haidi: good morning. i am haidi stroud-watts. shery: i'm shery ahn. sophie: i am sophie kamaruddin. welcome to daybreak asia. haidi: our top stories this monday, anger and iran as u.s. sanctions return. that riyal has helped in value -- halved in value this year. terrorists will mean most top thes will not be -- tariffs most top names will not be in

shanghai. a string of rallies, threatening to deter the agenda. shery: looking at how markets close in the u.s., stocks under tech heavy indices pacing declines, the nasdaq down 1%, the dow lost ground after three sessions of gains. we did get tech leading the declines on the s&p 500 after apple's poor results. we had real estate leading declines as well, but consumer stocks were the only ones that gained ground. we have positive momentum from data showing hiring rebounded in october. , domestic wecaps focused stocks gaining ground in the last session of last week. see how all of this will translate into asia. of ae: getting signs hangover after friday's rally jump the most in 2016. -- since 2016.

onn oil sentience kicking in monday, waiting for more details on the exemptions granted, india and japan among that. xi jinping's tone on the trade will be focused on later. offey stocks edging lower, .1%, set to step a four-day advance. westpac in focus after its flat results. the bank sees the australian economy slowing in 2019 because and softd which growth housing market. softbank is in the spotlight as its relationship with saudi arabia is under scrutiny. looking at the agenda, the boj meeting minutes for october do later this morning. pmi data from china and gdp figures from indonesia and trade from malaysia. we will get numbers from hong kong, singapore and the philippines after a series of disappointing asian pmi.

that could add to expectations we will see the world economy shifting into lower gear. a rethink told see the downside. haidi: taking a look at the asian hangover ride, event risks abounding this week. let's get you caught up with first word news here in singapore. haslinda: the u.s. army has begun building a new camp at the border between texas and mexico to house military and security personnel as thousands approach the country. more than 7000 active troops have been ordered to border areas in texas, arizona and california. they are not building facilities to house migrants. iran is bracing for the resumption of sanctions, insisting it has survived years of western pressure. the economy is sinking into

crisis with the plunging riyal anger.ular the trump administration is re-imposing sanctions by saying despitecoming not -- the u.n. saying iran is complying. >> we are confident they will be effective and i can prove that already. the iranian economy today is already feeling the effects of this. it is feeling the effects of this effort not because sanctions have snapped back. that will not occur until monday, but because the world and iran knew this was coming. haslinda: north korea is stepping up attacks on u.s. sanctions, threatening to resume the nuclear program if measures are not lifted. the u.s. called itself destructive actions, reinforcing kim jong-un's comments last week. secretary of state mike pompeo with kim andalks

president trump. an investigation into the theations of ryanair after search for a voice recorder enters an eighth day. a flight crew qualification search will go on. the governments had already ordered a review of their maintenance unit after reports of earlier issues. 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 am haslinda amin. import expo is going on in shanghai. president xi remains locked in the trade war. tom mackenzie joins us. this is the baby of president xi. so curious about the town he will strike -- the tone he will

strike today. of: that is where the focus attention will be. there is a difference between what we expect and what those in the u.s., also those in the e.u. want to hear from president xi, and what we expect to hear is a recap of the moves around increasing access, market access and lowering trade barriers weather in the financial sector or the autos sector. they could be a recap of the moves to cut import taxes as well and reiteration of the commitments to support the multilateral trading session, -- system and globalization. we look at what is wanted by those looking ahead to this speech. i have been speaking to those in the e.u. and those from the presidents of commerce, and both officials have said they want to see a commitment by president xi to tackle the core issues that are fundamentally at the heart

of this dispute between washington and beijing but also concerns far beyond the halls of power. tech transfer, made in china industrial policy, subsidies, state-owned enterprises, whether or not we will get that seems unlikely. the president of the american chambers of commerce said if we get a sweeping statement from president xi of a trading access, lowering barriers of entry, a broad range of sectors, that could alleviate concerns of his members. it could play into what we have been hearing from president trump. we know he has told his people to draw up potential areas of agreement for when they meet in december.es in we are hearing signals about that. it will be interesting whether they actually move the dial and what this could then do is

articulate the divide between these sites because the chinese think they can address these issues by buying more. they talked about this thing and attempt to show they are serious about the global trade surplus. president xi is committed to buying. china has committed to buying $24 trillion worth of goods from abroad, but if you break it down, it is not much more than the total imports in 2017 on an annual basis, so they want to hear more in the u.s. and europe from president xi. if we don't get that, it could show the divide that remains. about reality, not many companies sending representatives -- or they are sending representatives and started -- instead of their top ceo.

tom: chinese organizers point to the fact there are 3000 companies represented here from 100 different nations, you have orstates, nationstates leaders, 180 different companies, but you are right that for the vast majority, particularly from the u.s., you are not getting the top ceo's. you are getting representatives from google, microsoft, but not the big names. that could prove a disappointment to china and their organizers. we are expecting deals to be announced and signed memorandums , but whether or not they are a consequence of the meeting over the next few days or had already been lined up is another question. we are speaking to some of the executives involved in those deals over the next few days. there could be something, the .ig named ceo's turn up this once, slightly muted expectations, didn't get a full frontal support and we reached out.

you got more positivity from the europeans but no big european lawmakers here are any big ceo's from european companies. shery: thank you so much. in a final frantic push ahead of the midterm elections, president trump holding five rallies across the country. he told reporters he wants to keep the senate in republican control. a reporter joining us in new york. there has been controversy over voter access in some parts of the country. how important is turnout in this final stretch before the election, before the polls opened, and what are the polling data telling us? mark: turnout will be everything. ideas that theof rallies are getting turnout. he has his supporters, he is focusing on immigration, talking about the caravan coming from

south america, and he is talking about birthright citizenship. something he should be talking about the economy here that would be a good selling point to republicans but the thought he wants to get is core base supporters to the pole. he is emphasizing an issue that worked well in 2016. joby: and with strong numbers, not being talked about as much as other issues. immigration, the caravan, sending troops to the border. i wonder how effective this has been. mark: we will find out. it is a question of the close senate races, what does the makeup of the electorate look like? there is a lot of polling that suggests democrats are enthusiastic to vote against donald trump, but republicans are enthused. you see early voting numbers from both parties very strong compared to 2014. what does that electorate look like?

