haidi: good morning. i'm haidi stroud-watts in sydney. asia's markets an hour away from open. shery: good evening from bloomberg's global headquarters in new york. i'm shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "bloomberg daybreak: asia." ♪ haidi: top stories this thursday, the fed hikes rates as expected and indicates more to come this year and next. president trump says he's not happy. the president also accuses beijing of meddling in the november midterms. china dismisses that claim as nonsense. all of that pointing to a mixed

today in the markets as investors weigh the fallout. futures indicate further declines in japan. shery: let's get a quick check of the markets. decline and the s&p 500 index lose ground for a session.nsecutive markets were trading higher throughout most of the session, but we saw the fed chair jerome powell say the bank is considering hiking rates and continued to hike even after getting past the perceived new toll rate. the nasdaq down 2/10 of 1% while the dollar also got whipped by the latest fed commentary. let's see how things are shaping up in asia. like we may see a mixed session for asia. plenty to digest, including trumps wide-ranging comments this morning when it came to china and north korea, as well as canada. morningie slipping this as much as .2% on trump's comments regarding nafta. when it comes to the session in akyo, we could be headed for

muted start after an eight day gain for the nikkei, but the rally stalled on wednesday. we are also keeping an eye on auto companies in tokyo. this after shinzo abe says tariffs will not be applied to japan why bilateral -- while bilateral talks are underway with the united states. also on the radar today, we have chinese a shery inclusions at 7:30 a.m. hong kong time. china tos morning, report industrial profits for august at 9:30 a.m. we are on central bank this thursday after the fed's decision. its morning, holding on rate at a record low 1.75%. kiwi stocks under pressure by 2/10 of a percent. we also have the philippines and indonesia on the radar. both central banks expected to hike rates giving -- given their

ailing currencies. we are expecting a hold from taiwan today. haidi: a busy day ahead, indeed. sophie kamaruddin on the markets in hong kong. let's get to the first word news with jenna dagenhart. reporter: president trump has greeted the fed's anticipated rate rise by saying he's not happy. policymakers cemented expectations of another hike this year as well as further increases in 2019. twoquarter-point move to .25% reflects an upbeat assessment of the economy, identical to the last statement eight weeks ago despite concerns over the presidents escalated trade war. >> unfortunately, they just raised interest rates a little bit because we are doing so well. i'm not happy about that, because i know it's going to be a question. i am not happy about that here at i would rather pay down debt or do other things, create more jobs. still, i'm worried about the fact that they seem to like to

raise interest rates. we can do other things with the money. the new argentinian central bank president says he's happy with the peso at its current level, and he want intervene at a range of 34 to 44 at the dollar. say argentina needs strong control over money and the economy and policymakers will take the necessary steps to ensure the monetary base does not grow. supreme court nominee brett kavanaugh has been accused of the most lurid sexual misconduct yet. senate republicans press ahead with plans to hold a hearing on thursday. partew accuser says he was of efforts during high school to get girls intoxicated so boys could have sex with them. latestgh rejected the claim as ridiculous and from "the twilight zone." the recent round in the ruby has prompted india to raise customs

duty on a range of products from jet fuel to footwear to narrow the current account deficit. imports of goods were valued at $12 billion in the financial year through march. a five-year high in the current account deficit is a key weakness and one reason why the rupee has been the worst hit currency in asia. 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. dagenhart. this is bloomberg. thank you president trump caps off his time at the united nations with a claim that he has proof of china's attempts to meddle in the u.s. midterms. >> earlier today and just now, you made a significant allegation against the chinese government. he suggested the chinese government had metal in -- >> that's right. that's what i hear. >> what evidence do you have of that --

>> we have evidence. we have evidence. it will come out. i can't tell you now, but it didn't come out of nowhere. >> like it -- >> they actually admitted they are going after farmers. shery: in a wide-ranging news conference, he said north korea has all the time in the world to denuclearize. we have the highlights. how important is it that president trump is now saying he doesn't want to play the time game? reporter: that's right. it certainly throws into question where things are headed with north korea on the china fund, which is even a bigger issue when it comes to the trade war with trump saying his friendship with xi jinping maybe over. what about the fact that according toor president trump, china is meddling with midterm elections, and he is saying now he has evidence about it? reporter: this can only increased tensions between the world's two largest economies at a time when they have already escalated things.

folks in beijing have already argued in the past about u.s. meddling in foreign elections, so trump's suggestion that the chinese are doing the same to the folks in washington only ups the ante here. thei: and it seems like evidence, so to speak, is this full-page china daily insert in an iowa newspaper. reporter: that's right. chinese again have denied such allegations, and donald trump, although he says he has evidence, has not presented any today. that is something we will certainly be watching it he would present something of the sort. haidi: it was a pretty wide-ranging press conference. we started out with criticism of what the fed is doing raising to coveren went off really broadly his views on north korea, china, domestic politics. what stood out to you out of all

of that? reporter: really bad this shows how, over the course of trump's 20 months in office, anytime his domestic policy agenda has gone weekquestion, this obviously with kavanaugh's supreme court nomination and the potential firing of rod rosenstein, that he goes on the assault internationally. only this week, those foreign leaders were in the same room with him, which makes for a potentially awkward situation. one thing i have been watching closely as the resin -- relationship with venezuela being in the western hemisphere, of potential political importance to trump in the 2020 election as he starts to gear up for that early next year. his suggestion that a military option is still on the table there certainly has raised some eyebrows locally and in venezuela. nicolas maduro actually accepted his invitation to come to new york, so it will be interesting

to see in the coming 48 hours whether they actually meet and sort things out on that front. haidi: thank you, then barton stein. still ahead, we will take a look at ford warning of more damage from trade tensions, saying that million. cost $1 trump in his press conference earlier saying there's absolutely no impact from the trade war on the u.s. economy. we will hear of the ceo from the bloomberg global business form later in the hour. shery: up next, december looks like a loss for another fed hike with more to come next year. we will discuss that with the former atlanta fed president dennis lockhart. this is bloomberg. ♪

haidi: this is daybreak asia -- "bloomberg daybreak: asia." i'm highly the -- haidi stroud-watts. a third rated, hike. anotherrong signal of

one in december, although it did ruffle trumps feathers. >> those are the people who deserve it -- they did a great job. the people who did it right, the people who did the best job, got hurt them us. in one sense i like it, but basically i am a low interest percent. shery: it was the decision to drop that caused a stir. joining us is kathleen hays and also former atlanta fed president dennis lockhart. let's get started with you, kathleen. reporter: thank you so much. i want to get right to president trump. to me, think this is a bit of a distraction, but i will tell fed there are many former officials and fed watchers were really alarmed by the president even saying anything about being displeased with fed rate hikes, so it's not too surprising to me. what about you? is this a concern? >> from a policy point of view, it is not a concern to me,

