>> welcome to "bloomberg daybreak: australia." >> we're counting down to the major asia market open. haidi: these are the top stories we are covering in the next hour. sterling strengthens as theresa may strikes of brexit deal but critics are not happy. loweran market traders and quiet thanks giving trading. oil resuming its decline in saudi production -- as saudi production it's a record.

an altar of -- and altering about the power. >> we have a quiet day as the thinks giving holiday is in the u.s. and folks will be pressing for their black friday sales as well. if you take a look at the session in asia, we are bracing. we have stocks in new zealand adding about a 10th of a percent while futures are pointing lower. we have little on the data docket to drive sentiment other than inflation figures. and factory output from taiwan. japan is closed for its labor thinks giving holiday staying in it tight trading range. we will not get reaction to the latest developments around nissan. although the sun shares are gaining ground in germany. we do have the pound very much

in focus. this has theresa may has overcome one major hurdle for her brexit plans for the pound. having its best session in three weeks. jumping on the eu principle to the draft deal. it does remain to be seen if tore will be a smooth path brexit. the deal has to be signed this sunday and may well send it down a parliamentary vote. it looks like it will be a skeptical vote to be had. but by nosis averted, means smooth sailing from here. let's get you to first word news with tom mackenzie. as sophie was saying, sterling rose as theresa may's deal in brussels. critics are not happy. several eu nations were led to believe the accord was still a draft discussed at the summit this weekend.

condemned it as a sellout with keeping feet u.k. in the eu with no influence. how to bringscuss this process to a conclusion in the interest of all of our people. the british people want this to be settled. they want a good deal that sets us on course for brighter future. grasp.al is within our tom: the european central bank says uncertainty over italy's budget threatens to damage national economy. a chief grasp. economist said italy's current financial conditions are too tight for a country with weak growth and low inflation. 3.5%, farremain near higher than the start of the year. president trump says he closed the border with mexico and authorized the use for lethal force against central american migrants.

he said the military can open fire if necessary claiming without evidence, hundreds of criminals are within the people trying to enter the u.s.. the president added he is prepared to shut down the whole border which would shut off the shipment of mexican goods. a bushfire emergency is being declared in new south wales. strong wind whip up flames. they are working to contain the blaze on three fronts. 170 kilometers north of sydney. they are being backed up by aircrafts including a boeing 737. strong wind will likely continue all day. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. mackenzie. this is bloomberg. todi: nissan ceo is trying reassure investors

after the board voted unanimously to dismiss the chairman. correspondent joins us from tokyo with the latest development. you were where this took place. we are hearing of split opinions but in the end it was unanimous. steve: it was unanimous. that was probably the most surprising. we are expecting, given the actions and numbers favoring the removeget his motion to carlos as chairman, that was pretty much a foregone conclusion. he had a majority, but it ended up being a unanimous decision. seven board members were present and voted to have him ousted as chairman. he is not ousted from the board. that has to be done by shell folders, but he has been removed as chairman as well as kelly as

representative director which is a powerful decision on the board -- shareholders, and he has been removed as chairman as well as kelly as representative director which is a powerful decision on the board. is very the alliance important but an era is over. 20 some years at nissan with carlos ghosn who revived the company from the brink of bankruptcy, and one fund manager , butkyo said it was a coup again, the ghosn era is over. everyone is looking forward. sophie: steve, he is gone and there is speculation that the improveeo may seek to nissan's bargaining position. renault was sidelined and when it comes to these fast developments.

what could be his strategy for now? steve: right now, they're not naming it -- and interim chairman. there was speculation that the ceo would take over as chairman, but that would smack hypocrisy especially after monday where he said too much power was concentrated into one individual being carlos ghosn. the board last night, which convened into the evening, decided not to name an interim chairman. that will be decided by three independent board directors later ron at some point. right now, it -- later on at some point. right now, we have the french government weighing and and the japanese government -- weighing in and the japanese government weighing in. the japanese government has assured the french it has no

