to the editorial part of the magazine, but it will expand the brand and to merchandising, hospitality, live events. the idea is to spread the brand across the region, and this is a very important region. asia is home to more than half the population of the world. muchlling stone can get more of indonesia, china, australia, then it is a home run. yvonne: thanks. the risks facing samsung as it tries to manage the note seven crisis. more on that. this is bloomberg. ♪

yvonne: samsung continues to limit the fallout from its note seven battery fiasco. the company relying on its telecoms unit for half its revenue. let's bring in our bloomberg gadfly columnist. talk about this fiasco. what is the biggest mistake samsung can make right now? >> to shave market share. the 2.5 million phones are going to be recalled, that is a small

part of their overall market share. that is about 1% of their annual shipments. on a profit level, it could hurt a lot more, $2 billion of costs to go through this will process. it could be more, it could be less. that's 20% of last year's operating income for that unit, so that is a lot. the big mistake would be to cut prices to win back market share. samsung strength is like iphone, like apple, they have a lot of pricing strength. they charge more per unit than most competitors. some has a lot of pricing power. have good they operating margins and good operating income. if they cut price to chase market share as people say we are worried about samsung, that will work against them. yvonne: especially with apple. in terms of investors, how do

they see this? this is a problem for samsung? >> if you look at this shares over the last few weeks since they started talking about the problems and there have been all , the shares did drop quite significantly, but they have rebounded. like those long on samsung are staying long on samsung and don't seem too worried. samsung shares have stayed robust. , and youhe quality don't think that will be affected? >> i think a lot of people will move on quickly. if you look at toyota's problems with the accelerator pedals, people get past it pretty quick. this is what samsung has to deal with. people will judge later. back at youroking later saying that they do this quickly enough. once they started to see the problem, they did deal with it

somewhat quickly. they did jump on it and admit there was a problem. they said there was a problem. they are dealing with it as quick as they can, so they may be able to build that repetition again and people will trust them. samsung's share price, investors are betting that will be the case. good to get your insight on this. meantime, sony's magnificent seven top of the u.s. box office , taking in $35 million. the remake of the steve mcqueen western has mostly positive reviews, beating storks, which are in $21 million. the win is a boost for sony, which has faced falling market share in recent years. in 26, it is ranked fifth among the six major phone companies. that is it for us on "daybreak asia".

"trending business"is up next. opec meetings in algiers. reports the saudi's are ready to cut production to january levels. day, another warning of systemic risks in china's banking system. this time, the vending between china small vendor surging to record highs, and has the boj lost control of the yen? mr. yen himself and about 10 minutes time. all of that up on "trending business". this is bloomberg. ♪

♪ it is monday, the 26th of september. i am haidi lun. this is "trending business". ♪ we will be live in beijing, singapore, and melbourne this hour. the biggest drop in two months as saudi arabia opens the door to a production deal. in warnings of contagion china with smaller banks reliant on each other more than ever when it comes to funding. rolling