because i have full confidence the committee, the federal open market committee, will simply said policy in the best long-term interest of the country and the economy, and i think they will do their very best to ignore outside pressures. reporter: let's move onto another thing that cost a little bit of a stir today, dropping the word accommodative from the policy statement when describing the stance of monetary policy, which has actually been signaled the fed fire to this. bonds rallied though, they they think it's restrictive and they want rate hike as much. jay powell downplayed that at the press conference and said they don't need it anymore. what do you think? >> i noted in the press conference that chairman powell tried to explain it in such a will notpeople

overreact to the removal of the word accommodative. he said, and i think it's true, that that sentence had been in the statement for a long time, and it simply out lived its usefulness and became a little stale, and arguably the committee is now in a different where they are trying to sustain the conditions, so the sentence no longer is as useful as it was earlier in the process. where do you think the fed is in the process of hiking rates? i can pull up this chart, looking at this dot plot. boy,ow i'm circling -- a total of 16 saying there on board. then you get to next year and it's more like three. does the fed really need to hike much? i know it's not

a promise, they just think it might have been based on what they see, but do you see that they do too much? >> i think your chart shows there is a very strong consensus for a rate hike in december, assuming the economy continues on the track it is on. i would say that's a high likelihood. i looked at the dots earlier 2019, and what i saw in two moves, four at three, and four at four moves that tells me there's a consensus there will be more but not a real strong consensus yet as to how many. i think they will feel their way along towards a notion of neutral, and i'm sure you will ask the question about kevin washes article. neutral, and they

will probe, and then decide whether to pause at that point or to go further. reporter: you almost asked the question for us, former fed governors saying the neutral concept is a waste of time and misleading and the fed should drop it. do you agree? >> i don't entirely agree. i will make two points. estimate.is an it is not anything that is observable and therefore precise as an economic tool, but it is a useful estimate of where policy equilibrium where it is neither restrictive nor stimulative. i think you have to have something like that in mind to guide policy in the current economy. the second point i would make, which i think is a very important point, is if you accept it as having some ethic a

as a tool, the estimate has come 150 to 200 basis points over the last three or four years, which is another way of saying economists believe that what constitutes neutral over the long-term is a lot lower than it was in the past. that suggests a somewhat more demographic with drags and that kind of thing. i think there is some usefulness to the idea of a neutral rate. shery: let's talk about the economic environment right now. they raised the gdp forecast for next year. they seemed to brush off the trade dispute, the tariffs. where they right to do so? >> if they are not seeing any evidence in the data yet of influence of the trade disputes going on, it is probably too early.

i think chairman powell cited the anecdotal feedback that many of the fed presidents have gotten when they take soundings in the various districts. i think that tells you the fed is paying attention to this, but there's no evidence yet it is affecting the economy. the economy is really quite strong and employment continues strong. inflation is in a good zone. there is no reason to react at ofs point to the prospect some disturbance from trade. i think they will wait until they see real evidence. is real evidence or israel transmission in disturbance inevitable, though? is there any useful historical precedents that we see what central-bank policy making look like in the event of a trade war, and should we assume sooner or later we will see it show up as being a short-term spike in

risks?on and longer-term >> that's a good question. i'm not aware of trade matters having had a material effect on and the fact, i could be wrong about that. i need to check my history. u.s. will point out that economy is not highly dependent on trade. the economic data point that has , but notis important nearly as important as domestic consumption and business investment. so we could have a fairly severe and thend of situation, first-order effect might not be that big on the u.s. economy. to factor in consumer confidence and those circumstances, factor in market

reaction, second order effects if we get into a really bitter trade war. very different problems will only look at trade and try to guess the impact on the economy. when you were at the atlanta fed, part of the policymaking by the fed, very different issues now. one thing that hasn't changed. we talk about checking history. many times, the markets are concerned about the fed's mistake if it does too much. the fed's mistake is not able to know when it hits neutral and keep going on rate hikes. is there a risk happening this time? >> policy is always set in a context of really a lot of uncertainty. some of the tools are less than precise, so they are trying to navigate, which i think is what jay powell is using in the jackson hole speech.

they are navigating in a situation of uncertainty between bad outcomes on both sides, and it is never a sure thing. so, yes, something could happen, but i think the current approach of gradual increase in rates that are calibrated to the strength of the economy and to the inflation and employment , veryion is a very solid predictable for the markets, and therefore i think it is a very good path that they have carved out. the u.s. may be able to rein in effects of a trade war because it is not trade dependent anymore, but the effects are playing out clearly here in asia and some of the supply chain hubs around the world. international settlements earlier this week saying the global economy is

looking for carriers, and central bankers, because of accommodative policies, are in the -- are not in a position of power to do anything anymore. you agree? is a concernit that the first thing you would do in the event of a downturn is to cut rates. if the neutral rate isn't around 3%, that doesn't give them a lot of room to move, and once they get to zero, they would have to toolsp with other policy if they felt that they needed to add more accommodation, more stimulus to the economy. is, i think, a really important difference compared to earlier episodes. when i joined the fed into doesn't seven, the fund rate was i believe 5.25%. by december of 2008, it was effectively zero.

there was lots of firepower in the ability to cut rates. in a future scenario, probably not so much. therefore, the central banks are either going to have to be more resourceful, they will after rely more on convincing the public in terms of forward , butnce or communication things are going to turn, but they don't have the strongest tools compared to previous situations. we always appreciate your time, former atlantic fed resident, dennis lockhart, and cap please a -- and kathleen hays. plenty more to come. this is bloomberg. ♪

haidi: the heads of the world's biggest financial firms face a different kid risk -- significant risk. >> cyberattacks are probably

going to be organizations that have under spent on technology. my first candidates would be state governments, who possess social security numbers. for me, the problem could be coming in organizations that are not in focus. has beencial sector under such scrutiny because of the financial crisis that i would say it is one of the sectors that is doing as much as they can. i am not trying to suggest there might not be an impact, but the worry has to be in these other industries. there's a lot of personal information. >> there's a lot of corporation. >> but does it change the markets? >> one of the reasons markets has always, and this correlated to markets positive and negative, his confidence.

confidence and sentiment has a lot to do with markets. at the moment, it is hard, there's a lot going on in the world, and at the moment, markets don't really count. that doesn't mean they don't react with the market -- margins, but they have been less than -- sensitive with some of the things that might have created sentiment shifts historically. >> but i would argue right now despite the equity markets, equities are cheaper today than january. in earnings have been so powerful and appeared to be even more powerful that we witness about a multiple decrease in pes. ,he market is actually now despite the rally, pricing in a little more risk. >> compared to learn we started to q1 in january -- iswhere i was going with it opposed to just the view on whether the market is cheap or expensive now, fiber is an example of something that can

change people sentiment and behavior in a way that can have a second or third derivative effect on confidence and how people to play capital, and how it affects markets. haidi: breaking news. adding china a-shares to the emerging markets indices. ♪

haidi: getting more details on the breaking news crossing the bloomberg in the last few minutes. country reclassification. the top headline, the addition of china a-shares to the indexes 2019.une as expected, there will likely be a little bit of a delay with actual implementation. this comes after three years of being on the watchlist, and finally on the back of the msci, making the same move adding chinese shares to the emerging markets indexes, meaning these global funds will be forced to include yuan denominated chinese shares within their portfolios as well.

