rishaad: we are live from bloomberg's asia headquarters. i am yvonne man. welcome to daybreak asia. --iffs, wto and terror chairman of the fed. bloomberg at the oval office. asia-pacific markets are bracing for further losses. ramy: from the global headquarters, i'm ramy inocencio in new york where it is passed p.m. .m. -- past 7:00 argentina and turkey fell. the peso saw the falling -- warren buffett is still buying stocks, saying he is in the game

for the long run. he thinks apple is underpriced. ♪ yvonne: busy day today. let's break it off and start off with the breaking data from south korea, industrial production numbers for july beating expectations, putting it back in positive territory. looking at 0.4%, economists expecting a negative outlook. also year on year 9%. this is a welcome sign for the bank of korea as they make policy decisions later this morning. we have seen consumer confidence, job growth slowed down a bit. the government announced record spending packages earlier this week. the bank expected to hold today,

given the trade front. the u.s.-china tensions ratcheting up again. ramy: we are expecting numbers to drop in two hours. heret to get you updated with the asia friday open. it was negative across the board. s&p 500 down .4%. that was after records hit yesterday as well as the day before. today donald trump and his words on china saying he is ready to move across with tariffs on $200 billion by next week. we knew that was in the schedule, but his words clearly bringing that date into focus. let's flip up the boards because we are talking about what is the 10ng in terms of year yield and the bloomberg dollar. the bloomberg dollar rising further. it has been rising in the u.s. side .2%, but look at what is happening in the emerging currencies. peso, recordan

weakness, 38.5 to the dollar. 13% weakening. 6.69, pushing a little more to the upside, going up half a percent. yvonne: we saw the argentinian central-bank rising to 60%. e.m. still in trouble and given the comments from president ismp pulling out of wto, he considering that. i could have bigger ramifications and more tariffs on china -- that could have bigger ramifications than more tariffs on china. this is how we are trading so far. don't a quarter of 1%, but futures despite sydney heading in that direction as well with kospi futures down .3%. the boj decision is out soon. the renminbi dropping to a session low overnight.

we see the flight to safety with the yen strengthening, the movingstrengthening and lower in the aussie as well as the kiwi overnight. $.72 for the aussie right now. looking at bonds, we did see treasuries also catching a bid, and plenty of key events to look out for to move the needle. ,e mentioned jobs data in japan the bank of korea decision, china pmi the biggest one. will we see tariffs start to bite in the data in july? and also gdp throughout the week. ramy: president trump has told bloomberg he will pull the u.s. out of the wto if it does not start to treat america better. in an interview, in the oval office, he said the u.s. has been treated with disdain for years. mr. trump: i would say it was the worst trade deal ever made.

if they don't shape up, i will withdraw. ramy: let's cross to washington and the white house deputy team leader. what is the president's gripe about the wto, and what is he looking to achieve? reporter: he says the wto side withfer enough the united states. it is not exactly clear how that comports with the data because in 90% of the cases, where the u.s. has brought a complaint, the wto has cited with the u.s. - sided with the u.s. they also side with complaining nations, not against the defendants, and the u.s. has lost 90% of the cases where another nation brought a grievance. thes generally unhappy with trade system, and wto is a cornerstone of the international trade system. yvonne: we were talking about these $200 billion of tariffs on

chinese goods. it has been interesting because we had reports about this and john micklethwait did ask the president. he smiled, saying not totally wrong. what is the follow? mike: we have heard from people who know about what is going on inside, he is ready to slap tariffs as soon as the comment period ends next week. from people inside the white house, we know that is what he is contemplating doing as of now. when we asked about him on the record, he did not take a position, and until he does, he can change his mind. yvonne: thank you, the white house deputy team leader joining us with the latest out of d.c. an interview with the president. the president told bloomberg progress is being made on revamping the north american

free trade agreement, and the deal could be in place by friday. let's go to a reporter who covers mexico and latin america. tensions with china, when it comes to nafta, the deadline on friday potentially could be reached? reporter: that is what we are hearing from this afternoon. trump said he thinks they are close to a deal with canada to be able to announce. that would be paired with the deal with mexico monday. he expects a deal with canada either friday or some later time , but he really sees this as canada's only option to remain with the u.s. in some kind of free trade arrangement. we are hearing from other people close to the talks that there is expectation an announcement could come tomorrow. other people are cautioning the itgress has been made, but

is not necessarily quite there yet in terms of tomorrow. that is the deadline for u.s. representative lighthizer to extend a letter to congress, informing of the administration's intention to enter into agreement with mexico definitely. we are looking to see whether canada will be included in that as well. ramy: one of canada's biggest sticking point is dispute panels . tell us about that and what kind of compromise we might see here. has always favored the trilateral or i guess bilateral dispute settlement mechanism that allows for panels to mediate the dumping disputes between canada and the u.s. discountse kind of and subsidy disputes between canada and the u.s., rather than

leaving determinations only to u.s. courts -- solely to u.s. courts. this was in the original free trade agreement they had in the 1980's that became part of nafta in the 1990's. this is a priority for canada. the u.s. has a priority of wanting better access to the dairy market. being against these panels, because they see them as the sovereign entity of american courts to make determinations about the american economy and businesses. so some analysts have said they see perhaps a deal lining up or trade-off between the two countries that perhaps the u.s. 19ld give some on chapter dispute settlement if canada is willing to give on the access to the dairy market which has been

a supply management system that is fairly closed and important to parts of the country like quebec and the dairy farmers in that part. very hot political item from canadian point of view. -minus one day until the agreement, or there could be economic fallout. eric martin who covers mexico and latin america, thank you. let's get to first word news now. reporter: the e.u. is prepared if the -- lift tariffs u.s. does the same. the signs are expected to hold talks. they working -- they are working towards ruby lebanese. work to try to find a positive agenda. president trump said it is not good enough. london currencies in argentina

and turkey triggered a selloff in emerging markets. the peso tumbled to a new low, prompting energy -- people to raise to 60%. in turkey a report the deputy central bank governor was set to quit. brand struggled on the land debate -- the rand struggled on the land debate. iraq will block oil shipments in the gulf if their own shipments are blocked by the u.s. tankers.d close oil u.s. imposed sanctions after dropping the 2015 nuclear deal. measures against the oil industry are due to take effect in november. the indian rupee fell to a new low and higher oil prices raised concerns that the national finances and prospects for inflation --

we could not curb losses. higher oil and rising interest rates are putting pressure on the current account, although robust gdp growth is helping mitigate impacts. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jenna dagenhart. this is bloomberg. yvonne: thank you. of pc gaming, racer jumped 38%. we will talk to the ceo and cofounder and hear what the company's doing. ramy: we will look at the market outlook and look at diversifying beyond traditional stocks and bonds. this is bloomberg. ♪ ♪

yvonne: this is daybreak: asia. i am yvonne man. ramy: i am ramy inocencio.

