>> 7 a.m. in hong kong. i am yvonne man. asia-pacific markets are expected to decline after wall street saw its first drop in a week. sliding to a high. the euro weekends on continuing tensions in spain. raymond in new york. china is preparing to announce its new leadership team, offering clues to gigi king -- president xi's long-term plan.

♪ like celebrity apprentice. speculation. talking about how president trump was meeting with janet yellen. mike pence. >> pins and needles. kohn., taylor, a wait and see. donald trump has us on pins and needles. stuck in a wait and see mode.

been treadinge water. we have seen a trickle through in the asia-pacific. the anzac, 1/5 of 1%. expecting the new zealand prime minister to announce a new coalition deal later on. this is the head of the inflation data on wednesday. 7811 for the aud. in 1988 a record we saw after that victory for shinzo abe. the yen. ramy: that slight pullback you

just mentioned, taking a cue from u.s. markets. the first time in a week, after hitting record highs last friday. the s&p list down 4/10 of 1%. tec h, some of the biggest laggards, down about 2%. , just under $52 a barrel. sectors in the1 s&p 500 index were down. utilities were up. microsoft,ebec, amazon, they all report next quebec, -- twitter,

phabet,ft -- twitter, al microsoft, amazon all report next thursday. peter: the stocks were pretty good. for weakexpectation trading. that is what the results came in on. outside of that, for financial services, many businesses really performed very well. loan books performed well. equities. overall gave us a pretty good start. ramy: lettuce hopping to the abouterg -- let us talk the bloomberg terminal. green, the bigger

the surprise. looking at information and technology, the surprise is quite big. 4% for earnings. should we expect more? peter: expectation for the technology sector is highest in the s&p 500 index. the hurdle already is pretty high for a lot of these technology names. netflix,ok back at their results last week. they had such strong subscriber growth, and they were rewarded with shares. a one of these technology investors are looking beyond bottom-line results. what about when it comes to these investigations

involving russian meddling when it comes to google and twitter? could it start impacting earnings? peter: they could weigh on resul ts. we expect company management to address those issues. a part of thel be story, but not the driver. looking fore continuation of what will be driving growth for the overall business. there may be a slowdown or speedbump. yvonne: thank you. peter chung, joining us from bloomberg intelligence. let us get the first word news with jessica summers. jessica: prime minister shinzo fixedpeated there is no timeline for passing the constitution. his landslide when opens -- win

was on sunday. critics say switching focus to constitutional change was economic reform on the back burner. >> this victory has had a sobering effect on me. i want to manage the administration with more humility. we will implement policies. catalan cap salon -- separatists are mobilizing a human shield. groups will concentrate efforts around the regional government and the parliament billiton -- parliament building. spain's chief prosecutor says the catalan leader should be in jail. president trump said he was the new fed choice.

the presidents closed his aides are stealing him -- steeling him toward taylor or powell. business groups are calling for an arrangement that would allow them to continue trading in the european union for two years after brexit. any accord said that regarding this would only be signed as part of a broader deal. very hampered by the views of her own party. interests of her own culturally -- of her own country to keep the european union in the single market. >> mobile news -- global news,

24 hours a day. the communist party is preparing to reveal its new central committee on tuesday. any youngerude faces? that maketh insight into how givepresident -- may insight into how long president xi plans to retain power. ramy: whether he will be able to come out when he takes the will behether there five people on that standing committee, we do not even know. there is a lot of secrecy to this. it has traditionally been an event where everything is it shrouded until just the last --

where everything is shrouded until just the last minute. we are waiting and seeing what is going to happen. well he identify a successor, as happened 10 years ago? will be anticorruption -- the anticorruption czar say he is going to stay for another term? he is one year past the age of traditional retirement, 68. our reporter joins us live from beijing. talk about this selection process. >> this is really getting to the gut. of how the chinese communist party works. is thetral committee body made up of 200 people. bureau, made up of

25 people. and then the standing committee in the bureau. they will be standing tomorrow morning on the red carpet. the order in which they come out is going to be important, suggesting their ranking within the party. and then, the age president -- the age precedent. a couple of things to look out for. a red carpet affair. what are the scenarios we should look out for as well? it is very difficult to be sure what is going to happen. one of the most closely watched scenarios is president xi steps out with six people who are old to -- too old to continue past 2022.

maybe that will suggest he is trying to expend his own regime past 2022. is he going to stay on as the head of a military -- the military or in a different capacity? behind himeople will include younger people., potential successors. people -- two people tomorrow, potentially. if he walks out with a smaller standing committee, he could shrink the power base. that would rollout any -- rule out any chance we would see a

successor in that grouping. if shan stays on, that could rip up the age precedent. ramy: what would this mean for president xi? -- tell ustell it how much more power he has added. that is what we are looking at. there is lots of speculation as to who will take over for him. if he comes out with a successor, there is a of speculation as to who they are and what role they could be playing. up, just how much

is an analyst worth? theay the value -- weigh value of financial advice. yvonne: and the asia-pacific head of corporate banking from j.p. morgan on competition. next, this is bloomberg. ♪

asia."his is "daybreak jpmorgan's annual treasures -- annual treasures forum kicks off in tokyo. our chief north asia correspondent is sending by.