do we see more swing voters, or are they voters who voted for trump in 2016 likely to vote republican in midterm races for congress and the senate? shery: the candidate for governor in georgia opening a probe for possible cyber crimes. mark: there is a lot of controversy because brian cap, the republican candidate, is the secretary of state, so he is overseeing an election where he is on the ballot. the complaint from the democrats , this is adams last-minute election stunt i think was the word she used to get attention on this issue. we will see more reporting about this on the election on tuesday but is there real vulnerability of the voter registration system in georgia? much. thank you so

taking a look at the crucial midterms vote and how that will play out. we have full coverage here on bloomberg. robert silvers joins us to talk deal making. why it could get even harder for chinese firms to invest in american technology. asia. the eco-week in our economist is next. this is bloomberg. ♪

haidi: this is daybreak asia. i am haidi stroud-watts. shery: i am shery ahn. looking ahead to the economic data, our next guest says china short-term growth matters for the rest of the region while the philippines cpi reading is a most important singles data point. joining us is the chief asean economist for a great to have you with us. we know the philippines have been ravaged by typhoons

september. cpin numbers, the survey saying 6.6% year on year growth in october and why are they important? >> what matters is the central bank and most economies were expecting inflation would peak in these months. when that happens they can focus on other things but until then there are acute supply concerns particularly rice weighing on the economic outlook. it is serious enough it is starting to impact of investment and the entire outlook. ifis important to see momentum starts to show signs of peaking. shery: we have china's october trade data. the trade war escalation has boosted china's exports because of frontloading of shipments. the real question right now is for how long? how long can we expect china's trade numbers to be positive in this environment?

it is a good question. looking at the global cycle it is not just the trade wars and trade tensions but there is a continuous slowing on the global tech cycle. apart from one off, apple shipments here and there, that will weigh on shipments in the coming months regardless of trade wars. respitewe do see some in the g20, we could expect gradual slowing of trade data across export intense economies. haidi: this is part of the cycle we are in. in china in particular how much more concerned are you about and trying tocern remove the risks in the financial system you already see even if we see a circuit breaker in these talks between president xi and president trump? joseph: that is a risk that has been with us for some time and

not an acute risk in the short-term but something very much present. in the short-term the polarity shifts to keeping the economy in a cyclically good position. from my perspective looking at the broader region, it matters to what extent are they able to revive private investment manufacturing. it ultimately is a good indicator of china's imports from the rest of the region. initial signs of that, policymakers are moving in that direction, but it will take longer than expected. deleveraging, we don't expect complete reversal of the creditent strategy but more liberally to certain sectors. haidi: as mentioned before, we have ratings across asia. trade numbers out of china, the fed meeting, not expecting them to move this month that in a final meeting of the year. after that the trade tensions scenario, is it further pressure coming down on of aged --

emerging asset currencies and do you expect further response from policymakers in the region? toeph: the fed will continue remain hawkish. u.s. data continues to hold up very well here that was indicated by the jobs data on friday. we expect the sugared -- the stronger dollar to continue. that said we do think next year particularly in the middle, growth start to slow. inwill normalize to be more line with its trend. we don't think the stroke or dollar will go on forever. middle of next year it will start looking better, but in the short-term, higher rates is a headwind, particularly for the asian economies. banks will have to be more cautious than the rest. we started off talking with the philippines cpi. it is important because the central bank, if they see strong domestic pressure, they will

hike once more. think of indonesia even though there has been respite in terms of the rupiah recently, they will remain cautious for the fed outlook. shery: how resilient are these in the face of tightening monetary conditions, the fed hiking rates and the trade environment compared to other regions? joseph: there is a degree of sensitivity particularly the credit deficit economies like indonesia and the philippines but there is a strong degree of resilience from the macro perspective. central banks are generally doing the right things across the region. we are not worried about massive policy mistakes that weigh on the outlook to an extent. in the medium-term we do see some areas where southeast asian economies might do well. in vietnam's case, look at the pmi's over the last week.

it continues to stand out. export orders are quite strong and there is a case the vietnam will gain manufacturing capacity. short-term because of the trade war but it has been happening for some time. in malaysia and thailand they will get impacted negatively but much less so than other economies because there is a degree of complementarity. areas where there can be benefit. shery: we have been focused on the malaysian budget. how much does the government focus on fiscal consolidation to affect economic rose? joseph: that is a good question -- economic growth? joseph: that is a good question. offshave to look at one such as massive amount of tax reforms from the previous government. that has brought up the deficit in a short-term, growing up 3.7%

from the previous government's 2.8% forecast. for 2019 there is not much construction very -- contractionary look. they have pared back the welfare programs but none of these are being reduced sharply. we expect to be relatively supportive for growth in the short-term but the contractionary phase of the budget will hit in 2020 three we expect more taxes to come online and you will not see the positive impact back to malaysians. 2020 is when it turns problematic for growth. shery: we continue to talk about the yuan weakness flirting with seven and beyond. do you expect that will continue to act as an anchor currency, more so than the u.s. dollar in this part of the world? .oseph: it will be a key many like the vietnamese currency, others are correlated to the renminbi.

when you look at trade flows, that is where it matters because china is the largest trading partner for the region. u.s. dollar remains relevant particularly for countries that depend on capital flows and portfolio financing. but the trend is essential. i would agree with you there. haidi: thank you so much for your time. economist,sean setting up a heavy week with maker -- macro data. japan's top diplomat is gearing for his country's first actual trade talks with the u.s. in two years. the foreign minister coming up next. this is bloomberg. ♪ is is bloomberg. ♪

haidi: this is daybreak asia. japan is expected to hold

its first bilateral trade talks with the u.s. in two years on january -- in january. they will talk about the tariffs and president trump has discussed slapping duties on cars. this minister said japan will tough talks. he said any deal must be mutually beneficial. >> any trade negotiation must be or theresatisfactory will not be any agreement. so if we give something to needs toates, u.s. give something to us. so it will be depending on the further negotiation. i think the prime minister and that what we can provide in terms of agriculture previous epa to that japan has agreed to.

