good morning. australian markets have just opened for trade. >> i'm shery ahn. >> welcome to daybreak asia. our top story, asia-pacific markets look to extend the rally in new york. watch out for chipmakers. theresa may bowing to fight on as brexit hardliners have a vote

of no-confidence. wilbur ross is the u.s. still plans to slept tariffs on china matter what happens. despite the comments, we saw more optimism that trade tensions could be easing between the u.s. and china. here's a look at the markets. just the fact that china and the sending theking, tech shares higher. the trade related sectors like industrials also higher. the s&p seeing the best day in a week. the dow gained as well. the nasdaq gained 1.7%. s&p futures at the moment slightly down but they were higher at the open. fluctuation area it all of that will play into what happens in asia. >> as we start off, the cash

trade in signal -- sydney we are seeing gains. there are potential pitfalls ahead. brexit fears. we have korean media reporting that they tested a new tactical weapon. we are also watching japanese toolmakers. way on the nikkei later this morning. be in for as may world of hurt. we are getting the outlook for 2019. goldman lowering its gdp growth forecast for some countries in the region particularly those who have current account deficits like indonesia and the philippines. as well as india which posted a deficit for the month of october. on the agenda today, we are

getting gdp figures for the third quarter from hong kong and malaysia. export data from singapore and thailand. in sydney, we are keeping an eye on shares. now seeing a rise of 50% from 10%. this after australian regulators approved the purchase of quadrant energy. prospects of more and a and higher market volatility are boding well. >> let's get you to first word news. north korean tv has reportedly announced the successful attempt of a new high-tech strategic weapon. monitored by a south korean news agency.

trump said the u.s. was fully aware of them and suggested negotiations with kim jong-un remain on track. commerce secretary wilbur ross tod the u.s. still plans raise tariffs on chinese imports in january. despite the talks between president trump and president she at the end of the month. they will only discuss big picture items. he says of formal deal by january is impossible. the u.s. is imposing sanctions on 17 saudi arabian officials over the murder of the journalists. the announcement came just hours after the kingdom charged 11 people with the killing. to execute the order him came from the highest level.

believe that any rational thinking person will recognize that you sometimes -- things mistakes happen. people abuse their authority. people exceed their authority. the key is to hold them accountable. and to ensure it does not happen again. >> facebook is under fire for how it handled the threat of fake news and deliberate misinformation. including the use of aggressive tactics to discredit opponents. following a new york times report, facebook's cut ties with the republican pr firm that has linked facebook enmities to george soros. allegations of a test images and are unfair. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. >> u.k. prime minister theresa may is bowing to set firm as an army of brexit hardliners mobilizes to have her removed. they submitted a letter of no-confidence after cabinet members resigned. >> i am doing my job of getting the best deal for britain. deal that is in the national interest. when a vote comes before the house of commons, and peas are doing their job. they will need to consider the vote of the british people and our duty to deliver on that. is bloomberg now u.k. politics reporter. prime minister may seemed defiant. expect the no-confidence vote to be triggered?

is aat we could see leadership challenge in the coming days. potentially as early as next week. if 48 of her fellow mps sent a letter in saying they have no confidence in her leadership areas by the rules of the conservative party, if the chairman gets those letters, that will trigger a no-confidence vote area >> we half a dozenseen members of her cabinet quit their post. have detrimental is this for her plan? blow is another massive but she is a staggering on. this evening, she gave a press conference and she was defiant. she said being a leader is not decisions it is about making the right decisions. she said she felt she was making the right decision. one of the leading brexiteers

has not yet resigned. he has been very quiet today. i think if he was to resign, that would trigger more letters being sent to the chairman saying they have no confidence in her. just take a step back, what -- what isnents have the beef they have with her negotiation of the deal? -- what she has agreed on does not deliver what the people voted on particularly on the issue of northern ireland. --y feel like we did tim remain a battle stay with the eu. and actually end up in a worse position than we currently are. >> we have this great flowchart

situation when we look at what could come next if the deal gets past. if it doesn't get past, then what happens. what happens if we get a second referendum. what are the various possibilities, what is the timeline we are facing now? there are many possibilities. --the moment, i think people it felt like we are living day by day. she going to get this agreed by cabinet? are people going to resign and who? thepeople are wondering are -- is the going to be a leadership challenge? many lawmakers are pushing for the book to be amenable so they could change some of the text that they vote on. we still don't know if that is going to happen as well. there are a lot of variables. >> nothing exciting still.

