-- major markets are one hour away for opening. >> welcome to daybreak asia. top stories this monday. the threat of terrorists -- s on all exports. president trump says he is ready to go.

thestors are concerned of escalating tensions. dominated withen talks of immigration. >> markets in the u.s. on friday trump with president fsmmenting on additional tarif for china. the s&p 500 fell for four consecutive sessions. the nasdaq saw the worst week since june. we did get solid data when it came to job payroll rising more than expected. this was potentially a go-ahead for the said this month. sophie: we're looking to inherit the gloom in asia.

we have slowing chinese exports and the dollar is holding on to gains and it will not do any favors former jing market asset. the final reading -- checking in on currency market you have the offshore yuan holding steady as chinese policymakers have moved to declare barriers. the yen is trading below 111 against the dollar. the kiwi is having a third day of declines. dollar is hovering above 71.

we are waiting on moderating augustr inflation for due out at 9:30 a.m. hong kong time. >> let's get you the first word news with kathleen hays. surplus withade u.s. is rising to a new high even as overall growth slows. theite economists saying immediate impact of a trade war would be limited, the former governor warns about the long-term effect on confidence because sentiment can easily change. >> the people can become nervous. suddenly, there is a trade war

mindhey might change their in terms of stock market investments. >> boris johnson has launched what many see as a new bed -- new bid for power, calling theresa may's brexit strategy a humiliation. he rejected her plan to keep the u.k. close to eu trade rules. said it would leave britain having to accept eu rules without having any say on making them. alibaba -- he told bloomberg he is looking at a change of life and several sources he will make an announcement today, on his 54th earth day. he has been pulling back from -- on his 54th earth day. he has been pulling back from

alibaba for some time. birthday. moreis is something i have confidence i could do much better than be the ceo of alibaba. korea celebrated 50 years. president trump claims credit for the train -- change, calling a positive step for north korea. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> sweden faces months of political gridlock after an election dominated by immigration produced no clear winner.

jonas is watching this in stockholm. the reason people around the world war paying attention to the election was because nationalist anti-immigration swedish democrats were getting support. where are we now? the suite inlike votesats gained a bit of but it is about two things. what happened and what was expected. they fell far short of some expectations for the sweden democrats ahead of the votes. we still have votes left to count. 20%they fell short of the to 25% some thought they would get. speculation before that they would emerge as the biggest party in sweden and

right now it looks like they will only be the third visit -- third biggest. they are a force to be reckoned but many here in sweden would say they dodged some difficulties and how to deal with this insurgent nationalist force. >> we know they wanted to oust the prime minister. we are now hearing they will vote against low vein as prime minister. what will happen to the prime minister depending on the outcome? the prime minister came out a few minutes ago and said he would not step down as prime minister. so we are looking at two weeks of wheeling and dealing between the different factions. a lot of votes coming in on wednesday, which could further alter the situation.

in two weeks, parliament will reconvene and there will be a confidence vote in the prime minister. the alliance parties and sweden democrats have said they will vote to oust the prime minister. that is what we are looking for now. there will be negotiations between now and then. a lot can happen given that the situation is deadlocked. asis the scene anti-immigration, or antiestablishment? >> i think both. who are most drawn to the sweden democrats were antiestablishment. is not only anti-immigration that is drawn voters to the sweden democrats. analysis shows a lot of the people who voted for them were

affected by the financial crisis and the slow economic recovery we have seen in sweden over the past decade. we have seen an increase in inequality in sweden, which has driven voters to the sweden democrats and the left party, the former communists who gained of it in this election. they fell short of pre-election polls. >> where does this leave the currency and economy, is there more desirable pro-business result we could be looking at? >> i think the currency might rally of it. it is hard to say right now. we will see more tomorrow how the currency reacts. it has fallen a bit in the run-up to the election because of concerns over sweden democrats. the economy is strong but

slowing. if this becomes a protracted situation, a lot of the reforms sweden needs to do, look at the housing market, make sure the immigrants get into the labor markets, if policy is to do that , sweden will be worse off in terms of handling an economic slowdown. the swedish central bank is poised to raise rates for the first time in seven years later this year. the next government will have to deal with that, as well. >> thank you for your time. it is hectic in stockholm. trump is threatening to double down on his trade action against china. latest. here with the we were bracing for the

additional 200 billion. now he is talking about another $267 billion on top of that. >> we were expecting them to match the pot but he pushed all in. well, he has not done it yet. friday mid-day asia time we are tariffsg him to enact on the additional $200 billion of chinese goods. instead of doing that, when he ended up saying was, listen, we might actually impose more additional 267 billion dollars, on top of the $200 billion, on top of the $50 billion that has already been enacted. so it would in essence cover all exports the chinese due to the united states. $505 billion. it is all chinese products shipped to the u.s.

