♪ yvonne: we're live from asian headquarters. i am yvonne man. welcome to "daybreak asia." wall street declines said to spread asian markets. investors concerned about tax reform and inflation. a resource glut also ways on stocks. oil drops, the most in six months. global bloomberg's headquarters, i am ramy inocencio in new york. p.m. just after 7:00 tuesday evening. more pressure on the government and boj.

yes, prime minister. australia vote strongly for same-sex marriage. theolm turnbull calls results overwhelming and unequivocal. ♪ yvonne: plenty of breaking news in the last couple minutes. japan gdp missing estimates slightly. withhite house coming out the statement endorsing the house version of this attack -- tax reform bill. lots of questions about how they can iron out differences between what the senate once in the house. and of the senate wants, the house. it might be down to the corporate tax rate. which is why the white house might be leaning toward the house version. they do this policy,

stress it would cut the corporate tax rate to 20%. there had been discussion whether that would be higher. the white house leaning toward the corporate tax rate of 20%. we will see what happens thursday. at least one gop representative said they have the votes to pass this. yvonne: we got breaking lines on airbus, according to people familiar with the manner -- matter. there is a deal for 430 jets with indigo partners. that is a $40 billion deal. still trying to see if we will get more details on this, according to sources. it lets get to first word news with jessica summers. jessica: president trump wound up his marathon tour of asia, saying the roles have changed. he emphasized the need to reduce trade deficits. he said he builds new relationships based on respect,

which he said would be a change from previous administrations. he said asian nations would treat the u.s. and away they have not for some time. [indiscernible] countries were taking advantage of the united states. those days are over. things will be reciprocal. meaning, [indiscernible] jusco: southeast asian leaders and their trade partners entered talks in manila, calling for a talk on a new trade deal. they said negotiations are complex and challenging but they remain committed to a mutually beneficial partnership. they comprise a mouse half the world's population and more than 30% of global output. jeff has denied the line or misleading congress about

contacts with russia during the presidential campaign. he said he simply forgot about a conversation revealed by the mueller commission. now recalls the march 2016 meeting at the trump hotel, where george papadopoulos said he could arrange a meeting between trump and president putin. voted to legalize same-sex marriage after a nationwide survey. the yes vote was 61 .6% with almost 80% participation. ae voluntary survey was compromise. widely denigrated as a waste of money -- malcolm turnbull now faces a battle with the right wing of his party, to come up with legislation. >> i say to all australians, whatever your views on this issue may be, we must respect the voice of the people. we asked them for their opinion and they have given it to us. it is unequivocal, it is overwhelming.

they are our masters. we were elected to parliament. it is our job now to get on with it. get on with it and get this done. it is fair. the people have voted yes for marriage equality. now it is our job to deliver it. jessica: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. summers, this is bloomberg. ♪ yvonne: let's get to the market open. continue to see red. a pretty red tuesday here. we are treading water in a red sea. it looks like the latest gdp numbers, you have stocks continuing to fall. the nikkei 225 is set for a six day of losses. but the yen is holding on to overnight gains, despite u.s.

tax reform. japan gdp, the first of the heavy hitters when it comes to the eco agenda. south korea reporting a surprise jump in unemployment. the kospi extending losses. the yuan gaining ground. the mood is dour. commodities are a big source of consternation. tencent earnings in the more on the ugly commodities action. ckel plunged the most since march 2016. concerns around chinese demand. u.s. stockpiles of oil rose after already getting winded by a bearish outlook from the iea. the oil-led routes in u.s. equities.

aussie shares led lower by energy stocks. 89.e a look at g #btv 53 this shows the bloomberg age of raw materials, telling the most in six months. that pain is likely to continue. yvonne: thank you so much, let's get to our top stories. japan's economy grew for a seventh straight quarter with gdp growing at an annualized rate of 1.4% in the third quarter. this comes as a recovery in exports and rising businesses did offset a decline in consumer spending. now, chief market economist at nomura securities. he joins us live from tokyo. let's get your initial read on these numbers. we see seven straight quarters of growth. momentum has stalled. has it set us up for the fourth quarter and into 2018? 1.4 percent growth is

