haidi: good morning. the major markets have just opened for trade. ramy: good evening. i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." haidi: our top story, caution at the head of a new trading week. may wins eu backing pre-brexit.

there is no plan b is british lawmakers reject the deal. ramy: washington and beijing say they are ready for what could he a crucial meeting and brenda windowsthis week -- aires thisuenos week. sophie, what are you seeing right now? sophie: a mixed session in asia. beginning -- kospi gaining ground. a rate hike is expected to address imbalances. set for a third day of losses with oil producers. worst weekly decline in three years. with the move higher in u.s.

futures, that could keep the decline in check. let's get a check of the yen against this backdrop. -- prettying please flat. nudging higher on the eu leaders signing off on may's brexit deal. afterg to a two-week low sales disappointed from new zealand. , aboveg on treasuries that 3% level as we are waiting on jay powell's speech this week. checking on stocks to watch in tokyo. saikawa is set to address employers today. that is to take place at 4:30

p.m. local time in japan. watch as this saga continues. let's get to first word news with tom mackenzie in beijing. closed the has street and crying -- and crimea. targeted after they attempted to move into the waterway and three of them were captured. to stopd all measures the ships from violating orders. they held an emergency cabinet feet -- cabinet meeting. italy is hinting at a possible as aomise with the eu signal in a new willingness towards the deficit target. of 2.4% has been suspended until now. they need not a set in stone. it breaks eu spending rules and

it may impose fines worth billions of euros. reports from japan says carlos --sn did not intentionally denied all accusations of wrongdoing as formal questioning began. the board of junior alliance is set monday afternoon to vote on a proposal to remove carlos ghosn as chairman. taiwan's pro-independence leader has just over a year to win back public support if she wants to avoid becoming the islands first one term president. the president of the party suffered a defeat in regional elections. including traditional strongholds. the next presidential election is in january 2020. australia's opposition party leads the most by 10 points in a

poll, adding for bill. a landslide weekend election in the state of victoria. some expected to speak to the liberals, partly a backlash. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm tom mackenzie and this is bloomberg. ready toeresa may is stake her political future. she will be launching a drive to win support ahead of a key vote in parliament, held before christmas. they warned that there will be no negotiations if this is not pass by eu lawmakers. >> it will be one of the most significant votes the parliament has held in many years.

it will depend on whether we move together to a brighter future or open the door to more division and uncertainty. >> i am inviting those to ratify this deal in the house of commons, to take this into consideration. this is the best deal possible for britain, europe, this is the only deal possible. >> the agreement must be ratified. it is time for everybody to take the responsibility. the agreement will help to create trust and confidence theed for negotiating unprecedented future. haidi: let's bring in jodi schneider. the eu sent a coordinated message. one chance at this. >> that's right. this is the deal on the table. take it or leave without a deal.

theresa maytheme will hit hard as she tries to get this through parliament in. this is all there is. she is saying it is a good deal for britain. plenty in her own party and parliament disagree, but this is the only deal and the eu says it will not send it back to be renegotiated. haidi: it looks like theresa may have a couple weeks of frantic campaigning to get this vote through before christmas. >> that's right. they want to get it through before christmas with this new march deadline. she is saying she will put her heart into this. there is a lot of skepticism about it. , thers of her own party skeptics do not like it because the eu ine u.k. to terms of trade and other things,

for way too long. want to leave, they do not like it either. there is a barrel -- a very narrow passage she has to get it through parliament. this is at least a way out that allows some certainty and will not be a chaotic exit. this, whoot take knows what happens? there is the issue about her future. she is not weighing whether she would step down. that is a real question as well. what happens to her political future? sidestepped that question couple times, saying it is about the future of brexit. this, if it is wrapped up, they have to get to know each other in a new, future trade agreement.