he said the days of being ripped off by other nations is over. that is pretty much in line with what he has been saying all along. he has been casting hisire of late to china. he has a truce with the eu. he has a deal with mexico. canada might be on board with the new nafta. he said the south korean fta is done. that leaves china. no negotiations are ongoing, even though kudlow says trump is willing to meet with the president as early as the general assembly meeting. >> i am not sure everyone would agree that everything is done with canada and nafta and the eu. there is so much uncertainty when it comes to trade and what president trump will do. to make it worse, now we are seeing the trade circle with the u.s., china's trade circle is

reaching another record in august. that will not make the president happy. >> let me clarify on those other trading blocs. there has been progress in negotiation with the canadians. there has not been such with the chinese. so it is a waiting game and who welcomes -- and who can throw more into the pop. -- pot. there are two sides to the story. the trade surplus for the u.s. surged in august but that was due to front loading exporters and importers ahead of the potential increase in tariffs. the numbers were inflated. but the overall trade picture, exports by the chinese, is down to the lowest pace of growth since march, 9.8%. the exporters are starting to feel the pain.

we saw the government step in with new rebate issues. concerned and is if there is a silver lining, imports were up higher than expected, up 20%, showing domestic amand. -- domestic demand. it seems the consensus in the u.s. is that china will be the most difficult issue for the trump administration. for joiningo much us with the latest on china. -- thank you so much for joining us for the latest on china. this is bloomberg. ♪

>> this is daybreak asia.

>> forget the trade war. it is full speed ahead. that seems to be the latest message from the u.s. payroll report. but can the feeling last? kathleen hays is here. solid. data is -- you will his make the president's narrative happy. kathleen: why doesn't he spend more time touting these things? let's look at how good these numbers were on friday. payroll is rising. jobless rate of 3.9% is hovering

at the lowest level since the 1960's. wages rose 2.9% year over year. 2.3% range. of the took thelow opportunity on friday to say this economy is strong. let's listen. .> we are in an economic boom it is the story of 2018. some any people thought it would be impossible. onare picking up speed business investment and wages. when you get these conditions, more people will come to work and be rewarded by higher wages. the trump team has been saying for the longest time that they are fueling growth and

investment. this is something you will hear the white house talking more about as the midterms get closer. >> are the numbers good as they say? there must be something that is not clicking. wonder ifyou have to the trade war is taking a bite out of manufacturing jobs. they were down 3000 and the latest month. lost 4900 workers on top of 3500 workers in july. it is great, but if you look at , we going to the bloomberg library. hourlye line is the wage earnings. it is up to 2.9. the cpi is at the same level. when you subtract inflation from nominal wages, this is what you get. inflation has been rising and earnings have not.

we had a time of negative real wages and now they are flat. the tight labor market, maybe wages will rise more. the june and july payrolls were revised. this is what we care about. what does it mean for the fed? kathleen: i think the big are not fullyle on board in the markets, they are saying they have seen wages get revised down before. a voting member, loretta mester spoke in boston and said this is a strong jobs report and she still reports more gradual rate hikes.

she said monetary policy is accommodating and the fed needs to continue moving forward neutral. is 2.9%. that would support the rate hikes this year and a few more in 2019. >> such a time of uncertainty. kathleen hays, thank you so much. you can get a roundup of stories to get your week going. to tv on your terminals news oncan get the industries and assets you care about. this is bloomberg. ♪

is departing as chairman and ceo of cbs. he had been accused of sexual harassment by a dozen women. there is part of a larger sentiment that will end a legal dispute and we are hearing he will be leaving as chairman and ceo and that joseph will stick it -- step in as acting president. the legal drama seems to be ending. >> a little more certainty for cbs. die --mes after a busy busy day in terms of headlines. women had accused him of sexual

misconduct. today another story in the new six additional women accusing him of sexual misconduct. the other side of the story is , the hearing that cbs family holding company of sherry redstone is said to agree to dismiss pending led to get -- pending legislation. set to go on was next month and now we're hearing that cbs and national amusements this miss pending litigation. cbs has named joseph as president and acting ceo. apple suppliers are racing for a full-blown trade war. su keenan has the latest.

cbs, there are fast-moving details. what you saw with cbs is in july the new yorker first moved six allegations. that is when negotiations began package.t les moonvess contractvery unique that $50 billion we need to be paid to cvs if he left before the natural ending of his contract. if he left before the natural ending of his contract. but now the new yorker has removed and others story with its more women coming forward. 12 women total with very serious allegations of sexual misconduct , physical assault, sexual and in therassment,

latest story, allegations from a number of women on a culture at allowingrk that was sexual misconduct and harassment to continue. cbs is reacting quickly. word was the announcement would come monday. it has now come at this moment itt the ceo is leaving and that a interim cbs -- ceo has come. this stock will be on the move when we open on monday. >> implications for the viacom saga. is there more clarity over the shareholder battle? >> there was a strong move between sherry redstone who had opposed les moonves and what the board was taking on.

now it looks like that is being settled so cbs might move forward with more clarity. plenty more to come on daybreak asia. this is bloomberg. ♪

are 30 minutes away from asia's first major market open. >> it is 7:30 in new york and markets have closed. it is rainy and cloudy. the s&p 500 took a hit. you the first word news with kathleen hays in new york. >> swedish prime minister says the general elections produced no clear winner. social democrat coalition

had 39% support. the populist lead pulled 19%, making them they'll likely key maker after an election dominated with immigration. france is confident italy's government will reach eu budget roles and the finance minister insists there is no threat of overstepping the mark. he says ridge resting public accounts in france was not negotiable but declined to say what measures need to be taken. i have had a lot of discussions and i think he is fully aware of the importance of -- i think i am confident that all the italian leaders are aware of their responsibilities.