estimates, by some analysts, up to $15 billion worth of foreign investor influence into the we knowmarkets, which has been battered of late. greater influence as china's trying to deal with a trade war and boosting sentiment for equity markets as well. shery: they released their classification saying the china a implementation will start in june 2019 and will happen in three trenches. june 2019, then september, then march 2020. 20% in june 20 19, 40 percent in september, 40% in march of 2020. china will be reviewed separately from the asia-pacific japan index. we will be speaking about everything and what this means with christopher woods, ftse manager and governing policy. let's get first word news with jenna dagenhart. china denies it is

attempting to interfere in the midterm elections, dismissing claims as nonsense. president trump the assertion at the un security council after beijing placed an ad and annihilate newspaper tracking -- attacking his trade war. however, trump claims china has been trying to meddle in the , and it wasction rejected as out of hand. >> china has always follow the principle of non-interference in other countries domestic affairs. our observance of this has received a claim from the international community. we do not and will not interfere in any country's domestic affairs and we refuse to accept unwarranted accusations. 3 reporter reporter: reporter: daimler has named its first ever non-german leader as the doctors era heads to a close. he was born in sweden and has

long been seen as the heir apparent. the transition comes at a critical time. in june, daimler was the first global automaker to cut targets over the trade tensions and pressure of unprecedented spending on electric vehicles. china will cut import tariffs from november 1 on goods including machinery, paper, textiles, and construction materials. this will lower costs for consumers and companies amid the deepening trade war with the u.s. the combination of these and other cuts this year would lower the tax burden on consumers and companies by the equivalent of $8.7 u.s. -- $8.7 billion u.s. there is or if bank of new zealand keeping key interest rates on hold. it is assuming growth will pick year, withoming indications that core inflation is rising towards the midpoint of its target range. the rbnz says the next great move could be up or down. rate decisions

on thursday in indonesia, philippines, and taiwan. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. shery: thank you. we are counting down to some of the major market opens in the asia-pacific. plenty for investors to digest from the fate -- fed rate decisions, to president trump's latest commentary. what are we watching? sophie: we are waiting on several central-bank decisions, indonesia and the philippines expected to hike rates to fend off a lien currencies. we did have the rbnz as well seeing pressure for the benchmark, off by a third of a percent. in the kiwi comedy -- we did see some swings on the back of the governor's commentary. when it comes to how the tokyo session is set up, we are seeing

weakness for the nikkei 225 after an eight day gain. when it comes to the session in korea, we could see a gain for the kospi, plenty of catch-up for korean investors in the markets. lookinge dollar is study after the fed decision, keep your eye on currency markets and oil back about $72 after u.s. energy secretary rick perry ruled out strategic reserves to boost supply. when it comes to the session in japan, i want to highlight what's going on with the topics. we jump into the terminal to see what's going on when it comes to a technical indicator. that's the relative strength index. we do have the topics remaining in overbought territory for a third day. on wednesday.led this adds over 1000 stocks traded, and auto is the biggest drag for the benchmark after bmw cut the profit forecast and nissan as well as suzuki submitted reports government. keep an eye on the dollar as

well. 112.76 of the dollar. . . we coul see the dollar-yen get further in the short-term given some of the easing and the treasury yield right here, with a fed decision helping to push the dollar-yen above the july 113.17. we will be watching what shinzo abe might do on his fiscal stimulus plan. stayingof the cabinet after the reshuffling, proving that the tried and tested formula will continue. and also we could see a little bit of a glimmer of hope for carmakers in japan as well as the opening of bilateral trade talks with the u.s. sophie: potentially, as japan is hoping to delay potential auto tariffs with negotiation with

the eventual goal of avoiding them completely. we are seeing pressure for auto stocks yesterday, perhaps we might see some green shoots coming through today. the timeline is ticking. you do have the fed boy for the u.s. to determine if auto imports represent a security risk and present what we are seeing with japan to let trump is seen with canada, saying he will stop -- slap tariffs on canadian auto if there's no progress. this week, the senate finance committee held a hearing with senators from both parties and industry witnesses in general agreement that tariffs on autos and metals would only raise costs, hurt suppliers, manufacturers, dealers, and consumers. the auto industry saying that these tariffs are not going to be great for the industry at large. haidi: thank you for that. sophie kamaruddin on the markets in hong kong for us. in the u.s., the supreme court

nominee brett kavanaugh facing third allegations of sexual beforeuct, just one day his initial accuser is set to testify before the senate judiciary committee. kavanaugh continues to deny any wrongdoing. let's bring in our congress editor. tomorrow is building up to be the big day for his nomination. how do things stand at the moment? reporter: the white house and the republicans in congress are trading very carefully with the accuser, in this case, a california professor. she will be the one testifying and in a sense will be the main despite the other allegations by at least two other women that we know about. give both herill and kavanaugh unlimited time to make opening statements. they will be questioned, five minutes each from each senator. it will go as long as it needs to. it is going to be a very, very

well watched and -- hearing for republicansand the are still trying to press on with a vote on kavanaugh's confirmation as soon as next tuesday. haidi: as i'm sure you have been watching, president trump wrapping up his wide-ranging and lengthy press conference. a huge chunk of that was devoted to really defending brett kavanaugh and putting his support behind him. he initially called the accusations a big fat con job, saying why didn't they come forward earlier, before saying he was willing to listen to the whole story. what kind of message is he sending to senators who are considering kavanaugh's confirmation over the next few days? reporter: the main message is for them to stand firm. this showed a little bit of a breach in the republican strategy, which has been not to disparage the accuser, to give but trump made

this very personal to his own experience. he was accused during the campaign of multiple women of a variety of different sexual misconduct, all which he decried as fabrications. he again related his experience to how he views the allegations against judge kavanaugh as being a fabrication. he was very careful again not to the professorord, who will be testifying tomorrow, but he clearly wants the republicans to stand firm and get the nomination through, at least at this point. it could change at any moment. i suppose it could depend on how both sides, tomorrow in the hearing. shery: so the senate judiciary committee is voting on friday. how about the full sentence? --

