haidi: good morning. the markets are just an hour away from the open. welcome to daybreak asia. our top story this thursday. separate a muted start. while also rising on the back of lower u.s. stockpiles. the escalating trade war claims another.

the pledge from last year. winding up the historic summit. tremendous progress. shery: let's get a quick check of how the u.s. markets ended. stocks the little higher as markets digested the ongoing nafta negotiations. higher bys lifted train sensitive stocks like caterpillar. by banking shares. we saw the 10 year yield soared past 3%. take a look at what oil is doing because we saw oil jump past $71 a barrel. it has been rising for the past three sessions. oil prices. let's see how all of this is being felt in asia.

sophie: we are getting ready for a mixed session. japanese stocks could be at a three month high. tight the race might be. an interesting week for korean investors. this as they wrap up the visit which kim jong-un pledged to move towards denuclearization. take a look at what is going on in new zealand. looking to snap a five day event. the kiwi dollar gaining ground jumping about that u.s. handle greenback after the better-than-expected gdp that we got to the second quarter. up.s indian markets are closed this thursday. in hong kong, we will be welcoming the latest trading debut. so much for you

that. a lot to look out for. let's get to first word news. presidentcommission says the u.k. is still far from a brexit deal. irish prime minister added to the negative tone, saying he sees no progress in negotiations . the irish border remains the major hurdle. opposed. also remains i believe this is the right proposal because it maintains trade. it is the only negotiable plan on the table that delivers no hard border in northern ireland. create ae promise to million jobs in the united states cannot be met. worsening relations between america and china have destroyed

the basis on which he made his pledge when donald trump became president. he said he would continue to try to keep ties between the u.s. and beijing but warned that the terrorists should not be used as tariffs should not be used as a weapon. shinzo abe expected to be reelected. shinzo abe expected to be reelected. it comes from a solid economy and a hefty dose of good fortune. victory against his soul rival would help make him make -- the longest serving prime minister. summit.-than-expected talks may help revive negotiations. president trump is healing the trip as very exciting and a sign of tremendous progress. it is not clear if kim jong-un's

promise to close a missile coincides with the call to denuclearize. 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. this is bloomberg. the u.s. and canada will resume trade talks on thursday. is looking unlikely this week. the countries remain at odds on core issues. however, canadian foreign minister says that the talks are cordial. constructive, detailed meeting with the team. to bemosphere continues cordial. there is a lot of good faith and to be cordial. there is a lot of good faith and

goodwill on both sides. our officials have more work to do and we will continue working this evening. our washington reporter is watching. ande deep core divisions the dispute panels. the parties are far apart on them. >> that is correct. canadian report is back in washington having talked with her american counterpart. she said they would continue talking tonight and meet again tomorrow. she said the talks were cordial and constructive. she also said there was more work to do and we know there are's uncle big issues that remain between the countries. dispute resolution panel that they want to ask from the framework. that is not going to happen. dairycess to canadian markets have been long-standing divisions between the two sides throughout the entirety of the talks.

it appears there needs to be big movement to get to any kind of deal before the end of the week. haidi: the end of the week is when the next deadline is. we do have a good idea of why that deadline was it knowledge. canadian official earlier this week said thursday was mark -- widely seen as the deadline. we do have a good idea of why that deadline wasnegotiators hae kind of agreement by thursday. one is that once a high level agreement is reached, lawyers have to turn that into a legal text and formalize it. ofy wanted to turn a copy that agreement over to congress by the end of the month. we know that negotiators want to finish the deal to sign off before mexico's new president assumed office. movement, itor

looks unlikely that they will meet that deal. they have blown past deadlines before. we must remember overseeing all of this is that threat to move on without canada. if you decides that the deadline has been breached, that threat remains. that has to be sparingly negotiated. sophie: let's -- shery: we are hearing president trump saying that he wants to hear directly from the woman who is accusing brett kavanaugh of sexual assault. could his nomination be at risk? >> it looks to be in some trouble at the moment. republicans are going to move forward. they want to hold another hearing on monday. they invited kavanaugh's accuser and brett kavanaugh himself to speak to the committee publicly or privately. his accuser has yet to say whether or not she will attend.

like to see an fbi probe before she appears before a senate hearing. it is unclear if she will attend. if she does not attend come some republicans have called to hold a vote that was already scheduled for this week on monday or later next week. unclear whether they would do that. still unclear other that would further delay it or not at this point. shery: we are hearing that -- thank you so much. bloomberg washington reporter greg sullivan. let's go back to trade. whether the trilateral nafta or the dispute between china and the u.s. nathan served as under treasury

undersecretary of the treasury for international affairs in the obama administration. thank you so much for coming in. let me start with nafta. i saw you smiling. abelieve there is a chance of trilateral -- do you believe there is a chance of a trilateral nafta before the end of the year? >> it is in the u.s. interest for there to be such a deal. the probability that the administration will be able to get the deal done. needarly, the canadians the deal. negotiation is the negotiated for months. now they put the canadians and a place where you have to go through these very complex negotiations in a matter of a few days. because what they say at the end of a tough session is that

there was a good time to the discussion. standard line in diplomatic circles. it raises a lot of questions about can they meet the deadlines? my expectation is that someday i do notll be in, but know if it will be imminent. there will be talks tomorrow. give us the numbers. if there is no nafta, if the terrorists are imposed, how will riffs are imposed, how will it affect the u.s. economy? to do not have a lot of experience assessing the impact of tariffs on modern economies.

