♪ >> north korea tops the agenda as world leaders gather at the jong-un tries to achieve nuclear ambitions. betty: voters support the handling of the missile threat. boss tries tou fill holes. betty: we will hear from ray dalio. sydney, i'm paul

allen. this is daybreak australia, two hours away from the open. betty: off to another week. just past 6:00 in new york. we will look at how all the action on wall street will play into the asia-pacific trading day. despite these jitters over north korea, i'm sure that will be a big topic as the yuan general -- gathers.mbly i want to show you how we ended stocks on friday before the weekend. the s&p inching higher, up 2/10 of 1%, the dow climbing 65 points as well as the nasdaq about 20 points, 3/10 of 1%. there is a lot happening this week on the policy front and central-bank policy front with

the announcement we are expecting about detailing, reducing the balance sheet and the boj, as well. paul: plenty happening on the central ink front. front waiting on china prices. on the markets, you are right. business as usual with the s&p up 2.5 thousand points. the first market up and running, up 1/5 of 1%. the new zealand dollar weaker against the greenback, the election looming in new zealand. every time the lead changes, the dollar changes with it. it will be a close race on saturday. we are poised to follow the u.s. higher from there in plus of -- closeheir impressive

yesterday. meanwhile, the aussie gates strength against the kiwi -- gains strength against the kiwi. gold price is weaker, signaling the goings on in north korea, oil prices are down, iron ore prices slumped 2.5%, a little volatile of late. other news around the world, let's get to first word news with tom mackenzie in beijing. energye international agency says the lack of new investment in oil production is stoking supply and unstable prices. output that state will fault without new exploration even as demand grows is shrinking. first -- third consecutive increase in london and has risen almost 10% in a

month. the new zealand dollar is a clear broader of what the market feels about next week's election. it falls whenever the opinion poll shows opposition ahead. an average of polls puts of the ruling national party and labor level at 42%, both need the support of smaller parties to form a government. reports from china say beijing will halt work to battle pollution. they are banning construction in six areas during the annual heating season. it will apply to road and housing work as well as planned building demolition. it brings beijing's worst pollution. north korea hasn't shown pictures of its greatest missile achieve despite

its -- equilibrium ofan a real force with the u.s. and south korea. president trump will meet world leaders at the u.n. having said all options are on the table. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. north korea will top the agenda as world leaders gather with the world nations. ross, even the traffic today shows you just how it will be gridlocked next week with all of these foreign leaders coming to new york city. the president will address of the u.n. assembly on tuesday, a highly critical time for the world. what can we expect?

guest: this will be trump's first address to the united nations general assembly and everybody is keen to hear what he has to say. he is expected to call for unity on a north korea. his top diplomats, including secretary of state tillerson and his u.n. ambassador nikki haley had some strong rhetoric against north korea today on a sunday morning talk shows. besides thef, general assembly address, is meeting with japan and south korea to show unity. his message will be, the u.s. will not shy away from military options if the current round of economic sanctions doesn't bite. betty: we heard tillerson say there is a military option but before that, we have other domestic options. i want to also -- diplomatic options. tweet to also pull up the

president trump did over the weekend. howked president moon rocket man is doing. long lines in north korea gas line. too bad! how is that going to be taken in the region of south korea and japan, these taunts of calling him rocket man? president trump has a long and storied history of to hisng nicknames political foes and even political allies, rocket man kim jong-un is a bit of a surprise. most people will take it with a grain of salt, that you wonder if that kind of provocation of their leader is somewhat needless and could backfire and produce another round of harsh pyongyang.om

haidi: we have been -- paul: we have been hearing about these u.n. options. this will not be well received by china or russia, is it? guest: no. everybody around the world would like to see the u.s. not use military options against north korea unless actually provoked, unless there is a preemptive move by kim. china's ambassador to the u.s. was speaking in washington to reporters on friday and urged the u.s. to tone down its rhetoric. clearly, china doesn't want that, south korea doesn't want it. times,ave spoken several it's hard to know what the end game is between trump and north korea. paul: as you were discussing

with betty, the next key moment is the u.n. general assembly speech by donald trump on tuesday. which donald trump will show up? a diplomatic donald trump or the one with the rocket man tweets? president'snk the better angels will be there on tuesday. it is such a crucial address. i think we will see a diplomatic trump. there are some he thinks he needs help from the u.n. on. not just north korea. climate change will be on the agenda this week. he has a lot he needs to lean on the u.n. general assembly for and i think hopefully he will and curb the nature of his remarks. paul: we shall see.