senate? ? >> when could we >> see that there is a scheduled vote on friday, although that could be delayed. as soon as a vote could happen would be tuesday. democrats have some ability to stave off a quick vote over the move to so it will tuesday, giving more time for this to settle in somewhat. it is not entirely clear that all -- that the republicans have theotes yet to go with confirmation. there are still a number of sayouts, or i should undecided senators, within their own party, and a number of democrats running in trump states also who are publicly undecided about this. it will go down to the wire on tuesday. shery: thank you so much, joe sobczyk joining us from washington. south african president is among the delegates -- was among the delegates at the bloomberg global business forum in new york. he sought to reassure investor confidence, especially over plans for land reform and

rebuffed president trump's froms of a land grab farmers. >> we were seated together at their launch table, so we never really got time to talk about this. it was a different opportunity to shake hands, say how are you, all that. on the tweet itself, he was clearly misinformed. whoever. gave him that misinformation was completely wrong. there are no killings of farmers or white farmers in south africa. there is no land grab in south africa. we are involved in the process of discussing land reforms. in thes the original sin history of south africa. we are seeking to put right what was done wrong hundreds of years ago, when the majority of the most of the country, was appropriated by a minority, where black people were just

given 13% of the land and white people were given 87% of the land. that is a wrong equation. indusind balance -- it doesn't balance. what we are seeking to do now is to balance that equation and make sure that the land in our country is shared by all south africans who live in it, and that is an inclusive process that seeks to have an outcome that will lead to social cohesion, that will remove the threat and the risk of instability. so we are managing a risk. in doing so, we tried to do it in as an inclusive at a manner as we possibly can. we will do it in terms of our constitution. we will do it in terms of the rule of law. there won't be any mayhem. there won't be any land grabs. this will be, a wonderful process of solutions being brought to the fore by

landowners, by farmers, but companies, and a number of people. the end of this is going to be informed by what nasa and mandela taught us. -- nelson mandela taught us. reporter: do you have to change that can situation? -- constitution? >> that is one of the proposals on the table, whether we take the constitution or we don't. all going to come out in the process of the consultation that is taking place. is one of theis things that we need to consider, and that will lead up to a good have a clear will solution, which will be inclusive. this will take into account the views that have been expressed by all south africans, whether we change the constitution or whether we don't change the constitution.

i'm confident we will come up with a very good, all-inclusive solution. investors were concerned about a number of things. do you feel this is because we are expecting to go too fast in the reforms, too fast in cracking down against corruptions, or do you think it is part of the turmoil? been contenthave about south africa in terms of our policy construct on a number of issues. land has been one of those, and we are giving a very cogent explanation of the process we are involved in. on the other issues, for instance of corruption, we are parley with corruption with that, but other in the mining industry. we are addressing that. on telecommunications, we are addressing that. many of the issues that have been raised by investors on the policy front we are addressing,

and we are addressing all that in a very proactive and positive way. the beauty of it all is that we are including them in the discussions. we are collaborating with all role players in south africa, the unions, civil society, as well as business. you could not have a better outcome out of a type of process like that. haidi: that was the south african president at the bloomberg global business forum. coming up next, more from the global business forum in new york and take a look at what the next financial crisis might hold with citadels ken griffin and the jp morgan wealth management ceo. this is bloomberg. ♪

shery: it is "bloomberg daybreak: asia." i am shery ahn in new york. haidi: and i'm haidi stroud-watts in sydney. 2008 financial crisis left him

anything ever again, but some say another liquidity crunch is inevitable. sharing those views at the bloomberg global business forum in new york. i think jp morgan was incredibly fortunate to only suffer a crisis confidence. it is a real statement about the management team at the time that your core business was largely unscathed, but many of your contemporaries incurred tens or hundreds of millions of dollars of lawsuits related to their portfolios. and that is really the cause of the great financial crisis. it wasn't that lehman brothers blew up over one weekend. it is that we made the kindling with the another video losses that would come from subprime mortgages and leveraged finance. jumping forward over the last 10 years, what would have been some of the salient ways to prosper,

number one has been a huge cyst in car confidence in moving -- car confidence in moving my from fundamentals in understanding the political realm. in the grand financial, -- crisis, we have gone through enough of that suit -- alphabet , who have intended to unleash the spirits. quantity you gave easing has been how do we encourage americans and europeans to take more risk? and there is no doubt that by the metrics, the governments have been successful. if we look at levered loans success, we are at an all-time record at the high-yield and the lack of confidence in this debt. ironically on the 10 year anniversary of the failure of the u.s. financial system, we fueled buying binge that is pushing up valuations that is laying the seeds for the next crisis.

summarize, the 2008 crisis, it wasn't about the lehman brothers or the invest went banks, it was about the housing market where millions lost trillions of dollars, it was a national economic catastrophe, but the post-financial crisis, the salient change has been the weight that all of us have to place on what is going to happen in washington and at the european central bank as compared to strictly the fundamentals of the businesses or assets we invest in. that has been a real change over 10 years, frankly, not one for the better. >> i just want to chime in on ken said. = that is a fundamental shift from where we were before the financial crisis. the amount of debt that has increased in the world is three

to four fold. the groups that used to make that work going back and forth, and make markets, i.e. step in when no one else is there, where the banks. they have shrunk their holdings trillion to $15 trillion. by one third. when we need liquidity in the future -- guess what he is? he's not a bank. he is a fiduciary. he has a fiduciary obligation to care only about his investors and his shareholders. he doesn't have an obligation to step in and make markets for the sake of making markets. it would be a very different way but when we go through the liquidity crunch when it eventually will come. >> will it? >> i think this is an interesting argument that we hear from the friends in the banking industry, which is, what is the role we are going to play in the next great market correction? if you replay history, go to any period in a period of market

price adjustment, no one buys the asset that represents the falling knife. it, specialists don't do it, markets correct in price terms very quickly and very suddenly. the role of the market maker is to demise the availability of liquidity to all participants throughout that journey. that is the role of the market maker. how efficiently can we bring buyers and sellers together? the perception and reality that you can create liquidity helps markets. for example, the new york stock exchange are one of the largest specialists. we have gone to great lengths to work with the new york stock exchange and sec to read -- minimized the times. that is about creating the

confidence investor should have in the liquidity and stability of the u.s. equity market. thatke great pride in work. if i think about today versus 10 or 15 years ago, or 30 years ago, what's important to understand is that the role of the large investment banks has been supplanted by not only firms such as sit and all but by statisticalystem of arbitrage and other short-term trading shops that will absorb risk that comes to market quickly. by forcing this change on the banking systems that the regulators did, and i'm not going to debate the pros and cons of that, we re-architected the entire value change and ecosystem in a way that i think will actually work better in the next crisis. shery: citadel founder and ceo ken griffin with, j.p. morgan asset management ceo at the bloomberg global business forum in new york. plenty more "bloomberg daybreak:

asia" coming up next. this is bloomberg. ♪

shery: welcome back. as we count down the market open in asia, let's look at some of the stocks to watch. here is the carried in. -- sophie kamaruddin. sophie: this is shinzo abe this morning, saying auto tariffs and not apply when the u.s. japan are engaged in bilateral trade talks. also watching the sun as the carmaker pledges to take steps to avoid misconduct. in korea, the country's biggest helping to supply from losses from japan. one highlight from the you and assembly, the boy band from a speech, thatg went viral. we could see moves in stocks related to their label.

