♪ >> asia-pacific markets face a muted start after data from beijing and a rate decision and korea. making whatlen could be her final address on capitol hill. >> australia calls a royal commission into the finance industry, saying it is vital to rebuild public trust. >> president trump has discussed a range of new sanctions with china on north korea. ♪ welcome to daybreak asia.

i am paul allen in sydney. >> we have some breaking news right now on south korea. we are awaiting the bok decision. industrial output for october, down 1.1% in industrial output month on month. year for october, down 5.9%. expectations were for a continued rebound in industrial output. not great on year, so news at all for the south korean economy, industrial output had been on the rise of wing to the export of electronics and other items. have a bit of the damper may be countering some of the opinions

that the bank will raise interest rates this morning. we will introduce more uncertainty in that decision. markets seem to have priced it in. we will wait and see what happens when we do get the results of the bank of korea board meeting later on. running ints up and the asia-pacific. let's take a look at new zealand. off .3%. the kiwi dollar little changed against the greenback. trading just getting underway and australia. not too many stocks online at the moment. we are seeing a little bit of weakness come off .1%, no change to the aussie dollar. the 10 year easing off a little. we are also counting down to the opens in japan and korea. let's check in on japanese futures trading out of chicago,

higher by .1%. .5%,ikkei 225 higher by the u.s. dollar strengthening a little the against the yen. hearinger we had been , now china'sley envoy to the united nations is speaking in china, saying all parties and north korea should .how strength this after comments by president trump singh he spoke with president xi jinping and that will turngreed they the dial up on north korea with stronger sanctions, but not clear yet what the sanctions are and who would be opposing go sanctions. we will continue to monitor the chinese envoy and his comments to the united nations. back to the u.s. and the selloff in tech stocks.

moving higher, but the nasdaq tumbled with the fangs stocks taking a big hit. su keenan withis more. we started off on a high. tax reform.on you are seeing a rotation out of fangs stocks into the momentum yet to occur in those related tax gains. what we saw was a tale of two markets. .he dow posting gains the nasdaq at 100 was down more than 2% let's look at some of the big movers. look at block chain, anything bitcoin,o block chain, the technology associated with that taking a hit. speculationte on and a story after hours on

reported talks for an acquisition by nokia. target up the big on the move in retail. let's go to the after hour in juniper. it was up better than 20% at one point. cnbc reporting that nokia is in talks according to unidentified sources with juniper. according to the source would vie you juniper at $60 billion. that is really driving the stock up. interesting to see how that plays out thursday. retail on fire. this is a group that has been badly beaten up. positive commentary on the strength of the shopping season ahead. all these stocks have wind at their back, particularly some of the more troubled stocks like nordstrom and macy's. the fangs stocks taking a big hit. tell us more about the

rotation and the tax issues at play. that allis a view these tech stocks have gotten a pretty good tax advantage, so they don't have room to run. the decline was significant. trop --llion combined drop. at this. it trails the broad market. chart 350 three of 1% changes in the s&p 500 versus this group. huge drop here. the block slumped on speculation that u.s. tax reform were not benefit this group and investors wanted to move to other stocks. , the indextors taking a big drop. you can see the huge run-up this

year on a couple of different .actors let's go into the today chart one thing that concerns analysts is that these stocks are a leading indicator of demand. that could have significance in terms of taxes. let's go to macron. you can see the drop we've had. down grades ons momentum baked into the cake. stockso saw two other

that did spark a reversal. there you go. 20% move. in the context of bitcoin, that qualifies as a healthy correction. , 3661.to show this chart that strips away some of these firemen moves we have seen. -- these are violent moves we have seen. you some of the wild swings in bitcoin are not quite so wild when you consider it in that context. that looks like the right

chart. see a fewcan potential flaws for bitcoin that makes it a little less shocking and we have been discussing. joseph stiglitz had some interesting points as well. betty: he has indeed. it is maybe why he makes these points. bitcoin is about as viable as netflix. , it might disappeared be sad what to do on a friday night, but i don't know anybody will be losing their jobs over it. this is what he said about bitcoin. >> one of the main functions of government is to create currency. bitcoin is successful only because of x potential for circumvention and lack of oversight. it seems to me at all to be outlawed. it does not serve any social usable function. betty: he is using the argument

that a lot of people who have been critical of bitcoin because it has been used for money laundering, the black market, what is the good that bitcoin brings? paul: i feel like he is stealing my lines. i have been asking a number of guests about the role of government in currency. it is a cornerstone of solvency. it will be interesting to see what happens if that doesn't hinge on the authority of the nationstates. i think he was watching you last night and earlier this week. turning from bitcoin, other news we are following this morning, let's get to courtney collins. you.ank new sanctions are to be imposed on north korea after president trump discussed its latest missile test with his chinese counterpart. the white house has not

specified whether they will come from the u.s. or china, but beijing has far greater leverage over its ally. current sanctions have only limited impact and talks have been stalled for years while the north has continued strive for nuclear weapons. priced its jumbo bond sale to be the biggest dollar bond sale bashir. the $7 billion transaction will be offered in five points, eclipsing china's $6.6 billion offering in june. 8 billion dollars in its first bond sale, the largest by any asian company outside japan. we'll producers offered a united front as they arrived for talks in vienna. they recommended the current curbs be extended. final details will be announced later with oil traders expecting any extension to be reviewed at

the cartel's major meeting in june. goldman sachs and citibank warned of russia's reluctance to accept the cuts. it was nine months, not six months, ok, so this is solid. the majority of members will agree that it will be in conformity with that. told aolm turnbull has after the banks themselves ask for an inquiry. scott morrison sang it is vital to rebuild public trust and into the political uncertainty depressing the sector. shares of the big lenders opening lower in sydney after thursday morning. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. betty: still ahead, we are

counting down to the bank of career great decision. joining ushs and with the prediction on whether thursday is the day for a rate hike. plus, the clock is ticking on a u.s. tax deal by year end as president trump claims the bill would hurt him and his wealthy friends. this is bloomberg. ♪ ♪

looking at live pictures from the floor of the u.s. senate where republican lawmakers are voting to start .he debate on that tax bill republicans do have the votes to get that debate underway. one of the things interesting to watch her will be this trigger for tax increases if revenue targets are not met.