-- standing by. >> a busy week in tokyo. the election results. the super typhoon. today, we are at the jpmorgan asia-pacific treasurer's forum. good to see you. the last time we talked, we talked a lot about china being the real growth driver for the fastest-growing economies in asia. what about japan? we are in a negative rate environment. biggest is one of the markets for us at j.p. morgan. we are committed to this market. a very goodis on trajectory.

the stock market is at a high, as you know well. of prime minister abe gives the economy tailwinds. are leading to a very strong economy in japan. steve: some of the voters voted for continuity of these reforms. there was highlight of some of these risks to the banking system. too many employees. there could be financial risk if they don't i daft. risk? see some this is supporting the

outbound agenda of the japanese conglomerates. he is making and staying very relevant to the japanese base. n: we talked about big corporations, investing abroad. instances, how do you assess the risk in doing business with these chinese companies? the overall team in china has moved from quarterly to quality -- from quantity to quality. they are aligning that m&a agenda with the priorities of the country. d, and stayingd

--y from investments with which might be judgmental. the government is doing something very responsible, in terms of aligning all of the m&a companies won't get into trouble later. stephen: what are you seeing from companies in china? muhammad: i can only give you figures to the end of august. 5%.-over-year, down enterprise, 30%. from our perspective, we continue to be well-positioned on facilitating this agenda. the financing into the risk management -- and the risk

management associated with that. stephen: there has been a reiteration of opening up the financial sector to competition. muhammad: china's transition is going well, in terms of the way they are deleveraging, working on capacity. in that context, opening the economy is a welcome proposition for banks like jp morgan. we can bring the expertise we have in cash management and capital markets onshore for the benefits of clients in china. : i believe investment banking, you were ranked number two.

what are you doing to increase market share? market drivers. volatility associated with asset classes, and how the run the risk management agenda is going to be critical. driver.gy is another where technology is moving. stephen: what is the number three? muhammad: regulation. in termsg to clients of the fast pace of regulatory change. stephen: thank you for having us and have a great forum. we will be here all the rest of the morning. ramy: thank you. stephen engle.

-- stephen engel. we will hear from a former u.s. and find out china what donald trump is thinking as he prepares to meet president xi on his own turf. this is bloomberg. ♪

ramy: the former u.s. ambassador to china has said president trump should talktalk when he -- should talk tough when he is in china. here he is. feels even more confident as the years go by. president trump is going to see a confident chinese president. >> take us back to november 2014. you were ambassador and awaiting

the arrival of president obama. what goes into prepping for a visit like that? max: it takes a lot of work. knowing that the best relationships have mutual self-respect. president trump has to explain what is important -- is important for the united states. xi will for china. president trump has to be firm, chinay respectfully, that cannot take advantage of the united states in trade. they are moving into the south china sea against international standards. trump has to say, we want to

work with you, but only so far. usid: what should those of make about what we have seen in beijing? a three-hour speech by the president. other sessions. standing committees. what should we take away from what we have heard? risingvery confident, china, one that is focused on marxist socialism. the united states has to recognize china will pursue its own ideologies. americans cannot assume that because we have our rule of law and constitution that china will do the same. we are different.

we have to understand that difference. we are not going to be able to persuade them to our form of government, that we have to work with each other. ♪

sunny in day -- wendy day in tokyo -- sunny and a windy day in tokyo. a.m. 7:30 first fall in a week as we head weeka big earnings with industrials as well as technology on radar. yvonne: you are watching "daybreak asia.

tillerson is visiting afghanistan and iraq. it was his first visit to either country as secretary of state. ansident trump announced open commitment to afghanistan, putting as many as 4000 more troops there. says the fed should more closely monitor the economic struggle of the bottom 60% of americans. there is a growing grass between the top 40% and the bottom 60%. focusing on a national average can paint a picture writer than reality. officer says kong

two options are allowing shares on the main exchange, or confining them to a new platform. critics oppose the idea for fear it would diminish the one-share system. singapore is putting the brakes on vehicle ownership. carsnnual growth rate for will be cut from a quarter of 1% to zero. ensure itsant to most productive use. officials view a $20 billion increase in public transport over the next five years. i am jessica summers. this is bloomberg. we are counting down to the opening of markets in tokyo and seoul. we have a bit of the fatigue in the wall street session.

