haidi: welcome to daybreak australia. shery: counting down to asia's major market open. haidi: here are the top stories that we are covering. rising tensions. enemies threaten a result -- we will. the u.s. prepares a report on the jamal khashoggi killing.

shery: let's get you started with a quick check of the markets closed. we saw the dow gaining ground and some optimism about tensions easing between the u.s. and china. the s&p 500 gained. we heard from president trump some signals that there could be a deal at the g20 later this month. nasdaq took a hit. tech sectors were hit because of some disappointment coming from nvidia earnings. we also got retailers dragging s&p and weighing on the 500. a big retail week in the u.s. with best buy and target. we could see a little more volatility this week, given that there could be trading volumes down on thanksgiving week.

all of this impacting what happens in asia. lots of calories at thanksgiving dinner and lots of shopping on black friday. let's take a look at how we are setting up in asia. new zealand, this is how we are faring with a little bit of an upside there. downside.ittle bit of retreating from week highs on friday. we are seeing a little bit of upside when it comes to sydney futures trading on the back of that booster we had from wall street overnight. has aemarkable turnaround lot thinking that the worst is behind them. the top performer is the kiwi dollar.

let's get to first word news. theresa may is continuing to sell her brexit deal. her leadership has been threatened but has yet to be formally announced. removing her will not change the situation. proposing that the transition period be extended to 2022. coalitionpulist talking about its rule busting budget. the prime minister says the government is ready to eradicate wasteful programs. basic reform plans will stay. ony will issue a review wednesday. the trump administration will issue its report into the model -- into the murder of jamal khashoggi on tuesday.

there are increasing indications that the execution was ordered on a higher level. the ciat trump says report is premature. trump: anybody really know? there were certainly people that were close to hand that were probably involved. we put massive sanctions on people from saudi arabia, but at the same time, we do have an ally that has been very good in many ways. >> migrants have arrived at the u.s. border. people stood for hours to start their asylum process, but they can only take about 100 claims per day.

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. there are rising fears of an economic cold war possibly dividing asia after the summit in new guinea. our chief asian correspondent is back from where he was covering aipac. for the first time in the history, there was no statement. what went wrong? >> there were vast differences in opinion. it really came to a head at aipac. it followed quickly on the heels mike pence, really shaping different visions of how the economic trade order should be

playing out in asia. we heard xi jinping saying the trade war is shortsighted and doomed to failure. wto soed for a stronger very different opinions coming from mike pence and xi jinping. at the end of the day, they did not come up with a communique because u.s. officials told bloomberg that the chinese rejected a reference to all unfair trade practices. other aipac nations agreed to that language and the chinese did not. let's hear from the players. mankind has once again

reached a crossroads. which direction should we choose? cooperation or confrontation? open is or closing the door -- openness or closing the door? >> the u.s. will not change course until china changes its way. >> let me make this clear. it is an open platform corporation -- for cooperation. it is not to serve any hidden geopolitical agenda or targeted against anyone. >> the u.s. offers a better option. we do not drown our partners in a sea of debt. we deal openly and fairly. we do not offer a one-way road. when you partner with us, we partner with you.

say that the to u.s. was in no position to stop the trade war. they want to see changes from china first. it sounds like an extraordinarily fractured aipac crowd. stop chinese officials from entering the prime minister's office. all of the optimism that we had last week about the meeting in .uenos aires the odds are getting pretty long on that one. right.'s as five that incident where the police were allegedly called, the chinese have refuted that ,nd said that did not happen that it was a fabrication by those who want to influence the dialogue. the incident was reported saying

that chinese officials stormed papua new guinea foreign ministry, which was in the process of drafting the communique. they wanted more input and then the police were called. allas a testy exchange across. now will be on g20 where xi jinping and president trump will likely meet. haidi: thank you so much for that. still ahead, australia's world commission holds the final round of hearings on the banking sector on monday. a look at what that could bring. shery: and focus remains on equities.

