haidi: a very good morning. asia's major markets an hour away from the open. in bloomberg's headquarters in hong kong. haidi: welcome to "daybreak: asia." our top stories -- asian-pacific markets gain as the fed repeats the dollar is strong, the u.s. dollar jumping to a two-week high. elon musk accused of misleading investors. fabricated --e

president trump stands by his men as brett kavanaugh says his reputation is ruined. d isser christine blasey for certain he assaulted her in high school. off thets shrugged latest rate hike, focusing on a strong u.s. economy. st to gain s&p 500 bur 3/10th of 1%. the nasdaq led gains. we had amazon and apple gaining more than 2%. the dollar at the highest level in two weeks, while treasury yields rebound. let's see how this will translate in asia. sophie: we are setting up for games in asia after the recent rally stalled for the nikkei. we could see a bounce back this

friday. toectations are for a cut superlong purchases. we are keeping an eye on test related stocks - -tesla related stocks. panasonic the only supplier to the tesla model 3. in australia, we are keeping a night on thinking -- on ey eon banking stocks. the kospi consumer confidence bouncing back in september. in new zealand, consumer confidence stayed at a two-year low. looking study, but average. of 1%.1/10th the kiwi dollar could be set for a second day of losses. 7:30 a.m. hong kong time we are expecting numbers to show the labor market remained tight in august. later we will get data that may

indicate a rebound in factory production. retail sales growth expected to improve slightly, but remain lackluster. the dollar yen, keeping and on that currenc. trading at 113 spot. horizon, this with the fed bumping up longer-term projections for rates. >> president trump is standing by his supreme court nominee brett kavanaugh, after a day of emotional testimony on capitol hill. trump tweeted his testimony was "powerful and limiting, -- ri veting, accusing the democrats of a sham. kavanaugh spoke after one of his accusers said she was 100% sure it was him who attacked or in

high school. -- her in high school. i don't remember as much as i would like to, but the details of that night that bring me here today are the ones i will never forget. they have been seared into my memory and have haunted me episodically as an adult. >> this confirmation process has become a national disgrace. the constitution gives the senate an important role in the confirmation process, but you have replaced advice and consent with search and destroy. >> researcher energy aspect says a steep drop in uranium oil exports will make the fourth quarter the tightest for demand supply balance in more than a decade. iran's shipments in november may fall below one million euros a day. another analyst says opec's outlook has dropped 400,000 barrels a day. citigroup says brent nace let

below $80. -- may slip below $80. warning of challenging times ahead for ford. the automaker claims it has much to do to reverse its declining fortunes. the ceo claiming the company is making a healthy profit. fitch highlights the risk in ford's $11 billion restructuring plan, which could take five years. hbo is dropping live boxing after more than 1000 bouts over four decades. the network will televise its last title fight november 2, then bow out from the sport where it has been a leading opponent. first air in 1973, when george foreman took the world heavyweight title in jamaica. global news 24 hours a day on air and on tictoc on twitter,

powered by 2700 journalists and analysts in over 120 countries. this is bloomberg. >> the senate judiciary committee will vote tomorrow on brett kavanaugh's supreme court nomination after a dramatic day on capitol hill. president trump has tweeted he is backing his know after testimony he called powerful, honest, and riveting. kavanaugh denied assaulting christine blasey ford after she said she is 100% certain he attacked her while they were teenagers. kevin cirilli is on the hill and joining us now. how successful was judge kavanaugh, which is very defiant tone, in convincing committee members to vote yes? kevin: depends on who you ask. president trump was satisfied

with what judge kavanaugh did in this day of gut wrenching testimony. democrats, they say absolutely not, there needs to be an fbi investigation, many more questions, a slower more thorough process. truly it will come down to a handful of republican senators about whether or not they are going to vote to confirm judge kavanaugh to the supreme court. those include senator collins, theowski, jeff flake, republican from west virginia. we don't know where they stand yet. the other aspect is this is becoming a quick moving process. tomorrow morning at 9:30 a.m., the senate judiciary committee is scheduled to vote to move cap kavanaugh's nomination to the senate floor. there could be a vote this weekend or the early half of

next week. all signs pointing from republican leadership that they want to see judge kavanaugh confirmed. -- fromonse has done democrats has been, not so fast. haidi: we are now getting the latest research survey, a pew research center survey showing the supreme court nomination appointments becoming a top issue, along with health care and a strong economy. how do we expect this to affect the midterms? >> there was one open seat on the supreme court. that was a big motivating factor for republicans, who voted for president trump in large numbers, they wanted to make sure there was a republican to support a ninth justice on the supreme court. now democrats are being motivated that this seat could go to judge kavanaugh, despite the fact he has allegations of

sexual misconduct in his past. that has become a motivational factor for democrats. it is an issue driving out republican women, who are now leaving the party or souring on the party. we see in the polls a large gender gap between republicans and democrats. this supreme court fight could lead to an increase in the so-called blue wave we might be expecting, because the pulse show judge kavanaugh is doing poorly with women, republicans at-large are doing poorly with women ahead of the midterms. it could be in favor of say thiss who want to treatment is not appropriate. times senatorsus pointed out this is a job

interview for a lifelong appointment to the highest court in the land, with enormous ramifications over a half-century essentially. what would happen if this nomination goes through? duties stories stick around? they talk about an fbi investigation or it going through the courts. >> much of it will depend on who controls the court going forward. if democrats take over the house or the senate, they will have the power of the gavel. they can decide if they want to increase investigations. if democrats were in charge, they could ask for more hearings , m investigationso. they could eventually hold a vote on impeachment. i don't think it would be likely unless there is hard evidence to show judge kavanaugh lied under oath or to the committees.

