>> welcome the daybreak australia. we're counting down to asia's major market open. haidi: here are the top stories. three leading international institutions issue an emergency call on trade. the canadian dollar it's a form of high as nafta talks go down to the wire.

the deadline is midnight in washington. haidi: the tweet that cost $40 million and chairmanship of the board. elon musk suttles with the sec. it is a holiday quiet start in asia. markets are closed in hong kong and for the rest of the week will be closed in china for the national golden week holiday. trade here in australia on account of labor day. let's look at how the day shaping up across the rest of the region. let's get over to sophie in hong kong. sophie: futures pointed to a mixed start as they take off a new quarter in the region. new zealand stocks under pressure at the start of october. off by a third of a percent. with hong kong and china closed monday, will not gotcha -- get much reaction from the mainland. when it comes to what is happening in japan, we see futures nudging higher ahead of

the third quarter. corporate sentiment may have hit a ceiling. also this week, investors will be watching for the first follow-through from the boj on its plans to cut super long bond buying. we will see if there is any reaction to the closure of rail and air travel, because of a typhoon brought tokyo to a standstill. in korea, they could start off october on a soft foot. exports expected to have slowed. today marks the start of a process to clear land lines. this could be a landmark. aso this monday we will get bunch of pmi readings from across the region. september inflation data from indonesia, the philippines and thailand. the earthquake and tsunami, they are now under a

state of emergency. activity weakened last month. the official pmi came in at 50.8 compared to 51.3 in august. its lowest since may of last year. but domestic demand still remain strong. tesla boss elon musk settled with the sec, agreeing to step down as chairman as part of a $40 million deal. tesla will also have to add twop ew independent directors and oversee controls of its outspoken ceo. tesla has slumped since august. president trump has denied

micromanaging a new fbi investigation into supreme court nominee brett kavanaugh. a third woman accused him of sexual misconduct will not be included in the inquiry. but trump said he wants the investigation to talk with everyone. a former classmate says the fbi has asked her for an interview. >> the white house is not getting involved in the fbi investigation. the president very much investec -- respects the independence of the fbi. he says they should look at anything they think is credible. rosalind: the death toll from the 7.5 magnitude earthquake in indonesia has topped 800, with casualties expected to reach into the thousands. the government has declared a state of emergency for 14 days, with many victims found on a beach where a festival was being held. survivors of say there were no warning sirens. much of southern and western

japan are at a standstill ahead of a typhoon. this is suspended all rail services for the first time, although they are set to resume monday morning. runways.rt closed two it only recently reopened after being damaged by a previous typhoon. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. u.s. and canada are in last-minute negotiations to update nasa head of a deadline at midnight sunday washington time. -- white house trade advisor says several sticking points remain but everyone is acting in good faith. joining us now is our news editor. fingers crossed, how likely is it we are going to get a deal tonight that also includes canada? guest: we're hearing from all

best guess that the is a trilateral text will be published by all three companies by midnight tonight, about six hours from now. looks like there is still an outside chance canada to be left out. but there is so much momentum from so many quarters to one canada to be in, that we really feel like it is going to come down like that. we have seen the canadian dollar up in early trading in asia. markets are usually right, so they are picking up on that optimism. so, definitely the u.s. congress, u.s. businesses have all pushed the trump administration to want to make a deal with canada. but there are always a sticking points from canada itself. nothing is certain but a tremendous amount of optimism. haidi: what are the key hurdles to getting a deal? ros: one of the things canada is

really looking for is that it could be split off from the trump administration's tariffs on steel and aluminum. if you remember, the tariffs and quotas are supposed to be tied to national security interests, and canada, as a close u.s. ally, really wants to be excluded from any such designation. they also want to be under the yoke of possible auto tariffs. that is a huge bargaining chip for the u.s., because tariffs on canadian autos would possibly send the canadian economy into recession. it is something canada wants to avoid. justin trudeau does not want that to happen. in terms of things the u.s. would like to see canada do, including opening its dairy market and other elements, that is definitely a strong bargaining position. so, and there's a few other rather obscure but important elements, among those being hammered out now supposedly with