that u.s. andhing look forward and rulemaking.kind of haidi: that was our exclusive conversation with the japanese foreign minister. let's get you a check of business flash headlines. the money manager who predicted the subprime collapse is shorting two british prince over a new deal -- no deal brexit. he will not say which banks he is shorting. 50has a potential list of that he may bet against. metro bank and see why bg have bg havet short -- cy been most shorted. shery: profits jumping to $1.1 tolion as revenue surged 48% $3.9 billion.

their coffers were drained after they paid record dividends and were ordered to buy india's stake in a refiner. the group needs to cut debt and deal with policy uncertainty. this is bloomberg. ♪ ♪

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haidi: it is 10:30 in sydney where markets have been trading for 30 minutes now. we are seeing downside when it comes to how the asx 200 is trading, .4% low. we are looking at the likes of energy, one of the biggest decliners sector wise, despite sanctions on iranian exports kicking in. watching the big financials, disappointing results, and undershooting kind of season for the commercial banks in australia. 6:30 in new york. the time has changed. not 7:30, it is 6:30. we saw the s&p 500 lower by .6%.

they took a hit on the forecast from apple. we also had trade tensions, a big reversal from what we have seen a few days earlier. i am shery ahn in new york. haidi: i am haidi stroud-watts in singapore. let's get you to first word news now. haslinda: sterling seen strengthening sharply if they can clinch a brexit deal with the european union. we expect this to rise to a dollar -- $1.35. the pound rallied 3%. officials on both sides tonight [indiscernible] germany's ruling christian democrats discussed recent election setbacks and the future after angela merkel. lawmakers met in berlin and plant finding a new leader for when merkel steps down to it she

is giving up leadership and will give it to another german chancellor. she has led the party for 18 years. anddhabi going to boost oil gas production. they will spend $130 billion to raise crude output to 4 million barrels a day by the end of 2020 and 5 million by the end of 2030. they can produce more than 1.5 billion cubic feet of gas a day. the first singapore alliance flightfrom los angeles turned back after they detected an error with engine oil readings. it was checked the engineers and declared serviceable and cleared to fly. this comes after the airline resumed a direct service to new york in october. they use and ultralong range plane. an ultralong range plane.

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. so much.ank you we are seeing early trading in asia under pressure, the only two markets that are opened are in the red. let's bring in sophie kamaruddin. in on the shares, set to snap the gains. declining by .3%. health care among the biggest drag. tech a bit of a bright spot. zero is rising 2% after being upgraded to overweight at j.p. morgan. amongst the banks we see gains for westpac, up .2% despite its last results. seehe laggards aboard we this one under pressure after a u.s. court ruled against the company in an infringement lawsuit. and this one of falling to the

2017. since june when it comes to stocks we will watch it later, keeping an eye on saw inc. ahead of its earnings report. have put theaudi conglomerate under pressure. investments pumping 1.1 million dollars. on hitachiing an eye chemical as they say their beta troubles are deeper than initially thought, affecting 10% of sales. 5:00resident will speak at p.m. subaru, it could cut profit forecasts after recalls which could cost tens of billions of yen, keeping an eye on seagate survivors in asia after the company reported earnings. revenue whileof global pmx is 13% of revenue

from seagate. sophie kamaruddin in hong kong. iran is basing -- bracing for a new sanctions. this will affect the oil sector and financial transactions. the secretary of state mike pompeo said the buildup had an enormous impact already with iranian crude exports down one million barrels a day. let's look at this more with ros krasny. we are talking about waivers for a number of countries as well as the ability of opec to really ramp up to make up for the shortfall. ros: it is interesting. the word for the day is waivers. we reported out of washington on friday eight countries will get waivers to continue to buy or resume buying iranian oil including china and india, the biggest buyers and south korea and japan which had stopped

buying iranian oil in advance with the snap back of sanctions and now having gotten away, they will be able to resume buying iranian oil. there is some critics up in arms iran this including bearish u.s. republican senators. that has put the of ministration on the defensive. there are other countries not happy with this. are they likely to find themselves a foul -- afoul by trying to get around? administration is firm in its rhetoric. mike pompeo and trunk -- trump himself have been critical of companies in europe that might try to get around the sanctions. there are new sanctions on an oil and shipping, so it is wait

and see, but some critics feel like the administration has gone wishy-washy on the sanctions by granting the waivers and there could be more to come, saying the waivers basically put the iranian oil ministry in the same position it was when the obama administration was putting sanctions on and granting waivers a few years ago. if anything it is like fighting words to president donald trump, it is you are not being as tough as president obama. that might cause further action on behalf of the trump administration, but for now we are looking at down is up in terms of iran possibly increasing oil exports based on his waivers. shery: iran has maintained -- remained defiant. how i am -- how can they whether

these? ros: of course they will sound confident in public statements and never suggest they will be the great satan which they have called the united states. is innk iran's economy dire straits. you have seen increasing unrest in iran over several months as the impact of u.s. sanctions, two rounds have kicked in. struggle continue to but should continue to be defiant at the same time. shery: thank you so much for that. the guessing game over the impact of iranian sections continues. -- sanctions continues. a very different story from when sanctions were first announced with bullish bets. su keenan has more on the week ahead and oil volatility front and center. is one thing we can

count on. it looks like the original sanctions appear to have been undercut by the trump white house you that seems to validate the bearish bets we have been seeing in oil. let's go to the bloomberg. you can find our library of charts at gtv. hedge funds reducing long bets for the eighth straight week him of the longest streak of bearish cuts on bets on record. in the blue you can see volatility spiking up. let's go into the issues that veteran traders are saying. we are starting to see a fundamental shift concern about a shortfall because of sanctions to real concern about maybe there is too much supply of the market. the issue is twofold, one strategist says, and that is it looks like there is now not too much teeth around the sanctions. they are not as sharp as the white house indicated last month

