♪ yvonne: 7:00 a.m. here in hong kong. we are live at bloomberg is -- bloomberg's asian headquarters. a quiet session at the mid autumn festival. treasuries on the dollar, little changed. as hit it two-week low president putin hinted that further restrictions. an extension will be considered as the further curbs expire. kathleen: i am kathleen hays in new york. janet yellen's number two said he is confident inflation will arise. stanley fischer said the next fed chair will be have to -- will have to be flexible.

google takes a challenge to apple and amazon. the focus now is on artificial intelligence. ♪ kathleen: who will be the next fed chair? a story the keeps on giving. 24 hours ago we got news from bloomberg that trump aids -- that trump aides have given him a short list. who trump is going to pick, nobody knows. stan fischer would not say. -- heu can get the sense is not in favor of girls for a fed chair. he thinks you have to have flexibility in be able to change very quickly. whoously, no one will say will get it, but that is what everybody seems to be talking

about. yvonne: nevertheless, market see them out. a slow grind this time around. why we are talking so much about who the fed chair will be on this slow day. ended 50 up. nzx 50 up. -- but pretty much flat on the asx 200. retail sales for august coming up in the next hour. -- aussie continues to be continues to defy buyers. still above that .78 handle this morning. japanese futures lower by 10%. a higher open in tokyo by about 70 points or so. dollar-yen dynamic in play, 112.77. china remains closed for golden week.

pretty quiet here in hong kong, as well. south korea is closed for holiday, as well. kathleen: let's take a closer look at the latest close on wall street. another day of gains, not as strong as we saw last week. had a stronges report. west texas crude fell below $50 a barrel. let's hear from su keenan. it many will call meandering. even though we did see an extension of record gains, particularly with the s&p 500, up for a seventh straight day. the gains are not so large. it is green on the screen and we will take it. let's go to the big movers. netflix raised 225. investors loving them. office depot down in a good way. one of the first companies to report post hurricane disruption.

it is saying its number one market is florida, that was in the heart of one of the two big hurricanes. they see about an 8% drop in sales. an getting a major drug approval that will put it in competition in a big way. it is off to the races. tech is something we focus on here in the u.s., rebounding with this recent rally. if you look at a comparison of global tech performance, the breakdown, this red line is the china i.t. index. in 2016., up and away at the bottom here is australia. very interesting mix. china really standing out. expectedetter than report, really went gangbusters. guess you could say it was exaggerated by events? su: you could say that, but the

market taking this as a big positive for the economy. we saw the services industry one of the biggest parts, grow at the fastest pace for over a decade. food services was one of the areas of strength. home product sales were another area of strength. really across the board in terms of hiring, which may have said -- may have had something to do with after the hurricane. it says for the economy, it is placing the focus on the end of week jobs data. if that shows major disruption because of the hurricane, that will start to perhaps show a pattern. in any event, a big focus on other economic reports. hurricane affect in the adp report came out, as well. let's get to first word news. >> president putin says russia is open to extending the oil

deal, but nothing will be decided until march. his comments are the strongest --nal that moscow is willing putin spoke ahead of a visit by saudi arabia's king. he said the decision would be made based on the reality of the situation next year. >> i am saying we do not know yet whether we will extend or not. and the question is being asked when we are going to extend. once we decide whether or not to extend, that is when we will decide. but we are speaking about the possible extension. secretary of state rex tillerson said he has never considered resigning and did not denigrate president trump. he said his commitment is as strong as ever and never thought is quitting. a hastily called announcement followed a report by nbc news consideredson

resigning over the summer and called the president a more on -- a moron. he said he did not call the president a moron. to a record low of $.30 on the dollar. mick mulvaney said it should not be taken seriously. puerto rico had been plagued by budget deficits and borrowed $74 billion from wall street. they say puerto rico will run out of cash. catalonia, save nothing will stop their drive for independence. the regional president puigdemont expects a session within days, following sunday's referendum. king felipe financed -- the announced to the vote -- denounced the vote. , ithe king made the speech

had been a catastrophe toward catalonia and ignores the catalans who do not think like them. ignores to liberally the catalans who have been victims of police violence. >> we will have an exclusive interview at four clock p.m. hong kong time here on bloomberg tv and radio. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ trump's fedesident chair shortlist is out. the winner should be flexible but does not need a phd in economics necessarily. this includes janet yellen, kevin warsh, gary cohn. fromng us for discussion sarasota, florida, and our own

reporter from bloomberg intelligence. bob, let's start with you. as you watch this fed chair race, you were the director of research, seo your part of the market committee. how much difference does it make? they are in full force, there are 19 members of the fomc. everybody has a vote, and they cannot get fired. it is the second most powerful position in the united states. the make that difference for fed policy? bob: it does, because the chairman sets the tone. more importantly, there is a golden rule that applies here. they ultimately control the budget. when you control the budget, you have extra power. we have seen this time and time again with past chairman -- chairmen. they make a difference and set

the tone for the whole operation. even in terms of how the discussions take place. they change significantly when bob are naked came in -- when bob bernahke came in. the dynamic and how policy gets discussed. so yes, it is important. we have been watching the fed for a long time. now, they are talking he wasevin warsh, critical of the fed, has been critical and deposed rate cut that one time, he is a hawk. he could be raising rates right away. but my question is, it is different to be at the fed and and criticizing are questioning the policy. when you sit in that chair as chairman, don't you become chairman of the board? don't you have to create

consensus? >> absolutely. to present the committee. policybout the fomc statements. you have to present the consensus view. , theou have to define it meetings. you have to be able to listen to people, and present the consensus after them. it is a tough job, indeed. i think the chairman did a great job and janet yellen is doing a good job. but it is a tough job. we have seen president trump has been a disruptor when it comes to officials and the white house and the political establishment there. will it be different when it comes to choosing a fed chair? will it be about policy or personalities? bob: that is hard to tell at

this juncture. i really think that right now the best thing he could do would be to reappoint janet yellen, for a number of reasons. first of all, there are only two economists on the board. people are younger in the running, so to speak, who are not economists. when you're in that position and being presented with very sophisticated models of economic discussions, you are at the mercy of the staff, if in fact you cannot deal with them on an equal basis. was is what been bernanke able to do, what janet yellen was able to do.

