>> 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 after the worst month for global equities in at least six years.

bankhe national australia earnings fell the most in a decade. the cost of restructuring in misconduct. shery: let's kick things off with breaking news on the bloomberg. month on month the cellaring .2% after a rise of .7% in the previous month. year on year in october, rising coming bang ins line with estimates. this is a deceleration from the previous month of september, but only because we had some distortions in the data when food prices jumped in september because of the autumn holidays. right now the october number is coming in bang in line with estimates, accelerating .2%. paul, i believe you also have some news. from breaking news

singapore, ocbc just out with result, third order net income with a net interest income of 1.50 one billion. just some numbers there a little bit unexpected. shery: let's get the latest check on the asian markets, we had wall street closing higher, the s&p 500 seeing its biggest jump since february. sophie, what are you seeing now? sophie: after that 11th hour rally at the in october, the question is, can november be a kinder month? the asx 200 did cap the worst month since october 2016 but managing to ease losses for the in. gains for a fifth straight session.

a drop in cash profits this morning. suzuki among the names to report today, mazda posted an operating loss for the second order, so , nikkeif earnings futures nudging slightly higher ahead of the start of cash trade and the cosby extending gains although the index did lose 13% in october. nbc-tv reporting the finance replaced with a replacement reportedly already being sought. and also trade data due out at and a.m. hong kong time, let's check in on what else is on the agenda. balance fortrade september, the aussie looking steady ahead of that and

inflation numbers from indonesia as well. helped inally in tech one of the worst months for stocks with a win for the bulls. the dollar extended a 60 month high and strong jobs data helped ease investor uncertainty. su keenan has the latest. what a volatile month. su: the fact that we had the thatg jobs data, the fact so many earnings have been strong all along and now there is a focus that things are not so bad that helped together these back-to-back gains. let's take a look at the snapshot, the big picture of how we ended. the nasdaq 100, the tech heavy index up better than 2%. notice the vix way down. telecommunications, media, and take were the winners. on surpriseig way blowout earnings, amazon

following through from their earnings, facebook also up. apple will be out thursday. call-up was an exception. take a look at the other stocks that moved in a very big way, he had chip stocks, sprint and t-mobile moving higher on enthusiasm expressed by their executives that their proposed merger likely gets approved. this brings us into the bloomberg where you can find our library of charts and even despite these gains on the day and yesterday, we end as we have been saying, the second worst month of the decade, this big red move downward shows a lot of the pain we have seen. when we look at the best and worst performers, according to morgan stanley that the hedge funds also suffered losses. what is the story there?

su: ringing up the one-month leaders and the best performers, and you look at the red over here, some of these were the most heavily crowded stocks, advanced micro devices is a big decline are. where you have seen the hedge funds, it's a cautionary tale that can be very negative. multibillion-dollar funds announced the planning to close, after the bell we heard three days of value funds that had 1.6 , it hasat its peak inflicted most of the pain on the equity and hedge funds and surprisingly, morgan stanley says the macro funds appear to ofe come out the best, a lot the funds on average were down almost 7% going into monday, so it looks like the average fund

is about expressing your today. that shows why so many investors are looking more toward indexing the stock market then paying fees to be in a fund right now. paul: su keenan, thanks very much. let's get the first word news with jenna dagenhart. >> written in the's a progress is being made on a brexit deal with the top u.k. negotiator expecting agreement by the 21st of this month. he said talks could advance thanks to new british proposals on the irish border, although he didn't offer details. e.u. officials are more optimistic, saying there is a more positive mood among negotiators. >> at think it is possible to get a deal in november, but i think that deal needs to be based on the work that both negotiating teams are doing and also the commitments that have already been made for these negotiations.

>> italy seems to be sinking into political and financial crisis. the criticism as to the pressure from the e.u., with brussels having already rejected the budget. the finance minister defended his plan, saying it will work in a government stimulus is necessary to restart italy's stalled economy. lion air claims the crash on monday suffered problems with flight. are in earlier potts reported the issue but the 737 was checked and cleared to fly. indonesia says audio pings have been detected in the area although the flight recorders at the yet to be recovered. 189 people were killed in the crash. president trump said he is prepared to deploy as many as 15,000 troops and security officers to the u.s.-mexico border in a bid to stop migrants

entering the country illegally. his response to the northern down caravan escalated this week as he uses immigration as a campaign weapon for next week's midterms. he continues to blame democrats. >> the democrats have led immigration in our country get out of control with their horrible, not allowing us to get any votes past. we need democrat votes to change the immigration off. they haven't given us any votes. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart, this is bloomberg. shery: china's leaders are seeing lending additional stimulus measures in the pipeline is disappointing data suggest recent steps to shore up the economy have not worked. tom mackenzie joins us from beijing. making this announcement just

hours after that latest emi data, what exactly are they say? meeting of china's leadership yesterday afternoon, then putting out this statement, the statement included the line that they see the economic situation here in china is changing and downward pressures are increasing and they need to toceed with timely steps counter this. of course as you noted, it came, the statement after the pmi data showed manufacturing growth slowed to his lowest level in more than two years. the export gauge in contraction, broad-based disappointment in terms of the pmi numbers. responseeen policy from china's officials in the last few weeks and months we've been reporting on those, whether that is a plan to cut the sales tax for cars or other tax cuts, regulatory relief, support for

bond issuance or private companies, but this targeted and these miller approach they taken hasn't done much to shore up that economic data or convince -- toors -- and answers convince investors. you have the yuan close to decade lows as well. intof those things playing the mix here and it seems that china's policymakers are now up in terms of their level of concern, and now view more aggressive approach as potentially being necessary. paul: what is the likely timeframe for additional stimulus? we got a briefing yesterday afternoon, yesterday evening from nomura's chief china economies. he was pretty bearish, and he thinks that by april or may of 2019, you will really see a number of pressure points come into play here in china. the front loading in terms of exports will have been put to