there is a little bit of a science. we have some idea of how imports and exports respond to price changes. some guesswork. at the end of the day, as they go on, how does that impact consumers? goods will be more expensive for the u.s. consumers and firms, which means real expenditure and spending power is down. when china retaliates and reciprocates, that means u.s. exporters in china will be somewhat less competitive than they are today. somemallreciprocates, that proe

kind of signature in terms of consumer and business confidence in the u.s. you can make some guesses as to what those numbers might be. some kind of signaturemy feeling is e impact has been minimal. almost imperceptible. continues to prosecute this trade war, license is that some changes. the it has to go further than what he is articulating. do you agree with the likes of wilbur ross that they will not feel the impact of the because it will be so small and spread out? fed will be the looking at longer-term? i think the impact on consumers will be gradual and incremental. trump continues to pursue a

trade war. i think that there will be some effect that consumers will feel. is also important is that china is retaliating. the sectors that china puts tariffs on will feel that. feeling thee effect. that reality is something that the administration will have to deal with. so far, that has been the agricultural sector. respondedtrump has with a series of subsidies. is he going to be able to do that for every sector that is adversely affected? that will be very difficult. we know that china is

juggling its own goals. keeping stable growth. it wants to maintain a level of employment. what can you that would be double -- acceptable to washington and enough of a political win for president trump? it is not something that will happen this double year. i think that is the big question. i wonder if president trump himself could answer that question clearly and concisely. what we do know is that president trump once more than china has offered so far. forident trump is looking more than purchasing the go five natural gas and more agricultural exports.

one key issue for the white house is intellectual property and protections for u.s. firms in terms of intellectual property, both u.s. firms firmsing here and u.s. that are operating in china. there aren, i think important issues about a level playing field for u.s. firms as they compete in the chinese market. how china would credibly make a commitment that we are going to fix our intellectual property they can make all sorts of promises, but how will it be done in a credible way? it is not clear to me what exactly -- as i talked to people who are in contact with the chinese, the chinese are asking what exactly is the white house looking for? that is the issue. shery: that is what i am hearing from is -- from officials as

well. the library showing you this chart where you see the s&p 500 to 2019 forecasting. getting higher the last couple of time -- couple of days. pretty constant. onare not feeling the impact consumers and businesses. when will this be dispelled? >> you are absolutely right. the u.s. economy underneath this is red hot. one of the reasons why the economy is so red-hot is because it was -- is being supported by the tax cut. the stimulus is giving him some margin to prosecute his trade war. that through 2019 , the macro economy will be fine. as the trade war process, there will be some small that mounting

impacts on consumers. there will be certain sectors that will feel it. thank you so much for joining us. we will have to leave it there. with us in new york. still have come breaking down the korean summit. he says slow progress is still better than no progress. shery: and shaping up to be the battleground for the fed rate hike. this is bloomberg. ♪

shery: this is "daybreak: asia." haidi: the bank of japan may know over changes when it wrapped up. said he is watching the impact of extreme monetary stimulus on financial stability.

kathleen hays is here with more. the message over the past few weeks has been about sustainability from their extraordinary monetary policy. been.en: it has if there has been one big concern in japan and among people who watched the boj very that there are a couple key ways in which it may be building up excess. it might be putting the in acial system and is -- position that is not so stable. let's start with the basic. it did not change anything. the key rate is still negative. they keep that 10 year yield 0.2nd 0%, as high as percent. one reason for this is that the economy is doing well enough not to boost inflation.

take a look at the chart. this does not show inflation. what is the good news? exports have been growing. you have one contracting quarter. of gdp straight quarters growth. everyb openings for worker that could fill it. governor kuroda is not ready to let go of the stimulus, even hinting that he will be pulling back until he sees inflation rising further. the problem is that the government -- the boj owns something like 40% to 50% of the outstanding government outstanding bonds. they have the biggest balance sheet in the world. profitabilityanks . it is really tough to make money. this very high level index

begging the question whether or not the boj needs to keep buying etf. let's turn quickly to another chart. this is what is in question. you have the nikkei rising. rising. the topics highstill remain at levels. this is the question a lot of people are saying. this is the coming -- maybe that is a gradual way to start paving the way towards this and pulling away from the extreme stimulus. determined seem very to gradually hike rates. the bond markets finally seem to be buying it. a very important a nomination.s

she is at the brookings institution now but she was the head of the office of financial stability at the federal reserve board. he is picking someone who will be very focused on banks. she has not been tough on banks. she thinks the tighter standards are not preventing banks from lending. maybe the bond market agrees --ause they are looking at they think the fed will be .aising interest rates they are so high that we get that hike in september and december. you will see 99% for the september hike. is what happens after this? what is happening in the bond market are people are not waiting to find out. let's move to another chart. the yield continues to climb ahead of the september fed meeting.