intention of trying to unwind the alliance of the french government -- alliance. the french government also said they did not see this action of ghosn as an act to destabilize the alliance. that was one of the main points of speculation that the ceo did this coup to unwind and the efforts at carlos ghosn was trying to do to make a merger between renault and nissan more final. the french government, which owns a 50% stake in the known -- renault, think this was more on a legal basis than destabilizing the alliance. nissan wants a more equitable order ship with its french partner. haidi: more of a bargaining chip at the table. of the alliance but this changes the balance of power we have. steve: the balance of power

still is in the hands of the french because the french government has a very significant 15% stake in renault and renault has a 43 -- 43% stake in nissan with voting rights. nissan has a 50% nonvoting stake in renault. the ceo has increasingly pointed unfavorable to nissan and perhaps that is where the risk started growing between him and carlos ghosn as ghosn started to cement the 20 years he worked to put this alliance together by merging renault and nissan. the ceo did not want a merger. they will all say the alliance is the right way to go for the french and renault, it is the right way to go. that is a big question.

haidi: a very eventful few days of japan. opposition moves to make clean energy a critical issue. mayie: up next, theresa says britain is leaving the eu in march with or without a deal. we asked what happens if lawmakers reject her plan. coming up on

. sophie: heidi is that black inside of the studio right now. sodi: it is friday though, it has been an eventful week. at the least of which which has been going on on the other side of the pond.

the eu and u.k. have been busy. they agreed in principle to the and a draft that hans theresa may some key political win. we have the details from brussels. >> theresa may finally has her brexit deal. the european commission and u.k. government have agreed in principle to a relationship between the two sides that would be a trade area that has cooperation. the european union talks about financial services and their bond will continue to be strong into the future. there are some concessions you could argue that could help may get a vote said parliament. they have to do with the backstop as a separation between northern ireland, ireland, and the ireland -- i received -- ir

ish sea. there is also a line on migration which theresa may could argue about taking back control of the borders and free movement of people as part of brexit. the big question mark is, leaders are expected to sign off on it and when that takes place, it will be to the u.k. parliament to see if they conceal it to be approved and we will see brexit take place. the big question is if theresa may has the numbers to do this. if it does not get through, it is a nightmare scenario. sophie: back to the markets as we wrap up a holiday week of trading. investment chief market strategist, evan lucas. it is a quiet day. not much direction given japan and the u.s. are off lines for

the holiday. meant --st event events around brexit saw the pound jump. how are you assessing this development? will we see more certainty ahead when it comes to progress on brexit? evan: i don't know about certainty. the way we have been looking at this in terms of positioning, it's critical to how brexit plays out. the pound is the way to look at what is going on here. it is too hard to look at the equity side. we are biased toward a long pound play, either against the euro or dollar, all the way through to win the election vote in parliament. we have not got a specific date announced, but it is believed to be between the 10th and 15th of december.

sort of walk away and wait to see. we expect to see these kinds of deals happening, particularly with the european union vote. what happens in the u k parliament and commons is that she has such a small window ability to get this through. her,ad letters but against people threatening to walk away, so she will need to find between as much as four and 19 votes to get this through. that means she will have to labor the greens or whoever else. yesterday was a positive step for her and it is a long way to go. the comments is the big unknown. -- commons is the big unknown. sophie: morgan stanley is the latest to expect a more dovish past -- path for the fed. i want to share the chart on the terminal here with you showing you some backdrop around this changing dynamic.

in emerging-market currencies are looking less sensitive to u.s. stocks. recents weakened over months. we see more speculation that the fed will turn more dovish. kind of trajectory are you forecasting for the fed and what that might mean for emerging market access -- assets? evan: that is a great question. we also look at it is that the msi emerging index against the .ussie with back to the question the fed, although the market, and there is more talk around the fact that the current market market --appening is market pullback is happening. we have had 100 basis points in the last 12 months and we are expected to see at least four if you go i what the fed is telling you. that is a base case. the dot plot is what you need to