it will be an entertaining day. thank you for joining us this morning. reports from japan say prime minister shinzo abe is considering a snap election to take advantage of the week opposition and growing public support for his handling's of the north korean crisis. stephen ingles has been handling this. one could the election be held? be held as could early as october 29. parliament resumes october 28. they have to call a general election by the end of next year and the talk now, especially the one with nhk that shows the ruling party and the coalition got a bump up of about five points in the latest approval poll from the previous month to 44%. he is banking on a couple of things. another poll suggested two thirds of the respondents

support the hartline shinzo abe has taken toward north korea. agenda to into abe's reduce the pacifist constitution in japan and build up the military of it. he is banking on that. as well as disarray in the opposition. the democratic party has seen key members resigned after voting in a new leader. then of course, north korea playing into abe's hand. betty: how much of a gamble? even though he has this momentum, how much of a gamble is this election? what is his biggest risk? electioncalling a snap can always go the wrong way. he could lose two thirds majority. there is also a formation of the new party at a tokyo governor,

first female governor of tokyo has started this new party that has really hammered on his or abeover the summer -- mr. over the summer. they want to keep that momentum going. one of the reasons for calling this election would be, they told not have enough time form a national base. that is what is holding them back right now. betty: thank you so much. more to come on this story. there is plenty ahead on bloomberg television this morning. a lot of news we look at you caught up on, including our guest. j.p. morgan chase international jacob frenkel unpacks the latest on the central banks policy ahead of the fed and boj meetings. that is from 9:00 a.m. singapore time in -- sydney time.

paul: and we will preview the .atest china property prices that is at 8:40 hong kong time. this is bloomberg. ♪

♪ week: start to the trading , and we are counting down to the first market to open, sydney. a gorgeous morning in sydney. carrying on from that bull run we saw on friday, i'm that elute in new york. paul: i'm paul allen in sydney where it is a gorgeous day and you are watching a break australia. north korea -- daybreak australia. north korea has prepared to fire a second missile and the u.n. assembles tobly

discuss the nuclear threat. we hear from a professor at the national graduate institute for policy studies in tokyo. thank you for joining us this morning. we are in tokyo, a couple missiles have fun over. let's start with the mood on the ground in tokyo and the confidence of the people in the missile defense system. guest: people are content, but the races crisis demonstrated that the fact that japan is repaired in terms of possessing two different missile defense and created simple defense measures. strategya nuclear involving interesting paradoxes from kim jong-un's point of view?

launching a missile would mean almost certain destruction for his regime. korea's japan or south point of view, even having the missile is seen as a provocation. can you walk us to the risks there? nuclearorth koreans say defense capabilities are provocative, but they are not stupid. they are saying those things only to discourage us from strengthening our defense capabilities. fundamentals objective is to undermine south korea has south korea is the aly country that poses existential threat to north korea. they are competing for the position of leader of the korean nation and north korea is on the defensive. offensive for

provocative actions, north korea is trying to put south korea on the defensive and off balance to maintain its regime. paul: north korea has a long history of playing a limited hand of cards very well. what is the ultimate goal of kim jong-un? to extract the security guaranty? guest: i think there are two major goals, one is to undermine south korea, keep it on the defensive, off balance in order the challenging existence of the north korean regime. for north korea to normalize or at least improve

relationships with the united states and possibly japan the u.s. was the strongest superpower and improving the relationship with that country would improve the likelihood of survival. do notn and north korea have to the medic relations, but japan has artie promised that -- japany promised that might provide a large amount of economic assistance to north korea, it's a north korea might be taking that goal. betty: certainly could become -- that kind of aid is on the mind of both sides. i want to point out a chart that shows you how many missiles have been launched by north korea.

2145 is the chart. some years, hardly any missile , but in thenched last few years and the pickup 2016, 2017, an enormous amount of missiles being launched by north korea area it is really remarkable that we are at this point we are at. japan might not be the exact target, it is really south korea . is this going to cause or should japan start to think of increasing their nuclear capabilities? guest: i don't think japan needs nuclear weapons because north korea's objective is to undermine south brea, not japan. north korea would like to normalize relations with japan.

