welcome to daybreak australia. asia'scounting down to major market open. here are the top stories. u.s. stocks rallied a second day to close out a rough month. the dollar added to a 16 month high. tech helped with the nasdaq.

trading begins here in australia. >> let's get a quick check. day of the worst month since 2011 when it comes to equities. the s&p 500 gained a percent. the dow was led higher by tech. hittinghe big selloff those big tech giants. the first time this month that the s&p 500 rose for two consecutive days. the biggest jump since february. the nasdaq also gaining 2%. treasuries as we heard from the government that they were going to sell more long-term debt this quarter. this will result in asia. higherres are pointing

after we say farewell to the worst month in over six years for asian stocks. china is talking of stimulus which is helping. asian stocks on wednesday did post the biggest jump in eight months. canada's recovery big -- be sustained? -- can this recovery be sustained? we will get more detail later in the show. we also have woolworths reporting later. yamaha is on the radar. onwill be getting a read south korean trade and inflation. it is expected to the stable in october. we have been seeing export growth moderate. also on the agenda, a strike is

third quarter balance. plus inflation update from thailand and indonesia. be getting a private read on manufacturing and pmi. that will be closely watched after it fell to 50 in september. will it be trick or treat? pmi is definitely one of the highlights. let's get the first word news. britain and the eu are saying progress is being made on a brexit deal. expecting agreement by the 21st of this month. advance thanks to new british proposals on the irish border. eu officials are more optimistic saying there is a more positive mood among negotiators. >> i think it is possible to get a deal in november. i think that deal needs to be

based on the work that both teams are doing. also, the commitments that have been made. >> italy seems to be thinking into financial crisis. the criticism after the pressure from the eu with brussels having rejected the budget. china is signaling more stimulus measures on the way as weak data shows the approach isn't working. acknowledges the economy is changing. the government must take steps to counter the situation. china is reeling from the trade war and from the president drive against debt.

u.s. regulators are proposing a softer oversight for most banks. -- dodd-frank rule fed governors voted on a plan that would separate the megabanks regional operators. names suchmean that as capital one would escape stringent rules. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. taking a closer look at the u.s. close. one of the worst months for stocks. the dollar extended its 16 month high. finally, this very spooky quarter is ending on a positive note. >> first acted back gains for

the market we have seen all month. we talked about how october is typically volatile. let's take a look at the scorecard. snapshot of how we ended and out thanksulled it to the fangs. the nasdaq 100 is the most heavily concentrated tech index. let's go into some of the big movers. earnings carry the day. take a look at general motors. amazon carrying through and facebook was strong. kellogg was the exception. let's move on to other big movers. amd, sprint, t-mobile moving higher on a lot of enthusiasm by investors. the executives of those getting regulatory approval for mergers.

gtv is where you can find our library of stocks. it is the second worst month of the decade. this drop is the most since 2010. >> we keep talking about the the tech selloff and the faang stocks. >> i will take us into the bloomberg. what we are seeing with the hedge fund is a lesson on when they all crowded into the same stocks. we can see where the green was. this is just for the day. i am going to take it in for the month. were asee the big losers lot of the advanced microdevices. the faang stocks. what you hadurt with the hedge funds.

we had another value hedge fund that announced it was going to close. the rare bright spot in the hedge funds was the macro. they did fairly well. i mentioned the dollar advance on the strong private payroll data. how could the midterm elections put things at risk. goldman says the midterms present several scenarios that could halt the rise. political uncertainty, other issues such as weak fiscal stimulus and growth. had inlook at what we the latest payroll data, this is the private adp. it came in stronger than expected.

we could perhaps see similar confirmations friday of job data. all of this has been a surprise because given the trade and housing weakness, there was no question whether the payroll data would come in strong. friday will help us get confirmation. >> thank you. here in australia, national bank earnings will the most in a decade. misconduct was exposed by the banking inquiry. ae housing market makes for ugly set of results. that result was underwhelming but we knew it was coming. >> exactly. there is no doubt that the result is bad. it is the worst in a decade. everything strip out and use one of their other metrics, it is still down.