look at. if that moves down and you are eluting to and what the market is expecting, yes, you can play that out. particularlyeen somebody like jay powell continues to talk around dollar dependency and the idea that the overall u.s. economy is strong and monetary policy is still technically just in accommodating territory. i don't think you could call that yet. we will see december. next year is different because they changed the rules that every month is a press conference. a used to be on the quarters so it will not be as easy as that. i think we are little more bullish on the idea or hawkish on the idea that they will continue to forecast three rate rises in 2019 and go ahead on december as well. that is why we think the u.s. will see a lower level of growth, a tightening of monetary policy, and that means there more level on total

returns. as we move dow toward the lower cycle -- on the s&p 500 and dow as we move toward the lower cycle. haidi: i want to look at the period of trading until we went off into the thanksgiving holiday. selling has not changed despite the tentative rebound. thewe seeing a market where u.s. is pricing in the things getting worse on the trade front come january? evan: i think we are. we are repricing -- there has been a bit of an over hayes. the growth we saw -- over haze. is gone.h we saw 2018 is a moderation of that. you see a little more deceleration and a risk pricing. , i don't expect to see -- there are those big

[indiscernible] you're going to see a slowing. the market is finally repricing what this time next year looks like, which is, there will be lower growth, rates come back to a more manageable level so there is a little bit of downside. on a total return basis, still probably likely to see single-digit returns next year. don't expect to see a massive fallout or someone forecasting a giant bail market. haidi: i always appreciate your time, evan lucas their joining us. happy friday and have a great weekend. that's latesto electric vehicle will drive how we think. we speak to the boss of human horizons next, coming up on --

next. this is bloomberg. omberg.

sophie: client sophie in hong kong. indi: and i am haidi sydney. to targeta plan 60,000 unit sales by 2021. went onrizons negotiations with elon musk over tesla's plans for a chinese factory. he told tom mackenzie more about the company's ambitions. >> the first car we will 2020 twolaunch by 2021. -- to 2021. tom: how many units are you aiming to be rolling out at that stage? >> probably the first couple 20,000 to 50,000.

will be also on the market. tom: this is the premium segment of the market? >> we will go to premium market we will onlater on, the whole ridge of segmentations. tom: where does your funding come from? >> private and organization support. supporting us. tom: do have a fund-raising target? >> [indiscernible] before the first car launch. after the first car launch, probably we need to have another [indiscernible] tom: what you hoping to achieve with his company? human andion is for

human intelligence. then we get to smart cars, smart cities, smart transportation. we treat the car as a data collector and also combine information on the car. tom: critics would be pointing out maybe there is a risk of overstretching yourself with your focus not just on the vehicle and cars, you're focused on the roads, smart cities, that is a hugely ambitious vision and you risk losing focus. >> from the conventional point of view, you are looking for three areas. view, thisnt of world now is very dynamic.

solution very holistic otherwise your business will be like [indiscernible] sophie: those the human horizons founder speaking exclusively to tom mackenzie. a quick check of the latest business flash headlines. >> tencent might be able to take encouragements from a sign that it is finally -- sign that the pendulum is finally swinging their way. they moved above their 50 day average from the first time since june. that was better than expected. investors will be watching closely when hong kong opens later. haidi: the dolce & gabbana drama has seen thousands of its products pulled from china's biggest retail website, called from a boycott. the marketing sale is a big blow for them.

they spent about a third of the global total on luxury items last year. sophie: the upcoming ipo of softbank's mobile unit is .apping the plan is to make it easier for investors to buy individual shares rather than have to take the usual minimum block of 100. next, the chairman gives us his view with the eu and how the risk could affect markets. a lot to contend with with the was in europe. a lot of what is happening on the brexit front. this is bloomberg. ♪

it is 9:30 a.m. here in sydney. markets opened in just 30 minutes time, not much of a lead to grow from. u.s. markets are closed for the thanksgiving holiday, markets in decline -- when sidney begins trading. beautiful day, albeit a bit windy. i'm heidi. i'm sophie. it has been a quiet trading week indeed. quite a bit to digest when it comes those the last couple of weeks of the year. first word news with tom mackenzie. -- have reiterated their