korea, they south need to separate japan from south korea, united states from south korea. if something bad happens on the gran peninsula -- korean peninsula, what they would say is, if the united states and japan assist south korea, we will attack new york, washington, tokyo with nuclear weapons. be willing to sacrifice tokyo, washington, new oul? for se and we would be put in a difficult position. betty: even if new york is not the target, how could shinzo abe continue not to look at that as an option for japan? there are a large number

of things we have to do before talking about nuclear weapons because we are currently trying to improve missile defense capabilities by introducing newer, more advanced, upper tier missile defense systems and also trying -- we have a reinitiated civil defense training based on missile attack scenarios. we are debating whether or not it is a good idea for japan to capabilities in order to make it difficult for offensivea to conduct missile operations against japan effectively. because north korea has recently launched three missiles and four in anes simultaneously

apparent attempt to titillate the saturation attack to overwhelm japan's missile defense system. certain levels of strike capabilities, we could assist missile defense operations that we conduct. betty: thank you so much for joining us. this continuing story on north korea and everything you need to know to get your day going on this addition of a break, -- daybreak. you can also customize your settings so you only get the news you care about. this is bloomberg. ♪

♪ betty: i'm betty liu in new

york. paul: i'm paul allen in sydney. you are watching daybreak australia of it quick flash of the latest headlines. toshiba is finalizing the sale of its flash chip memory unit despite opposition. thank capital will be named the buyer on wednesday, but the plant faces resistance because the group now includes several competitors, including seagate technology. betty: infosys has been given a month to fix glitches in its tech. the company is trying to find returns and facing problems rectifying errors and software bugs. the network is supposed to handle 3 billion invoices a month but critics say it is not capable of matching credit, tax collections, and refunds.

paul: hong kong security regulars are pushing through with their plan to invest in initial public offerings despite scrapping changes to the listing projects. the proposals were announced last year. says it is less about enforcement, more about tackling problems before they happen. takeover.osed what is going on here? paul: this has gone to the high court. cbs has gotten the green light to buy network 10 four two of five million australian dollars. 205 million australian

dollars. we should have the decision today on whether that deal will be allowed to go ahead. plenty more to come on daybreak australia. this is bloomberg. ♪

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♪ markets open here in sydney in 90 minutes time. the features are looking ofitive, up almost one third the 1% following a u.s. market close on friday. we had the s&p top 2.5 thousand points for the first time. i'm paul allen in sydney. betty: i'm betty liu in new york and you are watching daybreak australia. a stronger opening in asia. let's get to first word news with tom mackenzie in beijing. the u.k. has lowered its threat level from critical to severe with a second person arrested in connection with friday's terror attack on a

london commuter train. a man was detained in the city after a teenager was arrested in over, at least 30 people -- in dover, at least 30 people were injured. it was the fifth attack this year. reports from japan say shinzo harambe might call a -- shinzo abe may call a snap an election. he is inclined to go to the polls despite recent political scandals. the broadcasters says an announcement may come by the end of september with the vote on october 29. u.s. regulators are closer to suvs over1.3 million reports of exhaust fumes leaking in the cabin. they are prompting the recall of

explorers between 2011 and this year. it has upgraded the inquiry to an engineering analysis after receiving 200,000 complaints. says it's the chief security officer has left, calling the breach -- they released a detailed timeline of the hack. the financial times say it is for an abysmal handling of the situation. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's get a quick update on the markets. new zealand the only market up and running so far as recovered from the open, we are looking flat right now.

the new zealand dollar is still a little weaker against the greenback. in termsen oscillating of what the polls have been doing ahead of the election. a third of 1% following their decent close, the aussie dollar still strong above $.80. we are seeing strength from the aussie dollar there, 1/5 less than 1%. around the rest of the region, the u.s. dollar is looking stronger against the yen but the british pound is weakening against the u.s. dollar. 2.5s&p 500 is cracking that thousand barrier, unconcerned about the security issues. let's get to more what we should be watching in asia with our

asian equities editor. what is expected today? >> we are just going to take the lead from the u.s. japan is closed but the u.n. is trading and it is weaker. market futures are pointing up across the region. later in the week will be the fed and we will have the boj talking policy, too. paul: indian stocks have been rallying. should we expect more? >> we will see how that goes, everybody is concerned about elevated valuations and ebola putting more money in the stock market because returns from gold and real estate have been falling since last year's demonetization won a premise are canceled 90% of the currency changing hands. butle are worried

individuals are putting more money into the markets. andou look at the bloomberg sensex, the syntax -- they are analyzing in the next hour or so. go ahead. our asian equities editor. -- willh economic dominate fresh on earning reports and also new hurricanes. brace yourself for more, jose and maria and more. first, the shrugging off of the north korean news on friday. when youhan decent think we are about 2500 for the first time ever, a record for the dow and there has been no 5% correction in the s&p 500 in 400