the u.s. negotiators on a conference call with the canadian team up in ottawa. haidi: ros, thank you so much for that, keeping us up-to-date with ongoing the gap -- negotiations with nafta in washington. whos get over to jason joins us from austin, texas. great to have you on with us. the s&p 500 had its best quarter in about five years. if we get a resolution on nafta, is this another excuse for a market that wants to keep going higher to actually go higher? a number ofnk for companies it is definitely going to be the truth. i think there would be a lot of optimism for a number of companies that have been under pressure for this. we're seeing a lot of concern. we just heard autos referenced as an area where there is significant concern. canadian companies. i think they would also be a

significant upside as well. haidi: the problem is we've had progress when it comes to korea, when it comes to the structure around a new agreement with the u.s. and japan. but the elephant in the room remains china, right? there does not seem to be much of a circuit breaker that is possible at this point in that trade war. jason: that's right. i think the nafta agreement, or disagreements we have seen and the push towards nafta 2.0 was a disagreement among allies that have been trying to rehash things out. i think the situation between the u.s. and china is much more aggressive. risks gettinghat much worse before it gets better. we have already seen this trade war escalation, a spillover into a currency war. i think that we are likely to see that continue. and i think that is a very different story, and that is the part of the reason why i would

reserve to say there is an upside for everything because the china elephant will linger. kathleen: one more question on nafta. it's an intertwined question, isn't it? just looking at the u.s. trade balance, deficits with mexico and canada, and the white line is trade deficit with canada getting wider and wider. mexico in turquoise is even worse. they have to get a trade deal with china -- excuse me, canada, to get a new nafta with mexico, right? and cars are the sticking point. can they get a car deal? jason: i think that is the big question we will see. we will have to wait too long to see based on the deadlines in place. but i think there is a lot of political pressure to get this done, and i think that it would be really quite bad if it does not. -- for the there

last few weeks we have heard hints and rumbles, and there's quite a bit of excitement around this getting done and moving forward. so i think that is quite likely. it as far as trade issues go, think china is a much bigger concern on a number of different levels. kathleen: let's move on to that big elephant in the room, because we want to talk to you about the purchasing managers indexes, which came in just over the weekend. i have another chart from the bloomberg library showing basically that we saw the manufacturing pmi get lower, right? the services, or nonmanufacturing pmi, actually improved. september pmi at 50.8 down from 51.2. nonmanufacturing went up to 54.9. jason, is this because of the trade war? because new export orders actually fell below 50. the index was at 48, signaling a

pullback. is that trade war? is that a lack of exports? jason: yeah. and that is what we have seen in that pmi -- there are two different pmi's from china. closested that one the because it is the privately composed one from small and medium-sized manufacturers. for a number of months that has been following just falling. -- that has been falling. you might remember it was below 50 for 18 of 19 months between december 2014 and june 2016. that coincided with a huge drop-off in oil prices, aluminum prices, copper prices, iron ore, robert. every -- rubber. everything fell. i would argue that the trade war risks are indeed what has been weighing on these different pmi's. haidi: jason, that flows onto the inflation picture as well. as you see, as deficit and

demand builds up, we also have broader commodities and oil prices, does that change inflation, and therefore the monetary policy picture central banks around the world? jason: our outlook for oil is choppy moving forward. part of the reason we don't see a strong of an upside is because of the china concerns that have weighed so heavily, really all year almost, on aluminum and copper and other gestural metal prices. so, i think that is really where we want to keep an eye on. but that really does not have that big of an impact on central-bank policy, because there are still upside risks from the iran situation. people sayf course china will keep providing liquidity, and the government providing more stimulus to offset the trade war affects. jason, you are sticking with us. still ahead, elon musk suttles with the sec over the going