if there is new evidence that contradicts what he said today, that could potentially lead to some hearings on that question. that would only happen if there is a change in power in congress. that remains to be seen in terms of what happens in november. there are a lot of steps to take place before judge kavanaugh gets on the bench, and whether or not there are further actions taken after that happened. we have heard from a few senators asking why judge kavanaugh friend was not subpoenaed. this is only one of the few accusers against mr. kavanaugh. what is next in this investigation? >> it appears the next step is the senate judiciary vote at 9:30 a.m. democrats pressed judge

kavanaugh for his answer to the question, but also judiciary chairman chuck grassley. they made it clear this will not go through the fbi. they indicated the fbi would only do the type of search done before the committee. democrats disagreed. senator lisa murkowski, a republican from alaska, also said it might make the process a bit easier if the fbi had investigated it. that has been a true sticking point throughout this entire process. haidi: kevin, appreciate your time. it has been a long day. covering what has been an extraordinary day of testimony on capitol hill. also an extraordinary day for tesla. shares plunging after the sec accused elon musk of misleading

investors. the sec filed suit less than two months after musk scent of the message about taking the company private. >> while leaving tesla investors to believe he had a firm offer in hand, we allege musk arrived at the price of $420 by assuming a 20% premium of tesla's existing share price, then rounding up to $420 because of the significance of that number in marijuana culture and his belief that his girlfriend would be amused by it. haidi: while musk says the sec suit is unjustified, let's bring in our tech editor san francisco. musk is saying -- sec is saying musk fabricated these claims. the penalties are pretty steep. >> we are talking about fines that could be levied against him.

we are talking about the potential ban from serving as a officer of the company, removal of his influence over tesla. big applications for the stock, big implications for the director of the company. what is telling is how quickly they brought it. it turned around very quickly, which gives one the impression that the sec thinks it has an open and shut case. usually these things take a long time, but they honed in on a specific set of tweets, things that elon musk and others at tesla said about the company, and the impact on the stock. it happened over a short period of time, really a few words he uttered, and whether he had the justification for saying them. it is an interesting case.

the sec makes the case that he, one, either had no justification for saying what he did, or if he did, he should have known that the information he had was not enough to justify saying that funding was secured. in other words, he had meetings with potential investors, including the saudis. they were interested in some sort of buyout. in no way should that have been taken as an indication that he had funding secured. that is the key distinction. what they are saying is as the ceo of a publicly traded company, elon musk should have known the difference. he can't claim to be ignorant here. that is the case the sec is trying to bring against him. haidi: what does it mean for other investigations, such as the doj criminal investigation? >> is a question of, do they use

that as a precedent, or put all the eggs in this basket and let it play out? sec has wrapped up things quickly. potentially the doj could move just as quickly. theirs would be more of a criminal case. really the emphasis is on sec. if you are a shareholder of tesla, there is enough in these implications -- less the fine, he's got the money -- it is a question of, can he continued to serve as an officer of this publicly traded company? to shoretesla's board up management. we talked about whether there was a coo search. in the past, they looked at people like sheryl sandberg.

do you accelerate, or do you renew this search for coo ? we were told recently they were not looking for a coo. but when the job of the ceo is on the line, when you're looking at a ban on him serving, you need to strengthen the bench. there is a lot of management turmoil right now at tesla. a lot of senior people have hit the exit. they really need to bring some stability to this company while the sec case gets revved up, while the doj figures out what to do. you pointed out, the stock in play trading fell -- in late trading fell 11%. haidi: tom, thank you. still ahead, catching up. we look at how surging commodity prices could mark a divergence between u.s. prices and the rest

of the world. >> our market prepares for the world to drag on. our guest suggests there is a risk that has not been priced in. this is bloomberg. ♪

shery: this is "daybreak: asia." haidi: our next guest says markets are like a coiled spring, ready to pop at any sign of improving trade relations between the u.s. and china. he talks of a temporary drag that will not cause any lasting issues. great to have you. do you think markets are appropriately pricing, underpricing, or when we look at emerging markets, overpricing the impact of a trade war? >> i think there are two camps you can look at. as an asset manager, we belief that cooler heads are going to

prevail and gets deals worked out with mexico, europe, canada, that you need to be looking around for opportunities. we believe the international and global markets started a global expansion in early 2016. this is an opportunity, a pause if you will, to take advantage of those opportunities. haidi: where with those opportunities be? clearly there are fragile markets. you need quite a bit of risk appetite to the opportunistic at the moment. where would we be looking in terms of evaluations? brett: i think trade tensions entryreated an incredible point into the emerging markets. i feel they have been completely decimated here, as well as the early international markets. japan, specifically, i feel is

coiled. they land a trade deal with the united states first. they are markets will respond favorably to that. in the emerging markets, if this were to get worked out over the next three to six months, i believe china is an excellent addition to give upside. chart onis gtv the bloomberg library showing how u.s. equity markets have outperformed emerging markets. emerging markets being the whi te line. there is quite a contrast. when do you expect emerging markets to catch up? brett: i think there is some overhead. 2016 and back to early look how emerging markets have moved relative to u.s. markets, we believe there is a longer-term global trend. i believe trade tensions have

