heidi: australian markets have just open for trade yourra -- trade. y: welcome to daybreak asia. ♪ haidi: asia pacific stocks are set for a muted mixed start for the week. the focus on china after friday's rally. the fed rate pace will be tested.

president trump talks of deception and lies. : let's get a quick reminder of how u.s. stocks ended on friday. it was a mixed close. the dow closed about a quarter of a percent higher. the s&p 500 just barely under the flatline. looking at these two indexes on a weekly basis, they were positive for the entire week. this is after breaking three weeks of falls. the nasdaq itself. wasn't so lucky, down nearly .5%. on technology, looking ahead to this week, we have a huge slew of earnings. it's the peak week for earnings in the country. we have technology, transports, and industrials. haidi: massive week of earnings ahead. i wonder if expectations might be high. let's look at how the asian

session is shaping up. new zealand is closed today from trading on account of the labor day holiday. australia just getting underway with a bit of downside. the aussie dollar at 71.13. the aussie and the kiwi catching a bid on friday after chinese policymakers. we are counting down to equity trading this morning. the docket is likely comes to data. korea, first 20 days of important exports will give us a good reading on the impact of the trade war in the supply chain here in asia. on fiveei 225 closed lower. nikkei futures looking pretty muted as we get into the start of trading. thee mentioned at the top, chinese session is on the mind,

to see if that brief rally is sustained. arabia admitsi that journalist khashoggi did die in the consulate. they elicited skepticism around the world. saiddent trump initially the estimation was credible. u.s. lawmakers say the killing came from the highest levels of the saudi regime. president trump is pulling the u.s. out of the arms treaty with russia, claiming moscow has violated the terms. the treaty was signed by presidents reagan and gorbachev in 1987 and is considered a landmark of cold war. violate at let them

nuclear agreement and go out and do weapons and we are not allowed to. we are the ones who have stayed in the agreement and we honored the agreement. but russia has not. we will terminate the agreement. jinping: president xi has vowed unwavering support for the private sector in china's latest attempt to calm fears about the slowing economy. xi says anything that negates and weakens the economy is wrong. vice premier said the government vowed to continue to support the private sector. the u.s. is ramping up pressure on china, and may change the way it determines if a country is manipulating its currency. acten mnuchin says a 1988 with a wider definition of manipulation --

china avoided the label last week. however, that could change under the law. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm haslinda amin. this is bloomberg. ♪ ramy: we've got breaking news across the bloomberg terminal. cvs corporation in focus. richard parsons, the interim board chair, is stepping down from the cvs board. this is according to -- citing a move to the state of his health, he says. cvs corporation is considering his replacement, stressed zelnick. both of these developments on the back of what happened with the stepping down of les moonves's. parsonsoration richard stepping down from the cvs board boardo illness -- the cbs

due to illness. 155 companies in the s&p 500 will be reporting results coming putting amazon, google, ubs, and microsoft. with jimbo this with geopolitical -- with geopolitical tensions, su keenan has more. su: that the strong earnings we saw in the past, they went long to stabilizing the market. this week is key. let's go to the. snapshot of the market as it closed on friday. notice the vix index, lower from the prior week. that is a positive. we saw a huge inflow of money into these etf's that protect against further volatility. poised to move higher because of the u.s.-saudi tensions. many are concerned it could

pressure prices much higher. let's look at the stocks that will be in focus. a banner week for earnings. over 150 s&p 500 stocks reporting. notice caterpillar and boeing. these are two of the international stocks, in terms of their sales, that are right in the bull's-eye of these tariffs. and what they have to say about how it's impacted their bottom line could be key to the way wall street interprets earnings going forward. let's look at the big tech reporting this week. this will be critical to the momentum in this category. alphabet and amazon, the faang stocks have been on tenterhooks. a boostget a bit of from netflix, but not enough to ensure investors these two reports could give either a thumbs-up or thumbs down to this followed trade. streets of the wall

strategists, strong fundamentals, that is what we need on display for third-quarter earnings. let's go into the bloomberg and see why. the s&p line -- the s&p 500 has been on wild swings. it has been especially so these past two weeks. volatilityi:more or more selloff to come. it could start weighing on economic growth. sachs'sgoldman expectation are holding. that's why strong fundamentals is what we are looking for. 20% of the s&p has reported so far. this will really give us a big view. if you look at what to key economists from goldman sachs came out with a note on friday, wall street is why the following it. they believe the stock market is

likely to turn from a significant contributor to strong gdp earlier this year to a drag next year, unless we see more of a rebound. half hasimate of about been erased at this point. severe warning that they will have to readjust their forecast and shows the importance of earnings. and what these ceos have to say about tariffs, how it could impact to gdp, not just the market. : there is a new survey out that puts the democrats on track to take control of the house in next month's midterms. thepoll shows the party has nine-point edge. let's take a look at the implications.

we know the polls and let us astray before, but how credible are these? >> they seem pretty confident at the moment. this is not the first time we have seen democrats with a similar read, in the high civil digits or even a double-digit lead in terms of congressional preference. at as you know, it's challenge to get a lot of voters out to the polls in the u.s. many voters in australia may not realize that voting is not compulsory here. millions of people never vote or maybe they vote in the presidential elections in at the midterms. we heard over and over again in the past month that voters are very engaged in the current electoral cycle. certainly the anti-trump voters have been engaged for quite a while. more voters have been pumped up about some of the recent policy moves, like the supreme court nominee process.

when thing that came out today that was interesting, nate silver, a well-known pollster in the united states, talk about how it is hard to judge turnout this year because there are so many races, congressional races, that have not been close for years and years, maybe for decades and suddenly they seem toss ups. so how do we know who will come out and vote in those elections? again and again, we hear that women, young voters, and latinos are the ones that are favoring the democrats this time around. will they get to the polls? we don't know. it's an interesting exercise at the moment. is still a lot of time for an october surprise. we talked about. unexpected anp's unknown plan for a middle-class tax-cut. that's the kind of thing that we could be hearing more and more of in the next couple of weeks. tax-cut,that, this

coming ahead of the midterms, what are the details? or is this just donald trump being donald trump? >> yeah, i think the current thought is that he came up with this idea on the fly. maybe he even read about a democratic plan that had been raised late last week to repeal and replace the 2017 tax cuts laggard, kind of across the board, middle and lower income americans. he may have thought another tax-cut was the way to go. we have spoken to people on the hill in the last 24 hours. they don't know anything about it. you never know if the white house might get to congressional leaders and say, look, come up

