tv Bloomberg Daybreak Australia Bloomberg November 14, 2018 6:00pm-7:00pm EST
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haidi: very good morning. i am haidi stroud-watts where australian markets have just opened for trade. shery: i am shery ahn. sophie: i'm sophie kamaruddin. welcome to daybreak asia. haidi: our top stories, backing for brexit, theresa may claims cabinet support but leading eurosceptics warned they will vote against it. the e.u. says the situation has changed. northern ireland will remain in the customs union. asia-pacific markets will be
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digesting the news as well as earlier declines from wall street. sterling had gains made on the deal. we have news that prime minister may was inching closer to a draft brexit deal we saw optimism from that, u.s. stock markets trying to pare losses but it wasn't sustained. we saw the downfall .8% to tech shares taking a big hit with apple leading declines and after falling .9%. -- nafta falling .9%. use of the ucs ma, it is so hard to keep track of all of the acronyms, but nafta 2.0 in question. democrats have taken over the house. we are seeing the s&p 500 fall .1%. futures under pressure but some
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positivity came from the oil markets as we saw oil prices halting the 12 day losing streak, sophie. reboundwe have the oil to contend with and the tech rout. asian futures looking mixed. south korean trading course -- hours are changed for the college entrance exams. taking a look at elsewhere, kiwi .6% while of asx 200 opening little changed after the first -- the worst to do drop since february 6. checking on the line of jobs data, due at 8:30 hong kong time. trading -- trading from thenesia and decisions from philippines and indonesia in wild in asia. we are keeping a close eye on what jay powell has to say momentarily. sophie kamaruddin.
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jay powell is speaking, we will get to that shortly. let's get to this brexit deal, potentially a game changer for real. the meeting lasted five hours but the prime minister has managed to convince cabinet to back her deal with the e.u. to keep the u.k. in a single customs zone until a solution is reached on the irish border issue. it gives scope to extend the post-brexit transition time. kathleen hays is here. we have been cautiously optimistic and sort of skeptical. it is a hard road. kathleen: there are so many hurdles to cross, different parties at war with various parts of the deal as it is written, but let's rembert brexit was passed in 2016 -- remember brexit was passed in 2016. the deadline is march. something has to be on the table for everybody to pick apart whether or not they can agree on it and what they will be are the
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cabinet to approve is an important first step. it is like any negotiation. to get a conclusion or deal, everybody has to give up something great nobody gets what they want out of negotiation or it is not negotiation print you have the upper hand and forced it on the other side. it is not where conservatives or theresa may are. as much of it is not a victory in the sense it would put a big smile on her face -- you can see her on 10 downing street -- the next step is more difficult to achieve has to speak to parliament tomorrow and negotiations begin. give: people have to something. they have to be concessions. the wonder she calls this a collective decision, not a unanimous one. which were the key points that were at stake? kathleen: the u.k. is going to remain in a transition time from march 2019.
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now it will go to the end of 2020. the biggest issue is the irish border, irish border backstop. northern ireland as part of the u.k. and there is a lot of water in the middle and there is a borrowed death border between ireland and northern ireland. it is hard to reconfigure the map. the irish don't want to have to show their passport when they are going across this line. we have nothing eye on that we will stay in the e.u. -- northern ireland will stay in the e.u. customs union, but this is opposed by tories, pre-brexit tories who say it is unclear when the e.u. will get out and other what conditions. the democratic unionist party would is not like this. -- does not like this. shery: we see one hurdle passed, but it is a long process.
