and >> it is 8:00 a.m. in hong kong. bloomberg'sfrom asian headquarters. the top stories this tuesday. a mix today ahead of a deluge of news from china. it was a sluggish day on wall street. investors awaiting inflation numbers. and tax reform. betty: i am betty liu. homedent trump will head with few concrete promises.

alibaba is returning to the bond market after a two-year absence. it plans to raise $7 billion. debate on tax reform is still ongoing when it comes to the wall street session. gains that weme still see a mixed picture especially when it comes to japan. we are extending the losses here today. not sure what it is due to, if crash looming.e the fundamentals do not support that. betty: something we need to watch closely. watching tax reform here also

the inflation report on wednesday were any further clues on whether the fed is going to go ahead with that rate hike in december. in the meantime as the asian markets are opening up my left it to the first word news with jessica summers. jessica: china's drive to curb credit growth and leveraging is showing signs of success. the pboc said the aggregate billiong was $160 against estimates of 166 million. m2 money supply rose more than 2%. the bank of japan governor said he is expecting to achieve 2% inflation and looking at expectations through guidance. he said many issues still affect inflation but the price environment has improved steadily compared with five years ago. are you change the deflationary mindset of the past 15 years. goldman sachs is giving the

thumbs-up to top bankers medication skills. they are successful in getting their messages across. other markets focus on policy and gross are look. mario draghi, janet yellen come and mark carney gather in frankfurt to discuss the same to medication issue. britain's lead exit negotiator said it puts the chances of a december deal at 50-50. two of them float -- told bloomberg that was the figure he put through when asked directly. a spokesman said that is categorically and true, he did not say that. talks are stalled on london's relaxants -- reluctance to approve an offer. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. iamb am jessica summers. this is bloomberg.

yvonne: the iea really think it's outlook for 2017, looks to be talking about the price outlook continuing to be bearish when it comes to 2025, the cut to 83 dollars a barrel and 111 dollars a barrel. is u.s. shale.it surge.e seeing shale we will continue to see those lines and the reaction to the w .ti >> we are seeing softness for crude sticking at 67 a barrel. had to saywhat they we have lines out of opec, they've have rephrased their demand giving the expectation of rebalancing in the markets.

weakness for oil prices so far this tuesday morning. there is plenty to monitor on tuesday. markets are looking back area we have japanese docs extending losses for a fifth session. bear in mind the fundamental picture has not quite changed tbijapan, do have higher with machine orders and we are waiting for third-quarter gdp later this week. that is expected to be on the strong side. the bull run may live on in japan. and data coming out from china. it will be keenly watched amid bond market jitters. you'll tour higher after credit growth slowed more than expected. in australia we are going to see if business confidence has been dented are the nationality drama that has claimed a eighth lawmaker. we had the aussie travel near a four-month low and stocks are falling be flow -- below the

6000 point level. -- heavy u.s. calendar. the dollar heading steadily. inflation figures may further flattened the yield curve. when it comes to the commodities space we are watching what is going on in the base metals area. we had overnight shanghai copper traders buying big and that has pushed prices in london as well as new york so keep an eye on that space. gold is remaining stuck in the tightest range for four years. bridgewater has added to its gold etf and investment fund holdings. replacing 5% to 10% assets in gold. >> world leaders met for talks theietnam and -- as well as

asean in the philippines. trump is revving up his tour of asia. how do you assess the progress when it comes to the bilateral trade agreements when many leaders in attendance still working to secure regional agreements? >> that is right, bilateral versus multilateral, that has been the big debate. that deliverables will be much more difficult to assess on the trade front. 360 billion this dollars trade deficit with china, a $69 billion trade andcit and goods with japan $27.6 billion deficit with south korea. the u.s.renegotiating fda. -- fta. he has pulled the u.s. out of the transpacific partnership. what we have learned is the 11 nations that are still there are

pushing forward without the u.s., they have reached a framework agreement. at the same time we have this regional partnerships as being pushed by china and india. this is 16 nations and the challenge there is how do you get eckstein nations to lower their tariffs to open up the market at a time when they already do not have those kinds of commitments. there are lots of challenges. i noticed donald trump throughout the trip for the last 12 days, he has been using and a-pacific region instead of asia-pacific trying to dry and india into the discussion that seems to be dominated by china and its economic might create i have some data that shows what is at stake for the u.s. because in 2016, trade between the u.s. an nations was 21 billion. was 360china and asean