with something, some bullet points, a one-page summary, tax cut 2.0. so that's the kind of october surprise that could reverberate across elections in the next few weeks. people in many states have already certitude vote. stay tuned, i guess, and see if president trump makes good on his campaign promise. ramy: we just have a little more than two weeks left before the midterm elections. thank you very much. still ahead, we will examine the fallout from the jamal khashoggi killing. haidi: discussing market strategy while the u.s. bank strength is the only thing to watch at the moment. this is bloomberg. ♪

ramy: welcome back. daybedyou are watching that's daybreak australia -- you are watching daybreak australia. on friday, the banks said the stock market is likely to turn from a significant contributor to strong growth at the start of the year to marv a drag next year. it's a chicken and a situation. what is your read on the state of the u.s. recovery? even just six months ago, it was just inching along. is it running hot enough now that you think we will get to a down part of the cycle soon? >> that is a very good question. like any investor, you want to know what the future holds. it is very difficult to predict exactly. the us economy is unequivocally strong. 3.2%,ta on friday shows

which is well down from the 42 point -- the 4.2%. industrial production figures, if you look at sales, incomes through the earnings numbers through q3, it is hard to argue that the economy is not a good shape. that is good for u.s. dollar assets. some of the things that we are looking at on the horizon is keeping an eye on housing. we see softer data. underwhelming retail sales. so it is up to the consumer, which is a big part of the u.s. economy. that is what you watch to see if fundamentally the u.s. economy is taking. haidi: you look at the consumer and whether or not the trade war will hit them in the pocket. it will be a lagging effect, to be fair. it has more of a short-term impact of volatility on people's concerns and investment decisions.

jobs.e got good stagnant.still we are saying to see a little bit of pressure on wages. overall, the consumer is insulated from the impact of tariffs, although they are concerned more for me sentiment perspective. ramy: honeywell on friday 100cally said they see millions of dollars looking ahead even though they beat on earnings. we see industrials like bowing and caterpillar fall. boeing you think -- and caterpillar fall. what do you think needs to happen before it starts to clamp down? add trade19, you can and tariffs into that equation, where there is the u.s. economy will start to feel the heat from slowing down. probably and to the first or second quarter next year, you start to get some impact. the earnings result you have

seen to date, we have a big week of earnings, so we won't say it has completely been a success. a positive so far, but big numbers this week from amazon, google, twitter, and some of the banks. we will watch closely to see if earnings season ends positively. volatility around the geopolitical risks. but fundamentally, the u.s. economy zynga check. probably looking -- economy is in good shape. ramy: fear of inflation on one hand. we are seeing fed rate hikes. possibly one here in december. the passing on of costs to the consumer, possibly overheating, do you think? what are your thoughts? >> the fed has been fairly clear. they will continue to raise rates. we can expect another one this year and a few more next year, to move rates toward neutral and beyond. there is concern about inflation, that we have not seen it yet.

reason inflation numbers did not come through with real heat. tariffs adding to the consumer, the cost of things leading to some pressure on wages. we will be watching that to the end of this year and into the new year. the trend is for them to continue to raise rates in a gradual form. that will add to some pressure on the economy over the medium term. the em, want to pivot particularly china. i want to look at the rows strength, comparing shanghai .omposite with the s&p 500 we are due for a rebound now, right? we had that rebound as a relief on friday. is this when the market sighs in relief and says, ok, beijing is

here? >> the comments made were a court noted effort by authorities within the market securities and government in china on friday to really send a message that they will support the economy. this was after a slightly softer gdp, retail sales figures showing that the economy is slower than people expected. so that is really to send the message. that sends a signal to investors . maybe this is a good value time to get in. that of the passivity want to be driving into emerging-market assets right now. the capital flows are still strong into u.s. assets. that puts pressure on the em currencies. much to be said, yes, there is a bit of support there, but that was a good signal from authorities. but there is still demand for u.s. assets. haidi: setting up the start of

the trading week for us. more to come on daybreak asia. this is bloomberg. ♪

♪ i'm in sydney. ramy: you are watching daybreak australia. richard parsons is stepping down one month after taking the role. the company says he is leaving for health reasons and will be succeeded for the time being by zelnick. chrysler is set to sell their car parts unit. we are told the deal is worth about $7 billion. an announcement could come later monday. a merger of the two parts makers

will create a business worth more than $17 billion in combined annual revenue, 65,000 employees from tokyo to milan. arcelormittal has been named. it is now set to start final negotiations with creditors, having agreed to create or test a clear about a billion dollars -- having agreed to clear about a billion dollars. haidi: australia's liberal government says that it will fight. the seat held by markham turnbull looks like it will be taken up. it is rare that you get such high drama in a by election. >> it is an extraordinary

results for the weekend. the seat was held by markham turnbull. when he quit parliament two months ago, after he was toppled by his own lawmakers, the latest round of clinical infighting in australia has seen a revolving door of leadership of the past decade, that seat at wentworth was left vacant. there is a palpable sense of anger in the constituents in that harborside electorate. and the government's candidate, a former ambassador to israel, could not cut through that, which left a gap for independent candidate karen phelps to's team right through -- to stream right through. markham turnbull held it by 17.7%. if they go on track, it does look like kerryn phelps will have overturned that majority, the biggest swing against the -election. in a bi

life will get an awful lot harder for the morrison government over the next few months. 75 seats in the 150-seat lower house. likeigned on independence, phelps, and other minor lawmakers to pass legislation. crucially, he will be relying on them as well to survive in a no-confidence motion that the main opposition labor party might bring. thatood news for him is the independence and the minor party lawmaker said they don't want to see the government fall. they wouldn't support such a no-confidence vote. but what it does mean is that the government looks weekend -- weakeened. was a vote on the issues,, change. >> it was desk climate change. on theas an exit poll --

issues, climate change. poll.was an exit more voters pointing to call and climate change for the way they voted. haidi: this is bloomberg. ♪

markets trading here in sydney for 30 minutes. let's look at how the asx is faring at the moment. extending losses into session lows, .8% lower. u.s. stocks edging lower in the friday session as well. amy: markets closed just under the flatline, although it was an up week for the s&p 500 as well as the dow. you are looking at midtown manhattan as we get closer and closer to darkness, as we head into winter here. what was hanging on investments minds -- investors minds was

warning on for the tensions from the u.s.-china trade were and how that might hurt earnings. this is the peak week for q3 earnings here in the u.s. haidi: you are watching daybreak asia. let's get you to first word news with haslinda amin in singapore. haslinda: the australian government says it in tends to see at a full-time, despite sector losers, and the majority in parliament. margin insists there's still a chance liberals can win seats to narrow results. it may be several days before the results are known. italy's populist government has budget, a contentious but will continue to discuss the issue with the european union.