there is some question over whether or not that will be possible. we have president trump keen to see some concessions for child care, but one not bring that corporate tax rate above 20% to pay for it, so we may see some discussion over the trigger for revenue targets and a potential increase in taxes as well. let's have a listen to president trump, who promised not to veto the bill when it arrives at his desk. desk, iey send it to my promise all the people in this room, my friends, so many friends, a great state, i promise you i will sign it. i will not veto that bill. isl: all right, with us now our capitol hill reporter laura davis. we were talking about the trigger. if that tax trigger happens,

what could it look like? one option is basically a provision that would say if we don't meet the growth, that corporate tax rate will come up one percentage point. another option is that it would cut spending. that would runn afoul of senate rules they are working with. increaselike a tax more likely than a spending cut, those in the house and senate the don't like that. it creates uncertainty for businesses. other saying we believe it will grow the economy and this is an insurance policy we will never have to use. gop billt's say this does pass on thursday or by the end of the week, what is the timeline after that? >> they are moving at breakneck speed and want to get this done before the end of the year and

before whoever takes over the new alabama senate seat. basically what will happen is they will pass this bill and then have to compromise with the house formerly through a conference committee where they sit down with representatives from both sides or it could be an under the table, behind closed doors, unofficial compromise, then both chambers would have to approve the bill again. we are not done. there are still changes. they still have to make sure they have 50 votes in the senate and enough support in the house. betty: thank you very much. reformig deeper into tax with stephanie miller. you give a 75% chance that congress will pass tax reform and a 60% chance they will do it in this quarter, in the fourth quarter. are those numbers rising for you? >> thank you for having me.

they will go pretty high if the senate can pass this bill on the oror if it happens tomorrow early friday. those numbers will go way up. i need to see the senate passed this first. where they are now is where the senate was with aca repeal earlier in the summer. it was on the next major vote on the senate floor during this reconciliation process that we saw senator mccain and senator collins and senator murkowski voting to kill the bill. i don't think we are quite there yet, but i am very bullish and i think it is very doable. betty: we are not quite there yet, but could we encounter, could this be obamacare 2.0 in the senate? >> there are a lot of reasons why we will be able to look back on this in a month and say it may be either way. thehe end of the day, all members on the republican side

of the senate really want to make this happen. lookingsenator corker at that trigger option to try to help him justify a vote as someone who cares deeply about the deficit. them working intently to make it possible, but every one of these issues that they raised could raise other issues and other problems on the floor, and so it is unclear, but i think the intent and the will is there, so there will likely be away. betty: indeed. it seems like some of the big thees that we saw like deduction, the individual mandate come and those have been largely resolved, so what will be the biggest sticking point now? >> i actually don't see a major sticking point between the two chambers. ort was the worry with salt aca. aca has brought a few senators to the table. senator collins and makowski

might be getting a commitment on independent market stabilization for a vote to repeal the mandate, so it ends up winning their votes. the real issue is can the senate get to a compromise among itself. if that is possible, i don't see any real issues between the two chambers that are not resolvable. betty: no sticking points today, but are there a few down the track? paul: not once did president trump a mention debt. this will add $1.5 trillion to the debt. are we setting the scene for another grand showdown? absolutely. the folks in the senate who care deeply about the debt, corker, flake, mccain potentially come a could have a problem with this. the tax foundation estimates the senate bill and a previous form would end up adding once you take economic growth into account roughly $500 billion to the deficit in the long-term.

that number is probably too high for the senators and needs to seendown, but we have not a dynamic score that incorporates that economic growth for the latest senate version, so there is an opportunity going forward to try to include new policy and this is what the trigger could do, either increase economic growth or create some sort of backstop if they don't hit it. the real issue with his trigger as it is currently envisioned is by making corporations worry that their tax rate might go up in the future, that impacts behavior now and down the road if they do not get that economic growth they need to get in order to not have the trigger set off in the first place. betty: thank you very much for joining us. us andou can always find the days big newsmakers on the .adio from 7:00 a.m. hong kong you can download the app or

adio.com. at bloombergr this is "bloomberg markets: asia." this is bloomberg. ♪

betty: this is "bloomberg markets: asia." shares of the big aussie banks have opened lower. after malcolm turnbull called a wind ranging inquiry into the finance industry. the big for themselves had asked for a rail commission to rebuild public trust and into the political uncertainty they say is depressing the sector. for more, we are joined in sydney by our next guest. why now? >> good question. we have in talking about this for the last year. this was coming.

the government has been done under pressure and momentum was building for opposition mps to conduct an inquiry. the government has decided this is the way they can control this situation. paul: there are some risks involved. >> the big risk at the bank is bank what will be uncovered. they have been looking for things that could be embarrassing to them and they have self-reported a number of issues, but you never know when a commission that can subpoena witnesses what they will find. betty: it is always a relief for them, right? it has been weighing on the sector for quite some time. >> yes, it has. it has been a drum roll going on

and on in the background. does give the banks and the government as well a 12 month inquiry, sir relatively short. give some certainty and hold out the possibility they can put some of these issues behind them. betty: thank you so much. sector.ustrian banking some headlines coming in. several vacancies on the board of fed governors. nominated toriend be another fed governor. several vacancies on the board of governors, and yet another name being put into contention on the fed. plenty of vacancies to

fill it we will be keeping an eye on that story. coming up, north korea facing further sanctions after its latest missile launch. we will look at what is on the table. this is bloomberg. ♪ . this is bloomberg. ♪

paul: 9:30 in sydney. 30 minutes away from the first major market open. york, 6:30 p.m. in new where markets close lower, dragged down by that selloff in tech shares. got one step closer to passing tax reform in the united states. i am betty liu in new york. paul: i am paul allen in sydney. let's get first word news. thanks. first up, senate republicans may have provisions to the tax bill that could trigger $350 billion

in automatic tax increases beginning in 2022. some senators sought the provision to prevent the tax cuts from increasing federal deficits. the gop bill reduces revenue by $1.4 trillion over 10 years before accounting for any economic growth it might produce. president trump's re-tweaking of anti-muslim videos has wronged condemnation from lawmakers on all sides. the president's early morning tweet sparked rare criticism from the u.k.. prime minister theresa may said he was wrong in jeremy corbyn said it was dangerous and a threat to society. the president has yet to say why e read tweeted the post. theresa may visited troops in iraq, she said negotiations were continuing and

the u.k. would honor its commitment to the european union. she also insisted there would be irelandborder between and the republican after brexit and that free movement will be respected. bali airport has reopened after a three-day closure sparked by a smoking volcano. ash awayift pushed from the airport, leaving clear air for planes. hundredsown canceled of flights and stranded thousands of tourists. indonesia said the danger is not over. urgedent joko widodo has anyone still near the volcano to seek safety elsewhere. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks. we are counting down to the market open in tokyo and seoul, korea with sophie kamaruddin.