lower than market expectations. a good growth.er japan's potential growth rate is around 0.8%. japan's exports have been elevated by global demand expansion. know, japan is quite good at producing capital goods. up,ever global demand goes [indiscernible] i think japan is growing, along with the other nations, globally. yvonne: seems like they have been riding on this external demand. i want to throw up a chart, g #btv 5933. quarters ofht growth, the longest streak we have seen since 2001. also, the gdp tracker is seen in white. maybe this summer, the gdp

tracker has been in negative territory. is the risk now tilted toward the downside, now that we see private consumption, it investment accelerating? has robustieve japan growth on track. yes, the summertime, private consumption was rather weak. the fact of the matter, japan's income has been growing quite robustly. what we know, nowadays companies are converting part-time employees to full-time status, which means rising overall income. this is on the back of the rising consumption in the first half of this year. the first half of this year, consumption was very good. we had bad weather in summertime.

it is natural to see some slowdown in q3. iselieve private consumption likely to be on the moderate growth path in the coming quarters. i am not too worried about japan's growth rate. other hand, private investment has been still robust. private investment has been supported not only by the global demand, but also by a showcase of labor. in japan, the labor market is quite tight, with unemployment rate at two point percent. companies are struggling to hire new employees. tryingey are doing is, to raise productivity by raising the investment. i think investment is the fundamental reason to be supportive. that is likely to continue in the coming quarters. ramy: what does this number mean

for mr. abe ¥2 trillion stimulus package? expandas talk it could if it came in below estimates, it did by a few percentage points. is it enough to trigger talks about possible expansion? say, look at the last year. japan usually has a big fiscal package. year and next year, we are likely to see some slowdown. a ¥2 trillion package is a good idea to mitigate this difficult issue. it is good to look at what is going to be spent, in terms of this ¥2 trillion. to be used to

improve productivity and expand the labor market, that is a good idea. i generally support the policy by the administration on this front. of private,ms personal consumption, we see a little bit of an impact. what does this have in terms of ramification for mr. abe's consumption tax, in terms of increasing it in the future? will he say, maybe not yet or as planned? tomo: that is a good question. think the implementation of our next round of hikes depends on how consumption grows over the next couple of quarters. what we know is, consumption was quite good in the first half of this year, supported by the raising income. if it moderately increases going forward, it is enough reason for mr. abe to implement the

consumption tax hike, as planned. mr. abe said earlier the consumption tax hike can be ontponed if we have a crisis a global level. i think the tax hike is on track. this is already considered in the stock market. yvonne: governor kuroda was in frankfurt. a very fruitful discussion when it comes to forward guidance. i want to play what he mentioned about transparency. is not a matter or elocution. it is a matter of policy itself. there is debate on

whether for guidance -- for eguidance is an effective tool. they had the pushback that inflation deadline several times now. that is right, where we believe inflation rate is unlikely to reach 2%, it is good to hear mr. kuroda emphasized the importance of communication. guidance is quite important for the market to believe that the boj is here to stay with a very accommodative policy. that keeps the yen from depreciating and that is good for japan's economy, overall. yvonne: thank you for joining from nomuraoshita, securities. warningy some banks are

trading is set to continue. this is bloomberg. ♪

♪ yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: and i am ramy inocencio in new york. two of wall street's biggest trading firms sees trading stuck in a rut. the trading environment remains muted and they do not see anything that is change the pattern. let's discuss this with the laura keller. looking at predictions moving ahead, what kinds of drawdowns, what kinds of positives might we be seeing? street executives are telling us that, once again, we had a threat the last two quarters. we are seeing some trading doing

a little better. tom montag at bank of america said credit trading is doing well. one thing holding back a lot of these banks is rates trading. not seeing a lot of movement on the macro front or a lot of client activity. tive told uss' execu commodities is continuing to be a problem for goldman sachs. theays it is on pace to be worst year for commodity trading since goldman sachs became public company. ramy: we are seeing it down by six months or so. interesting. i am curious, what is the reason of earnings,erage much of it has to do with volatility or the lack thereof. what about moving ahead? any volatility offense you are looking into? laura: in the u.s. we are