record is pumping oil at levels. 4.4 million barrels a day as agreed under the opec restrictions. demonstrators burned government buildings and the iranian consulate for demanding jobs. south korea has become the first of the top three oil customers to stop buying crude oil from tehran. they imported no oil from tehran last month. china and india have restricted their orders. korea is the first to cut off all deliveries. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> we are counting down to

another major market open in the asia-pacific. sophie, asia is in for another episode of monday morning blues. e.m. is not out of the storm. >> a lot of ingredients playing out to weigh on market sentiment. let's use the aussie dollar as a barometer. low as at a 2.5 year trump threatens tariffs against to china. westpac is adding to the downside outlook for the aussie. upcoming chinese inflation data is due at 9:30. they are expected to moderate to 4%.

we have the final read on japanese gdp data in 20 minutes. becca put japanese bond traders in play. put japanese bond traders in play. moonves is departing as chairman and ceo of cbs. when it comes to its agreement with national amusements, they have agreed to dismiss pending litigation. we saw shareholders trying to negotiate a resolution a going to trial next month. we are seeing some clarity over the viacom and cbs drama that has been playing out. it has been a quick moving story. reportthe new new yorker

talking about another six women potentially coming out and accusing les moonves of sexual misconduct on top of the first six he had been negotiating the exit settlement four. some clarity at last. and there iss out a new president and acting ceo who has quite a task ahead of him to try to rebuild morale. >> let's talk about president trump and his threats to double down on china. our next guest says the escalating trade war presents the biggest threat to u.s. economic growth. let's introduce the policy director from the mitt romney presidential campaign. it is great to see you. last time we spoke you are confident that the republican party was being underestimated because of the solid economy. even the latest threat on trade and tariffs, is that still your

assessment? >> yes. the question is when we will see the negative impact on the rhetoric on trade, when will it begin to show up in the u.s. economy? we have had several months in a row of robust job creation. we have seen relatively strong gdp growth here in the state over the last two quarters. so the big question is when, and if it is not for the election, then republicans are being underestimated in terms of their ability to hold on to control of both houses of congress. >> we saw candidates talking more about guns, immigrations, other social issues. what makes you think this will be the key driver for the midterms in november? >> special elections and midterm elections behave differently

than presidential elections. with midterms, if you go back historically and look at the last several, we see elections predominated by the partisan basis of each party. those bases are motivated by issues. one issue is the strength of the of the economy. the republicans have the strength going into the election. if we see a midterm electorate that is similar to previous ones, there is reason to believe the republicans could do better than people expect. challenge is whether trump's lack of popularity among non-republicans will be a drag against republican candidates. >> to turn away from the talk we had last week

the newward's work and york times op-ed. how is this affecting his popularity? >> for the president, this week has made him feel cornered. attacks very much under and it has resulted in aggressive tweeting, which is usually what we see from him when he feels the need to respond, but generally speaking there is an atmosphere of concern about what we have seen from the bob woodward book and the anonymous op-ed. in terms of how it affects his popularity, what we see in the u.s. is that people's opinion of the president are really largely formed. if you do not like him, this episode is another proof as to why. but there is a significant percentage of the republican electorate, almost 90% that has

a positive view of the president and something like this does not affect that view of him. they are positive toward him and will continue to be positive toward him, regardless of what developments come out of the media. does this raise the risk of a policy misstep? is this why we saw the additional raise of 267 alien tariffs? $267 billion trade is the biggest potential misstep this administration could take. the president has ramped up his rhetoric toward china and indicated they will proceed with one round of tariffs going forward, but could potentially have another round after that.

that is a big challenge politically. how does this play for the president? this might hurt the u.s. economy in the long run, but in terms of the short run, it could be helpful. it is difficult to tell at this point. it is a long-term problem for the economy, potentially a short-term gain for the republican party. whether or not the book and the op-ed damages the president's credibility, it isn't separate issue. but how concerning is it that we -- this is a separate issue. but how concerning is it that we keeps seeing that the president is not committing the loyalty of people in his administration? >> we do not know the identity of the person who wrote the op-ed. we do not know how senior this person is. assuming it is truly a senior

member of his administration, it is deeply troubling. we're not talking about people who say it want to go in and convince the president otherwise. times you have disagreements with your principal and it is ok to make that case. but this is different. we are seeing people who are saying, we know the president has decided one thing, we are going to go in do another. very damaging and corrosive to the administration and the nature of american democracy. these individuals are appointed officials, appointed by the president. >> let's talk about another is onent, barack obama the campaign trail. he spoke in illinois and is going to other places. how convincing was he in making the case that the gop is allowing a lot of the andident's misbehavior

things the present -- things the public does not like? >> it depends on the audience. he spoke in southern california yesterday in an effort to convince a number of voters who are more independent and moderate, in districts where hillary clinton did well in 2016. the effort was to speak to those voters. if he gives a speech like the one he gave yesterday, trying to tie the gop to everything trump does, it could be effective with moderate voters. but he runs the risk of motivating republicans who do not like him. midterms are about motivating the respective political basis. there is no greater motivator for publicans and barack obama. he can convince republicans to vote against the position he articulates. brett kavanaugh's