a bit lower in australia and new zealand at the moment. what are you keeping an eye on? fluie: we had that fang that could catch on in asia. tencent has been on the back foot. as you can see from this chart 4512, tencent in blue has then outperforming the fangs stocks in the bottom part of the panel right here. we have to keep things in context when it comes to the tech space in asia versus the united states. bitcoins wild ride is continuing , now below $10,000. when it comes to the eco-agenda, asian factories in focus, chinese pmi data, factory output from japan and south korea. did have aories sluggish october with production falling 5.9%. pulling up the futures board, some jitters before the open in

seoul, korea and tokyo. forill be of this he gave korean investors, especially with the central bank expected to kick off a tightening cycle at this morning's policy meeting. we have anxiety around north korea. goldman sachss, is warning pain is coming for investors. pain being felt in on see bank stocks as malcolm turnbull has called for that inquiry into the industry. pulling up the board to show you that downturn for aussie banking stocks. the big four losing over 1%. one stock falling over 2%. this is malcolm turnbull announced a wide-ranging commission. the banks had been pushing instead for an inquiry to restore public trust and in political uncertainty that they

say is weighing on the sector. as you can see from this chart 83 86, aussie banks have been 2017 pressure for most of given the string of scandals we have seen in the space ranging from misleading financial advice, attempted rate rigging, anti-laundering laws. energy shares also under pressure as we wait to hear from the opec meeting in vienna this thursday. betty: thank you so much. we just had breaking news a few moments ago about marvin goodfriend being nominated to the board of governors on the fed. is a carnegie mellon university professor and why be respected, even possibly have been on the list to replace janet yellen at one point. our bloomberg global economics and policy editor kathleen hays has more. i'm looking to see the date

of our story from june when there was word that two names were on the white house listed to become members of the board of governors. was chosen quickly and that chair has been open for a long time. marvin goodfriend has been waiting for several months to get the final nod from the white house. there are so many things to say about marvin >> -- goodfriend. he is always somebody you can get on the phone to talk to. i'm sure marvin is thrilled. this is like the culmination of a lifetime. he is some monetary economist. he has talked about the fed and written about the fed. if you look at what he's talking about, buying bonds and quantitative easing if it was

going to monetize the debt and help the treasury carry its debt something he would say is probably out of step with what the fed should do. he was the director of research at the richmond fed years ago. he went on to carnegie mellon to teach. i think he will be viewed as a moral conservative, hawkish economist. he is out at jackson hole on the time. i don't think he was considered a replacement for janet yellen, but considered to be in the running for the board. many, he taylor, like is him us a de facto fed official because he was a director of research and has been on the fomc and they go to the meetings. marvin goodfriend, congratulations. we look forward to have you on bloomberg television and talk about it.

i can imagine anybody not wanting to vote for marvin. we will see. we are still waiting to hear about the vice chair. there were four open, one is done. important one. marvin goodfriend, there you go. paul: kathleen, the latest comments from janet yellen as she told congress the u.s. economy is growing enough to warrant more rate hikes as she continues to wonder why inflation remains so low especially when labor markets keep getting tighter. it sounds like janet yellen to k stuck to the policy script. >> you got it. ready for more rate hikes and let's listen to what she had to say earlier today. >> i expect that with gradual

adjustments in the stance of monetary policy that the economy will continue to expand and the job market were strengthened supportingrther faster growth in wages and incomes. >> the beige book was out today. ons ahead of the meeting december 12 and 13 where the chances of a rate hike nearly 96%. that was confirmed almost by jerome powell when he spoke yesterday. the feds beige book seeing moderate wage growth per you wonder where inflation will come from. to 3.3 percent, but consumer spending is weak. jerome powell also said he does economy overheating. the most important question is what happens next year as the new fed chair looks at it.

betty: plenty more to watched see those other appointments. paul: thank you for joining us as always. trump's warning major new sanctions will be imposed on north korea following its latest missile launch, but has not specified what they might be or whether they will come from washington or beijing. asianief north correspondent stephen engle is in seoul, korea. what is the latest on north korea? the latest are the comments coming from the security council meeting, fairly predictable comments come if i can say so, from the russians, japanese, chinese, and the u.s. this following the latest icbm test by the north koreans yesterday morning that fell into the sea off of japan. russia's envoy saying moscow is deeply disappointed in the latest test.

china's envoy saying all parties to north korea should show restraint. the u.s. ambassador nikki haley the chinesenks president has the opportunity to do the right thing with north korea, also saying donald trump had told or asks xi jinping to cut off oil supplies to north korea. that is something the chinese have resisted doing that could lead to a collapse of the north korean economy and not something the chinese want. the un security council has passed several resolutions and of north blocking 90% korea's exports, including coal and seafood. a call toalso been reinstate a proposal to have you in sanction approval of the interdiction of north korean ships on the open seas. that is something that was

passed around in a draft , butsal earlier this year was ultimately dropped, so there are sanctions the united states says it can take unilaterally on north korea. rex tillerson saying we have a long list of additional sanctions, some of which involve additional financial institutions. so there is lots of diplomatic wrangling going on about what come if anything, they can do to control north korea's ambitions. this all comes at a time when the bank of korea in seoul will be making a critical decision, will they are want they raise rates for the first time since 2011? 14 of 19 economists surveyed expect they will indeed raise rates by 25 basis points today.