we have jpmorgan carry frank with us for that. this is bloomberg. ♪

haidi: we are counting down to the start of trade in sydney. coming online in just a bit. we are seeing a bit of the retreat when it comes to the aussie dollar and the kiwi dollar. some support in the turnaround that we saw in trade. that has taken a little bit of a beating. we are seeing a little bit of downside when it comes to the aussie dollar and kiwi dollar. watching daybreak australia. a new trading week starts, weighing trading tensions.

let's assess the mood with jpmorgan market strategist carry craig. we have all the headlines over trade tension, but it seemed to be more about earnings and concerns over earnings growth. we are headed towards black friday. will this change the equation? >> good morning. i think it has wrapped up. numbersook at the paper , we saw a earnings beat most measures. case when those revenues came through. those companies were punished a lot more. the companies could actually predict margins in the future. they are still pretty resilient.

as we look ahead into 2019, i think the big story will be about convergence and earnings across different regions in the world. looking towards more 10% growth. it offers more potential globally. i want to get to those global themes, but before we move on from the u.s., another topic was the corporate debt sector. got pounded and huge turmoil happening in that sector. anding investors selling getting out of the way of a potential drop. in au see any risk corporate debt starting to emerge? >> there are risks as a whole. not in the household sector, which is a more robust outlook.

we know it has been a problem for past market downturn. it is not nearly as bad. on thisa little deeper and we feel a little more comfortable about that level of orbit debt. we have seen it wider now. they have been relatively contained this year, given the macro worries that have started to emerge. startlly, credit markets to balloon out on spray. we get those early warning signals. we have not really have that. it would suggest this is something more sinister. you are looking at more of a technical aspect. they have caught up to a certain degree.

on the whole, it feels relatively comfortable about high-yield. still relatively sound. haidi: i wanted to get your thoughts on whether we are seeing global growth. it seems to suggest so. he saw the move in treasuries, saying he thinks the fed is slowly approaching neutral level. about the kind of concerns of the uncertainties in trade and the rest of the world. does that cast into doubt what next year looks like? it is more about getting the communications that all right. hikes andeking rate the market was sensitive to that. a are concerned about how much

more growth we will get out there. bill be a train wreck growth. recognizertant to when the federal reserve talks about getting back to neutral, it is a range between 2.5% and 3.5%. at the minimum, we get another rate hike in december and a few more next year. i think we will wait until we .et to the middle of next year it will be a case of reassessing. it really has evaporated from the narrative. that thease of saying global economy will look a lot different are the middle of next year. every meeting will be live. really interesting, that communication. i want to get your views on emerging markets. it seems like a turnaround.

to finally break through that moving day average. when you take a look at what equity markets are doing, they finally stopped under from performing -- underperforming the u.s. >> i think what you can say is you definitely see more stability in the indices. it really does feature the same. maybe it will not turnaround just yet. a higher rate cut from the federal reserve. we are seeing strength for the u.s. dollar. we do think that the dollar will eventually start to come off in the medium-term. there are still those headwinds from the trade narrative that are changing all the time.

the fact that we have oil prices that need to stabilize as well. we think about those three variables. a little more volatility. we would still be quite favorable on em equities. we do see that u.s. dollar weakness coming through. think about that convergence and growth as the economy grows. this chart showing that the dollar trade is quite crowded right now. having a go at the markets right there. do you believe in the medium-term we could see weakness? what >> about the short-term? in the short -- what about the short-term? if there is not anything cordial that comes out of the

meeting attended two presidents, it will be -- if we see what we saw of the -- youd the eurozone, it should see a short-term boost to markets. the dollar will come off of it. it will affect markets in the very near term. the fact that fiscal stimulus will come off and it will start to fade in the u.s. suggest slower growth. the federal reserve is more concerned and getting through that cycle. markets will adjust to that. we always appreciate your time. coming to us out of melbourne.