private fiasco. we will ask if the government shakeup is what they really need. the final stretch of 2018, we look at the biggest market takeaways from the third quarter and calls for the final quarter. this is bloomberg. ♪ his is bloomberg. ♪

kathleen: you're watching daybreak australia. commodities have just posted their longest losing streak in more than three years, and some analysts fear the worst may not be over. still with us is jason shanker. i want to go back to oil, because it was a very interesting week and this is one of your specialties. so, earlier in the week donald trump was complaining about opec ripping off the rest of the

world. then on saturday he speaks on the phone with the saudi king about his concerns about prices. what do you make of this? oil prices definitely have risen. can trump make a difference? jason: a couple things. the first, three big factors have been driving oil prices. the first is we have seen recently pretty good global growth. the second is opec and non-opec members have pulled back a global inventory surplus. thee was a glut after recession through 2016. recently we have certain -- seeing concerns about iran. those have always been -- the downside risk is concerns the trade war would spread. the interesting thing is we switch say -- is we would say there is concern iranian oil could be displaced or completely be removed as a result of

changing u.s. policy, and that is sending prices up. risk,e chinese trade war that presents downside risks. oddly enough, both of these things very much depend on policies coming out of the united states more than almost anything else. kathleen: isn't the eu looking for ways to get around the iran sanctions? it is complicated, but it looks like they might be able to pull this off. if key u.s. trade partners, presumably allies, will head in that direction, how much bite will these iran sanctions have in the end? jason: although the europeans are trying to find ways to potentially circumvent the sanctions on iran, the challenge really is around the swiss banking system, which really is run out of the u.s. so, there's not really a great way around that, so how will the oil be paid for? so there are questions and discussions as there are from

time to time between india and china. how will they pay for the oil? will they not use dollars? will they not use currency? will they use gold? those become the questions. when you get to that, how are we going to pay for this actually, that becomes one of the reasons there are upside prices. haidi: what is your assumption when it comes to the u.s. dollar in the fourth quarter and beyond? has it behaves the way you thought it would in terms of having a fairly muted quarter after we saw that kind of return clearlyhaven affect, exacerbated by the trade? -- trade war? jason: since the middle of 2016 we have had a bullish outlook on the renminbi. but what happened as we saw the trade war stuff he'd up in march, weheat up in changed our outlook on where it was going. the risk the trade war could be influenced changes in bank policy from the people's bank of --na, something we could

think could push the renminbi to even weaker levels against the dollar moving forward. we had been expecting significant weakness compared to where we were earlier in the year. and i think we could see more weakness still from where we are now, even into next year, as long as this drags out. updi: jason, i want to throw a chart and get your views on other broader commodities. mine, canary in the coal if you will, for global growth. in particular looking at how it correlates with momentum in chinese growth. it doesn't look so bad. when you look at shanghai copper ances, it's a bit more of old-school industry-based index and actually seeing a pickup. is this suggesting we are going back to old drivers of economic growth in china? could that be what sustains things like pmi for manufacturing going forward? jason: i think the thing that

will sustain the economy is going to be global growth and global trade. in the u.s. and china are in a very symbiotic relationship, they have been for long time. china a lot of good from and china buys a lot of our debt. is not ahat apple cart very easy thing to do. we very often discussed who can hold out longer, and i really think that china has the potential to hold out longer because there would be perhaps significantly greater negative long-term consequences if they were to bend on the tariffs issue now. haidi: jason, appreciate your time and your views as always. jason joining us from austin, texas. next, a $20 million tweet that cost elon musk is chairmanship of tesla. we will ask if investors get on board after all this drama. this is bloomberg. ♪ s is bloomberg. ♪

haidi: a quick check of the latest business headlines. tencent is reorganizing, reducing the total number of business groups from seven to six. it is setting up a new cloud unit for smart retailing, education, and health care. they will join corporate development, in-flight entertainment, technology and wii chat. indian bank -- as supported raising as much $2 billion, hiking borrowing limits by 40% to nearly $5 billion and increasing share capital to enable and offering. -- an offering. kathleen: elon musk and tesla