it was a big day for u.s. stocks , until trump headlines hit, then it was downhill. the s&p extended losses on the words that trump wanted to hundred billion dollars in tariffs to be imposed on chinese imports as early as -- $200 billion in tariffs on chinese imports to be imposed as early as next week. why now woodward su: it looks like the stoxx were it give a -- stocks, path and it was lower. let's go to the market snapshot. many say it was optimism with mexico trade deal and canada that perhaps they would be backing off the tough talk. but late this afternoon it was not the case. the indexes moved lower, the dollar higher. let's go to industrial index where you can see the sharp drop

in the middle of the afternoon. that is where the headlines it area that was the reaction, -- the headlines hit. that was reaction, a knee-jerk reaction. you can see this is indicative of the pace of the drop for those companies in the bullseye of any tariffs. dollar tree and michael's, retail stores, both hit hard. dollar tree analysts say down because they don't really have online sales strategy, michael's down as they hit their forecast. is -- has had a very storied history and had many bulls favoring the stock. notice at the bottom we have got a semi conductor, you have got sent tech earnings revealing pieces of graphics, a tech company, really shows you how companies do well. they can take off in terms of

earnings. let's go to the gtv where you can find this chart. it has to do with the fact that given record highs, the bullish estimates by analysts appear to hit 3000 for the s&p by the end of the year. it shows we are almost there. weight onestingly the the market appears to be have stocks come too far too fast? that is starting to layer in with everything else with global concerns. you have been watching the trade sensitive stocks as well. how are they reacting to this? su: why now? we knew this was coming. let's take a look at the stoxx impacted. the once you would expect, mining, industrial stocks that exposure,bal [indiscernible]

the copper mining company. let's go to the next panel. there was an increased concern this would weigh on sentiment. there are many investors that say we have not seen trade concerns hit the latest earnings. there is now concern to hit in the second half. we saw oil above $70 for the first time in a month. a lot of it has to do with tighter supplies not just in the u.s. but iran with the whole sanctions situation as well. ramy: let's bring in russell investment ceo -- senior investment strategist doug gordon. talks a day where trump really ruled everything, including over the markets. in the past hour or so, in this interview with bloomberg news, he said about, he could withdraw from wto, that canada doesn't have a choice in talks.

how do you factor all these things in? it pulled the market down, gave them a path. it is the right question. when we look at today, a microcosm versus recently, you have to question if it was .esilience or complacency in the morning it was quite resilient. we got interview comments from the trump talk, but right now i think we have to weigh them in a forward construct and assess what we think is most likely. it right now looks like that we will have escalation in the trade restrictions and tariff response.coupled with we have to focus on where it is coming out and repercussions. they can be with respect to the fed and monetary policy going forward. one of the places that caught my eye is where we have seen input

prices and inflation in those costs not able to be passed through. impactingee this margin erosion later in the year. ramy: also in terms of erosion, sentiment, confidence, i want to ask you about this. i have this great chart about diverging views. the consumer confidence index in yellow, it hits a high not seen since 2000. let me see if i can turn this illustrator on and show you where we are. 19.53. at the same time, the university of michigan consumer sentiment is at zero. this is amplifying the bipolar bipolarism of -- sentiment. doug: there are so many metrics for the christian and what is the right one is a challenging thing.

question and what is the right one is a challenging thing. there is less concern in corporate confidence. if we see ceo's concerned about the impact of trade restrictions and pullback capital expenditures and -- and pull back from capital expenditures, that could be [indiscernible] as well as it could accelerate. yvonne: it seems like this week, now that we saw progress on the new nafta deal, all this stuff about u.s.-china trade tensions was put on the back burner. now we are getting news there is a fast-track. how much is priced in? doug: i don't know. uncertainty with what form it will take. even the comments on the interview, and associated with

that, we were not sure if it would happen with the fed, something delayed, or staged in two. i think the market is waiting for the whites of the eyes. dependents to be data . that is interesting we are using that phrase again, but you can see it in the fed surveys where you see commentary in the conversations with companies and conversations certain to manifest fears and concerns. i think it is one where the market has to be complacent. you have to think how hard and fast it is over the last month and a half. we will see what happens. you have good news out of the -- i would not say nafta but maybe potential prospects of positive moments around that, the elephant in the room, the largest economies in the globe. yvonne: what do you see with

allocation? his tech the leader or is it time to move to something defensive? doug: it is about being diversified and taking a vintage of the tools, being currency with -- taking advantage of the tools. diversified across different fixed income alternatives, leveraging more unique tools using options to structure your portfolio, participate in a portion of the upside, but protect against the potential downside risk. given the run over the last year and a half, i would be happy to make that asymmetric play right now. .t is about doing that of arrows in the quiver. this divergence in u.s. stocks with the rest of the world, look at the financial conditions which have start to hit extreme levels, back to what we saw in 2000 where would

loosening conditions in the u.s. are loosening by one standard deviation. asia, things are getting tighter by the similar amount. how long-lasting can that be, and which way would it go? em brings down the u.s., or what? doug: there is two sides to this. when you at emu have multiple hits. you have dollar strength, then the potential of forcing impact from trade restrictions. then you have the guilt by em deficitfor any countries for what is happening in turkey and argentina. those are different situations where argentina is taking medicine to get the imf out, turkey not so much. you have the contagion risk with indonesia, south africa. even russia, it has more of a

sanction story. it is early to spend your risk in em, although it is really attractive. there are exogenous risks that are too hard to anticipate and the risk should be spent elsewhere in the portfolio. yvonne: great to have you there. senior portfolio manager joining us from seattle. this is bloomberg. ♪ this is bloomberg. ♪

>> the world's biggest bank posted its fastest profit growth in years as asset quality improved. net income in the second quarter rose almost 6%, broadly in line with estimates. big banks have reported profit growth of at least 5%. >> petrochina is rewarding shareholders with a payout after

it is profit in three years. it is reading total dividends by almost a third. the number eight is considered auspicious in china. more to come. this is bloomberg. ♪

happy friday. live pictures out of tokyo right now. we are seeing dollar-yen catching a bid for the japanese currency at 111 flat. the president threatening to pull out of wto. that perhaps has bigger implications than tariffs. that coming from our exclusive interview with the president. breaking data from japan. ramy: breaking news, the jobless rate for japan came in at 2.5%. the consensus was just a tad lower, 2.4%.