they have not raised rates since 2011. this could spark a round of tightening across asia, perhaps not china as they are using other tools, not japan, no hike on the horizon there with negative rates right now, but look at the philippines, malaysia. south korea is growing at the fastest pace since 2010. up, so this could exacerbate further strengthening. this could be the beginning of a tightening cycle in korea with the bank of korea behind me raising rates this morning. betty: we will be watching for that. , talking more about the bank of korea and their possible rate rise. hsbc's fred newman joins us next to discuss that and all the economic data set to be released today. we are waiting for japan

industrial production in just a few moments. this is bloomberg. ♪ ents. this is bloomberg. ♪

betty: this is "bloomberg markets: asia." paul: i am paul allen in sydney. korea set to lift interest rates for the first time in six years, underscoring confidence in the nation's economic recovery and inflation. our next guest expects normalization to be slow and shallow. let's bring in frederick newman eight hsbc. say slow and shallow, did he gets low today with the's industrial production numbers for october a bit of a disappointment, contraction of 1.1% of a did that change the picture in terms of the expectation for a rate hike today? a done deal. we do expect one, but the numbers this morning are weaker,

partly related to the car sector, but our sense is that the be ok really wants to set a marker here and that we are on the path of recovery, so let's normalize rates a little bit and start with a rate hike today. eight teen of 24 analyst -- of 24 analyst predicting a rate hike. does this restore your faith in the phillips curve to a degree? >> to a degree, perhaps. there is strong growth in korea, but we have seen some inflation pressures. wage pressure still remained low in korea. abouts a rate hike not rising inflation or trying to rein in inflation expectations in. this is more a rate hike that

says we have rates at lows. let's raise them because ultra low interest rates have some distorting influence on house soces come on leverage, and four macro prudential reasons, we should hike rates. the other thing central bankers there might bes a recession someday in the future, and it is better to have higher rates to give you some leeway to cut rates should you need to in the future. that is certainly the argument around the fed and why they should continue their rate hiking path as well. curious we will watch out for the comments in the statement from the bank of korea, but what we you be looking for? we will certainly look at their prediction for economic growth over the coming year, how they assess the external environment. is externallynomy

dependent and has led asian central banks in terms of the rate cycles and their assessments of the external environment will give a sense of how asian central bankers really look at chinese growth going into next year, global trade, and that is something we would look for. how do they think about macro prudential measures? how do they think about interest rates in the context of stability? any chance that they want to hike more to rein in potentially excessive leverage building up in the system? bok doesf indeed the b raise interest rates, who might be the next central bank to be impacted by this? the $1 million question, who is next in line. there are a few central banks in the region. the australians for example in the first half of next year might follow. we have the singaporean monetary

authority that may also tighten things that the margin in the second quarter next year, and even in malaysia things look as if interest rates michael up at some point, so it is not going to be a massive tightening cycle across the board. .e think japan will be on hold india will remain on hold. thailand and indonesia might even cut. these highly trade dependent economies might take the first cuts. the japanjust have industrial output numbers for the month of october. whatare falling short of economists had as to mated, but represent a rebound from the prior month. up .5% month on month for industrial output. half less thanan what economists had anticipated.

also rising by 5.9%, falling far of seven an estimate point 1%, however number slightly better than the prior month. this continues to show how the japanese economy his struggling. we have seen some pickup and consumer strength in japan. there are no conditions that all it seems for japan to move it anytime soon on rates. >> that's right. ,rom a cyclical perspective there is no need to hike rates or two with the drop monetary anytime soon, but there is another consideration. the moment the bank of japan exit, it would reverberate through markets and appreciate the yen, and that would stop any export recovery

and inflation pressure we might see to we expect the bank of japan to be the last major t monetarynk to exi policy partly because of these dollar-yen considerations. betty: thank you so much. fred newman, the cohead of asia research at hsbc. more disappointing numbers from japan on industrial output. you can get a roundup of that story in today's edition of daybreak. on youryb terminal. it is also available on mobile in the bloomberg anywhere app. you can also customize your settings to get the news on assets that you care about. this is bloomberg. ♪

♪ betty: i am betty liu in new york. paul: i am paul allen in sydney.

a decision about supply cuts pushed crude prices to the lowest in a week ahead of the opec meeting with russia in vienna. 2.1%,s fell as much as but closed down 1%. russia's energy says consensus reached and concrete parameters will be revealed thursday. has we wait, we will get more insight. ramy inocencio has the bloomberg chart you need to know. looking at asia trading, deputy i futures rising, but there has been some uncertainty. weestors want clarity, are going to get those cuts extended or not? leaningay they are towards a nine-month extension, but no clarity and no certainty for sure. let me take you to through where we stand today.

this is 724 my first bloomberg terminal chart. the production for opec and russia combined. that is off the record earlier in 2017. that wti crude is above $57 and its highest since 2015. continues to call, we would expect a vti and brent to rise in tandem. let's look at 3122. people are saying we do think a nine-month extension will happen , there are some bears out there. chart seeing that in 3122. this. on the right-hand side is up to 4.3.w come the last time that happened was the early part of june 2017. the higher this goes, the more

is out there,ere people thinking if it does not happen, we bore lock in prices now. goldman sachs putting it milder saying that while the this suggests some rising concerns, it does not reflect a high risk premium as we head into thursday. finally, 8881. we can not talk about the u.s. shale. and while that one pied closes, another pipe opens. opec is represented in the white lines. this is negative production down. in the yellow line, u.s. shale rising to a high now. definitely trying to take market share as oil prices rise. those are your three bloomberg charts on oil. paul: thanks. coming up next, we are counting down to the bank of korea rate decision.

goldman sachs head of research will give us his view on what the bank is likely to do. betty: that's right. we will also be joined by facebook as part of a special series on the future of health care and how the social network is developing tools to boost blood donation. this is bloomberg. ♪ . this is bloomberg. ♪