confirmation hearing has been dramatic. is this a potential game changer for the next 20 years for the u.s.? >> and beyond. brett kavanaugh by historical standards is relatively young. he could be on the court for over 30 years. the issue is he is taking the place of a supreme court justice, anthony kennedy, who was largely seen as a swing vote. so someone like brett kavanaugh who has been a reliable has shownve, and views that are consistent with conservative views, it would change the dynamic of the court for many years to come. pivoting away from asia, the view you could take from

president trump canceling high profile visit that were scheduled for the region. does this add fuel to the narrative that you have beijing extending itself and the u.s. turning away from the region? >> this is a huge challenge for the geopolitics of the region. the u.s. signals that asia is less important and we are paying less attention to what is happening there. it is a huge problem from an economic and strategic perspective and china is positioned to fill the vacuum. leadership of u.s. in the region is a huge problem and i hope the president and administration commit to being present in asia economically and strategically. >> always appreciate your thoughts on time. thank you for joining us from the hoover institution. up next, the road to recovery.

we will bring you numbers from japan as they cross the bloomberg. ♪

>> we counting down to asia's first major market open. japan's future is down 6/10 of 1%. this is ahead of major data points coming out in a few minutes here and gdp second-quarter final numbers and reactions and trade balance. we are expecting gdp growth to be revised upwards. this is daybreak asia. japan's second-quarter gdp is due out in minutes. we'll get a better view of the rise -- of what the revised number is. we have strength across private expenditure.

for all of the talk about shifting policy from the bank of abe staring down the barrel of another turn. the economy is plodding along. >> that is right. it is on autopilot and that is good news. the economy in japan has not been this good in almost 30 years. finally there is wage traction and japanese companies are investing in their business here in japan. it is good news. the gdp report in a couple of minutes will be interesting because capital investment expenditure, we should be revised up. the data points that way. companies,is large reinvesting in the businesses

here in advance -- here in japan, that is the focus. it gives sustainability to the cycle. >> what happens going forward, seeing that we sought natural disasters in japan like the earthquake? >> the irony is that the public the disaster countermeasures, rebuilding japan, it means the fiscal will stay-- spigot open and support domestic demand. the irony is from a growth perspective, the bad news on the weather front is good news for demand >>. what about the politics side of things? we're expecting prime minister abe to win the liberal democratic party for another three years. could his third term be the

charm? wish it is.and that is what global investors want to see. the reality is economic policy is not an issue in the ldp raise. have hisbe, we contestant, but it is not about major economic policy. it is more about security policy and global policy. that is the issue at shows you the economy as well. >> we have the gdp second-quarter rising 3%. the nominal gdp rose 7/10 of 1% on a quarter by quarter basis. slightly better than some estimates. 3%.he number is

more than the expected 2.6% growth. seeing gdp private .onsumption numbers up zero .7% it is higher than the estimate of ¥1.9 trillion and higher than of ¥2evious month trillion. numbers on angdp upward trend. what happens if president trump -- trying toading do something with a trade relationship with japan? >> you are putting the finger on achillesles he'll -- heel.

tariff is on car parts. that really hurts. a 25% tariff could cut car company profits i of 250%. to 50%.ts by up >> could this have an impact on the currency and what happens to the economy due to the fx rate? on the currency, you are right. been a bastion of stability, the dollar yen exchange rate. producers are happy to see the depreciation of the chinese currency has come to an end their it in many -- has come to an and. the deep creation of the

renminbi since the start of the year was a headache for some construction machinery companies in japan. let's hope the depreciation of the renminbi is coming to an end. the low hanging front -- low hanging fruit has been picked. do you expect abe to make any progress, getting women into the sales course -- salesforce? hopeful there will be a agenda.gulation what i am looking for is for prime minister abe, once he is reelected, to reshuffle the cabinet and streamline the private sector advisory groups like the competition council and

fiscal and advisory council. blood would be a strong message that deregulation nation is back on the agenda. >> we always appreciate your thoughts. not doing too badly in light of all of the volatility globally. plenty more to come on daybreak asia. this is bloomberg. ♪

>> this is daybreak asia. after a countdown to the market open, here are some stocks we are watching. take a look at the apple suppliers, especially the koreans and samsung.

taiwan.er stocks in apple's asian suppliers could fall after the maker was warned a list of proposed tariffs would affect many of their products and increase cost. now president trump is threatening another $267 billion of tariffs. we are expecting the unveiling of the new iphone and other apple products. no doubt you would have watched the u.s. open women's final. osaka became the first japanese person to win a grand slam single title.

ramin is expected to get a boost as they sell a package featuring her image. market open is coming up next. this is bloomberg. ♪ xfinity mobile is a new wireless network

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haidi: asia's first major markets just open for trade. y: and i'm in new york. sophie: welcome to bloomberg daybreak asia. this monday,es president trump says he is ready to go. ana-pacific markets with eighth straight decline.