next, the prime minister theresa may trying to sell her brexit deal, also battling for her survival. this is bloomberg. ♪

haidi: i'm haidi. shery: you are watching daybreak australia. google cloud is to have a change of leader. diane greene will step down in january and will be succeeded by thomas. he will work alongside green until she resigns. -- she intends to remain on the board at alphabet. the whistleblower is fully committed to working with parliament, even with the

prosecution. he left after alerting management about suspicious amounts of money. he spoke out through the media. shery: blackrock is thinking about applying for a license for more control of its operations there. take ina 16.5% investment management and has asked regulators about a joint venture. he hopes blackrock can become a strong player in china. the u.k. prime minister theresa may has told her critics that removing her will not change the brexit deal she struck with russells. they reject the deal and say they want a vote of confidence. our policy editor kathleen hays

has the latest on this brexit battle. we know that theresa may has of her cabineten members, so what is she doing now? kathleen: she is fighting back. she said i got the deal, this is the deal we need. inc. back to june of 2017 when she called that snap election. she survived with a bad outcome been. you cannot underestimate her determination to move ahead. on sky tv, she said about the brexit battle, it is not about me. it is about what is right for the country. a change of leadership will not make the negotiations any easier or change the parliamentary arithmetic. it will bring a degree of uncertainty. theresa may took control of the game.

reporting rob and also important, the brexit negotiator is no longer going to be involved in the negotiations. still surprised that john said he was hoodwinked by the final result. they need 48 letters saying they want a vote of no-confidence. they might have a little more than half. in terms of jockeying for who might be running if we get a no-confidence vote and who could ultimately replace her, dominic rob saying i am not an ally of , so he seems to be distancing himself from that. the leader of the house of commons is absolutely determined to back may on brexit.

she is going to brussels next week to continue discussions. haidi: what has been the reaction? business leaders have to be concerned about a bad deal or no deal. shall see.e reiterating that the u.k. cannot get a better deal. this is it. this question about the transition through brexit and how long will that last? he said it could be tended to 2022. business is getting more worried about a no brexit deal. mark carney has predicted dire consequences. there are a lot of dark clouds hanging over this. a lot more reason to make her battle very important. we will see how it turns out. week, noother eventful

doubt. a lot more coming up when it comes to australia's bank. the final leg of the commission gets underway. this is bloomberg. ♪

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haidi: 9:30 a.m. in sydney where markets open in 30 minutes time. we are getting a slow start to the day, great day in sydney. in sydney. the kiwi dollar has rallied on rice -- about a condi compromise with the g20 meeting. looking at gdp numbers out of singapore and thailand and inflation out of japan. i'm haidi stroud-watts. shery: i am shery ahn. you are watching daybreak australia. let's get to first word news. apex summit -- apac

summit wound up in papua new guinea. china balked at the wording of a pledged toe but fight all unfair trade practices. the u.s.-china trade war overshadowed the facts that they traded barbs in back-to-back speeches. >> mankind has once again reached a crossroads. which route should we choose? openness or closing one store? -- ones door? the future it hinges on the choices we make. offers aited states better option. we don't drown our partners in a sea of debt. we don't compromise or coerce independent spirit we operate failure -- failure it -- we

operate fairly. we partner with you, and we all prosper. union iseuropean working on new rules to prevent foreign investing security amid increasing concern the pace of acquisitions of china. they made the announcement tuesday which will include how far concerns go about fbi with their peers. chinese bloodhe moderate from buying a robot maker earlier -- conglomerate from buying a robot maker earlier. any emissions scandal could have been averted after they halted manipulation in 2011, but documents show whistleblowers alerted they would invite to allow vw sales to report illegal activity. someone reported manipulation but not the exact issues that triggered the scandal. spacex not planning to upgrade workhorserce --