days. 269% rise is now the third strongest bowl run ever. let's go to some of the big movers on friday, surprisingly they were retailers given we had negative retail resorts -- results, but macy's is moving higher. perhaps there is a deal that will play through in the week ahead. expected for than august and that is fueling economic concerns. retail sales are an indication of the strength of the economy, we are going to hear -- grab the spotlight. when we go to the bloomberg, what we saw on friday is the markets lowering the risk going into the weekend even though we saw resilience rid of his -- resilience. we saw it head down. betty: we are likely to see oil

be in focus, the early in the latest reports on the hurricanes that are swimming along here heading toward the east coast. su: let's take the demand report that came out last month. very bullish. if we look at the price run, we can see back toward $50 for the first time since july. we have not seen a significant close above $50 since may. some of the headlines on oil, in the iea demanding strong production from the u.s. and europe in the years ahead, what we are also hearing is concern that there is a risk of a volatile oil prices because of weak upstream development. not a lot of companies are investing. talk about more hurricanes as weak recovered from harvey and

irma. coast,ming up the east maria just became a hurricane around the caribbean islands. and max has died out, but certainly it is a huge focus for the oil market. let's go to the bloomberg market one more time. what we see here is the spread isactually, what we've got the wrong chart. what we are seeing is the spread between the intermediate as refineries come back online. paul: let's talk about stocks in the spotlight. we have a big merger with northrop grumman and a new round of earnings. courtney: we have -- su: we have new headlines on northrop grumman won a lot of

the mergers are announced, northrop grumman is said to be in a position to buy orbital ctk in a deal worth $7.5 billion as reported by the wall street journal. supplies advanced aerospace systems. this could be a big deal in the aerospace industry. let's take a look at fedex year to date. one of the better performers in the stock market and yet it is closely watched for its earnings as it is an indicator of the economy. a lot of the delivery and shipping companies are. pressures been under as a lot of other companies have been. finally, bed bath & beyond, one of the major retailers, it has been suffering as the entire industry group has. a focus on how this group is doing will be an indication on the group as a whole.

paul: thank you for that. we have a central bank double-header this week as the central bank and japan needs to step up policy and open the door to a rate hike. what can we expect from janet yellen and kuroda? kathleen hays is there. does this move the dial? kathleen: we know that they cloud hanging over the reserve is the inflation gauge. it started weakening for months ago, moving away from target. when the cpi accelerated for the month of august, people were upturnmaybe that was a in the pce. the retail sales report we got on friday true cold water on that because here is what happened. they were supposed to be hit by the hurricane but they felt

2.1%. even more condemning the actual numbers for sharply lower suggests there was weakness before the hurricane hit. there were a lot of selling days due to auto sales as you can imagine. people could not go to the store after the hurricane. what we see now. this has an influence on what people are looking for. will weaker spending actually slow inflation? what will we end up with? 0% odds of a september rate hike. december odds are now up to 46.7%. people are thinking by the end of the year, we will see numbers that allow the fed to move. week, they will update their economic projections. will they change their dot plots?

we have not looked at the dots in ages. dots on your terminal. on the far left, you can see the last time they updated them, they were eight plus four of the 16 who saw the three rate hikes this year. what if one of those dots falls back here. that could get the markets attention. one thing for sure, janet yellen is going to channel captain kirk as the fed boldly goes where no central bank has gone before. they will announce the start date the balance sheet will get more details on that rid of the deal to markets. -- that. a big deal to markets. it -- they are so far from inflation targets. what can we expect? kathleen: it is much a done

deal. they will have a policy hold until it starts accelerate. -- accelerating. they have arctic conceded they are not moving as fast as they should. what is going on in japan is that some of measures have receded. what this shows you is the employment rate down to a record low. morgan stanley's japan wage growth indicator kind of has a track on high unemployment -- high employment, low tracker indication. that is part of the question. this, one of the important things coming out of this if they are updating their inflation forecast for the next three years, they already had to reduce their forecast for this year from 1.4% to 1.1%.

bloomberg intelligence things we will hit 1% pretty soon but that will be a big focus. do they change that at all? it gives us a sense of what will happen down the road. sticking to you yield curve control,- yield curve they will make it clear we will keep our 10 year yield at 0%. betty: they have to keep that control. up next, the founder of the world's largest hedge fund says central bankers have done a remarkable job dealing with the financial crisis. what advice does a ray dalio have for president trump? we will have that next. this is bloomberg. ♪