shery: north korea marks 70 years with a parade. yourngton welcomes icbms >> a down -- icbms. here is sophie with the latest p.m. sophie: a risk off -- latest. mood after we off saw second-quarter manufacturing volumes decline. shares low. a two and ag near half year low. japan's economy grew faster than forecast at 3% on a quarterly

basis. that is not lifting the sentiment. in the jgb market, we have the boj buying. the 10-year yield for the ust up this morning. inflation figures from china do. -- due. reckons -- guru reckons that will spark a bond rally. apple suppliers in focus after apple warned that tariffs on chinese products could hurt u.s. consumers. radar. also on the it is up about half of a percent. we see some movement in korean tourist stocks.

watching the korean peace talks north koreans town down the military parade. globeright is the biggest owner of tennis wear and equipment. haidi: i like the two-minute noodle maker. the first word news, the latest with kathleen hays. kathleen: japan grew faster than forecast in the second quarter. welcome news for shinzo abe and the bank of japan. the economy expanded 3%, topping estimates of 2.6% and way above the 1.9% in the initial prediction. minister says the

general election has produced no care winner and he will stay on leader until parliament has a chance to decide. democratve a social coalition a slightly less support than the opposition. with therade surplus u.s. rose to a new high come even as overall growth slows. president trump's threatens all exports to the united states. governor is warning about the long-term effect on confident, saying market sentiment could easily change. >> maybe they become nervous. nobody really knows. suddenly, there is a trade war. may change their mind in

terms of stock market. ma is expected to step away on monday to focus on his first love, philanthropy and education. several sources say he will make the announcement today, which happens to be his 54th birthday. the ceo role in 2013. , someday, very soon, i will go back to teach. this is something i have more confidence, i think i can do much better than be the alibaba ceo. kathleen: north korea celebrated 70 years of existence with a tone it down military parade. -- rvers say that

trump claimed credit for the change, calling it a positive statement from north korea. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kathleen hays. this is bloomberg. ♪ shery: president trump threatening to double down on his trade action against china. stephen engle is here with the latest. president trump goes along with all of his trade threats, that could amount to the entirety of chinese exports to the u.s. there could be some dark days ahead for the economy there. stephen: i friday, we were expecting him to press the button on $200 billion of additional products from china. hetead of doing that -- hasn't ruled that out, by the

why-- he instead said, hey, do we put duties on all exports out of china to the united states? to hundred billion dollars, but an additional two did $67 billion, so $467 billion. that is on top of the $50 billion that have already been enacted. that would cover all the exports, 505 ellen dollars worth billion worth00 of chinese exports to the united states. he's been consistent. he said it again on friday. the days of being ripped off by other nations is over, he said. he is ready to tax all chinese imports at short notice. at -- cast desire china.re at bemering china seems to

messaging to his supporters. there's two sides to the story on the export numbers. on the one hand come of the trade surplus with the united states soared to a record in august. that would not necessarily play to the trump argument. however, it is a bit of an aberration because a lot of traders frontloaded their order in august ahead of that expected increase in tariffs. it might not be a true representation of the picture. you have to look at the exports. they were of 8.9%. exporters are having a tough now.right we saw the government step in with new export rebates, tax rebates, on 397 products to ease the pain.

if there is one bright spot for the import export seen in china seen in china,t help, domestic demand is holding up. story fitting into bearishness. last week, we had a.m. -- in equities falling into a bear market. joining us now from hong kong is shawn dobby. wells fargo saying switch from u.s. bonds and em stocks. there is a plethora of opportunities if you are a long-term investor. >> that's true. it's all about timing. the first thing to say is that, so far, the data points in

global trade has been reasonably good. not been dueem has to the trade war, but the balance sheet management by the feds. in october, the balance sheet started to be run down. this soda to reduce dollar liquidity and made it very painful for a number of emerging markets, which have absorbed a lot of dollars over the last eight years and issued a lot of dollar debt as well. you've got a double whammy for a young. you not only -- for the yen. you know have the fed raising rates, but the fed is running dennis balance sheet. every month, it is drawing down excess dollars from the system, which is painful for the countries that have borrowed in dollars or have seen large capital inflows from the u.s. haidi that tells me: the turning

point, the catalyst could be a more supportive regime in china. >> that's true. in our own view, there was a significant policy u-turn in the last six to eight weeks, not just in terms of the fiscal start where they seem to have backtracked and allowed a lot of infrastructure projects go ahead, but more importantly from the pboc, we have seen a .ignificant widening so there is policy loosening again from china. probably does give a softening to a difficult period for em. unfortunately, for em, it will be down to the fed balance sheet. going into the end of the year, the dollars are likely -- the dollar is likely to strengthen with a self reinforcing wave of people buying the dollar. getting some lines on

the chinese noodle ipo. secured, the ipo looking at a $960 million uptick in its hong kong ipo. how houses among the investors. what a torrid time to be coming to market right now. >> in some ways, it is really. it's not because, again, the hong kong economy is holding up really well. at the beginning of this year, the retail sales numbers were really good. that credit data has been very good as well. it's just the fact that there's a cycle in hong kong which revolves around the bounce sheet of the hkma. ofbably toward the end