sec overa sum to the the weekend. he tweeted he had secured funding to take tesla private. we have details on the settlement of this incredible story. you kind of get the feeling the sec wanted to make sure they made an example of elon musk. you cannot get away with these tweets. >> we are seeing that in terms of the dollar amount. musk, but another $20 million to tesla. you are part of this, you need to reign in your current ceo. i say current because he has maybe the option to step down. for sure fiesta step down as chair. you can see the main details of the settlement. $40 million total in terms of a fine. tesla also has to appoint an independent chairman to take over for that position that elon

musk has to step down with in the next 45 days. tesla also has to add two new independent directors. the reason for this is they basically want to make sure his communications are all above board. we don't have to go through everything he has done, but the tweets heard around the world about $420 is one of the biggest things that cost all this -- caused all this. you will note that corporate governance near oversight is really the brunt of this in order to protect investors. looking at the past two months we can actually see it is down by about 30%. ever since august 6, this is one heck of a roller coaster ride. we will see where shares go in monday trade because theoretically this should be positive news. haidi: what does this mean for the company going forward? ramy: fundamentals is what it all boils down to.

just in the next few hours tesla is trying to get all those deliveries out, because this is the end of the third quarter. if it manages to get those out, elon musk is quite happy about this. bloomberg at an email obtained that he sent to his employees. he says we are close to achieving profitability. that is a word we do not often see when it comes to tesla. we will achieve an epic victory. i have a bloomberg model tracker here. we are expecting the orange line 3'sill in at 90,000 model produced, more than double from the white line from tesla's reporting in the second quarter. theing ahead we will watch share price as well as production numbers out as soon as tomorrow. haidi: see if investors can put all that drama behind them. ramy with the latest on tesla.

plenty more to come. this is bloomberg. ♪ this isn't just any moving day.

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haidi: it is a: 30 a.m. here in sydney -- 8:30 a.m. here in sydney. start of trading for a brand-new quarter. futures looking pretty lackluster. a little more positive looking to the tokyo open. markets are closed today in hong kong, for the rest of the week for the national golden week holiday across mainland china. kathleen: in new york it is 6:30 p.m. and you are watching daybreak australia. let's get right to the first word news with rosalind chin. imf and: the wto and world bank have issued an emergency call to reform the global trading system as the

u.s. a trees from prior agreements. the urgent challenge is to harness the wto and accelerate pacees of -- the chains of in the economy. questions american participation in multilateral agreements. the canadian dollar reached a four-month high. an u.s. and mexico reached agreement in august, putting pressure on canada to reach a deal as well. the final text of the u.s. mexico accord has been held that to see if the u.s. and canada can bridge. the conservative party goes into his annual conference with plans to raise property taxes for foreign buyers. the government says they may -- the sunday telegraph says the rate could be as high as 3%. the bank of england governor said last month brexit could see

house prices plummet by more than a third. saudi arabia is using oil prices to -- it will leave almost $300 billion in 2019, more than the government projected. rates to unemployment its highest in more than a decade. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. haidi: let's get the sophie kamaruddin in hong kong. we are heading into the final stretch of 2018 after asian stocks have capped three straight quarters of the client. -- of decline. it has been a bumpy quarter for asian stocks, in stark contrast

he was equities which posted the best quarter in five years. stocks, they hit an august 2017 low in early september. thailand and japan among the best performers in the region. hong kong and china with the biggest laggards. going into this final quarter we have a host of headwinds facing investors from the u.s. midterm elections, earnings, and rising trade risks. oil will be a big headache. let's see how oil has spread. brent climbing more than 30% over 2018. this will hurt when it comes to inflationary pressures after oil had the longest run of quarterly gains in over a decade on impending supply disruption. reports from some of asia's heaviest fuel importers will be key this week. turning to japan, the yen trading at the weakest level this year.