8 billion. a decade ago they were less than the u.s. or on part. the chinese have made significant ground in trade with asean partners. final moment or final day, what will leaders hope to accomplish? >> there is going to be more geopolitical issues. north korea will be discussed in the south china sea is important nationsecause asean have reached an agreement to find a way to resolve their disputes for overlapping claims. they have agreed to push this formal and start negotiations for an official code of conduct. that is progress being made. it's on donald trump's offer to

act as a mediator or arbitrator with disputes with china. a lot of the members were fairly -- were saying it was a nice gesture. briefing from, a the eurasian group. trumps biggest trip and success will depend on your perspective. the administration set out to accomplish what they did. that is the key point. he got to announce a bunch of deals that allow all participants to claim victory even though a lot of those deals he got in china were already in the works long before. the big thing opening up of the chinese financial sector to foreign competition, that was in the works for a long time. betty: thank you. we spoke with hank greenberg on what he says president trump accomplished in asia. trip.rall, a pretty good

prepared for philippines which were very good. he had a good meeting in vietnam. takeaways from china, many companies have seen change, which is good. you see how it -- we will see how it plays out. roger joining us now is altman, a former deputy treasury secretary in the bill clinton administration. great to see you. it has been a long time. give me your take on this trump trip. would you give him something? am sure from the president's perspective the trip went fine because as your correspondence said he got to announce a bunch of deals, many of which had in various forms been announced deviously that he could highlight. gaps --re no particular

gaffes and he felt the trip went fine. i think it is remarkable that the 11 other nations are going ahead with tpp. betty: why is it remarkable? the u.s. hasically been the leader in trade reform and this is the largest trade deal ever negotiated. the u.s. is not only a leader, it is not only not a leader, it is opposing a not participating. that is historically quite unique. i think it is unfortunate but my point is how striking that really is. --for the president media president offering to mediate, the chances are if the chinese accepting that are below zero. have been democrats quite harsh on this trip.

chuck schumer had put out something along the lines of he was pandering to xi and the japanese. something like an accidental president. guest: this president has a habit of going to various countries and supporting strongmen or figures that in most respects constitute strongmen whether that is saudi arabia, china, the philippines, or elsewhere. instead of striking a balanced tone and talking about human rights in china, he just says xi is great or do or to a -- or duerte is great. it is a different approach. historically if an american president went to china he would at least refer to some of the

repression that we all know is a hallmark of the chinese rule. betty: as you heard hank greenberg say he thought it was a step in the right direction to have better relations with the philippine president. he seemed to be giving more credit that there is more to be gained from having better relations with the chinese president than not. roger: first of all, let me not give the wrong impression. it is important that the u.s. have a constructive and very active dialogue with the chinese leadership. these are the two most important nations in the world. and in termsally of geopolitical influence and the relationship these two countries have with each other is crucial to each other but and to world stability progress around the world. that is very important. all i am trying to say is president trump has a habit of going there and saying my friend xi is fabulous or my friend

duarte is fabulous and that is a different approach where there was a balance. that does not hurt us. i am not saying that hurts us. it does not whatsoever heard us, it is different. betty: i would say a lot different when you look at president trump's tweets. he seemed disciplined in asia but when he came to the weekend and he was sort of let loose on twitter, i want to read for you the tweets, you have probably seen it already. why would kim jong-un insult me by going -- calling me old? roger: i do not call him short and fat. be his friend to and maybe someday that will happen. roger: this is trump diplomacy. betty: he is taking a different approach.