netmarble has a 26% stake in that company. haidi: thank you for that. with the market open in japan, south korea, and sydney almost upon us, we will get all the action next. this is bloomberg. ♪

haidi: i'm hardly strong bots in sydney. major markets have just opened. shery: good evening from bloomberg's world headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin, welcome to "daybreak asia." ♪ haidi: our top stories this thursday, chinese a-shares gaming more prominence. second emerging market status from next june. the fed hikes rates as expected. more to come this year and next. president trump is not happy about it. shery: the president also

accuses beijing of meddling in the november midterms. china dismisses the complaint as nonsense. a lot to digest for investors in asia. we arethe rate hike, also hearing from the bank of korea governors saying monetary easing needs to be reduced. let's see how this is affecting trading in asia. here's a sophie kamaruddin. sophie: we are welcoming south korea back to the fray. we see some weakness coming through for the korean won after four days of gains. againstit above 1116 the dollar. we have the deal k governor reporting. is limited impact from the rate hike, but monetary easing is something to consider. when it comes to the picture in australia, sydney stocks are off .0 110 -- .10. in japan, we see the nikkei 225 losing ground.

the topics extending losses we saw on wednesday. auto stock is very much in focus today. the yen is looking steady after strengthening from a two-month low. perhaps as trade issues are set to engage in bilateral trade talks. there could be more room for yen strength, given the recent. easing and treasury yields the fed. 's could push the yen back above 113, along with prospects for more fiscal stimulus. a quick reminder to our viewers. standingve the rbnz a pad. taiwan expected to change, a quarter of unchanged rates. the philippines and indonesia are both forecast to hike rates. the question will be by how much has they joined the rupee at the bottom this year. haidi: busy day ahead. sophie kamaruddin on the markets

in hong kong. let's get you the first word news with jenna dagenhart. jenna: president trump greeted the feds anticipated rate rise by saying he is not happy. policy makers cemented expectations of another hike this year, as well as further increases in 2019. it moved to 2.25%. it's identical to the feds last statement eight weeks ago, despite concerns over the president's escalating trade war. >> unfortunately, they raised interest rates. we are doing so well, i am not happy about it. orould rather pay down debt do other things. create more jobs. thatorried about the fact they think it is right, we can do other things with the money. haidi: china will cut import oniffs from november 1

goods, including machinery, paper, textiles, and construction material. it will lower costs for construction companies with a looming trade war with the u.s. a combination of these and other cuts would lower the tax burden on consumers and companies by the equivalent of 8.7 billion u.s. dollars. the new argentinian central bank president is happy with the peso level, and will not intervene at a range of 34-44 to the dollar. it is also said argentina needs strong control over money in the economy and policymakers will take the necessary steps to ensure the monetary base does not grow. argentina agreed to a new credit line with the imf. in the rupeeund has caused india to raise customs duties on a range of topics from jet fuel to footwear to support the currency. imports of the goods were valued at $12 billion in the financial

year through march. a five-year high in the current account deficit is a key weakness, and one reason why the rupee has been the worst hit currency in asia. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists in more than 120 countries. i'm jenna dagenhart, this is bloomberg. sought tosident trump defend his supreme court nominee brett kavanaugh at a press conference, calling the sexual assault allegations a big fat con job. >> this is one of the highest quality people i have ever met. everybody that knows him says the same thing. , ine are all false to me certain cases. even the media agrees in certain cases. bring in our senior

answered -- our senior international editor. onsident trump seemed intent not replacing his supreme court nominee. >> a good part of the press conference was talking about the nominee and trying to discredit the democrats, who he says are helping foster these unproven allegations of sexual misconduct against the nominee. there is going to be a hearing tomorrow in which one of the isen who alleges mis-conduct going to speak and tell her story. the president says let's listen to her, but he spent a lot of time in the press conference talking about how this was a con job and the democrats are trying to credit the nominee. republicans are standing by him moving forward. the president also talked about a lot of things on the

international stage. he said he is not sure he and president she -- presidenc -- president xi our friends after china is interfering in the midterm elections. the president didn't have hedence of that, but did say has been standing by it and isn't sure he and the chinese president our friends. he also talked about his unhappiness with the federal reserve, six interest rate increases since he took office, saying he is a low interest rate guy, and he is quite unhappy with the fed continuing the rate increases. he also talked about president trudeau in canada, saying he is unhappy with him and the trade talks. he said he did refuse to have a meeting with president trudeau what at the one because of

-- at the you when because of what he says is bad negotiating style. this point, he is still looking at doing other things and going it without canada if he has to. covered a lot of ground, rambling back and forth, still talked about the 2016 election and made some contentions about states being won and percentages he won. butas all over the place, did make a number of statements about his interactions with world leaders. the unhe also said that laughing at him yesterday was fake news. the was interesting was drying out of the timeline and how washington is planning to deal with north korea. thiswanted to put in place

2021 january deadline for pyongyang to get rid of its nuclear weapons, now the president is saying we are not playing the time game. >> that's right, that was the other thing that was striking. things that had been said a few days ago, in several instances by members of his own cabinet, the president seemed to have a different impression. it is unclear what is happening with north korea. speech,ed kim in his un in which he took aim at a lot of other countries. he seems to be wanting to move forward, but the timeline is called into question. haidi: very different tone from the rocket man speech one year ago at the same form. jodi schneider, our senior international editor in hong kong. coming up, china a-shares being added to the index.