suspending -- the spending plan was by all members of the coalition government. bridges eu rules by forcing a higher than expected deficit. least 22 people are now known to have died in a train crash in taiwan. the express was traveling from taipei to the set -- to the southeastern city of title -- taitung when the train came off the rails. it was one of the new, improved and faster models. an investigation is underway. the tokyo stock exchange will say that it was to blame for an october 9 trading which, but will not -- trading glitch, but will not pay compensation. they will submit the report on tuesday. the transmission of a large

amount of data through merrill lynch japan securities before trading open caused a server glitch. this is bloomberg. ♪ haidi: let's get more on what we should be watching in asia. adam haigh is here in sydney. the very end of last week was eventful, somewhat of a relay for chinese investors. the cavalry is getting ready to get involved. will it be sustained? >> certainly, there was mounting speculation that the national team finally arrived and there was state-backed buying of equities in the chinese market on friday. that's what people have been waiting for for some weeks. 30% down on the shanghai composite from the january highs. this bear market is getting pretty painful for a lot of

people. the authorities are very aware of that. it's a very coordinated language in both the regulators that also from the central bank on friday as well. we saw a bit of risk-taking on friday. the overall question over the sustainability of this is far more harder to answer. . recently had a nice little rally. one of the things that came to that evenont was thing is like the h-share pledging program that has been going on quite widely across at least 11% of the equities companies listed in china, that people are getting behind the authorities getting behind that calling up companies and saying don't ask for those. don't call in those loans. short-term, that is helping, but longer-term, it may be building up a bit of a problem for the future. it will be a tricky start, really, to monday. that china open will be key to a

clearly u.s. futures, taking off in the last hour or sok risk -- in the last hour, risk sentiment. signs of lofty expectations that are going to be tested. q3 earningso season in the u.s., we saw the downgrading of consensus earnings expectations from a very high level to a somewhat less higher-level. we had some of the banks come out. there large huge problems. decline ingnificant some of the industrial and some of the material names in the u.s. market. your gtb library shows a very well, how october has been particularly painful for the industrial sector, the worst month for many years.

we have some other big names in that industry coming out this week. we've also got some of the big tech heavyweights. indeed, and both of those cases, there are a number of examples of companies really alluding to some of the trade war issues, some of the strength in the u.s. dollar that is becoming problematic. peak earnings season, peak period for the ending season, will be pretty key. there might the one silver lining, that we start to get the end of that blackout period for buybacks. if we do see companies trying to buybacks in stock, there is every chance that we get some kind of a sustainable recovery in u.s. equities. y: duffer you to check out our gtb library for some of -- our g tv library.

the federal reserve commitment to a fourth rate hike in 2018 will be tested this week. third-quarter growth numbers show if the economy is maintaining a tax-cut-filled momentum. kathleen hays is here -- tax-cut-fueled momentum. kathleen hays is here. otheren cole whitt consensus for the federal reserve is looking for one more rate hike this year. 12 out of 16 fomc members signaled the fed member meeting in september. said itt of the alanna is considered a dove on policy. he had a number of things to sayk let's look at some of his key phrases. we see the economy continues to strengthen and continue forward in a positive way.

they are trying to keep the recovery going as long as possible, he said. they key rate is between 2% and 2.95%, which is below numeral -- below neutral. that leaves him for more hikes. there are a couple more moves that are left. week.ed speakers this richard clarida, a relatively new vice chair of the federal reserve, will give his first official speech as a man in that position on thursday. that ahead of that, look at the list.

if they don't clarify what is happening next, i don't know who will. the one more thing, gdp, third quarter number was for .2 -- 4.2. it is supposed to remain well over 3% in the third quarter. that is what the fed contenders trend. if that number comes anywhere near forecast, it will just seal the deal for the rate hike in december. haidi: what else are we watching when it comes to central bank on the watchlist this week? kathleen: i have a long list. starting with the bank of japan. release thewill twice yearly financial system reports. why do we care? remember, governor kuroda mentioned this at the last boj meeting. it can be connected to the sentiment we have to tweak policy, let the 10-year yield go a little bit higher to support ranked balance sheets. how will he tie that together? what will it for their meeting a couple of weeks from now?

the next thing on my list is bank indonesia. they are meeting on tuesday. five rentech since may. consensus is that they don't need to do more because the rupiah is stabilized. they talked about being preemptive. they see one more 25 basis point rate hike. the european central bank, no signals expected. continue tapering off their bond purchases, even though we have the italian budget battle in the background. it has been hitting bond markets. but they will look past that and i assume that they will have that settled long before they have to make that eventual rate hike next year. -- raphael bostic of alanna saying that the fed is hashogging the jamal k murder. he said, in case there was some thing like sanctions on oil that

would hit that market, raise that price. and i want to conclude on the people's bank of china. friday, the head of the pboc said that the moves in the chinese stock market did not reflect fundamentals. that theso indicated pboc could be ready to take more steps to support corporate credit, support lending. i think those types of comments, amidst all that is going on, will be closely watched on that central-bank watchlist. .aidi: thank you we will be watching china very keenly. -- the vice premier and other officials have come out in a record needed event to shore up sentiment amid the global

market selloff. stephen engle joins us from hong kong. is this an indication of how much pressure beijing is feeling from the trade war? stephen: absolutely. talked as well about the calvary coming to the rescue of the stock marketl also, the big. wigs. are not talking up the economy. they are talking up the private economy as well as the stock market. the international situation is definitely at the forefront for the beijing officials as a trade war intensifies. it has its gdp report last week. they call it the severe international situation. didn't use the words. trade war, but they are feeling the pressure. and xi jinping come over the weekend, through state media -- pledging unwavering support for the private sector. he said it is a consistent policy of the party's central

committee. they have this severe international situation, which is having ripple effects, ramifications for the stock market, which is $3 trillion in january,p lost since down 23% year to date. gdp growing at the slowest pace since the global financial 6.5%. at it all comes at a time when they bring thetrying to guys -- as well as stricter realtor a frameworks. so the cavalry came out. the banking and securities regulator who said the slump doesn't reflect fundamentals. and as fun -- as kathleen said, the bank is studying measures to ease companies' financial struggles.