roger: do i think it is effective that he take that ad hominem approach to kim jong-un or any other foreign leader and talk about how they are short and fat? no. i do not think that is constructive. that is president trump's style. he is not going to change it. betty: no, certainly not. we will talk more about this and .he news over the weekend the chinese are listing foreign ownership in chinese security firms and banks. you can rewatch our interview with roger altman or any of our interviews using tv and you can watch us live in your terminal. dive into the securities or bloomberg functions we talk about and become part of the conversation by sending us instant messages during our shows. this is from -- for bloomberg subscribers only. check it out at tv . we be back -- we will be back in moment. this is bloomberg. ♪

>> we have breaking news from stephen mnuchin. minor differences he sees when it comes to the house and senate tax bill. he reiterated that he prefers the corporate tax cut next year. the senate bill is the one that pushed back the corporate tax to 2019.35% to 20% mnuchin said he is not concerned the fed is delaying the tax cut as well. a little bit of a mixed signal from secretary mnuchin. he said he is looking forward to a successful tax vote and said the corporate rate is higher than 20%. those of the latest lines coming through from the u.s. on that front. from the comments treasury secretary trying to push certain tax reform saying he is looking forward to the successful vote this week. segue into our guest, roger

altman. let's talk taxes. you said there is a 70% chance it is going to go through. are we going to get tax reform done this year? roger: no, i don't. the chances for a bill next year are a little bit that are then the alternative, no bill. 55 -- orot say it is 6040. i do not the give a happen this year and i do not think anyone else does this year. betty: why? roger: i do not think the house and senate will be able to reconcile their differences and it is not clear which bill the house version, the senate version, or which conference committee version of the compromise will be able to garner 52 votes -- 50 votes plus one in the senate. is republican strategy rather understandable. it is to pass this on the same

republican on the -- only basis which they tried to use with the repeal of obamacare. that is going to be challenging when you have a two vote margin in the senate. the ceiling is kept in the senate bill for the estate tax. they have very little room to work with and i do not think they will reconcile these differences. says: mnuchin is saying he -- sees minor issues in the house and senate. what is the issue that will derail it? roger: the debate over the state and local tax reduction is one of the biggest. withsenate bill does away deductibility of taxes and the house bill says property taxes up to $10,000 a year would be adaptable. york,gh tax states, new california, illinois, new

jersey, they will be forced to it went through to lower their own taxes and that would impact services from medicaid to infrastructure and a reading else. the question is republican members of the house from those states, from california, illinois, new york, and new jersey thomas several of whom said they will not do it will be able to support the bill and if you lose enough of them you do not have the votes in the house. oft is up in the list controversies. the things like the implementation of the corporate the cut, differences on number of brackets, differences on a variety of issues among the estate tax, and i do not think it will be so easy to reconcile those when you juxtapose that against day to vote margin in the senate. do you think

that proposition is more favorable than perhaps lowering and cutting the tax rate from 35 to 28% which you have suggested before? roger: i think it will be tough to get through a rate as low as trying percent. there are a lot of independent analyses that show the overall bill whether it is the house or senate version would cost two point 52 3 trillion over 10 years as compared to the 1.5 to the 1.7 estimate. that the republican leader is talking about. the cost of the bill in terms of deficits is going to become quite a controversy as the try to cast the votes. whether the corporate rate ends up at 20, whether it is effective, whatever it is next questions. are tough for such a narrow version -- margin in the senate.

betty: just stay with us for moment. the ever core founder staying with us to talk about taxes and on the market. "daybreake to come on asia are." this is bloomberg. ♪

yvonne: credit suisse is to pay $135 million and higher and external mueller -- march or to accusations. banks pleadedsix guilty and agreed to pay almost $6 billion in charges related to currency manipulation. goldman sachs has been laying the groundwork for business in china where it will have control as beijing relaxes the rules on foreign ownership.

we are told the partner is open to selling a controlling state -- stake in their venture and the two sides are negotiating. the new rules raise the ownership rates at 21%. alibaba is returning to the bond market after a two-year break. taking the sale of two $7 billion. several banks to work on the offering. it raised a billion dollars in 2014, the largest -- $7 billion in 2014. is producing more vehicles. they m2 bring flying cars to the market. by graduates and hopes to deliver the first flying car.