when you saw the price of oil rising. secondly there is a view the saudi's would move to fill any gaps in production. we are seeing rising production in the u.s. and russia. take a look at the last five days. oil prices coming down sharply. that the 90 day chart you can see we had oil hitting a four-year high. this was on concern about oil that would come off the market, a shortage because of the sanctions. prices have come down on almost 20% since that peak. you have volatility in the market, questions about china and the u.s. dispute, so when you have volatility that has been hanging on, a lot of questions as to where oil goes from here and so far the bears have been having the wind back. shery: we need to keep an eye on the election results, but there

is a new set of earnings. what should we be expecting? su: earnings in the last two or three weeks have been the driver. we have a slew of companies you look at the stoxx that will be in focus. big media, sky, disney. we have a lot of tech by .ualcomm, big pharma we thought so be mentioned the bank stocks, softbank is reporting and more big oil, marriott hotel, berkshire hathaway reported in profits surged.- and profits we will see investors trading on that. goldman sachs also in the spotlight. the wall street journal citing unidentified sources saying goldman is about to promote the smallest amount of partners in 20 years. those promotions could be announced as early as this week. take a look at the snapshot of the markets as we left friday.

gold picking up a bid here. spotlightll be in the . will volatility rise again? easy to guess on that given the headlines weighing on trade. haidi: looking also at the penultimate meeting for the fed this time we are not looking at any changes but lots of new numbers to give us a better picture. gtv again is where you can find our library of charts. you can see we are on track for there to be four hikes so that leaves another two for 2019. the services industries are weighing on the market area this and it soared to a record in august. the bond market continues to be front and center in terms of where yields are going.

the fed is not one of the top events of the coming week, so it tells you how the volatile nature of the market is being driven by other factors. haidi: su keenan for us. it will be a lot harder for chinese companies to get into u.s. tech as the reach of the investment watchdog grows. we have more on that. this is bloomberg. ♪ ♪

shery: this is daybreak asia. shery: i am shery ahn in new york. the simmering trade war is poised to make it even harder for chinese openings to invest in american tech here the committee on foreign investment in the u.s. has launched billion dollars in potential deals and more perhaps. we talk about that with our

guests. great to have you with us. ,hat is the risk of having weaponizing such cases of business deals part of this trade war? >> the u.s. government is making very clear they will be taking a investment into the united states for national security concerns. they are seeing national security in more corners. land nearjust military bases attracting the u.s. government. they are looking at deals that involve personal data of citizens be they are looking at deals with critical technologies like artificial intelligence, any dealshnology, and that could give visibility to a foreign acquirer into a u.s. business. there are new rules coming out that are expanding the business

jurisdiction and then they are going into deals they considered sensitive. some of the new rules are going to require mandatory filing with cfius forrtain -- certain deals. arteries could bring things to them to get clearance but now certain deals like critical technology sectors will have to be reported. companies have to take a much closer look earlier it on in the process because the rules require them to file 45 days at least before closing. there be a risk of hurting america's appeal for business? >> for certain kinds of deals companies will have to know that they need a longer run way to prepare for this process. but it is not blocking all deals, even all chinese deals. there is no doubt it is focusing on chinese deals more than most, but they have cleared a number

of sensitive transactions including chinese deals in previous month including white semiconductors and automotive. it is not an instance of all cases being weaponize as part of u.s.-china trade war. but this enhanced process is part and parcel of the broader escalation and trade tensions between the u.s. and china and it reflects the u.s. government's concern about maintaining technology advantage. that: how confident argue decisions can be made objectively in the context of the geopolitical environment we find ourselves in? my impression is cvs -- cfius is not holding up cases. some cases are getting blocked

but some are also getting through. has become a it politicized process, but there is no question this process is reflective of the broader concerns about keeping u.s. technological advantage. companies will have to reckon with that and think about it as part of the due diligence before they come to the table. bloomberg came out with a really shocking report that suggested the likes of amazon and apple are being infiltrated .y the chinese chips the companies denied that later. is that sort of think not beyond the realm of possibility and what are the types of security risks and breaches that are more likely than others? >> the bloomberg story was interesting. it was fascinating to read. you have seen fierce and unequivocal denials from apple

and amazon. they have been supported by the u.s. government. know.that story, i don't there is no question supply chain security particularly in the electronics sector is of mounting concern. it is amounting to u.s. governmental authorities and how hey are managing -- it is also broadly concerned with electronics manufacturers around the world and ensuring the integrity of their product lines from cyber security threats. it is a reminder cyber security threats can come from the which we have always known and which most people associate with hacking activity but also from the hardware side from chips and other hardware. companies need to be coming -- keeping a broader scope protecting their systems and users? -- users. haidi: how coordinated have the

trump administration's efforts been against cyber security efforts? >> for the most part it has been more or less consistent with what we saw in the obama administration including was -- when i was in the obama administration. you are seeing a sharp focus on critical infrastructure protection that is protection of electric utilities, aviation, other sorts of sensitive sectors, financial services. you have seen the trump administration signal it will loosen the reins on offensive cyber operations from where the obama administration was. it is too early to know how that is going to play out. but cybersecurity is clearly important in this administration and increasingly important in the corporate and private sector. you are seeing it as a new --

number one issue. time. thank you for your alibaba is staying cautious on the global economy even after delivering earnings above estimates. more on what the giant is seeing. this is bloomberg. ♪ ♪

asia. this is daybreak i am haidi stroud-watts. shery: i am shery ahn. alibaba is a public example of the trade war effects in china. the company missed sales estimates for the second quarter and full-year productions -- projections. ramy inocencio has the details. concern for whether or not this is a symptom of slowing growth in china. ramy: it seems that is the case. jack ma it says what is happening with the trade war isn't depressing consumer

spending and that it could last for the next 20 years. we are talking about maybe next year. he is saying the next two decades. chinese economic growth is at the slowest since 2009. let me walk you through the earnings numbers and we will get you into more deter -- deeper stuff. this was a big beat. the estimate was 7.43. everything was negative. revenue was down 1.6% against the estimate. the fiscal year sales guidance was also lower. you can see there is now the expectation for 53% growth. the earlier was 60% and shares have been falling as the trade ,ar has continued to escalate down 20%. hop into the bloomberg terminal. i will show you what the revenue growth is for alibaba. the blue is tencent.