that is the support sector -- a sentiment for japanese equities. the yen, the worst g10 performer in september, trading close to the 114 handle, which has seen a number of houses tweak their forecast for the currency. last check on the futures, we have a mixed bag potentially for asia's major markets in the region. therate gains ahead of third quarter survey. it could be under pressure as we wait on september trade figures. light trading expected in australia today. the focus will be on banks in particular. we saw banking shares rally friday after a world commission inquiry report from them did not see any penalties recommended you. -- yet. kathleen: sophie, thank you so much. let's move on to trade issues. economic data looming large on wall street this week.

investors getting one more chance to hear from the fed chair jay powell. the end of the quarter, three months where the s&p 500 surged despite these. let's start with jpmorgan's thoughts on trade tensions, what it means for key market indicators. over the weekend i was stunned. particularlyerful, in light of the last week. j.p. morgan chase talking about the actual impact. let's go right into some of the headlines. they are saying we are going to see an intensification. their outlook is for 2019. they believe the unkind -- the endgame believes a 25% tariffs on all chinese goods, a weakening of the yen, and weakening or more of a bear market in chinese assets across

the board, we could see more of a quote, risk premium. very interesting forecast. let's look at the snapshot of the u.s. markets as we head into the week. dollar, it's going to be of interest. those have bounced back. they had a strong month. the s&p 500 did well. crude, that will be a big spotlight this week. it's up in a big way. gtv is where you can find our library of stocks. s&p 500 surges in the third quarter, the strongest gain in five years. very impressive given the fact that we had the yield on the bond above 3% the beginning of the year, now we are right back and seeing these gains. we are to hear from

jay powell. could the fed rain on the stock market parade in the fourth quarter, or is the fed on the back burner? su: it looks like they have accepted a series of fed hikes. we will surely hear from a round of fed speakers. first up and foremost in the spotlight will be the jobs data out on friday. the expectation is that will be gains of about 185,000. but this data will be skewed as the hurricane -- from the hurricane, as we typically see. very much in focus will be what this means for the fed's dot plot, which we have seen at their most recent announcement. salesalso talk about auto which will be coming out from all the way -- all the major u.s. automakers. there are a number of adverse factors impacting demand analysts, including rising oil,

so these numbers will be very important. again, the speeches that will be coming out, the neeb, a very important economic event in boston this week on tuesday in the u.s., that is when jay powell will be speaking. we will also hear from the vice chair of a senate banking committee. there will be 20 of commentary for the market to trade on as to what the future of the rate hike space will be. haidi: in terms of the stocks you are watching, tesla and facebook competing for the negative headlines. what are you watching? su: tesla will have its first trade -- chance to trade since the weekend. s.e.c. and elon musk were able to settle for fraud charges. they took a big drop on friday ahead of the settlement. will it bounceback is the issue.

and will the focus return to the production data? we are ending the quarter earlier this week. the numbers will be out in october. that will provide a new data point to trade on. again, tesla's ceo stepping down from the board, but still the ceo. facebook likely to be in effect -- the in the spotlight as an announces its biggest data breach yet. finally, a big bunch of stocks reporting earnings. a deal in the oil patch with show -- shell. pepsico coming out with earnings. hasbro could be due for a big jump, even though the toy sector has been under pressure. so, that's all interesting. oil near its highs for the years above $73. the hedge fund at sort of moved to the sidelines a month ago. they are very focused on this

idea president trump calling up the saudi king. it appears through as many tweets and actions and sanctions on iran that he is very interested in managing the price of oil. that is a new element the oil market is not really had in the past. haidi: su, thank you so much for that. , see why next australia's banking watchdog has failed. this is bloomberg. ♪ mberg. ♪