and roger altman saying that there will be a chance of tax reform. this is bloomberg.

yvonne: we are half away -- half an hour away from trading in the lion city. betty: you are watching daybreak asia. let's get to the first word news with jessica summers. angiea: the international agency said the shale surge will be the biggest gas human history. by 2025 the growth in u.s. oil production will equal that of saudi arabia at the how it -- height of its expansion. toy raised estimates by 30% 105 billion barrels while cutting its 2025 price outlook 17% at $83 a barrel.

say aseanom manila nations are discussing a coat of conduct. to launch talks during the summit this week. they will strengthen the fight against corruption and improve cooperation on terrorism and infrastructure. the trial has begun in new york on a case that should world soccer to its foundations and led to a string of high-level stacking. three former south american officials of fifa are accused of accepting bribes in exchange for sponsorships rights. froms built on testimony crooked software traders who are seeking leniency. hong kong's benchmark index closed at its highest level for 10 years. climbing 6% to a record. the hot market for tech listings

have surpassed the days of the tech boom. tencent is getting set to make its trading debut. shares are up. the stock is said to be 550 times oversubscribed by 300,000 individuals having applied for shares. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. latest let's look at the with sophie kamaruddin. we had some big data out of china. sophie: japanese stocks are fluctuating, the nikkei 225

snapping a four-day drop. topixstate stocks and the are back listed, some diversion -- two on what is going on with the yen. another thing, oil prices slightly under pressure after the iea cut its forecast number. another item of note, we have business conditions rising to a record high. the aussie slightly firmer on the back of that trading at 76.28. stocks remain under pressure. falling for a third day area taking a look at what is moving the dow. spot.he one bright energy stocks are dragging the most falling over 2%. tracking what we are seeing in the oil patch. and it could be dragged lower by shell planning

to sell its stake in the aussie oil firm to cut its debt. let's take a quick look on what is going on with equity movers in tokyo. showing you toshiba. rising the most since september on a report it is in settlement talks with western digital. at japanese and mizuhoave smfg has posted second-quarter profit falling lesson than expected and it confirmed it will be cutting 19,000 jobs over the next 10 years. the stock falling. yvonne: thank you. the early going in the markets. altman, the former deputy treasury secretary in the clinton administration is here. we were talking about tax reform and the likelihood of whether it will pass are not next year. pass, do you think it

-- accreted toa the economy, will it event a boost? roger: the answer is yes initially. a corporate rate cut of that for ought to be a positive fixed investment and provide some growth element. i think you are seeing the a tax bill.cipating and to some degree, they are higher and higher prices and we have seen so much of that reflecting the antics -- anticipation of a tax bill. be market expects this to growth inducing. i would say yes. the house and senate versions, the most progrowth bill or like the most progrowth bill that congress could pass, i would not say that. there are more approaches that could be taken. this bill on balance would provide some growth.

betty: we will stay on the flip side. do you see that being a catalyst for a severe market correction because we have continued to go up in the market. ther: if i knew the answer -- to that we could have the answer on some gigantic yacht. i do not have the answer. i do not have a yacht. i do not know the answer. from the historical point of view of it from a tax bill we are overdue for a correction. anytime you see, we have 15 consecutive months in the s&p 500.in the anytime you see frothiness you wonder if you are on the edge of a correction. historically, the more the market rises in an uninterrupted way like it has, the more the correction is closer. betty: we have seen resident trump take credit for the stock market rally, taking credit for the animal spirits in the

markets and i am curious if you yourself see the animal spirits not only in the market but also in deal making. has trump been good for dealmaking? separate is hard to the contribution he has made from broader events. in his defense, presidents do take credit for stock markets, he is nowhere new the first to do that. back, it is a year ago since he was elected almost exactly. quite quickly after his election, within a day or two, the markets started to rise and it has risen ever since more or less. you would have to say that the trump effect has been positive for the markets and has been at the margin, positive for deals. deal volume if you look at it at the number of deals rather than volume was healthy before the election. it has been good since 2015. what is better now in particular in the last two or three months