i appreciate your time. as u.k. faces fresh political turmoil, u.s. stocks hold to their five-day slide. this comes after another volatile trading session. recovery.s taking a industrial stocks were the big winners of the day. rising for the first day in six weeks, it feels like something had to get. was it a convincing rally? >> it was a choppy rally. it wasn't clear how we were going to end. text cost of the early day rally, then there was a retreat. when there was optimism about the g20. then we had the industrials rally. a lot of haven trade into treasuries. note the strength in tech

particularly the semiconductors. that is going to change when we get to the after-hours performance with chip stocks down heavily. let's go into the apple chart because that was a big story. a big tex story. we are looking and now at the pound volatility. weighede brexit chaos and pushed stocks down periodically throughout the day. what brought them up and created optimism was apple's resurgence. it recovered from the longest selloff that it had seen in months. you had a morgan stanley analysts say it was worth buying on the dips. it was a tentative rally. let's look at the big movers in the day. downward asing liability for the caliphate -- california wildfires continues. dillards down in a huge way. the ceo indicates they are

cutting into profit margins with discounts. look at the chip stocks. rallying ahead of earnings. as they givee way a lackluster forecast that is affecting all chip stocks after hours. nordstrom also lower renewing pessimism about retailers because it also says the discounts are cutting into its growth margin. talk about the energy markets. there has been insane volatility whether it is national gas or the oil market. >> they are both incredibly wild ride. rebound of yesterday continuing into today for oil. that is despite the fact you had a bearish -- supply data. we heard that there were sanctions from the u.s. on the saudi individuals that balance it out. oil prices caught a bit for the second day. ride, wasl gas wild

it just the cold weather? it was expected this kind of -- time of year. it is not clear if there were losses here, but the traders still reeling and trying to figure out where the fund community stands. >> thank you so much. still ahead, commerce secretary wilbur ross says president trump and she will only discuss big picture issues. later this hour. >> life on deck at the apec summit in papua new guinea. this is bloomberg. ♪

papua new guinea is hosting the apec summit for the first time this week. world leaders will discuss a wide range of economic and geopolitical issues. our correspondent is there. a lot on the agenda. there is a lot on the agenda. a lot of backdrop to the humor. we are down almost to the level. that is where the broadband is. the ceo summit is in full swing today followed by the leadership summit tomorrow and on sunday.

i'll have the apex director who is of course the former reserve bank of new zealand governor as well. six years now is the head of a pack. it is interesting times as you are having the summit here and public new guinea. finance ministers got together, they put out in 1800 word communique and trade was mentioned just once. surely trade will be on the top of leaders minds today. >> it has benefited so much from very strong trade. every economy says they want more of it. there is some disagreement about the rules of trade and conditions for trade. we have had a lot of discussion. trade ministers and foreign ministers meeting. you can be sure they will be talking about trade a lot. >> what kind of trade

discussions have you seen? >> we have always been working on getting rid of order barriers. the red tape and regulatory issues. of workontinuing a lot going on behind the borders. across the borders with supply chains. now, we have seen with regard to ,.s. and china tariffs going up that causes concern around the table. >> is that dispute between china and the u.s. going to overshadow the smaller concerns of the other nations? no, it doesn't dominate because the other economies will not let it dominate. they are concerned about it but they want more trade and the right conditions following the right rules. they are sending a strong want to keephey

seeing barriers come down and not go up. >> given the volatility going up, also china's slowdown in response to the trade war, what kind of threat is there that we could be facing in the couple of years? years? >> we don't see that. we don't see very muchyears? >> we don't see that. we don't see very much affect on economy impacts yet but of course there will be. the economic modeling suggests there is a negative effect on both sides. around this region and particularly in east asia, there is a lot of talk about the upsides. advantage,et the where might supply chains relocate. we are seeing a lot of discussion about it. ,upply purchasing managers boards looking at new investments. more sophisticated technology.