♪ betty: asia pacific markets open. traders await data from beijing and a rate decision in seoul. paul: australia banks slump on the news -- new -- betty: president trump turns up the heat on north korea discussing a range of new sanctions with the chinese president. facebook brings the power of social media--

betty: welcome to the second hour of "daybreak asia." i am betty liu. paul: and i am paul allen here in sydney. a big day in korea. in the asia-pacific for the first time in a long time. we don't get too many live meetings in, do we? but just before we had that industrial data. really disappointing, falling far short in south korea for japan as well. certainly a pattern we are seeing with those numbers. it does throw into some doubt whether the bank of korea is going to raise interest rates later this morning. we're also watching global news. let's get to the first word news with courtney collins. new sanctions are to

be imposed on north korea after president trump discussed the latest missile tests with his chinese counterpart. they have not specified whether they will come from the u.s. or china but beijing has far greater leverage over its ally. current sanctions have only had limited impact. the north has continued its drive for nuclear weapons. alibaba has launched its jumbo bond sale said to be the biggest dollar bond sale this year. the $7 billion transaction will be offered in five parts, eclipsing the $6.6 billion offering in june. it remains the largest dollar-denominated issue by an asian country -- company outside japan. oil producers offered a united front as they arrived in indiana. recommended the

current supply curve be extended from six to nine months from march. final details will be announced later with oil traders expecting any extension to be reviewed at the meeting in june. goldman sachs and city had warned of russia's reluctance to extend the cuts. be forextension would nine months, not six months. this is solid. agreed toe majority that and would be in conformity with that. courtney: chairs of the big australian banks have tumbled after the prime minister called for a wide-ranging inquiry into the industry. a commission to rebuild public trust and and political uncertainty they say is oppressing the sector. the year-long inquiry will examine a series of scandals including claims of money laundering and rate fixing. >> it is clear that the speculation and the uncertainty and the politics around this

issue required the government to take control of the inquiry issue, have a properly instituted inquiry, and get this matter addressed. courtney: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. paul: thanks. asian investors face a busy day. there is a string of economic battles come up -- battles. thing from south korea. >> a busy day ahead with a flood of key reports. australia also on the radar for third-quarter reports due at the bottom of the hour. we are seeing stocks lose the 11. ground since august the aussie dollar also down.

currencies are under pressure. .he korean yuan sliding kiwi dollar also losing. ln sticking above the 1.12 evel. slower than forecast japanese industrial output. little has changed. korean investors have a surprise drop. so to extend losses for a second day down by 7/10 of a percent. the yuan, with what we have going on with risks and the bank of korea decision, yuan has a lot to digest. the tech heavy costs will also be watched closely following the tech route we saw in the u.s. i.t. stocks sliding over 2%. falling almost 5% this morning while samsung losing about 3%. over in sydney we are seeing

banking shares sliding after the inquiry that was announced which courtney just mentioned. aristocrat leisure, that is the day's lagger. it is now falling the most in over five years. cashhave agreed to a $919 deal to expand its social gaming. of course it is this big picture we are keeping an eye on, given the eco-data we got from asia. betty: thank you so much. let's talk more about president trump saying major new sanctions will be imposed on north korea in response to the latest missile tests. he spoke after talking to the chinese president but did not specify whether sanctions would come from washington or beijing. the u.s. u.n. ambassador haley security council the world must do more. >> today we call on all nations to cut off all ties with north

korea. in addition to fully implementing all yuan sanctions, all countries should sever diplomatic relations with north korea and limit military, scientific, technical or commercial cooperation. they must also cut off trade with the regime by stopping all imports index boards -- and exports and expel all north korean workers. paul: joining us -- betty: joining us now is jodi schneider. trump talking about maximum pressure on north korea. what might these new sanctions look like? jodi: it is hard to know. he did not specify after his phone call saying only they would be major. obviously if they came from the chinese side it would have more of an impact because china is the largest trading partner with north korea. in the past the sanctions have not amounted to much. sanctions but

they seem to have had limited effect so far. one area it might be coming from we heard from the state department, introduction of ship set sea, may be another attempt for a pressure point on north korea. paul: so what options are available for the u.s.? especially in the likes of north korea launching another icbm on wednesday? jodi: that missile test obviously is part of the reason for the response that president trump had right after the test. he said we will take care of this. yet again, these sanctions have not done a lot. but there's not a lot else the u.s. can do. the u.s. has been reluctant to start talks. there was some indication from secretary of state tillerson that the u.s. might do that but then president trump said no.

action, whiletary hinted at by the president, is really a tough step to take even a china -- given that south korea and japan have major population centers nearby that would be seriously affected by any military action. the does not seem to be cards at this point so there are not a lot of options the u.s. has. these continue talks about sanctions continue to be the asponse whenever there is missile test or any action by north korea. they come back with sanctions and just ratchets it up. betty: it does. stronger and stronger rhetoric. any indication what china might do? jodi: china has been an interesting player in all this. obviously they have supported some u.n. efforts but they have been reluctant to take the step of cutting off oil imports to north korea, which of course

would be huge. there is no indication they would do that. china and russia have continued to say let's have talks. china said that again after yesterday's action by north korea. at this point it does not look like they will be serious action by china. betty: thank you so much. jodi schneider in hong kong. looking ahead, using social media to boost blood donation. our future series on the future of health care continues with a look at what facebook is doing. paul: and will governor lee pull the trigger? counting down to the bank of career indecision. this is bloomberg. ♪

♪ this is "daybreak asia." betty: the fastest pace of economic growth since 2010 could be the catalyst for the bank of

korea to hike interest rates for the first time in six years. stephen engle is in seoul for that meeting. these numbers that came out earlier this morning kind of putting a damper on these rate hike expectations. but if governor lee does raise rates what kind of cycle can we expect? what we are expecting is what is called a dovish hike. aboutould give hikes by 25 basis points off the record low which they have kept it 1.25% for more than a year. a dovish hike would also kind of give guidance going forward that do not expect another height -- another hike soon. you would get a hike maybe once every couple months. a lot of economists say maybe that could be extended to six months. manyctions right now, economists are projecting maybe

two hikes over the next 12 months at most. yes, gpd is growing at the fastest pace since 2010. the yuan is up 11% so far year to date. and exports are doing very well on the back of the global recovery and also the surpluses high. there are a lot of positives in this economy. but the reason to be dovish is gdp growth is not expected to have as many legs as past cycles leading up to 2008 and other cycles when they have tightened quickly. also inflation is still just a little above the government target but not out of control. they don't want to take the steam out of this recovery too hard, with too fast a rate tightening cycle. behind me is a temporary offices of the bank of korea where we