it got as high as 2.81%. the highest before the finance of crisis started. the market is more on board with the fed. we will see what happens the year comes to a close. for now, that seems to be the story. shery: plenty more to come on "daybreak: asia." this is bloomberg. ♪

haidi: let's go over to japan where we see the futures gaining ground. than 1%., rising more futures also looking up at the moment. we are seeing the japanese yen holding steady. it is going to change for the last couple sessions after the bank of japan held 30 and governor kuroda rejected the

speculation that the boj would -- 20 more coming up on daybreak asia. this is bloomberg. -- plenty more coming up on "daybreak: asia." this is bloomberg. ♪

haidi: 30 minutes away from the major market open. we see a bit of a mixed picture across asia and futures. a rainy day in sydney being reflected in that tepid start that we are expecting. shery: also reflected in the stock market. stocks closing higher. the dow was boosted trade sensitive shares such as caterpillar and gaining ground for another session. you are watching "daybreak: asia." let's get the first word news with jenin -- jenna dagenhart.

jenna: the frosty relationship between president trump and jeff sessions has worsened dramatically. trump says his dissatisfaction goes beyond the decision to step back from the russian inquiry and it quits handling of and what heissues said was poor performance at a confirmation hearing. the white house says they will nominate an economist one of the vacant seats on the board of governors. she specializes in financial stability and credit markets. she spent three decades at the theand help strengthen banking sector after the financial crisis. former malaysian prime minister has been arrested over a money scandal. -- they he is in the

tension and will face further charges thursday. prosecutors say more than $2 billion was siphoned out of one indeed be. new zealand's economy expanded at the fastest pace in two years led by agriculture. gained 5/10. all year, the economy expanded 2.8%, a fraction better than the previous three months and ahead of forecast. policymakers are likely to remain cautious after a slump in business confidence. 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. this is bloomberg. shery: they're counting down to some of the major market open. india had a holiday today.

if -- will see we had the vote. what are stock investors looking at? sophie: the focus for stock investors will be how big of a margin. is up against his opponent. august, his opponent said he would manage the economy with fiscal balance in mind. it would be a problem as easing continues indefinitely. the crunched the numbers and said what would be bad news for stocks when it comes to that vote. if he gets more than 270 votes or 33% of the total come that is it hundred 10. that is the magic number. that might be the clear beginning of the end.

gdpi: on the back of the that we had earlier this morning. sophie: we do have the kiwi dollar jumping. we do have it climbing to a three-week high. moving above the 66 handle. it will perhaps give it the momentum as it moves towards the mark ahead of the greenback. it has been a punishing quarter for the currency. off by about 2.4%. for aht be the catalyst bullish uptrend. taking a look at what this could mean. divergent views of where it could go from here. on the back of this gdp update, it could use the chance. we do have the likes of morgan's

at least saying they expect no change to the rate. that is the case until 2019. a rate hike in the first quarter of 2020. haidi: thank you so much for that. look at something else. startups and venture capitalists with increasing headwinds from a slowing economy. ventures backing successful firms has paved the way to invest in tech startups. managing director spoke exclusively to bloomberg about the new $400 million fund. duringlways have -- even -- we keep our pace in the same way.

quite some good lp is like as. -- us. our strategy is targeting the good ones. always trying to lead the way, trying to follow. think they are too perfect examples of that. just before. you have done incredibly well. how much was this latest round of funding? >> $400 million.

it is a good size for us to invest for two years. >> what areas are you going to target with that money? that --ore broad than ai or more broad than that? >> we are excited about more and more sectors getting more mature. started building motorcycles and you start to see cars coming up. you can see that coming. fund more and to allow that. >> we have heard a lot from various venture capitalists. agreement that we are seeing a resurgence for a lot of startups in china. be destion to you would think that chinese startups are

going through another capital winter where they are unable to find money? i would not call it back to winter. it is back to cooler weather from to hot weather. it seems we are exiting the summer. it is time to cool down a little bit. it is good for the industry, cooling down and the money and capital. it should stick to the value of the company. be super rich overnight. that kind of mentality, i do not think it is healthy. should focus more on how the capital and investors together

with entrepreneurs can join hands. wealths believe that the is always a byproduct when you are creating a value for society. money are trying to make during the bubble, good book. -- good luck. shery: speaking exclusively to david bramley in beijing. tom mackenzie joining us from beijing. becomingharder is it to raise funds in these environments? it was interesting. he talked about a cooling environment staying there was not a deep freeze. we heard from a leading investor in the ai space. you valuations are becoming more rational. there is a little less money in

the market. he saw that as a positive. some of theon causes of this comes a slowing economy and some of the regulatory hurdles in the tech space that has been rolled out. there is the background or that backinting out in 2017, 40 billion u.s. dollars in 2017.ted in the second quarter of this topped. it is a lot of appetite as they look to invest in areas like ai robotics and manufacturing. that continues. china seems to be in a particular rush to go public. is this opportunistic or impatient of them?