♪ good morning, i'm betty liu in new york. paul: i'm paul allen in sydney and you are watching daybreak

australia. the new ceo of fordham metals iron orel lead the drive into new businesses. the old ceo step down after seven years in charge. david stringer joins us from melbourne. what do we know about some of the likely contenders? will they be happy if they make an eternal -- internal appointment? guest: i think they will be t acutely at those appointments. they felt because of the esteem as anold the current ceo inspirational character and i think investors will be happy as the company looks to the existing executive, to keep names in the mix.

one is served on the board since 2013. the other is seen as greg li company joined the in september and has experience with technology and fortescue is looking to implement automations. two very strong candidates. i think they would be happy with either of them stepping in as ceo. betty: they are also on the hunt for new personnel. what changes are we expecting on that front? david: we have a merry-go-round in the sector. cfo chris lynch will step down next year. they are also on the hunt for a new chairman. they are expected to announce a

successor at some point this year. and the minings sector and certainly that reflects a switch away from the cost-cutting phase into a new period where companies are cautiously embracing growth. betty: certainly a lot happening here. hedge fund manager ray dalio says the role of monetary policy since the financial crisis has been "remarkable." of the future hedge funds to make money during the crisis. that made rate a celebrity. celebrity. he gave his assessment of policymakers. >> there is fiscal policy and monetary policy. if i take monetary policy, i think they have done it remarkable job, that we have had what i call a significant,

beautiful deleveraging. what i mean is, our debt burdens and the debt service burdens have gone down while the economy has grown and we have not had and inflation problem. they did that by understanding the mechanics and engineering and i think i was able to be of some help in terms of that excess, but they have done a beautiful job. if you look at the economy right now, short term, we have a situation where we don't have too much inflation and too growth or ation or debt bubble and so on. we have something that is reasonable. this is very different than 2008. we have a political situation, which is difficult. and an a wealth gap

opportunity gap, which is a difficult situation. and we have big obligations coming forward, tension obligations, health-care obligations that are going to be a burden. that is going to be a gradual problem. policieshose monetary have done, have handled that well. fiscal policy reasonably well. it is much more politicized area. much more favorable characterization than a lot of people would give fiscal policy. most people would give fiscal policy two thumbs down. hesitancy in terms of me giving it complements relative to another but the political environment in itself is such a difficult environment and outtakes itself is this -- politics itself is

dysfunctional. nonetheless, if you take the individuals and you put them in ask, how dond you they do all those jobs, all things considered? those are things we have to consider. the things they have done and fiscal policy, yet. ah. system ise political a very challenging situation. >> if you were advising the president, what would you tell him to do? >> the most important thing is to make sure we understand what the country's principles are that bind us rather than those that divide us. medice idea medical decision-making, to come up with the best decisions, to bring the country together in an idea

medic craddick way. 1937 if i would take an analogous. period of time. 1929-1932, the equivalent of our two dozen 8-2009, interest rates want to zero, and we had a large wealth gap that created populism. the central bank begins to tighten monetary policy and then we had a populism and a fall in the stock market. >> we are once again at that precipice? , we cannot have a tightening of monetary policy that is material. gap,ve a very large wealth i get that at the top 2/10 of 1%

of the population's wealth equals the bottom 90% of the population's wealth. it is not just wealth, there is a polarity and this is a time where we have told of those things. you cannot have an economic downturn because socially and politically we could not stand an economic downturn. it is a threat to our system. it is in many ways analogous. the tension, the conflicts. that is fearful to me. if you asked what i would recommend the president of the united states to do, it's to try to deal with conflict well. bring people together, not make one side a battle the other side and get at the best decisions. that's what i would recommend the president do. that was bloomberg editor

at large erik schatzker speaking with ray dalio. more ahead on daybreak australia, this is bloomberg.

♪ ♪ paul: i'm paul allen in sydney. betty: i'm betty liu in new york. you are watching daybreak australia. that is about it for daybreak australia, daybreak asia is next. and we have great guests, including jacob frenkel from the bank of england. another guest says it is obvious janet yellen should be reappointed but we know there is a long list of those who could take her place. paul: just when you thought japanese politics was getting too stable, we have reports that shinzo abe might call a snap

election. it might not be until june next year, but it is probably capitalizing on week opposition. we will take the team leader joining us to talk more. this is bloomberg. ♪

♪ >> asia-pacific markets signaling a positive open has traders shrug off the impact of a hurricane and geopolitics. >> north korea topping the agenda is world leaders gather at united nations. kim jong-un says he will achieve his nuclear ambitions. >> japan and may have a snap election, voters approving the handling of the missile threat. >> ahead of the united nations general assembly, we get the view from j.p. morgan.