looking a lot of politics. as we saw in the last fourth and third quarter, we saw when donald trump came to power, a lot of these traders, whether in equities or credit, were excited because they thought these regulatory changes would come from reform. we have not seen a lot happening on this front. there are regulatory changes that could happen. if you are a trader, you are looking at those and trying to figure out if they will be based on surprises. yvonne: i think next quarter will be even more tough because you have the base effect and all the client activity we saw during the election, and what happened there. what we have been hearing from bank of america and goldman -- are the other banks joining in on the conversation to manage expectations? laura: not yet. we normally hear from these

executives at different conferences when they are asked about how trading is doing so far in the quarter. at this conference, which happen to be a bank of america conference, tom montag kicked off this morning. we also had goldman sachs speaking. we will not hear from jpmorgan for another couple of weeks. the times when executives give us some kind of perspective on what trading will look like. perhaps we will hear from jpmorgan, but that may be the only other bank we hear from before the quarter finishes up at the end of december. laura keller, thank you, joining us live from new york. you can get a roundup of stories to get your day going in today's edition of "daybreak asia." subscribers, go to dayb . it is also available on your mobile app, you can customize settings. this is bloomberg. ♪

♪ ."my: this is "daybreak asia i am ramy inocencio in new york. yvonne: i am yvonne man in hong kong. the biggest taxi service trying to revamp against uber in japan. ryan fowler joining us in tokyo for the details. it has been remarkable in the story where uber showed they have not made much of a dent in japan. tell us more about the incumbent they are up against. uber first came to japan in 2015 and it has faced a real struggle to make inroads here. there are three main reasons. one, the standards here. japanese cabs -- i may be biased, they have the highest standards in the world, the cars are immaculate, the drivers, unfailingly polite. and all the cars come equipped

with a navigation system so it is easy to get to your destination. also, the unions lobbied the government to create strict regulations to prohibit private drivers from operating in big cities. the third thing, japanese culture. it is not a culture that puts a lot of value on cheap services at the expense of high-quality. we favor high-quality here. all of those reasons of combined to make it hard for uber to get a foothold in japan so far. yvonne: i think i am pretty biased, too. every time i take a cab in tokyo, the jack -- the driver is wearing white gloves, there are automated doors that open for you. let's talk about the regulations. what is it about the regulatory environment in japan that makes it hard for ridesharing companies to take off? brian: first of all, you cannot pick up paying customers if you are just a private driver, if

you are not part of a taxi company in a big city that offers transport services. that is not necessarily true in the countryside. uber does offer services and a couple small, rural areas near killed to -- near kyoto. having to use -- taxi drivers from other existing companies. they are operating in towns were most of the residents do not own a phones, so there is no point to this digitized service. ramy: you talk about price, we have to talk about price. the one time i took a taxi in $100 to ended up paying go 15 or 20 minutes. i was late for my plane. i remember how painful that was. how could investment in uber change that? in terms of getting more and cheaper cars out there? brian: this is a really

interesting deal. first of all, there is a lot of money. that will not hurt, that will help uber do a lot of things with that money. the strategic partner, softbank. softbank is a tremendously influential company, owing to its scale, success, global reach. masayoshi son is a man they can get a lot done. bank of japan is at record numbers of foreign visitors every month for the last two years. that will increase ahead of the 2019 world cup, 2020 olympics. these visitors do not have their own cars, they do not want to grapple with the subway system. they are going to be people looking for taxis. of pressurew source for all the existing incumbent taxi companies. we will have to see what masa your she's on can do with the

government -- we will have to son can dosayoshi with the government. things definitely investors as well as people who take taxis will be watching closely. brian fowler in tokyo, thank you. carmakers in the u.k. warning lawmakers they could face semi catastrophic destruction if that e.u. stops automatically accepting british certification post-brexit. honda, bmw and others have urged theresa may to ensure cars and components can be sent to the single market with minimal trade barriers, once the e.u. ties up. voting, yes. yvonne: australia backs same-sex marriage, malcolm turnbull calling the results overwhelming and unequivocal. this is bloomberg.