looking at the jobs to applicant ratio, that came in bang on estimates. the take away here, jobless rate 2.5% against to consensus. yvonne: we continue to see that tight labor market, but that jobless rate picking up just a little bit. not a whole lot of reaction when it comes to dollar-yen. japan won't release industrial output. that happens in just a couple minutes time. for more on what to watch, sophie kamaruddin. you are also watching the boj. traderswe are seeing looking a little nervous, waiting to see if the boj will scale back. the boj announcing its policy greek. yieldsto show you, jgb

sticking around 1% as traders may be nervous after the boj came through with a surprise bond operation. the trading in jgb's has returned to dismal levels as volatility has waned after surging ahead. even so, the market will want to push towards 2%. if we get decent factory output data, that could push yields higher. ramy: we are also waiting on chinese pmi. asia will basically wrap of august with a heavy data line of that includes indian gdp as well. set to close out august? sophie: it has been a fairly rocky august. ramy: looks like we just lost audio. we're going to continue on here.

let's move on to our next reporter. talking about argentina's currency, we know this has gone from bad to worse, but now it has gone from worse to devastating. unprecedented 15 percentage point hike in the key interest rate failed to stop investors from running for the exit. the country's finance minister is confident that they will overcome the turbulence. carolina, what is the latest? >> we just heard from the treasury minister who sent the ofernment is releasing plans how they will be addressing cuts on monday. that means the jury is out on how the peso will react tomorrow. investors have been anxious to your more news on how the government is going to tackle its fiscal deficit. lack of detail was one of the

main reasons why an announcement like on sunday, which said the country was seeking early disbursement, it failed to calm investors because there wasn't a detailed schedule or amount. investors have to wait until the end of the day for the imf to confirm that. now the treasury minister has also said that he will travel to d.c. on monday. need in terms of what they to try to resolve this, they had the whole entire $50 billion possibility there, but i'm curious, is that even enough? for theould be enough financing needs next year. the question -- one of

argentina's main problems is the previous administration jacked up public spending in a huge way over the past decade, taking advantage of high commodity prices. that hasn't been the case for some time now. argentina has been operating in the red for several years. pressures,nflation that has led to a pressure on the economy. that is one thing that investors will be looking at. also, how they will continue to meet these budget cuts that are part of the program that the imf laid out. yvonne: it seems like argentina is at least responding in the right ways. they've gone to the imf, hiked rates significantly. what else needs to be done?

is it on the fiscal side now? >> that is what investors are going to be looking for. the government has announced they are freezing most major infrastructure projects and looking to continue other ones through public and private partnership programs. the next thing to keep on the radar, budget negotiations. those talks will begin in september. the president will have to from partiesakers who are not keen on the imf that they should accept tougher austerity measures in the country. the other thing is that investors have said that argentina has taken an unorthodox approach to this crisis, but it is yet to be calming down the nurse.

carolina, thank you. you can follow more on this story and the day's trading on our markets live blog on the bloomberg at mliv . ramy: all right. looks like we are having some issues here. let's head to our first word right now. that is with jenna dagenhart. >> thank you. china is calling on the u.s. to do the right thing with tariffs on chinese imports next week. levies wrapup on september 6. we are told the president intends to put more tariffs on china. the yuan fell on the report while the dollar and the yen rose as investors sought safety. president trump is threatening to pull the u.s. out of the wto if america doesn't get better

treatment. speaking to bloomberg at the white house, he said if they don't shape up, i'll withdraw. the president said the u.s. is at a big disadvantage and has been treated very badly by the organization. a pullout would damage the trading system that washington helped build. >> i would say the wto is the single worst trade deal ever made. if they don't shape up, i will withdraw. >> trade talks between the u.s. and canada look like they are going down to the wire as they try to reach a deal. the outcome could hinge on the dispute panels that the trump administration wants to eliminate. the u.s. official said it is not certain that the american side will budge on its demands. negotiators have expressed optimism over the talks. former san francisco 49ers quarterback colin kaepernick has been the nfl's bit to dismiss his lawsuit which alleges the league colluded to prevent him

finding a new team as a free agent. kaepernick was one of the first nfl players to neil during the national anthem, making him the face of the black lives matter campaign that has seen athletes protest peacefully. president trump said they should all be fired. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. ramy: thank you. posted ampany razer revenue jumped and aims to spend more on new ventures. an exclusive interview with ceo and cofounder min-liang tan, next. this is bloomberg. ♪

ramy: now for a look at some of the stories trending across the

bloomberg universe. on the website, bloomberg's exclusive interview with president donald trump in the oval office. he's threatening to pull out of the wto if it doesn't "shape up." on tictoc, hong kong has a talent wishlist. if you are an expert in waste treatment, the city once you. on the terminal, users are reading all about the oracle of omaha. warren buffett already adding to his stake in apple. that is number three. he says the iphone is enormously underpriced for all the things it offers. you can check out those stories trending on bloomberg online or on the terminal. laptops and gear maker razer expects revenue growth to accelerate as it invest in phones and online payments. joining us for an exclusive

interview is the cofounder and ceo, min-liang tan. thank you for joining us. it seems like revenues certainly outperformed here given that you've been spending so heavily in launching this new phone, as well as a virtual currency. your net losses as well are rising. how should we take away from the first half? min-liang: we've had some really strong growth year on year. over and above, what is more important is that prophet has been rising quite a bit. corresponding margins have been rising at the same time. that is improving year on year. in particular, i think something we've been able to achieve in the first half of 2018 was improve our services model. this is something we talked about the last time we went public about improving the

high-margin, high-growth business model. the first 12n months. that is something that i think the analysts and myself are really happy about. yvonne: what do you think is driving that? we've seen that you launched a phone last year. before this, you have no experience when it came to building a smart phone. it has driven quite a bit of the revenues we've got. entire gaming market has exploded. there's stuff like fortnight mobile. there's suddenly this attention on mobile gaming and we are in the forefront of it. this whole notion came about when we launched the razor phone. i think it is an area we are focused on.

we want to continue investing. no doubt you've been watching the developments out of beijing with china freezing those gaming licenses. how is that impacting you? really two things. in china, there's a huge amount of growth. there's still time to take advantage. we are seeing a lot of growth in china. what has been really interesting for us is that we have a services business which helps game companies monetize in emerging markets. we have the largest monetization platform for medium companies to reach places like southeast asia. what we've seen is a lot of the game companies have reached out to us. we've been helping them monetize in southeast asia.