expect the rate decision within the hour. betty: i know it will be a lot of anticipation here but you mentioned the korean yuan. isn't the rate hike going to further strengthen the yuan? and that would be a problem. stephen: that's right. again, it is up 11% year to date versus the dollar. a tightening cycle could put more pressure -- upward pressure on that currency. some ofe we are seeing the export numbers strong despite the fact that the yuan has been up. most economists and currency traders that we have talked to expect another year in yuan strength. you are kind of fighting the yuan isway, because the having upward pressure right now. so i think right now the concern is that the economy is getting a little bit overheated, despite

the concern it could bolster the yuan even further and that could damage this export-dependent economy here in south korea. paul: stephen, does this mean anything for the broader region? could this be the beginning of pricing elsewhere in asia? stephen: it depends on the market, of course. with the u.s. obviously going on its tightening cycle, you have to look at japan, china, india. those economies are expected to move their benchmark rates anytime soon. china has other measures they are using to tighten up areitions there in japan negative rates and no horizon for a rate increase. you have to start looking at smaller economies that are doing really well. look at the philippines. 6% plus growth. a huge investment boom. also malaysia, 6.2% gpd growth. those two economies are having

rate decisions coming up soon. december 14 for the philippines and january 25, 2018 for malaysia. those are perhaps the next possible two central banks to start raising rates here in asia. paul: all right. stephen engle in seoul outside the bank of korea temporary headquarters. thank you very much for joining us. joining us now from hong kong, goohoon kwon, goldman sachs cohead of research. also joining us is our global economic policy editor kathleen hays. we had 18 of 24 analysts surveyed thing hikes were pretty much based in today. then we got industrial production string -- -- you, does that change the

picture? goohoon: i don't think so. we have anticipated a weaker number. we expected a 1.5% decline month-to-month given the discourse and coming from -- nothing surprising. it had no effect on their policy rate decision and we expect to cut. betty: i would like to ask you about inflation. in fact, it seems to me it is worth looking at. normally when it means for a possible rate hike today -- you are looking for what a lot of people are looking for. both the core and headline number are below the bank of korea's 2% target. number one, why is it a low target? the trend does seem to be lower now. a lot of central banks are facing this problem around the world, aren't they? when you look at the call for more rate hikes in 2018, what

inflation stays low? does that stop to be ok from moving? goohoon: no. at what thek statement says and also with the governor says, they focus on inflation. they also look at financial stability. onthey make decisions based not just the one inflation. other central banks focus on inflation but i don't think the bank of korea focuses entirely on inflation. when you look at asia, exports are doing well. among them, korea and malaysia are the only countries where policy rates are below inflation. even if inflation is slightly below 2% target, you can still policy,rea monetary this rate is very accommodative. monetaryr two hikes,

policy still commodity of. -- what is the chance that a rate hike, even if done measured and reasonably well, what's the chance of that jeopardizing financial stability and south korea? goohoon: -- in south korea. too negativeink for too long. from the fed point of view they are talking about a credit crunch or market penalizing to affect negatively. i think korea is looking at it the other way. they think it creates a lot of pressure for prices, especially the housing markets. which is not popular. rates could be fully

justified. >> in your view there is a bigger risk here of the be ok not doing anything today, that could be a bigger disruption to the market and then actually doing something and raising rates? goohoon: yes. hikes, threetwo hikes. or dovish hikes. stimulation -- [indiscernible] change in the policy. paul: it's a bit of a double-edged sword. we are likely to see strength in the yuan returning. where do you see the yuan headed? goohoon: we had a view that the korean yuan would probably be

the best performing in asia. global growth accelerating next year. emergence -- especially hi tech. it will benefit korea the most. you could argue which comes first, the chicken or the egg. given the strength of the global economy, especially exporters, the korean yuan will strengthen. >> how will the fed rate hike make toughertate, for the bank of korea to move? in other words if the fed is fourg rates, three or hikes comes true, does that make things easier for the bank of korea? rate hikesting the

now actually a good thing for them to do? goohoon: yeah. haveouse view is we will four hikes next in the fed. at least two hikes. differential will not go against the korean yuan. given the other issues in korea and globally we don't think korea it will be as aggressive as the fed potential rate hike. but definitely the fed rate cycle in the frequency will affect the bok decision. until now we stick to two ho iekes -- if that changes we have to change our view. >> goohoon kwon, thank you so much. and the kathleen hays as well.

reactionollow all the to the bank of korea decision on our markets live blog on the bloomberg at mlivgo. is commentary and analysis from bloomberg expert editors live in real-time seek and find out what is affecting your investments right at that moment. this is bloomberg. ♪

♪ betty: breaking news. nokia saying they are not in talks or preparing an offer for juniper networks. they wanted to come out with this in reply to reports coming out from cnbc saying there was in fact some take over or merger talks between them. but nokia coming out to squash that saying they are not in talks nor are they are preparing an offer for juniper networks. had caused the stock of juniper to rise considerably on

the back of those reports. paul: we will keep an eye on that story as it continues to unfold. let's have a quick check of the latest business flash headlines. the london stock exchange ceo is stepping down and did what of the most high-profile spats between board and an activist investor. leave next year resigned at the request of directors. had claimed he was being pushed out against his will and demanded he stay. but the board stood its ground in reportedly planned to release a negative dossier on him. betty: apple has moved swiftly sue fix a security flaw in the sierra operating system, releasing an update and changing development practices. the problem allowed anyone to login without it password. it put personal data potentially at risk. it is a rare and embarrassing failure for apple who software is generally less prone to hacking than windows. producers discuss

renewed supply curves with leading members yet to be convinced. this is bloomberg. ♪

♪ it is 11:30 in sydney, 90 minutes into the trading day. off 8/10 of 1%. be a royal commission inquiry into the big banks here in australia. betty: i am betty liu in new york. you are watching "daybreak asia ." paul, i know you have breaking news now. paul: i do. we have building approvals for the month of october. expected,better than

up 9/10 of 1%. they had expected a contraction of 1%. so that is an improved number year on year. expectation had been for 14.1%. . no great deal of reaction from the aussie dollar. of 1% higher as opposed to a slight contraction that had been expected. now let's get the first word news. here's courtney collins. courtney: first, senate a provisionmay add to the tax bill which could trigger of 23 hundred $50 billion in automatic tax increases beginning in 2022. some senators thought the provision to prevent the tax cut increasing federal deficit. the gop bill is seeing reducing federal revenue by $1.4 trillion over 10 years before accounting for any economic growth in might produce.