+++ except for perhaps john taylor who was very well-qualified. janet has proven she is flexible, and she has stated she would be flexible. the fact that she has been cautious and interest rates have been low, that plays in the president trump's agenda in a positive way. we cannot forget the fact that when you appoint a chair, that person has to be confirmed. she is quite confirmable, or be aof these others might bone of contention because they are not in the mainstream. mighten: and people question gary cohn's independence from donald trump i want to bring in stan fischer. he also mentioned flexibility as an important characteristic. listen to what he said. >> you need someone that has the flexibility of mind to see that he or she needs to take a at a particular moment in time or over the next year or two. kathleen: that is the former

vice chair also on his way out. i want to ask you a question about what he said. he was partly answering a question about rules, sticking to a rule. who do you think would work? jerome powell was a former banker, one who has been looked at more closely. twoe are reports of one or wall street firms that have had the treasury department calling to ask specifically about j. powell. is he the right guide? yelena: i think he is the second in terms of probability. i still think janet yellen has a 50% plus chance of getting the job. but she was speaking very strongly against the regulation -- deregulation.

if that is too much for the administration, maybe j. powell is the next on the list. it will not represent much on that said change in investment. i agree it would make total sense for president trump to appoint janet yellen. the short positioning in treasuries has been remarkable. i have a chart for our viewers to see. the short positions, the biggest in over a decade. this is a survey of jpmorgan. we have seen substantial moves. it should we be making that kind of bet when we do not know who the fed chair will be? bob: that is a very big bets at this juncture. you could lose big in this particular case. you is not a time i think want to -- you might as well go

to las vegas or some other lace and place a bet there. than try to do this. plus, we do not know when it will be forthcoming. stay with us, we will talk more about puerto rico. president trump's comments on puerto rico's debt spooks wall street when it comes to bonds. what a great roundtable. later, equifax's former ceo is grilled by the loss of nearly 150 million americans personal data. this is bloomberg. ♪

yvonne: -- kathleen: this is "daybreak asia," i am kathleen hays in new york. yvonne: i am yvonne.

we have bob eisen buys -- eise nbeis still with us. let's look at g #btv 3010. president trump suggesting puerto rico can wipe out its debt. who had to mulvaney step in and backtrack those comments. what you make of the president's comments? is there truth to what he said? case,n this particular mick mulvaney is the one you want to listen to. in the heat of the moment and so has a tendencynt to exaggerate in needs clarification. it is clear puerto rico has been devastated. they had a terrible situation, they were in bad financial straits to begin with. liquid geen their most

at 32 just recently but rebounded a little bit. as far as the insured puerto rico is insured, we are confident the bond insurers will --ke the required payments yvonne: we lost connection with bob eisenbeis. we will see if we can connect with him later on. you can get a roundup of stories in today's edition of daybreak. subscribers, go to dayb . you can customize your settings to get news on industries and assets you care about. this is bloomberg. ♪

♪ we are counting down to asia's first major market open this morning.

japan futures, they are a little higher. good news, as market trade gets underway. this is "daybreak asia," i am kathleen hays in new york. yvonne: i am yvonne man in hong kong. bank mergerss says are unlikely in the near futures. they told bloomberg they think consolidation will continue on a domestic level, but declined to comment on commerce bank rumors. they say the industry is uncertain about the fallout from brexit, but think the fomc is better placed than most. we needed to prepare, to consider the assumptions. we are a eurozone-based bank, an bank.ased the challenges are smaller for us than for others. kathleen: more changes ahead for deutsche bank.

they are reorganizing ahead of a plan. they set up plans to list a minority stake and hinted at an overhaul. than $830had more million under management at the end of june. yvonne: analysts are urging caution, following a weekend cut in reserve requirements. it is up almost 10% in two days. securities have reaffirmed the negative rating, echoing the pboc and saying the reserve cut is not a cut in monetary policy. bank of america calls it a targeted liquidity easing move, and that is "smaller than you think." kathleen: blackrock in discussion to invest in a fintech company to help retail investors. sources say blackrock made strategic investments in recent years, with the aim to eventually acquire some.

they are investing technology to diversify revenue. the reserve bank of india pretty much did as expected. it held its key rate steady. it is caught square in the middle between inflation that has jumped up for a while, food prices are starting to fall back down by the end of the year. it is tough because growth is slowing. it is interesting, governor patel expressing concern of the loss of growth in early 2017, noting the gst's rendering short-term prospect uncertainty and may be delaying the revival of investment activities. a lot of caution, but hopes a rate cut will be coming. thene: it certainly is dynamic between the upswing in inflation and the slowdown in growth. they were expecting a v-shaped

recovery after this. not the case, at least they have admitted that. we have brought back bob eisenbeis. thanks for staying with us a mid these technical issues. bring it back to puerto rico real quick. the end of the conversation, you are going to be holding on the puerto rico debt. but the territory was already bankrupt even before hurricane maria. how confident are you they will have the ability to pay, now that it seems that ability has declined substantially? bob: i need to clarify that the only puerto rico debt we have been involved with at cumberland is insured puerto rico debt. of the debt is based upon the quality of insurers to make payments at this point and we are confident that will continue.

we are not into noninsured puerto rico debt, which is been in the form of a restructuring and is a difficult situation made more difficult now because of this devastating hurricane. is the upheaval and chaos of the bond market over? we have a couple stories, people could not believe the pricing. is it back to the tough situation, they are behind a source of permanent damage? that is interesting because we have seen the impacts of the hurricane on more than just puerto rico. it has been on various minas apologies that have been hit over into houston. some have seen a 10 basis point or so increase in our cost of funds. right now, communities are often times yielding more than taxable treasuries and high grade states like utah, aaa are paying more

than some sovereign. kathleen: sounds like some good deals. thank you so much. keep it right here, this is bloomberg. ♪

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beautiful thursday morning in hong kong. public holiday for the mid autumn festival. we are minutes away from the region's first market open. kathleen: a gorgeous wednesday, 7:30 p.m. in new york. markets close a little higher. eking out small gains. shotan see that gorgeous of the glittering new york skyline. i am kathleen hays in new york. yvonne: i am yvonne man in hong kong, you are watching "daybreak asia." >> president trump saluted the courage of the people of las vegas after visiting survivors of modern america's worst ever

mass shooting. he gave no sign of discussing gun control, brushing away questions on firearms. it is said he commended emergency wounded -- workers, and said the city showed incredible resolve. pres. trump: i will tell you, the people of nevada and the extraordinary city have shown the world their incredible character, courage and resolve. nevada really is a very, very special place. >> the casino industry is trying to get on with business following the mandalay bay massacre. were attracted 26,000 delegates with security added to an agenda that is been about growth and opportunity. casinos have been reviewing security measures come up the possibility of body scanning at the door. >> what happened is indescribably painful in said --

and sad. las vegas will have to recover from this. as for our security, we feel pretty good. we have always had a lot of people and security, we are sensitive to the world'risks. and we are comfortable with our measures. >> r.b.i. held interest rates unchanged. five of the six member monetary policy committee voted to 6%. the amountlowered lenders must invest in specified securities, such as government notes. they lowered growth projections. said theng developer excelsior hotel was a reality check for their property market. the chairman could not confirm her company was among those bidding on the hotel, but said

the issue should make people think. wereasing expectations fueled by the $3 billion u.s. sale. i think there is a gap between expectation and reality. failed is a very big word. i think the owner just did not get what they felt the market would pay. the cycle has to get some reality check. we are getting a mild reality check. >> fed vice chairman stanley fischer said the tightening u.s. labor market would miss wages and inflation, even though the process could take longer than expected. gauged's preferred price has been below the 2% target for the past five years. depart the fedto next week. he said some goals take longer to achieve. >> i believe we will have higher inflation.