we speak to the managing director later this hour. shery: our next guest as chinese stocks are set for a rebound. we talk market strategy in a moment. this is bloomberg. ♪

shery: this is "daybreak asia," i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. chinese stocks are going to rebound. japan is showing strong underlining earnings. the situation described as a close spring. joining us is the head of equity research for asia at union bank. great to have you with us. followingd the news in the footsteps of the msci and adding china you want them unedited shares -- denominated shares to its global index. i want to look at the weakness we have seen in the composite, one gauge of how far we have seen really the chinese markets

fall. if you look at valuations compared to the snp -- ask and &p, do you think the confidence will be the injection and sentiment investors need? think this isl, i well expected and trumped by the news yesterday the msci is thinking of going to 20% from almost five, in terms of rating by next year. in terms look at this of international realization of china's domestic markets, fixed income included. it is definitely a positive. is it the catalyst? hard to say. haidi: what is the catalyst? we have been talking about how bassett and chinese equities are, how expensive they are in

comparison. there doesn't seem to be the appetite from domestic retail investors or foreign institutions to get in there. the current trade situation has been a bit of an issue. we think there is a bit of a window in the fourth quarter for some short-term outperformance from china. a step down we have seen, in terms of 25% tariffs down to 10%. we think it looks like a strategic move from the u.s. we have described it as moving from a game of checkers to a game of chess. it opens up a window. we are six weeks ahead of. the midterm elections. president trump can focus on that. the chinese are not going to negotiate with a gun to their head. i think we have a window where

the trade rhetoric is off of the table, maybe the political rhetoric is on the table. it'll allow markets to focus more on chinese equities. valuation by itself is never a catalyst, but with some of the headwinds lifting, it makes it more interesting. especially some of the domestic related sectors, like health care, education, also the banks, which are generally a beneficiary of any loosening those from the pboc, in terms of reaction to the external situation. shery: we saw the fed hiking rates pretty much expected today. 25 basis points move. let's look at the gtb chart. it is simply showing you the fed whentpacing federal banks it comes to the tightening policy at the end of the day,

what will happen is there will be a bigger winding down with its peers elsewhere. does it mean it will force emerging markets to tighten monetary policy because they will need to defend their currencies? >> i don't think that is necessarily the impact. the u.s. is a couple of years ahead of europe, even further ahead of japan, in terms of unwinding the extraordinary accommodative situation we have had revisit. this was extremely well telegraphed. we only surprise would be if had an increase of more than 25 basis points. ofhink you may have had some the mortgage lenders stock positioned for that. we saw them come off with the confirmation. directly issia more on dollar strength, were we saw

a little bit of a move in dxy. that is generally headwind and cap slates a lot of issues. our central banks going to react to that? no, it is more domestic situation. japan,ious exception is where the widening differential between the fed and boj is generally negative for the yen. a week yen is generally negative for flows into japan equity markets. shery: yet, how do their earnings growth look in a corporate sector? japan, it looks fabulous. japan's earnings bottomed almost two years ago. we are up more than 60% in that time, pretty broad-based.

the markets saw only about 24%, less than half of the earnings growth. that includes the 8% for the last couple of weeks. we have set a couple of things before, sometimes japan is more boring. not much happens for a long period of time. once we get the differential between earnings and the market, it looks like a coiled spring. you can get sharp outperformance from the market. we think that's what we are in right now. you, alongside many other analysts, feeling more constructive, maybe on emerging markets in asia? >> when we talk about emerging markets in asia, we are mostly talking about china. we think the strategic step down, in terms of trade rhetoric, has opened up a window. we have pretty depressed valuations, trade headwinds living -- lifting, at least in

the short-term. that makes us more positive on china and asian emerging markets. it does raise the situation of two points. we could all be revisiting 25% in january. that is one issue. is theond issue situation can change extremely rapidly. it is all in the control of one person. the 25% to 10% was an overnight change. this is part of the reason why the markets are not pricing in the complete worst-case scenario on everything imported from china to the u.s. things can change quickly. haidi: one thing that has been stable was the weakness in the dollar. is that an option you are making? if it stays weak, things can't look to terrible for emerging markets.

we have -- our view is we are pretty comfortable with where the dollar is now. the dollar is strong right now. , thethat perspective stronger dollar has been the opposite of last year, 2017, where the dollar was weak and allow the market to focus on earnings. this year, it is stronger. earnings are still decent. growth rate is slowing. it has been a much tougher year for asia. shery: head of equity research for asia at union bank, thank you. if you have missed that interview that we just showed you, tv is your function where you can watch all of our past interviews. you can also send us questions, ask the guest a question and we will try to get them on it. if you missed out on any of our charts, you can also find them.

this is bloomberg. ♪

haidi: this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. airbus is said to have sent a high-powered team to china to form of a potential $18 billion deal. planeser for 180 neil first touted in january, and will be discussed by the ceo. the allegation -- it also marks the anniversary of the first family line in china. a deal may be announced at november's china expo in shanghai. found an acquire has revenue was overstated by as much as 90% last year. 2017 sales in asia were worth ofut $117 million, far short

the 1.1 billion dollars declared in a recent financial report. the cofounders have resigned, an inquiry has been passed on to the markets commission. shery: the world's biggest producer of chips for mining cryptocurrencies has filed for an ipo in hong kong. the proposed sponsor of the asering, which is to raise much as 3 billion u.s. dollars, is a major test of investor appetite for a digital currency company after bitcoin and its peers tumbled following decembers surge to new highs. says artificial intelligence with half human -- will not replace human intelligence. they are focused on how new technology could impact upon millions of dollars -- millions of jobs around the world. >> the finding is that when we extrapolate it to the rest of

the world. jobsonclusion was a lot of would be significantly, materially affected. when we look at those countries, it will be about 26 million jobs that will probably disappear. the second findings, which i thought were interesting, is because it applies to those tasks that are repetitive, and because there are more women doing those jobs, women are likely to be more affected than men by the impact of artificial intelligence on the labor market. do you think that is true? >> it could be true. that is just one side of the coin. you can also say it is repetitive. relatively simple judgment, it is not that hard. if you try to teach the computer

to drive, it is not that hard. most people when they grow up, they can learn to drive. it is very hard for computers to learn how to drive. companiesr -- a few are working on it. we have quite a few years until ,e get truly self driving highly autonomous vehicles. not completely free from drivers. we will use the computer to enhance the human activities. >> you don't want to replace us? >> i don't. >> one more question. i am expected to read. arounde 40,000 employees the world, many of whom are in

china. are you enjoying a regime, environment, and framework that enables you to research, develop anything you want? >> pretty much yes. china is a big market, there are a lot of people. we have millions of users using our services every day. we can use data to learn how to improve our services. we do have opportunities to innovate. that being said, how do you provide -- protect privacy? how do you make sure technology does not go out of control and do bad things to mankind? there are a lot of things we need to worry about. i do see more opportunities than stress. shery: imf managing director.