54% growth. you say those are great double-digit. the charts are still pretty high, but this is also its slowest pace of growth ever since the last quarter of 2016. this is slowing down. the cofounder said he admitted to consumers they are seeing uncertainty in the future and cutting back. isalso pointed out alibaba moving into the digital space. that has support. >> alibaba is not necessarily hitched to the economy and consumption trends because what we are doing is digitizing not only our own platform but also the traditional retailers platform hoping and -- helping and enabling partners to capture more customers. in terms of the analysts,

there wasn't much impact. empty buys. -- 50 buys. haidi: we keep talking about the trade war that has been on china's borders but there is a battle within with domestic competitors. what are they trying to do? ramy: they could be trying to push ahead, force these merchants to buy more ads and effectively try to get other people to latch on. but the question is if it will work, if they will push the market -- merchants to smaller companies, jd.com, and those are backed by tencent. pacific ethic points out those are charging much lower fees in terms of commission. alibaba could step up marketing services, but we will get one interesting thing, one week away. singles day will see the appetite of the chinese

consumer. haidi: my favorite nonofficial made up holiday. to a group fork their look on em. this is bloomberg. ♪ bloomberg. ♪

haidi: good morning. good evening. to "daybreak:e asia." him haidi: i was -- our top stories, set for a breakthrough on trade. playing host to the business expo as tariffs drag on. u.s.: anger in iran as

sanctions return. inflation since food prices through the roof. we come after the biggest gains for msci asia-pacific. sophie kamaruddin has the details. we have a hangover underway. u.s. teachers also nudging lower. off by about three quarters of 1%. we do have the yen study. -- study. , offg a look at the mood by about half a percent. take a look at some currency moves of note. around cable hovering

130. more news of progress when it comes to brexit talks. against thee 137 dollar. --s is ahead of the mi data pmi data. adding to the notion that the global economy could be on the downside next year. malaysian trade could provide more on that front. japang off the visit to with details to be discussed as malaysia forecast. checking in on stock on the radar. softbank under pressure. the head of the earnings reports.

plowing ahead with investments. billion in1 glassmaker. as data troubles continue to plague the company. that is the highlight this afternoon. expecting a cuts annual profit forecast after recalls. sophie kamaruddin on the markets. not looking too positive in asia. haslinda: part of iran is bracing for u.s. sanctions in the next few hours. despite the rhetoric, the economy is sinking deeper into level with anger at high corruption.

complying with a 2015 nuclear deal. >> we are confident that they will be incredibly effective. i can prove that already. the economy today is already feeling the effect of this. it is already feeling the effect of this. world and iran knew this was coming. camp on: building a new the border between the u.s. and mexico. more than 7000 active troops have been ordered to the border the area. they have not been asked to build facilities to house the migrants. germany is ruling that democrats have discussed setbacks on the future of angela merkel.

finding a new leader when angela merkel steps done. she is giving up leadership and will not seek another term as chancellor. ordered anas official investigation into the operations of lion air. it will cover the airline operating procedures and coordination with the aviation industry. they had already ordered a review after reports of earlier issues. 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 haslinda amin. this is bloomberg. opening the expo in shanghai. other informed companies.

tom mackenzie joins us now from the expo in shanghai. in the wake ofy the trade war. tom: we were expecting potentially a recap of some of the steps that have been taken over the last year to open up am of the market. whether that is the auto sector. some of the attempts to cut taxes. likely to be articulate china's tradingg of the global system. ist many people want to hear quite different. speaking to european officials and those in the u.s.. they want to see the president address some of the structural andiculties between beijing

brussels, issues that have been there for many years, but now are more sharply in focus. things like forced tech transfer. attempt. to see some it would be a global platform. that is what one prominent business leader told me. ands key to the europeans u.s. officials that we speak to. they want to be able to operate in sectors that remain closed off in china. toy want some attempt address those issues. it seems unlikely that we will get much concrete action on those fronts from the chinese president. to somees, it may add of the positive momentum that we heard out of washington in terms of a potential move for

something that could look like a deal between president xi jinping and president trump. haidi: this report of president trump saying they are likely to make a deal. it was a little bit of a turnaround from the low level expectation that we have had. tom: it was. some have said this could be an example of trying to choose the markets ahead of the midterm elections. others have said this is a change in attitude. they are looking to try to get a deal. movement,ere is some they expect he would get a cease-fire. even after that, the structural issues in terms of the relationship need to be addressed.

the chief economic advisor to president trump saying any deal would take a long time and would be a long and difficult process. president she is likely to the $420e and address billion trade surplus and buying $400ina trillion over a 15 year. -- 15 year period. what does it tell us that they are sending representatives and not their ceos? it is interesting. it shows a lack of appetite. there are many companies that will be involved. about 3000 companies. you will get 180 different u.s. firms represented by their executives.

you'll get tesla and microsoft, but not the big names. not nearly as many as you would get. the enthusiasm is not there. there is a concern among trade tensions. companies that operate in china holding back until they get more clarity on some of these issues, until they get more movement. still ahead, explaining why shorting the yuan is one of the top treats these days. haidi: capturing capital says it is time to stay defensive. what they are waiting to see in markets, next. this is bloomberg. ♪

shery: this is "daybreak: asia." says weur next guest should wait for further equities selloff before getting involved in the ongoing trade tensions. is the us from sydney portfolio manager, raymond lee. an exuberant rebound. >> thank you for having me on your show. you might want to wait. perspective, we are quite defensive because of some news that could come that is hard. for us, we have a book, just to

wait and then passed by before adding in more risk to the portfolio. haidi: what would be the main thing for you? would it be a circuit breaker? >> a couple things. trade is a big one. i think the markets review that quite positively. if the republicans were to win the senate and the house of representatives that has, -- representatives, that would be good. , the third thing that could lead to sell off of raising interest rates and how emerging markets handle that as money goes out of their jurisdiction and into the market.