more supply chain in southeast asia. some of that is positive areas. there is an upside as well as the downside. >> how much concern is rising debt in east asia? especially if there is faster than expected tightening by central banks? >> we would not want to see a reverse of the global financial crisis again. trade flows slow down. that made it hard to repay debt. we don't see that happening. it is important that we keep the trade flows going. >> how much of a catalyst will be the new invigorated tbp? -- tpp. is this going to be something

that a lot of these economies will focus on as well as getting other nations in flex south korea and indonesia and thailand? >> absolutely. the members who have ratified have been proud to tell the other members that. an organization -- it is been done on the sidelines. >> how about public new guinea? we don't talk a lot about it because it is the poorest member of the block. the big question, chemical it off? are they pulling it off? >> yes. they have been working on it for a number of years. they have been working on the policy side and infrastructure. they are accommodating a state

visit today from the chinese president. they are doing it. contributed, they have said we want to focus on digital. we said how is that going to work. you don't have much broadband here. ity have put up a spin on saying there is a lot of discussion about platforms that we want to make sure that all , remote small business areas. wax digitization is a big theme of a pack. is a big struggle right now with many economies grappling with the old and new technologies. how far regulation needs to go or should not go. of discussionot going on about data privacy, cybersecurity, data localization and to conductivity with platforms. women sitting in villages in the highlands with

making backs that they we. have can they get those into the marketplace? they had done a lot of competitions and had a number of apps and place that allow middlemen to get in there and said this is how you can get pricing and marketing. some of it is using blockchain. we are able to do some sophisticated stuff indirectly and i think that is going to have some real dividends. >> take you so much for your time. congratulations on completing your six years as the head of a pack. we have a full slate of interviews coming up. >> thank you so much. we will be looking forward to those interviews. we have an alert on the bloomberg. pg&e has been cut.

junk. be cut further to that is the utility in california that has been suffering from the wildfires. we have heard from the company saying that if it's a equipment is found responsible for the california wildfires than the cost would exceed its insurance coverage. this is very important because we have seen the wildfires. it happens almost annually. pg&e was already affected by last year's wildfires as well. >> there is special it -- speculation that the company may be forced into bankruptcy. their liability could be as much as $30 billion. the company and others may turn to the state of california for assistance. if that happens it would provide

a little bit of respite. lost,the worst single day they rallied as much as 44% in the extended trading. california public utilities commission official told investors that the agency doesn't want the company to go into bankruptcy. some support may be coming. one to watch for sure. this is bloomberg. ♪

we are looking ahead to the final trading session. a beautiful sunny day there in tokyo. looking at the markets that are ready trading. we are seeing modest upside to trading in sydney. new zealand trading relatively

flat at the moment. danes for the aussie dollar on the back of the jobs for work. this is bloomberg. ♪

it is friday morning in sydney. the markets have been trading for 30 minutes. some gains are being seen. materials and energy rebounding. complaints about the weather, it is a bit great. -- great. look at the picture in new york. it you can barely see anything. now, we are expected to get three inches of show -- snow. futures a little bit down.