coming up, we discussed china's asia includes an, with ftse russell managing director of governance and policy, christopher wood. 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 haidi: it is 8:30 in the morning in hong kong, one hour away from the opening of trading. markets that are already trading across the asia-pacific, looking like a down day as we have investors digesting mixed messaging from the fed going ahead with the rate hike. droppingome next year, the keyword accommodative from their statement, also talking about the mild levels in inflation at the moment. looking like a mixed day for trading in asia. i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. you're watching "daybreak: asia." let's get jenna dagenhart for the first word news. jenna: china denies it is

attempting to interfere with the midterm election, dismissing the claims as nonsense. president's meeting after beijing placed an ad in a newspaper attacking his trade war. it calls the fruit of a president's folly, however trump's claim that china has been trying to meddle in the elections was rejected out of hand. >> china has always followed the principle of noninterference in other country's domestic affairs. observed ance has claim on the international community. we do not and will not interfere in any country's domestic affairs. we refuse to accept any unwarranted accusations. jenna: brett kavanaugh has been accused of sexual misconduct as senate republicans press ahead to hold a hearing on thursday. the new accuser says he was part of efforts during high school to get girls intoxicated so boys

can have sex with them. kavanaugh rejected the latest claim as ridiculous and from the twilight zone. the reserve bank of new zealand kept its key interest rate on hold, saying downside risks to the outlook remain. it's assuming growth will pick up in the coming year, with indication that core inflation is rising towards the target range. the next remove could be up or down, they are awaiting rate assistance thursday in indonesia, the philippines, and taiwan. the dialer named its first-ever non-german leader as the doctors the era heads to the close. replaced nexte year. the replacement has always been seen as the heir apparent. it comes as a credit -- at a critical time. the pressure of an president sending of a vehicle.

global news 24 hours a day, on air and on tictoc on twitter, powered by over 2700 journalists and analysts in over 120 countries. i'm jenna dagenhart, this is bloomberg. at ourlet's take a look asian markets shaping up this morning. sophie: asian stocks are looking mixed. the yen is keeping steady as the fed decision is absorbed. .4%.ikkei 225 is off we see korea coming back from the long break, gaining ground. the cost be up by 2/10 of a percent. we have plenty of catch-up in light of the revised bilateral trade deal with the u.s., as well as development around north korea. as we wait on asian central banks to react to the fed decision. say --ok governor had to bok governor talked about the lead of widening the rate

cap with the u.s., and driving capital outflows. let me show you what i mean with this chart. it shows you the rate gap divergence between the u.s. and korea. tied.k has had its hands we are going to find out more on sentiment when they hold their meeting on october 18. when it comes to stocks on the move, i want to highlight japanese autos, they are mixed. tsuzuki is going to have a two-day drop, even after they report more cases of testing data issues. a furniture maker is sliding, despite pushing better than forecasted second-quarter profits. the company said it would slow down its new store openings in china after signs of cannibalization of existing stories emerged in the first quarter. last week, korean defense linked stocks are climbing, given development around north korea. first tech heading back towards

the highs we saw in the middle of 2018. the company specializes in landmine clearing robots. shery: as we have been reporting, after three years of consideration, the ftse russell will include china a-shares in its indices from next june. the move could push billions of dollars to the chinese markets, helping to stabilize it in his trade war with washington. we are now joined by ftse russell's managing director of governance and policy, christopher would. great to have you here. what did china do right in the past few years for you to move and include its a-shares? engaging withn the chinese authorities. we have seen really positive moves. we have seen relaxation, and we have seen a near quadrupling of the daily quota.

it is positive and helps us make the decision. shery: we see the chinese stock markets are some of the worst in the world? how concerned are you they may backtrack from these financial reforms? christopher: that's not the message we are getting. our decision is looking at the long-term. this is for international investors to get long-term investor -- exposure to chinese equities. haidi: the previous reasons for waiting and saying no three times before the conclusion was finally agreed upon, with things like inefficiencies, settlements, and clearance. you can't say some of the capital control and even operational issues are not still a factor when you are trading in china. christopher: it is important to note that our inclusion of china a-shares is in its first phase limited to stocks traded on stock connect. we are told by our clients, are index users, that they are comfortable using stocks connect

-- stock connect. the mechanism is all very positive. for stock connect, we believe the boxes are ticked. haidi: does it suggest we will see an acceleration when it comes to the shanghai-london connect? christopher: possibly, i can't really comment on that. it is very positive. haidi: let me ask you something i am sure you can comment upon. this gives you a greater competitive edge, given msci, one of your larger rivals, has made a similar move. christopher: the original move was quite smooth. they went for an inclusion factor of 5%. we are announcing an inclusion factor of 25%, 25% of shares available to international investors. although that inclusion factor allowed participants to test the markets to get confidence that stock connect will work

wasn't such a, it significant move in terms of index wight. -- weight. we even announced a 25% inclusion factor for this first stage. it will be enacted over three charges. we saw that msci seems to be responding to that. haidi: you are conservative in that story. would that go to suggest msci was taking a slow and steady approach? particularly at a time of such volatility for the chinese markets, and uncertainty when it comes to the regulatory outlook. there is some degree of risk in taken, andp you have being resigned to the passive funds forced to buy the shares to be proportioned that the decision -- the proportion the decision reflects. christopher: we have discussed

the figure with our advisory committee. we have other committees that are focused on the asian region. they tell us they are comfortable with the inclusion factor, particularly as we will implement it over three charges. every subsequent charge is conditional on the charge prior doing well. shery: what will be the condition for fuller implementation that has to be met? christopher: if we will continue with the stock connect route, we will like to see more stocks coming through, availability. if we can extend our inclusion to include china a-shares is available through keep yorkie, we can see the index to the voters, fewer restrictions, and some provision of ddp for investors using the root. shery: is there a time i were not, or will it consid -- be considered after the charges? christopher: after the charges are done. we have seen if it works well

for purchases. what we haven't seen if it works well for sales. we will see if everything is working fine before proceeding with phase two. shery: what about government bonds? you are still putting china on the watchlist. christopher: for fixed income, indices, historically, have not had the same kind of process for equities. we are announcing that going forward, we will still have a rigorous classification system implementations -- systems. we will test china bonds against the system. shery: the reaction after the msci decision was pretty muted in the markets. are you expecting a bigger response from foreign funds? what are the number of functions of how much of foreign investor inflows are expected to report into chinese markets as a result of this move?

christopher: as a result of our first phase inclusion, we estimate around $11 billion will go in. that will take the weight of china a-shares in our emerging market index to just under 6%. haidi: thank you so much for ofning us, chris woods ftse russell managing director governance and policy. they will include chinese yuan dominated index. trump administration is being urged to resolve its trade disputes quickly or inflict further damage on the company. jim hackett even put a dollar figure on the steel tariffs when he spoke at the bloomberg global business form. -- forum. >> i never imagined trade would be at the height of discussion as it is today. trade is a function of equilibrium, businesspeople can make decisions. sadly, a hurricane or some sort

of fire, you are used to dealing with that. i have two beliefs about trade policy. it has to be updated, it has to be modernized. it has to be resolved fairly quickly. what we are urging our , they needion to do to come to an agreement quickly. about $1s tariffs took billion of profit from us. of irony is a we source most that in the u.s. today anyway. we are in a good place right now, but if it goes on longer, there will be more damage. >> are you making changes in the way you produce vehicles? >> really not. the trade didn't change any of our thinking about that. we are more of an exporter in

that regard. make it in louisville, kentucky. the 25% tariff has made the price of our lincoln mkc not as attractive. we have had to move people in that factory to other operations because of that trade problem. shery: fort ceo jim hackett at bloomberg global business forum. coming up next, tariffs was of conversation with u.k. economic secretary john glenn to discuss why britain is seeking opportunities in japan after brexit. this is bloomberg. ♪

shery: this is "daybreak: asia." i'm shery on in new york. haidi: i'm haidi stroud-watts in sydney. let's go to tokyo, where the uk's economic secretary to the treasury is attending japan's largest syntax summit. we are joined by john glenn.