one side. a slowdown in durable goods and the property market in the second tier cities. trade tensions, trump threatening to impose tariffs on all imports of chinese goods into u.s. markets. ofura thanks in april or may 2019, and then a more aggressive response from china's policymakers at that point. removing some of the property curves that have been put in place but certainly it will be a challenge. say it's longics been a balancing at for china to shore up growth versus tackling the debt. moody's analytics say beijing is squarely out of its comfort zone. tom mackenzie in beijing, thanks very much. nab earnings fell for the most

in a decade. and president trump interest his final campaign swing, looking to boost republican support by stepping up his immigration rhetoric. live shots of fort myers, florida, where president trump will deliver another campaign speech. this is bloomberg. ♪

shery: this is "daybreak: asia." i'm paul allen in sydney. president trump says he is ready to deploy of 215,000 troops to the southern u.s. border as a group of migrants heads north. he has last out at the house speaker after paul ryan criticized his proposal to end birthright citizenship. he tweeted, paul ryan should be focusing on holding the majority, rather than giving his opinions on birthright citizenship, something he knows

nothing about. let's cross to washington, greg sullivan is there. this is personal spat resurfacing or is it just an election tactic? harshit was certainly a tweet, attacking paul ryan over comments a birthright citizenship. paul ryan tamping down any kind of thought that president trump could take executive action on ending birthright citizenship noting it would take a lengthy constitutional process. president trump has sought to make immigration a focal point with the upcoming midterm elections. recent events such as the mail bombs threat and the pittsburgh synagogue shooting have deflected attention away from where trump wants it, like immigration and the economy. ofy try to keep any kind disagreements out of the public throughout president trump's

first two years. the tweet came as kind of a surprise, but it is the president trying to divert attention back to his favorite subjects before the election. some pictures of the venue there, he will be holding a campaign rally there in a short while. some republicans are worried that enthusiasm among voters might be waning. can the president lift the mood? greg: he will certainly try. he is embarking on an eight state, 11 rally to her, hoping his rallies will focus on immigration to for -- spurred his supporters to be motivated enough to go to the polls. who wins or loses for flipping the house or senate control will depend on turnout. earlier republicans believed that the fight over supreme ,ourt justice brett kavanaugh

his confirmation fight, had motivated their voters, who looked on the confirmation process with discussed and frustration over how the nominee was treated. eight havend trump said that the fear he has dissipated somewhat and perhaps enthusiasm is waning. the president trump hitting the campaign trail, hoping his rallies and energize the voters and even out some of the democratic enthusiasm heading into the democratic elections. an john bolton weighing in on the national debt, calling it a threat to society. reforms see in time at topping the agenda soon? greg: while saying the national debt was a threat to u.s. security, john bolton also said he did not anticipate any reforms to entitlements anytime soon. budget experts have pointed to entitlements spending as a large driver of the u.s. deficit and debt. walton call for cuts to

discretionary spending, the annual spending that congress and ask. trump, that is that a higher level than before he took office. also fueling the deficit, tax cuts passed by the gop and president trump this past year. with bolton focusing on discretionary spending, it's hard to see that congress could come to some kind of agreement, especially if we end up with a divided congress after midterm elections. any substantial spending reduction seems unlikely. greg sullivan, thank you so much. don't miss our special election night coverage on bloomberg tv and radio, starting at 7:00 p.m. eastern on election night. an interesting that were seeing china and the u.s. viewed expand from newspaper ads and now to social media to it remember it's just been weeks since president trump accused china of interfering in american politics

because of chinese that in a newspaper in iowa criticizing some of the policies of the administration. about beijing. >> the u.s. has a track record, a couple of years ago they were tweeting their own air pollution readings from the embassy while the chinese were showing much more flattering numbers. the u.s. enjoyed some success but this time around there's a sharper political dimension to it. shery: we will see how long the chinese allow it to happen on wechat. >> the chinese foreign ministry hasn't replied to questions on this yet, which i find fascinating. coming up next, we are looking

for a turning point in the markets. why and how the midterms could influence the u.s. dollar. this is bloomberg. ♪

paul: the u.s. dollar climbed to another 16 month high on the back of rallying stocks and better than expected domestic economic data. weakness ifllar congress is split. chris weston joins us out of melbourne today. fors, what are you looking when considering the dollar? where do you think it's going to move? is it just symptomatic of the midterm elections and things will shift dramatically after that? chris: one would expect a split

congress, we been talking about a pesky 7%-9% lead since the beginning of september. one would expect that should be in the process. what to call some modest the barragekness is of legislative headlines that come out. we will see the word impeachment bandied about, but of course he's not going to be impeached anytime soon. that's not going to happen, but it will put a lid on the dollar rally. the tax situation will be investigated by the democrats and we will see the house investigation into russian meddling in the 2016 election come into play. imagine any of those

would spurred the u.s. dollar into any kind of life. we need something to cause that change essentially as well. >> in terms of impeachment, we saw with former president clinton that it doesn't necessarily mean the end of the u.s., but doesn't the remain a pretty attractive haven play at the moment? chris: it's kind of like an island on its own at the moment. pmi seriesfacturing has been one of the sources of concern in the last month or so. of course the wage data, people seeing through that on friday, the key catalyst for

downside move in the dollar which is based on the fact that the momentr owned at is probably going to be what happens in the u.s. dollar against the chinese currency. -- there really ramp up in the 12 months going forward in the next few days. then i think you're going to see a broad u.s. dollar weakening but think the pullback in the dollar will be fairly mild. chart shows exactly how bad it was for the s&p 500, one of the worst months since 2010, or of the decade. these stellar earnings are not providing any comfort, then what is next? chris: the level of earnings to, it has two

slowed down a little bit. to go through the different measures will take quite a lot of time but the fact that were seeing agility in things like pmi series and housing numbers, we're seeing multiyear highs , and the year yields fat are hell-bent on their path of gradual normalization while the markets are saying perhaps you should ease off a little bit. then with the background of less liquidity coming through the market type funding cost, and you've got an eclectic mix and extended positions all at once. much, chris you so weston. general motors surprised with quarterly profit that overtook expectations. we will look at the earnings come a just ahead.