shery: when it comes to emerging-market equities, showing that they have been having a tough time. compared to the last and msci world, that index -- when you expect the opportunity to be? people stand to benefit now. maybe take more of a longer-term view, take baby steps. markets, there are two categories. high-quality e.m. and lower quality. lower quality are countries like argentina. it might become -- difficult. they are slowing in growth, but

there might be value there. andight look attractive take a longer-term holding position. so when will those have an effect in the chinese economy? when equally expect that turnaround to happen? i am expecting second half to come in a little stronger. was tightening their monetary policy to have an impact on growth. -- what you are seeing is a loosening of the monetary policy and selective stimulus to get the economy kick started again. it will be a little bit stronger. you will see equities bottom out later this year and have more of

an upward trend. we are getting a bunch of inflation readings out of this part of the world. trade,expect, even with to get taken out of the narrative entirely, do you expect that trade to continue? >> i think it will. if you look at the strain -- the inflationa, with wage , that is a good sign that the broader economic number friends nation is going to continue to trend 2% or higher. with the u.s. interest rates being so high now, i think you will see money flow more into developed market. i think the better place to do it this time around, because the

balance sheets are stronger. they can whether that storm. haidi: and you do expect the policymakers to continue to try to front run the fed? asia, bank ofk at korea hiked rates this year. this is all in the first half of this year. even china was tightening monetary policy. what is more likely it is they will not be hiking rates out of asia. malaysia is going to have a big fiscal deficit. i do not expect interest rates to go up in asia. the trend of divergence will continue to play out in the next

couple months or so. we have seen this chart on bloomberg showing that in september, reserves fell, but they managed to stay above that level. what are we getting from the pboc on the yuan policy lately? reserves are very interesting. they took many decades. that.e of a quarter of , they do not really want to intervene. we have had that selloff in the last few months. they will probably prefer themselves. hasainly, the weaker one the benefit.

it is good for exports. the pboc to get actively involved, but they might make comment. with a they are more ok gradual decline been a sharp decline that we have even in the last couple months or so. shery: thank you so much. coming up next, as washington few hours,esume in a we will take a closer look on oil markets. this is bloomberg. ♪

shery: this is "daybreak: asia." iran is bracing for a renewed u.s. sanctions over the next few hours. targeting the oil sector. the u.s. secretary of state says

iranian crude exports are down by more than a million barrels a day. jody, it is interesting. the talk of sanctions have already had a meaningful impact. that is what they are saying, that they are seeing a lot of companies believe iran and the fact that the u.s. has already pulled out of the deal and said that sanctions will already resume. it is hard to measure that, but that is the case the trump administration is making hours before the sanctions resume. haidi: the other thing we are talking about are these waivers for a handful of companies. the ability of opec numbers to ramp up production. >> that is right. there is a lot of criticism coming from the u.s. congress

about these waivers. to continue tod buy crude oil from iran saying the do not want to disrupt oil supply but also to give countries more time to comply. that is causing this criticism. it is unclear what the countries are. china is one of the countries or not. know: at this point, we that they still support the iran nuclear deal. >> that is right. with the trump administration is trying to do is isolate tehran as much as possible to bank on businesses, banks and countries would rather do business with the u.s. rather than iran. cause leaders bear to

come to the table to negotiate a disarmament of the nuclear weapon agreement. they are very strident at this point. that is the goal. shery: thank you so much. cut with sanctions set to in, the longest week on record. following as fears of an impending shortage subside. how should we expect the oil market to respond? .here has been concerns it would not make that much of a difference. yes.

your analysis is correct. a lot of people were expecting the trump administration to take a hard line. tough saying you cannot import any iranian crude. have eight waivers with countries like japan. china could be included in that list. they are not taking the hard-line that the market acted. you are seeing the price of oil fall a bit from a few weeks ago to about $75 right now. you are seeing that $10 drop because of that. , lot of people are saying look the administration, they will be -- the obamathe in

administration. it is looking like a repeat of 2012. you are seeing a bearish response. watching the waivers is crucial. what else? we could see an attempt to circumvent these sanctions by some of the parties or countries that have not been happy about it. the market will be watching the details. who will be included? the trump administration said waivers will be given to meaningfulaking a impact, as well as the market looking at how much oil is iran exporting. the shipperok at track data and satellite data to the how much they are exporting. they will see how other countries not included in these waiver programs are going to react and see how saudi arabia will boost production. thank you so much.

our energy reporter there. this week on bloomberg television and radio, we are covering the annual forum right here. ♪

8:30 in hong kong. we are an hour away from trading there. what an end to the week. hong kong stocks up over 4%. looks like we are surely to see more caution creep into asian markets today. the asian markets are trading at the open pretty muted so far. i'll haidi stroud-watts. shery: i am shery ahn. you -- let's get to first word news. seennda: sterling is strengthening if the u.k. can clinch a brexit deal with the european union. $1.35 ifrise through agreement is reached in the coming weeks. a rallied 2% on reports of

recorded financial services even though officials on both sides denied it. abu dhabi has approved a new five-year budget to boost oil and gas production. the government will spend $135 billion to raise crude output 4 million barrels a day and more by 2030. ask --rgy field will will produce 1.5 billion cubic feet of gas a day. north korea is stepping up attacks on u.s. sanctions, threatening to resume its nuclear program if measures are not lifted. they say they must stop self-destructive actions. mike pompeo is due to begin talks within days of a potential second summit between kim and trump. the first singapore airlines flight from los angeles turned back after 40 minutes or the