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kathleen: the hardest part is going to be the house of commons where there is more members, more division. there is still -- the labour party division, they don't want brexit. who has really stood up and push for a second -- pushed for a second referendum? tony blair said it could fill. gordon brown saying the same. now everyone is moving ahead and the people voted. they narrowly passed it, now they have to come to agreement. i think the problem is if you are a private -- pure brexiteer, yuan out, you want new agreements as this one -- agreements. as this one stands, they have the right for trade and no duties, no tariffs. the have given up your time that a pure brexiteer would like to have. the top is the good one, the
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deals approved by parliament. no deal, chaotic exit, not good, general election, or second referendum. maybe they will decide it is worth taking a second look at this division. it would be interesting if the vote went the other way after all of the last 2.5 years. haidi: the roller coaster continues. policy editor there with the latest on brexit, watching that story. chinese tech giant earnings continue to roll in. tencent beating analyst estimates, and a gaming giant has beaten the average estimate in turn -- in terms of american receipts. adr, quarter adjusted per two dollars 50 five cents. the estimate was $2.46. atrd quarter growth profit
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$1.4 billion u.s. approving a buyback program after the stock was down 37% year to date. shery: yeah, we are also seeing right now fed chair jerome powell speaking to the dallas fed president kaplan. let's listen in. >> over time the market will have to get used to that, and we will have to be part of, we try to be transparent about our moves, but certainly all meetings are live now. there is no question. we have sometimes been reluctant to move at a nonconference meeting because you want to explain what you did, what your thinking was. that has been our state of mind. we could have moved any meeting at any time but we didn't. over time folks will get used to the idea we can move at any meeting.
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thane fed went for more eight years without any changes to the fund rate. over the last three years we are at a point where the fed funds rate is 2.25%, and this is part --the process of monetizing normalizing monetary policy. what do you see is the biggest challenge in normalizing? >> i joined in 2012 and we were so far away from our goals. inflation was way from the target. i wanted to keep rates low. we kept them low for quite a long time to give the economy every chance to breathe and recovered. three years ago we reached a deal that it was time to start moving rates back to the level that is normal for a healthier economy.
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i am happy about the state of the economy and part of it is we have moved. our policy is part of the reason why the economy is in a good place. the economy is growing at 3%, inflation is on target and there is good reason to think we will continue in a positive vein. the replaced about the state of the economy now. if you look forward and down the road, you see challenges ahead, and they are typical of this point in a cycle. howave to be thinking about much further to raise rates and the pace at which will do that. what we will approach is to be at how really carefully the markets and the economy in business context are reacting to our policy, looking at incoming data across all three of those sources to tell us whether our policy is appropriate and our
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goals will be to expand the recovery and to keep unemployment low and keep inflation low. follow-up.ze and notof the things people may realize is our primary goal is to expand -- extent this expansion. we would talk about misconceptions leader but how does what we are doing extent the expansion? >> we have been gradually moving again back up to normal kind of rates. the record shows there is sort of two kinds of errors. one is to keep the rates too low for too long. you can get imbalances in the economy that show up in terms of inflation or in the form of financial imbalances. the other mistake, and we had plenty of ice to do this, is to raise rates to suit and
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prematurely terminate expansion. prematurelyand terminate expansion. we have been raising rates quite gradually. along with these moves on the fed funds rate, we announced at the market committee last fall a plan to reduce the balance sheet and let it run off. for those who are not familiar, not by selling securities but simply not replacing triggers -- treasuries as they mature. what is your assessment how far we -- how we are doing on reducing the balance sheet and what you think the prospects for progress are the next couple of years? >> our plan to normalize the balance sheet is going very well. i think we were concerned in the run-up to announcing it that
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there would be strong market reactions and tightening of financial conditions. that hasn't happened. it is very important that we return the balance sheet to a stronger side. we said we would do this. it is large because of the securities we bought as far as quantitative easing, which are down long-term rates and supported economic activity. we said we would reverse that and get to a smaller islands shaped the we take that seriously. -- smaller balance sheets. we take that seriously. i don't know what size it will be. in a longer run the balance sheet will depend on public demand for liabilities, which is currency and reserves. they are over night delegations that we issue that's it in the sit in theks -- that reserve banks in the form of cash. the demand is much higher. we are in the process of returning to a smaller balance sheet. i say we are on target.