this is bloomberg. ♪

paul: 10:30 a.m. thursday morning here in sydney. .3%, national australian bank out with results, for your cap -- full-year profit but shares are up. we will have more on that in a moment. 7:30 p.m. here in new york. markets closed higher on this last trading day of october, happy halloween, everyone to one of the worst months since 2011, despite the fact that we got the biggest two-day jump since february.

i'm shery ahn in new york. paul: i'm paul allen in sydney and you are watching "daybreak: asia." let's get the first word news with jenna dagenhart. china is signaling more stimulus measures on the way as the current peace no approach is not working. a statement acknowledges the economy is changing and downward pressures are increasing, and says the government take steps to counter the situation. china is reading from the trade war and from the president's rise against that. criticizinge now the mainland itself. the u.s. in the -- mc is using we chat to post criticism that's critical statements from top american officials. alleging interference, followed by mike pompeo's comments on human rights violations.

as. regulators are proposing softer oversight for most banks, the doubt that rules unlikely to pose a threat to the financial system. faye governors voted on a plan that would separate the megabanks from smaller, regional operators that would mean names such as capital one and pnc financial's would escape the stringent rules reserve for systematically important banks. turkey says jamal khashoggi was strangled the moment he entered the consulate last month. the chief prosecutor said his body was dismembered and destroyed in a premeditated murder. turkey also says the saudi prosecutor who joined the investigation was not helpful. officials say he failed to cooperate and offered no information about where the body might be. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm jenna dagenhart. this is bloomberg. still early in asia, but the markets that are open are higher, in the green. let's get a check of -- with what's happening with sophie kamaruddin. sophie: gains for the fist straight day for the asx 200, higher by .4%. materials in tech shares in pole position and will worth leading aboutvance, the stock up 1.5% after posting its first quarter update. food sells rising 1.8% for the first quarter. when it comes to other segments under pressure, real estate up by about .4%. this as australia's housing slump in her's its second year with buyer caution pushing prices lower in october. i want to highlight some of the gainers, corporate travel slowing back some losses after sinking 27% yesterday.

earlier opening 10% higher after raising its guidance and casino operator star entertainment on the rise after's trading update. domestic business showing good momentum, and bhp jumping by the most in two years, up 4.4% after announcing a $10.4 billion share buyback in a special dividend after completing sale of its onshore shale assets. weakness for gold miners as prices take a not from the dollar rally. the likes of northern star up by about 2% this morning. rise afterme forecasting strengthen global nitrogen prices. when it comes to the leading lacquer, it's all by 3.5% after being cut to sell at morningstar. paul: thanks very much, sophie.

national australia bank's earnings fell the most in a decade on restructuring costs those factors combined with the softening housing market make for a pretty ugly set of results for the sector as a whole. a big decline in cash profit for national australia bank, but it was not a surprise. italy: almost a relief rally in the shares. the numbers are bad, but the bank has been guiding this. -- maybe a little bit of relief that there are not nastier surprises waiting in store. we are looking at the situation, this is not a good operating environment for banks, talking

to a media's ceo, he said he expected the environment to be challenging going forward. so the banks will have to be grinding out growth in a much tougher market. as we saw, they're still making in excess of $5 billion profit, so they are not exactly paupers. nab is shedding staff, looking , 4000 rid of 6000 growth net step over the next couple of years as it tries to merge some of the bank technologies which may not talk to each other as well as they should. it's also looking to get out of it wealth business, not all of it, but certain sectors that it no longer wants to do. that is a trend we have seen across the sector. assetnk sold this global business to mitsubishi japan.

has sold 21 businesses over the past two years. paul: it's not just others really, got tainted in the banking inquiry cleared --. >> its come basically from cooley -- conflicting advice, and hasn't come from -- scandals are not really around like if a credit card fee has been too hire something like that. it's been around more advisory tech products. causingly, these event disproportionate damage to their reputation. paul: finance report of fraser, thanks for joining us today. nab shares of about 1.25%.

ceo a talk to the nab little later on. you can see that it 2:30 p.m. sydney time. shery: and lots of earnings out of the u.s. as well. general motors showing old-school business with carmakers can still be lucrative, despite slowing global sales. the automakers arrived in -- surprised investors. where was the strength? ramy: in the united states, selling suvs and pickups, and surprisingly in china. aboutnded up pulling in $500 million, even those the sentiment has been clouded because they also saw the first slowdown in the country which andd to some negativity

some concerns there. let me walk you through the the estimate was for $1.25, that was supposed to be a year on year fall. third-quarter revenue was upbeat also, by $1 billion, looking ahead the total full-year profit be atst is supposed to the high-end of $6.20 or so. and looking to technology in 2019, they are still targeting those commercial self driving cars for 2019. a little more about the suv sales in the united states, taking a look at margins on the order of about 10% or so, they said this was strong pricing, pricing andy low they sold fewer, but they still pulled in more profit there. $500ina, i mentioned

million, but that is against the backdrop of growth, 20% year on year. still at said, it is very volatile market there because of the global macro economic background. we talked to the gm cfo about that. it's clearly a volatile environment that we are watching very closely. we have been intensely focused on cost and you see the cost discipline coming through this quarter. the question is about sustainability and whether they can continue to do this. the cfo said that in regard to the flashing of taxes that we talked about earlier this week to 5%, that could support the whole china market overall. i'm not sure if it would affect the bigger cars because the 5% does affect the smaller ones. shery: does that process usually me job security?

that might not be the case with gm. ramy: they offered a bunch of people the possibility to leave the company. gm said they are doing this because the economy is basically good right now, so they want to get that out how they still can. numbers, they offered this to 18,000 salaried employees, that makes up a little more than one third of their 50,000 staff. and this will not be cheap, it million, for30 1800 employees only. this is the number of employees they have to do into 2017, the ceo has been on this series of shrinking employee levels for the past several years, most recently out of europe. we will see a many people decide to take this voluntary buyout,

but it would be involuntary if not a lot of people decided they would take that. but they are not getting the and of all the jobs out there, i mentioned technology and the self driving crews car that they say will launch in 2019. that added about 900 jobs over the past few years and they are setting their sights on growing that. is onef driving aspect of the growth engines they will try to push in addition to all the other car companies out there. shery: thank you so much for that. onk of japan trying to boost buying again, so we will talk about that live in tokyo to break down strategy. this is bloomberg. ♪

paul: this is "daybreak: asia." i'm paul allen in sydney.