october, maybe early november, the hong kong aggregate balance, which is the excess like me in the interbank market, that will go back to where it has been for the last 25 years. from that point on, we think the interest rates will move up to reflect the outflows from hong kong. once again, hong kong is courting this vice of the emerging markets, where you have a strong dollar and dollar liquidity moving out of the system. ery: we have seen these moves by the u.s. administration to tighten regulations my comes to chinese investments and other investments that could hurt national security. does that mean there is more capital left in the region in asia for business investments? >> that's a good question. i think that one plays out to a much longer period of time. that when it is more link to the problems of a trade were, in

which, over time, you don't see many recycled back into these economies and vice versa. i think it's probably a longer-term theme. but one in which it is typically late to the trade war we have -- links to the -- linked to the trade war we have at the moment. we will have a different landscape for global capital flows. at that point, china's r&b more -- - rnb becomes ofdi: what sort opportunities can you gaze from this sort of economic data? >> that's a really good point. i think it links into the fact that, so far, there hasn't been any evidence that the global trade war has been detrimental to the global economy. expanding, are still a really good i number for august from the u.s.. if you look -- a really good ism

number for august from the u.s. things on the ground are very vibrant. the way i would look at it at the moment, provided new orders are growing, the global economy is taking the trade dispute on the chin without too much of a second round effect. it is very much linked into what is a very good season. this is about the best season of the year, and judgment will be sometime in the fourth quarter when we have to look at the new order's minas inventory -- minus inventory. financialsee conditions remaining accommodative. does that favor the u.s. compared to the em for the time being? -- the u.s. the use has been a dollar home, dollar assets in general have been very

well through the whole of august. em is not a homogeneous set of equity markets anymore. it is down to parts of north asia and one or two parts and perhaps russia and parts of eastern europe. this story for the u.s. is to the level of which good news is printed in. may be the best place to be is in parts of europe like denmark, netherlands, germany, and japan comes out of this very well. i think it is a good place to be over the next six months. always appreciate your time and your insights. recapping some of the breaking news on the bloomberg. haidilao is close to

the $1 billion public offering we were looking at earlier, also more information about cornerstone investors. so more details of that as they become available and as we get closer to a potential date. still ahead, we will discuss china's consumer and producer inflation or. looming trade tariffs darken the outlook. shery: up next, what the numbers mean for japan with current account to data from tokyo. this is bloomberg. ♪

♪ haidi: this is daybreak asia. shery: as investors watch that

, one indicator in the last few minutes, japan's second-quarter gdp numbers. kathleen hays is here with a look at first glance. is gdp.: the big focus we did have that contraction that has been followed -- in the first quarter, followed by recovery in the second quarter. the numbers look better than they did before. you will see -- start a new, right? here is the first quarter contraction. it followed nine quarters of growth. and now, on a year-over-year basis, it is 3% year-over-year for japan gdp. this is good news.

within that report, business spending up 3.1%, more than forecast. consumer spending up nearly a full percent in one with expectations. that was all good. we also got the july current account. on an unadjusted basis, it did widen to over ¥2 trillion from ¥1.9 trillion. on an adjusted basis, a --inkage of $1.7 trillion ¥1.7 trillion. the merchandise trade balance when into a deficit because of a higher overprice bill. there is concern, trade were coming struggle yen, could slow down exports them a make it harder for the boj to reach the elusive 2% target. an interesting story at would like to recommend over the weekend, bank of japan will take time before making its next steps. this is according to ask official who was at the boj from 2006 to 2010 in a number of

positions. he is now at the ricoh institute for economy and sustainability. bottom line, he says, at the july meeting, the boj made some tweaks. now they will not do anything else. they will need to be much clearer about what their intentions are. kuroda leading the boj with widening the ban for yield curve control, the band around , an for that 10-year jgb early sign that, when they are ready to a, that is one of the doors a could start walking through. the boj has been careful not to that.at -- to contain at the next meeting, it will not be so much of a focus. we will have to wait until the when there is a monetary report. the trade deficit is expand by higher oil prices. not a full speed ahead for the

boj, but makes them feel a little less concerned. haidi: a robust scenario. thank you, kathleen hays. coming up ask, jack ma is preparing for the next age in his life. we are on the watch for him to announce his retirement from alibaba. the latest in just a moment. this is bloomberg. ♪

♪ is daybreak asia. jack mize expected to step away monday from the company helped launch to focus on his first love, philanthropy and education. he told bloomberg last week he is looking for a change of life. several sources say he will make that announcement today, his 54th birth day. and veryk, someday

soon, i will go back to teach, go back to education. this is something i have more confidence -- i think i can do much better than be the alibaba ceo. haidi: how much is this retirement or's succession will have an impact on the company itself? thatis a day is something jack ma has been preparing for a long time. as early as 2013, he stepped down as ceo of the company and excused himself from the daily responsibilities of the company. aibaba has put into place partnership structure, 36 people, that oversee the company's overall guidance end of element. sewed development and jack ma stepping down now will not be a huge impact on the company. but the question people will be

asking is can you really take alibaba out of jack ma. this company was founded by him. so much of him -- the company reflects his personality. even the chairman says that he wants to take a further step back away from the company. asking, when it comes to big strategy guidances, whether jack ma will continue to have that kind of influence over alibaba. shery: who will take over now? quite a twist of events over the weekend. reportsly, we saw other senate jack ma would step down as chairman on monday. but then the sem p, which is owned by alibaba, issued a report saying that jack ma will stay on as chairman as of monday. they are expected.