there are basic mechanisms and the basic mechanism here is, unemployment is declining all the time, wages will start going up at some stage. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ thank you, we are counting down to major market opens in the asia-pacific. let's get to our bloomberg global market editor adam haigh from sydney. good to see you. i am perplexed about where the aussie is going because we heard a firm stance from the rba governor philip low saying, a strong aussie is not appreciated. but we see people buy on these bids. adam: absolutely. in many ways it is perplexing a lot of people. summer surprised that the relative strength.

for others, it is merely a reflection of the economy getting into slightly better shape than we had 12 months ago. the key question is, what the rba alluded to this week around growth and inflation and whether there continues to be a situation that holds back his colleagues from being able to raise rates. it is interesting to see that the market is pricing it less of a chance of a rate hike in the back end of next year. it brought down those expectations over the last few weeks. this is in the context of a global move to a more hawkish setting from the developed world -- like of thea bank of england and canada. they will be taking some time more to proliferate here. it is a tricky one for the rba.

the aussie dollar remains high, it weighs on growth. they would much rather see the aussie down to 70 rather than 80. the short-term there are technical factors around the 200 day moving average that might see further declines, that pits the aussie against the u.s. dollar. at the moment, that trend seems to be lower. kathleen: let's look at chinese markets -- but come banks trading in hong kong that are having a very strong run. we know that has something to do with china. these are really the big chinese lenders that are listed in hong kong, the likes of icbc and big names. remember that banks have been an underperformer this year. thepickup we have seen over past few days is interesting because it begs the question as

to whether they can gain that status. dive into the bloomberg and have a look at a chart, it encapsulates it nice, g #btv 5019. what this does is it shows us the last time icbc had such a huge move. that stock was up 7% on tuesday. back in 2011, this is the start of an easing cycle. i think at the moment, analysts are less optimistic about the situation today, relative to where we were a few good use ago. they are convinced we are seeing more of an easier environment for credit, and an environment where the authorities are prepared to stimulate the financial sector more. despite this good run-up this week, when hong kong closed today, i think if the markets get going again tomorrow, those bankshares will be closely watched to see if we can continue that rally. kathleen: thank you, adam haigh

joining us from sydney. reide: -- kathleen: hoffman sees huge potential in the future of artificial intelligence. speaking at the "vanity fair" fears distract from how ai can really help humanity. >> you have thousands of people working on this project, a gives you a very broad scope of potential whistleblowers, people that if they see something wrong, can speak up. be intentional about, what is the thing that best help society. that is to design ai to pay attention to the question of, how to we have good human outcome? that is what is going to happen. , you cause it -- you tell the ai to eliminate famine,

and it eliminates all human beings. that is fictional. andbuild safety measures these devices, can you ask for more resources articulate your is a simple safety measure. ird know google is thinking about that, and microsoft and facebook. mongeringfear irresponsible, as mark zuckerberg says? >> i think it is dangerous because it causes the discussion not to focus on the real issues. we all talk about robots versus, in the street, how are algorithms already influencing our lives? what are the things we should do for transparency for the right social outcome? it is not that we should not think about the science fiction dystopias, but think about steering toward the utopias. >> facebook and google are called before congress in this big russia investigation. they say they're are adding more

humans to the problem. can ai fix this or is it only something a human can do? >> i think both. ai can get better. here isa weird ad buy, something that looks like it is external forces trying to do political ads. let's have humans look at it. i think the answer is both. improve the ai to detected just like you would detect fraud or cyberattacks. and have humans get involved and they say, this is weird, take a look at this. >> what about robots and jobs? it, but thek about ground is shifting beneath us as we speak. our -- our jobs under threat, and how many? >> jobs will be transformed just as any technological revolution changes them. people had at change moving from agriculture to the city. we have to pay attention to people in these transitions it can be difficult.

however, i do not think that means jobs are just going away. technology usually creates a lot of new jobs. better than a radiologist, but the radiologist can still talk to people and look at the weird cases that the ai does not know about. that is the transformation we should be building the technology for. >> apple, google, facebook, amazon, they are in a race to get there, to be better. who wins? in technology, i think they are all going to win in different ways. i think you will get great voice stuff from all three companies. i think you will have google doing that -- this is the big pile of data. you are microsoft doing, if you want to build and ai with private data, we will partner with you. it can go in different directions. yvonne: that was greylock partner reid hoffman speaking

debt emily chang at the "vanity fair" in l.a.. google has announced new hardware in efforts to catch up with apple. mark bergen, who was at the event in san francisco and joins us. good to see you. a lot of gadgets google unveiled when it came to phones, laptops. what were the highlights and things that caught your eye? why do you think google is doubling down on hardware? mark: a lot of gadgets come up and -- some new ones we saw. google pixel, their home speakers. like was an ear bud apple's. the big theme from sundar pichai, he began of the event with a focus on ai and talked about language translation. that was the thread throughout the entire portfolio. saying, our ai and

software are better than anybody else's and we think and rumors will move toward the google experience. yvonne: the strategy sound similar to what we heard from amazon last week, which is also doubling down and hardware. while it may not be as profitable, it is a way to tie in their products to their core business, which is services. is that the same thing we're seeing with google? mark: i think amazon has a much clearer a book. there are commerce company, they look at what the echo is. google is still trying, struggling to find what the business model is. they are clearly still a big online search engine and most revenue comes from advertising. they are looking ahead and seeing a future where may be voice computing devices and augmenting reality are taking off. apple is pushing on that. they want to be relevant and it is hard to lead off with these devices.