they are seeing this as opportunistic. 2017decent revenues in seen in the motivator. you have the likes with revenues about 70% -- them to startng trading later in hong kong. it, wanting to ensure that they can cash in on that success. days is this period of 180 in hong kong. five ipos sobout far this year that have created about $48 billion of wealth for about 16 different individuals at the time of the ipo.

some are feeling a bit of a squeeze. the founders of tencent will be feeling a little less flush after the hammering that the stock has taking -- has taken. seeing a test of investor sentiment. we will be looking at one later today. it is an interesting month for ipos. haidi: our china correspondent there in beijing. coming up next, we ask you what is on the menu now after hit -- the historic summit. this is bloomberg. ♪

shery: this is "daybreak: asia." kim jong-un and president moon wrapped up the historic summit with another step towards denuclearizing. isning us now from soul isfessor -- joining us now the investor. william manage expectations going into the from it? have even impress by the deliverables coming out of the meeting? >> some of the outcomes were impressive. the more not so impressive. i think there have been .greements on the improvements

on the denuclearization side, some might think that the outcome is not as good as they expected. progress is better than no progress. north korea -- haidi: north korea has come out in a strong position. they have not really had to give anything up. has anything really changed since the singapore summit? they are not given to much yet. you can have assumptions. he might be thinking about a negotiation with the u.s. they want to do that when they meet the americans or they might

be trying to mother -- muddle through. , ifhe latter is the case they want to do that with the americans, i think we will see next week when they meet with the americans. shery: resolve u.s. ambassador nikki haley criticize and attack russia for undermining sanctions against north korea. we have already seen president trump blame china for not upholding sanctions. between the u.s., south korea and north korea? the sanctions will not be upheld. think that is a reasonable concern. there are at least two things that we should be wary of during all of this. back to the last

year when the tensions were high and they looked like they were on the verge of nuclear conflict. we cannot go back there. is using orsk lifting sanctions. as long as we are wary of these scenarios, i think we can talk to north korea and be reasonably hopeful. you are talking about hope for the korean peninsula, we are hearing that korea will pursue hosting the summer olympics together. arender what the risks because we keep hearing about warming relations but we have not seen any progress with denuclearization. holding the joint sports

event is one thing that we can do without undermining the sanctions. i am not particularly worried about it. ,ou are talking about 2032 which is far in the future. , mr. pompeo mentioned negotiations with north korea should be completed by 2021. iscan be reasonably hopeful what i mean. we do not lose much by talking to north korea. we will see next week when they meet in new york, how things are changing. you do not lose much, but there is a sense that you are not gaining much other than goodwill. doesis point, washington

not have a list of nuclear facilities and properties that north korea has. diplomatic overtures like the return of american soldiers remains and the release of u.s. hostages. without progress on denuclearization, is something like this worthwhile? >> what north korea has indicated through the agreement yesterday was mostly about stopping developing their nuclear program further and their test site and test facilities, which is good. up their about giving nuclear arsenal. like i said, they might be saving them for talks with the americans. trump re-think president

in new york alongside a general assembly. how good a mediator has he been beyond -- between the two sides? met kim jong-un, the talks resumed between the , like theorth korea june summit in singapore. think it could provide momentum for restarting talks between the u.s. and north korea. shery: always great to see you. university professor and ambassador to the u.n. and the report. now for a look at some of the stories trending across the bloomberg universe. equity fund hit a jackpot. a massive surge of marijuana business.

japan's longest stretch of economic growth in a generation and the challenges that remain. and how african swine fever threatens $108 billion industry. -- pork industry. this is bloomberg. ♪

shery: this is "daybreak: asia." let's get a credit check of the headlines. $3.2 billion share buyback using proceeds from the coal asset. $1.9 billion with sydni traded shares. it closes november 12. a drawnout battle for

british broadcaster sky might be settled on an abbreviated bidding war starting on saturday. lasting just one day, it has emerged as the favorite way of ending the battle between 21st for thefox and comcast biggest satellite broadcaster. haidi: a unit has scrapped a billion dollar to buy in e-commerce company. they withdrew its offer and will hold a share meeting on friday to explain why. unloadttempting to assets worth about $70 billion. counting down to the market open across asia. let's take a look at the stocks we will be watching in today's session. sophie: i am watching korean

auto stocks. the impact of tariffs on the american auto industry. he highlighted the potential harm passed along to customers. discussing how they would pass on those higher costs to consumers in the u.s. witnesses are to include north america and united auto workers. i am keeping an eye on japanese tourism stocks. roseafter foreign rivals in the wake of a string of natural disasters and a record heatwave. the total number of visitors last month to japan was a record for the month of august. in sydney, i am keeping an eye on a fun one. rolling out a slight -- slot

machine. done -- familiar with it. himooks like we have getting a little more of the limelight. shery: that show is pretty addictive. i stopped -- i cannot stop watching. coming up on thursday in the u.s., we have some great interviews on bloomberg tv. with theive interview co-ceo of the carlyle group. and before we go, take a look at currencies right now. we are seeing the japanese yen holding steady. looking at commodities right now. $71 a barrel passing that mark. gold also holding steady. steadyanese yen holding

policyhe boj held unchanged. we are also seeing the korean .on trading like this, stronger commodity currencies have been grounding. this is bloomberg. ♪

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haidi: very good morning. asia major markets have just opened for trait. shery: good evening from bloomberg's global headquarters in new york. "daybreak:come to asia." >> asia-pacific markets facing a muted start after banks lifted for the second day. the kiwi climbing as new zealand gdp beats estimates. will this escalating trade war claimant another scalp?