we have seen the longest rally since 1988. >> there may be a place for a hangover. these markets are looking tired. they need new information to feel that. -- to fuel that. -- looking to open lower. take a look at what is driving the japanese stock market. corporate earnings have been really good as well. can't that continue? sophie: goldman sachs are anticipating second-quarter earnings to be better than projected. its etf,ave held back

which could be seen as a vote of confidence. viewerst here shows what we are talking about. octobers a blip in compared to over the course of 2017. investors better be prepared for things to get stronger. ramy: when it comes to the winners and losers from abe's win, investors had only a day to digest everything. where do we see gains and losses? sophie: manufacturing could be set to gain. it shipments grow -- we have seen it shipments grow by double -- we have see n shipments grow by double. six major electronic parts toers saw a record from july

september. manufacturers have been a part of this record. orders worth about 30% in this quarter. ta, a 10%-15% boost. a strong fiscal year is anticipated because of a demand for the new iphone. there could be a tailwind for these exporters. ramy: thank you. president trump says he is very close to announcing a fed chair. there were reports that one of the dark horse candidates has moved up. here is our global economic and policy editor. a case of musical chairs. kathleen: it is a case of republicans making their views important decision

that donald trump has to make. we know he said over the weekend that he is very close to making his decision. let us look again at the field. john taylor. well, on the board of governors. a banking expert. dodd-frank. and janet yellen. donald trump says he likes her. orse, the other five on the short list, warsh. cohn, economic director. warsh met with mike pence on the same day that donald trump was meeting with janet yellen last

thursday. knew concern republicans want someone who is going to change fed direction. arsh would be on that list. ton mr. powell was nominated fill the expiring term of another governor, 21 republicans voted against. -- in 2014, 24 republicans voted against. powerful stuff. on yellen's to stay path. whoever what is, wall street is saying, make up your mind. yvonne: yes. a guessing game. more potential leadership changes.

poillicy. with boj we were speaking to one of the former chief yesterday. there needs to be an exit before making that decision from ecb. kathleen: pedal to the metal. bottom line. take a look at this chart. it shows the size of the balance sheet at the g3 central bank. stayey are going to stimulative, this could be helpful to emerging markets in asia. could be a removal of

stimulus in countries around the world. let us take a look at another chart. u.s. yields have come up a lot. u.k. yield, low. german. peak, low. look at how low. the boj is keeping it there. stimulus, while the other central banks start moving theirs. the boj cut way back on their purchases. the boj knows it can change nobody feelscause it is time for the boj to start

pulling back on its monetary stimulus. yvonne: thank you. in a rare case of investor webo is, the owner of being urged to makes with being changes to improve shareholder returns. two shareholder advisory firms mike ins get more from san francisco. what are these complaints? mike: the shareholder advisory investorsre the main pushing the investor campaign. sina has this great assets. webo is not being used to its full capacity.

it is being cloistered away a little bit. webo would be the parent company of sina the value could be unlocked, for shareholders. there is now the backing of glass-lewis as well. the shares are trading at $111 in the united states. they could go up to $190. yvonne: are shareholders listening? mike: it is always hard to tell what influence the firm has. there might be a bit of an issue. it is an asian-based company that is involved. investors might be listening. people read these reports.

if they don't know what is going on, they are going to do what they would have done anyway. least, if there is a cheerleading squad on the field, you were going to be cheerleading for either side. ramy: interesting. what are they telling shareholders? mike: partly because of their business, they know what they are doing. we are dealing with a company that is more familiar with the chinese market than some of those who are criticizing it. they say, they have the expertise, and they don't need none expert voices coming in. interesting. mike in san francisco with the latest coming out of sina> . check out the interactive

television function. to dive intoble any securities or bloomberg functions we talk about. this is for bloomberg subscribers only. this is bloomberg. ♪

ramy: this is "daybreak asia." yvonne: a quick check of the latest business flash. mark johnson has been found guilty of fraud. he was convicted on nine out of 10 fraud in conspiracy counts. the 51-year-old is the first person tried in the global

currency rigging scandal. he pledges to appeal. analysts say this company faces and inevitable restructuring. global bonds rallied on monday. there would be sufficient proceeds to pay down two f acilities. yvonne: there are plans to inspect kobe's aluminum products. aluminum from their has been used -- from there has been used for several customers. regulators say they are monitoring the situation. ramy: the italian finance minister has told bloomberg he

wants to address growing calls for autonomy. spain is still grappling with separatists in catalonia. this is certainly a challenge. we in europe must find ways to combine the systemic dimension of europe with a national and local dimension. reshape that. >> what else can europe do to medicate -- two address -- to address them properly? requireean challenges european responses. there are national responses which are insufficient and we need to integrate them. >> there is a lot more work that

needs to be done. in order to slow down that trend. these are structural problems. and there is a window of opportunity to deal with them. the economy is growing at a healthy rate. lots of job creation. let us talk about the italian economy. 1.5% projections for growth this year. >> this growth could be stronger. there are upside risks. by how much more do you think the economy could grow? ms werell those refor fully implemented, and all resources utilized, we could go to 2%? >> how would that translate into