we have talked about natural gas fluctuating then retreating. i really can't tell. it's very cold. recall working with you, you are always cold. >> i always have a heater under my desk. [laughter] let's look at first word news. says theresa may's brexit plan would be rejected by the british public. the survey was conducted after her drafted deal was announced. the plan is opposed by two to one. another poll suggests half of u.k. voters now want a second referendum. fewer than one in 10 thinks the ut will grain a good deal from

brussels. >> i am doing my job to get the best job of getting the best deal for britain and the national interest. the house of commons will be doing their job. they wanted to look at the deal and consider the vote of the british people to leave the eu and our duty to deliver on that vote. says he issachs ceo personally outraged that the bank is linked in any way with the multibillion-dollar scandal in malaysia. in a voicemail he called the behavior of three implicated individuals reprehensible. goldman stock tumbled the most in seven years. pg&e saw losses of more than

60%. the after-hours rally came after fears that the companies links to wildfires are overdone and the worries are overstated. the stock may downgraded to junk. investors are looking at whether pge equipment ignited one of the blazes. matched its annual lunch records with time to spare this year to set a new mark. a rocket successfully blasted off from the kennedy space center carrying a satellite that will improve broadband connectivity in the gulf and connect amateur radio users across the world. has had 18 successful launches this year. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. asia's biggest rate hikers on the move again. indonesia and the philippines both boosting their key lending rates. our guess is here with the details. are the pressures to move it really that strong? >> at this one, some of the pressures have been contained. look how the currency has stabilized. if you look at the bank of decideda, they both they have some problems. let's look at a chart. that is really something.

for a half percent up to five and a quarter percent. over time, it definitely has strengthened. nevertheless it is still weaker than it was back here when they had to start raising rates area what is going on? bad of the bank of indonesia said the rate hike was aimed at cutting the current account deficit. 1.2 billionsted a dollar trade gap in october. bigger than expected. now is at 3.4% of gdp. this is something that is on his mind a current account deficit really invites capital outflows. if emerging markets get unstable afraidi'm sure they are they are still vulnerable. a lot of people are calling for another rate hike perhaps as soon as this year. bloomberg economics says there

will be a rate hike on december 20. timing must be partially planned because the bank of indonesia it will have in hand with the fed has done. a look at the philippines. in as manyate hike meetings. is the cycle complete now? >> that remains to be seen because they have a pretty high inflation rate. they did raise their key rate for the fifth straight meeting to 4.75 percent. widely viewed as a move to do something before inflation gets worse. let's look at what they said in their policy statement. the monetary board believes the prospects for the domestic economy remain generally favorable and allows this to for a measured adjustment in the policy rate to rein in inflation expectations and preempt further

second round effects. they are underscoring how this is a preemptive move area it is aimed at this inflation rate 6.7%. that is what they are looking at. they have predicted it is going to return to the two to 4% range. the prospect of more fit rate hikes not just this year but next year in 2019, continues to weigh on the philippines peso. it is still down 5% this year. let's take a look at the chart that shows you how it has performed. you can see on the right-hand side what happened. a big move lower. it has definitely improved. is one oft month, it the best performers in asia. wantss something that bsp to make sure they stay ahead of. things are looking a lot better

right now but as we go from 2018 to 2019 and the fed keeps hiking toes, there are a lot of its have emerging-market currencies. >> thank you. let's look at the aussie markets. >> we are seeing upside for all these stocks friday. while you are in sydney, in melbourne the conference is underway. we have investments liking new farm. that is helping to boost the stock. now we check in on other movers. movers earlier rising.

boost.ng and up to 15% education extending gains after surging the most since 2011 on occupancy growth. the stock was upgraded to outperform apple quarry. this is a company considers the sale of underperforming engineering unit. investing the business, that would be the best option. see my bg sliding over 7%. it is one of the so-called challenger banks. citigroup says the smaller feel thethey would most pain from any downturn in the event of a no deal brexit area a quick check on the aussie dollar. it is on track for the first three-week event since june. holding steady after rallying thursday on strong jobs data. let's get a quick check on broader market action. these chairs on the rise.