so yes, the officials in beijing are concerned about the trade war and ramifications. amy: looking at what they are actually doing, they are talking a lot, but where is the real follow-through? stephen: that has always been the biggest struggle. that is abu mentation of what they pledge. they need to have a speedier rollout of reforms and measures that have already been committed to. but at the top, we talked about this revision, or a draft plan for revisions to the personal income tax that will allow households to ease their burden because of the overall pressures in the economy. they can have deductions for health care, for education, for mortgage interest as well as rent as well as support for elderly relativesl . . the premier also has pledged more significant tax breaks without being specific.

the minister of finance also same are measures are coming down the pike. we are waiting for more specifics. much.thank you very up next, treasury secretary steven mnuchin knows the importance of u.s. economic ties to saudi arabia. that as other allies struggled to accept riyadh's situation khashoggijamal murder.

haidi: i'm in sydney. ramy: and i'm in new york. you're watching debris asia. and saudi arabia, the admission hoggi was killed in the consulate has prompted widespread skepticism. riyadh said that the columnist

had left the building alive. the government says he died in a fight in what it calls "a rogue " operation. >> mistakes were made. the compounded the mistake was a cover-up. that is unacceptable. these things unfortunate happen. we want to make sure that those who are responsible are punished and that we have procedures in place to prevent it from happening again. the foreign minister says that the crown prince muhammad bin salman had no knowledge of what happened. i think we are all trying to figure out exactly what is true and what is not, what is a cover-up here. where do you stand on this? break it down for us. >> we heard multiple narratives at this point coming from the saudi government itself, which show that maybe the right-hand did not know completely what the left hand is doing, which is

disturbing. the talk of a cover-up is possible, they talk of a watched interrogation going horribly wrong is plausible. but whatever the details come i think the focus for the white house is on coordinating -- details, i think the focus for the white house is encore knitting with the saudi government. they won't allow details leaking from turkey of the investigation, of the investigative reporting we have seeing around this interfere with bilateral strategic relationship. ramy: it really does come down in large to donald -- in large part to donald trump and what he thinks is the truth and how that impacts u.s. ties with the saudis. what do you think this has to do with the trade deal, the u.s. arms trade still, $110 billion, signed earlier? >> of course, these big arms deals mean a lot to president trump. he is very business

transaction-oriented. is a$110 billion figure little misleading. a lot of these arms deals extend from the obama era and even the bush era. they take a very long time to play out. but it is a very important defense relationship between the u.s. and saudi arabia. that is something that the white house will maintain. but we could see some real interference from congress, given that this is an issue that is galvanizing a big bipartisan reaction. this is where you have powerful figures, like senator lindsey graham, who sits on multiple committees, including with influence on appropriations, that could stand some of those defense sales as they are announced on more of a piecemeal basis. we saw hints of this in a very close senate vote on arms deals that were linked to any potential civilian casualties in yemen. that trend was already there,

the congressional response to limit arms sales between the u.s. and saudi arabia. is not like all of those deals go out the window in one fell swoop or anything like that. you could likely see some interference. haidi: where does this leave iran as part of the u.s.-saudi strategic alliance, especially with iranian oil and what makes up for that? >> of course, the u.s.-saudi relationship is made up of many different facets. aen the -- the iran issue is big binder. you see the white house taking a very hard line on sanctions, going to extreme area lengths on it can go on secondary sanctions as well, refusing waivers to a number of key trading partners. a bigeans we will see running shortfall in the a big running shortfall in the market. november 5 is just around the corner.

of course, president trump does not want to see a big hike in oil prices ahead of the midterms. he has been leaning heavily in the saudis to temper the oil prices and raise production itself. that is a negotiation that plays into this entire context. and saudi arabia has given some pledges that it will temper the oil price and increase exports to some degree. but it is also worried about getting too deep in its capacity. it is already hitting that limit. haidi: we have seen a number of u.s. allies really struggle with the extent of the reaction to this, everything from germany and putting their arms sales on hold to what we are seeing in the u.s. you have president trump admitting now that the narrative from the saudis have been marked with section allies. at the same time, he says the crown prince, he maintains he is a strong person. will we see a stronger response from the white house? >> i don't think you will from the white house itself.

this is the white house that has taken unilateral action on foreign policy. less than amount ago, the inmans and the saudis were damage control over her comments -- over comments from the lebanese minister. there is a lot of back-and-forth going on. the europeans are taking a stronger stance. congress is taking a strong are stance. go to the summit in riyadh last spring where trump said we are seeking partners, not perfection. i guarantee no one is listening more to that message than muhammad bin salman. he took that message and he ran with it. it's not just the saudis. you look at bahrain, the united admits-- the united air -- the united arab emirates. there's something deeper going on here where they are trying to

draw the line on any foreign affairs meddling. trump says that he will pull out of the intermediate nuclear forces treaty. to what do you agree -- to what do you think this is a push to do something bigger or a mistake like mattel gorbachev said. >> the u.s. will try to deploy -- try to bring the russians back to the table. it has not worked. bolton is a huge influence on this. you see this trend of withdrawing now i negotiating later. he will be carrying that message when he meets with russian officials. you have to remember china in this mix. china is not party to these treaties. the u.s. is making increasing competition for china. it needs for its ability to deal with china. withdrawing is very real from the inf. what to watch for is this also

negotiations in the new start treaty which is crucial for arms control. ,aidi: getting some numbers trade numbers from south korea for the first 20 days of october, a strong number, 31.4% when it comes to exports. exports coming in at eight when he 6% clip, quickening from the previous -- coming in at 26%. the trade war see asian demand, global manufacturing demand, as well as the impact on the asian supply chain still muted. we will get more analysis coming up soon. this is bloomberg. ♪

is now the time

to get out of equities? is now the time to get into fixed income? it depends on where you are. a couple of interesting acronyms from tina to trf. we will explain in a few moments. this is bloomberg. ♪

haidi: a very good morning. asia's major markets have just opened for trade. ramy: and good evening from new york. welcome to "daybreak asia." haidi: our top story, asia-pacific stocks look set for a mixed start to the week. focus on china again after a relief rally and top level calls

to come. just join government says it will fight on despite looking to lose its parliamentary majority. aty: widespread skepticism saudi accounts of the death of jamal is sotchi -- cheap -- ramy: it is a new day and a new week ahead. which markets should investors be looking at today? just looking back at last week it was a bit of a crazy week. fridaye u.s. closed on the s&p 500 fell below 200. that sentiment is creeping into asia. u.s. stock futures are falling and we have australia down as well. i would say you are looking at asia in general but then of course china we need to watch as

well. people are going to be watching to see whether or not the rally will continue today as more verbal support has been coming through from chinese officials over the weekend. a lot is going on in the central bank space this week. what are investors watching for which could be impactful? >> there are a lot of rate decisions coming through. that is definitely something people will be watching. a lot of earnings coming through from the u.s. which i think will garner a lot of attention. amazon, google, twitter. that will take up a lot of attention from investors and that will seep into asian markets as well. aside from that there is also the xi and abe meeting which will be interesting to watch. we will see what happens there.