to announce a succession plan early this morning, probably as early as this morning. through those announcements, we will find out more details about a succession plan. shery: thank you. plenty more coming up. we will be talking north korea next. this is bloomberg. ♪

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haidi: we are an hour away from the open of trading in hong kong. headwinds of emerging markets as well as trade tensions continue. looking down across the asia region. shery: you are watching daybreak asia. let's get the first word news from kathleen. : boris johnson launched a new bid for power, calling

theresa may's brexit strategy a humiliation. johnson ruled that her proposal will leave britain having to accept eu rules without any say on making them. thece says it is confident populist government will not reach eu rules. said progressing public accounts and france were not negotiable, but declined to say what measures would be taken. he also said italy would stay within eu guidelines. discussionsa lot of . he is fully aware of the importance of the decisions that will be taken for the next interim budget. i'm confident that all the

italian political leaders are aware of the responsibility. athleen: iraq is pumping oil levels. it is producing crude at 4.4 million barrels a day, agreed under the opec restrictions. burned government building demanding jobs and basic services. south korea has become the first to fulfill demands to stop buying oil from iran. china and india have restricted their orders in looming sanctions from iran. but south korea is the first to cut off all deliveries. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries.

i'm kathleen hays. this is bloomberg. ♪ haidi: thank you so much for that. downward pressure in nearly part of the asian open. robust numbers, wage growth numbers from the u.s. on friday. investors concerned about a more confident than expected fed. -- y: that could sophie: that could add to the risk off sentiment in asia. banks are waiting the most in sydney. national australia bank has offered to keep its key homegrown -- key home loan rate unchanged. the kospi headed for a fourth day of losses. the be ok is considering lowering the 2018 gdp growth forecast.

the japan economic outlook may be brightening after growth came in better than expected in the second quarter, stronger business spending help in the picture. stocks adding about .2%. gdp data seen as another step for the bond markets, slightly higher this monday. jgb futures are pointing to more. stocksterrorism following. of an outbreak in korea. pay stocks gaining ground this morning. of gs engineering going up. shery: we will be speaking about north korea.

downyang staging a toned parade, lacking the more provocative weapons, such as icbms. president trump called it a positive statement. peter, that is what the president is saying. water north korea experts saying? peter: clearly, the parade, without -- they consciously held back displaying nuclear ballistic missiles, the ones they displayed back into very. two -- in february. it sent a clear signal to the trump that can jump on is looking to revive the talks that have stalled recently -- that jong-un is -- kim looking to revive the talks that have stalled recently.

the peace talks and the details about denuclearizing the peninsula back on the table. president trump been mentioning north korea quite often, mentioning a letter by kim jong-un. how confident can we be at something will happen on this front, something more than just being symbolic, something concrete? peter: trump does have a vested interest in getting something done. obviously, this is a great positive distraction for all the domestic issues he is facing. so any movement on the north korean issue is a good thing for trump at this moment. i think he will push for something major. when that will come, it is not certain. the question is, whatever agreement they come to, the opponent tatian, how long that would take -- the implementation, how long that would take.

kim jong-un has had a lot of lip service about denuclearizing the korean peninsula, but analysts question whether he would actually give up all his nuclear weapons. haidi: the devil is in the details. the north wants a treaty to formally and the -- end the karen war -- end the korean war. peter: they have engaged in multiple, social, family reunion types of events. they are trying to open a liaison office in north korea, perhaps reopen joint industrial complex. there is a lot of activity, but nothing will happen concrete until there is an agreement between the u.s. and north korea, particularly over the sanctions. unless many of the sanctions are

lifted, south korea cannot do much. declaring a peace treaty would be meaningless. haidi: thank you so much. the eastern economic forum begins on monday. president putin expected to meet with prime minister shinzo abe and premiership thinking. -- premier xi jinping. what are we expecting from these meetings? putin will be meeting with a host of leaders from the region. andt, prime minister abe next day the chinese president and then some officials from south korea. there will be a host of meetings and discussions. the first with prime minister abe on how to have some joint economic activities on the disputed islands.

beo, a lot of this will economic in nature but there will be talks about cooperation, how to work together in the region despite some obvious differences and tensions. haidi: what other leaders are set to attend? there is kim jong-un among them? >> a confirmation has not been received. at this late time, it is uncertain. one would expect perhaps not. another big item of discussion, someone who will not either, whether president trump and mr. putin will have meetings in the future. they had that famous summit that the u.s. said wasn't a summit in the spring, but whether they will meet again is a matter of some dispute. over the weekend, on the sunday

talk shows, there was some discussion that they are not having it. on the other hand, they are having it, that the president is open to it. that is the backdrop are subtext over whether those meetings will occur. ere continues investigation in the u.s. that will be a backdrop, some who is not there, but talked about certainly. what do we know about a possible summit between leaders and is stumble -- in istanbul? >> there is talk about that as well. i think we will know much more in coming days after these meetings are held,. part of these discussions often is how much they are talking a again.talking

i'm sure there will be plenty of talking about talks, including that future meeting you mentioned. shery: that is where diplomacy is. thank you. coming up next, a look ahead to the leaders in china and what they may say about the economy. this is bloomberg. ♪