the asx 200 is set for a weekly drop of 3%. we are seeing stocks and wellington slide to the downside. pitfalls abound. >> thank you so much for that. coming up, commerce secretary wilbur ross says a full-blown deal between the u.s. and china this year is impossible. we will weigh the trade war impact with the u.s. coming up. this is bloomberg. ♪

this is daybreak asia. commerce secretary wilbur ross says a trade deal with china is impossible despite the planned g20 meeting. we're joined now by a reporter. >> it seems there has always been a bit of that. commerce secretary wilbur ross in saying that a deal would be impossible by january, those comments are not really a surprise. he has a point. the u.s. demands are very steep for the chinese. , he is saying the u.s. has a list of 142 demands. the u.s. is also seeking structural and fundamental changes to the way china orients its economy and trade policy. theother issue is

timeframe. getting a new deal by the end of the year. anding through the demands getting inked to paper. that would take a lot of time. that being said, still a good sign that the two side -- sides are talking ahead of president trump's meeting on the sidelines of the g20. >> we have seen reports the chinese officials have outlined some concessions. are they any different from a we have seen in the past? >> that is correct. the chinese did provide the u.s. with an outline of concessions. those have been characterized as a great starting point. others have characterized it as not much new or nothing the chinese have not already done. far from reaching the bar that the president has already set. hard to know if that is a good starting point or more of the

between two countries whose negotiations aren't going anywhere right now. >> thank you. joining us now is the u.s. chamber of commerce executive. great to have you with us. >> you spoke with the ambassador regularly. how involved is he in those talks going on with china. is it your view that he is as hawkish about beijing as he is the portrayed? ambassador has spent a lot of time assessing what is needed in this u.s. china relationship. i think that it is no question, he is a driving force in how the trump administration is looking at its talks with china.

no deal will get done without his hand. said, where i depart from grade is that china has offered a starting point. still --ard there is what we need is confidence building measures. need the u.s. to suspend further actions that would escalate tensions. there is a lot riding in the g20 meeting and argentina. we will see where that takes us. >> how favorable our confidence building measures for businesses? how long will it take until we get something concrete and a breakthrough? >> given the range of issues , we are being discussed

know that the vice premier and secretary of treasury did have a talk last weekend. what we need is three things. first for china to come with meaningful market access in other kinds of openings to provide some confidence in the u.s. administration area. intellectual property and trade secrets and forced technology issues. on the other side, china is , raisinghave to expect tariffs from 10 to 25% or taking further steps to raise tariffs from additional products in china. what i hope will happen is a timeframe. three to six months or longer for the two sites to get back.

>> earlier you said there were talks going on between the two sides but not at the right level. they need to sit down and map out what can get accomplished. china has already said there are issues that have been raised by the u.s. side that can be done. that are other issues more difficult for them to achieve in the short timeframe. is we will said start moving on the issues you say can get done. a week -- don't wait. xi jinping has indicated he is willing to move on financial reforms and eliminate tariffs on autos. don't wait. put it and play. the commitments that he is made public way. >> how much of what we are hearing is gamesmanship going on behind the scenes and how much buffer does he have behind-the-scenes to be able to make these concessions?

there is obviously the issue of face-saving in china as well. >> both sides have domestic pressures both china and the united states. there is a lot of jockeying going on. presidentshat both want there to be success in the g20 discussions that they will have the end of the month. there is no question that they really playing both to the international audience as well as the domestic audiences. i believe they will want to say that they have made progress. the only way they can make progress is for some confidence building measures to put forward by the chinese and the u.s. administration to respond in kind i not raising tariffs. that is a burden on the u.s. taxpayer. it is a burden on tumors and businesses. we don't want to see tensions escalated i additional tariffs. we understand why the administration is pushing china probing them to take more deeper

structural -- reform cuts than they have been willing to take. before you left for beijing, you had a private meeting with china's top diplomat. what kind of gauge did you get in terms of how things were going on the beijing side? >> i will go through all of the details, but what i will tell is that i discouraged him him using old talking points. this deal between china and the u.s. will be more than just purchases. china should not expect america to sell technology products to eliminate or reduce the trade deficit burden between the two countries. that is not what this is about about something much