the rate decisions will be a good -- an interesting deal as well. ramy: let's get the first word news now with haslinda amin. good morning. mixed reactions from u.s. allies after saudi arabia admitted that journalist jamal khashoggi was killed when he visited the saudi consulate in istanbul more than two weeks ago. france wants more clarity and germany suspended arms sales. president trump initially said the explanation was credible, but u.s. lawmakers said the killing came from the highest levels of the saudi regime. saidsh president erdogan he will reveal details of his according to ay, turkish newspaper. is planning to pull u.s. out of a major arms treaty with russia, claiming moscow has violated the terms. the intermediate range treaty

was signed by president reagan and gorbachev in 1987 and has been a landmark from the cold war. he says russia has been secretly developing a missile system in defiance of the 30-year-old agreement. >> we are not going to let them andate a nuclear agreement make weapons and we are not allowed to. we're the ones who have honor the agreement and russia has not unfortunately honored the agreement, so we're going to terminate the agreement. haslinda: the u.k. government is hinting at increased flexibility on one of its so far unbreakable red lines in the bridge to divide with brussels. negotiations have stalled and how to prevent a hard border in ireland. the sizer edging towards an agreement towards a so-called backstop which would keep britain in the union for the for siebel future.

>> we placed -- foreseeable future. >> the one big issue remains this bridge. i do think if you listen to the new music, there is goodwill and pragmatism on all sides. we need to see that through. haslinda: italy's populist government has approved its contentious budget. said the land was approved by all members of the coalition government and brush aside warnings of a potential ratings downgrade. thanresees a higher expected deficit. 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 haslinda amin. this is bloomberg. arabia,rning to saudi

the country is calling the death of journalists jamal khashoggi a quote, tremendous estate perpetrated by a rogue operation. >> it obviously was a tremendous a stake -- mistake made. that is unacceptable. these things unfortunately happen. we want to make sure those who are responsible are punished and that we have procedures in place that prevent it from happening again. the about turn and response has prompted a lot of skepticism and many allies are not convinced. we are by our senior international editor, jodie snyder. how are washington and its allies reacting to this seemingly ever-changing narrative? >> this evolving narrative is getting a lot of attention worldwide. is saying that while he sees this as deception and lies, at the same time he said the crown prince is a had noperson and he

involvement in mr. khashoggi's death. germany said it will put his arms sales with saudi arabia on hold until more comes out. and congress is pressuring the administration and president trump to react and look at to change the relationship between the united states and saudi arabia, including arms sales, which the president has reiterated he is very reluctant to give up. ramy: on the topic of arms, mr. trump also said he plans to pull out of a nuclear weapons pact with russia. what happened to his great relations with moscow? jodi: it is interesting. he came out with this and surprised many people, including congress who said they did not

know about this. it looks like he is trying to have some tough talk on russia and he is doing it through this arms dale date -- this arms treaty deal. this concerns other u.s. allies including germany and others who think it would be a bad move to a lot of this deal, especially given that we are not hearing anything else that will replace it. this could be president trump, he has done this in the past where he tough talk and then walked it back. everything he is saying right context be taken in the with those midterm elections coming up in two weeks. much of what he is doing is trying to get republicans and his base to turn out in those elections. haidi: which is why he is talking about another tax cut ahead of these crucial midterms. do we have any details? jodi: not really. that was a really big surprise, including chief tax writers who

had not heard about it. the tax cut which was passed last year really is viewed as having helped companies and wealthier individuals. while there were some benefits to the middle class it is not fade -- played as a middle-class tax cut. now he is saying we will give soon, butd do you one congress is not even in session. this is viewed as trying to increase turnout in the merger elections and try to go to more middle-class people, who polls show they do not think they benefited from a tax cut. haidi: quickly on brexit, there are some indicators the u.k. and softening itsybe stance on the customs union. jodi: that's right. theresa may is trying to come up with some deal that would allow basically the u.k. to stay in

the customs union for a while to increase and expand the transition period. because there is a lot of pressure from the eu to come up with something so they can finalize this divorce. we will see how well that plays. face someo going to pushback from members of her own coalition in terms of eurosceptics who do not want to see this delayed further. this is a very divided parliament. she would have to seek votes on the other side, so we will see how this plays. but there is a lot of pressure on her to get a deal through. haidi: the clock is ticking. thank you so much for that, jodi. government liberal says it will fight on despite heading for humiliating defeat in a weekend election. the seat formerly held by the ousted premise looks to be won by an independent.

that means scott morrison would loses parliamentary majority. ed johnson is here in sydney for us. the voters have sent a clear signal. ed: they have indeed. election results looks like it is the biggest ever swing against a government in a by election in australian political history. he had held that district by a whopping 17.7%. that is huge. karen phelps has completely turned that around. she is currently about 1000 votes ahead. the expectations are she will take that seat and with it, a race scott morrison's parliamentary majority, just after two months. haidi: we expect a federal election by may. what does that mean from now until then? means the government now only has 75 seats in the 150 seat lower house. and aks weakened

vulnerable and relying on the support of minor party lawmakers and independents like karen -- keyto pass keith pieces of legislation and survived any no-confidence votes. that puts it in a sensitive position. is those minor party lawmakers have said they have no interest in seeing the government fall. they would not support any no-confidence vote. it will make for a lot between now and elections in may and make it very difficult for morrison to establish a policy agenda and show he has any signs of authority over parliament. ramy: in terms of trying to get any policy through, whether through may or beyond, what are the main issues that was to be driving this? i understand climate change and immigration were key issues most recently. ed: that's right. there was a palpable sense of liberals fore