we will be helping them launch in southeast asia. it is pretty exciting to be working with those companies. ramy: i'm not sure if i missed it, but i did want to go back to your concerns about china's freezing on gaming licenses. what are your concerns there? 'sn-liang: from razer perspective, we don't have any specific concerns. the chinese market is still a huge market. i think engagement is still very high. i think it is a matter of time for the entertainment sector to continue growing. the entire global market is still growing. i mentioned southeast asia in think the because i chinese media companies are looking for options to monetize and grow outside of china. southeast asia is a natural platform for them given the one

belt, one road strategy. we are able to help -- ramy: you mentioned fortnight. these are critical to the growth in the industry. now that china has halted the approval of these new games ent tothe likes of tenc monetize them, this should worry you. is this regulatory changes are a structural issue where china will continue to crack down on the industry? min-liang: i can't really comment on specifically what the authorities think, but i think perspective, because we are a global company, we are seeing growth across the region. we are pretty insulated from that perspective. andtill see a lot of growth

we see even stronger growth for ourselves in the second half. we see this continued growth in the market and we are pretty excited about it. yvonne: can you give us a rough timeline on when you will be profitable? our core business is very profitable. if you look at our gross profits, we've grown quite dramatically. we could be profitable tomorrow. we could start investing in's exciting new areas. our services business is very profitable. business -- the only area that we are investing in right now is the mobile area. we do see a lot of future growth. you see the growth of our top line over and above. we've got a longer-term perspective in terms of growing

our business. your stock has been down more than 50% since you started listing earlier this year. what do you say to those that say razer can't live up to that valuation and the business model can't turn a profit? min-liang: essentially most of the tech stocks have come down quite a bit from listing. we've been fortunate enough not to be as effective as some of the others. our numbers are robust. i think you can see a lot of growth. you can see that we've been going very well, in fact better than the industry. the entire gaming industry is still probably one of the most exciting industries out there. from a fundamentals perspective, we should do very well. we want to continue growing alongside the market and investing in the future. ,amy: looking to tie ups

earlier this year bloomberg reported that razer and singtel were getting together in the payment space. what is the latest on that? min-liang: we control one of the largest e-payment networks throughout the emerging markets in southeast asia. perspective, if we they are thet, largest carrier in southeast asia. about 15 million users. we are converting them to our customers and conversely working with them to create the largest e-payment network throughout the region. with the largest carrier working with us and with our network, we are working to bring the entire region to a cashless region. yvonne: thank you. min-liang tan joining us on the

phone. breaking data coming through from japan. numbers fornary industrial production missing the mark, down 0.1%. economists were expecting a 0.2% print. a little bit better than the -1.8% we saw in june. 2.3% year on year. we had a slow day in japan. the jobless rate ticking higher. don't forget our interactive tv function, tv . you can catch us live, catch up with interviews, and check the bloomberg functions we talk about. plus, be part of the conversation by sending us instant messages. this is bloomberg. ♪

yvonne: this is "daybreak asia,

." we've been watching what is going on in d.c., the latest when it came to these u.s., mexico, and canada talks. we are expecting to hear from the canadian foreign minister with an update of what the fate of this deal is going to be. ,e haven't exactly seen her yet but we will get you the latest once that goes through. we heard from the president telling our editor-in-chief during this interview at the oval office that talks have been constructive. of course there is that deadline that they want to get this done by friday in the u.s. certainly want to watch. we will bring you the latest. ramy: and we are also monitoring what is happening out of evanston, indiana -- evansville, indiana. we are waiting for the u.s. president to speak at in indiana

rally. we just heard from him with that exclusive interview with our editor-in-chief, talking about everything from leaving the world trade organization, as well as tariffs with regards to europe. it will be interesting to see what he has to say here. we will get you the latest. yvonne: i think perhaps what was a little more alarming, besides the headline from potentially not ruling out that the u.s. may be imposing tariffs on $200 billion of chinese goods, he talked about the european side as well. he was just as unhappy with europe as with china. this coming at a time when europe is talking about lifting auto tariffs from their side. let's listen to that interview. >> not good enough. business lot more auto than we will ever do. first of all, it is not just

tariffs. they will take the barriers down and charges no tax, but it is not good enough because they will always sell more cars. buyingonsumer habits are their cars, not our cars. yvonne: i think we can also worry about europe as well. seems like the president seriously considering whether to impose those auto tariffs. ramy: let's do a check of the latest business flash headlines as we wait -- no, we will not be doing that actually. what isng to monitor happening with donald trump in evansville, indiana as we wait for him to speak. the indianas again, rally. and the latest lines that we have been seeing right here are twofold, with both post-nafta talks, with regards to mexico as

well as canada. the countdown is starting to china and those tariffs. 5-6 depending on which time zone you are in. basically next week donald trump saying he is ready to pull the trigger on that, to put $250 billion total in terms of tariffs in play. we're going to leave that there. bloomberg subscribers can continue watching. you will also find the diary entries coming today and later as well for some of the events you may have missed earlier. let's take a look at what we are looking ahead to in the market open. it could be potentially a pretty ugly day. we see the president talking about potentially pulling out of wto, slapping tariffs on more chinese goods. we see futures in japan down 0.6%.

we did see that dollar even into the yen as well. down 0.3%.es also the market open coming up. this is bloomberg. ♪

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limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need this bed. yvonne: 8:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. i'm your yvonne man. the top stories this friday, tariffs, the wto, and chairman of the fed. president trump invites bloomberg to the world -- the oval office. new measures against china. $200 billion of levees could come next week. >> from bloomberg's global headquarters, i'm ramy inocencio in new york. it is just past 8:00 p.m. on thursday. emerging markets tumbled on argentina and turkey. the bezos falls are the key interest rates hitting 60% to try to show confidence. the largest and most ambitious infrastructure project in modern

history. we have a special report on china's belt and road initiative. yvonne: looks like a sea of red as we kick off the asian trading session. a wide ranging interview we've had with president trump, talking about pulling out of the wto. not exactly ruling out our early reports that the u.s. is looking to impose tariffs on $200 billion of chinese goods. stocks certainly feeling the weight, with currencies heading lower. ramy: a reminder that we already knew that this timeline was in our sites. september 5, september 6, depending on where you are. donald trump's words putting into focus that this is indeed going to happen. let's get more on market reaction and do a market check,

and bring in sophie kamaruddin. sophie: it is not a happy friday. we have stocks opening lower on the board. the nikkei 225 snapping an eight day advance. investors in japan will have industrial output and job data today. it is a heavy date of line of best data lineup. you have china tmi a major highlight. it may point to stabilization. you do have the offshore yuan, trading below the 687 handle against the dollar. this as trump reiterated his stance that china is trying to devalue the currency. we also have korean sector activity. check out the jump we see in the korean won. it is now trading above 1114 against the dollar. the cost be also on the back him up by a third of a percent. the mood is still down for the kiwi dollar, as well as then bx