shery: let's get a quick check of the latest business flash headlines. thedrive to reduce country's biggest corporate debt, they asked the leasing arm to take over at least 10 planes. told talks about the wide-body leastlane they back to at april. of health care technology unit could raise $2 billion. the business provides platforms used by hospitals, insurers and pharmacies, and we are told the listing could come sometime next year. softbank'sncluded vision fund. it's: nomura says underperforming european armed need to shake contributing to

wider losses in the last order. the cfo said he intends to reduce the unit to an appropriate size after the business lost $102 million in the three months through september. japan's against brokerage posted a rare net loss from year earlier. paul: bank of japan is sticking with it yield curve control policy as it tinkers to improve sustainability. kathleen hays here with the details. let's start with governor kuroda's press conference. it's pretty clear the policy is not changing anytime soon. kathleen: there may be tweaks and conjecture and speculation about how those tweaks could lead to an eventual pulling away from all the stimulus, but not yet. thernor kuroda underscored biggest picture has not changed from an other words, they've made some progress.

the boj had to cut its inflation forecast in its monetary policy report. it's important to do these ,weaks to yield curve control the range has been widened, but don't expect any big changes on any aspect of the program, the governor made it clear. that's what the story is for now. >> i have no intention of changing the current gold of guiding around 10% right now. we will keep taking necessary measures to improve market functioning. kathleen: there's been conjecture that one of the reasons the boj might want to allow the yield to move higher is because banks are struggling to make money. the flatter the yield curve, the concern is there taking on riskier loans to boost profitability. the governor said the bank currently have ample capital and

he sees no immediate problem on this front, downplayed global market turmoil saying the global economy is still growing but if the risks materialize from overseas, they are ready to deal with them. risk to theide price in growth outlook stems from overseas. if the risk materialize and have a big impact, the boj would naturally think about a policy measure. kathleen: matter of fact, a couple of people commented that he looked a little weary yesterday. when the boj has to downgrade their inflation forecasts, he often looks of it tired. shery: it was interesting to the market has functioned better since they widened the trading range on the 10 year, but then we saw change in the bond purchase program, so what is the signal here?

kathleen: the signal is they want to make it work better. the governor may that point again yesterday. he's been concerned about the lack of trading in the bond market and once it to keep functioning well. bottom line, it's important that they made these tweaks to keep it going better. day the cutting by one sales time for when they would sell their 1-5-year bonds. they are boosting the amount sold that auction, and for other bonds outside the 1-5-year maturity, they are going to space out the purchase. there has been an issue where people have been buying bonds at the government bond auction and in turn around and selling them at a rhenium by spacing things out. and to keep the program sustainable, it looks like it will have to be in place for a while. shery: kathleen hays, thank you

so much from tokyo. for look at some of the stories trending across the bloomberg universe, check out the easiest countries to do business. and which places you might want to avoid. more eight ising coming as trade war pressure rises. and bitcoin celebrates its 10th birthday. look at what 10,000 bitcoins could have bought you over the past decade. check out those stories online or on the terminal. this is bloomberg. ♪

paul: this is "daybreak: asia." i'm paul allen in sydney. shery: and i'm shery ahn in new york. enthusiasts saying openness helps with innovation in capital markets. the subject is top of the agenda at the annual asia securities

industry and markets in singapore. austen.me life is mark we cannot help thinking of alibaba and financials, some of the world's biggest fin tech companies. how open has china been to this industry? mark: china has been the market and even this region globally. you seen alibaba grow tremendously over recent years. pointnly from a fintech of view, digitization is the new normal. it is here to stay. there's a lot of discussion around how the banks, the incumbents will end up ntechgating all the fi innovation over the coming years. it's around who can get rid of their legacy systems the quickest and be able to compete

with these big tech firms like alibaba. we continue a trend to see for the next five or 10 years. shery: where do you see the biggest potential in terms of markets? mark: i think china, as you mentioned, has massive potential, it's a big, big market. if you look elsewhere in the world, the u.s. has something similar and you're starting to see this development. europe a very big market given the challenge fight markets for singapore and hong kong, on their own, they are very, very small. while they can be innovative and nimble, the question is do they have the economies of scale to really compete. what will happen with the smaller markets is they will create small, innovative tech firms that will be gobbled up the aggregators, the global,

regional banks that will incorporate that technology into their own and then offer it out to the market. the challenge to the market is, the new guys are bringing something new to the market. othere bringing something than the traditional banks and we will have to see how that evolved going forward. strengthsk has been a and that's what the banks have been doing for a millennium. we have connectivity between the tech firms in the consumer, can they put that together to harness that and compete. think they will not over time. i think the banks will partner up with these guys and the once it are the biggest and most nimble will be able to actually compete. paul: some of those smaller firms, what are the most innovative developments they are working on better catching your eye? mark: there's a lot going on in kyc, for example.

the most challenging thing is on avoidingcustomers and terrorism financing, etc. there is spatial recognition technology, these kind of things that will make it smoother to onboard customers and to make sure you know who your customer is. those developments are fascinating and the thing to watch in this space. you seen this in china where they've been previewing people, monitoring people and their facial expressions to determine if they are lying or not, or at least that is the theory behind it. paul: do you expect the brewing trade war to cast much of a shadow over your conference? mark: that's the other big topic, the trade war. conversely, the trade war is

accelerating china's opening. from an exportve dominated, investment driven market to a consumer led society. to do that, they really need a capital market. the need to take the savings going into their banks and transform that through the capital market. when you look at accessing the china market, whether on stocks, bonds, through asset management channels, that has been freeing up tremendously over the recent months. we expect that to continue, only because china wants to develop an alternative to having exports to the united states because of the trade war. .hery: thank you, mark austen let's get a check of the markets, asx 200 gaining .8% while new zealand stocks are up .4%. all of this coming at a time when asian stocks have surged to the highest in a week on