we knew this was going to come. it is not a shock. banks are trying to become simpler organizations. hitting rid of staff and selling off businesses. the housing market is slowing. .e have talked many times there are not many surprises. we expected it. are there any bright spots? >> there are two things to note. the first is the business banking. it now focuses on small and medium businesses. that did see revenue grow. go back toying to their banking roots and specialize in that. the other number investors will look at its cost.

even stripping out restructuring costs, expenses are still up by 6%. beingo is guiding to that flat in the near term. investors will look to see if those cost reduction plans -- >> thank you for joining us. nap ceo is going to join us later today. that at 2:30 p.m. cindy time. still ahead, more earnings reports. still money tois be made. >> what to watch in it next week's midterms and whether is no sign of recession ahead. this is bloomberg. ♪

you are watching daybreak australia. expanded a high. traders appear to be bracing for potential dollar weakness due to next week's midterm election. but mr. at the dollar. incredible strength recently. how long can that continue? i think it is a safe haven may be at this point. the utter confusion in markets indicative of is what is going on. president,bout the

, australia's political situation. i would suggest at this point with interest rates where they are in the u.s., there is a bit of a rally in the u.s. dollar. how long that is going to last is the big question. willie peek out after next week? my guess is it will probably slow down. for the dollar to be stronger at this point, it is tough to make a good case for it other than things are a mess in europe and there is confusion over policy. that makes for a stronger dollar. been investing in

asia for decades now. a set ofseen circumstances like this and where do you put your money? >> we have a little bit more cash than we usually do, but that is in u.s. dollars. the most undervalued area in the world today is in asia. my guess is there will be a settlement and the u.s. will refocus away from foreign policy andmore on infrastructure that money will flow back into asian stocks. shouldn't you also be betting that a lot of money will be put into play in the

u.s. economy? wouldn't that be a safer bet or d believe that local gridlock could temper all of that? gridlock is the wave of the current situation and the future. is notek's election going to be decisive in any way. i think the arguments between the extremes on the right and left will continue for the next couple of years. on emphasis may be more domestic infrastructure spending, there is not going to be enough action. we have a huge federal deficit and it will get larger. that will concern a lot of people. that we haveation seen created over the last isple of months in asia

where the smart money is going to gravitate between now and the end of the year. >> let's talk about china. we have seen the shanghai composite rebounding in the last few sessions. that is after taking a huge beating. ratio againstt the s&p 500. that wenear a level have not seen that many times. every time we have seen that in the past 25 years, we have seen a rebound area are we headed toward a recovery given where we are at technically speaking? >> technically, i would say yes. again, i am not a technician. i think the valuations of good quality chinese and asian companies generally are very attractive at this level. be, you aree will

right. anytime there is a sharp selloff over the last 25 or 30 years there has been almost a immediate recovery. the odds favor a recovery in asia in the next few months. >> not to be cynical but it does come naturally to me. part of the reason you feel that way is because the chinese government will do something on it? >> exactly but with a weaker yuan. it makes china really attractive. i don't think you have to be a brain surgeon to figure out that when you have a sudden selloff and there is a lot of money go where there is value. it makes sense to me. i have only been doing this for 50 years. it looks good to me. >> thank you so much. coming up, president trump tries

to turn the focus back to week'stion ahead of next midterms. the latest letter from washington. this is bloomberg. ♪

you're watching david australia. let's get a check of the latest business flash headlines. sprint and t-mobile -- both companies expressed optimism that their merger will win approval. wednesday was the final day for opposing arguments to be filed. they argue they need to work together to challenge the biggest carriers verizon and at&t. -- told ceo has called bloomberg he's looking forward to the future. all of the customers associated, we have not made any

decisions on how to use our brand portfolio but what a great problem to have area >> aig reported a surprise loss on natural disasters. analysts were expecting a small profit. lester's wildfires in california wait on the results. slumped the most in 18 years. they reported a decline. salesives insist cereal will turn around. iny recalled honey smacks june. president trump says he is ready to deploy up to 15,000 troops to the southern u.s. border as a group of migrants head north.