kathleen: i'm kathleen hays in new york. haidi: and i'm haidi stroud-watts in sydney. it didn't end well when it came to financial sector in australia. is giving interim report describing an industry with bad behavior. it also criticized --

it did not end well in terms of the reputation, but in terms of the banking stocks, they rallied. what does that tell you about how investors -- ? >> i guess they thought the report would be more damaging. it looks as though the commissioner has also put some blame on the regulators for failing to do their job. maybe the market was expecting much more harsh criticism. haidi: from your point of view is the industry inefficiently regulated? andrew: i don't think so. if anything we have several different watchdogs. it is hard to determine which one should be following which particular branch. here, well, we can see there are a lot of cases that have come to light, some of which the market probably haven't taken seriously. haidi: allegations in findings

include things like charging fees to deceased clients, or charging fees and not providing services. this of course is not to blame the victim, but is -- andrew: i think there is. to a certain degree people are kept in the dark because the do not have comprehensive information on their personal financial information. it is unclear how much they could save if they were to negotiate with different banks. i think it is important that people at least take some responsibility. they can keep track of their own personal finances. they can keep track of borrowing enough money that they need and not too much money that they cannot afford to repay. long people have relied on the bank to protect them from themselves. kathleen: that is interesting to say, and this just sounds so familiar. because the u.s. banking

industry went through this kind of thing and it continued with wells fargo. it is not over. if mortgage fees are not transparent in australia to customers, what are they supposed to do? i think maybe the reason the market said it is not very serious is because of an attitude like that. they can do what they want and move on. andrew: that's the thing, the regulators have not proven that they brought enough wherewithal to want to change. ,hey just said, well, look, yes some of these are fairly isolated and have only affected a small minority. here, we have some people who are claiming, well, we probably charged fees for deceased people, but how many people as that actually affected? i think that is partially what came into this. people are certainly kept in the dark in terms of what information they have access to and how much they are able to actually determine, well, who do i get her -- get a better deal

if i shaft around. here is a lacknd of competition in the banking sector. of allare very confused the different products. the productivity report here called it similar products. kathleen: you have a group of 30. i am sure you have heard of them. buts actually more than 30, a number of people, the less couple years they have been pounding the table about governance and culture at banks. more needs to be done. you need to change the culture management themselves punish this. i wonder if more severe penalties aren't needed for individuals, whether it be a financial penalty, or maybe jail time is too severe but something where you have to really pay a price for misbehaving. andrew: i think that is the case.

when you tryline to have a loan application and maybe it is difficult to determine the circumstances. for a long time here, people have been incentivized to bring people in the could potentially be looking for a loan. there had been ideas behind looking at predatory loans, or at least ideas over mortgage introducing fees that are necessarily favor to banks over the customers. we have been in the ideal where there has been very little distressed to the housing market up until this point. there have been fewer mortgage defaults then there could have been in the event of a real crisis. the banking commission could have been far worse had the economic situation been such that there's potentially a rise in mortgage defaults. the could be some arguments that

if we keep these ongoing there could be more and more stories are similar in nature, but not necessarily systematically powerful. haidi: is the problem structural within the financial industry? brokers third-party with financial sales, and a duty to shareholders. where does the customer came into that? andrew: this is where the fine line is where we have to strike a balance between what is best for the customer and what is best for the shareholders. in australia we are told the banking sector, it's so powerful, so many australians hold shares. there is an argument to be said that we want a strong banking sector to really look after us all. at the one end, there are real cultural issues in terms of people who are working at banks are being focused on short-term sales targets. it is not a surprise that perhaps they could approve loans

that maybe they should not be approving otherwise. on the other hand, the customers are probably thinking, well, there's really no downside to investing in property. property markets have skyrocketed, particularly in sydney. people are saying it is time for me to cash in on this as well. we have seen a lot of instances reported where people have borrowed money assuming property prices cannot go down, then they are blaming the banks when actually the property prices collapsed a little. that was too much for them to handle. kathleen: if you could change one thing, if we made you the whatng czar of australia, would you change about the way the system works now that would lead to a system that incentivizes bankers to deal with all of their customers fairly and honestly? andrew: i think one of the things that i would do is make it transparent over what actual