positive sentiment. the future is looking a little mixed. next, we'll have the back of singapore economist joining us. ♪

paul: i'm paul allen in sydney, where major markets have opened for trade. kamaruddin inphie hong kong. welcome to "daybreak: asia." paul: the top stories this thursday, markets had into november after the worst month for global equities in at least six years. the dollar extended a 16 month high. the yuan remains at its weakest in a decade as the trade war

signals more health for the gaining economy. plus blockchain has financial transparency, it's hong kong's fintech week. shery: and south korea's exports rising 22.7% in october. this is a huge job and much higher than estimates. the estimate was for jump of 18% year on year on exports. , coming from7% weaker figures in the previous month of september. it was due to the autumn holiday. a bigger jump than what was expected, 19.9%. this is leading the trade surplus of 6.55 really dollars. this is interesting because we are already seeing the china-u.s. trade war affect chinese pmi data.

we had already seen strong numbers for the first 20 days at the month of october. the problem there is that it was jumping and semiconductors and petrochemicals. that is a key risk for the south korean economy if those exports are not broader. at this moment, october that is strong, year in your exports jumping 22.7. we got cpi data from korea this morning, in line with estimates. let's get a check of what is happening right now. core inflation rising 1.1% on a yearly basis for the month of october. .3% after losing 13% in october. concerns looming over the

economic outlook for korea. 225, andr the nikkei the yen trading against the dollar. the boj tweet its bond buying plan for november which could hint at fewer purchases. gains for stocks in sydney, wellington set for a fifth day of gains in both markets. nudgingie dollar , when it comes to stocks were keeping an eye on the earnings front. samsung dropping 5% after posting a whiter than forecast operating -- wider than forecast operating loss. watching number after japan's biggest broker posted a rare net loss as revenue at its retail and wholesale businesses took a

hit. an operating loss for the second quarter, cutting its target by 43%. and plan to spend 8.8 billion dollars on five g infrastructure 40% cheaper plans than current rates during the first three months of 2019. mobilephone rate carrier charges have been above manner for the -- a bugbear for the japanese government. paul: let's get to the first word news with jenna dagenhart. jenna: britain and the e.u. say progress is made on a brexit deal. the top u.k. negotiator expecting agreement by the 21st of this month. new british proposals on the irish border, although not

offering details. officials are more optimistic saying there's more of a positive mood among negotiators. >> at think it is possible to get a deal in november. but i think that deal needs to be based on the works at both negotiating teams are doing. and also the commitments that have been made in the negotiations. jenna: italy seems to be sinking into political and financial crisis. the criticism as to the pressure with brussels already rejecting the budget. the finance minister defended the plan, saying it will work and that government stimulus is necessary to kickstart italy's stalled economy. u.s. regulators are proposing a softer oversight for most banks to doubt that rules for lenders deemed unlikely to post a threat to the financial system.

fed governors voted on a plan to separate the megabanks from smaller, regional operators. names such as capital one and pnc financial would escape the stringent rules reserved for systematically important banks. the lion airplane that question on monday suffered problems without student airspeed sensors on an earlier flight. pilots you flew the plane to jakarta the night before the accident reporting the issue, but the 737 was checked and cleared to fly. indonesia says audio p have been detected in the crash area, although the flight recorders have yet to be recovered. 189 people were killed in the crash. global news, 24 hours a day, on-air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. shery: china's leaders are signaling additional stimulus

measures are in the pipeline as disappointing data suggest recent steps to shore up the economy have not worked. tom mackenzie joins us now from beijing. could we finally expect some sweeping measures like we saw back in 2008 2015, or will it be targeted, small measures? is the question that is front and center for china watchers. they have pledged officials here not to unleash a flood of stimulus. statementd get in the from the politburo following a meeting yesterday was a sense that officials here now see the economic slowdown and the trade war tensions as being more acute. they talked that downward pressures on the economy and the need for timely steps to address some of those issues. so it does seem they are teeing up additional steps. that manufacturing data disappointed, manufacturing growing at the lowest level for

more than two years. the exports section are gauge in contractual territory. we've had measures outlined by officials over the last few it's corporate bond issuance our personal tax cuts, whether it's targeted or piecemeal, it doesn't seem to have convinced investors. share prices down more than 20% and the yuan is weaker, at its lowest level in almost a decade. it hasn't done much to support comingnomy data, still in weaker. it seems like officials are looking to table additional measures. we may not get that flood of stimulus but it looks like there honing and our more aggressive approach to try to shore up the economy. stimulusthere may be coming. i guess the next question is, when? chiefe heard from the

china economist at nomura, he painted a bleak nature of the chinese economy. he said the crunch point will come around april and may of next year, saying there will be a confluence of events. additional tariffs from president trump initiated of possibly all of china's exports to the u.s. market. that along with a slowdown in durable goods sales and the property market, he says consumers have less cash in their pockets and households are more indebted. he says all these things will come together around april or may of next year and then you response,n aggressive cuts to additional taxes and trying to release a little bit of steam from the property market to give the broader economy more support. that is the view from nomura.

it seems the priority is shoring up growth. don't expect much for the yuan, , we'veems to be that you heard that from one of our strategist, talking about the yawning, the pboc is saying that expect the yuan to break through 7.1 in the next six months. additional support for the broader economy. beijing, mackenzie in thanks very much for that. garfield reynolds is with us now. how about some opted this -- optimism this month? garfield: it certainly cannot get much worse, you would think. a lot of the bad news has probably been priced in.

i think we can expect a tentative start to the month. we have strong risk coming up between payrolls tomorrow at of worry.. which could be a there has to be attempts 8 -- two tatian just hold back until we see what u.s. midterms deliver. time to deploy the old warren buffett there he, be greedy while others are fearful? valuations are extremely attractive, the rewards are there. the question for an investor is, what are the risk, and am i willing to take them on? especially with volatility still elevated. that has to create some concern. shery: here in the u.s. we have seen value outpaced grow, while

tech was taking a beating. we saw value stocks gain a little more ground. is that what we will see in asia as well? what sectors should we be watching? garfield: tech is an extremely important sector, when you're looking around a lot of asian china tech isding not so important there. hong kong has just come off it for stretch of monthly gains in 36 years or something and tencent is extremely important, and dependent on china tech development but also on take in general. south korea and taiwan were in the -- among the worst markets last month. tech will be important, american tech did well overnight. it comes back to where you think the markets have done enough to price down the global growth outlook. everything not a little too optimistic earlier on this year.