they're pretty high-priced right now instead of competing with apple and amazon. kathleen: it is funny because one of their new products is a smart speaker. becoming commoditized. there arey, alexa, saturday night live skits. why even bother with something like that? because they want to let people know google is here, or do they really start to make that much money on it? now, alexa is front and center. alexa has its own, amazon prime, music services, that is something where youtube is not present. it is a big existential threat to google's business. outside experts will say -- is better. google has years and years of training on ai and years of doa, these ear buds can

instant translation. pretty futuristic stuff. how good is it have to be to convince consumers to switch? a lot of them to pick google over amazon? kathleen: i think i will choose those earbuds that do several different linkages for my trip to tokyo. mark: i have not tried it yet. [laughter] kathleen: thanks to mark gurman, joining us from san francisco. in a moment, equifax's former ceo talks with congress about the massive security breach. we talk about what went wrong. this is bloomberg. ♪

yvonne: this is "daybreak asia," i am yvonne man in hong kong. kathleen: i am kathleen hays in

new york. the former ceo of equifax facing the third congress grilling over the hack that affected 150 million americans. the biggest injustice is that equifax may come out ahead. joining us is tom kellerman. certainly, equifax may come out ahead in that they may get through this. i understand their stock was higher. this is an me, accident that is been waiting to happen. what are you taking away from these congressional hearings? and is this where the answer lies? tom: it is egregious what has occurred. a ceo and head of security were asleep at the wheel. they knew better and should have reacted faster. they should have deployed nest -- next generation security defenses from preventing this attack from being realized. knowingmost important,

the concept of verifying who is who to enable financial transactions is now being undermined because of the nature of this breach and the ubiquity across the american population. kathleen: what can you tell us about gus -- about gus? tom: what should -- what we should focus on is, this data was attacked by the most elite attackers in the world. it is not their goal just of burglarize. we are dealing with home invasions of repositories of data that will manifest themselves in a ubiquitous nature across many lines of businesses because of the identity theft epidemic that is forthcoming. yvonne: any legislation that can prevent future data breaches like the one at equifax and yahoo!? talk about replacing social security numbers, slapping bigger fines? to what extent will that work? federalre should be a

data breach reporting mandate that requires you to reported within a month of one occurring. secondarily, there should be mandates regarding standards of care, normal standards of care. regulations of cyber should be modernized accordingly. we need to move away from social security numbers and de commoditize the numbers so they no longer want to steal it. we can see that through different types of technology. isneed to verify who someone prior to issuing a line of credit. there are many different types of technology that can allow us to achieve that. the use of static social security numbers is the reason why they have become the heroin of the dark web economy. yvonne: let's talk about this russian interference. congressional lawmakers and investigators are looking more

into youtube, gmail, after what they did with facebook. the investigation has widened. how do the social media companies stay ahead of the fake news and people buying ads? it seems like what we are seeing out of facebook, very reactionary. how can they do things that are proactive? tom: we need to get back to the culture of silicon valley. most of these firms where they are legendary in what they have allowed in the functionalities they provide to the american and global population of the world, were never intent on securing or sustaining the environment that they built. they have been overreliance on traditional security controls like firewalls and encryption for too long. it is fundamental they reorient and realize the sustainability of their brands necessitate greater investment into cybersecurity capabilities, and the use of ai could be quite legendary in its reactionary

impact. you are looking for unknown or behavioral anomalies within your infrastructure and across her social base. you should be able to act in real time through human interaction. it is a wake-up call. kathleen: al franken from minnesota talking about the guy, gus, who did not tell somebody they needed to replace software. this still seems to be a problem. maybe that is why robots would be better? tom: i think gus is a scapegoat, frankly. the greatest challenge is that there had a security was still reporting to the head of i.t. that is like having a defensive coordinator report to an offense of coordinator. we need heads of cybersecurity to be equal to the guys that run i.t. so they can provide a balanced view on when something will put an organization of long-term risk.

yvonne: tom, great to get your perspective, strategic cyber ventures ceo. i want to remind you of the return of high flyers. season one premiere at 6:00 p.m. hong kong time. .aslinda amin back abroad hernb co-founder will join and talk about what it is like to be a billionaire, and why he almost quit. take a listen. >> we went to a lot of investors. they said things like, this is not a product i would use. they could not believe there was a large market. how could you trust a stranger in someone else's home? the entire year we were unsuccessful raising money. by the time we got to the end of the first year, we were having conversations about, how do you know when it is time to quit? ♪

♪ yvonne: a quick check of the

business headlines. honda is planning to end production at a plant in japan for the first time in company history. it will stop making those cars around 2021 and combine operations with a plant. honda said the move is due to treating domestic demand as they try to cut expenditure and develop new technologies. they say it will also boost competitiveness. >> once the consolidation of two plants is completed in 2021, our domestic capacity will fall to 810,000 units per year. currently we are producing 700,000 units for domestic, and 100,004 overseas. that means we will be at nearly full capacity, increasing our competitiveness. kathleen: the e.u. ordered amazon to pay to luxembourg.

in the latest attack on tax deals, the european commission accused luxembourg to allow the company to cut their taxes to 1/4 of what they were. they are suing ireland for failing to recover a single penny of last year's record bill from apple. making a big bet on e-commerce, crating a 200 strong -- it seems to be working. they are on track to hit $1 billion in e-commerce this year, double last year's total, a fraction of the $63 billion total. pepsico has kept it quiet until now. kathleen: on the next hour of "daybreak asia," we look at the outlook of oil. our guest joins us in about 15 minutes. yvonne: struggling to hit around 50, a good time to talk to him about that. we discussed the asian property around 8:40 hong kong

time. we will bring you the interview with the chairwoman coming up next. this is bloomberg. ♪

yvonne: 8:00 a.m. here in hong kong. u.s. stocks off fresh eyes, treasuries and the dollar little changed. president putin hints at for the restrictions as oil hits a two-week low. an extension will be considered as the current curves expire. from bloomberg's global headquarters, i am kathleen hays in new york, just past 8:00 p.m. . cap and russia. the inquiry expands, though no proof of collusion yet. the clinton campaign is also under scrutiny. janet's number two is confident inflation will rise. stanley fischer also says the

next fed chair will have to be flexible when it comes to policy. yvonne: pretty quiet here in asia, but not a whole lot of catalyst to give us direction in the market. we did see a little bit of a meander up in u.s. stocks. we are sitting on the sidelines ahead of the u.s. jobs report and the president's choice for fed chair. kathleen: do you get the feeling -- i think one reason why you feel it there is because first he said last week, two to three weeks we would hear the decision. -- hiss ago, we know aides gave him a short list. you think, how long is this going to take, what are they waiting for? we have been talking about it a lot lately. this is a very important

decision. if he does not stick with janet yellen, this person has the next four years to be in charge of one of the world's biggest and most important economies, so we obviously are paying attention. yvonne: interesting for moves in the dollar. we saw at weaken as we broke the news 24 hours ago. betting interests seem to be heading as well, in line with yellen on her policy stands, so perhaps that is what we are seeing, the weaknesses keeping the dovish stance from the federal reserve. kathleen: i think once we see the next fed chair, anything could happen, to an extent. i know what is going to happen, we go to the first word news with paul allen. paul: president putin says europe's stagnant market will turn around and he is planning to make russia a major global gas player. speaking at an energy panel in lng is he said while