♪ shery: this is daybreak asia. di:

central bank governor says investors may be getting nervous. >> how much does the trade were actually hurt the chinese economy? what are the tools that china can help in sustaining and countering the trade war? 's monetary policy? policy possible? a complicatedhave calculation, a mathematical model to calculate they in negative impacts of a trade were on the chinese economy. [indiscernible] it has more impact.

things., there are two one is confidence. people may become nervous. nobody really knows. suddenly, there is a trade war. mind in change their terms of stock market. so this kind of behavior is much the impact. , in addition to the trade war, when we see the u.s. ,ign shins -- sanctions

emerging markets, turkey, russia have constant depreciation. so that makes us nervous. hopefully, the sentiment could gradually stabilize. expecting the latest data out of china in the next hour. consumer price inflation likely held steady at 2.1% while reduce or price growth is expected to have decelerated to 4%. what should we be looking out for? well it will it tells about the health of the economy? the most important part, i don't think it is about the inflation data. china's inflation is not affected by the u.s.-china trade war. you look at the top price index and the china cti is not

something so close. so even though we have the thelation of the trade war, inflation may be quite minimal, maybe around 0.2%. we will have to see how manufacturing is doing. we start to see the manufacturers in china start to feel the pain from the trade war. that could be more important, looking forward to the coming days. see chinaalready announcing measures to support to those exporters. where should we be looking within china to gauge with the trade war is doing? tradethe export data, that we saw this weekend? >> that's right. exports are important, but we

did not see a strong impact. so far, we only saw the $50 billion in place. it does not have a significant impact. u.s. is exports to the being distorted. other than the trade data, the pmi will be another important indicator. we try to see the potential change of the manufacturing sentiment, regarding the potential trade war. in the latest numbers august, we have seen stabilization of china's bmi -- pmi. but we start to see the decline of thebecause manufacturing base in china. bmis the first time the in 2018.w 50

we start to see more trade war on china's economic activities. haidi: that decline confidence could be in the pmi numbers. i want you to take a listen about what policy priorities should be. for china, number one, they are riding an asset bubble. currency.keep the distortion.nd of haidi: the number one priority support.ly be'

the growth is important. they need to strike a balance between growth and a financial risks. in the end, we need to contain the financial risks for more sustainable growth. that is the more important for china. maybe we should expect more measures from china to support a mess to demands. the best way to support domestic highests why they investment guide for structure highestnt -- investment, infrastructure investment. assist -- and for more sustainable growth, are you going to contain the financial

risks in china? revising the balance between financial risk and growth. the second day he said they priority is maintaining stabilization in the currency. trump goes all in, 200 billion dollars, and then another $267 billion on top of that, what happens to rnb? will put pressure for the rnb to weekend from here. from here.n the reason why they have been under pressure for the past two months is not because of trade war, but because of policy expectations. china has shown there is limited

downside room. maintain the measure between the u.s. and china. the trend were be a potential white card. china will not use the currency as a weapon to fight the trade war. in june, people were very scared. but now china has made very clear [indiscernible] onmay see some impact currency, but not what we saw in june this year. haidi: yeah, don't bet against the pboc. thank you. remember, bloomberg users can look at the chart that we use.

analysis.n key this is bloomberg. ♪

shery: this is daybreak asia. haidi: let's get a quick check on the latest business flash headlines.

raising 900 $63 million in a million inpo -- $963 a hong kong ipo. haidilao is known for its customer service. shery: toyota says it is planning to resume production in hokkaido. makingut down vehicle throughout japan, halted temporarily to prevent supply chain disruption. the plants have been restored and all of hokkaido. has suspended for exports. more than 600 picks will be cold after an outbreak -- culled

after an outbreak. it may be a link to recent outbreaks in south korea and russia. shery: coca-cola is moving forward in horlick's. coke is preparing a first-round bid. the deal could be worth around $3.9 billion. last month, coke paid within $5 million for costa as it looks to diversify away from soft drinks. haidi: let's take a quick look at how markets are setting up for the start. we are seeing a bit of upside 225,we see the nikkei getting a boost on that better report.ected revised

kospi trading flat at the moment. aussie stocks trading lower for an eighth straight session. shery: let's see what futures are doing. we now see singapore driving 1.8% down, while a taiex futures in taipei looking up .2%. kuala lumpur is closed today for the king's birthday. that's it from daybreak asia. our market coverage continues as we look ahead to the start of trading hong kong, shanghai, and shenzhen. haidi: china inflation numbers on tap. stand by for all of the market action. the china open is next. this is bloomberg. ♪

rishaad: 9:00 a.m. in hong kong. in singapore, and :00 sunday evening. david: you are watching bloomberg markets china open. ♪ rishaad: china's trade surplus region a new high. trump saying he is ready to go. david: stocks treading water right now, early trade on monday

as investors