created the first entry point since then to get into those markets and take advantage of them. i believe the dollar going up has also added to those tensions. we believe the dollar is in a long-term trend. it has been in the trend and 2016, and we think it continues. >> yet we see the fed continue to tighten, other central banks following suit. companiesff sensitive getting hammered now, are there any individual stories that can still buck the trend? brett: there are a lot of industries being infected in these markets. it seems like people are throwing out the baby with the bathwater. one particular company, we feel this is a newly listed stock less than two years -- it is a

great opportunity. growing year-over-year. they are in the beginning of expansion. the markets they have gone in, they are taking advantage of a fragmented market, stealing market share even from the big-box guys. see treasury yields push above 3%, what is the chance we will see a repeat of the bond market driven volatility we have seen in february? brett: that is some fast and furious volatility. a very special move. -- swift move. it seems like the bond markets are very accepting of the path the federal reserve is going on. i think the federal reserve has done a good job of communicating their intentions. thus far, we feel like the bond

market and equity markets are ok. now, could that change going into 2018? absolutely. as the yield curve keeps flattening, the bond market will be the driver in the long run. >> when you talk about the yield curve flattening, we talk about the fed inverting the curve. analysts are divided over how much of a risk that would pose. what is your take? brett: i think there is a potential of that. inverted yield curve is what we are concerned about. a yield curve could stay flat for many years before it converts. -- it inverts. i think there are many legs left in this economy. the fed has mentioned in press releases about the yield curve flattening. they must a attention to it.

haidi: are there a lot of legs 's position inusk tesla? would you be concerned with an sec lawsuit in his recent behavior? brett: absolutely i would be concerned. it is a lot of responsibility being a ceo and a fiduciary capacity. i think the board seats are an interesting position. his name is everything to that company. they really need to get a true operator to come in. he needs to show willingness to allow that operator to take over day-to-day operations. he needs to perhaps stay on as a visionary for the company. >> at the beginning of the year, we talked about for sure we will see a rotation from growth to value.

have we really seen that? do you anticipate that cyclical move will happen anytime soon? brett: we think it is happening the need the market, -- beneath the market. i think there are incredible opportunities in both areas. the real stock pickers are taking advantage of that. momentum seems to be the leader in the trend. there is rotation occurring beneath the surface, we believe that. shery: have investors priced in the trade war between the u.s. and china? brett: i don't believe the market and investors have priced in a full-blown trade war. that would be a risk to the market if it were to escalate past this. what we see is movement toward de-escalation at this point. financialranklin

chief market strategist brett ewing. this is bloomberg. ♪

>> this is "daybreak: asia." in sydney, we are awaiting a slew of data out from japan. we are just getting it now from bloomberg. lower, at 2.4%, against expectations of 2.5% in august. looking at inflation numbers, 1.3%. higher than the 1.5% expected. excluding fresh food year on year. a little bit better than consensus expected. excluding fresh food and energy,

. prices hason oil been weighing. 6/10cpi number better than th of 1%. those numbers coming out of tokyo. the bank of japan will recommence on its still tapering -- stealth tapering of bonds come january. >> tesla plunged in late trading after the sec accused ceo elon musk of misleading investors. the agency filed a lawsuit, saying he made a series of false statements. the sec is asking a federal court to remove musk as chief executive, saying he committed security front. musk said he is saddened and disappointed by what he calls unjustified sec actions. central banks in the philippines and indonesia have raised rates to bolster their economies

against the turmoil in emerging markets. bump, stepping a up its fight to curb target inflation. indonesia raised its benchmark for the first time intimate. -- time since may. the governor says the bank's stands remains hawkish. sources told bloomberg the boj will continue with stealth tapering of superlong maturities. just last week, the central bank cut buying of notes maturing over 25 years, causing long end yields to decline. the superlong sector is favored by institutional investors. a new report says almost 2/3rd of u.k. companies have not carried out risk assessment on the impact of brexit. many businesses are awaiting clarity or have simply stopped

paying attention. the bcc says the lack of action is most acute among small firms. a report says u.k. consumer confidence fell on continued brexit uncertainty. global news 24 hours a day on air and on tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: we are counting down to some of the major market opens in the asia-pacific. for more, here is sophie kamaruddin. sophie: a lot for investors to digest. we are keeping an eye on what the boj may do, keeping a close eye on the superlong sector. we saw that jump in 30 and 40 years yields on this chart which you can find in the library.

the broad dollar bounce has pushed the dollar-yen to a fresh 2018 high. fed bumping up longer-term projections of its rates. and rubyand rupiah visualized -- rupee visualized on this chart. indonesia and the philippines on thursday increased rates as expected. indicating that more needs to be done to improve sentiment, especially in the face of the firmer dollar. the concern is a ripple effect is being felt in the economy, barring costs rising and companies canceling expansion plans. with that in mind, the rbi expected to tighten as early as next week potentially. thank you so much sophie,

in hong kong for us. politics dominated with that kavanaugh testimony. we saw stocks shrugging that off. dollar jumping to a two-year high. the likes of apple and nasdaq -- and tesla making nasdaq the highest of the day. we will talk about tesla as well. that was the dominant story of the day. we did not see the controversy on capitol hill play into how the markets reacted today. >> people on jane street and wall street riveted with testimony. the dollar rose to a two-week high on a couple pieces of economic data, including durable goods. notice the strength in tech the broadest measure of the market was down.