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♪ much better this wednesday morning in singapore. 8:30 in the lion city. half an hour away from the open. i am yvonne man in hong kong. morning.eautiful i'm ramy inocencio in new york. you are watching "daybreak asia ." under pressure after reports russia remains yet to be convinced about extending output curbs next year. two people close to moscow say they think it is too early to make a decision. the duration of any extension is also up for debate, with 3, 6 and nine months being discussed.

saudi arabia said to be the only viable option. yelleng fed chair janet has revealed frustration with her central bank colleagues, chiding them from staking out policy decision -- decisions before hearing other views. speaking in frankfurt, she said they are avoiding forecasting decisions and not making commitments. yellen said doing that is bad. treasury secretary stephen mnuchin says president trump is not necessarily seeking a phd economist for fed vice chairman. the president's k, jay powell, will be the first not to hold an economics doctorate. a couple,onsidering one who holds an economics phd from cambridge. bloomberg has been told airbus has a deal with indigo partners, jet liners.owbody

one of the biggest aircraft sale deals in history said to be announced wednesday at the dubai air show. be worth almost $47 billion before the customary discounts. acau regulators plan to reveal details next year about a revised process for operators, including wynn resorts. they want to follow through on a non-gaming commitment, and bring in high rollers. business is booming in the world's largest gaming hub, with revenue hitting a three-year high in october. 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. ♪ yvonne: thank you. time to see how the asian markets are shaping up. looks to be extending losses we have seen in the wall street session.

turning out to be a big data day. with that mess on third-quarter gdp out of japan. the latest data out of australia, the wage index rising less than forecasted at 2%, versus the estimate of a 2.2% yearly growth. we are seeing the aussie slip, down about 0.33%. we are not seeing too much in the way of currency moves elsewhere. take a look at the equity space. this is the regional index for asia. the stock index closed to wiping out the month to date gains as investors are very much put on a -- put on at. rational exuberance might not be dampened. a record net, 40% of investors say things stocks are overvalued. but 60% say they are taking on above levels of risk.

icarus perhaps flying ever closer to the sun. the latest bout of angst can be linked to a slowing chinese growth and warnings of the oil global market. that is dragging on stocks across the region. base metals have been under pressure. new york stock, down over 1%. the continued lack of progress on u.s. tax reforms, keeping the dollar near three-week low. continuingthe yuan to retreat. bonds mostly climbing, but chinese debt is falling, continuing the falloff we saw tuesday. yvonne: let's get to the next story, the selloff in sovereign bonds reaching a fresh milestone after yields reached 4% for the first time in over three years. analysts say it is likely to continue unless authorities step

in. let's get more from our china market editor. anyou think we have reached unimaginable level right now that could spread to corporate bonds as well? for have been working here four, four and a half years. i have never seen such a selloff. last month we had the yield rising 20 basis points. that was really unimaginable. if the selloff does spread a bit to corporate bonds, it does not go against the story line. sayingc governors corporate leverage is excessive. the plan to crack down on that. we are beginning to see some effects in corporate bonds. itabout six days we had rising 12 basis points.

since beginning of last week, the five-year aaa rated bond yields rose above 16 basis points. we're beginning to see something like that. remember the pboc is doing this to reduce risk in the financial system. i do not think they will let things go in credibly wrong. from aghtly minor point, global perspective, bonds will be under pressure. we saw yields in the u.s. rising quite significantly friday. you think the melt we have seen in interest rates, is it really reflecting on what the economics are saying? if you take a look at the data, it is softer. but we are not seeing any clashes, we see global rate moderating. borrowing has slowed, as well. is the market perhaps mispricing things? robin: there is a host of factors behind this. some people say, inflation.

inflation was 1.9% last month, the highest percent since january. we have had inflation at similar levels earlier, so we did not see a massive selloff. we have seen good economic figures, which are necessarily bad for bonds coming in theory. we have seen these before. afraid, the market is that authorities will try to spreadown, and it will the debtffers of market. it is worrying for the time being. ramy: take into account the foreign investor outlook, have it is -- how does it affect their outlook on chinese debt and the ability to draw in global funds? robin: this is an interesting point. things in perspective, foreign investors boosted their holdings of bonds to a record in september, about 1.1 trillion

yuan. trillion yuan1.04 of offshore chinese stocks. it is probably not significant at the moment. but they have other venues. they are not too interested in short-term yields. they hold 2% of chinese debt. they are looking at more 10 year yields. we havet-term gains, seen foreigners boosting holdings by six times. they prefer a three to six month ncd. it is not the most liquid market in the world. they tended to hold and selloff the majority. high, about 4.6% compared to a 10 year yield of 3.9%. yvonne: thank you.