the debt of the country? what about the gdp? accelerate debt decline, because of the nominated growth. inflation is low, still. >> you have spoken about some of the ecb reform efforts, you have expressed perplexities when it comes to supervision. beyond itsng boundaries. could you clarify? >> this was the recent communication that the ssm but doubt about the timing and features of the program that needs to be implemented. for the italian economy. we must be very careful in

getting the speed and timing right. if we do it too fast, we could derail the system. issue about the job that has been opening up at the bank of italy. would you take it if it was offered? >> a minister cannot take that job for a year. that was the italian finance minister speaking to bloomberg television. more ahead. this is bloomberg. ♪

ramy: welcome back. yvonne: a quick check of the latest business flash headlines. outlook may cut dividends from ge stock prices

after the 2017 profit was slashed. morgan stanley recommended selling. ramy: prominent automakers have e.u.inspected by authorities as to a of an investigation as to whether german authorities colluded on technology. the industry is grappling with scandal.esel chief yvonne: google has made it easier for scientists to use quantum computers. it can be used by chemists and scientist to adapt algorithms and equations for quantum computers. microsoft is pushing the technology. they could help make more

powerful supercomputers. says its search for a second headquarters has 8earned to 38 proposals -- 23 proposals. only seven states refrained from bidding for the project, which promises 50,000 jobs over the next two decades. amazon says it will make a decision next year. australia.k in ofre has been allegations trying to manipulate a benchmark interest rate. allen is here with more. this could start to hurt full-year earnings. how much are they settling for?

paul: that wasn't made public when the settlement was announced. but there have been reports in the region of millions of dollars. we are likely to see the number buried somewhere in the next couple of days. accuses westpac and the national australia bank of lls, aboutng bank bi $10 trillion in derivatives. there were quite a few trades between 2010 and 2012. evidence has built up around messages and emails. says, we are trying to push the rate lower today, then push it higher tomorrow. westpac says the role was to monitor whether the rate gets

set. we will hear more evidence on wednesday. amy: and said his trading -- nzac is trading a quarter of a percent lower. what does this mean with regards to regulator pressure? paul: there have been a bottom terriers to getting -- there have been a lot of barriers to getting a settlement. there has been a reputational hit to the banking industry in australia. the banks are confident they can prove their in distant -- their innocence. anz are saying they don't have the ability to move that rate because of the size of the market. they are saying conversations

were taken out of context. we are going to learn more on wednesday morning. thank you. on the rate rigging scandal in australia. subscribers, go to your terminal. it is also available on mobile. you can customize your settings so you only get the news you care about. yvonne: coming up. -- ussing the fed into the the fed and the boj. all looking ahead to the ecb meeting this week. isn't worried about china's growing pile of debt. this is bloomberg. ♪

>> 8 a.m. in hong kong, we're live at bloomberg asia had orders. i'm if on -- yvonne. face acific markets cautious day after the first drop in a 14 week high. china has new leadership and may offer clues to president xi's long-term plan. bloomberg's global headquarters, it is just past 8 p.m. on a monday evening. president trump says he's close to naming his fed pic. there are reports a dark horse candidate is back in the race. the boj has a warning for local lenders. too many branches and too much

staff could damage the system. ♪ a very good morning to you and to you, yvonne. you would've thought the u.s. markets might've got a little bit higher off of corporate tax reform. stilln't get that, we are waiting on it. it the markets actually fell about .4%. the first fall in a week and maybe asian markets are looking at the q. yvonne: it looks like we are in a bit of a holding pattern. the moment to take a positive and leading up to the big events. the ecb meeting and we have tech earnings coming through in the u.s. as well. look at the latest now. >> the markets taking a breather sliding down .2%.

have the yen hovering near a three-week low. although trading just slightly higher, up about .1%. -- aussie stocks gaining. and we are seeing the cost be open flat after a two day rise. ,t is looking a little change trump says he's very close to announcing his pick for fed chair. .25 percent,about and a five-month low will bond yields climb ahead of prime -- due to police coalition agreement later tuesday. the aussie is slightly higher this morning, but here on that's what they do at the bottom of the hour. i take a look at what is moving the dial in tokyo.

the nikkei down .2%. it utilities in the green of about .8%. discretionary stocks are leading the drag. automakers and yamaha motors. climbing this morning, we did have the nikkei newspaper reporting that several park makers set a record quarter for their borders. the nikkei ported a 20% drop in domestic sales for the first 20 days of october following the inspection scandal. kobe steel, the company considering withdrawing its earnings forecast because of uncertainty because of its scandal. both companies are seeing weakness this morning. is forecasting an annual loss impacts.illion of tax

some focus was going on in tokyo there given the rallies that we have. >> investors definitely taking money off the markets right now. first world news with -- first word news with jessica summers. jessica: seeking a broad consensus on revising the path of the constitution and repeated that there is no fixed timeline. the plan opens the way for more abenomics. the pressure is on him to tackle japan's growing debt. switching focus to constitutional change threatens economic reforms on the back earner. -- back burner. sobering effect on me and i want to manage the administration with more humility. one by one, we will implement policies. cattle and separatists

are mobilizing a human shield to take control of the region. we are told groups concentrate around the regional government. they have expected to declare independence this week. prosecutors will see them in jail for 30 years. president trump says he is very close to announcing his choice as fed chairman. he is considering john taylor. white house sources tell us the president is steering him to tailor or powell. and the u.k. government has dialed back expectations of exit transition deals. this is despite business groups calling to allow them to continue training for two years. said minister theresa may it would only be signed as part of a broader deal.