the dow had a 170 point swing. day on't exactly a rally wall street. the big movers -- you have tech, apple, facebook, amazon in green, up as much as 2%. let's go to the big movers. a lot of red on the screen. bed, bath, and beyond, one of the companies to slash their forecast, saying china tariffs are the main reason, down 21%. the hedge fund owner at e lambert announces a new way to convert debt into equity. it doesn't go over well. was you would be creating worthless earnings. t inher company, dowdupon the bull's-eye, a chemical company down for a fifth

straight day. shares with a dramatic fall. it brings questions of how it will trade in the u.s. come market open. >> let's talk about these efforts by the sec to force musk out of his role as investor, and any role going forward. fabricated saying he this tweet on august 7. that peak, it really did bolster the stock. the sec asking for musk to return any ill-gotten gains, to go to a lawsuit, an unusual move. expect this -- some quick action was needed. orderre asking for an

that would bar him from serving as a ceo or director, which would remove him from tesla if successful. it has been pointed out at the eet,of the show that this tw securing funding at $420, how he arrived at the number was very unusual. torounded up the number $420, thinking it had some significance for those who follow marijuana, and that his girlfriend might be amused. this is not the analysis any ceo would use, and that is clearly part of the sec's concern in removing him from the company, which would raise questions about tesla's future. shery: oil edges higher, but gold at a six week low. su: the dollar playing a small

role in both. let's go to brent crude. what is the direction? brent crude $82 on the day. we are looking at wti. the third weekly gain. with brent, there are questions whether it could go to $100. $82 is where we are. the iran sanctions continue to be the driver for brent. concernss., there are how that would affect supply. the dollar higher after a weakness of gold at a six week low. wills ceo says the bank remain disciplined, despite the departure of its former head. he weight in on fed policy and

the pressures faced by president trump. >> we expect another hike for december, another three hikes for 2018. i think the fed is executing their plans, and the economy is sustaining this policy. i think we will continue to see hikes in the future. >> what do you make of trump's comments having a punch at jay powell? an influence to a ifunterproductive outcome -- any fed or central bank feels contrary to the pressure. in that since, monetary policy should be a matter of the central bank. >> in june, you said you would

not be surprised by a 15% correction. how close are we to the investor turning on this market at the moment? sergio: if you look at the u.s., you could argue we are reaching all-time highs. in asia, you look at what happened in the second quarter in hong kong and in china. 20%.ts were down i think we have seen asymmetry of movement between the u.s. and asia, which is quite indicative of the state of the world, isn't it? mean for youthat and the investment bank? sergio: we regret -- we are sorry to see him leaving. he was very crucial in helping

us to execute our strategy and develop the strategy for the industrial bank. on the other end, we are also glad and proud that one of our on such aning important role. in essence, what it means for us as an investment bank, we operate with the same focus and strategy we have been doing in the last 6, 7 years. >> orcel is gone. are you committed to this bank going forward? what do you want to say to the markets today? sergio: of course i am committed. i want to make sure we execute on our plans. we have a very strong team on the executive board and in the rest of the organization. so i'm committed to lead the

bank to the next frontier. >> the next frontier comes. in terms of shareholders, have they backed your double-header at ib? some point out there are not star names. what do you say to that criticism? sergio: that is the criticism when you see new appointments and the market tends do not know people. i saw comments like that on myself, on andrea, doubting. i am pretty convinced we have strong and solid choices for our investment bank, and the bank in general. we have a lot of talent. we will make sure they get the right exposure. >> you and i have done a lot of sit downs, a lot of changes. you have done share buybacks, finally. people say to me, the stock price is moving sideways.

are you moving back, or is it a pure dividend play? sergio: we are not a pure dividend buyback. we have a plan in place. asset management and gathering in general, supporting their growth, we expect wealth management through businesses to nexttwice the gdp in the five to 10 years. we are well positioned for growth in asia, in the u.s., and we can extract more value from our franchise. haidi: ubs ceo sergio ermotti speaking to bloomberg in london. dollar at a weaker compared to emerging-market strength. this is bloomberg. ♪

haidi: we're counting down to asia's first major market openings. this is how the japanese session is shaping up ahead of tokyo. nikkei futures up ahead 1.5%. we had tokyo inflation data in particular. industrial numbers out in sometime. u.s. stocks giving asia a pretty big lead. this is "daybreak: asia." our next guest says the continuation in the commodity rally may play a key role in reinforcing the convergence theme, driving dollar weakness and further e.m. strength. we have seen the dollar jump to a two week high. joining us is a chief global

strategist. great to have you with us. tell us -- first of all, steve expect the commodity rally to last? this. let me try to on oil were tog, if surge higher, wti to $90, copper to have a second move higher along with other base metals, that to me is an interesting factor that a lot of people would not have expected that could play an important across asset role. dollar start with the the dollar has been the story of 2018. what you have seen over the last

you have seen this decoupling from the nominal rate differentials. that is sort of a regime shift possibly underway, where other factors are coming into play. commodities have rallied over the last couple weeks. it could reinforce the divergence theme is over, and you could see a performance from emerging markets. haidi: one of the bullish factors has been one his going on with oil. we have this chart in our library, brent sitting close to

a four-year high. that on the expectation it will push up inflation. how does that play into expectations for the fed? michael: it is a big factor. when oil collapsed a few years ago, janet yellen looked right through that. she saw that as a transitional factor. production started sliding heavily in the united states. there was a bit of a reassessment, as shale production had tripled, the broader u.s. economy was in a different place. a $26 oil price was not constructive to the hole u.s. inflation story. wtithe fed looks at oil, if and stays0 or $90 there for a couple days, it will be interesting. not focus on core numbers,

inflation metrics. i think it will certainly help reinforce -- certainly the energy reproduction story. you hear stories of truckers getting paid $350,000 a year. it will only accelerate the inflation story. the other chart that is adjusting to look at is the break even in inflation. those to be more sensitive to inflation than nominal yields do. yearu look at real 10 yields, for example, which have gone up a lot this year, you may see those starting to contract. what this ultimately suggests, if tariffs drive inflation could ignite a staflationary risk in 2019.