breaking lines when it comes to noble group. we will see how the stock reacts to this. talks are at a preliminary stage when it comes to addressing their capital structure, as well as its liquidities position. they are seeing the priority right now is near term liquidity. the company has been plagued by this crisis for two years, when it comes to battling plunging securities, diesel concerns, a loss of more than $3 billion this year, as well as dwindling cash holdings. we learned about how they are shedding assets, selling noble petrol. rather than leaving it to a third-party and selling it to them. that is according to a statement on tuesday. good, the credit agency saying the liquidity is going to be a key concern. we will continue to watch those

lines from noble. ramy: over to australia, the country has voted overwhelmingly in favor of same-sex marriage. those numbers crossing an hour and a half ago. a long-running chapter of a divisive political debate. let's get over to paul allen in sydney. the survey over whether or not to change marriage law was controversial. at least for the yes camp, they would say it is effective. paul: eventually it was. there was a lot of distaste for the entire process, but the results speak for themselves at 61.6%. on.pollsters got it spot every state and territory in australia voting overwhelmingly in favor of marriage equality. the next step, to make this long. the lower house resumes on the 27th of november for two weeks.

malcolm turnbull said he will facilitate the introduction of a private member bill. let's hear what he had to say. >> it is our job now to get on with it. get on with it, and get this done. it is fair. the people have voted yes for marriage equality. now it is our job to deliver it. paul: malcolm turnbull went on to say the goal is to get it passed by christmas. yvonne: does this bring an end to the political battle over this issue, or is it just beginning once again? paul: no, we are nearly at the end, but not quite. there are a few things to iron out. most conservatives oppose this for reasons like, can you force a religious official to marry a same-sex couple if it conflicts with their religious beliefs? another was to trot out the example of someone you might

have firm religious convictions, do they have to be forced to bake a cake for a same-sex couple that wants to get married? one of the key conservatives that oppose this was kevin adams. law, ands it to become these are discussions over concessions for religious exceptions. he expects no major hurdles there. it looks like the debate is done. yvonne: thank you, paul allen joining us in sydney. oil remains under pressure amid reports russia is yet to be convinced about extending output curbs. this is bloomberg. ♪

♪ yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am remy inocencio in new york.

on a rare 3-d sensing system for the 2019 iphone, another step crating and augmented reality device. they are evaluating technology from that on the front of the iphone x. they started talks with prospective suppliers including sony, panasonic and others. yvonne: apple supplier honda , talking about hiccups with the latest iphone. 39% fall. expected $1.2 billion. it was their largest profit fall since 2008. apple accounts for half of its business. ramy: raising retail shares in a hong kong ipo by $220 million

when it went 561 times overprescribed. to 571er will be reduced million shares. the chinese -- the chinese car financier will raise u.s. dollars for the ipo, with shares rising. yvonne: what a week of ipo's. extending declines, crude stockpiles continue to climb. ea executive director thinks the u.s. will dominate oil markets, when the shale boom becomes the biggest supply surge in history. >> in the next 10 years, more than 80% of the global oil production growth comes from the united states only. as such, there will be a lot of oil in the markets and it puts downward pressure on the process. joined for more, we're by been -- ben.

what was the most surprising part of this? >> the supply surge has been well forecasted. it is perhaps the contrast andeen the iea forecast that of opec, the day before. opec is seeing high demand, has trimmed its demand forecast. also, a milder winter. the recovery process is prompting shale to come back into the market. we saw that last week with the u.s. numbers climbing to a record at 9.6 million barrels a day. was released this morning, what are you seeing their -- there? ben: it adds to bear sentiment. it is not odd to see this on a seasonal basis. yield,.5 billion barrel