proposal criticize his to end birthright citizenship. he tweeted paul ryan should be focused on holding the majority rather than giving his opinions on birthright citizenship nothing -- something he knows nothing about. we know the caravan is not arriving for a few weeks. how much of this is just strategy before the election? >> there is no doubt that president trump sees immigration as an issue that resonates with his supporters. his supporters sent him to the white house on his pledges of immigration policy. here we have him bowing to put military on the border. originally saying there would be 5000 troops but now they say up to 15,000. his comments yesterday about

birthright citizenship. he is trying to keep the focus on immigration. that has been especially crucial on him as his attention is immigration and the economy rather than the synagogue shooting and the economy. here we have him doubling down as he is known to do. with just days to go before the midterm. >> this rift between president trump and paul ryan due to voter sentiment. is there any impact of that? >> it is possible. both the speaker and donald trump have managed to keep tensions call for the two years of trump's presidency.

president trump reacted furiously on twitter. he wants the voters to focus on the economy and immigration. >> i was wondering when this would become an issue again. john bolton is calling the national debt a threat to society. congress that a discretionary spending limit every year. it john bolton is calling for cuts to that.

he said that entitlement spending probably would not see any cuts. increasedal debt has 2012s largest gap since under president trump's full fiscal year. part of that is driven by increased government spending. >> thank you so much for that. don't miss our election night coverage. that starts at 7:00 p.m. eastern on election night. next, the doj stays the course. it is a long way from reaching its inflation target.

that is coming up next. this is bloomberg. ♪ i am a family man.

i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.

in sydney, it is the first day of november. the economy is up half of 1%. we got a pretty decent lead from u.s. markets. right, we saw the markets with a biggest two-day since january for the s&p. saudi journalist was strangled the moment he entered the consulate last month.

he was dismembered and destroyed in a premeditated murder. turkey says the saudi prosecutor who joined the investigation was not helpful. officials say he failed to cooperate and offered no information about the location of the body. the airplane that crashed on monday suffer problems with altitude and airspeed on an earlier flight. pilots who flew the plane the the plane wasaid checked and cleared to fly. things have been detected in the crash area although the recorder has yet to be discovered. 189 people were killed in the crash. an executive at alphabet has left after the new york times reported that he is accused of sexual harassment. he left the company with no severance. .

google employees plan to stop work on thursday over the company's handling of harassment claims. accused china of meddling in politics, it is now criticizing beijing. -- u.s. embassy prints -- penses interference.zing onbal news 24 hours a day air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. asian stocks at the highest level in one week. will they get a further boost from the gains on wall street? the kickoff to november, let's take a look at the month that was october. october was very punishing.

the regional benchmark lost 9.6% for the month of october. all but three of the 50 listed stocks lost ground. 17%.nt is down let's look at how futures are shaping up for asian markets. we are seeing them nudge higher across the board. stocks have added a 10th of a percent. we could see some day -- gains. .ook at what is going on we're going to get inflation and trade numbers.

we will see whether or not there after we saw the 20 day shipments pickup for october. in the auto space, keep an eye for monthly car sales. two companies are set to report details. must that came through with a second-quarter operating loss. it cut its target by 32%. >> thank you. let's get more on what we should be watching as trading gets underway in asia. the you want is continuing to drop.