price people are paying for on their mortgages. i would make the credit scoring system transparent. so people are able to shop a muchand there would be clearer incentive for banks to compete with one another. here, we really are kept in the dark. we are really unsure over what are the opportunities that are out there for me. if i don't know what my own credit score is, and the statistics are something like 80% of people don't know. it is very different from what is happening in the u.s. i don't really know. could i get a better option? i am not sure. there is very little competition between the major banks over here in terms of, i can get an interest rate whether i go to one of the big four banks, whichever one it is. i would like to see transparency in terms of what are the actual rates that people are paying on their mortgage, rather than the quoted interest rates.

we have seen a big difference between what is being quoted and what people are actually paying. some loyal customers appear to be taking the short end of the stick, when they are actually paying more for their interest rates than customers willing to shop around. so really it is putting the power back in the consumer's hands. understand that yes, i am considered to be a good customer from the bank's perspective, so maybe you should value customer service. here, that is not what has been happening up until this point. i think it is really time for consumers to be empowered by knowing where they fit relative to the relative population over here. if prime we will see ministers got morrison starts pushing harder for this. thank you, andrew, for joining us. the former treasury secretary talks to bloomberg about u.s. china relations, and the dangers of a trade war. this is bloomberg. ♪ ♪

kathleen: you're watching daybreak australia. hank paulson's is a trade war with china carries dangerous long-term risks because companies and nations may pull back from doing business with the u.s. he spoke exclusively to bloomberg in chicago and said there were no winners in such a standoff. hank: we dealing with a different china today than even just a few years ago. so, china is now an economic competitor to the united states, it is a security competitor to the united states. it is using its capacities and capabilities to exert influence in long-standing fears of u.s. influence. side, on the economic

john is almost a $14 trillion economy and it has not opened up like it should. so, i think it is untenable for to save thetinue world to keep its markets open for chinese companies if china is not going to open up for foreign companies. so, there's a lot going on. this really believe that trade war obviously does not benefit anyone. impasse is af serious thing. >> is there a more effective way for us to get that opening of the markets? sitting face is very important for them. hank: i do -- saving face is very important for that. hank: i do not think there is an easy way. by far the best way to do it is work with our allies to exert

pressure. to exert pressure that way as opposed to tariffs. not only does public confrontation an issue but the other thing about tariffs is people focus on the short-term impact, which is a tax on the american consumers. i think we do not pay enough attention to the dangerous long-term impact. wantedes and countries -- want to do business with the u.s. because we have reliable, stable economic policies. is, is question really china going to start looking for new markets for which they are going to buy soy greens -- soy beans? they going to be concerned if they need to protect themselves if there is another tariff war and they need suppliers? what about foreign companies,

are they going to want the u.s. to be a supplier if they think the u.s. will come in and break up the supply chain? is a foreign investor going to want to come in and build a plant in the u.s. if they are afraid they will be in the middle of a tariff war? so they are some real potential risks here. so, i applaud the objective, the objective of opening up the market. past efforts have not been as successful as they should be. thei just, i worry about long-term impact. none other than former u.s. treasury secretary hank paulson. that is it for daybreak australia, but daybreak asia is next. let's look at how trading in new zealand is doing. a bit of downside, quarter of 1% lower. futures looking pretty negative. labor day, a long weekend here

in ostrow you. of course we have -- here in australia. dollars,e and kiwi some of the worst performers over the past quarter. plenty more to come. this is bloomberg. ♪ is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. one hour away from the open. >> good evening from bloomberg global-- bloomberg's headquarters. >> welcome to "daybreak: asia." ♪ haidi: our top stories, the canadian dollar hits a four-month high with the new freeway. the deadline is midnight in washington. three institutions