rocket booster. elon musk said it will have only minor changes. he said spacex will focus on the falcon heavy booster with an accelerated program he described as counterintuitive. 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 rosalind chin. this is bloomberg. haidi: let's get you a quick update on the markets that are trading in the early part of the asian session. in new zealand seeing the turn to negative territory, down .1%. the kiwi dollar and aussie dollar continues to give up ground after hitting multiweek highs friday. turning of sentiment when it comes to optimism over the trade tensions. sydney futures looking like we will start relatively unchanged. let's see what is happening with

adam haigh. --king at the keychains trends in 2018. adam: the big oak performer has been u.s. equity market. what we have seen the last few weeks is a reversal in fortunes and e.m. is starting to rally. the big laggards in the currency market, the aussie dollar, starting to rally again, so you are seeing an upturn of the trends. in the equity market the key thing is growth has oh performed value as it has for much of the bull market. at's itrformed value has for months -- as it has for much of the bull market. people can set up allocation perspectives and forecast for what happens in whether this is a short-term blip or a fundamental change in markets underlying strength. what the folks at citigroup are saying from the perspective of the underperformance recently of

equities relative to e.m. is this is short-term and for the next few weeks going into 2019 you see a reversal, people become a little happier with the underlying strength of the earnings story and u.s. equities, and u.s. equities will outperform in 2019. there is a lot of across different asset classes examples of these winners turning into losers and the real laggards turning into better performers. shery: any hopes for those emerging markets or risk assets given we are seeing the trade tensions and monetary policy tightening? up fort is a tricky set the week with the fact you have the aussie and kiwi dollars coming off real risk proxy in for sentiment and where people want to allocate money at the moment. it is clear over the weekend there is nothing really to move

the dial in favor of people expecting some kind of resolution at the g20, in which case you would expect further near-term pressure on assets like equities, the australian dollar, maybe even further weakness in the chinese yuan when trading gets underway later. and there is ongoing concerns around people die a expectations for the fed hiking into 2019 -- dialing back expectations for the fed hiking into 2019. credit equities continue to be a problem. you can see on this chart clearly you often get those times when trade tensions reach kind of a tipping point, and they can swing they dial for risk assets in hong kong one direction or the other. it has clearly moved back in favor of just an idea of caution and people that were holding out hope for when the g20 gets underway at the end of next week

, they were holding out expectations that president xi and trump would give at least the markets some kind of underlying floor to the current sentiment. the has swung back really now. -- that has swung back really now. we didn't get any information apec. big -- from 1992 weirst time since didn't get a statement. thank you so much, bloomberg will bull market editor. forget to check out the gtv library for some of the church you have seen on the chart. gtv on the bloomberg. president trump says we may never know the role the saudi crown prince mohammad bin salman played in the death of jamarcus ok -- jamal khashoggi. there are increasing indications it was ordered at the highest level.

our reporter has the latest on this. we have heard again president rejected thoses lines -- those claims about five times. what are the expectations? reporter: the pressure goes to congress. what we have seen is a lot of bipartisan concern with the crown prince's actions. it is something you hear from both republicans and democrats. they are talking about things like, do we have to stop gun sales, are we willing to be involved in the war in yemen the way we are now? that report will put the whether or them and not trump sort of signaled what will be in that report with his language during the interview, saying the prince had denied it remains to be seen. we will see what happens. indi: what about the latest the robert mueller investigation after the acting attorney

general? ben: trump said he would not interfere with with accor -- with whitaker if he wanted to put pressure on special counsel bob mueller. push him out the door. it was a bit of a strange thing for trump to say because the concern is trump put whitaker in their to do his bidding on those issues. it is doubly strange because the reports we are getting now is whitaker is telling senators or colleagues he will not be taking those actions. what is going on is not exactly clear, but we know democrats are very concerned about whitaker's presence in the justice department and they say he was not constitutionally placed at the head of the justice department, and they are pushing that in court. the white house and justice department say it is legitimate and there is no problem. weeks since the