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>> there was a lot of press about a speech at the annual conference at jackson hole in august where you spoke about a few theoretical concepts, neutral rate, natural rate of unemployment, and you cautioned about the imprecision and uncertainty around those concepts. why did you give that speech and why did you emphasize that? >> what i really was trying to do was bring the subject of risk management to the front and talk about what an important role it plays in making monetary policy. to give the quick version of it, we have a couple of concepts we need anything about the economy. one is the natural right amount of employment, if unemployment is lower, at theory you would see inflation or a pressures build up. it is higher and maybe inflation declines or is below target. the other is the neutral rate of interest. in theory if the rate of
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interest was below neutral, and it would be stimulating the economy, pushing up, be above neutral, what it would push down to slow down. we need the concepts because that is how we think about the economy. unemployment is just a number. it has got to be relative to something. to say weas just don't measure these with any precision. we look back 20 years later and no we were off by a mile. how do you make policy? there has been a time of work done on this. -- a ton of work done on this. you need to think not just about the baseline policy, but what if things go wrong? is -- axample noneconomic example would be you are working -- walking through a room of furniture, lights go
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off. you slow down. it is not different. with uncertainty is some cases you want to do more, some less. that was the point. it was fun writing that speech and delivery, i have to say. >> [laughter] >> let me talk about a few elements there has been a lot of press about and all of these we talk about our around the fomc table. there has been a lot of discussion about trade policy. how does it affect how thinking? -- our thinking? >> we don't have responsibility for trade theory that is outside our lane. >> [laughter] is an it does, trade important factor for the economy. i would be of the view and i think many of my colleagues are
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that over a long time our economy has benefited from trade. it addresses productivity, let's is this is sell their -- lets businesses sell their products. trading to be both free and fair. i would say that if this process that is going on now winds up with lower tariffs in better observance of agreed trade rules, that would be good for our economy and the world. if instead it winds up in a place where we have more widespread protectionism, that would be bad. it would be unfortunate. you really have to think of the near term effects. we don't see much. we hear a lot from businesses about a higher costs, the markets. we see a larger concern for context,contracts -- the reserve.
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it hasn't shown up in the data. it would be hard to say because you don't know what the data would have been without the trade issues, but in theory you could see slower growth to the extent that more and more products are subject to tariffs. more lower growth. >> another thing that is going on, we know there is concern global growth is decelerating, outside the u.s. the dollar has been very strong wishes creating strains -- which is creating strains. does potentially decelerating global growth and the strength of the dollar affect our thinking and your thinking? >> as money will have first-hand experience, our economy is woven tightly into global supply chains. growth abroad means a lot for our businesses who source raw materials or products.
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the strain of the global economy -- strength of the global economy is important. 2017 was a good year, not for every country but a high percentage of countries experienced a good, solid growth. it was optimism at the beginning of the year. there has been a chipping away of that. there is a slowdown, not terribly. you see for growth, but you see kind of growing signs of a bit of a slowdown. .t is concerning we monitor it. our mandate is for u.s. economic conditions, financial stability, but it is important what happens around the world. roughly half of global economic activity takes place in emerging-market economies including china and india. far more than half of the growth in the road comes from
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emerging-market countries. so what happens there really matters for us. we watch it carefully. >> stock market turmoil, which we have had some volatility the last number of weeks, a number of us watch markets very carefully. how does it affect the thinking of the fomc in terms of analysis, implications for monetary policy? >> we are looking mainly at the real economy, unemployment, growth. financial conditions and market matters a lot for that. it is not just the equity market. it is the debt market and levels of interest rates and credit spreads. they all matter. we monitor all of that carefully. , it is ay markets high-profile thing. it matters for the economy.
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companies finance in the equity markets and consumers own equities. when they are high, people will spend a little. it is not a big change. you would need to think the increase in equity values is sustainable and sustained where they will spend much out of their wealth, but there is an effect. when prices get down or go volatile, we pick up an effect, but it is one of many factors that goes into a large economy. i say it is one of many. spreads,h that, credit health of the credit markets, fixed income spreads, how does that affect our taking? with the turmoil, they have held in pretty well. how does that affect our if that situation changed and you saw credit spreads gap out? >> credit spread is the increase. if the treasury borrows here,
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private sector companies will borrow higher. the difference between the rates is called a credit spread. they have been very tight, which is to say investors are feeling optimistic, and they are not getting paid a lot to take the incremental risk. credit spreads have been fairly low. that is probably because the economy has been so good. it is something we monitor. when credit spreads are low, they can move quickly and that can have negative effects. begin finance at low rates also. >> a number of bankers in this room, obviously we do a lot of work at the fed on regulations. recently been a number of initiatives to reform regulatory policy, and as it affects big smallversus holdings, --
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ranks, what are your views on regulatory reform and what we are trying to do in your thoughts about regulation being updated, modernize regarding that? >> i think the reforms we have the largest financial services, some of the most important we did after the have four elements of reforms for the largest institutions that are important. that is higher risk-based capital, higher liquidity, liquid assets. it is stress tests that forced institutions to understand risks are and manage better. it is resolution planning in case it all goes wrong and the company has to go bankrupt and be resolved. crisisre the pillars of reform and we want to maintain those and keep it strong.