50. this after we saw the set from new zealand. the testament falling to a two-year low. this is confidence sinking to the lowest levels in a decade. the yen has seen benefits from this risk off movie. we have trading back below the 111 handle. the best month since february after trump said the eu offer to remove tariffs on autos is not good enough, and the u.s. will move ahead with new tariffs on china as early as next week. the jgb market has not been exciting in recent days ahead of the doj's september bond buying plan due today. we see it just above the point, 1%. traders staying on the sideline as they cross their fingers that the doj will cut back purchases in september, given the tightness in the bond market. checking out stocks i want to put on the radar, keeping an eye onto toyota and japanese car markets.

as u.s.-canada talks continue. plans companies as china restrictions on the industry on the mainland. tencent likely to be title from japan. .apcom is falling over 3% keeping an eye on harvey, norman in australia. one of the companies to report earnings for the net income matching estimates. ramy: thank you. let's do a deep dive into eco-data. it has been coming in fast and very is, starting with the labor market and output numbers out of japan. our global economics and policy editor kathleen hays has a rundown on all of this. what is the takeaway? kathleen: broadly, the labor market remains tight. industrial production has a little bit of a setback. that's not expected to go away right away. let's start with the job list -- jobless numbers. it picked up 2.5% from 2.4% in

june. it is just above a record low, at 2.3%. when you look at the job to applicant ratio, that is impressive. it continues to get higher, 1.63 jobs available in july for every one worker. that is up 1.62 in june. if you look back at me telling you these numbers, every month it seems to move higher. bloomberg economics in tokyo is saying this is gradually going to boost labor demand. it will be economic expansion. in a tight labor market, on the supply side not so many workers. it will help wages rise slowly, but not fast enough to get the 2% bpr target from the bank of japan. that core cpi from fresh food prices, anytime soon. all the people have walked to work, we got news on industrial production in japan. the number was expected to be weak.

there has been heavy rainfall in western japan, which will probably keep the number normally low -- unusually low for the next five months, according to bloomberg economics. still .1% in july. on the year over year however, up 2.3% in july versus down 0.9% in june. things are still moving ahead. yvonne: we are looking at the korea data we got earlier this morning. we are expecting no change in the bank of korea. there is a lot going on in the economy beneath the calm we are seeing from policymakers. kathleen: they are expected to hold their key rate study again. the approval rate at 1.5%. they last hiked it in december. . let's look at what is going on with the big broad measures. here is the key rate. it was raised in november 2 1.5%. line, which blue

has come down from about 2.7% to about 1.4%. t, that's whyn i they don't match up exactly. cpi, the target is right here. this is the 2% target from the bank of korea. you are far below that. it's another reason for the governor to wait and watch. recently, he has cited financial imbalances as something they may have to hike rates in response to. they have record household debt, they have surging property prices. as i told you, inflation is below target. korea is also facing the slowest job creation in eight years. the trade were between the u.s. and china is getting worse. korea, like many asian nations, a big exporter. one more thing which mike make them want to raise their rates, if said keeps hiking rates, if that causes investors to remove capital from korea as they have

in other countries. i don't think that is an issue. the bank of korea just looks like they will wait and see what happens next. yvonne: especially after we got the fiscal package earlier this week out of the government. kathleen hays our global economics and policy editor. let's get to the first word news with jenna dagenhart. jenna: trade talks between the u.s. and canada look like they are going down to the wire as they try to reach a deal. the outcome could hinge on the so-called dispute with the trump administration wanting to eliminate. they are not certain the american side will budge in its the band for getting rid of them. negotiators have expressed optimism over the talks. currencies in argentina and turkey triggered a selloff in emerging markets. the peso tumbled to a new low, plunging policymakers to make the rate at 60% in hopes of shoring up confidence. in turkey, the deputy central bank governor was expected to

quit. in the highest the highest in volatility since december 2016. fell to a newee low as higher oil prices rates concern about the oil importer's national finances and the prospects for inflation. selling by state-run banks, but could incur losses. on theoil and pressure budget and current accounts. robust gdp growth and other factors are helping mitigate some of the impact. former san francisco 49ers quarterback colin kaepernick has beat the nfl's bid to dismiss his lawsuit that alleges the nfl promoted to just prevented him from finding a team as a free agent. he was one of the nfl players to kneel during the national ofhem, making him the face the black lives matter campaign that has seen athletes protest peacefully in sports event. president trump says they should

all be fired. global news 24 hours a day on air and on tictoc powered by more than 2700 analysts in more than 120 countries. i'm jenna dagenhart, this is bloomberg. president trump stepped up his criticism of a cornerstone of international trade. he told bloomberg he pulled out of the wto if it doesn't treat the u.s. better. >> the wto was the single worst trade deal ever made. if they don't shape up, i would withdraw from it. trump'spresident remarks came as he made key decisions on several trade fronts, including a possible deal with canada and mexico. dan 10 joins us in our hong kong studio. what does he mean about pulling out of wto? what is he likely to achieve by saying this? basically end the

wto as we know it. setting the global trading system, the wto is a big part. this was the system created back in the day. trump has basically taken a global trading norms that have existed for the past few decades. he has already taken action to undermine the wto. it may be part of his strong-arm tactics to try to get what he wants out of the wto, rather than pullout. we have seen these sort of threats before. if he follows through with it, then all bets are off. ramy: donald trump also said he is looking to move ahead with tariffs on those $200 billion in chinese goods by next week. we knew this was going to happen based on the schedule. we have seen he is focusing the lens. we saw the concerns ripple

across equities. this $200 billion threat has been around for a wild -- dan: the $200 billion threat has been around for a while. the question was whether he would delay the implementation of these. it appears it will go ahead as planned. i think china is expecting this to go forward. they have seen absolutely no progress on the trade front, basically since trump pulled out of a deal with president xi jinping's top advisor a few months ago. in beijing, they are waiting for the midterm elections to see if the democrats can win big. that might open up trump to a deal. they are not expecting anything before that. they are digging in for the long haul. yvonne: how did beijing respond? tariffs on $200 billion of goods, there's no way they can retaliate in kind. how should they respond? dan: there are a bunch of