now we've had to pull back. is the pullback sufficient and can we start to get some optimism about where the global economy goes from here? shery: garfield reynolds, thank you so much. still ahead, and economist says it's a time to embrace china's status as a superpower, or face the consequences. we will speak to her live from sydney. takesand richard jerram the pulse of asia's economies. this is bloomberg. ♪

paul: this is "daybreak: asia." i'm paul allen in sydney. shery: south korea's exports rebounded in october following a decline of more than 8% in the revis month. but analysts do not see a positive outlook.

the impact of the trade war has started to appear in china's macro data and it may only be a matter of time before the same happens in korea. let's discuss all that went .ichard jerram always great to have you with us and not surprising to see that the export growth in south korea seems to be pretty focused it comes to semiconductors and petrochemicals. is that a key risk going forward, that exports growth is not broader? richard: they have always had this problem in terms of narrow focus of the economy. thedifficulty of a lot of trade releases is try to read how much of an impact from u.s. tariffs there is. presumably there was some frontloading of exports before the tariffs came in. the other china see how much is a reaction to that and how much is a genuine weakness in underlying exports. it just makes it even more difficult.

china the pmi data out of shows how china's numbers have been lagging behind those of the u.s. and europe as well. that line in yellow at the bottom. it still about 50, it's not below the 50 level. how do you take the latest numbers out of china? is it a positive because it is still expanding or negative because it is so close to that threshold? richard: that is an important point. you seen several times when the pmi has been below 50. there has been a urgency for policy stimulus. the striking thing is, we all know is a problem, clearly there is a problem for exports, but the overall number is not so bad. the nonmanufacturing part of it is still fairly healthy as well.

sure, there is a hit from american tariffs, but there is probably also some policy stimulus getting in their, they've done quite a lot already. easier credit, and it looks as though they getting some sort of balance. you certain have a slowdown but it is not particularly worrisome at the moment. the concern is if companies are forced to shift their production networks over the next 12 months, maybe the pain will intensify, but i think there is promise from chinese policymakers that if you need more stimulus, you will get it. let's forget about the credit bubble for the moment in order to preserve short-term growth. pmi ishat manufacturing showing a rather disturbing trend. i'm wondering what is your expectation and if it might nudge the chinese authorities

into bringing that stimulus on sooner. richard: clearly the numbers are sleeping. your not collapsing, losing a few tenths of a percent each month. they are trying to calibrate how much more they need to step on the pedal to wrap things up in order to offset the damage, which undoubtedly is coming from the export sector. so you would expect or weakness. was mentioning about china yawning as the yuan approaches seven. do you see that being the case? people in markets often make a big deal about big numbers, the dow going through 20,000, or chinese currency

going through seven or whatever it is. i think there is no reason why you care, it doesn't really matter. it seems they have tightened capital controls fairly effectively so they would not really fear a flood of money out of the country if people started speculating that is getting out of their control. moderate weakness seems consistent with whatever else they are doing in the economy. natural like a fairly progression of the overall policy. shery: is it time for the chinese authorities to accept slower growth? aside from trade tensions, the property been slowing. richard: i think the time came

for our five years ago and i think they have made a bad to jackistake of trying up and protect the growth rate with a lot of crazy, low return investment projects that keep future bad debts on the economy through massive credit bubble. the problem is you should have been trying to reallocate resources more aggressively through reform -- reform. they haven't done that, and it just becomes harder now that you have this headwind coming from overseas. they put themselves in a bit of a whole really by the failure to reform and try to change the economic model over the past four or five years. shery: thank you so much for that, from bank of singapore. in breaking news on the bloomberg, we are hearing that one stock is down more than 10%,

falling the most in more than 10 years. carrierafter the lowered their price cut plan and also after they announced buyback plans. they lowered the plan in the way mobile fees will be cut by up to 40% in the first quarter of 2019. and their buyback plan of as much as 600 billion yen worth of , saying this will do little to ease investors concerns of weakening profit growth. the stock falling more than 10%, the most in more than a decade. we will keep you updated on everything happening in asia, plenty more to come. this is bloomberg. ♪

reported robin wrote

that beat analyst estimates. let's get the details from russell in tokyo. what drove these better results? russell: it was all about the lending income, the interest loans group.ed and also a drop of allowances due to a year ago, they set aside a lot in the gas bad loans sector that have been worked through the sector. analysts in singapore a watching closely to see whether and how they're making money from the rising interest rates, increasing funding cost but also allowing them to charge more for loans. we saw united overseas bank last week posted a narrower interest margin from the previous

quarter, causing shares to tumble quite a lot. time investors welcome the stock trading later on this morning. it's actually the worst-performing stock among the three big banks in singapore. of posting amber posting a rare quarterly loss. what went wrong here? some's largely due to one-time payments, they booked a large expense for selling a decade ago, selling illegal dispute stemming from its sale of residential mortgage-backed securities that led up to the global financial crisis. the concerning thing is that underlying results were also

bad, revenue fell in retail banking and in wholesale, brokerage commitments -- commissions fell. they have a lot to think about, perhaps the most concerning aspect was the slump in retail business. remember this was a quarter whether that nikkei touched a 27 year high and nomura said sentiment was soft. since then we've had market turmoil with the nikkei have in its worst month in october for more than two years. so doesn't bode well for the retail business going forward. shery: russell, thank you so much. coming up next, one of australia's leading experts on china's development from the

australian national university tells us why we should stop expecting the rising superpower of china to become something it is not. this is bloomberg. ♪