deeper and more fundamental. there are concerns about china's industrial policies and its use of subsidies. trade secrets and forced technology. these are issues that have to be addressed in any final deal. to bed encourage him frank and open and to evolve the messaging that we have heard from the chinese diplomats in the past. the stakes are very high for both countries. the economy in china is softening. have a direct impact on our economy as well. both sides have to get back to the table and build confidence short-term to get to where they need to get in the three to six month. let's not forget, we will enter presidential politics in 2019 if we have not already. it will get more difficult if not easier for a deal to be

reached. china understands that. both sidestant that get to the table and it begins with the g20 discussions between the presidents. the domestic posturing would amplify as we get into the next term in the election cycle. take a step back and look at this. how much do you think is really a bit of an existential or ideological fight? it is targeting the tech aspect of things. chinese innovation. press a try to some sense of china destabilizing the existing power balance globally? >> there is an element of that no question. i heard a lot about vice president pence is speech, that got their attention. the discussions between china and the u.s. has a lot more to do with competitiveness than just trade issues.

the stakes have gotten higher. that makes it more difficult to get something done. premierng and the vice have a lot of domestic pressures of their own. there is no question that we need to remember the size of the economic relationship between china and the u.s. the responsible that they had on global issues, whether it is a sustainable development goals or security issues or economic issues. there is a lot of stake for both countries but also for the world. at the end of the day it is too big of a relationship to fail. boulder to require action on both parts. china needs to respond and take a more responsible stake position to a range of issues that are not just driven by the u.s..

europe japan and other countries have also shared frustration with chinese actresses. we are very concerned that is developing in a way that would prohibit fair competition in the marketplace. this needs to be addressed in the discussion. >> finally, before we let you go, let's talk about nafta 2.0. we just had a key democrat pouring cold water on the usmca. that it would be dead if the president did not renegotiate the terms of the deal. what are your members tell you about this? >> there is a sigh of relief with usmca that the u.s. and mexico reached every agreement. there are a lot of things in

there that we like. there are also concerns about the rules that were established that would create challenges for us going forward. whole, we are bullish about the usmca. now, the hard work. it has to get signed and it has to get through the u.s. congress. beare hopeful that he could taken up in a lame that is not likely. if not, certainly in the first half of 2019. there is no question we will need democratic support. this is not a bill that can get past just to the republicans. you will need bipartisan support. this will be a test early on for the new congress and for the speaker of the house and how she deals with the new administration on trade issues. there is a lot to like for democrats in this bill as well. out and say ymca every time i hear usmca.

the nafta 2.0 version is something that needs to get done and america needs to be leading from the front of trade action of the back area is very important that we get this deal done and we get it done early in 2019. >> quickly, with the usmc on the line and other free trade agreements, there is not much progress on those fronts. what does that do for the united front against china? >> it makes it more difficult. andeed to work with europe japan and other countries in addressing the range of issues that have been raised by the u.s. administration. we need to build these alliances. we are having difficult negotiations with europe around the tariffs. issues wea lot of have with other countries and it makes it more difficult to put your focus on china and to build the coalition of interest that i

think exists out there. it makes it more difficult if you are building up trade conference with other countries. we have a lot of alignment with europe. we need to be working with them. >> great having you with us. check of theuick asian markets. we are seeing australian markets right now. qa stocks are down a quarter of a percent. futures on the nikkei are flat. we had the best day in almost two weeks for asian stocks and we are seeing some positive sentiment coming from wall street. >> that is right. we've also seen some gains when it comes to emerging markets. the philippine peso is outperforming. likely to drive down some of the divergence trade we

have been seeing between the fed and asia. it is tgif. a chaotic week. more to come. this is bloomberg. ♪

haidi: good morning. asia's markets have just opened for trade. and i'm sophie kamaruddin. welcome to "daybreak: asia." haidi: our top story this friday. looking to extend that rally. watch out for a chipmakers. still planning higher tariffs on china in a matter what happens