let's start by talking about what you are doing in tokyo. what kind of opportunities and investment attractiveness do you see in asia? particularly as they face a period of economic uncertainty? andhe key point is japan the u.k. have a lot in common. they have strong syntax sectors. part of the reason i am here is to try to explore why there are greater opportunities for us to work together. theu.k. is the leader in ability. japan has the aspiration to grow. there is collaboration that can be made in london and vice versa. exploring those opportunities, meeting with banks, people in financial services, and hopefully deepening the relationship. haidi: if the changes and uncertainty surrounding brexit

already threaten the viability of existing japanese investments in the u.k., what would be the incentive for a japanese ceo, or any foreign business leader, to double down on the investment? so sure that be there is so much uncertainty. we are making strong progress and making the agreement with the eu. the three things that come together in london, the financial center is the city of london. we have also become a hub for technology for the next generation. we also have world-class regulators in the sca, which helps businesses verify their proposition being fit for the market. those things together are not related to brexit whatsoever. they provide reliable platforms

for businesses to invest and grow. that is what i will discuss today. shery: we heard from prime minister theresa may at the un general assembly promising low taxes for companies in the u.k. take a listen to it. >> whatever your business, investing in a post-brexit britain will give you the lowest rate of corporation tax in the g20. industries and the financial center in london that are the envy of the world. some of the best universities in the world, strong institutions, a sound approach to public finance, and a consistent and dependable approach to intelligence regulation. shery: she was speaking at the bloomberg global business forum. is it the same message you will try to send in asia about low taxes in the u.k.? >> we have been very transparent over the last eight years we

have been in power. it has been an imperative for the british government to reduce the level of corporation tax to make us very competitive. we expect that to continue. we are going to continue to reduce corporation tax to make it the best environment to invest and for financial services, in particular. i echo the prime minister's words. messagee taking the across asia, and the uncertainty that may be is perceived around usxit, does not stop being ready for investment and ready to build the simtech of the future. shery: prime minister may was talking about new immigration rules as we talk about the economy. the understanding is you will set quota for different categories of migrants. will there be restrictive when you try to get top talent? >> it certainly will not be

respective -- restrictive. financial services companies need ready access to the right talent for their businesses. i will make sure working with our colleagues that we will have the right arrangements in place to make it easy and straightforward for financial institutions based in japan who have business in london to be able to move their staff as they need on an easy basis. haidi: the opportunities you are targeting on this trip to asia, can you tell us about what they are? to what extent do you see growth opportunities outside? here in asia making for the loss of business from brexit? >> i have had visits to indonesia and malaysia this week . in japan specifically, there is considerable amount of capital that many japanese leaders are keen to invest in.

the offer in london is unique. we rank ahead of singapore, ahead of silicon valley. it is important the message is heard in japan. we also have big infrastructure projects in the u.k. that i know the japanese are interested in. whethern to explore there is greater interest for more investment. i will discuss with government industries -- leaders of financial industry, to see where the synergies exist and where we can work together. haidi: i'd like to get your views on the proximate -- progress of brexit talks. what is your best case scenario when it comes to the financial sector and banks at this point? in terms of the talks that are ongoing with the eu, what kind of talks are taking place? what are you hoping to achieve or get out of it? >> at the end of july, the cabinet set out a clear position

. we made considerable progress in many of the areas. over the coming weeks, i anticipate we will get to a final point and get to a negotiating field with the eu. for financial services in particular, we want strong bilateral relationships with our good tory and supervisor authorities that allow us to be able to plan for the future. if there isn't, we are toadying aligned with the eu at the moment. if either the autonomous supervisory bodies wish to deviate, we will understand what the process will be so that there is certainty for japanese businesses and banks and financial institutions. shery: given that we are headed towards brexit, and what could end up being chaotic for businesses to understand what's happening, how would you reassure investors, foreign

investors that have existing investments in the u.k., that their money is safe? and how do you bring more ceos to spend more money and capital in the u.k.? >> i don't accept that it will be chaotic. i understand there's a lot of concern until the deal is done. the british government is focused on delivering a deal that keeps us close to the eu, but also develops deeper opportunities overseas, particularly in asia. my message to the japanese business leaders today is to say that britain is open for business, the city of london remains a global hub, somewhere they can rely on a strong regulatory authority supervising transactions and making sure investment can continue. there will be no chaos in the city of london, no matter how the final deal with brexit works. shery: john glenn, britain's

economic secretary to the treasury, thank you so much. still more ahead on "daybreak: asia." this is bloomberg. ♪

haidi: this is "daybreak: asia." i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. let's take a look at the business flash headlines. tesla is offering incentives and

tapping an army of volunteers to boost sales and delivery before the end of the quarter. previous months were about convincing buyers and investors that the company could ramp up production of the critical model three. this period has been about pushing the cars out of the door fast enough to drive our revenue and move towards profitability. getting rid of some preservatives and artificial colors from its burgers, bonds, cheese, and the big mac special sauce. it affects almost two third of the u.s. burger lineup. changeex supply chain for a company with 37,000 global locations. the pickle slices still have a synthetic additive, the catch of still contains high fructose corn syrup. haidi: let's look at what's coming up over the next few hours. what are you watching? >> another day, another ipo. we have the china renaissance group coming to market this

morning. we are having it debut on the hong kong stock exchange. the retail portion was only 82% subscribed, not oversubscribed. shares were $31, and 80 hong kong dollars. it is expected to raise about $2.5 billion in the public offering beginning today. joined bying to be the man himself, the founder of the chief executive, coming up in about 1.5 hours, fan bao. looking at the prospect of the company, what they do with the money, and where we go next in that space. shery: that's it from "daybreak: asia." the china open is next. ♪

♪ david: if president trump called you and said i really need you to come in and help your country, what would you say? condoleezza: i am happy to be doing what i am doing now. [laughter] david: you negotiated with north koreans. condoleezza: when i first heard he accepted the invitation, i thought, nothing else has worked, so why not? david: on the iranian agreement. condoleezza: i did not support that agreement. david: let's talk about vladimir putin. condoleezza: i know him well. he likes me. david: what are the qualities you think great leaders have? condoleezza: a sense of humility about what they can achieve. >> 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.