>> it is very clear that this is one of the main topics dominating trading in asia the moment. it is a question of what china does with its policy settings. where the currency trades and how this local expert -- escalation in the trade war pans out. aroundition is really the chinese authorities keeping the yuan stable. remember how close we are to that seven level. his point is that the devaluation clearly helps exporters but it hurts importers. he said beijing would not allow that to happen. second the fact that it had an effect --

the third is more about the psychology of beijing and policymakers in china. they don't want to see that level breached. he thinks for now we have a steady move of weakness but at this point he doesn't see that being breached. >> let's turn the focus to the u.s. because when it comes to the economic growth, one large manager is saying investors should keep faith in what should be the longest the covering -- recovery in history. >> the argument for the strength of the u.s. economy and a policy-setting from the federal a naturalhey see

reaction to have the economy is developing, not a cause for concern. they make the argument that you could see continued flattening in the yield curve for many months and even years. for a long. of time before you could get an inversion. the white line is showing that. the blue line is an indicator of consumer confidence. speakingall of that is to the idea of a recovery to goes well beyond 2019. willeconomic recovery become the longest on record. this he policy-setting is very appropriate for an inflationary outlook that is not problematic at the moment. backdrop thatth looks pretty firm. we have this private payroll numbers overnight. we are looking for the monthly

u.s. government payroll report that will come out on friday. all indications are that this continues to confirm that the fed is on the right track with the hike in december. pretty firmly penciled into market expectations. clearly a debate on whether they move to times or three times in 2019. the economy is doing well enough for the yield curve flattening to continue but for inversion not to be a problem just yet. >> thank you. charts on thedams gtv library. stickingof japan is with its yield curve control policy. a bloomberg editor is joining us with the details. with the press conference. it is clear that the policy is not changing anytime soon.

>> absolutely. he underscored that in many times as he answered many questions at the press conference yesterday. the monetary policy statement was made pretty clear. the inflation picture has not changed he said. stimulus has to be maintained. they will not be at their inflation target until 2021 if then. the recent tweet in july with a raised the range they can trade in has improved the bond market. in theill be no changes yield curve control policy ahead. let's listen. i have no intention of changing the goal.

we will keep taking necessary measures to improve market functioning. >> there is a lot of speculation going into this. when you have a yield curve control, it makes it tougher for banks to make money. regional banks are being hit by a shrinking population. when asked about that, the government was frank when he said banks have ample capital. he sees no immediate problems. he downplayed the effect of global market turmoil. stabley market has been and he said the risk coming from overseas if something happens. the downside risk to the price and growth outlook stems from overseas. if these risks materialize, we would think about policy

measure. >> in terms of the tweak to the bond buying program, this happened right after the bank of japan -- after he wrapped up his interview. they are changing and how they issued bonds. they are cutting back on the schedule for one kind of bond. premium. a certain bottom line there was a trade -- in line with the governor's commitment to make sure the aggressive stimulus remains in place as long as possible and is sustainable. this is what they are endeavoring to do. what is at the top of the watchlist right now? >> where watching for the jobs

somet on friday and we got data showing worker compensation rising a bit more than forecast. also we got the private survey from the adp. that looked pretty solid in line with the forecasted surveys. the government seems to be dialing back this pressure that is put on the r.b.i. to help banks a little bit. is a bigne, there discussion about central bank independence. that will continue to be in focus for any central-bank watcher at this time because we know there has been fed bashing by trump in the u.s.. this is an age old thing that happens between governments and

central banks. thank you for joining us. general motors is showing that the old-school business of carmaking can still be lucrative despite slowing global sales. they surprised investors. we have the details. this was unexpected. >> it was. analysts were expecting a loss for this quarter you're on your. we sought the shares rally more than 9%. that was also at its two-month high. you are taking a look at the numbers here. we went over the earnings us i will go over that revenue. the estimate was for something less than that. not only that, looking into the future, we are seeing the full 2018 profit at the high end of

this range. it is also looking to the future beyond combustion engines targeting self driving cars in 2019. back to the third quarter, they basically made money where they needed to. money ins., they made the full-size pickups, trucks and suvs. if it wasn't in the u.s., it had to be in china were they also made money. one recent comment that had some cloudiness over this was the gm said it would take a hit in china. we talked to them about that. it is clearly a volatile environment and when we are watching closely. what has worked for us this quarter are things we can