the official figure will be the highest since march. a little pressure on prices the moment. it 62 for brent, putting pressure on prices at the moment. we have the opec meeting coming up. you should see a little caution on the selling side. yvonne: we heard reports on russia. they are not completely convinced when it comes to the output curbs. is opec in jeopardy? ben: there is certainly a spanner in the works. for at least a couple months, expect -- extension of opec cuts have been broadcasted to the market. the russian energy minister earlier this month questioned the reason why they would prolong or agree to extend cuts, it seems earlier than what would

be required. should theytion of, agree to extend to the end of the month, and for how long? if you look at prices, it is not all bad. september, both print and wti are up 15%. forecasts.tpacing there were still a little to be excited about. gap should be at this moment -- thank you. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak asia." subscribers go to dayb . it is also available on your mobile. customize settings to get news you care about. this is bloomberg. ♪

yvonne: this is "daybreak asia." i am yvonne man in hong kong. ramy: i am ramy inocencio in new york. airbus said to steal one of the biggest aircraft deals in history. they are nearing an agreement with indigo partners for 430 narrowbody jetliners. we have been tracking this. this is a lot of planes.

wondering ifto be this is a deal that will be going through or not. lostunds like we have just her, we will try to get her back. in the meantime, a quick check of business flash headlines. yvonne: citigroup and ubs exposed to the assets of wealthy saudis, some of home under investigation for alleged corruption. jpmorgan in credit suisse high on the list, managing wealth for the kingdom's wealthiest individuals. is a clientrince's who has been obtained by the authorities. paying millions of dollars to settle a criminal investigation, into allegations it helped clients evade taxes. the second-biggest charge levied by french authorities. privatentered on hsbc's

location in switzerland. ubs calling on central bankers to be more open to digital currency, saying they could replace traditional cash and be back by monetary authorities. the chairman said policymakers often look at the risk. the private sector tends to look for opportunities. skeptics have called it a bubble big for many on wall street to ignore. ramy: airbus says it is going to beat, possibly selling one of its biggest deals, 430 planes, narrowbody jetliners. tell us about this possible transaction, how likely this is to go through. >> it seems this deal is going to go through. we have been hearing buzz in dubai. major order for

airbus because it will be one of its biggest orders. it will be a very good deal for airbus, if this is announced, as we expected to be. ramy: this has to do with the neo airbus, their best selling single aisle jet. why does the need so many? 430, what is so special about this airplane? kyunghee: it is the best aircraft for budget carriers. supposedly that is going to be ordering it is indigo partners, which has investments around the world. for them, buying all this in one go would help provide a security for these owners to come through, and for the aircraft to go through these budget carriers, which would need them

to expand. yvonne: how significant of a sale is this for airbus? could it and the sales slump we have seen for them? kyunghee: i think it will. this is one of the biggest deals in aviation history. this would begin for airbus, given it has a slow start at the dubai air show. is given their salesperson set for retirement soon. this will be great as he goes into retirement soon. yvonne: thank you, joining us live from singapore. that is almost it for us on "daybreak asia." a look at what is coming up on bloomberg markets. jpmorgan, talking about where the markets go next. seems we are having a problem edging out. it is this flattening in recent days.

five days in a row. looking at hard rock international and its expansion in japan with legislation, setting out parameters of where they can and cannot go. one of their plans for japan and the rest of the world. asia.s tracing yvonne: there is still a lot to hammer out. we were speaking about this. but say it is a big market, the regulations side, narrowing down what you can or cannot do in that market. especially given the obsession of gambling in gaming. indeed, all of those parlors that have a vested interest. the trials and tribulations, do they like the legislation? there is a lot of pressure on japanese authorities and a lot of business ahead of the olympic games coming up in three and a

half or four years time. boss to talk about the airline. gay rights,ites, -- gay marriage, 61% saying yes to it. they will settle down and say, it has got to go. that and more coming up. ramy: thank you, do not want to miss that. that is it for "daybreak asia." market coverage does continue. you are watching bloomberg. ♪

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♪ rishaad: slow but steady exports driving japan to a seventh straight orderly expansion. gdp and consumer spending remains weak. oil under pressure again after reports russia is yet to be convinced about extending output curbs. riyadh says it is the only option. apple's supplier suffered its biggest earnings decline in 10 --rs as a technical hip-hop with a technical hiccup in iphone production. haidi: also coming up, beware a communication breakdown. the fed boss saying listen first and speak later. this