>> shinzo abe is backed to one another term. his critics say he has largely failed to deliver. >> u.s. 10 year treasury yields topping 3% at the moment. some say this could lead to more volatility in other markets. let's see how things are shaping up for the asian market open. sophie: kicking off with what is going on in japan, the nikkei 225 adding 1% share. this after japanese stocks climb to a three-month high. there is still plenty of room for a rally to the had when it comes to japanese stocks, given the commitment or lack thereof when it comes to abe-nomics. critics waiting to see if the third arrow can be released from the quiver. we will see if shinzo abe can win as he is against the former

disciplined finance minister. gaining 0.5%. 200 that segment helped lift aussie stocks wednesday. in new zealand, earlier losses now shifting gears. we could see this benchmark extend for a six-month session, this helped a lot by the gdp second quarter rising 1% on a quarterly basis. that helped the kiwi rise to a three-week high. we might see that momentum of $0.86 u -- $ toward 0.68 u.s. a pickup in global yields. looking flat as we kick off the session. we have traders looking toward

the bond option of 20 year notes. the yen trading near a two-month low. the focus is what is going on in the treasury market. the 800 pound gorilla in the room. the focus is back to u.s. fundamentals and treasury yields. haidi: let's get you to first word news. >> the white house says president trump will nominate an economist to serve on one of the three vacant seats of the federal reserve board of governors. he is a senior fellow at the brookings institution who specializes in financial stability and credit markets. earlier in her career she spent three decades at the fed and strengthened the banking sector after the financial crisis. eu commissioner president jean-claude juncker says they are far away from a deal. the irish prime minister added to that negative tone. he says he has seen no progress

in negotiations since march. the irish border remains the major hurdle. bloc also remains opposed to theresa may's checkered plans for future ties. >> it is the only credible and negotiable plan on the table that delivers no part of order in northern ireland. -- no hard border in northern ireland. >> jack ma says his promise to create 100 million jobs in the u.s. cannot be met. he says worsening relations haseen the u.s. and china contacted his pledge. -- impacted his pledge. he warns trade should not be used as a weapon. the former malaysian prime minister has been arrested over the 1mdb scandal. he's in detention and will face

further charges on thursday. he is already facing multiple counts on criminal breach of trust, corruption, and money laundering, all of which he denies. prosecutors say more than $4 billion was taken out of 1mdb. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. higher,.s. equities led while treasury yields picked up to the highest levels this year. bloomberg's su keenan has the latest. the biggest concern has been, we will we see the selloff we saw with equities? su: that is a concern. banks were a big leading gainer in the market and i. there were concerns expressed by market strategists that this

market continues to shrug off trading concerns as a negotiating strategy. the dollar unchanged in after-hours, but showing weakness in the after session. the yield above 3%. that is a key level. you will note the s&p 500 banking index showed a big gain. own,tech heavy nasdaq was d as was the nasdaq. the only major benchmark in this major day of trading. gtv is where you can find our library of charts. notice this green block here. these are the leverage funds net dollar positions. it is starting to come down. one of the big hedge funds is warning the next step may be for investors to pull back on the dollar. let's go into the big movers of the day, banks, as i mentioned.

deutsche bank getting a very big jump on the day. take a look at some of the other big movers. you will see amazon, which was down slightly, but it was the impact on amazon's news it will have 3000 cashierless stores. its grocery competitors took a hit. tesla stock having a good day. caterpillar -- interestingly, one of the stocks impacted by trade concerns. it is higher. the chinese announcing they will not devalue the currency. a plus for caterpillar. new age beverages up som 54%e. that is a play on this pot stock craziness. ramy will be on later with more on that. patchalso had in the oil a bigger than expected drop in

u.s. stockpiles. wti less than $71 a barrel. su: going to the three-year low, this was not expected. we saw a $2 million drop in oil. you can see $71 in the latest trading session. however, it was also the fact that exports rose, and a higher than normal of refineries, which has raised the concerns of availability of oil in the fall and winter seasons. as one analyst said, we are at the tail end of the bull run in oil. he also raises concerns beyond this seasonal direction. there is a secondary factor, and that is the iran sanctions, limiting the oil in the bull market. haidi: let's take a look at the setup in the asian session. the stock rally in asia,

particularly for emerging markets, has to resolve it seems. it could be helped by a weaker dollar. mark joins us from singapore. hiding beneath the headlines, the positivity we got from that, but you look at 10 year treasury yields pushing 3% -- is it possible we are setting up for a repeat of what happened in february? mark: maybe not. it is quite significant when you look at the asian currencies in particular. we have looked at the singapore currency. the peak around the 138 level. despite the fact that treasury yields are raising quite a bit in the last week, and still the dollar has not risen above singapore. that is an indication asia is looking past this rising in treasury yields. they could be looking at other things. they could be looking at american deficits, that they