actions they could take against u.s. companies. non-tariffs measures to make life more difficult for the u.s. there is definitely action they could take. also not heard their own economy too much. the more actions you take, the bigger blow back there is printed trump is clearly making the study on the ropes right now. in beijing, there is a feeling we can outlast this. they have livers and control of the state economy to get through it. it is unpredictable when you put tariffs on this many items. yvonne: especially consumer goods. it could bite the chinese even more. dan: it could hurt trump and china. yvonne: thank you, asia's government managing editor joining us. we talk more about trade next. we analyze the markets impact in

the next round of tariffs and look ahead to the pmi numbers coming out of china. ramy: later in the show, we talk about korea's upcoming policy decision with an economist who works at the central bank for 15 years. this is bloomberg. ♪

yvonne: this is "daybreak: asia ," i'm yvonne man in hong kong. ramy: i'm ramy inocencio in new york. president trump is set to send another $200 billion in tariffs on china. that would keep extra pressure on beijing, with trade talks going nowhere, and early indicators showing the economy weakened again this month. over to shanghai, china markets economist david to. when you heard donald trump said these words that he is ready to

pull the trigger, what were your thoughts? david: i think i saw it brings only uncertainty to the global trade. we allthoughts? know that china is in the chains.tream of global everyone should consider what would happen if desk -- if china is affected. on the other hand, this has been a long-lasting thing. i think china is somehow ready for this. it seems hope is definitely falling away from us, with less than a week from when this could happen. in terms of policy tools that could happen, that beijing could pull, we already know things are on the table, including reserve rate cuts.

do you think one, that's enough, and what else could they do? expect more cuts by the pboc, and more credit easing efforts made by the authorities. on the other hand, we think it will be very cautious about money. it really needs a good balance between that -- between these two kinds. talkingwe are potentially tariffs on 200 billion dollars of chinese goods, most of which are consumer goods. how likely is that going to hit the economy. how is this really going to bite? if it comes to truth, it will influence china's market sentiment, especially for the producers and all of the other

players. on the other hand, it also influences the u.s. heard we all know that china is the main supplier of the u.s. consumer goods. it needs more inflation, or prior to the household. . think everyone knows it is just simple logic to understand this. it is still very early for china to tell what the influence should be to china. calculate that the ofort to u.s. is about 3.5% china's nominal gdp. k all of this trade will be removed from the world. on the other hand, it is hard to make the second round effect to the china economy.

it brings uncertainty not only to china, but also the world. yvonne: we have seen the pboc, we have seen the government veer towards more of a progrowth stance to try to offset some of this. how effective do you think it will be? do you think even if we see these tariffs put into place, that the growth target is still intact? pboc hasthink the turned from deleveraging to stabilizing the economy, as we all thought -- as we all saw. i think the pboc is continuing to support or stabilize the economy with their monetary policy. hand, we cannot calm on them. we should count on other agencies, such as the ministry of finance, because state

council has reiterated the fiscal policy should be more reactive to the aggregating markets. more, theyn that have been making great efforts to support the economy growth. i think it will take place in the next couple of months. ramy: i want to bring in the chinese yuan. it was at 6.8 a couple of days ago. we heard president trump talk about this and about developing the currency. link the currency. >> we are looking very strongly at the formula. as you look and see what has , they areth the yuan trying to make up for lack of business by cutting their currency. you can't do that.

tolerate aeijing much weaker yuan? we continue to say seven is that redline. david: there are two sides for this question. on one hand, i think everyone should know that the exchange rate is just the price. it has function in the economy. it can balance the internal and external pressure to the economy so that it reacts to trade tension, which is natural to me. on the other hand, whether the pboc can tolerate, or the governments can tolerate more of depreciation and take into account that the pboc took several policy actions before it reaches 7.0.

we have to be viewed as critical threshold. hand, i think where the pboc is looking at is not the exact level of the dollars you why. they are looking more of the exchange rate against the basket. and also the potential. i can say that they are more cautious about the crossflow than the interest rates, then the exchange rates. yvonne: we are taking a live where theve pictures president is hosting the make america great rally. we will bring you the latest lines as soon as we get them. david, you mentioned the cross-border flows. the chinese are pushing back against weakening the renminbi. you don't see this as a move as of goodwill measure to appease the u.s.?

this is about real concerns over capital outflow? china is still a country with capital management. as we see in a market, you have the quick control. on the other hand, several of the emerging markets are experiencing finance flow due to the kindness of -- tightness of the dollar and the weakening sentiment regarding the profile of emerging markets. story, maybe we are still too early to call a conclusion on that. i think china is still safe. on the other hand, money is going back to the u.s. yvonne: david, thank you.

our china's --anz china markets economist. let's take a look to evansville, where the president is expected to speak in this make america great rally once again. it just picked up a couple of hours go. we had our editor in chief have an exclusive chat with him in the oval office. one of the few things he mentioned, the pulling out of the wto. how that will have big ramifications for the global economy overall, given the fact that he says he might pull out if things don't shape up. we are not sure if it is posturing to get some kind of change within the wto, or whether he is interested in pulling out over all. on top of that, we are focusing potentially slapping $200 billion of chinese goods with tariffs. that will certainly be a focus in the markets today. we had earlier reports about the

, a bit of when asked a smile saying it is not totally wrong. ramy: we rt minus seven days until that could possibly be triggered. commentson, other donald trump did tell us in the oval office meeting. in regards to what's happening on this side of the world, he said he thought it was close that there was positively in constructive tone. also coming from foreign minister of canada. donald trump said it may be friday, that is the deadline he has put out there, or within a period of time, possibly some wiggle room. he said canada does not have a choice. we will bring you more lines as we get them out and continue to watch this make america great again rally by donald trump in indiana. yvonne: we are getting some lines.

economyident says the is now the best in the u.s. history. we got gdp prince that seemed to there is a growth of momentum after the tax cuts earlier in the year. this could really give the president a little bit more of an upper hand, he thinks, in doubling down. if he can get a deal with mexico and canada, perhaps he can go harder when it comes to china. ramy: we have been discussing this, in terms of the economic strength the u.s. has been exerting. 4.2%, a surprise uptick. we have in bringing up one chart in particular, a tale of two economies. economic growth has been stagnating around 6.5%. economic growth has been stagnating around 6.5%. we will leave that there, but

bloomberg subscribers can continue watching. we will also find the big dire injuries coming up today and later this week of some of the events you may have missed earlier. up next, this is bloomberg. ♪ xfinity mobile is a new wireless network