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we also want to make sure everything we put in place is as efficient as can be. doesn't make regulation better or make it inefficient. put them at a fast rate, it is appropriate to go back and make sure it is ok. as you move away, the proprietary trading on big banks, you can't be in the proprietary trading if you are a business. if you move into the regional banks and smaller banks, we are -- we think it is important to tailor regulations so banks that don't present a don't presenture,
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risks, the smaller institutions should not have the same regulatory expectations of the largest ones. we are looking at banks that have small rituals, sub regionals, making sure that at each step we are appropriately tuning our expectations and level of regulation to the nature of the institution, the risks it is running. that is the heart of what we are doing. i do separate it into the very largest institutions. lessons from the financial crisis which led to financial crisis is the impact of financial stability. we talked about bank regulations. we got a question from the audience about the shadow banking system which is related to that. why is financial stability so important, and what is the most important lesson you will learn
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from the downturn of the great recession we went through? think all of us suffer from a lack of imagination what it could look like in a modern financial system. without away is financial stability, you can't really have economic stability at all. financial stability is a necessary precondition to having a healthy economy. what we mean by that? when there are economy, events in the the financial system can keep doing its job, providing credit to household and businesses throughout even stressful times as opposed to the crisis. or economicion downturn really what happened was that was a run on the
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financial system, and that made the pre-existing economic downturn so much worse. hold built and intent -- a , financial that stability concerns. it is a high-profile concern and interestingly was not actually before the crisis because people didn't see this coming. they didn't see the vulnerabilities. we see them now. we found out the hard way. >> relate -- what is the impact in your thinking of high levels of government. the household sector is deleverage, corporate debt is higher which is something we watched. the government debt to gdp is higher. [indiscernible] is now $54 trillion. how does that affect your job? on an u.s. is
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unsustainable fiscal path. that has been true for a long time, associated with our uniquely expensive health care delivery system and aging population. we don't have control over that here. the fiscal sustainability questions or problems for the medium and near term we will have no choice but to address them potentially. the sooner we do, the better. business cycle thinking, our timeframe is moving interest rates around to sustain this recovery. when the economy is weak, trying to support it, trying to prevent it. there is more business cycle approach to the economy. because of limited of a role in my thinking now. if i turn on the television and read the papers, people talk
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about decisions that jay powell is making about interest rates, they hope you make the right decisions, and i sit in the room with you and this is under the heading of misconceptions about the fed, you might explain to people what is the process to making monetary policy decisions ? what role do you and the group play in making these? >> i would say we have a tremendous team are there are 12 reserve bank presidents and five governors, four others than me, senior staff played a role in the last eight presidents, and it is tremendous. if we do something wrong, it is my fault. >> [laughter] >> i also think of it as collaborative. i am somebody who really likes to hear disparate views. it helps me have somebody smart explain to me why this is a bad idea, and that is part of the
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way i get to a place where i decide it is a good idea. decisions but it is a group process that i have to read, but i want people to bring their own ideas as strongly as possible. i never discourage anybody from saying things that are sort of dissident in those meetings. it is a group process. wand.ke waving a magic sometimes it does happen. >> [laughter] >> on that note, what are the other big misconceptions about how we make decisions and monetary policy? what are the ones you hear that you say it is not that way. >> i would say central banking is, can be pretty far from peoples daily lives and can be something they should go on leaving their lives -- -- leading their lives.