they told bloomberg a must reach a deal quickly. >> it is obviously very hampered by the views of the hardline in her own party but she really on the interest of the whole country which is to get a deal they keeps the u.k. in the single market. by 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. aonne: preparing to reveal committee on tuesday. few clues on the lineup, it will -- our senate correspondent joins us live from beijing this morning. tom, we've been talking about

how much emphasis the president is going to have choosing the fed chair. what is happening in china could be just as dramatic. >> this is what we talk about the issa tarik mechanics of the chinese communist party. ist we're going to get essential and is expected to be unveiled at some point this evening. their first job tomorrow morning beijing time will be to vote, at least in theory. in practice, that decision has probably already been made. of the bureau, there is a standing committee and that is the apex of chinese power that will be unveiled on the red carpet in quite dramatic fashion. the one thing to watch out for is the lineup. just what order they come out in because that will indicate the ranking in terms of the party

leadership. yet the thing to bear in mind is the age requirement. it's not a rule, but a precedent. they can't extend their terms beyond the age of 68. that is something also to remember. the other thing to remember is the party charter. will president xi be enshrined in the party charter? will find out at the end of today as well. if he does and if he's named in the chinese communist party constitution, it puts him on the same level in terms of power and prestige. yvonne: what are some of the different scenarios? we were talking earlier. but doesn't matter that the president has reaffirmed his power in the party congress? >> it matters because we will figure out just how much more power he's going to have.

if what we are expecting, he is going to continue to have significant influence. he is expected to be stepping down. it could be a different role as head of the military or head of the party or create some other role for himself. he never had a big formal title but maintained it. he steps out with six people before 1960. after 2022. the question of who would take over and would throw out a precedent set in 1992 where you get these successes effectively named to put on the top table.

stepping out with a smaller. president xi to set out with a line up of six people that does .nclude guangxi chan it could also rebut the age precedent and potentially mean that president she might look to extend his own time past 2022. that is chinese politics for you. >> thank you very much. >> what does this mean for the next five years. context chinese leaders.

put chichi this paying in the pantheon there. in the pantheon there? thought -- and it is very catchy. characteristics on a new era. if it is enshrined in the par.e, and it is on if he doesn't have his name enshrined but has this theory, is on the same level. it shows you where he might be positioned, according to this party chart. in terms of what happens the next five years, it is very likely according to all the china watchers that the going to be is not stepping down to tend his rose garden in 2022.

what he may do is cross at a new position and remain ahead of the military. -- the head of the military. it's that kind of thing they could unveil. not just domestically, but foreign policy as well. someone who has been dealing with washington and beijing ties over trade negotiations, the south china morning post reports over the weekend he could be elevated. u.s. china relationship, something that could be a positive. in it is leading up to president trump's visit in november. raimi: terrific reporting a terrific details, as always. tom mackenzie in beijing. looking ahead, too many staff, too many branches. why the boj's warning japanese banks that they need to slim down to survive. yvonne: perhaps too many cooks in the kitchen. plus, betting on the fed raise

as president trump says he's close, very close to a decision. is bloomberg. -- this is bloomberg. ♪

yvonne: this is daybreak asia. just as president trump says he is very close to announcing his pick and it is all but assumed, right? there were reports that one of those dark horse candidate has moved up again. our global economic and policy editor kathleen hays is here. who are we talking about? we are talking about five people but the latest is kevin warsh who is a former morgan stanley executive and a former member of the federal reserve's board of governors. let's start by looking at all the people on the list because there are five on the short list interviewed over the week by fox news, donald trump signaling that his favorites are john

taylor, j powell on the board of governors, and spent many years banking, and janet yellen. he said i like janet yellen a lot in that interview. the three. a gary cohn who used to work it goldman sachs, doesn't seems a likely. and kevin warsh was not really high on the list. it turns out kevin met with mike pence on the same day that trump met with yellen, thursday of last week. betting,also apparently and we have been getting an idea that john taylor is favored by conservative republicans that change direction. kevin warsh is also in that can't as someone who would change direction. furthermore, the wall street journal story points out that back in 2012 when j powell was first nominated for board of governors, 21 republicans voted against him, and in 2014 when he

got his own turn to be on the board, 24 voted against him. more of a race to the extent that donald trump will listen to his own vice president and listen to other conservative republicans. one thing we know for sure is he said he would make this pic by november 3 because that's when he's leaving for asia. on high alert waiting to see what happens. like we're like that every single day. there is so much debate about john taylor and how hawkish of the fed chairman he could be. that situationin as well? .athleen: an excellent question he was against fed easing in the financial crisis. he was critical of quantitative easing.