less competitive than pipeline gas, he expects that to change. he also said russia wants to build lng plants from the baltic to the far east to take on qatar, australia, and the u.s. sincepee rallied the most march after the r.b.i. held interest rates unchanged. five of the six member monetary policy committee voted to keep the repurchase rate of 6%. sovereign bonds fell as the r.b.i. lowered. the proportion of deposits lenders must invest in specified securities such as government knows. it also raised in placement -- and placement forecasts. hong kong says the scrap sale of the excelsior hotel may have been a reality check for the city's heated property market. german i really would not confirm -- the chairman would not confirm her company was among those bidding for the hotel but says the issue should make people think increasing expectations were fueled by mays sale of the hotel. gap think there is a

between expectation and reality, and i think it is good. i think failed is a very big word. i think the owner just did not get what they thought the market would bear. the cycle has to have some reality check. maybe we are having a mild reality check. separatist leaders in catalonia say nothing will stop their drive for independence, despite the eu backing spain. the regional president expects to declare secession within days following sunday's referendum. the government in madrid and king philippe a announced the vote as a legal, although the prime minister has been criticized both for his slow response and hard-line stance. >> [translated] the king made his speech. the politics have been a catastrophe towards catalonia and ignores deliberately the millions of cattle lands who do not think like that.

it ignores the catalonian seven victims of police violence. paul: we will have an excuse interview with spain's economy minister at 4:00 p.m. hong kong time, 7:00 p.m. sydney, here on bloomberg tv and radio. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. on paul allen. this is bloomberg. yvonne: thank you. taking a look at the regional benchmark, pretty much flat in the early asian session. we did see fatigue overnight when it came to the dollar. still seeing fresh record highs on wall street. let's get the latest from sophie kamaruddin. seeing no surprise, south korea is on holiday today as is china and hong kong. check out what is going on with japanese markets, extending gains for a fourth straight session. foreign inflows have been ramping up. last week's foreign net buying came in at the most since 2015.

we have all the stocks marginally higher -- we have aussie stocks marginally higher. the all share market is set to snap a two-day decline, but it has been rates down for months. lesssx 200 is now worth than at the end of 2007. take a look at stoxx in wellington on the up while the kiwi dollar is thinking -- sinking to lows we have not seen since june. this weekend we got the budget surplus better than forecast, but the finance minister stephen joyce said that should be seen as a one-off and will likely reverse in the years ahead. we do have the aussie on the back foot slightly ahead of a trade and retail sales figures due out later today. that could be the best for volatility and what is a fairly limited agenda today. in the commodities space, check out oil, continuing to drop.

new york crude sliding for a fourth session further below the $50 a barrel mark. ,old also under pressure today hopping around a key technical level, the hundred day moving average ahead of this friday's u.s. jobs report. let's take a closer look at the nikkei 225. it gained nearly 8% so far this year and has managed to recover from the lows we saw back in september. that is when we had geopolitics looming, as well as natural disasters, which helped push the yen towards 108. september was the best month for japanese stock since october, but there are signs and stocks may be overbought. this is the relative strength index showing it is back up to 70 for the first time since may. sec. tillerson: -- yvonne: thank you so much. the senate intelligence committee says there is more to do to determine if president trump steam colluded with russia. richard burr spoke after president clinton denied any

relation -- president putin denied any relationship with his counterpart. we are going to discuss that with jodi schneider rid let's start with the investigation, the senate intelligence committee. where are they now and what are they focused on as this gets underway? jodi: they are looking at facebook and other services and what the russians might have bought, what kinds of ads they might have bought on these services and how they were targeting the ads. in addition to looking at whether they were particularly targeting wisconsin and michigan , states that hillary clinton was expected to win and ended up with electoral college votes going to president trump. they are also going to look at the democratic stronghold states like california, new york, and maryland to see whether they were targeted as well and in what way. yvonne: the house intelligence

committee also said to interview former diplomat samantha power, former obama advisor ben rose. why? jodi: samantha power was the u.s. ambassador to the u.n., so there is talk. said some republicans have -- or are reported to have said -- that she may have unmasked some names of people in part of the investigation into the russian meddling, trump associates. so there is that. the democrats are saying no, they just want her because she had a role in the obama administration. yvonne: switching gears and talking about rex tillerson. he held a press conference today in response to the nbc report he might be quitting, he called the president a more on. he seems to deny all that and says he is staying. jodi: a surprise press conference, was not scheduled. he said he never considered resigning.

he did not really deny calling the president a moron. he said he never thought of resigning and left it to the state department spokesperson to say he never would have used that word. did not necessarily say he did not criticize the president. they have long been at odds since he came on, most recently -- yvonne: has undermined him time and time again when it comes to north korea. jodi: he called them out last week and said not so fast on the diplomacy route. but he said he is not resigning. they also denied a report that the vice president had to talk them out of resigning. sec. tillerson: have you ever -- kathleen: have you ever seen anything like this in the time you have been watching politics in the u.s.? have you seen a time when this happened with so many officials? they are selected, then there is this back-and-forth. it seems like something blows up and the person is gone, but this seems unique with donald trump,

almost. see: it is very unusual to public officials and members of a presidents own administration publicly rebuked and countering them publicly. that doesn't seem to be -- and there doesn't seem to be a strategic reason behind that. instead it seems to be the president says what he thinks and sometimes it is counter to what administration officials bank. it does cause a lot confusion and causes them having to back withthings and come up surprise press conferences, like yesterday. yvonne: back walking we heard from mick mulvaney, too, when it came to puerto rico, the president suggesting to wipe out its debt. there was a question whether he remained presidential in puerto rico, still a big question, but democrats also weighing in on the debate on whether to talk about bailouts, bankruptcy, restructuring of debt. what are they saying? jodi: an interesting 24 hours in

puerto rico. the president made remarks to a radio station about wiping out the debt. it is unclear whether he could do that and whether he even wants to, it is an offhand comment, but it caused the municipal debt market the plunge initially. then administration officials back walked it again and said he did not mean that, we want puerto rico to a tangle its debt in a reasonable way. now democrats are saying this gives an opportunity to rebuild puerto rico after hurricane maria, to try to find a fair solution to restructuring the debt and dealing with some of the debt issues and bankruptcy of the past couple years. again, not a lot of details on how they would do that, it is extraordinarily competent it and expensive. yvonne: there are others eighth that faced similar problems, probably not as bad but certainly an issue. thank you. still ahead, hong kong's

property markets facing a reality check according to one of the city's largest commercial landlords. we will hear from hysan development. kathleen: plus our next guest remains bullish on oil thanks to demand in asia and europe. the outlook with barnabas gan in just a moment. this is bloomberg. ♪

yvonne: this is "daybreak: asia ." i'm yvonne man in hong kong. kathleen: i'm kathleen hayes in

new york. putin saysladimir russia is open to extending the output cuts deal with opec to the end of next year, the strongest signal yet the kremlin is willing to redouble efforts to lift global energy prices. putin spoke at russian energy weak on a panel monitor by john fraher. [translated] what we were able to do with opec i believe is for the benefit of the whole global economy. whether we are going to extend this agreement depends on way the administration of also macron the global market. i'm not ruling this out, but we are going to act upon realities by march 2018. >> that sounds like he would perhaps be in favor of extending them beyond march. the end of march is not very far away. [translated] i think this is possible.