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the public doesn't know that much, and that is not on them. i think you get a lot of questions. when i was a governor question i always got was is that a full-time job? >> [laughter] >> i would usually say no, it is three full-time jobs. that was because i think people think, it sounds like being a director of reserve bank, which is a part-time job. being a member of the board of governors, director of the spend $100 aould week on that. but as the main one. haidi: we are going to leave it there but bloomberg users can continue watching that discussion there with jay powell you will also find the diary today and thisup
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week. it has been a really fascinating conversation -- he has covered topics including the trade war, saying if it is well and results in lower tariffs, it is a boon for the u.s. economy. if it is mismanaged, he was very diplomatic -- it would be problematic. talking about credit spreads being tight at the moment. he was asked about the equity .arket and sell off he said this was one component of a large expanse of the u.s. economy. the more importantly he reiterated going press conference in every meeting starting from next year. he did confirm it means every meeting is live and rates could move at every meeting. he was saying all meetings are alive now. we could see more rate hikes. we are expected to see more next year. as heidi mentioned, one of the
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key points about the equity markets being one of the factors in the economy, not making a big deal out of it. let's discuss all of this. this man has been listening to the press conference with me. thank you for hanging around. let me start with what was your biggest take away? it seems the chairman went through all of the talking points, and a lot of what we heard today we heard in the past. fed isly he believes the doing a good job so far. what i took from that is they have stayed on this predestined rate increase, and he thinks the economy is doing well enough to continue. no real worries now. risksrtainly pointed out that could be down the road, but right now he thinks the u.s. economy and the data proves it out, u.s. economy is leading the global economy out of that great
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recession. looks to continue. right now they will continue to stay on the preordained rate hike in december and a couple more next year. shery: there are concerns if we see the balance sheet unwind we could see liquidity being drained from the financial markets. the the chairman is not concerned. you think the unwinding is going very well. is that what you are seeing? we are still seeing good options. even though some of the central banks are set -- stepping away and not buying as much of the u.s. treasury auctions, rates, look at the bond rates. they have -- we are seeing rates while they have moved up a slightly, we are still seeing a flat curve. they are able to continue the auctions pretty much without any real problems. so for that reason, interest
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rates and as far as the liquidity in the market continues -- even though the fed is pulling back and is not a buyer of bonds, i think right now the bond market is healthy. one of the interesting point he made was this is a difficult question that they haven't seen any impact from that tariffs from the trade wars, but he also pointed out he doesn't know what the data would look like without the trade wars. asre was some uncertainty the fed looks whether or not there needs to be a policy reaction to that. they are comfortable with the way their policy is moving forward. the big risk he talked about was slower global growth. the worst-case scenario for the pushingariffs start
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inflation higher, and we see pullback in global growth. a lot of economists and investors think -- and you even heard it with third-quarter earnings reports, investors are starting to worry about growth in 2019. certainly a lot of the economists are starting to pull back their growth expectations for global growth in the coming year. does it impact the inflation outlook or static inflation in the u.s., and that these tariffs, there is no circuit breaker and we get the doubling down at the start of january? sign.lation, there is no wages are starting to move up. they nailedell said the inflation target. 2%, the preferred gauge stayed
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where they want it to be. i don't think there is a risk of a spike in inflation anytime soon. we are not seeing any indication of it. the bigger risk i think is a slowdown in global growth. this gtv chart showing how crude prices are coming down. the inflation expectation slowing down. globalare in the camp growth is more of a concern. >> trade is our major concern. i sit on a current the and precious metals desk. heldollar has been, has the hammer so far this year. strong dollar also impacts emerging markets, makes it harder on commodities. it pushes down commodities. local trade is really where our major risk is right now. shery: does that mean the
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emerging market rout is not going away? >> i don't think so. pieces have good opportunities. india is one. i think it will lead the major economies in gdp growth. india also has demographics in their favor, a young and educated population. they are going to benefit from an emerging middle class. i think india, their currency has been hit hard, but from this level, it is a good opportunity. brazil is another that is certain to emerge with new leadership and pro-business attitude. we could see brazil also become a much better opportunity. haidi: thank you so much for staying with us as we have been listening in to the conversation --ween jerome powell and
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chris cassidy joining us. jay powell continues that discussion. he is talking now about fed independence now with the allusions to some of the criticism that has come from the u.s. president. trump treated -- tweeted multiple times he was not happy with interest rates and things there are better things to do with the money and expressed disappointment with his appointee. jay powell said the mandate [indiscernible] we are just trying to do our job . we are doing just fine, saying it is apart from short-term political considerations and the independence of the federal reserve means they have protections from political involvement. that allows them to serve the public. we will listen in on that, you can track it on tliv . let's get you to first word news with jenna dagenhart.