no doubt he has indicated that be flexible.o we know the boj will be more stimulative than ever after abe won. though, not news, only for the boj and the japanese economy, but asian emerging markets, global bond deals, because the fed, no matter how hawkish or not hawkish, a question of how fast the ecb meets on thursday. so the boj can be an offset regardless, very forged aspects globally for the bond market. i think john taylor would be best for the boj. kathleen, thank you. let's talk about the dollar now. g #btv 9627.

it seems like we have found a bit of a bottom here. we are seeing the red bars down there, the dollar short now starting to just shrink a little bit. last week, we saw the biggest shrinkage and more bullish sentiment since march. some of the dollar bears out there seem to be waking up a little bit. a second session touching the highest since the 14th of july. joining ustegist, live from singapore. peter, kevin warsh, and name like that, what does it mean for the dollar bears? peter: i think of kevin warsh were to get through to the fed chair, he is generally perceived to be one of the most hawkish man in terms of nominations. are likely than not, the markets are still favoring powell, but taylor is up there as well. compared to the current fed

chair, janet yellen, who is still also in the mix, they are perceived to be more hawkish. in terms of market reaction to the initial announcement, it will be a dollar positive reaction. word to be reappointed. if we get powell or taylor, it could be differing degrees of probably knee-jerk dollar strengths. yvonne: what does this mean for the whole bank. ,e can continue to make this the ecb makes us as well. they could be extending their qe program. those priced in so far. peter: we had a strong rally

for the euro. a lot of that was the improvement in the economy. if we look ahead to this week's meeting, i think the general consensus is a nine-month extension. purchases around 40 billion euros a month. we are relatively more hawkish than that. already looking for a six-month extension. we try to limit any adverse market reaction whereby financial conditions tied to it too much. criticizing that the program is open-ended. just to cool the heels around going to zero in a straight line. it then again, if we look at more broadly, we have

organization -- yvonne: go ahead because i was going to ask about your forecast. he could be rebounding at the turn of the year. how do we get there? in catalonia as well as italy. >> i think it is generating market headlines and newspaper headlines. but in terms of the actual reaction to the currency, it is not generating too much of a negative impact. you need to remember the ecb and other policymakers put in place a lot of backstops. to prevent politics and any type of political risk driving market direction. driver.t really a big when we look at things going

forward, obviously, the dollar is one side of angst. hasdollar in the u.s. improved and we are starting to get some traction around a tax policy coming through is well. that caught us a little bit by surprise. optimistic, att least in terms of the timing and the scale of any measures that come through. and i think one thing people need to remember is that when the fed announced tapering, it was the return of an human to the market that drove the dollars strength. it wasn't the rate hikes by the fed. once there is tapering of the asset purchases, the euros sensitivity to the dollar will continue to increase. the economy is improving. it continues to surprise for the upside.

we think we can generate that rebound. raimi: peter, thank you for joining us. plenty more to come on daybreak asia. this is bloomberg. ♪

raimi: this is daybreak asia. yvonne: and i'm in hong kong, a quick check at the latest headlines. spent almostronics 18 billion u.s. dollars this year. it may reach five billion dollars on strength and semiconductors. a three-year plan on shareholder returns will be revealed on samsung's october 31 earnings conference call. seen buying the company's vital time but say it faces the

almost inevitable restructuring of more than $3 billion of debt. bonds rallied on monday and is said the deal coupled with the earlier sale of the gas and would provide sufficient proceeds to pay down to secured debt facilities. a plane to check the safety and quality of its aluminum products. it has been used by several customers, including mitsubishi .eavy for its regional come -- that: here y pimco think china's deleveraging campaign will create pockets is pain without actually reducing debt. emerging asia ahead, we are joined next. this is bloomberg.

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raimi: 8:30 a.m. and a sunny singapore today. i'm in hong kong. raimi: and i'm in new york and you are watching daybreak asia. its get to first word news with jessica summers. jessica: hedge fund billionaire ray dalio's says the fed should closely monitor the struggles of 60% of americans. the bridgewater associates say the growing gap between the top 40% is a major cause of slowing growth. focusing on the national average can paint a picture that is brighter than reality.

it was tillerson's first visit to either country as secretary of state. in august, president trump announced the open-ended commitment to afghanistan, putting his many as 4000 more troops into america's longest running board. the officer says he supports the introduction of dual class shares. financial services secretary james lau says the options are allowing shares on the main exchange or confining them to a new platform. diminish theould one share and one-vote principle. singapore is putting the brakes on ownership. motorbikes would be cut to zero. the precious commodity in singapore, the most productive use.