ousting malcolm turnbull. this latest round of infighting. australian politics have been in such turmoil for a decade. it was not just his affection with him being ousted. an exit poll saturday night showed two key issues that cause voters to vote for phelps was the government support for the coal industry and lack of action in battling climate change. it is also very interesting that an independent has cut through. just seven months out from national elections, that is a message that both the labour party and the liberals will be looking at very closely. this general sense of voter disengagement with mainstream and the factties, they are now supporting independence instead of labor or the liberals. ramy: looking ahead to that. ahead, we will discuss the

outlook for global effects with state street. they say the forecast for the u.n. is -- joins next, hartmut issel us. this is bloomberg. ♪

haidi: welcome to "daybreak asia ." stocks in asia facing a mixed start to the week. remember on friday we heard from the pboc that banking and insurance regulators and security regulators all issuing statements marking their support for the market and for economic growth, promising measures to ease pressure on companies with a higher proportion of pledged shares. ubsing us is hartmut issel, head of apac equities and credit.

we saw a relief rally on friday. is how the ball and knife stops small and -- falling? it seems the calvary and national team have arrived. hartmut: we do think regarding china, that the authorities have also learned better to deal with these types of situations. a national team in a sense of 2015 would have tried to go in and buy and support the markets that way. we have seen it is difficult to sustain, so we do not think this type of support is very likely this time. itthe pledging side we think is more credible to do it more in the background. to your question of how far or how close are we to the bottom in china, we have done a bit of an exercise a few days ago on all of asia because in many of the markets, not only china, we

see this fear factor. --took stable mashers measures and compared to where when people are really panicked in the markets, how low did we go. but in asia we, are about 14% away from those bottoms. we are coming close. certainly from a valuation point of view it looks increasingly attractive. haidi: does the volatility of the last couple weeks -- fundamentally the selloff from the u.s., are we getting closer to if not the end of the cycle, but the down segment of the cycle? hartmut: it certainly suggests that the cycle is beginning to age. terms if it should come out of the u.s., in 2019 it

is unlikely simply because the stimulus we got to where this year -- we got earlier this year is still working through. we predicted slower growth for the u.s. in terms of gdp and earnings for next year. even though it will not disappear terms of growth. 2020 again in my guess lower. lower.it might get get out of not to equities into cash too early. this is the tricky part when we are getting more mature in the cycle. equities are on the table for investors. we intend not to miss those. ramy: he definitely do not want to miss those. in terms of one of the themes we haven't talking about this morning is the impact -- we have been talking about this morning is the impact of the trade tariffs with regard to companies that have been reporting the past few days. they have been saying we are

thinking we will be hurt by hundreds of millions of dollars here. when does this actually become reality and we see it turn? side, weon the macro isolated the part that already came out of china came he out of the tariffs in july. we are seeing dramatic, high double-digit retreats from imports into the u.s. we are not hearing companies -- i should first make the remarks, i think the overarching theme is probably the cycle or when we had selloffs more globally, they were more related to the cycle rather than trade. coming back to trade, we are also of the opinion that whatever comes next, if there is incrementally more tariffs that the u.s. would put on, on the margins it starts to hurt the u.s. more than it has in the past. as an example, if the second

half of the trade volume out of china also comes under tariffs, we think big companies like apple who produce in china and ship to the states, they would get affected. we could no longer say that u.s. companies are completely immune. hopefully we will not see those kind of tariffs. looking ahead it seems like everyone is saying this will get worse before it gets better, at least through the midterms and likely into 2019. what are your thoughts? hartmut: yes, it is unlikely that the heat comes off in the short-term. from an investor's point of view, we're seeing valuations also from the chinese markets not only the chinese markets in asia already coming under stress, close to historic crisis levels, even know we are not quite there.

we need a lot more bad news for markets to really drop very sharply. we probably need a little bit of good news to see relief. the saudi points give us a bit of an anchor. -- these valuation points give us a bit of an anchor. haidi: are we starting to see more rotation into value or do you think despite the selloff the last couple weeks we are seeing investors want to buy into the positive headlines? globally we have a bit of a tilt towards value. i think the most prominent one right now is arguably energy. it is not only because we think oil could put it higher, but this part of the cycle, the very sectors that may be are to an extent causing inflationary pressure, they don't also

benefit. maybe it sounds counterintuitive, but historically often that is how it plays off. energy is certainly one of the sectors in the value sectors i would highlight at this point. ramy: hartmut issel, thank you very much, as always. remember bloomberg users can interact with the charts using gtv go. you can browse recent charts featured on tv to catch up with key analysis and save the charts for your own reference. this is bloomberg. ♪ e. this is bloomberg. ♪

ramy: welcome back. watching daybreak australia. cbs says the interim board chairman is stepping down one month after taking the role. he is living for health reasons

and will be seceded. he became -- ramy: the head of japan's biggest bank has joined the exodus from saudi arabia's investment conflict amid widening follow-up from the jamal khashoggi affair. he will not attend the so-called davos in the desert but his deputy president will go. finance leaders have withdrawn from the event. bloomberg is no longer a media partner. haidi: yet chrysler is said to have -- are told a deal is worth $7 billion. an announcement could come monday. create a business worth more than $17 billion in combined annual revenue and 65,000 employees from tokyo to milan. ramy: next we will have a preview of earnings that chinese

telecoms. that will be starting with china unicom. let's also take a look at what markets are trading in the asia-pacific. you can see it is pretty much negative across the board in our current trading. the nikkei is down by more than 200 points. cost be is down 6/10. asx 200 down by 7/10 and continuing to fall. most of these are at session lows. there has been some negativity coming in from u.s. asian markets in terms of corporate earnings and the u.s. china trade war. this is bloomberg. ♪ s is bloomberg. ♪

haidi: it is 8:30 a.m. in hong kong, one hour away from trading. after a relief rally corded response -- coordinated provide rallied to support for markets as well as economic growth after gdp missed the mark on friday. the question is whether that sentiment will be supported. we are seeing slippage elsewhere. asia-pacific seeing declines about half a percent. the way to japan and here in australia.