>> it is 11:30 a.m. in sydney and we have the aussie dollar climbing on the back of just-released trade numbers for the month of september. a big blowout here. ,3 billion trade surplus expecting a surplus of 1.7 billion so strong numbers. we have september exports rising 1% from a month earlier while imports falling at 1% and the aussie dollar pushing up toward $.71. if you are following on from the south korean trade numbers, we surpluslowout figure, for september of $3 billion. let's get the first word news.

jenna: china signaling more stimulus measures as we see the piecemeal approach is not working. a statement acknowledges the economy is changing and downward pressures are increasing and says the government must take steps to counter the situation. china is reeling against the trade war. after the u.s. accused china in meddling in domestic politics its diplomats are criticizing a shooting and itself. the u.s. embassy is using we chat to translate statements from talk -- top american officials. speeches were followed by mike comments on human rights violations. president trump said he is prepared to deploy as many as 50,000 -- 15,000 officers to the u.s.-mexico border in a bid to

stop migrants open -- entering the country illegally. immigration during the campaign and continuing to blame democrats. >> immigration is an important subject and the democrats have let immigration in our country get out of control with their horrible not allowing us to have any most to get past. we need democratic votes to change the immigration laws, they have not given us any votes. jamal khashoggi was strangled the moment he entered the instant bowl consulate. the chief prosecutor said his body was dismembered and destroyed in a premeditated murder. turkey says the saudi prosecutor who joined the investigation was not helpful. failed tosay he cooperated and offered no information about where the body

might be. an executive in f a bit -- alphabet left after the new york times reported he was accused of sexual harassment. -- focused onwas andects such as balloons delivery drones, a source says he left the company on tuesday with no severance pay. some employees plan to stop work on thursday over the company's handling of the harassment claims. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the british pound is surging up 2.51%. as we see reports from the british times on brexit, theresa may has struck a deal with brussels that would give u.k. financial services companies continued access to european markets after brexit.

we are seeing sterling jumping .4 percent, the biggest jump in about three weeks on a report from the times saying that british and european negotiators have reached a tentative agreement on all aspects of the future partnership on services as well as exchange of data. that is according to government sources. we will keep you updated on that as soon as we get more developments. let's get a check of how asian stocks are trading at the moment. is a busy start to november, especially with what we are seeing in tokyo. the nikkei 225 up 1%, and this is we get a flood of earnings inundating investors. we are seeing the likes of nomura take a hit, off by 6.4%, the mostthe sense -- since twice 16. headwinds are ahead for retail and wholesale units and the stock is down 22% in 2018. let's look at other movers.

when you look at the leaderboard, you have tv ko this afterainers, j.p. morgan upgraded the stock. tdk jumping after raising its four-year operating outlook. and adding 10% this morning, jumping on its sales a beat. let's take a look at laggards, we see plenty of decliners on the nikkei 225. you have yamaha motor off by on its sales and panasonic sliding by the most in two years after it missed in an operating income. no change was seen to the forecast but up and down, we are seeing the cost segment forecast according to jeffries. telcos are under pressure, take a look at what is going on with ntt docomo.

and it is a jury morning for japanese telcos, this after docomo spoke of plans to cut mobile plants by 20% to 40% during the first quarter of 2019. the mobilephone carrier spoke of plans to share buybacks and that is doing little to ease concerns over weakening profit. this as docomo cut its four-year net income and along with japanese telcos, you do have softbank under pressure, sprint beat in second-quarter results and there might be a merger underway between sprint and t-mobile, not really helping that stock avoid the selloff in japanese telcos this morning. paul: for more on kokomo which is off more than leavened percent, let's get to sophie

jackman. shareholders are not so happy. what is going on? that theocomo said plan to cut 20% to 40%, rates to hundred billion yen of profits to customers. , it that kind in the -- cut will take them till fiscal 2023 to get operating profits where they were in the previous fiscal year. it will take a while. this five g infrastructure they plan to build and payment service will help them make up that lawson profit. investors are skeptical. paul: earnings did not do much to reassure investors either, did it? sophie: they did not. despite the fact they did announce a share buyback that would be the biggest share buybacks they have approved in

their history. we are seeing all the carriers down, kt shiite reporting earnings and softbank, with the to lower prices we expect those providers might have some plans to thought as well. there is a wait-and-see move. shery: what we know about spending plans with 5g? sophie: docomo will put down ¥1 trillion on the five g infrastructure across japan and they see investment will pay off in terms of their share of [indiscernible] in japan. there are base stations and infrastructurer but docomo says many new services will be available that will be able to be provided through the of limitation of the 5g. all the carriers have plans for that and we are going to see over the coming weeks what kind of plans they have for five g infrastructure.

shery: thank you for that. scott morrison gives his first major speech on foreign affairs later in sydney. he will say his confidence of navigating the competition between the u.s. and china. with tensions high on all sides, is that optimism justified? let's bring in one of australia's leading experts. joining us now in sydney. great to have you with us, thank you for your time. there was one headline that backt my eye a few days about japan ending its 40 year official development of citizens for china. where they still receiving oda? are they acting like a superpower? they will cut official development assistance to china.

>> that is a good question. china finds itself in a reticular position. it is the world's second-largest economy but it is still in per capita terms of poor country. over the last several decades, -- and aid recipient. it is time the recipient part of that came to an end and so it depends, the decision is welcomed and what we see is china seeing much more on the giving side of things. prominently with its initiative but contributions it is making to the global economy. been shyina has not when it comes to its ambitions, they want to grow and they are not hiding their strength here. is this the right approach when you're dealing with your rivals?