shery: let me bring in economic data breaking out of japan. we are getting industrial production month-to-month rising 0.7% in august. we saw a weakness in july, where 0.1%.rial production fell 4% growth. was of 1. we got those floods in japan. it seems recovery has slowed. year on year, still missing estimates of 1.5% growth. retail sales coming in better than estimates for the month of august, growing 0.9%. the estimate was for 0.5%. retail trade here on your also %, more thaning 2.57 the estimate of 2%.

let me bring back michael purves and talk about the global markets. japan has seen a strong corporate story. cells markets have risen. the u.s. seems to be doing the same thing. i wonder, when you say we will see this convergence, is it a convergence down or up? michael: between now and the end of the year, my trading recommendation has been a lot of these things are going up, not down. converging up, if you will. there is a second question when you talk about convergence and divergence. do you want to the -- to be long e.m, eurozone, or chinese equities? that gets a little tricky. the japanese prints you just posted, one more confirmation

that the japanese acceleration you saw in 2017 -- it is still taking that pause it is an echo of what we have seen in europe. but of holding their own, not getting that excitement that was that 2017 story, where you saw great appreciation. the other story on the equity side in japan is if the yen -- thato you -- how does factor into the dollar relationship? haidi: when you take the outperformance when it comes to commodities, particularly things like copper, does it give you reassurance the chinese economy is not doing so badly given the trade war? michael: sure, that is the

narrative, that the chinese will simulate around this trade war that does not seem to have any end insight. copper has been bid up. inventories in china are down. the copper premium in china is up. you see this across other metals too. it speaks to that the chinese will aggressively use their toolbox. the currency is certainly not getting weaker with a lot of other key metrics weakening in china. is again, all this stuff early in the stages. it's not like the world needs to see china create one more asset bubble as a way of navigating trade. but if it is going to happen, it is a trading issue you have to factor into your analysis.

if copper and base metals continue to surge, and oil really does take that leap up -- and oil is dependent on sa udi and opec and so forth -- the dxy has been consolidated for some time. it may be the straw that breaks the camel's back to get it to $90. with that, you will see a lot of slow into ian assets. -- into e.m. assets. shery: michael, thank you so much for your time. we are counting down to the market open, the friday session in asia. soph is taking a look at stocks on her radar. sophie: with elon musk in the sec crosshairs, investors worried about the fate of tesla.

keep an on eye on panasonic, the's old battery supplier for tesla. according to the nikkei, toyota n 2020,to begin sale i with plans to export to china and europe. recallg honda's plans to 230,000 vehicles in the u.s. to update rear camera software. says itmaker takeda will work on paying down debt instead of acquisitions. that is a look at the stocks opening in the region. haidi: in the next hour, be sure to catch our interview with chile's president. he tells us about president trump's meeting tomorrow friday in washington dc. what he expects out of that

meeting. he also talked about investments in the chilean economy. could china join the transpacific partnership? take a listen next. this is "daybreak: asia." this is bloomberg. ♪

haidi: good morning. shery: good evening from the scope -- global headquarters. sophie: welcome to "daybreak asia." >> the asia-pacific markets look set to have gains. the u.s. economy is strong. the dollar is jumping to a two-week high.

muskec says elon fabricated his go private tweet. >> brett kavanaugh testifies on capitol hill. she is certains the judges all her in high school. >> u.s. stocks are climbing and ignoring the fed rate hike. on the solidg economic data out of the u.s.. let's see how this is translating in asia. a solid economic picture is keeping the dollar sustained. is trading near its lowest level in 2018, the worst month since april. boj policy continues to diverge. the yen is testing 114. there is a push through that 115 handle. do see stocks in japan

jumping this morning, resuming a rally. the cost of the extending gains potentially for a fourth straight day. is consumer confidence data for the first time in four months. -- we also want to highlight what is going on in sydney. keep an eye on banking stocks. the aussie dollar is under pressure. low, falling to a one-week the worst quarterly streak in 12 years. wellington, stocks are looking to gain ground, up about a third of a percent. i also want to highlight the

offshore you want. -- yan. yuan. a five-game losing streak. -- day losing streak. oil prices, brent below 82. exports are tumbling in the fourth quarter. haidi: thank you. let's get you to the first word news. plunged in late sec accusedr the elon musk of misleading investors with his go private tweet. the agency said he has made a series of false statements. to remove elonng musk as chief executive. hereleased an email saying is saddened and disappointed by what he calls unjustified action. leading investors to

believe he had a firm hand, we alleged elon musk arrived at the a 420%f $420 by assuming premium over this existing share $420 and rounding up to because of the significance of that number in marijuana culture and his belief his girlfriend would be amused. gradualank policy of rate hikes is helping to sustain america's economic expansion, according to jay powell. runningthe economy was at a healthy clip, allowing the banks to move closer to a normal rate. central banks in the philippines and indonesia have tried to bolster the economy to avoid the turmoil in emerging markets.