are the presence of certain larger deals. which was not the case earlier this year or last year. fundamentally -- what has changed? roger: it is hard to say. some level of it is undoubtedly animal spirits. the higher stock prices go and this is ironic when you think about it, the more that decision wantyours wants to do -- to do deals. it makes them feel confident. say do not buy high, the higher you see stock prices, assuming they are at relatively high levels rather than rebounding from a low level, the more deals you see. that is playing out now. equity valuations will be tough for m&a. this comes at a time when we are

seeing rallies on stock markets but a different story, a divergence when it comes to what the bond market is pricing in. you continued to see the yield curve flattened. is this a function of the fed being in this tightening cycle? roger: i do not think the current level of interest rates or the anticipation of a rate hike in december is a problem for the environment for transactions. that is all baked in. after all, the 10-year closed in the vicinity of 230 8, 235. by any historical standard, that is rock-bottom. what you have here are high stock prices, low interest rates, robust credit availability, and pretty high-level levels of business confidence. always those ingredients make for a high level of deal volume. yvonne: i wanted to shift the chinasation to talk about

opening up its financial markets and lifting the limits when it comes to ownership of the securities companies. do think western financial institutions want in on this or are they late in the party here now that the economy has slowed and the pboc governor is calling for some possible minsky moment? roger: it is tough for financial institutions, very few if any are able to make money in china. it is one thing to sell assets to china parties, we have done a fair amount of that. but to make money operating in china working with chinese entities, that has proven very hard. whether this brings forth increased investment by western financial institutions into chinese entities, i am not sure. not, but it varies from institution to institution including what operations you

already have in china. this is a case-by-case situation but broadly speaking, it has to operateofitable for western institutions and it is a tough equation. betty: i wanted to ask you about jay powell. did he make a bright decision? make the right decision. jay powell is a sober and serious person and i think he will be a fine fed chairman. president trump in general chose well. a lot of people heaved a sigh of relief when he chose jay powell. like: and not someone perhaps john taylor. are we underestimating the disruption in the markets by his appointment come a are we underestimating this? roger: i do not think so. we may have market disruption for reasons we talked about that it will not be on account of jay powell. he is a reassuring figure, not a

figure that causes anxiety. i do not think so. betty: thank you for staying with us, really great to see you. roger altman, the ever core founder and senior chairman and former deputy treasury secretary. you have some breaking news on softbank. responding to some of the reports that we have seen of late saying that uber is clinching the software deal. it looks to be not 100%, softbank saying they may not make this investment if the terms are not satisfactory. no final agreement on this uber investment at this stage. they are saying that the er by no meansub decided now. there is a lot of elements involving this deal, one billion itself atoes to uber it has to do with the politics involved. investors agreed to put the

lawsuit on hold and drop the complaint as well -- long as government reforms kick in. questions onot of whether this does remove the major hurdle between them and their investors. betty: we will continue to watch this one. ahead on bloomberg television. catch live coverage of the federal bankers meeting and they discussthere to challenges facing lawmakers. this is bloomberg. ♪

betty: this is daybreak asia. yvonne: alibaba is heading back

to the bond market after the break of two years. sources say it is looking to raise as much as $7 billion of dollar notes. new mega potentially bond. how does this compare to the sales we have seen? looking to raise $7 billion. it will make the potential largest deal. this is after their two-year absence. the issue [indiscernible] and returned to the market bringing 7.9 billion. this should be the second one and the fed [indiscernible]

betty: this is when they came off of singles' day -- sales day. it is good timing when it comes to gauging investor demand. >> they had five banks including for u.s. banks and one european bank. they are trying to diversify. shore,omes the off company'sre of the credit to offshore investors. betty: when are we likely to see the final details? >> alibaba do have 1.3 billion due novemberto -- 28. they could use this process for financing but we do not know a lot of details. bankers are saying we can expect the deal in the following weeks.