flight crew detected an error with the engine oil reading. it was checked by engineers and cleared to fly. the nonstop flight comes after the airline returned a direct service to new york on october 11. they use the a350 900 ultra long range plane. 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. amin.aslinda this is bloomberg. haidi: let's take a look at the asian markets this monday morning. let's get to sophie kamaruddin in hong kong. after the recovery rally party last week, we are seeing asian stocks take a breather today. sophie: looks like we could see a hangover underway. looking at current valuations. stocks are being led lower by

japan. the nikkei is off point percent -- .3%. looking for the worst week since july but there is a pop for the british pound, hovering around the 130 level. as we count down to the u.s. midterms. take a look at stock movers. we are seeing red across the benchmark from seoul to tokyo, but there are gainers, yukon amping 30% after signing $1.25 billion tech export deal with jensen biotech. on may pharma tracking gains. the yukon deal could bring fresh investor interest in the tech for long it cancer -- for lung cancer equipment. third-quarter results were better than expected for this beverage maker. retail sliding after domestic

sales fell 10% for october and subaru falling to an august 2014 low, the company delaying , andncement until 3:00 nikkei news reporting the carmaker could cut its forecast. southeast asia's largest lender will be one to watch when they get trading. reporting strong earnings numbers, matched analyst expectations. a higher profit. i want to bring in now our bloomberg intelligence analyst. what has been driving this? >> very good morning. the singapore banks earnings outlook remains robust. even on the stock price you see, they did a fair but -- it of catch-up. the margin went up five basis

points, but they will be a flat year to date. for dps it was a one basis point margin uptick which brings back markets' confidence. ordi: is this sustainable, is it as good as it gets? reporter: i am positive on the outlook still. if you look at the performance, we are looking at 15% to 30% profit growth for the end of the year, which is good given how volatile markets are. i key factor, one of them being the margins i talked about. the second is a will for management business. these seem like market performance has been weaker this year which is hurting portfolio performance but the growth is very secular upper trend. that positions them to benefit when the markets pick up.

side ofacid quality things, singapore banks have a stable outlook on earnings and asset quality which is a big edge above the emerging-market cousins who are facing risks given how things are shaping. shery: what about dividend prospects? reporter: very true. the dividend outlook for the singapore banks is promising. if you look at the regulatory capital, they are north of 13%, well above the 12.5 come persona -- 12.5% comfort zone. up 50 basisone points. ocbc and others, they have comfortable regulatory capital levels, but they might look to beef up their businesses in organically. but we are still looking at a 3.5% dividend yield. shery: what about india's

largest one reporting tonight? reporter: they are likely to report a loss again. though the magnitude should be lesser than the $48.8 billion from last quarter, predominantly it will be driven by higher provisions because they are still in the process of resolution of bad loans and we could see some weakness from the treasury right of things as bond yields have risen. the one bright spot i can think of is the net interest margin outlook. they have the best outlook. but should help. shery: thank you so much. softbank is set to release earnings in a few hours with performance of its tech portfolio to factor in its results. --'s go to bible, joining pavel joining us from tokyo. analysts to not seem confident

especially because of the poor performance of the group. what should we expect? reporter: there are a few things that are already out. the shares are already out, third and fourth quarter results . but there are still points of interest. i think investors will be keen to confirm the health of domestic telecom operations ahead of the planned ipo later this month. another point will be looking at the performance of the division fund itself. last quarter it was surprising to profit largely because of one-time valuation gains and gains in investments. we look at walmart, could be a question if these gains and be consistent. most people would really be -- there was a bunch of issues that include the

planned ipo as well as potential of taking a majority stake in we work and the company's relationship with saudi arabia. saudi arabia a big backer of its $100 billion vision fund, but this coming at a time when saudi arabia is under heavy scrutiny because of its appearance -- the disappearance and murder of the journalist. should we expect to hear anything from masayoshi son? reporter: it is worth pointing out how important the relationship is to softbank. they have contributed $45 billion out of the $100 million fund. saudi money is the engine that has made it possible to make all these spectacular investments that have propelled them to the center of global attention the last two years. the key to that is son's personal relationship to the crown prince here that has come under fire when business leaders

in droves have abandoned the future investments initiatives summit in riyadh. traveled but did not go to the event. this will be the first time he will have to face comments in public. was caught up in ofs telco as well on account lower prices. does that throw a spanner in the works when it comes to the mist -- the listing plans for the mobile unit? point of it is another intense interest. the cabinet secretary has come out repeatedly attacking the telcos for charging too much. rates could come up as much as 40%. every time he says that they have plunged. what makes this interesting is the second largest carrier has

said they will not follow and that their rates are reasonable. softbank has taken a wait-and-see attitude but there is possibility they could go one way or another. it is becoming a more present -- iposing issue because the of domestic telecoms is scheduled for december 19. it will be interesting for son to address. haidi: our bloomberg technology reporter in tokyo taking a look at softbank. the case are shorting the yuan, we will hear why this person calls it a granting move weaker. this is bloomberg. ♪ ♪

this is daybreak asia. i am.. -- i am shery ahn. haidi: the u.s. coming off its

biggest gain day. the chinese currency is slipping beyond seven per dollar in recent months. allison capital head of global macro and joins us. let me start with this chart. you talk about the number of analysts and money managers that expect to see the yuan sliding through the seven and beyond. we were talking in the break how quickly things can turn around with a tweet your statement from president trump. has your views changed since we have had this pretty stark turnaround on expectations of maybe a deal being done at g20? what we have to allow for is probably the agreement [indiscernible] thursday and friday. prior to thursday i was thinking that prospects of any agreement were relatively low. as such we should follow the

fundamental story for the renminbi which make it come up most majors are looking at at the moment, looks like it should or 720.d 710 looking at future rate differentials, different measures. the pressure is there for the renminbi to go to 710, 720. against itleaning with cyclical measures and state banks are buying the renminbi at the close each day. they keep it stable, but they are fighting pressure which is china driving it that way. panic.n't want to create in that scenario we are seeing a move. what we have to entertain now is if we get a positive result from the g20 at the end of this month, and that will be hard to predict. binary set ofot a outcomes given we don't know what constitutes a win, a positive result. how much upside do you see for the yuan if we get some circuit

breaker? a circuit breaker would be a delay of the january 1 step up in tariffs on the $250 billion. that would be taken quite positively by the market. i think you would get out performance of the chinese stock market. that has been a key driver of the currency. that could take the dollar-renminbi back to seven or 6:60. the fundamental driver which is the chinese economy is relatively slow in comparison to the u.s. economy which is strong, it still suggests over time, the three to six month horizon, pressure is on for the renminbi to weaken. there will be a relief rally of some magnitude, but that is the most we can expect out of the g20 meeting, not anything more concrete than trump saying we have made progress on talks.