pushed the trade war too far. american consumers are going to get hit very significantly in the next round of trade tariffs. things are beginning to move against the u.s. dollar. that is generally a good thing for asian assets. when their currencies are doing well, it usually feeds well into markets as well. it feels we are at some kind of turning point where dollar strength is no longer guaranteed just because bond yields go higher in the states. >> this chart showing that the dollar bulls are paring their positions, and the net dollar positions have been reduced in the last few weeks. if we take this chart on live bloomberg, you can see what's happening with the dollar strength and expectations of where it will go. let's talk about not only if equities will be doomed, but

what does it mean for volatility? mark: we're going into a period of reduced volatility, for at least a shift in volatility. particularly because of the volatility in the chinese currency. china seems to have gotten back in control of their currency. they are pushing it into a tighter range. we saw a big volatility spike in emerging-market currencies with turkey and russia. that seems to be coming down as well. volatility could shift somewhere else. asian equities, for example, have a lot of catch-up to do with the united states. it might just the that -- just be that asset classes are shifting around. it might not necessarily mean it is bearish. it could be a positive thing. ahead, china's

second-largest tech startup has been gaining in the gray market. we go live to the hong kong stock exchange ahead of its public debut. shery: plus we will be live in tokyo as shinzo abe views for another term as party leader. this is bloomberg. ♪

asia." is "daybreak: shery: japan's prime minister faces a primary leadership election thursday. our chief north asia correspondent stephen engle is on standby. you are with a guest that says japan can nil afford another year of political inaction. a sixn: it has been quite yard run for shinzo abe as he goes for his next three-year

term. almost a foregone conclusion. the question is not if he wins the vote today, but by how much. let's put that question to our first guest, temple university director of asian studies. does he win by a large margin or squeak by? >> it looks like he is going to win big. if he doesn't win big, it will be news. popularuld push for changes to the constitution. if he ekes by, he may have to stick to what the people want, which is getting going on these much needed structural reforms. >> i think many hope for the eke by scenario. abe has made clear this is his legacy project. beware of politicians in search of a legacy. his holy grail is constitutional provision. there's a lot of unfinished business on the economy.

that gets people worried. why is he going to spend this time and energy revising the constitution? a poll last month showed 6% of people thought this was an urgent priority. >> how has shinzo abe survived? i was standing in the same spot a year ago when he had the snap election. granted the election is still in disarray. is he survival because of disarray, or because the economy is doing ok? jeff: i think he rebounded from those two cronyism scandals in the snap election, primarily because the opposition fractured and implement. the other thing was their order a few missiles -- was there were a few missiles coming overhead from north korea. that played a big role in his political victory. >> so he called the snap

election at the perfect time. jeff: you may have problems with me, but aren't i better than my potential rivals? the people said, yes. >> let's talk about some of his rivals. does he have a chance? jeff: in 2010, he won the first round in the prefecture. in the diet, he's not all that popular. he is arrogant, he is very smart. i think abe clearly has a lock on the diet vote. >> what about the rank and file, to have already voted by the way? mystery why.o me a he doesn't have a particularly charismatic personality. former defense minister. when he talks on tv, he sort of gives you the creeps. he doesn't have a feel-good factor. >> that is not a good slogan for

the campaign, is it? [laughter] i want to do a-- much more aggressive overhaul. for?s go hmm, which to go clearly they will stick with abe. abe will take this as a mandate. 810 people will decide, most of them older males. they will decide the next three years. the thing is most people don't agree with his signature policies. most households aren't feeling the love. the wages are stagnant. taxes are up. >> and taxes are going to go up even further if he gets in. jeff: he has dodged that bullet a few times before. clearly households are not

feeling the love. people are wondering what is going to happen. -- 19%future, people only think the future will be better for their children. >> isn't this the most growth since the 1990's? jeff: there is a real disconnect between, look at the corporate growth, stock index, everything seems gangbusters. but you look at the surveys, 80% of people are waiting to feel the benefits of abenomics. that is the real problem. he pledges a lot, he delivers very little. the premises he keeps are the ones people don't like. >> can japan afford another three years of stagnation? jeff: i think the policy drift is a real problem. if he doesn't finish on doesn'tral reforms,

create sustainable economic growth, that will be a problem. >> does he maintains a push for ultra-loose monetary policy? jeff: he would like to do that. there are some thinking there will be a taper. there are rumors of a stealth taper. he wants to keep the spigots open, but you are buying time to promote structural reforms, and he has really come up short. >> what does the opposition have to do to put up a viable threat next snap election? jeff: it is not looking good for the opposition. they are pulling the single digits. abe pretty much has it his own way. the problem will be his partner is opposed to constitutional revision. you are seeing peak abe. when he wins, he will be a lame duck.