betty: thank you for this. on alibaba in the bond market. gather for the u.n. climate talks. we look at china's growing declininghe u.s.'s role under president trump. this is bloomberg. ♪

yvonne: this is daybreak asia.

betty: china and the u.s. announced $250 billion worth of old and new deals during president trump's visit to beijing last weekend over half of those were in the energy transport, and environmental sectors. let's take a closer look. china and the u.s. seem to be going in office -- opposite directions. where are they working together here? >> one of the major areas for cooperation between the u.s. and china is the u.s. is a large energy producer and will become a large energy exporter in china is in need of a lot more new alternative fuels particularly in the gas -- natural gas, especially as china faces increasing energy needs ring the winter season -- during the winter season and tw reduce heating costs.

investmentdid total in energy drop in 2016? blip.6 was a bit of a 2015 was the end of a major 13 five-year plan. were policy regulations around wind and solar. the market held back in terms of investment in the early part of 2016 as we waited for changes to sort themselves out. we do not expect this to be a continuation and we expect a bumper year and new wind and solar in china as well as many other markets. learning about when china will be launching the carbon market. what is the timeline for that so far and what does this mean when it comes to the industry, what is it -- does it mean for the

industry and economic development? >> carbon markets have been under discussion for a decade now and they have been piloted in various regional markets. the discussion and the general promise from policymakers has been by the end of this year china is launching its national carbon market. the discussion indicates that negotiations china is announcing its launch of the carbon market covering nine provinces and possibly one sectory, the power industry. we should see the announcement this week. when it comes to pollution china and [inaudible] are in a fight. it does not look very pretty. what are the approaches when it

comes to china and india to lead into different conditions at approaches arer there and how do they differ? differences are the time difference, maybe air pollution and india had not become such a severe and public become in thes most recent couple of years whereas in china air pollution is the -- became the issue around the olympics almost 10 years ago. china and the regulators had more time for public sentiment to adjust and to acknowledge the severity of air pollution and for policymakers to implement various measures to address it including reducing industrial output, including sitting caps on coal consumption and promoting the development of clean energy. it will be interesting to see with india may be in the last week, air pollution in some cities were 10 times the level

of pollution we saw here and it is cleared that the breaking point for india's market has been reached so it will be interesting to see over the next two years how india's regulators and the market will respond to the same challenge. yvonne: thank you. from beijing. the most in two months after posting a surprise quarterly profit. theincome with second-biggest online mall came at $152 million. analysts were expecting a $17 million loss. logistics in new fashion attracted shoppers and working with walmart to broaden its network. betty: second quarter profit plunged and it offered a bleak output claiming it will cut 19,000 jobs.

and seasonfit commissions down more than 2%. japan's biggest -- third-biggest lender will cut a quarter of its workforce over the next 10 years. >> the way japanese financial firms do business will change drastically. branches will be automated with no need for humans to greet customers. smaller branches in local moreborhoods will provide quality services. we will work closely with the local banks and figure out the role the big names should play to make business or efficient for all of us. petrobras reported lower profit. up income was $81 million from a $5 million loss a year ago. adjusted earnings missed an

average estimate of 7 billion, production fell after two major offshore platforms were shut for maintenance. time for a quick look on what is coming up. a lot of data coming through from china. industrial production, retail sales. are breaking and getting a look into [indiscernible] playseeing the state of for china's economy having momentum and moving along, japan and gdp figures, another look at where the -- whether abenomics is working and not. beendays of losses, it has between the gain line. whether the markets

are too hot right now. looking back at the earnings season which has wound down. what does it tell us about the state of play for the u.s. economy and the global economy? looking to the numbers out of japan, also fed inflation data, that should give us a clue to the rate hike in december, whether it will happen. in singaporeval as well. yvonne: markets coverage rish.ues with this is bloomberg. ♪

rishaad: president trump will head home with few concrete promises. remember the.com days? got a.m. in hong kong. it is 8:00 on monday evening in new york city. haidi: i'm haidi lun. china's drive against leverage debt is paying off. slowing last month. this is "bloomberg markets asia." ♪