you know this quite well. it is that important to entertain culture in such a public forum and public statement. there are many countries who did not join us. they are positively responding to what we are doing today in reducing production. for example, the libyan leadership publicly stated recently that it is considering the possibility of having the libyan producers join our efforts. at least the part which is being controlled by the powers which have made such a statement, marshall have to for example. everybody is aware of this. and understand the need for such joint efforts. i shall repeated again. we will have to look again at the way the global energy makes it look in march 2018.

we made contact with our key partners, with opec, and with main producer nations. i hope we will have the honor and pleasure to receive the king of saudi arabia very soon in russia, and undoubtedly we are going to talk about it. so we are maintaining this constant dialogue. i shall repeat it based upon the realities, in march 2018 we will make our decision. i don't rule out that we may extend these agreements. >> i push you on one last question. everyone in this room, of course, life stability -- likes stability. everyone in markets likes stability. if you were to continue the production cuts, could you see the extension of cuts lasting until the end of next year? >> [translated] i am saying we don't know yet whether we are going to extend or not. the question is being asked until when.

once we decide to extend or not to extend, that is when we are going to decide on the time frame. overall, speaking about the possible extension as a minimum towards the end of 2018. yvonne: joining us now from singapore with more on comments from boudin, ocbc economist barnabas gan, joining us live from the lion city. good to see you. hovering around $50 right now. what did you make of the president's comments when it came to extending output curbs? do you think the market is pricing that in anytime soon? barnabas: i guess it is good news for crude oil. putin hasfore what said in the conference, i think the markets are really looking at opec and russia at least extending the cuts by three more months to june 2018. currently the deal is supposed to last march. i guess what putin is adjusting, to extend cuts to the end of

2018, could be a good sign for prices, at least on one end. opec and russia, looking at the low oil price in seriousness and they want to support oil prices higher. yvonne: you still have the bullish call, 55 by year-end for wti, 65 by 2018. how much of this forecast is contingent on oil curbs being extended? theabas: i think beyond bullish trend that i am looking for, that the bank is looking at right now, is for a much underpinned. i think there are three key points i would like to highlight in this interview. i think for most, we look at the oil fundamentals. that is very strong empirical evidence that the oil glut is gone, at least from the production and supply point of view that is now having more

demand versus the supply in the market right now. that is one. and i think what is important is the countries, given there is over demand, from the fundamentals alone, the oil producers should start to taper. last but not least, i think we are looking at a very good 2017 and 2018 economic outlook. oil price, given that it is growth related, should be supported by improving global economic outlook. yvonne: those are all excellent points. certainly gross commodity, something like oil -- certainly growth commodity, something like oil is an important driver. here is a chart that shows the crude became the most in september. in october, it is back in the red. prices fell for the fourth day in a row as the news from the

united states government suggested there is more supply. you know very well that what happened when the saudi's allowed oil to get above $100 a barrel, they made it profitable for all kinds of new producers, blake shelton users. the higher the price gets, if it goes from ride back to green, the shale producers say, you be -- yippe. remaining 55 is not out of the question, but is that the point, like the equilibrium and maybe that is where the world stops? see $70-$80going to barrel oil again? barnabas: i do expect time and time again. a lot of guys do question the bullish outlook we have. that itdeny the fact rarely is very fragile. as of this morning, we have seen wti has fallen below $50, also

because of the fact that the oil exports by the u.s. have gone to record eyes again, almost 2 million barrels a day. what is important to note is that when there is higher oil prices, it does give incentive for u.s. producers, especially shale producers, to go yipee as you are saying. with the higher oil production we may see from the u.s., it does suggest that even though oil prices might inch higher because of the global economic recovery, it may also mean that the rally would be very gradual and slow. justwe are pricing at $55, $10 up to $65 and 2018, underpinned by the global outlook and improving fundamentals. i would like to bring one key point, which is a recommendation of brent.

what is surprising to see is there is a shift of the forward curve. it is not so much that everybody is looking at lower prices the next few months. with the recommendation, does give incentive for global stocks to follow immediately right now. because of that, with the lower oil that may be seen in the coming months and improving fundamentals, we have seen the global recovery is very strong, synchronized growth -- kathleen: it is a very positive argument. oil goes up a bit, but still low enough so people can afford it, drive their economies, drive their cars. thank you very much, very interesting discussion. plenty more to come on ." this is bloomberg. ♪

barnabas: now -- kathleen: a quick check of

business flash headlines. bnp paribas says bank mergers are likely despite reports they want a tie up. the chairman tells bloomberg he thinks consolidation will continue on a domestic level and declined to comment on the rumors. he says the industry is still uncertain about the follow from brexit but thinks be in the is a better place -- but thanks bnp is a better place than most. >> we need to prepare, need to consider the assumptions. we are a eurozone based bank, so the challenges are smaller for us than many others. yvonne: more changes on the way at deutsche bank as the head of investments is leading the asset management arm as it reorganizes. deutsche has said it plans to list a minority stake by marge and hinted at that overhaul the asset management unit. the operation has more than $183 billion worth of assets at the end of june.

next, we talk about the casino industry, review security after the mandalay bay massacre. we hear the president of las vegas sands. this is bloomberg. ♪

kathleen: 11:30 in sydney. the excess 200 trading up about three points this morning. yvonne: i'm yvonne man in hong kong. kathleen: i'm kathleen hayes in new york. you are watching "daybreak: asia ." breaking news out of australia, the trade balance for august has just been released and we are seeing that it moved to $989 million aussie from 469 million aussie in july. the bloomberg survey was looking for $850 million aussie, so beating the forecast. yvonne: more in terms of export growth. retail sales was quite a mess.