support for the alliance despite the firing of -- strong backing for what they call a winning cooperation, and that was later backed by the ceo, hiroto. haso dismiss renault, which appointed an interim leader to do the same. china has rejected u.s. accusations that it has done about the theft of intellectual technology. officials dismissed the claim as unwarranted, and claimed the trump administration is, quote, wrecking relations. saudi crown prince mohammed bin salman has begun a tour of arab neighbors, his first foreign trip since the murder of journalist jamal khashoggi. some see the tour as designed to

show he is not a pariah, despite being linked to the killings. plans to attempt the g20 in buenos aires, and president trump has said they plan to meet there. the leaning tower of pisa is not leaning so much. tower has beenhe straightened further and is in better structural help than expected -- better structural health than expected. it had been closed for tower han straightened further 10 years, on fear that it would collapse. hundreds of tons of lead counterweights to pull the building up. global news, 24 hours a day on air and on tictoc on twitter. powered by more than 2700 journalists and analysts in more than 120 countries. i'm tom mackenzie, this is bloomberg. set up for the final trading day of the week, it is looking quiet on the trading front. docket, data on the inflation figures from malaysia

and singapore and factory outputs from taiwan. japan and india are closed, no lead from the u.s.. have futures pointing lower in sydney, so we could have aussie shares resuming the climb. sophie: -- heidi: let's take a look at what we are watching, adam haigh is here in sydney. the pound moved significantly overnight. it is one hurdle down, but not exactly smooth sailing ahead. stillhink the market is divided. you get the short-term rallies when you get increments of positive news. this is clearly an incremental positive in the overall story. heidi: we just hear that it is untradable. we have a great chart here that shows you the volatility we

are expecting on a forward rate for the pound. very high. people expect this to be a very volatile market. peoplere still plenty of expecting the short-term rally we've seen in the last 12 hours or so to continue. , talkingfor example about further increase in the pound from here. of the deal,chance overarching lee, gives him a moresh standpoint, and chance that you see dissenting parliament,ritish moving in favor of may's position. people wanting to keep short hedges on, that you still get a -- will it be the first or second week in december, are we going to have to push that normal u.k.ion period in

parliament back and will it not get done until the end of december? that go on for many more weeks until we get an understanding of what the next steps will be. it is still a volatile trade, pound sterling. turning to china, we have seen growth slowing, the yuan rate in --the lowest why do we hear the sound of money rushing out? adam: in a sense, one of the surprising things about the fact that you've had a deceleration in the chinese economy, as you said, currency trading at its weakest in more than a decade, but that hasn't been met by the extreme levels of capital outflows which is what you've seen during times of stress and 20 15 and 2016. this chart shows it pretty clearly, one thing we keep on watching, how much of that money is starting to flow out.

if you look back to those red bars in 2015, when we had real capital outflows, where we are now, sure it is a little bit about the 2017 and 2018 level average, but it is not extreme, some of is because the capital outflow restrictions that authorities have put in place, in some corners of the market, it is giving people confidence in the authorities for managing this bout of turmoil with a greater degree of success than they have been able to during past periods of turmoil. people will continue to want to watch the level of the offshore yuan-dollar going to the end of the year, at the end of a lot of tariffs to come in on january 1. someurse, if we do get kind of positive sentiment coming out of thexi-trump meetings at the end of next week, there is some upside for

that you one to strengthen -- for the yan to strengthen. >> don't forget, you can check out our gtp library as always, g tv on your bloomberg terminal. italy's standoff with the eu may slow down the italian economy and raise the risk of an economy crunch. how he sees the entire situation unfolding. how it will be, we will see. points spreadness is increasing the cost for taxpayers, increasing the cost for companies, that need to issue bonds, increasing the cost for banks, which also have to raise funds in the markets so, my fear is like in 2011, the

rise in the spread will it lead a credit crunch and accelerated slowdown in the economy. >> are you worried that an italian/eu standoff would impact the ecb's ability to exit? >> i think it is too late, frankly. in any case, the ecb has to divide its policy based on the performance of the whole area, so it cannot change its policy for just one country. beenxpectation of -- has there for some time, hasn't really affected the other interest rates. so i don't think they can change policy at this stage. >> up next, a serious climate change disaster. labor leader bill schwartz moves

the labor policy -- ahead of next week's election, that and the wider economic picture. ♪