indonesia raised its benchmark for the fifth time since may, trying to shield the rupiah. the bank stands to remain hawkish, according to the governor. have toldmanagers bloomberg the bank of japan will press ahead with its super long maturities when it announces the october debt purchase plan in a few hours. the long and yield climbed last week. sector is favored by institutional investors. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you for that. standing byump is his supreme court nominee after

a day of the emotional testimony on capitol hill following bytimony by his victim -- christine ford. >> i categorically and unequivocally deny the allegations. i never had any sexual or physical encounter of any time -- of any kind. i never attended a gathering like the one she describes. i have never sexually assaulted her or anyone. that shequestioning may have been sexually assaulted by some person in someplace and sometime. >> the senate judiciary committee will be voting on the nomination on friday morning in the united states. there will be a senate for a vote early next week. let's get to jodi schneider.

dayas been an extraordinary , with testimony on both sides. it is likely senators could walk out of that room with as much data as there is certainty. do we have any inkling as to how that vote might go? you have a very quiet testimony from dr. ford. she seemed calm and assured but she was terrified, which she said in her own words. brett kavanaugh was angry and defiant, saying he hide never done this and the republicans paint this as a fear campaign on the part of the democrats. a lot of questions, but the president said he liked brett

kavanaugh's defiant kind of tone. it does look like a vote will go forward in the committee. then it will go to the senate floor. he willconnell said make sure it comes to before and it will be interesting with the vote could be. republicans have a slim majority there, 51-49. can only afford to lose one vote, only one defection if there are no democratic votes. we have a few republicans who are not sure, including jeff flake and mr. makowski. -- lisa murkowski. this will be a lifelong appointment to the highest court in the land that came down to credibility and can door.

adversarialiant, stance is different to the statement he released prior to the hearing. withthat go down well voters in terms of going into the midterm elections? that is the question. if senate republicans get this what enviable locations -- are the implications about for the midterms? if democrats take the house, there is probability, but the senate is a harder map for them. women and millennials will be very upset by a quick vote in the senate on this. there are also questions about these other women who have come forward with allegations as well.

it came up in the testimony of republican senators, saying, they will get to that later, but if they don't now, when will they? concern inlot of this could doat to the future of the republican party if they push this through. is strongly trump backing his candidate, saying the testimony was powerful, honest, riveting. he also says the false allegations against him were being reflected with the false allegations against judge kavanaugh. how much political capital can president trump afford to spend with this nomination? odi: it is interesting, that

defiant tone brett kavanaugh showed in this hearing the president showed in his news conference the previous day about allegations about him. this is the kind of thing the president likes. but what are all the indications of this? president trump wants to see this go through. republicans are standing by. there could bere some fallout somewhere, particularly among women and independent voters. much, jodiu so schneider. the bank of singapore has moved to an overweight decision. volatility will be part for the course as we enter fourth quarter. our guest joins us now. what drove you to this overweight position in asia? it was a relative call,

technical in some ways. the worst is possibly over for emerging markets. you have valuations on your side, especially relative to some of the markets. are you looking at some of the interest rates going higher? we're also looking at cheaper assets. >> where is the dollar going to go? how will it affect markets? johan: that is an interesting one to discuss. there is a second set of comments from the fed chair.

that could be coming to an end, to be honest. the dollar may be seeing more straight. longer-term, it might have run its course. emerging market calls are independent on those currencies starting to stabilize as well. the fate of the emerging markets is tied up with the dollar. and the fate of the dollar is very much tied with what we see out of this trade war. we see donald trump doubling down on china. we'll ecb dollars shooting up again? dollar we see the shooting up again? are sort ofsides trying between the lines. they are looking for some degree

of responsibility for talks, sanctions are less consumer focused. it is necessary to at least stabilize the situation, to analyze where volatility is going to be. the markets are not too clear about that. atwe will take a closer look the fed and what lies ahead. stay with us. lots more to come on daybreak asia. this is bloomberg. ♪ ♪

is daybreak asia. shery: this has been a think week for central banks. two institutions in asia are raising rates even more

aggressively than the fed. r global economics and policy editor is here with a recap. one has a bacon currency problem, and one has a big inflation problem. weights -- key rates were raised. a heavy lifting may have helped. look what has come since april. this is a big move. at least we have not seen the rupiah weakening any further. the only currency that is weaker in asia is the indian groupie. held on to any kind of gains from this move when it was made yesterday. statement thatcy

this remains frontloaded and preemptive. there could be another rate hike this year. trade war angst continues. the current account deficit is getting wider. we have not seen 50 basis points in the united states for a long time. they are fighting their inflation problem. go to the bloomberg library. rate, ithe inflation say it is creeping at a very fast rate. the target range is 2%-4%. hike, 100the rate basis points since mid-may, the philippine peso is down 9%. it continues to look week.

peso also did not gain too much. they are probably going to have to do more to restore confidence in their currency. that.nk you so much for johan. no us is surprises from indonesia or the philippines in terms of trying to get ahead. effectivenessany in terms of how economies are trying to show up their economies and currencies? there is a lot of work to be done. neither of these economies or markets really have foreign inflows on the fixed income side.

neither of these are going to be solved by what we have seen so far. we could have to keep moving from a currency point of view, and domestic issues. aerging markets only became big issue within the last few months. problemcit was a bigger i don't think if we have additional belts of volatility, there will be more of a job to be done. energy prices are higher for emerging markets and the fed. if you take a look at oil prices , brent is at a four-year high.