next year it is a busy calendar. olympics the next year after that. jeff: getting a referendum, the constitution done -- it is not going to be easy. >> the vote on the ldp lawmakers will happen in the diet behind me at 12:00 p.m. hong kong. tokyo stephen engle in covering the elections today. you can get a ramp-up of the stories you need to get your day going in daybreak. bloomberg subscribers can go to daybgo on your terminal. we have seen the man rally in -- bad rally in -- mad rally in cannabis stocks. this is bloomberg. ♪

haidi: this is "daybreak: asia." let's get a quick check of the business headlines. chinese. two. lender -- peer to peer lender gained on its first trading day in new york after closing 26% higher. 13 chinese tech firms have debuted on u.s. exchanges this year. financial -- >> a large part of the $234 billion that flows through its tiny estonian unit may have to be treated as suspicious. denmark's largest lenders says the chairman will quit. the government in copenhagen says they could face fines.

and another story we have been watching, collateral damage, another scalp in the trade war if you will. alibaba's jack ma says his goal of jobs in the u.s. no longer possible after trading conditions destroying the possibility between the two nations. what a difference a year makes. last year he was speaking to bloomberg's anchor emily chang and talking about his plan for one million jobs over the next five years . jack: we want to enable more small business in america, help them sell products to china, sell products to asia. in china, we have created 33 million jobs. each business that is online can

create at least three jobs. we hope we can help one small business in america become a listed alibaba site and sell to asia. haidi: this is the latest development in terms of jack ma taking a stronger position in terms of how critical he is being of president trump's trade war. he says he will push for positive bilateral ties. this fight for economic supremacy could go for the next 20 years. shery: it is interesting to hear him say that the promise of one million jobs was based on china and the u.s. having a collaborative and friendly relationship. now that the situation has been completely destroyed, destroyed their premise, they can no longer carry on that promise. it is interesting to see jack ma

take a firmer stance. we have heard him be skeptical of this trade war, saying it could actually last for 20 years. he has become a little bit more candid, given that he is stepping down in a year's time as head of alibaba. haidi: perhaps making his views more known as he steps into issues with philanthropy and leadership. let's face it, he has always been a pretty outspoken business leader. shery: that is to say the least about jack ma. interestingly he is also taking his country's side, if the u.s. goods,tariffs on chinese they will shift to the rest of the world. a warning for the u.s. as well. coming up next, a flying high. we will check out the canadian cannabis company that is smoking

out the charts. this is bloomberg. ♪

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150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need >> we are in our away from opening in hong kong. >> let's get the first word news. >> the proxy relationship between president trump and jeff decreasedas radically. the united nations says cultivation has reached an all-time high.

cultivationays increased 17% last year which could mean it rose by about 30%. the findings are based on satellite imagery and on the ground verification. just months after facing calls to resign, shinzo abe is expected to overwhelmingly be elected. college say they turnaround comes from a stalled economy and a happy dose of good fortune. victory against his old rival would make him japan's longest-serving prime minister theresa north and south korea has wrapped up talks after what is being seen as better than accepted -- expected summit.

president trump is handling president moon strip has very exciting and tremendous progress. however, it is not sure -- not known if it aligns with washington. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. >> let's take a look at how asian markets are shaping up so far. thetocks are mixed while dollar is heavy. take a look at some of the specifics here. pressure, butnder still gaining ground. they cost is adding a third of

1%. wellington, that is snapping a five-day event. that is jumping on the back of the data we got this morning. over in japan, gains are continuing, although we are but nikkei isped, trading at levels we have not seen. the question is if all they oruld win decisively continued gains for japanese stocks. after a big four-day climb, the biggest is since november 2016.

it is now at the highest in nine months through the last time it happened, we did see it at about 10%. it may come down to what the election has in store for us. >> it has been a dizzying ride for investors to read the stock nearly doubled, only to see all that go up in smoke in less than an hour. it is veryugh volatile, they did manage to gain. >> they did manage to gain this 40%. .4% was the high i'm not sure there's anything to read their. lost all ofater, it that and went negative.

this rollerou coaster ride of the highs and the lows. here we are, $300 per share and really, 45 minutes falling by 15% just today and look at that -- closes atast $217, $.95. werend a half hours, there not one, but for because of the volatility we are seeing. thisple of analysts saying is on the long side of things as opposed to short. they are calling the stock surge beyond comprehension. why the crazy right here?

said theykennedy could be one of the few players with a market cap of $100 million. that got a lot of people stoked. happens within 24 hours of the da saying they would allow them to import marijuana for medicine or research, so we and ever since it went ipo this past july, it is actually risen by about 1000%. hop back into the bloomberg says hundreds of echoes, maybe nightmares. you can see it is up by more 1000%.

in memory what happened with blockchain. we saw the pops in late 2017 ever since a year ago. a lot of people are wondering if this is the whole blockchain mania. have we been here before? there. it is not >> the surge has left private equity funds much more loan -- much more known. >> they are based in seattle and not many people know about it. ,hat is because seven years ago they really put all of the money into marijuana and the possible growth in the entry and what is interesting is it is backed by

peter teal. he put his money here and in terms of the return, we are talking about billions of dollars. they have a little bit under the percent ownership as of march 31, but at the height of what was happening, they could have come up with about $8 billion so if you spread that across the three of them, it may have made them billionaires over the course of the past several hours and at one point coming in $2.6 billion. i can only imagine what they might be doing to celebrate right now.