sophie: you are watching daybreak australia. australian opposition leader has lashed 7 billion u.s. dollars in extra funding for the in energy and deeper cuts in carbon emissions if he wins next year's election. he spoke at a bloomberg finance event in sydney, determined to turn the climate change disaster into a key change for voters. >> our home has already lost too much time to toxic politics, government liberal infighting and acts of personal revenge dressed up as policy disputes. there is not another month, not

another minute to waste. our nation simply needs to get moving on the question of energy and climate. sophie: for more, we are joined by james thornhill. not another minute to waste, what is the significance of the labor leader's announcement? >> we can say he's trying to put clean air between himself and the government, if you'll forgive the cliche. you could arguably say that australia has lost three prime minister's in the last -- was forced to step down, mainly because of her aborted effort to bring in a carbon -- and malcolm turnbull was forced to abandon his plan for a national energy guarantee and lost his job anyway with an internal party coup. ist this tries to do

reintroduced the national energy enshrining carbon and commission reduction targets into a broader plan for more stability. the question is whether they can actually get that energy guarantee through, because if they have a majority and the other half dozen, it is possible that the other half may block it. blocking this plan, there is still a lot of uncertainty whether anything can get through parliament. energy toward projects and enhancing -- if nothing else, this is probably the boldest statement we've had on climate change, in an effort to tackle climate change in australia. heidi: what has been the response? >> predictably, they have not been supportive. they called it a breaking ball.

>> to quote miley cyrus. >> and from a national interest point of view, why would you go past the paris climate target, which is a minimum 26% target, when you don't have to and other countries are doing it, and there is an economic cost. that of course does not take into account that the new generation -- cause and effect in the long run. but his point is if you don't manage the energy transition with a wider base load of transition capacity, which they believe comes through fossil fuels, you risk destabilizing the grid and causing energy blackouts and shortages in labor. the government calling the energy policy from labor a wrecking ball, but they hope to make it a key issue for voters. will this boost their election prospects? >> that is a good question.

the polls give you a mixed message. most of them show that australians have a natural love of the open environment, and polls consistently show that australians want their government to take a more proactive role in pro-environmental policies. that said, there was a poll this week that showed the majority, 47% -- to get power bills down. and greater environmental policy comes at the expense of higher bills. will the voters back that? ishink what it boils down to effective communication. more can align his pro-climate change policies with a narrative that says he isn't going to raise power bills, he might have a winner, especially considering the power vacuum

with the government. mentioned, a breaking ball is how the australian energy commissioner attack the proposal, calling it doubt, on theno economic side of things, relying on this track record of 26 years without a recession. we are looking at some of the other issues, pressuring the australian economy at the moment. slowdown, concerns over the trade war on its biggest trading partner. one notable voice says australia's economy will continue to exceed expectations. andrew, it is great to have you. i want to look at this chart, because i think it beautifully has playedluck that a big part in australia's economic success in the past 20 years or so, riding on the dragon's back.

it has really trailed the import demand from chinese economy. we know that is coming under pressure because of the trade war and structural slowdown in china anyway. i always think of the donnell how -- te, about inspired by political turmoil. do you think a change in government will make any difference in the economic outlook? uncertain, too early to be definitive. but the point we've been making is that it is actually quite feasible that a change to a labor government, and again, it is uncertain, we don't have the full suite of policies, but we think it is quite feasible that the suite of policies we end up with serve to amplify australia's economic upswing, rather than -- because of the additional demand that it could bring forward and

the additional public pressure that it could bring to wages. the thing we've kind of in highlighting, looking at labor policies, personal income tax related, i don't think it is well appreciated that their package is actually 70% more than thefor households governments, particularly geared toward lower income to have a higher -- to consume. policies on industrial relations , as far as the details we have so far, look like they could put upward pressure on wage growth, particularly with a push for industrywide bargaining, restoring penalty rates. the other point i would make is that changing to labor doesn't change the stimulus and the system to other major government policies for which there is bipartisan support. also, the tax release that has