retreating ofp's anti-muslim videos by a far right british activist has drawn condemnation from lawmakers on all sides. the president's early morning tweets sparked a rare criticism from the u.k.. prime minister theresa's may said he was wrong and opposition leader jeremy corbyn said it was a born to come a dangerous and a threat to society -- abbhorent and a threat to society. prime minister theresa may has denied the u.k. has reached a deal on the so-called brexit divorce bill. british as you visited troops in iraq, she said negotiations -- she also insisted there would be no hard border between northern ireland and the republic after brexit and that the movement will be respected. today show host matt lauer has been fired by nbc for what is being called inappropriate behavior. a company memo read out on the air city colleague at the

company had made a complaint. matt lauer is the latest prominent personality to face .llegations global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney collins. this is bloomberg. paul: thanks. time now to see how the asian markets are shaping up so far. here is sophie. sophie: it's turning out to be a red morning with losses being seen. the tech space very much in close -- in focus. $60 billion wiped out in value. asian stocks set for a fourth day in declines in the first weekly drop in five. we have chipmakers hardest hit.

sk hynix, samsung and tokyo electron. several you -- several reports with a grim outlook to the semi conductor industry. the worst performer on the next falling the most since april. admin these tech tremors, year to date asian i.t. stocks are still you today winners. -- year to date winners. far outpacing what you are seeing for gains in yellow and the regional index in blue. a quick check on other movers. the korean yuan falling by the most in a month while korean 10 year yields slip. the kiwi is sliding. confidence is at the lowest level since 2009. ground.inuing to lose we have factory output level

following disappointing retail sales data we got yesterday. although for factory output numbers it was a 12 straight month of growth. looking at the aussie ahead of chinese pmi data have it now. little change following the building approvals data we got as well as third-quarter. that's a helping when it comes to aussie stocks which are losing the most ground since august. financial dragging the most. cba leading the drop among the big four banks. aristocrat losing the most ground in five years. awe is searching after a takeover offer. said it is not attractive enough to provide access for due diligence. betty: thank you.

old oil prices are being pushed to the lowest in a -- crude futures falling as much as 2% in new york. paring those losses to close down as you can see down about 1%. russia's energy minister says a consensus has been reached. concrete parameters will be revealed thursday. let's get more insight with ramy. ramy: of course investors are definitely hoping they will come out with something on thursday with regards to some kind of extension of those supply curves to definitely push that price up. g #btv 724. the yellow line is the production for opec and russia together. it's definitely off its record highs we saw in early 2017. in tandem as that has fallen.

the price of wti has risen. just a little above $57 per barrel. the question of course is what happens from here. maybe about 24 hours to go. even knowt chart come there is optimism that there might be some breakthrough in terms of a nine-month extension, there are some bearers and we see that in g #btv 3122. ist you are looking at here the brent put skew. it is actually a measure in this case for bearishness on whether in opec agreement will come out. highest dot is at its ever since june 1 of this year. so we are seeing that people are definitely hedging their bets that maybe there might not the an agreement to their liking. finally, let's head over to this final bloomberg terminal chart. 8881.

we definitely have to talk about u.s. shale and this equation. -- or atpe closes least opec's pipe closes -- u.s. shale pipes are definitely opening even wider. you can see this with the yellow line which shows u.s. shale production rising higher and higher. at the same time we are also seeing the contraction in opec supply here. you can see in the blue bar here that this is the net effect of balancing out. while it is still negative, you can see as u.s. shale production continues, the blue bars definitely fall smaller and smaller, basically outweighing any kind of affect opec is trying to have. those are your three bloomberg terminal charts we need to know on oil as we look ahead to thursday. paul: thank you very much for that. coming up, we are going to be looking at using facebook to drive blood donation in india. we will ask professional network

about its future role in health care. this is bloomberg. ♪

betty: time for our weekly series on the future of health care. at facebook moving to encourage blood donations in india. can social media provide a positive health care outcome? joining me is facebook's health product manager hema budarju. thank you so much for joining us. first tell us about this health initiative being launched in india. what exactly is it about? hema: thank you for having me here. this is about blood donations in india. if i can step back a bit and explain the scenario and he set up. -- the setup.

when people need blood donations or someone is in need -- let's sometimes they have to rely on finding blood donors themselves. when this happens they rejected their family and community and sometimes facebook. so what we saw in india is that thousands of people were reaching out on facebook to find donors. there's a lot of activity here. let's take a look. experts in lot of the field and they said there is a way to connect people in need with people who can donate blood. so the need a shortage of blood. we make it easier for people to donate. betty: how do you make it easier? hema: one, you can sign up to be a blood donor. if you are in india even go to facebook.com, sign up to be a

donor. it's a simple process. you can indicate your blood type or not. it doesn't matter. if you are ever in a situation where you are looking for a blood donor, you post a special post on facebook and say i am here, i need blood at this location, maybe this type, here's my phone number. if you had signed up to be a donor you receive a notification from facebook that somebody nearby you need help. are you willing to help? you can then reach out to the person saying you can help. that's one way of making it ready. the other way is voluntarily going and donating blood when there is a camp nearby. thatso let people know there is a donation happening close to you and you can go in and donate. i want to say it is automated, but it just takes the facilitation easier by finding

people and matching them up. hema, i am told you also have a personal story related to this which is why you are passionate about it. hema: i am. i have a very close personal connection. my father had cancer. five years ago use diagnosed with stage four cancer. as part of the chemo he lost a bunch of blood. he was also really low on platelets. the doctors said he needed a letter blood transfusions. the hospital had some supply but had trouble finding donors. and we reached out to friends and family. here's what i would say to everybody -- when people are given context and information, they come out to help. in our case they came out. they came out and my father made it through that particular round of chemo. and i think taking inspiration from that, if you give people context, if you give people tools, many people will do it.