control. we have been intensely focused on cost. >> cost discipline there. they are also talking about possibly with the cut to tax for consumers of i percent. >> looking ahead, gm wants to refine its strategy and its workforce. >> they offered buyouts to more than one third of their employees. they offered 18,000 people. they are saying this could cost them $130 million. not everyone will take it. voluntary ifme in not enough people take it. end by they expect it to the end of this year and they

will take that charge into the fourth quarter. the last time this happened was nearly a decade ago. 1900 people took the buyout. ceo has been trying to take down this major cost into the start of this year. >> thank you so much for that. coming up, we will be joined by a head of institutional banking to discuss opportunities in asia and beyond. this is bloomberg. ♪

exactly two years ago anz sold its retail business. we are joined by an executive

for institutional banking. >> we have been trying to eradicate that position for some time that we did sell our retail and commercial businesses in asia. on theed to focus institutional business. that is where we started. there was a retreat back to the future. we are very successful in the region. >> after the retail and , we knew weale could not win in that business. we have been focusing more recently around institutional customers where we know we can offer a good proposition. we shrunk the customer base by

40%. we are much more focused on the customers. >> you are not deploying capital. the optics look like you are still being cautious. >> that is true over the last six months. we have been investing capital back into asia. heavily in china. we deployed our transaction banking capabilities across the region. the money is flowing back in but it has been missed on the basis that we have been retreating on such a number of customers. we are still investing. >> where do you see the growth coming from? china and in that region. also in certain sectors, we are concentrating our efforts in the funds in banking sector in resources and agriculture.

they are tightly aligned it's what we do here in australia. that is where we think we can provide. climateurrent political , has that caused you much pause? >> not really. we don't do a lot of business in that court or. we are concentrating in australia, new zealand, asia. at this stage, we see opportunities in that rather than it being a threat. >> if china catches a cold the rest of the region -- that has been on the minds of a number of our customers. not so much the trade , it is more that there is a slowing down in china and that will depress economic activity. thatina has been signaling

it is relaxing access to the financial sector. we have been in china for some time. we are not looking to buy anymore banks in the region. we will continue to invest in capability as they deregulate. >> a couple of years ago, the former ceo was doing a big push. more than half of the capital was deployed there but you are only getting i percent return on equity. how is that ratio looking now? >> that was partly in the international business. that was the whole of our institutional business. which down to about 33% is where we think the right balance is. the wholesale business has been improving in the last few years. we are smaller but much more profitable.

we can add a lot more to the bank as a group. de-risking program complete? >> yes. in a growth mode. ourxpect to grow transaction banking and markets businesses. go, i am i let you going to get a word on earnings. in result was out yesterday. work expecting much better. in terms of your area, how did that fair? were down in cash earnings by 10%. that was driven partly by an outstanding 2017. side, the that to one

second half results when you even it out were really strong. our revenue was up around 2%. our costs were down 4%. our cash earnings were up 20%. that is more in line with what you would expect going forward rather than those big markets two years ago. >> thank you for joining us. on, we will have the australian prime minister delivering a keynote address. he will also do a q&a session. ♪

you're watching daybreak australia.

i'm not sure how much you celebrate halloween in australia. here in the u.s., it is such a big deal. apparently adults make up the bulk of the sales when it comes to the costumes. look at this chart. this is a $3.2 billion industry every year. adults take the bulk of it. >> this is my halloween costume. [laughter] we have a love tolerate relationship with it in this part of the world. go, a quick check on the markets.

the aussie dollar is hovering below $.71. this is daybreak australia. ♪

>> good morning, i'm paul allen in sydney. australian markets have just open for trade. shery: i'm shery ahn in new york. and i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." ♪ paul: our top stories this thursday, u.s. stocks rallied a second day to close out on an upbeat note. the dollar added to a 60 month high. asia-pacific markets poised for muted start to november aft