>> it is a very complicated strategic time. i think in world history. the world and the u.s. facing a challenger. its way up the ranks for decades and if it is ready to move beyond that, china's policyns through their are commensurate with its position in the global economic order and the second largest economy in the world. i do not find that all that surprising. i find it a little bit baffling that the americans and the europeans as well are finding it hard to accept that another country would rise up and challenge the global dominance from the technological frontier. this was always going to happen if china's economy developed the way it did. has: you say that australia to embrace the superpower status . is it that bleak? i am thinking in terms of what

sophie jackman was saying about the develop mend of the 5g network and you are saying it was unwise? >> not necessarily. i do not have access to the intelligence that led to the government to make the decision about the 5g network and i put , itrust and then -- in them may have made sense to say no to huawei. huawei is known for being one of the lower costs and highest the goodsoducers of and services they were hoping to provide. by rejecting them come a us trillion consumers pay a higher price. the price might be worth paying, if the security impact are allowing them into the market would be too high. that is a decision we need to leave with the us trillion government and trust them to make the decision on. paul: in terms of chinese

generosity and overseas aid, we have seen that in the traditional sphere of dominance in the pacific. is this something australia should be concerned about, and the amount of donations going to pacific island nations? >> you could call it concerned but at this point, that concern would be misplaced and will amount to nothing. china is a far bigger economy than the australian economy and they have more money to spend and there is nothing wrong with the australian government competing on some levels especially in the pacific where the sphere of influence has been the strongest and where the minimal -- where the aid budget, they can make the biggest impact but to think we can outcompete china in the region when our economy is so much smaller, is somewhat wishful thinking. we are seeing a trade war

brewing between china and the u.s., impacting the economy in china. we are seeing the latest data showing a slowdown in the economy. xi's powerpresident or control over money and guiding the chinese economy and government? a tough position, they will oversee lots of economists and thinkers beneath him in the university and government trying to figure out the best response to the trade war that has escalated in the last year. i don't think anyone knows quite what the right step to do is and because of the power that he has accumulated in his own hands in the last year or so, i think he is expected to come up with an answer to that. nobody has the answer and i don't think he is an exception

to that. shery: we are seeing strategies whether it is the u.s. or japan to bring in india and boost their relationship with india, the counterweight to china in the region. are we going to see a shift in the balance and alliances in the region as this plays out between china and the u.s.? thehat seems to be what countries are seeking not only in the u.s. and japan but australia is committing to ring in europe and -- in the ranks as a trading partner at the economic relationship more broadly. it is somewhat wishful thinking. the indian economy has grown rapidly but not as rapidly as many other countries in the region. not as rapidly as china. there is a whole bunch of problems with domestic to moment at home so the chances that india will replace china and

become the dominant force of growth in the asia-pacific region is not something we will see a to realize in the next five years. you for your time. some of the headlines on the british pound because we saw it surge on that headline coming from the times saying that theresa may has struck a deal with brussels. to give financial services countries continued access to the eu after brexit, we are seeing the 10 year yield also moving and gaining in ground, rising above that 3.1% level, extending gains for another session. the british pound also moving on the news while treasury yields are higher. is on news that british and european ago she does have reached a tentative agreement as

well as the exchange of data that is according to sources that talk to the times. this is moving markets. at the moment. 20 more to come. this is bloomberg. ♪

shery: this is daybreak asia. paul: this is paul allen in sydney. this is day two of sin tech week week.tech your platform is called quarter, this sounds rather ambitious that you will become [indiscernible] explain how it works. guest: thank you. it is an enterprise grade

blockchain pratt -- platform that allows companies to transact and interact with each other using smart contract. with a high level of security. using that technology, the blockchain technology as a basis ,or working with each other transacting information, and being a lot more efficient. considering an ipo as well. how far down the track with that be? i can't discuss that, that his heart -- probably far off in the future. we are focusing on building the business, building the ecosystem, we have over 200 developers building on our platform. different solutions for financial services and also for other industries as well.

paul: what sort of timeframe are you looking at to make this live and operating? nowt: this is live right treated as opposed to other platforms we do have companies doing live transactions right if you go to our marketplace you can see that there is over 64 solution showing their wares. we have four or five that are live right now in gold trading. and vessel insurance and also in trade finance. shery: where in the region do you see most potential? guest: in asia, everywhere is growing, we are here for hong the syntech week, government is taking many of these initiatives. we are seeing countries like thailand and china is doing a

lot in blockchain in there their own way. we see a lot of the central banks working to learn about central digital currency, to learn about how regulations are going to have to change to allow locked chain services, helps theirlatform businesses help the financial industry be more efficient. shery: how many developers, firms, or tech partners are choosing to build in the platform? it is an interesting question because in some ways we do not know. we know 200 are building. dore is hundreds of ones we not know that are building right now and we find out when they complete the system. i was in china a few weeks ago and met to developers that had built systems for trade finance, had never met them before. they built it and they want to use the enterprise-level because

they want to link to financial institutions. as an open source system, there are thousands of developers that are working on it and we find out about it when they want to come on the platform. shery: thank you so much. you can get a roundup of the stories you need to know to get your day going, user terminal and they are available in the bloomberg apps and your mobile. you can get the news on the industries and assets that you care about. this is bloomberg. ♪

paul: this is "a break asia." let's get a quick check of the business headlines. carriers are plunging after all, announced plans to cut mobile phase as much as 40%. the decision puts pressure on rivals such as softbank and follows government calls for the companies to bring prices down. k bbi slumped, the worst performance since 2008 while though, was 11% fall was the worst intraday decline in over a decade. getting a shakeup after intruding to wider losses in the last quarter -- quarter. he intends to reduce the units

after the business lost 102 million dollars in a three months through to september. japan's biggest brokerage posted a rare net loss as retail and wholesale revenues declined from one year earlier. shery: and planning and ipo while its health care technology unit could raise $2 billion. the business provides platforms and as -- by hospitals insurers and pharmacies. the listing could come sometime next year. they raised more than $1 billion in a funding round in february from investors including softbank's vision fund. paul: let's have a look at what is coming up in the next few hours. what are you watching? david: we are, we will continue to follow the market after we wrapped up, it was a memorable october, the worst, second-worst

in 30 years and we will be ceo atby the regional alliancebernstein. to tell you about, the property guru and we will be talking about an abl with joined byd we will be them later in the program. to look forward there. let's have a quick look at how markets are trading. the nikkei off .8 of percent, the cost be higher and the asx higher by 1/5 of 1%.

>> you met your wife in high school? >> we met in seventh grade. inventedn how you high-yield bonds. >> you do not want to be --endent on a wewhat helped change how finance things? you fix your tie? >> people wouldn't recognize me if my tie was fixed.