in we're actually finding and a lot of positive reception in india. just in a couple months time, more than 4 million people in india have signed up to be blood donors. that's incredible. it's incredible to see the community come together and say we are here to help. paul: paul allen here in sydney. the number of sign-ups is impressive to be sure, but is there anything being done to ensure the privacy of his -- those people signing up is protected? any facebook collect information or are you just providing a meeting place for these people? hema: facebook takes privacy very seriously. when you sign-up to be a blood donor the information you provide is optional. you can say here is my blood type. we do not share this information. in fact, we do not even share your blood donor status.

you can share it with your friends if you want to. respondonors actually when there is a need for a donation? it is up to them to say i am able and it matched as blood type, therefore i can donate. we do not collect any other information at this point. and we do take privacy super seriously. so, assuming you enjoy success with this in india, we would you take it next potentially? hema: we are planning to introduce the blood donation feature in bangladesh, where we see similar activity where thousands of people in a week look for blood donors. our role as facebook is to make it easier for people to connect and donate blood. so that information is key. the first step is maybe help a friend in need.

really to make a sustainable, to make sure it is not reactive. people should not have to look for blood donors. they should be available in hospitals. for that we are working with partners to make sure voluntary blood donations is a habit behavior. so bangladesh is our next step in early 2018. paul: thank you very much. that is hema budarju of facebook. thank you for joining us. you can find more from our series on the future of health care on bloomberg.com/futu reofheatlhcar.e

♪ cooling is successful only because of its potential for circumvention. lack of oversight. it seems to be it ought to be outlawed. >> you look at bitcoin and it's not much different from gold. i'm not sure why there's so much hostility towards it. if it's the same mold as many commodities. it's even mined. >> there are tangible and intangible investments. to me, bitcoin is the ultimate intangible. there's nothing there. there is nothing backing it

other than what somebody else will pay for it. >> it feels frothy. but i think the real issue is not bitcoin. i think it's the disruptive nature of technology. and if things we are doing in greece. the things we are doing hopefully in italy overtime. the banks that were operating across africa. all of them recognize the disruptive nature of technology. whether it's the application of block chain or the core of processing or delivery of customers and clients, financial services today are being disrupted by technology. paul: some investors sharing some very different opinions on cryptocurrencies. this as cryptocurrency plunges as much as 20% just hours after hitting a record $11,000. traffic led to reports of intermittent outages. as we were saying earlier, a 20% swing and. -- in the context of

bitcoin is almost considered a correction these days. i remember ben bernanke talking about gold. he's not really a fan of gold but it is tangible. if civilization collapses, there is still gold. if the internet falls, where are your bitcoins? betty: well i don't have any. i guess i am out of the race. warren buffett does not like gold either. shame on you if you buy bitcoin can expect any kind of stability. you should only expect instability if you are invested in bitcoin. i want to show you a chart that might give some investors some comfort. g #btv 3661. as one of our guests pointed out, bitcoin just trades on technical. isyou look at it here, there a technical support level for andoin at $8000, $5000 $3000.

if it falls third or -- further it could be supported, there could be some buy in dip opportunities. if you have not gotten into the bitcoin craze -- paul i am not sure if you are into that either. paul: no. [laughter] betty: let's get a quick check of the latest business flash headlines. india is said to be ready to erase more than half the debt of its national carriers to boost its appeal to potential buyers. bloomberg has been told the modi government wants to transfer all of india's non-aviation assets and short-term loans worth $4.7 billion to a separate vehicle. that would still leave about $3 billion in debt with a bidding process seen happening in march. paul: american airlines is struggling with a scheduling glitch that is given to many pilots time off in december. leaving some flies without a crew during the highlighted -- the holiday rush.

they said the issue will affect thousands of flights next months. american declined to give a number but said it expected to fix the problem by offering pilots 150% of their normal hourly pay to pick up flights. dropped the most in september after stagnant sales showed new designs and store renovations are yet to resonate with customers. same store's jails -- asia-pacific was a bright spot with comparable sales growth of 2% in china's luxury market. we are awaiting manufacturing data from china which is due out in the next few minutes. the consensus forecast is for pmi to drop slightly from october. the asian managing editor is in hong kong. where you expecting from these numbers? >> as you said we're going to see a little drop if the economists have got this one right.

we are still in expansionary territory. but coming off some of the real strength we saw in september and if we are anything like what economists expect it is probably mpsestic factors putting cri on excessive leverage coming through to the real economy and also the anti-pollution push is maybe putting some smokestack industries back to bed. the external picture is pretty favorable. ofhad readings of flash pmi china's biggest trading partners looking very strong for november. that suggests that there is still demand for chinese-made goods. it might becoming more on the domestic side. betty: thank you so much. malcolm scott in hong kong. just want to mention we are getting breaking news right now on bank of korea. for the first time since 2011, raising their key interest rate

to 1.5% from 1.25%. 25 basis points. the bank of korea taking a quick look at how the yuan is trading right now. comioks like it is indeed lows, strengthening a bit against the u.s. dollar. much of this talk of the rate hike was indeed priced into the markets, the currency and equity markets. --in, bank of korea since the first time since 2011 raising the rate to 1.5%. paul: we do see modest gains in the yuan. modest being the operative word. industrial production coming in weaker. not enough to change the picture despite being somewhat of a curveball. contracting 1.1% with modest

gains. as our guests forecasted, not enough to change the equation for the bank of korea at that late hour. tightening on the way in korea. the rate lifted to 1.5%. betty: i am looking right now, we're seeing a slight -- we are cossby continued rise in on the cost the index. -- rise off the lows. u.s.wing the it raises the specter of what are the other central banks -- who are the ones you may raise interest rates? of course is a lot of speculation that australia might start to do that as well. paul: plenty of speculation that we may see a couple hikes next

year in australia. but those forecast increases in australia seem to keep pushing out deadlines. we will just have to wait to see what 2018 brings. betty: i believe are shot is joining us now. now.shaad is joining us rishaad: [indiscernible] we'll be talking to steve engle and 45 minutes. will it work? what does it mean for all those sorts of things? also have data out of china. indices for many factories coming through. . ♪ this is bloomberg

>> it is my macabre a.m. in singapore. 8:00 on the eastern seaboard of the united states. i'm rishaad salamat. haidi: and i am haidi lun. this is bloomberg markets: asia. rishaad: declines in the asia-pacific after the so-called fang bites wall street. the hike in seoul. haidi: australian banks something