midterms, we have an outcome for the florida senate race. ben: the rick scott prevailed by 10,000 votes, i very narrow margin that expands the republican votes in the senate, push judgesier to through. but you need 60 votes to get anything done. because we have divided government, it means we need bipartisanship to get anything done in congress. brody there for us, the latest out of washington. australia's big ranks among the leaders of the big banks facing more questioning. we will look at the royal commission hearing into misconduct getting underway again today. this is bloomberg. ♪

haidi: i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. australia's royal commissioner

looking into banking misconduct, the big lenders being called to testify over the coming days. our reporter is watching this for us. what are we expecting today? reporter: today we are going to hear from the biggest of the australian banks, commonwealth bank. it is one that has been most exposed with the regulations of the royal commission and it has had many hearings. the final before the judge goes away and set the final report is policy questions. not individual secrecy and failings but the wide swath where it was allowed to happen. we saw a list of banks behaving badly. we could see any upside? emily: the banks are determined to show they have changed. the relatively no coo of commonwealth -- new coo of

commonwealth bank has been apologizing. they have learned their lesson. they will get another opportunity to tell us they have changed. but to be honest it will be another week of bad headlines really. there is so much criticism, and that will be a net -- another round this week. emily off for another couple of busy weeks as these hearings recommence. walker.us is david can the banks change? david: we will see this week. they have been telling us how and why they have changed and we will hear about how they are addressing governance, prices and remuneration failures and promises to do better. haidi: does it actually matter? the banks have still rallied even as this showcase of bad behavior continues to be exposed. david: we have seen them fall recently.

nomination costs mostly. one of the consequences for shareholders of the royal commission is substantial sustaining increases and remediation costs. reporting season, the banks have hundreds working on remediation with means the costs will continue at elevated levels into the 2019 financial year. it is another reason why earnings will be flat and dividends for another year. shery: we saw the report haidi stopsned, and the inquiry short of penalties. we saw bankshares rally. will it be any different when we get the final report in february? we haven't seen the final report with the negatives on the , they stood by the market. bloomberg can show how percent earnings estimates have fallen very heavily the last three years. with that in mind the banks are heading into a long time of

growthng as earnings starts to bottom, housing growth levels out and banks will achieve the capital targets pay we will see ongoing buybacks in anz. simon commonwealth think later next year -- some in commonwealth bank later next year. look at price to value multiples, seen in previous times. it will be a time of low single digit growth for banks. investors need to keep that in mind. investors -- s shery: tell us about the investors. what role can banks play in a diversified portfolio? david: our messages for them to reconsider having large heavy obligations in banks. 100% of inbound portfolios through product growth business toe such heavy allegations

banks and we would encourage bankers to reconsider this, even the outlook for no earnings growth or slow low single-digit growth. volatility we are seeing on equity markets this year is coming from offshore events, creating opportunities to buy other quality activities and reasonable discounts to value. portfolios, role in mainly in income oriented portfolios where their role is to provide steady dividend yields. but even there, the allocation of banks should be known and managed and moderate. the growth portfolios, banks have little role. they could become interesting if they keep falling precipitously. they are starting to price in a recession which we don't think will happen and we know the rba upgraded its gpa forecast. if that happens -- haidi: to what extent of a

slowdown in the property market are the pricing in? david: the one we are likely to see some of the price falls in sydney and melbourne 20% top to bottom is already largely priced in. came out with ubs their nightmare scenario at david: 20%. that will be the worst case scenario. trading discounts are the most bearish. salesprice targets on the side, it shows you how they are. this continues much further. they will get interesting again. haidi: existential question about the banks. the kind of profit in terms of fiduciary to shareholders. does that affect enforcement for good behavior? i don't think so. we will see more pressure on the regulators.

the other story, regulators, these shares were get all the attention this week, but there will be a lot the regulators have to do, and we have to see regulatory capture of regulators buying banks. we have seen contributing to the [indiscernible] fory: thank you so much your time, david walker, client investment management. facebook's recent slump has hit mark zuckerberg. when will see how much is worth has fallen. this is bloomberg. ♪ this is bloomberg. ♪

shery: welcome back. i'm shery ahn in new york. haidi: i am haidi stroud-watts. you are watching daybreak australia. let's get you a check of the business flash headlines. the cbs board is gearing up for talks with diet,. a merger could be announced soon.