--di: ramy: let's get the first word news now with haslinda amin. horrifiedthey are about saudi arabia's policies may have been used by the kingdom to silence dissidents. they responded to a new york times article that details a report in which it has identified several people driving conversations on twitter. -- later reader arrested or had social media accounts shut down. vowedent xi jinping unwavering support for the private sector in china's latest attempt to calm fears about a slowing economy. he said anything that negates and weakens the private economy is wrong and supports of -- governmentaid the would continue to support the private sector. president trump says he is

considering a new middle income tax cut before the midterm elections. in a move aimed at boosting republican chances of remaining a majority on capitol hill. no one else knew anything about it. trump said house republicans are working on a plan, but people in congress says there is no sign of it. the us joy in government says it australian government -- they insisted is a chance to liberals can win. it may be several days before the final tally is known. --lier morrison can basically conceded. at least 22 people are now known to have died in a train crash in taiwan. express was traveling from taipei southeast when it came

off the rails with more than 360 people on board. 170 were injured. the train was one of taiwan's new and improved models. an investigation is underway into what caused it to come off the rails. 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. this is bloomberg. we looked at in the last couple minutes, we are asian markets starting the week off on a weak footing. most major markets edging into negative territory after what has been a whiplash couple weeks. asian equities team leader and strategist join us from singapore. we saw on friday chinese markets rallying on government support. the national team is finally

here. is there a sense that sentiment is finally stronger? divya: i think people are still waiting to see what is going to happen this morning when markets open. to pay thing, too, attention to is the fact that on friday, despite all that verbal support that came, market support only started rallying four hours after that support. it will be really interesting to see what will happen today. the verbal support coming in from xi jinping over the weekend. i think people are waiting to see what will happen today. haidi: you take a look at what is going on with meetings at the moment, the lack of traction from tokyo and seoul stocks. is there a sense that this is painting a picture of a dead cat? mark: certainly. over the weekend we got a reminder of how bad geopolitics

is. the u.s. will pull out of a nuclear agreement with russia. we have seen continuing saga was saudi arabia. donald trump still insists is not ready to lift tariffs against china. there is a deluge of reasons for people to be negative on financial markets. when you hear all that going on, how can you get excited about the outlook for global growth? when the imf downgraded their outlook for next year, they may be the first of many to do that. right now it is very difficult for people to be optimistic on what is going on. current earnings may not be too bad, but what will happen next year? the outlook is not great. ramy: it does seem there is more pressure than lift. one other source of pressure is steve mnuchin, u.s. treasury secretary, saying they will inbably move the goalposts

terms of calling a currency a currency manipulator. of course this has to do with china. mark: indeed. what kind of message does that send to china, that you are going to shift well-established goal posts just because you want to impose such a title on china? if anything the incentive for china now is to get the yuan as weak as possible before the u.s. imposes such a sanction. they have six months to weaken the yuan if they want to.

point of view they cannot be too impressed when they read this kind of thing going on with the u.s. if you also compare where the yuan was compared to last time it was close to seven against the u.s. dollar. at that time china growth was double-digit. the growth was beginning to slow slightly. china had gone through a massive period of expansion which is contrasted out. if you reflect that into currency policy there is some justification for a weaker yuan. outlined a lot of negatives. i am feeling a little pressure here. looking ahead to what we can expect this week, is there anything we can hang our hat on that might be a positive? divya: i think what we will have to wait and see is earnings. we will have to see what is coming out of the u.s.. that usually plays quite a bit of an impact on asian stock markets. this week in particular there were a lot of tech stocks reporting. you have microsoft, amazon, alphabet, twitter. we'll have to wait and see if it will be good news or not so great news. also rate decisions could potentially have an impact on markets. and of course the abe and xi meeting later this week, people have to watch and wait and see. haidi: just before we go, it is a big week for signaling out of

the ec be. also watching the latest brexit developments where theresa may has softened her stances somewhat. what are you watching for? mark: i think the ecb, it would be brave for them to signal too much this week. they still have the attire budget being discussed and that is causing some turmoil. they will be happy if they draw no attention. the uk's situation should be a lot more volatile. they were huge protests. in london hundreds of thousands of people were on the streets effectively asking for a second referendum. political pressure is building tremendously on theresa may. it could break at any time. in short the pound could be pretty volatile. ramy: you can see the one week down 7/10 of a percent over the past five trading days. we're going to leave it there. singapore,ark in,

thank you very much. let's look ahead to earnings from china. they expect total revenue for the first nine months to rise 6.5%, the equivalent of $29 billion. let's bring in bloomberg intelligence senior analyst. should they be excited about this number? >> i'm afraid not. a significant chunk of profits came from china's listing. given they have a 28% stake in the company, they gained some profits from the listing. if we look closely at the quarterly revenue and breakdown of mobile revenue we actually saw a significant slowdown. which is not surprising because mobile roamingd

fees nationwide which is very profitable for the chip -- three chinese telecoms. the focus would be more on slowdown in revenue and subscribers. and how unicom could tackle the larger rivals. ramy: looping in the entire tellico sector, what can we expect from the rest? anthea: china mobile had a slowdown in subscriber gain before the july termination of roaming fees. in recent months we saw quite an encouraging pickup, likely followedhina mobile its mobile rivals in getting more aggressive for unlimited data plans. we expect china mobile profit growth to be sturdy. the company also benefits from china tower listings. although relative to their huge profit pull, the impact would be less significant.

they may be anticipating a slight decrease in pay out. that would be the selling point of china mobile. at the same time for china telecom and china mobile, they continue to fight for subscribers. betweent we saw the gap has in terms of subscribers a significant lead as well. haidi: what are we watching for on the cost side? anthea: on the cost side, china tower already agreed to cut raising rates. going forward, especially for next year, the three should start to think about their plans for 5g and whether they can negotiate for better rates. market continues to speculate the potential merger of china unicom and china telecom, even know the likelihood is slim.

still, there may be other ways g, even know they are not ready to merge. they may be considering how to share the infrastructure, how to co-share some towers and stations, etc. let's get you a look at some stories trending across the bloomberg universe. reactions to the latest developments in the khashoggi are dominating the most red list on the terminal. withallies are struggling the changing saudi arabia narrative. you can read how egypt -- tictoc on twitter, the biggest single contracted million with $365 the so-called netflix of sports.

check out those stories on bloomberg or online. this is bloomberg. ♪

ramy: you're watching "daybreak asia." steve mnuchin says he is open to changing the u.s. determines which nations are giving their currencies. that is a move that kid -- could give president trump to officially brand china an exchange rate manipulator. joining us is asia-pacific head a global markets at state street which manages more than $2 trillion. great to have you on the show. in terms of the possibility to call china a courtesy manipulator, do you see this as the initial step of something that might possibly be a done deal? michelle: i think it is a done deal.