this is starting to have an impact on yields rising. change the inflation and the rate outlook for the fed? at the point of the cycle we are lookingw, some years back, four or five years ago. the future could be the second round of core inflation might be more pronounced. if the second round feeds into core inflation, this has additional impact. there is slightly more of an issue now. this also takes the time to feed through. it is not clear what is going on

with oil prices. i think we will wait and see what is going on in markets to see what the affect is going to be. >> if you keep hiking rates, the danger is that it will choke growth. how big of a threat is this for the two economies. >> in this part of the world, trade wars are a much bigger deal. this could try to assess out how

this will play into the supply chains. i think the issue also has to do with market volatility. risk at the margin could shave a few points of growth. >> what about shoring up investor confidence? have they achieved this? this is the next step. you have argentina, turkey, all of these. a change in have central-bank policy. with a few months of hard work, they can do a followthrough. why youanother reason

might want to start thinking about your risk allocation. >> thank you so much. you can get a round out the stories you need to know with bloomberg daybreak. you can get the gist of what is important with the trading session. live from new york, this is bloomberg. ♪ >> let's get a quick check of

the latest business flash headlines. the chairman of samsung electronics has been indicted.

he was accused of leading an operation to sabotage a newly formed unit as cfo. the indictment is more legal woe 's for south korea's biggest company. mine is beingee increasingly grounded for early repairs and faulty engine. it has 8% of the global fleet affected. the issue was discovered last december. requirements for repairs will be published in the coming weeks. >> the joint venture partner of -- must droponths its legal fight to contest the

sale of the operation in asia. coming up next, our conversation with chile's president. this is bloomberg. ♪ ♪ >> it is 8:30 a.m. in hong kong.

we're just an hour away from the open. we are shaping up when it comes to the asian session. there is political chaos when it comes to the brett kavanaugh testimony as we head into the end of the week. at the be looking positivity regarding the u.s. economy coming from the fed chair. shery: you're watching daybreak asia.

let's get to the first word news. president is standing by his supreme court nominee after a day of emotional testimony on capitol hill. trump tweeted he was powerful -- his nominee was powerful, honest, and riveting. the senate will vote on his confirmation on friday morning. one of his accusers said it was one of -- 100% sure it was he assaulted her in high school. >> the details about the night that bring me here today are the assaultedones i will never for. they have been seared into my memory. >> this confirmation process has become a national disgrace. the constitution gives the senate an important role in the confirmation process.

advise andplaced consent with search in destroy. -- and destroy. two thirds of businesses have yet to care he any impact of surveys on the impact of brexit. action says the lack of is less acute among small firms. u.k. consumer confidence fell this month among continuing brexit uncertainty. populist coalition government has agreed on a budget for the next four years, including 2.4% of gdp. the leader of the five-star movement forced the finance to raise the deficit to finance their election manifesto.

a company says a steep drop in oil exports from iran will make this the -- will make the fourth the highest for oil demand in over a decade. citigroup says brent may slip below $80. towel,throwing in the dropping live boxing after more than 1000 ballots over four -- bouts over four decades. televise itsill final fight on october 27. its first fight was on january 27 of 1973, when joe forman -- goergeorge foreman knocked out e frazier to win the heavyweight

title. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: the chilean president used his u.n. general assembly addressed to condemn the venezuelan government and call for more action on climate change. chile's largest trading partner, with copper and key exports. i started by asking the chilean president if he plans to double his country's economic growth. >> the price of oil is going up. our rate of growth is already there and we will honor our

commitment. economy is experiencing a rise. peso hase chilean been going down. we are seeing this emerge market selloff. will this exacerbate economic challenges? have big: we trouble in argentina. they've just reached an agreement that will allow them to overcome this financial crisis. in this difficult neighborhood, the chilean economy is growing. we have had a best growth rate in the last six years. we have achieved.

-- we are happy with what we have achieved. we want to be able to keep growing at 5% or 6% for a long time. shery: which growth reform will you prioritize? tax reform inra: order to incentivize investment. and for the small sized firms. particularly the ones that are going to need a pension. expectancy iny -- chile is going up very rapidly. how will this day labor a commitment? how do you get more flexibility?

within the world of labor and the family? we are working in that direction. chile's credit-rating has been downgraded. do you have a timeline to regain your former rating? we are trying to recovery our -- recover our sound macro economic policies. we are reducing our fiscal deficit. we will recover our trade rating. shery: within your presidency. sebastian: we are working for that. shery: china plays a big role in

your economic growth. how is chile maintaining the straight relationships? china has become the largest trading partner of chile. tpp, veryted the difficult. we finally reached an agreement. the final day, under president trump, the united states decided to drop out. china will join the agreement. shery: have you had conversations with china about this? sebastian: they have demonstrated an interest. for the chinese to

increase their influence in the world/ . the united states should come back to the paris agreement and the tpp. responsiblyeal with climate change. we are the first generation to be hurt by it and the last generation to do something about it. shery: you will have a conversation with president trump tomorrow. what do you hope to achieve? n: one issue i would like to discuss is that free trade is good for everybody. another issue i am sure president trump would want to talk about is what is happening in venezuela.