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adam's bill, indiana, where the president is speaking at a rally. one line he mentioned when it came to trade talks with canada. he reiterated canada must get rid of trade barriers. before this rally, he spoke with the editor in chief of bloomberg on how he thinks the talks have been constructive. they are hoping for some deals by friday. still a lot of sticking points from justin trudeau, the prime minister of canada. he says there is a sticking point when it comes to derek, and the dispute panels. donald trump ramy: talking up -- ramy: donald trump talking about

this may imply we have not had a breakthrough in the agricultural sector. for prime minister trudeau, he has said that is something that is sacred for canada because of what he calls supply management promises that he has made to his own citizens. says interesting that he this. we will see if anything develops out of this, and if the foreign minister from canada's talks with bob lighthizer. let's get the news with jenna dagenhart it. jenna: china is calling on the u.s. to do the right thing as president trump said to put tariffs on $200 billion of chinese imports next wee. isare told the president going to slap more tariffs on china when the deadline passes. the yuan fell on the report, while the dollar and yen rose as investors. safety. the u.s. is prepared to live tariffs on all u.s. products, if

the u.s. does the same. the sides are expected to hold talks in the coming weeks, building in a loose agreement to work towards zero levees. trade commissioner cecilia announcement denied giving in, she said they are trying to find a positive agenda. president trump is threatening to pull out of the wto if america doesn't get better treatment. speaking to bloomberg at the white house, he said "if they don't shape up, i will withdraw." last month, the president said the u.s. is at a big disadvantage and has been treated badly by the organization. a pullout would severely damage the trading system that washington helped build. was theld say the wto worst trade deal ever made. if they don't shape up, i will withdraw. ira says it: --

will block exports ifn they are halted by sanctions. this threat would be close to oil tankers if iran is threatened. the u.s. would impose sanctions after dropping the 2016 nuclear deal. measures against iran's oil industry are due to take effect in november. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists. and analysts in more than 120 countriesi'm jenna dagenhart, this is bloomberg. yvonne: just some lines crossing through the bloomberg. the canadian foreign minister speaking in washington, d.c. with an update on it these talks with the u.s.. it was long intensive talks they have been going through a lot of ground. they still remained for the optimistic, saying there is a constructive atmosphere. still goodwill from there. a good atmosphere we

are making progress. that's the latest coming out this hour. we could also hear from president trump in his rally in indiana, saying a nafta deal with canada could happen. we still see some positivity when it comes to that front in the north american hemisphere. let's go back to what we see in asia. positivity in the north american hemisphere, but we don't see that in space. indonesia is moving to intervene to defend the rupiah against weakness in the em space. the turkish lira extends a decline, given the idiosyncratic we are seeing for the economies. it will be closely watched when indonesian trading comes online. that the bank indonesia is going to buy bonds for stock building. that is going to be he we watch today when it gets underway in jakarta.

broaderomes to the space, checking on how asian markets are faring. it is not a happy friday. you have u.s. stocks falling across the board. the nikkei 225 halting. we see currencies under pressure. we have the dollar looking steady. that's putting pressure on the korean won, up by 4/10 of a percent. the korean won could be the whipping point when it comes to assessing the damage from trade tension. i want to highlight what is going on with stocks on the move. ruger bank falling after a report saying the chairman may have siphoned funds for personal use. 75% year is down about to date. it is the third worst performer on the topic. totokyo, cap come falling limit the number of online games on the mainland, as well as restrict usage among minors. it has fallen the most since august 13, when it dropped nearly 10% after tencent was

ordered to remove a cap come game after making its debut. harvey normand is halting a today rise as they report a drop in pretext traffic -- profit. they announced plans to raise about 164 million aussie dollars. this after the financial watchdog said it will not impose penalties on companies that were being investigated for their accounting methods. in the is a shot on how asian markets are faring. yvonne: let's get back to washington right now, where the foreign minister of canada just spoke to reporters. >> has -- are the political decision-makers getting together again tonight? the ambassador light house i will be getting together with 13. -- with our team. i will see you shortly.

yvonne: that was the latest coming out from washington, d.c. a pretty short interview. she did mention how it was a good atmosphere. they are making progress in trying to get this deal with the u.s. and saying the talks will continue later on today and thursday. this looks like it could continue through the night. ramy: in addition, putting donald trump's words into context, he was saying in indiana that the nafta deal could happen. it seems as if verbally things are headed for the positive, with regards to some kind of post-nafta relationship with u.s. and canada. and of course in mexico, possibly getting to something. tomorrow, we can all talk about it. we will continue to cover this. in the meantime, talks continue between krista feel and and robert has her. we will talk about earnings.

the world's largest bank posted fastest profit growth's and -- since september 2018. icbc and the four other big lenders reported stable growth in the second quarter. analysts are cutting forecasts for the rest of the year. france's shannon joins us now. we talk about how the top banks have been benefiting from the deleveraging campaign. we were talking about more tariffs. what does this mean for the outlook? >> the outlook could be twofold. i many of the chinese banks, although they have been improving asset quality, they are still raising their credit course agreement. they have pushed the coverage really high. that's for the separation of higher tariff on the state. if i take a look of revenue performance, all of them have been doing ok.

ramy: in terms of trying to price in this risk, are investors able to do this? haveis: investors could been pricing a lot of this risk. many of these banks have been coming off of a loss since the market peaked on the 26 of january. many of these banks have also underperformed the bull market. be refractingould what the investors have been thinking about in the ongoing credit card deal. think most of these banks are expected to extend credit? like what the pboc is asking for? francis: i think policymakers or regulators have been taking a hostile move. we -- yes, they will.

as a result, they have been pushing up the provision coverage and trying to cover up the possible rise because of the new roles. yvonne: thank you. more earnings to tell you about. china's biggest oil and gas producer reported its best monthly profit in more than three years. reporting a 114% surge in that income. rewarding shareholders with a higher and lucky payout. let's turn to our editor. are think their earnings meeting expectations. they already warned investors. need to pay a lot of attention for their protection, for the oil and gas. they have already made it clear

they will try hard in the second half and the year after. they are also protecting rather bullish oil prices for the second half, 70%-70 4%. marketsns signs of the are totally optimistic about the markets of asia. they want to produce more oil and gas. , ithis current oil price think that kind of output will bring more returns, higher profits in the second half. yvonne: you expect the second half to be just as optimistic as the first? francis: yes. they are optimistic about the oil market, about their own production in a vision. urgedpresident she china's big oil to raise output in order to enhance energy security. how is petrochina actually reacting? is only one way they

can react, they have to support the policy. they are producing more than 30% of china's oil, around 70% of china's gas. conference, the president of the company said they were excited and encouraged by the policy. they were saying the chinese government is expected to issue new policies to encourage the exploration. they may get cash subsidies, tax rebates. it feels like everything is playing into petrochina's favor, because they are mostly an upstream player. they have a refining access. most came from upstream. ramy: asia energy reporter aibing. thank you very much. theyup next, the most ambition infrastructure project in history. a special report on china's belt and road initiative buried this is bloomberg. ♪