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reporter: theresa may is claiming victory in her fight to win a brexit deal, saying she has got cabinet backing for her plan. she emerged from five hours to admit more battles lie ahead. seen as a collective decision which some are saying implies the vote was not unanimous. the euro skeptic has said he will not support the deal. the trump administration is defending the banning of cnn correspondent jim acosta, saying journalists have no constitutional right to enter the white house. they have been arguing in court with the white house lawyers saying the president has broad discretion over who merits a press pass. the judge said he would deliver his ruling later thursday. the first members of my been caravans heading to the u.s. border have arrived in -- migrant caravans heading to the u.s. border arrived in tijuana.
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more groups will arrive in the coming hours. local authorities offer shelter but most preferred to visit the border fence good one dropped to the u.s. side but ran back, by agents. watched air quality is the worst with levels of 2.5 particle soaring to 11 times the health safety mark. it was higher than levels recorded in parts of california during the wildfires. but the polluted air is significantly below heights reached in recent years. it was 61 in march 20 10, 25 times safety levels. 2010, 25 signs safety levels. 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 jenna dagenhart. this is bloomberg. shery: u.s. futures on the rise. that after wall street fell to a
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two-week low. we are seeing asian markets mixed. sophie: taking a look at the mood in sydney, seeing aussie shares higher by .2% after the worst two-day drop. red.ve one glaring the financial segments. this as analysts continue to cut profit projections for the biggest banks in australia. taking a look at the leaderboard we have consumer discretionary end health care shares in pol position. looking --ipate it anticipate it will continue to grow. the rba seeing no strong case for rate hikes in the near term. see it is at the widest since 1981 and we continue to see this edging lower. so now playing the waiting game. it is looking stale to some.
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the workrked -- function the governor will stand through 2019 but td securities is penciling in tightening from new zealand, giving a string of strong data points. she is forecasting more strength for the kiwi. currently-kiwi -- trading at a six-month low noted by the white line on this chart, reflecting relative weakness in australia's economic momentum to new zealand. the blue line tracking the difference in the price indices. new zealand has surpassed estimates and by a greater estimate that australia. we will find out more about their outlook in a half hour time when the promised her of new zealand speaks to haslinda amin in singapore. haidi: looking to that conversation. sophie kamaruddin there on the markets.
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asia. this is daybreak i am shery ahn in new york. haidi: i haidi stroud-watts in sydney. day two of the jp morgan conference in hong kong which rings together investors and tech players to discuss the pressing issues. rishaad is there for us. thank you. let's get a look at what we have been losing. the key participants we have been talking to include our next guest, the cohead of aipac investment banking. how would you describe the mood? >> very upbeat.
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people are focused on the fundamentals which are strong. companies continue to scale, people raise capital, improving monetization and margins. they are optimistic. rishaad: what has been the buzz in terms of what you cover with gmt? >> the buzz is around a number of sectors people are optimistic for, and ai -- ai is a huge theme. chinese ai companies have commercialized more effectively than any other in the world, more so than the u.s. were they have good technology but not been commercializing to the same extent. shared economy is a big theme with cars, trucks, real estate. i think another big famous robotics. you see robotics companies next year. you will see continued consolidation in the wireless infrastructure world and also -- rishaad: agree with that. john: data centers are a big
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area of activity. fintech will also pick up again with further clarification in china. you will see more activity both from consolidation and some of the big fintech players in china come to the market. what hastell me happened to the markets. where do we have valuation? two companies think this is compelling? [indiscernible] are: sentiment, people pessimistic right now. the selloff in many ways is contrary to fundamentals. the sentiment changes, the market will pick up. when people talk about a bubble, i don't think we ever believed it was a valuation bubble. it was full but reasonable. we think there is room for valuation to come back and
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continue to support ipo activity and private equity. tencent has had a , hurt byme of it regulatory changes. what do you make generally of what is happening with copies like tencent? john: the performance is good. rishaad: it has been beaten down quite a lot. john: despite the macro factors in china and given the regulatory push back, the company performed well, and hopefully that is a positive sign for the market and chinese tech stocks overall. me, does the trade war play into this? john: not really. is ifly way it plays in you believe the trade war is undermining consumer behavior and consumer spending in china, that it could impact consumer spending on consumer services
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but otherwise i don't think it has a big impact. it doesn't have a lot of impact -- rishaad: does this have any residence -- resonance with 2000 and were john: i don't think there is a bubble. [speaking simultaneously] john: it doesn't feel the same because in 2000, at the time you had a lot of businesses that experimental, very early days, building internet. many of the businesses today across the mobile internet and china, they are much bigger scale is this is, more mature, generate profitability. a different world than we are looking at. valuations have come off because of macro sentiment than fundamentals. you mentioned more companies to come to market, maybe hong kong -- does the
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market have liquidity to support this? there is liquidity globally. it is not just hong kong. local investors invest in hong kong. -- global investors invest in hong kong. there is fatigue. people have lots of money but it will normalize in the new year. rishaad: what is exciting you the most? john: ai. why? because i think the chinese have commercialized ai better than anybody else until you start to see companies come to the market whether it is facial recognition, whether it is robotics or just content, and you will see the application of ai in a profound way. rishaad: the head of aipac investment banking. joining me at the j.p. morgan conference. haidi: great conversation, thank you.