>> when it comes to investments in the u.s., there has been a little bit of a controversy over chinese investments and protecting some of the strategic industries. controversy over chinese investment in some companies. how to you balance investment, but also protect your industries? sebastian: we prioritize goods, services, capital and people. almost 25% of our trade is with china. thesecond issue with chinese, they are very active in chile's foreign investments. respect the law and fulfill all the requirements, they are welcome.

we don't want to discriminate. shery: mr. president, thank you for your time. chilean president, sebastian piñera. chile once free trade in china to join the tpp. haidi: an extraordinary punch innt, a bit of a the face for washington if that happens. asian markets are shaping up as we get to the end of this week. sophie: asian stocks are being led higher by japanese shares. 225 gained above the 24,000 level. our colleague says a tactical rally could be underway for corby and stocks, given the rebound in consumer confidence. stocks, given the

rebound in consumer confidence. rising sinceeen the trade deal with the united states and korea was signed on september 25. we are seeing the slide on the cost be. one of those movers are sliding, korea and aerospace. space.ean aero sliding after it lowered its annual forecast. october 6 tol visit the very first restaurant yoshinoya opened in 1956. we love your udon. renesas cut the price target and outlook on a chip cycle

slowdown. close potentially high number. elon musk finds himself in the sec crosshairs. panasonic is long about 1.2%. -- panasonic finds itself at about 1.2%. haidi: thank you. sophie checks on the asian reaction to this tesla story. he have a report from te "wall street journal" saying elon musk's lawyers have

reached a settlement with the sec, but that was backed down from on thursday. there is a document that says tweeted outshare he was a reference to weed and did that in order to impress his gilrfriendat the time. it goes to these almost extraordinary levels of sscrutiny that go into these tweets. -- scrutiny that go into these tweets. he dates for celebrities, that does not exempt him from these security celebrities, that is not

exempt him from security ru les. >> people go a long way to impress their girlfriends. imagine if he is banned from leaving these companies and being a director of any company. it is a pretty heavy price to pay. at the end of the month, he actually unfollowed grimes on twitter. it might be all for nothing. >> there are conflicting views about elon musk. investors are not looking for more uncertainty when it comes to tesla. take a look at social media sentiment and what it has been doing/ you can see the negative sentiment just hireling on -- piling on tesla.

you can see the negative sentiment in the second panel pricing. it is not just about the fcc -- gation.there are federal prosecutors after tesla right now . this could be a criminal investigation. this is regarding statements that elon musk has made in the past regarding the health of the company. there was already another sec investigation happening about those announcements he made about manufacturing goals and sales targets. musk is in a very precarious situation. let's move on. kenya to see visit

how the nation is building up its infrastructure with chinese help. this is bloomberg. ♪ omberg. ♪

haidi: this is daybreak asia. oury: the latest episode of belkin road series continues staring globally. we speak to some of the nation's top business figures in kenya. china is looking to build its largest infrastructure project in more than half a century. ♪ >> welcome to mumbasa.

traders have been coming to kenya's oldest city for centuries. the chinese are the latest to try to make their fortune. -- is seen aseen the gateway to east africa. at least five nations rely on this port to get goods in and out. nation's gift infrastructure project since independence from britain in 1963. billion and3.8 china arranged the financing and built the start of a rail network that promises to open up the passage of people and goods deep into the heart of the continent. it has taken travel from the toital down from eight hours five. are well off.

they need to make us more competitive. >> to get our products out there is a problem. we are hoping the markets can be opened up to china and all other countries. these countries are mortgaging their futures. this will lead to a huge amount of debt. lead to china controlling vast swaths of these economies. >> i do not think that will happen. it is a sinister move by china to get control of strategic assets. port ifhey get mumbassa kenya defaults? it's an unlikely scenario.

the benefits we see would supersede these. the infrastructure in this case was necessary. ♪ >> you can catch episodes at 9 p.m. in new york. don't forget our interactive television function. you can watch us live and catch up on past interviews and dive into any of the securities or bloomberg functions we talk about. you can also leave questions for our guests during our shows. this is for bloomberg subscribers only at tv . this is bloomberg.

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attentiont pay enough to the dangerous long-term impact "bloomberg businessweek." -- to the dangerous s long-term impact. tontries and companies want do business with the united states because we have reliable and stable economic policies. is china going to start looking

for new markets for which they are going to buy soybeans in africa? are they concerned they will need to protect themselves if there is another tariff war and they need suppliers? >> that was the former trade secretary hank paulson -- henry paulson's taking about the latest china trade dispute. about everything from the 2008 global financial crisis, including what could spark the next big global risk event. let's get a check of the latest business flash headlines. airbnb's biggest chinese rivals is said to be in talk with investors to take on the biggest name in home-sharing. this company was a potential acquisition target for airbnb two years ago.

plans to separate industrials and materials units of this company in a sweeping overhaul. trade for activist investors. do with business structure and the company's weak performance. challenging times ahead for the automaker. it has much to do to reverse its declining fortunes. the chairman refuses to describe the situation as a crisis, claiming the company is making a healthy profit. but there is risk inherent in its more than $11 billion restructuring plan, which could take five years. >> time to take a look at what is coming up over the next few hours. happy friday. see asian banks -- at

central bank deliver in asia and the philippines. a cooling down of inflation there. cohead oflk to the asia economics to discuss the central bank decision and look ahead at the pmi numbers coming through this weekend. supposedly there is no end in sight for this fed tightening. some of these emerging-market economies are still very much under pressure. >> we are looking forward to it. it for "daybreak: asia cap our market coverage continues. >> stand by for "bloomberg markets." ♪

>> it is almost 9:00 a.m. in hong kong and shanghai. rishaad: asia-pacific mixed. rising, the yen on the slide. yvonne: tesla a loser after hours. elon musk accused of misleading investors. s.e.c. says he fabricated the go private tweet. rishaad: growing predictions of $100 accrued. brent at a four-year high. yvonne: brett kavanaugh testifies on capitol hill. christine ford says

she is certain the jud