yvonne: this is "daybreak asia, i'm yvonne man in hong kong. ramy: i'm ramy inocencio in new york. china is in the early stages of the largest and most ambitious infrastructure project in modern history. president xi jinping's trillion spans belt and road plan three continents, and will touch nearly 60% of the world's population. we take a look at beijing's plan to become the next mobile trading superpower. -- global trading superpower. >> fast trains are one of the symbols in modern china. so is the pace of the networks being built. top speed for the train is more than 300 kilometers per hour. rightly or wrongly, in the eyes of some, reflection of china's ambition. >> contrary to other people's

misconception, it is not a program dominated by china. it is a program by which china works with other countries. unfortunately, some people misunderstood it as china program. china wants to take advantage to .romote its own interests nothing could be further from the truth. >> views on china are often masks -- mixed. these markets are desperate for federal permit -- better metro systems, road systems. at the same time, there are concerns. one phrase you hear from locals is chinese companies will often when, or come out on top. we are here in the oldest of china's four great ancient capitals, home to the terra-cotta warriors and the han dynasty. in the easternmost point of the

belt. in its simplest form, china is looking to revive the road of the agent silk road with modern infrastructure, economic orders by road and road -- rail and road. driving west to a maritime silk road that circles back to china. in reality, it is more complicated. maritimee think about silk road, it may be westbound. even if it increased the itationship between asia and could be eastbound, or south westbound africa. the think it is central to china and xi jinping. it is about the story of the rise of china and reality of the size of china's economy, and the reality of the size of china's trade. clearly we are

not going to build a garden in our backyard. we are interested in building beautiful gardens with beautiful flowers that will be enjoyed by all the nations in this world. yvonne: that report on the belt and road initiative from our chief correspondent stephen engle. stay tuned for our special four part belt and road series. we take a look at what's becoming -- what's becoming of president xi jinping's policy. we navigate opportunities, challenges, and pitfalls of the plan to dominate global trade. catch that at 7:00 p.m. tonight, or 9:00 p.m. in sydney on friday. ramy: let's get you back to live pictures of donald trump speaking at dansville indiana at a make america great again rally. earlier, just in the past 30 minutes or so, he was saying

that a nafta deal with canada could happen, or some kind of new trading relationship. with that said, he also added that if no deal with canada happened, the u.s. will put tariffs on their autos. this also calling into focus a current auto tariffs that he has spoken about with regards to europe. our editor in chief did speak to him on that. donald trump saying the tariffs on those autos still want enough, and anything they were trying to do to push back against them would be enough. -- wouldn't be enough. yvonne: we heard more from the foreign minister of canada, talking about how they have had intense talks. it seems like the talks will go into the night on thursday in d.c. she mentioned about the chapter

19 issue, the dispute panels. she did say the u.s. and canada have said to make no progress on chapter nine, according to our reporting. -- according to our reporting, she did not want to comment on that. we will watch what comes out in indiana. we will continue to watch what comes out of their with g live go, see what's going on. see the big entries coming up, and the events you may have missed earlier. this is bloomberg. ♪

ramy: welcome back, this is "daybreak: asia," i'm ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. bank of korea is expected to leave matters unchanged as it waits more clarity for jobs, growth, and inflation. the u.s. and china trade front, our next guest is expected to deliver a 25 base point hike in its november meeting. joining us is the senior asia-japan economist at nomura. he was at the bank of korea for 13 years. lock us into the thinking at the be ok. we saw a bit of a talk this tilt, now there continuing to have jobs growth coming in. yet, they also have to worry about these capital outflows with the fed continuing to like.

how big of a dilemma is this? >> the hawkish members highlighted the main reason why they will hike interest rates. is -- one, the economy number two, they have financial risk on housing markets. and number three, the interest rate gap between the u.s.. we believe there is a case leaving it in tact. the issue is timing. because of a lot of uncertainty, especially about the u.s.-china trade tension. we don't think it is the right time to deliver the hike. waitlieve that bok will until some uncertainty subdued. then they will hike interest rates. that's why we think the most likely timing will be in november. that's the last meeting this year. yvonne: we started to see job

creation at the lowest in eight years. we talked about consumer confidence hitting a low. moon jae-in is known as a jobs president, yet he has also spurred a lot of backlash when it came to pushing for minimum wage hikes. yet, that actually leads to slower job creation. in the end, is he really doing the right job, in terms of stimulating growth? especially since he announced his spending package? youg: we think there are a couple of reasons for that. number one is the shipping sector, number two is the market. the population started to decline this year, then made an impact on minimum wage hikes. think about the gdp growth. korea, exports are strong, despite a lot of tension about the trade. poor stable despite very job market data.

we now see very strong housing markets. believe on ae macro level, the economy is right above the potential growth. the only problem is job markets and some of the confidence. we think this is more some of the structure element. ramy: i am going to break in. we do have that in here. 1.5% is the number standing for the bank of korea as you and many did say. 1.5%, looking ahead to what you say is november. you sayo ask him looking ahead to november that there is a chance. expectnd of chance do we ? you say it leans hawkish, in terms of the members of the bank of korea. young sun: this is very important, we need to look at how many vote dashboard-based decisions that are.

they will speak on that at the conference after the meeting. asbelieve it is the same july. if there is one more, it will clear a strong signal for the rate hike. on the other hand, we also need to look at the language for the be ok governor -- bok governor. if he continues to highlight the need for the monetary policy normalization, we believe the market will start to price in the way takes -- rate hikes. we need to wait until the bok governor talks about it. the one good indicator is we ha index that you can see in the bloomberg terminal. yvonne: when it comes to this threat of more tariffs from the u.s., the president says potentially on $200 billion worth of goods. that will have to affect korea

in some way. can they still hike in november if this is still a threat? young sun: there is concern about in direct negative impacts on. exports if the u.s.-china trade tension is elevated. so far, when we look at the data, especially the first 20 days, the market is strong. semiconductor, petrochemicals, now the automotive exports have jumped. the only narrative exports area in south korea to ship very good and meet the demands. yvonne: joining us from number, that is it from us. our market coverage continues with david and heidi next. this is bloomberg. ♪

david: it is not a clock a.m. in new york. in sydney, this is "bloomberg markets: asia." david: stocks across asia-pacific are following on the last day of the month. investors fall -- fear president trump will hit china with massive tariffs. tariffs, the wto and the present of the fed. the president speaks to bloomberg in the