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thee tensions and restaurant emerging market starting to take their toll on one of the most resilient economies, thailand sought shipments unexpectedly plunge in september, putting the 8% export growth target at risk. finance minister said china wants to be part of the china backed deal. >> out of thailand it is concluded but there are some countries that still have bilateral for things they have to fake -- but i can say that right now we are coming up with essential inclusion for market access deal. >> so china -- thailand is intending to be a part of this? >> we would like to see [indiscernible] canwe hope that if you
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drive that through next year and come up with an earlier conclusion, then we will be able to have it signed in thailand this year. p? inda: how about tpp >> yes, that is also included in .he policy of this government we are right now in the process and also to ask for opinions from stakeholders in the countries. a lot has been organized in thailand to listen to the concerns that might have on this agreement. we hope very much when they open for a session of new members, thailand and other countries will be interested to seek for
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the application process. haslinda: how much clarity do you have whether or not thailand can achieve its 8% growth target for thai exports for the year? we haveast assessment>> people around the world, we asked them to do assessment in the market, we feel confident we will be able to make it 8% as announced. haslinda: how about 2019? same growthin the rate. haslinda: are you concerned about the strong bought -- the strong baht? >> whether i like to see soft or i like to see it strong defense for me in my perspective, depends on market value, the real market value is the matter. to people, businessman want
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keep asking -- they want to have it stable. that is what they are looking for. that was the thailand energy minister speaking. monitoring a conversation with robert kaplan and jerome powell. lots of interesting tangents in this conversation, speaking about trade, jay powell saying he hasn't seen in the data the impact of the terrorists but also pointing -- the tariffs but also pointing out we don't know what that looks like without them either. there is a slowdown globally. he doesn't sound like he has said anything different with regard to the rate path or trajectory, but also covering things like political independence as well, not quite
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arresting the topic for what the fed is doing but saying the fed does have a legal protection and independence that allows it to get on with his job and mandate. shery: very diplomatic answer, the answers from robert kaplan. he is talking about the strength of the u.s. economy and how that is pushing up the dollar. he is not worried about the financial conditions or equity markets taking a big hit from what the fed is doing, although he is also talking about the potential the tariffs could push up inflation higher. he's talking about her trade, productivity is saying many positive things about trade. comments we have heard in the past, the balance sheet runoff, people have worried there could be liquidity drained out of the banking system that could weigh on financial markets.
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but he doesn't seem concerned about financial conditions. itdi: in particular when comes to the recent equity selloff he was asked about, he said the equity market is a small component amidst a bigger range of considerations when it comes to the broader economy. talk about the housing market, saying housing could be less of a cyclical drive today than in concernsbut expressing about the softening environment the fed monitoring closely. there are suggestions that it sounds dovish more than from the theseparticularly saying are just projections. they can change at any time. u.s. futures have been fluctuating. take a look at what asian markets are doing. there is a mixed picture when .2%see the asx 200 gaining after falling. nikkei futures down .7% as well as the kospi down and under
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haidi: good morning. i am haidi stroud-watts in sydney where markets have opened for her trade. shery: good evening from new york. i'm shery ahn. to "daybreak:e asia." ♪ haidi: our top stories, backing for brexit. theresa may cap -- claims cabinet support, but lady euro skeptics warn the will be voting against it. the situation has changed
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