shery redstone is also considering a three-way deal that would add text to interactive. to's is likelyke to lead if the merger goes ahead. boss is likely to lead if the merger goes ahead. for aluminummand remains a healthy, but china might not be a significant exporter from now on. we have a positive view on alumina while goldman sachs says the market is too optimistic about the rest of supply. ceo ofnaming this man as another victory for elliott management and push for radical overhaul. the former merrill lynch banker will succeed someone posted last week for resisting -- ousted last week for resisting change.

it undermines the top telecom italia shareholder. turning to the week ahead it is a holiday shortened week. the tail end of earnings season as well, corporate reports, fresh eco-data and direction of oil prices after last week, likely to dominate the trading headlines. su keenan has the latest. black friday is what we are looking ahead to as well as thanksgiving business. the big shopping day after thanksgiving will be a major event, kicking off the start of the holiday shopping season. followednd of the week by the internet sales. what we are really looking at once again is the stock market direction, oil direction, and that comes off one of the brutal weeks of the month, yet another down week for stocks. take a look if you will at the bloomberg gtv.

you can find stocks and charts. what you are seeing is bond bulls and dollar bulls in decent position, adding to their positions. we saw yield, after, come down off the seven-year high we saw last month. that was a big change. if we go into the stocks in the spotlight, this is the end of for earnings.son it is also the end of the season where retail is in focus as the black friday coming on. brand, under a l lot of pressure, all in focus this week. you notice stocks are down. that was the friday close for all of these people have another panel of stocks that shows some of the other companies gear into it, jd.com, gap, but there are tech stocks of interest.

that also is something that will likely guide the market. we should note typically the holiday shortened week's we see a lower volume. that could add to volatility. that is what many market strategists are saying you can count on this week. haidi: what about volatility for oil? we saw the energy sector trying to boost the broader market with oil prices rebounding. su: we saw those oil stocks get hit heavily. a bit.d come back you can really see the dramatic lunch. there were so many factors we talked about their one of the catalysts was the iran sanctions which we thought would either raise or reduce the price of oil, and the waivers came in and sucker punched many of the bulls . if you take a look at what we have done the last month alone, 76 dollars,high of

and then we fell to $56 is the worst of this. a real question hanging on the market as you are serving to see the entire energy sector really ride, in to the wild natural gas. going into the bloomberg, the an old treeas between oil futures which was driving natural gas, which was falling that got caught here. had to unwind. another is the spread between the leader dated contracts in natural gas. that was another one that got blown out. many say there is carnage among hedge funds yet to be revealed but clearly a lot of losses took place. shery: we are confused to see with natural gas last week. thank you so much for that, the latest on the market moves in the u.s. one stock i am keeping an eye on this week will be facebook.

we know after all of the scandals surrounding their actions since the russian 2016, weincident in saw mark zuckerberg losing so much from his net worth. rich go is the function. you can see recently he trailed only jeff bezos and bill gates, sixthw is -- he is in place. he is still worth of $55 billion, so not too bad but something to note as he has lost $30 billion from his -- facebook's peak july 25. haidi: we try to have sympathy, only the sixth richest person. it certainly seems like mark zuckerberg and facebook cannot catch a break. you have a group of democratic senators demanding an answer

about allegations made in that new york times report last week. that is a must it for daybreak australia -- almost it for daybreak australia. we will have more on daybreak asia. this is bloomberg. ♪ mberg. ♪

haidi: good morning. i am haidi -- shery: i'm shery ahn. welcome to daybreak asia. stories, the apex wraps up, the u.s. and china barbed comments. no communicate -- communique. russell says the u.k. transition could be extended. the u.s. prepares for reports of the jama