we were expecting a rise of just .3%, we are seeing things in contraction, august down .6% for retail sales after we were pretty much flat the month before. eighs on where the r.b.i. is going to go, the market pricing a rate hike in july. if we take a look at household debt and weaker wages, you can see that reflected. kathleen: it rose 1% from a month earlier, imports little changed. it is understanding, we were talking earlier with adam haigh about the strong aussie dollar and how that complicates things for the rba. interesting that exports are doing ok in spite of that. we have got the data broken on australia. let's get to first word news with paul allen in sydney. paul: fed vice chairman stanley fischer says the tightening u.s. labor market will lift wages and

inflation even though the process could take longer than expected. the fed's preferred price gauge has been below its 2% target for most of the past five years. stanley fischer is due to depart next week. he told bloomberg that economic goals often take longer than expected to achieve. >> i still believe we will have , as soon astion there are basic mechanisms. the basic mechanism here is unemployment is declining all the time, wages will start going up at some stage. secretary of state rex neverson insists he has considered resigning and did not denigrate president trump. he told reporters his commitment is as strong as ever and he has never thought of quitting. the hasty announcement followed a report by nbc news that tillerson considered resigning of the summer and referred to the president as a moron. 's office says he did not use the word moron.

president trump's proposal to erase puerto rico's debt has been firmly rejected by his budget chief as bonds plunged to a record low $.32 on the dollar. mick mulvaney says the president should not be taken seriously. prater rego has been plagued by budget deficits for decades and borrowed $74 billion from wall street. the treasury secretary well maldonado says puerto rico will run out of cash on october 31. google has unveiled the second generation of its own devices along with an array of new gadgets as it plows deeper into the consumer hardware market. at a press event, google introduced two more -- new versions of the pixel smartphone and new premium laptops and home speakers. executives announced each device with a repetitive focus on its artificial intelligence software. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. on paul allen. this is bloomberg.

yvonne: thank you. time to see how the asian markets are shaping up. a reaction as we got the retail sales of australia, continuing to see the all the tanking. lowest price we have seen since march of 2013. sophie: let's take a look at what that is doing to the aussie atlar, falling almost .5% session lows, given that we had the miss from the retail sales data. trade data better than forecast, experts rising with imports little changed. that is hurting the aussie dollar today. we do have pressure elsewhere in the currency market. the kiwi is continuing to sink following the new zealand finance ministers saying the better than forecast budget surplus is likely a one-off. take a look at the aussie share market. not much in the way of movement following the latest data. i would take a closer look when it comes to be potential outlook for the aussie dollar. you can see this on #btv 5082.

there could be some support for the currency as rate traders have switched to a tightening bias. you can see the us which happened around november of last year, just before the early 2017 jump we saw a macron the aussie dollar and with traders having fully priced in an aussie dollar. that could be the fuel to fire up the aussie. as we saw, the aussie under pressure following the latest data. seeing what is moving the dial him around the share market, materials gaining .7%, being offset by the drag in telcos and financials. goingtionary stocks also down .33% after they retail sales miss. taking a look at the mrr function, i want to show you some movers to watch. galaxy resources gaining about 3.7%, rising for a sixth straight day. the lizzie a minor says it is --

supplyor says it is in talks with battery maker panasonic. lithium prices are expected to remain strong going into the fourth quarter. qantas is gaining ground over 2%. it was raised to a buy at goldman sachs. the bank anticipates tourist arrivals to the activities will increase 6% by the end of the decade. qantas airways is trading at the highest level since december 2007. while we are seeing some moves in aussie share market, it is the aussie dollar we are keeping an eye on given the latest round of data. yvonne: just a slightly weaker aussie today. this week we have been looking at the risks surrounding australia's growth. today we focus on the markets. australia's economy is punching above its weight with a 26 year

run without a technical recession. the same cannot be said without its share market. let's bring in adam haigh from sydney. why this disconnect? adam: i think the first thing that is important to note is that australia is a very interesting component of the asian market, but essentially a shrinking component. the likes of south korea and india and china, the big market here, they have all grown over the last 10 years, while the australian stock market has shrunk. it is pretty much where was in 2007. the disconnect really is all around. the economy may indeed be recovering and it has been a very good player in the developed world, but the stock market continues to struggle. there are a couple reasons around some of the structures, the two big supermarkets,

banking industry, duopoly in the resources sector. all that helps to stymie competition in those sectors and new capital coming to market is very rare. often, foreign companies have been buying australian companies. that is a positive. over the last 10 years or so. but that limits the australian listings as those companies get bought by big overseas firms and end up being swallowed by an overseas listing in the states. the stock market languishing now on a global basis. scope of how does the what investors can buy on australia's market compared to the u.s. equity market? is the u.s. equity market that much more attractive, so it is growing and the aussie market isn't? adam: of course, one of the big success stories of recent times in global equity markets has been the u.s.

a large component of that has been some of the biggest companies of all time, the apples and facebooks and even microsoft, which was there 10 years ago but today exists as one of the biggest companies but in a slightly different guise. in australia we don't really have that tech sector. this is a great chart that shows you the australian component of technology, that white line at the bottom. that compares to some other markets that have a far greater weight in the i.t. sector in the global msci benchmark. certainly the choice is somewhat limited for australian investors buying into the equity market. basically you have the big four banks and two resources companies, and they make up 55% of the entire stock market. whereas in the u.s., there is a

lot more diversity. there a big tech companies that take up a good proportion, but there is a greater sway of different companies you can buy from, consumer staples, consumers discussion, through health care in different companies. australia remains limited in that fact and the fact there are not new companies coming to market with any scale is often cited as one of the limiting factors. there have been some tech companies that have done well. unfortunately for australia, they have ended up lifting abroad -- listing abroad. one of those chose the nasdaq listing rather than a listing in sydney. it just shows you how some companies are willing to go far broader to gain access to global capital. kathleen: thank you for that cogent explanation, adam haigh joining us from sydney. the las vegas sands president says this week's mass shooting won't have a huge impact on earnings, because most of its

revenue comes from asia. speaking to bloomberg in tokyo, robert goldstein says he has lived in vegas for 25 years and you need to know it is a resilient down. >> what happened is indescribably painful and sad. las vegas has a long road back to recover from this. as for our security at the venetian and palazzo, we feel it is pretty good. we have a lot of people in security, always have. we are very sensitive to the world's risks and are very comfortable with our measures. will that change, i'm not prepared to say it will. we will wait and see. we constantly look at these things and update. the person who runs our security is a special guy, out of u.s. government. we are very comfortable and we will do our best to continue to monitor as we think there is need to do more. but very, very sad, indescribable to wake up to that horror. >> can you talk a little bit

about how you see this impacting earnings or visitor numbers? , most ofblunt with you our earnings come out of asia and not las vegas. macau properties and singapore properties represent the bulk of our income. more importantly, it is a time to grieve and a time to look at what we can do better to protect our customers and ensure las vegas's future. our earnings will be fine, life will go on. it is not about the money, it is about providing the best experiences in the best, secure environments for employees and customers, who are our partners. it is almost hard to talk about this since i am a 25 year resident of that town and how dramatic and said it was to wake up the other morning. i am just praying for our colleagues, friends, coworkers, team members that we can

together work through this. we are providing funds, blood, support, volunteers. our team has responded very, very well. our hearts go out to the victims, obviously. so many victims. it is a long road back and it is sobering beyond a sobering. >> speaking of the biggest, what are your thoughts on how this may impact the local economy or the overall gaming industry there? >> i think it is premature and i would be remiss to say they are going to do this or that. vegas is wildly resilient, a town built on optimism and hope. when i moved there in the middle 1990's, it was the boom of development. hopefully it will continue to grow. right now there is a multitude of projects. i am hopeful it will bounce back and recover. our families and friends and colleagues will recover. but how do you talk about this and think about the future?