more than $20 billion of public transport over the next five years. global news 24 hours a day powered by 2700 journalists and analysts in more than 120 countries. i'm jessica summers, this is bloomberg. eames that we have pressed the pause button really in this equity rally. set for aave them second day of gains largely thanks to what is going on in sydney. and we have the aussie share market generating about .1%. dollar justve the above that data. they may be allowed to move more freely once the chinese congress wraps up. and the dollar is trading near a five-month low, details

regarding the coalition agreement due out later this tuesday in the yen keeping steady near a three-month low. the trading in tokyo has warmed up and we will take a look at land, ready to unveil the latest mobile game. almost 4%, dropping the most since november after morgan stanley cut the stock to equal weight and lowered the price target to ¥1200 for 1500. it is leading, the most since april. it boosted the for your operating income and the guidance estimate. given the record rally for the nikkei 225, number a has raised its targets for the benchmark at 21,800 points. by the end of this year, not too far to go and that's an outside of about .5%.

at 22,800 point, blinding yellow. that could be the catalyst here along with potential boj etf. we see that reduce for the month of october so far. putting some stocks on radar after some readings. the miners raced to buy after reporting a record quarter. raimi: thank you very much. it let's head over to bloomberg's new reality summit that kicks off in singapore. driving china's economy. the next guest says china's deleveraging campaign includes pockets of pain.

let's talk about this. >> we look at the portfolio management from pimco live. pimcogapore, as you say, has the chinese authorities there. a little bit from broad deleveraging. we were saying a little bit of pain, but essentially, we could see a bit of smoothing over. >> [indiscernible] there are pockets of deleveraging and they want to tackle the commodity-based players.

>> as he was saying to me earlier, debt is not such a dirty word. things, number one and a lot of the capital. a 50% savings ratio. this is a family affair. i love the savings. is, as well asg the cost of that debt does not rise above the nominal growth rate and stays low, it will be sustainable for a long time. >> what is you think about the conference and the opening remarks? yuan, is thate something -- >> first of all, it was a power play. there are very few on the planet, but his point to 2050,

talking about it in growing terms. those things are really super speculative. finally, president pain will be at the top. they need that for the central bank. it will be high-quality and distributed. i think those things will take place. >> potentially, we could see a widening of the yuan. it the governor said a couple days ago that this is not very important. flash crash anyway. >> it is natural for a currency that enjoys the basket.

these are part of the basket and they move around. the chinese suppress the volatility current he, it will lead to more imbalances. they learned a few lessons, and i think it's worth thinking gradually. has basically every forecast. seven to the dollar. >> by and large, that was the dollar story. they change quite rapidly. quarter, it is ahead significantly.

>> take a look at the overall china market. as ugly any stock that had shanghai and it today rose by the daily limit on friday. we heard that news of the trade agreement and we saw that rally continuing. where else can we see growth and potential coming through in the china and hong kong markets? >> [inaudible] and they will be cannibalizing a lot of sectors around the world whether it is fusing, if it is software, it is happening. and secondly -- [indiscernible] the president mentioned it in his speech. [indiscernible] they probably had a great couple of years.

>> and he said not to speculate it. on trade. >> i'm no expert on the white house. it is pretty clear that north korea is no laughing matter. there's a lot of volatility. it is coming to asia. it is highly unlikely, before they get there. me that whether it market, or asia, that

what that's going to be. is november 3 and we won't hear anything before then. >> taxes definitely something the trump administration really wants to target. it would help, and hopefully trickle down. we will have to wait and see. andan waste an entire year it would be a controversy. >> we will watch with a lot of attention, and it's a different than we saw as well. joining me here, live from the grand hyatt in singapore and we will be coming to that throughout the day.

yvonne: i look forward to that. and things to pimco's luke. overstaffed and too many branches, the boj is warning local. -- local banks. that's coming up next. this is bloomberg. ♪

raimi: this is daybreak asia. e in hongnd i'm yvonn kong. loaded local lenders maybe hurting the country's financial says him. gareth allen joins us live from tokyo this morning. tell us the message the boj is trying to send here. what is the systemic risk they see? message the is any japanese banks want to do something about your profitability. and the financial system reports the bank of japan has data and

six monthly reports that they do , analysis of japanese banks comparing it to european banks. and they found they have too many branches. it is efficiency and low profitability. bank of japan has pointed that out. it is all lost on the banks. they cut the workforce and in japan, you have to do it by attrition. so we can improve the efficiencies by investing. and they are generating positions. yvonne: sure, but what i don't understand is that isn't the boj the one inflicting some of the pain for japanese banks with negative interest rates? what of a saying -- seeing as efficiency that needs to be slimmed down?