>> thank you. up, the latest big tech listing. this will be live.

.> this is daybreak asia china's second-largest tech startup is climbing the gray market. about $4.2 billion in its ipo. walk us through this ipo. the second-largest tech ipo

is about to trade today, obviously on the trading floor already. the company is raising at least $4.2 billion. tech stocks have been a general struggle this year. it would be really interesting to see how this actually fares. at a is coming to market time. concernednvestors with when it comes to liquidity? >> there have been opening battles on all fronts. costs and revenue growth are the keywords.

investors are paying close attention. alibaba has announced they want winter.lion by the at thek you for that hong kong stock exchange. forget, joining us at 10:00 a.m., that is midday. i believe you are anticipating to a great to have you. >> thank you for having me. >> it has been pretty patchy.

look at the recent hong kong listings. health care another one that has really disappointed. if you look at the landscape, is ora function of liquidity the headwinds from the trade situation from the united states? what is behind the lukewarm reception we have seen? >> i think it is a little bit of everything. u.s. andell off in the hong kong. ands mostly domestic consumption-based. i think a lot of the regulatory environment over what happens with some of the business models

have made it the process. it has been fairly strong for a lot of tech companies. >> as we work talking about, you were an early investor. i take it that means you are not looking for an exit. we have been long-term investors in the company for quite a bit. we started back in late 2015. i think in the services industry off-linelly in the online business model, there is a lot of room to grow. >> you also have investment in

miss fresh. give us the criteria when you're making these choices. , we likerely businesses that have a proven model and on a path of explosive growth. in the case of miss fresh, they foodevolutionizing the service industry. i think it is a combination that has not really been frankly for the better part of the rest of the world during that is an exciting opportunity for us. you started deploying capital late last year. we see more opportunities going forward in terms of that evaluation? >> we have been very patient investors this year. today, we have been very careful

primarily because of the valuation department. it has come down about 30% since its high in june. >> when you take a look at the comparison of unicorns and the -- ey and unicorns it is obviously easier for a company that is private to be will to focus on what they are doing. just ask elon musk. it has actually been easier to raise a large amount on the private side then the public side. these groups are in the siege of

being i feel ready. i think people are not really thinking about audio performance in the market. these companies are trying to be public because of the stage they are. i think the access to capital has not been a problem and andfully volatility wishes is going to come back to the market. >> i think one of the bearish elements have been a lack of certainty and clarity. you that it seems a there ist clouded? >> certainly a lot of new regulations coming out, particularly in the internet space.

a lot of the business models have been around for a long time. a lot of these subsectors have not been regulated before and policymaking generally in china, this year there are trades where it is going. there has been changes in social security reform and on the gaming and education space. i think there is more regulation , but i don't think they are unpredictable or there is a lot of volatility in what is coming ahead. chinesecomes to the consumer, how effective are the trade tensions? >> from a stock price perspective, certainly, they have been negative. from a fundamental perspective,

businesses are largely reliant on domestic consumption. i don't think it will be impacted by the trade war at all. i think that is offering an interesting line. >> what about domestic consumption if the chinese economy slows. >> there's a lot of leverage that has been taken out of the market. had a very has negative performance here today, but from a spending perspective, we have actually seen it growing and even though the growth rate has been tapered this year, the momentum is still there.

have be seen the rise of companies start to at least pose challenge like a tencent and alibaba? >> deadly. the competition is fierce. there are reports of alibaba increasing subsidies for its delivery business for example. tencent is a very large supporter. i think the difference between be a and the u.s. tend to little more diversified in the sectors they plan. >> what is the next big thing? >> we like local services in

general. as it is a good candidate for the next $2 million plus company. revolutionizing the it is a and i think good example of long-term delivery services and their are brought online and in people's homes. >> thank you so much for your time and of course if you missed out on any of our charts, you on thed them again bloomberg library. you can then address them and save them for future reference as well. this is bloomberg.

this is daybreak asia. quick check on the latest business flash headlines. buyback using sales from its core assets. a close on november 12 and over

$4 billion in the first half. a conquered iraq and it will step down april 1 after 37 years with the country. a quick departure for toronto a -- duron -- and other devices seen as lower health risks. a mini is rolling out .ersion of the playstation the new playstation classic will retail for $99. original consoles are offered $60.bout $40 to it includes titles like tech in three and final fantasy seven.

starport has taken a stake in mgm resorts. sources tell bloomberg they have no exposure to the operations. let's take a look at what we have over the next few hours. >> 30 minutes, that is going to start trading here in hong kong and 30 minutes after that we have a ceo joining us. the other thing i want to it is a live interview. seems it is for the stock

there. is shinzo abe is set for a third straight leadership. we will be conducting that interview in tokyo. lots coming up here as well. we had over,e let's take a look at how markets are setting up going into china. more volatility.

♪ become thehave wealthiest man in the world. jeff: i was finding the second wealthiest person in the world. [laughter] david: what more than books? jeff: i thought we can sell anything this way. what happens when you offer a free, all-you-can-eat buffet? who shows up first? the heavy eaters. i have no idea what you are talking about. [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