been legislated -- smaller corporate as well. i wanted to go back to your point about wage growth, potentially upward pressure on wage growth. the stagnant wage pressure, or localf it, has been a phenomenon, and existential head scratcher for a lot of central banks, not just australia. think one ofd i the most encouraging things we've seen is wages rising globally. strong wage growth in the u.s., the way we model it, running in excess of 3%. in europe, we are seeing a pronounced pickup. granted, we are coming from low levels, but things are moving in the right direction, easing some of those valid concerns about the technological change, change to the global -- in australia, we are a bit farther behind in the cycle, but wages are at an inflection point, and they tend to have a

lot of statistical momentum, so we think this could continue. more broadly when we look at the australian labor market, dramatically different position to where it has been in previous years. previous years have led to week wage growth. you can see in surveys, labor utestages are about the ac they have been in years, outside of the peek at the resources boom and minimum wages rise. the unemployment rate has fallen to 5%. the -- was forecasting it, only a couple weeks ago. coming off a low base, not expecting australian wages to rise higher. good reasons to expect -- heidi: andrew, -- >> it might be that the latest policies accentuate that. heidi: was that upside risk to wage growth and inflection i had, the final piece of the

puzzle that could ostensibly rate the rba to begin the hike cycle, by november 2019, as you are forecasting. but 2018 seems to be the high water mark for australian growth, above consensus. five is the high. further, what is the trajectory you are painting for australian growth? growth willclearly, slow because we have headwinds in the housing sector intensifying. but we think it can remain above trend, well supported in a number of respects. at the end of the day, financial conditions in australia are still highly accommodating. we have the largest pipeline of public infrastructure spending, gdp paste through the 1980's to work through wages rising, income rising. and we can see businesses confident.

growth will slow, but it should be quite a manageable slowdown in growth, remaining above trend. sophie: is pointing out what is going on with housing prices, i want to turn to the terminal real quick. the second year of the downturn, when it comes to the month after the boom. we are seeing a decline despite -- home value loans, coming with credit tightening as well. do you expect credit to continue , do you see this downturn as orderlyle, or perhaps as the rba governor painted it tuesday? >> i agree with the governor's interpretation. on the credit side of things, the reality is that -- and the regulators have been doing these since the initial measure was announced in 2014, so this has

been happening for some time. and most of the adjustment he has done. there may be some more incremental headwinds to credit growth going forward, but we think it is very much at the margin, and that sees the guidance from the head of abra. as to where the economy could handle these folding prices, it is actually quite well. sydney, for example, prices have fallen continuously for 16 months, consumer sentiment is up at outperforming the national average. we agree with the rba. seems to haveect diminished since the financial crisis. some of the other things that matter more like income growth, tax cuts, sentiments are availing. we think consumption slows, but it will be a manageable slowdown. sophie: thank you so much, andrew boak.

there is more coming up ahead on daybreak australia. ♪

heidi: a quick check of the latest business flash headlines. china's struggling h and a group is said to have turned to bed -- units to raise money. talks began with h&a with extreme pressure to face down one of the most -- debt mountains in asia. $20 billion of assets this year, intending to sell 3 billion more this month. chinese food delivery company -- served up a wider than expected loss, market share against alibaba. the shortfall is seen at $12 billion in september, compared to $680 million earlier. backing, -- expanding into new areas in a

rapidly growing market. also, our colleagues in the u.s. are off for thanksgiving, and no doubt enjoying the retail frenzy that is black friday. al the way to cyber monday, beyond five day shopping extravaganza, 164 million people thected to partake, 71% of population looking to open their wallets online and in-store. we compare this a lot to singles' day, which may be having an impact on the amount of spending we are seeing for black friday. of course, people will be looking for retail therapy, looking for deals wherever they can. you have to question whether or not singles' day will ever overtake what black friday deals have to offer. u.s. retailers moving into the singles' day makes, several discounts that may look even more enticing. heidi: the point is that there

is a finite amount of results, spending money on singles' day, then a few weeks later. probably not so much on black friday and cyber monday. ♪

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>> a very good morning and happy friday from sydney. the us trillion have just opened for trade. >> in hong kong, welcome to daybreak asia. ♪ our top stories this friday. three semester rock it brexit deal