>> it is the bank of japan predicament in the first place. it has really squeezed the traditional properly. and the report is that, despite the banks efforts to try to boost the income, it is still comparatively low as the income has those banks around the world. this fear among japanese banks. customers have too many fees. so many banks in japan. they are so competitive. they are reluctant to boost the income. raimi: telik they are we to see

consolidation in the sector? for many years, the regulators in the bank of japan said the community banks had several hundred more. have been trying to encourage them over the years. such as banks, the next 20 years. it needs to be shaken things up. >> interesting stuff. thank you for that insight. the bloomberg banking reporter from tokyo. a quick check of the latest

business flash headlines. the former hsbc mark johnson has been found guilty of fraud for front running a $3.5 billion client order. he was convicted of nine out of 10 counts of fraud and conspiracy. he is the first person tried of the scandal, banks paying more than $10 billion and he plans to appeal. more prominent automakers as part of the brand colluded on technology. ratedre the latest to be after checks last week. they reported that the three men in the 1990's will coordinate tech, cost, flyers, and strategy. raimi: 238 proposals across 54 america.cross north

and 50,000 high-paying jobs over the next two decades. amazon says it will make a decision next year, so we will have to wait. yvonne: google has availed software making it easier for to of computers. the open source software could be used by material sciences to adapt algorithms and equations to run on quantum computers. a google, ibm, intel, microsoft, and he would systems are all pushing the technology. it is orders of magnitude more powerful than digital supercomputers. the most in six years after its worst outlooks sparked fears that it may cut dividend for only the second time. banks lowered their expectation for the stock price after ceo john flannery slashed the 2017 profit forecast.

they recommended selling citing higher property that is not seen as priced in yet. looking for clues. trying to break down what china's new leadership group might say about president chichi paying -- xixi ping. this is bloomberg. ♪

raimi: this is daybreak asia. i'm in new york. and i'm in hong kong. the commonest party is preparing to reveal its essential committee on tuesday. beijing has offered few clues on the final lineup. observers are wondering if it will include any younger faces. us bring in china's bloomberg asian government reporter. take us through what you'll be expecting over the next two days or so. you talked about the big reveal will be happening on wednesday. and there will be a lot of importance and significance to were the order in which people come out and if they will be standing as well. will allow the new central committee. it made up for members, and 15 important members. and the central committee will elect the party through and the standard committee tomorrow. but from today's central

committee, we can get a few clues about very important ping'sns about whetherpi top anticorruption czar will stay there. he actually comes out of the curtain and really sets the stage for xixi ping, unlikely he will name a successor. >> it is a good indication of ping's own intentions. just like a diplomatic line for tomorrow and the standing committee is to keep the clearest indication yet about ping's succession plans. if we don't see any young officials. i mean any young people that were born after 1960. which should assure them, they are young about 10 years up to 2022.

like maybe he's going to hold onto power. which would be unprecedented of course. how important is it about the clarity of these names and their positions, and whatsit stake over the next five years. >> for the immediate predecessors, both of them have the air powered note either before or during the second term. so if hang is not going to signal -- ping is not going to signal anything clear tomorrow, it will be through what would be placed in 1992. to the destruction of the systems, it is going to reach the question about whether china's elite succession terms have been on place and if it

seek aick around and third term for himself. yvonne: at this level, he's gotten rid of thousands of corrupt officials. whether it is the weight of the references or the staff or whatnot. if he names his successor, it would only dilute his power by about five years. >> it would somehow make him a lame-duck. and by anointing a successor, like doing his second term or during his midterm, it will increase pressures on the successor. predecessor to how has been waiting in the wing for 10 years. and basically, he has been very, very quiet for 10 years, being groomed in the standing committee since 1992. so i think that the party

consensus would like to avoid that kind of scenario from happening. raimi: very quickly here, what could be the appetite for china's masses for its citizens if president xixi ping tries to do a third term? would that be accepted? is hugely ping popular among the, you know, kind of the masses. largely, because of his anticorruption campaign. if there is one thing why he actually set up the succession institutions of 25 years ago is because he wants to maintain the treaty and avoid those sort of like women called of leadership that has been established under chairman mao. maybe china did not want that from happening. you, our asian government reporter. a look ahead to the party conference in the last day. here is today. us look at how markets are trading here. a bit of a pullback after the recent run-up we have seen.

japan in particular snapping out of 15 days of gains, the longest winning streak we have seen since 1988. we have some lines coming through from terra also, the finance minister talking about how these election results apps the stocks went up. taking a bit of credit here saying that markets do support the government's economic policies. raimi? raimi: that is it for daybreak asia. richarkets continue with and heidi next. stand by for bloomberg markets. this is bloomberg. ♪

>> in hong kong and over in singapore, it's 9:00 monday evening in new york eddie. i'm rishaad. >> this is bloomberg markets asia. ♪ >> investors awaited wave of earnings, the dollar steady in the yen near a three-month loan. >> struggling to maintain its record rally, he says the markets do