delay implementation of the step up on january 1 and talk longer. shery: i was going to ask about the difference between fundamentals and the trade tension and uncertainty with the chinese economy because these charts on the bloomberg showing when you see china's uncertainty index going up, that would be the line in white. that uncertainty about china's economic policy, that is coinciding with the weakness in the chinese yuan. how much of its moves or fundamentals, and how much because of fear itself? looking at that chart it would correlate highly with performance of the domestic equity market. i think the consumer confidence the appearance of confidence and investor flows, you need to get some reason to think there is a place coming in here, tensions will go down. it would be a step to say we will have discussions. we are not even close to that.

xi toump and president walk away from the g8 -- g20 meeting and say we have agreed on global points that we will .ork toward trump says he will delay that tariffs, that would be positive. and at the end of the day they are still fighting a slowing economy in china and not much slowing to date has come from terrorists. .- coming from tariffs it is from their own economy with shadow banking. they are doing modestly today, but it is not huge. the u.s. economy is quite on fire. when i look at the rate differential outlook, it will be well --o deescalate whereas in the u.s. we will have a rate hike. trade likey should any other g20 currency. in this environment the general trend is a weaker renminbi.

we will get relief if there is easing in trade tensions. shery: how important is the seven per dollar level? it is important psychologically, but what about policy makers? do they care more about orderly weakness? this isy my take, and personal opinion but comes from talking to people and talking to a lot of china watchers and consultants, the mindset has whole sevene have a hours to make this stand. let's see what the currency needs to do to support the economy but not create a panic. that means they focus on their savings basket. if you don't -- two or three months ago it was weaker. they get to split the currency to what it should do which means if the dollar in asia strengthens, the renminbi will

-- my theory is it will strengthen because of the u.s. economy. that will drive gradual moves towards seven. but it will be gradual and the market will be disappointed with that. gradual is ideal if you don't want to cut currency outflows and panic. gradual ideay comes from. when you look at the currency market, they think it will be a big break through seven because you can see the premiums people are paying for when you move the strikes through seven. haidi: appreciate those views. we will have to wait and see how all of this plays out. coming to usie, from sydney. you can get a roundup of stories need to know to get your day and week going. bloomberg subscribers can go to dayb on your terminal. it is showtime in shanghai for the big trade forum day. daybreak, that is on the

anywhere app. you can just get news on the industries and assets you care about. this is bloomberg. ♪ ♪

shery: this is daybreak asia. i am haidi stroud-watts. shery: i am shery ahn. let's get a look at the business flash headlines.

tomorrow shares will cut forecasts. the earnings announcement was elayed until 3:00 p.m. the outlook for full proper it to $2 slashed 30% billion. that they are running into tens of yen. subaru is recalling 70,000 vehicles in total. profit of $5.8 billion, narrowly missing expectations. it has been a disappointing earnings season for australia's big for banks. -- four banks. it went to 13%, the weakest in a decade. the rivals are all floating but westpac intends to keep its advisory business. fastestne of china's growing robotics startups is ramping up its international expansion even as president trump's tariffs forced the

company to dial back on u.s. ambitions. they raised $100 million and expect to do more than double --m that at the next funding double that at the next funding round. we spoke to the founder about their plans. think the market potential is quite high. we believe in china at least robotsan 400,000 necessary for this market. we hope in the next five years we can deliver more than 20,000 to 50,000 robots are year. tom: and yorkie customers -- --r key compounds tourists key customers are e-commerce? >> one is retail including e-commerce. and manufacturing companies.

tom: how competitive is the robotics space in china now? >> very strong competition. a lot of robotics companies start and grow very fast. we are not only selling automation solutions, we also provide logistics service to our customers. business, we have lots of operational experiences, and we combine those experience inside our system and we cover a lot of data, so that will be the long-term. tom: how much funding have you raised to date? >> last year we announced the largerfunding series b than $1 billion u.s. next time should be more than 200 billion yuan.

tom: do you operate in a sector that is part of the made in china 2025 industrial plan? >> we haven't got money from government directly but because the government is promoting this concept, it can help us advocate the market. prioritiesre your for overseas expansion? >> it will be our first priority . we enter japan, europe, australia, united states. for those countries we are seeing big demands for robotics and automation. we almost cannot see any strong competitor outside china. tom: is your business being impacted by the trade tensions? >> yes, taxes are higher so our plan to grow in the united states is slowed down. we want to see the results of

the trade conference between china and u.s. shery: that was the ceo of deke plus robotics. let's get a look at how markets are trading in this session. we are seeing the nikkei down 1.3% with the kospi leading declines. we have seen the biggest jump in asian stocks since 2016 but wall street losing ground, so the asx 200 also losing .2%. taking a look at how asian futures are shaping up, we are looking at a mixed future. singapore looking positive, but elsewhere, taiwan looking like downside.

♪ >> is not :00 a.m. in shanghai, welcome to "markets: china open ." china hosts a wide ranging expo as the trade war drags on, but many of the top names will be in shanghai jude -- in shanghai jude >> the u.s. renews sanctions against iran. food prices are through the roof. >> and president trump tries to rally support that the -- support come at the midterms threatened to derail his agenda. ♪