at this stage there is a lot of negotiations going on around the trade scenarios. you have until the end of the summer to have any resolution of the trade conversation. it is one of the tools that could be leveraged. i think at the end of the day the chinese are probably keen for that not to happen. donald trump and his administration are very keen to force the administration but i do not think it is a done deal and any stretch. ramy: in terms of getting the pressure on to them for sure. right now on the screen you can see where the u.n. stands against the dollar. yenave been seeing the continue to weaken ever since june. s, do youink -- i gues care if we cross over seven? michele: the market is very concerned about the crossing the seven mark. the chinese have a lot of tools they can use should the trade war continue.

there is a big deterioration. they have fiscal tools they can use to stimulate the economy. countriesng-market will be watching closely as well. i think people do care if it passes over seven. the central banks have many tools to make sure that does not happen. haidi: how much of an impact does this have for the rest of beingn terms of the yuan perceived as more of an influential anchor currency than perhaps the u.s. dollar in this part of the world? michele: i think the u.s. dollar will always be the anchor currency at the end of the day. the u.s. are in a cycle of strength. i think that is likely to continue. it has spread throughout the summer through all the g10 currencies. the yen has actually appreciated against the dollar. i think at the end of the day the fact that the u.s. inflation

indicators are picking up concerns about the budget deficit continues to mount. the fact that you can actually see the dollar debt and emerging-market countries impacted by strong dollar will pull inflation into emerging markets. china is part of that. they have been a large purchase for u.s. treasuries. see a strong dollar scenario and pressure in the treasury market, then that will import inflation to all the emerging-market countries including china. i think china does not take precedence over the u.s. in the emerging markets. i think at the end of the day the strength of the dollar is really paramount. haidi: it is paramount to the extent where you see a continued strength of the dollar, particularly if we see by the beginning of next year the washingtonuation, doubling down if we do not get a circuit breaker by that. michele: it is very important

and i think the dollar will continue to strengthen. u.s.,at the moment in the treasury is around 3.2%. au have something around 6%, large interest-rate differential. flat, markets essentially emerging equity markets down double digits. asset markets have really underperformed in their entirety. we are seeing our customers accumulate large amounts of cash rather than invest. i would expect that the u.s. bond market will continue to see results. i think the dollar will be the beneficiary. we will continue to see upward pressure on the dollar, regardless of what happens in the trade war. ramy: rounding out this conversation, where do you think the japanese yen is going these days? right now it is at about 112. michele: i think it is

reasonable to expect the japanese yen will probably finish the year around 110 or lower. it does look like there has been a fair amount of support for the yen as a stable currency to the last six to eight months and i do not see that changing. at the moment the japanese fundamentals are looking quite strong. increase participation in the labor markets, actually increased unemployment numbers looking good, and the fiscal situation is quite sound. we are about to see some pickup of inflation. online inflation showing fairly positive trend in japan. by large i think the safe haven status will continue. we can expect to continue to see the yen strengthened against the dollar, which in light of a stronger dollar view, this would be an unusual occurrence but i expect that to continue. ramy: thank you very much,

michele. our interactive tv function is tv . catchn watch us live and up on past interviews and dive into any of the securities or bloomberg functions we talk about. plus you can become part of the conversation yourself by sending us instant messages. this is for bloomberg subscribers only. this is bloomberg. ♪

ramy: i am ramy inocencio in new york. haidi: you're watching "daybreak asia." a nobel prize in economics winner said on friday that the fear of the next financial crisis is pushing down investments. we will almost surely have another financial crisis. we do not know when, but it will happen again. there is a thing we can do right now to get ready for that, which is to create a bunch of new banks which are legal entities that are shells sitting there. anothered to inject quantity of government taxpayer funds into banks, put them into these new banks. the queen banks, let them operate, then you avoid the populist backlash of why did you give billions of dollars to the guys who through us out and

seemed like they cause the problems. withould sort them out 100% government-owned equity, but with a plan if you provided a bunch more capital you would eventually selloff the shares. part of the source of the is thet aggravation distribution of wealth and income. the practical effect of investment right now is not going to infrastructure, not going to education, not going to things that will redeem that. as you suggest we are feeding back on ourselves because politics almost make that impossible. the other thing is part of my job is to raise possibilities and to try hard to actually be wrong. what i mean by that is we need to suggest things that are precise enough, people can say, yeah, well, turns out that is not true. i think we need to think hard

about what is behind things like this resistance to invest. think about what it was like during the crisis. if you got caught with no youidity as a corporation, had to selloff a bunch of assets at very depressed prices. you want to hold onto a lot of liquid assets so you are not forced to sell them off. two, you think if a bunch of other people have to selloff , i have even more liquid assets, i can make a killing. so kind of the expectation of another crisis may be part of why we see so much accumulation of liquid assets and so little investment in the machines, infrastructure, things that raise the quality of life. >> how do you fix that? to reduceyou try everyone's estimate of the probability we get another crisis. so thereet things of is a crisis and the government

has to intervene. less that we rely on private money. you use government institution to buy assets and provide liquidity. >> you have been somewhat critical of your own macroeconomic profession. on a -- are macros helping us? look at the fed. we have all these models. are they working for us and helping us? >> i think we have room to do better, in my profession. and i think we are at a very critical time because there is some skepticism about experts. when i went to the bank after the brexit vote, which for a lot of people was saying if the economists are for it, we are against it. we have to clean up our act. that means we cannot be tolerant of shortcuts and sloppiness. ahead, i know you are going to speak to howard

marks of oaktree in a few minutes. what is on your agenda? haidi: as much insight as we can get. first off, he of course is in sydney promoting his latest book. him about talking to where he thinks we are at when it comes to the cycle, how investors are distributing between risk and searching for safety. looking at the future of value investing is not done so well with the past decade or so. having a good old chat about how he sees the markets and outlook. all of that is coming up. that is just about it for "daybreak asia." stand by for bloomberg markets with yvonne and dave. this is bloomberg. ♪ e. this is bloomberg. ♪

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yvonne: it is not caught a.m. in shanghai. welcome to bloomberg markets change the -- china open. day,for a third straight we are going with a focus on china after friday's rally and top level calls for calm. yvonne: china involves -- unveils plans for personal income tax cuts. rishaad: there is white -- widespread -- president trump talks deception and lies.