i can't, i don't know what is going to happen. yvonne: that was las vegas sands president robert goldstein. up next, new signs that singapore's property slump is ending. what about hong kong? we will find out more with henry chin, next. this is bloomberg. ♪

yvonne: this is "daybreak: asia ." i'm yvonne man in hong kong. kathleen: i'm kathleen hayes in new york. one of hong kong's largest commercial landlords says the city's property market is facing a reality check. wasally -- irene lee speaking after the failed sale of a hotel. she said prices will adjust, not crash, as the market is rebalancing. >> there is structural change for sure. it is brought about by generational change, i would say. among millennials

outgrows the baby boomers. i think retail has changed in the world generationally. >> especially across the border. >> absolutely. i think hong kong has felt the pain a lot more. it has been magnified by many things. one is we were spoiled by china opening its gates. the mainland was flooded, coinciding with rising prosperity, so we were very spoiled with just wonderful business. it just could not go down. then came corruption, crackdown on corruption. then came the sophistication. and they wanted more than just coming down the border to shop. they wanted to go to paris and milan to experience. >> some feel they don't feel as welcome. >> that is true. but if you think about the proportion, seven point something million people and the mainland is over 40 million. i think we got overwhelmed and

the infrastructure was not able to cope with the flux. i think that is sort of understandable. >> in the first half, you had a 5% drop in retail foot traffic. is that a blip or is it worrying? >> it is worrying, it is actually a trend. retail does not have to drop 5% or 1% or whatever. if you look at the sales figures in hong kong, they have turned a corner. it is not a time to be complacent. we are repositioning our portfolio, because i think early adopters will be the winners. i do think that brick-and-mortar is not dead. somebody needs to figure out how to work with the omni channel. brick and mortar has shown itself to be terribly important for online. >> what does the failed sale of the excelsior hotel -- i believe they thought it would be a conversion to commercial space, given the higher yield. what does that tell you about the market and how aggressive or you in getting that spot in your

hood, as you valid? >> in my hood. everyone keeps insisting we had to have that building. well, the result shows that we did not get it or we did not bid. >> what does the price tell you, or the supposed evaluation of $30 billion hong kong? >> i think there is a gap between expectation and reality, and i think it is good. i think failed is a very big word. i think the owner just did not get what they felt the market would bear. >> is the market too hot with what we saw with mary road, a world record for a commercial property? there are other developers as well, whether hong kong is the center. they are floating that 35 billion hong kong dollars. leading a place, floating 25. are they going to get them or are they just testing the market? these developers are cash-rich,

they don't need to sell. >> we all got quite excited with mary road, a big number. up, up, and way. it is ever increasing expectations, a bit like what we talked about earlier with retail. the reversion has been enjoying 30%-40% without having to blink an i led. so we will continue. the demand is never-ending, so we must continue to open more and more stores. i think the cycle has to have some reality check, so maybe we are having a mild reality check. >> is that put you on the sidelines at auction? >> we will continue to bid what we think is good value. yvonne: that was-chairman irene lee speaking to bloomberg's chief north asian correspondent stephen engle. let's get more analysis on property markets from henry chin, cbre had of asia-pacific

research. he joins us from taipei today. also joining us is bloomberg's real estate editor. henry, as we mentioned about the $3 billion purchase of a car park earlier, you would think the commercial property market is driving. -- thriving. how is sentiment now? isry: i think hong kong fundamental changes. if you look at the office market for the demands in central hong firm you realize the prc is getting more impressive in hong kong. financial sectors become 70% of the driving forces for the hong kong central office market. thatnk this is something is concentrated among prc and the financial sector. ,ong kong, fundamental supply you can see compared to singapore, singapore has lots of

supply coming to market over the past few years. hong kong, we don't really have any supply for central or cbd areas for a number of years. the only supply we have seen -- but the demand is very strong, limited supply in central, so i would not be surprised for murray carpark, you can see the historic high prices because the demand is so strong. yvonne: there are structural issues that irene had talked about. thise just not seeing sense of excitement anymore. mainland companies, are they rushing over to push up prices? moving from hong kong to shanghai, also coworkers getting to spaces. has a lot changed? >> there have been very significant changes. ,ainly there is the euphoria the bloom is off the rose kind of a feeling since china has

curbed the appetite of some of its largest and most aggressive dealmakers. if you look back at some of these earlier commercial property transactions, especially last year, a lot of the support came from very high bids from mainland chinese companies. you saw buildings in central being snapped up by chinese companies that were eager to put their own name on trophy sites in hong kong. you did not see the price sensitivity with chinese buyers that you are seeing with some of the local hong kong buyers who say, wait, i don't think i want to pay top dollar for this. belt, one roadne , you are connecting the dots between these property markets and that initiative. henry: yeah, it is interesting. if you look at the hong kong commercial real estate market

transactions over the last two years, it is free much concentrated on the chinese companies coming to purchase. but something i really want to highlight is the private capitals in hong kong, developers find hong kong very attractive. we saw so many transactions in the hong kong family office developers. number two, china [indiscernible] ,he control is still in place but the government also highlights one belt, one road. something very important in line with a strategy they say yes, you can do it. hong kong is in a strategic location. theare riding a dragon and past is on the way to going to china, but is china going out, has to come through hong kong. i do think hong kong, a strategic location, is very important for future growth. i am personally very positive about hong kong markets. yvonne: henry, thank you, good

to hear your perspective. henry chin, cbre head of asia-pacific research. also thanks to our real estate editor. more ahead here on "daybreak: asia." this is bloomberg. ♪

yvonne: that is almost it from us here on "daybreak: asia." a quick look at the next two hours, rishaad is joining me.

rishaad: another day, another record on wall street. more of the same, do we get tailwinds coming through? is the trump reflation trend back on? looking at the dollar coming off of late, benign a sessions even though we did not have records. us having aoining look about the trump trade expectations for the u.s. rate hikes coming up and how much they are priced in. looking also at the oil markets a bit later on, and also property as well. just a flavor of what is coming up. kathleen: that is it from "daybreak: asia." markets coverage continues. this is bloomberg. ♪

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