that looks to be a difficult task. >> that is right. now comes the tough part. they will have to come up with a framework for how the u.k. will work with the eu going forward in terms of economic -- economic cooperation and all agreements will need to be ratified by the remaining 27 eu nations. it will not be easy. they were trying to negotiate this deal over the weekend. there could be all kinds of things. already, the french president has made it clear that he will be tough on that trade agreement and certainly, other nations are going to follow. one part is done. getting it through parliament

will not be easy. it will have to be hammered out and it could take years. brexit.e latest about be anotherng up to down day for stocks across asia. it looks like the nikkei 225 is turning positive. we are seeing a mixed picture. chris, looking at the markets right now. andeems a little positive negative. what can we expect to see today? a bit of a muted open. futures are up a little bit. korea is up. we have seen a lot of investors in recent weeks start to worry about the end of what has in a very prolonged economic swing upwards.

also, and expansion in the stock are very edgyple about end of cycle trades kicking in. it does not seem like there is any confidence, that we have hit a bottom quite yet. we are still above where we hit in the lows in october. there are three things that investors are looking for clarity on. one, what opportunity is there for the federal reserve deposit its tightening cycle into the next year? will the u.s. and china reach some sort of trade agreement or a cease-fire? and when will the collapse in oil prices stop? narrativeshree key

that investors are looking for clarity on. haidi: we will get to oil in a moment. it is a make or break week. >> investors will at least be andng that president trump president xi jinping, when they meet, at least they call a cease-fire. we are weeks away from the next step up in the tariff hikes on chinese imports. some $200 billion worth on january 1, as of now. at least, investors will be looking for some sort of cease-fire as negotiations continue. be far toobably optimistic to look for any kind of real deal.

the trade and investment issues difficult complex and to see how a complete deal could be done within a day. haidi: maybe this could be more important for oil. the ministers might be traveling together to the g20. have three key players there. you have president trump, and thet vladimir putin big guns when it comes to supply, all there. we will see how that pans out. obviously, president trump would like to see continued supply from saudi arabia, particularly to oil markets. another hitting player is the investor. we have seen over the past

couple weeks, we have seen indications that investors have capitulated, but then we take another leg down. when will investors say we have cleared out the long positions and we are ready to start fresh? chris, maybe some rest bite for the oil market after g20. still ahead, a group extending the deadline for restructuring. this as singapore begins an investigation. ramy: and why this week's leading -- meeting might turn out to be a watershed moment. this is bloomberg. ♪

ramy: this is "daybreak: asia." relatively light

data calendar this week. likely to drive market expense again. in when osiris -- buenos aires. to have you. into terms of expectations for what we get out of the g20, if you look at the rigor picture come a changes that washington .as been demanding from beijing is it likely or and possible that we could see compromise? that is such a great question. no.short answer is i do not think so. i would remain quite skeptical about that relationship longer-term.

it looks like larry kudlow is back in the driver's seat, as far as getting ready for this meeting goes. there will probably be some hugs, handshakes and positive commentary on trade, but if china buys more get -- natural it from the u.s., more cars, will not change what you have rightly identified as the core issue, which is intellectual property. underneath all of that come to stop -- two superpowers confronting each other and vying for power. in the short-term, yes, there will be positive headlines and we will allow the china market to rally. we can expect lots more stories -- like thatity story. all this news reports. mark, is there a sense of the

s&p falling into correction territory? this selloff dragging on. is there a sense that people have priced in to double down in january? >> clearly, yes. fors&p has been going down about a month now. to me, it is very much about interest rates. , ratesrewind the clock went up quickly in january and the market fell in february. rates went up again in september and market fell in october of this month. be if ituestion will links or not. ishough their mandate managing unemployment and inflation, in the back of their mind, some of these officials must worry that if the s&p continues to fall come

historians will record them as the culprits. we think we could becoming closer to a pause, which would be beneficial to the market, perhaps the verbiage coming out kinder thanwill be the wordage up until now. ramy: that could give some rest bite to equities. we have seen them falling over the past few months or so. in terms of equities over to , we have been taking a look at the shanghai composite. it has been falling for much of the year, but we did the eighth like as far as some technicals. 46% or 47% of the company has traded above. only about eight. -- 8%. would get better before it gets

worse? >> no. kind of the reversal. it will get better before gets worse. we will enjoy a rally in china and it will take us into the end of the year. longer-term, the relationship with the u.s. is still a major problem because it contains -- taints the perception. it is backed by reality that this has become a more authoritarian place in the last one to two years. you could probably say the same thing about a lot of other places in the world. its stock market did well, so why can't china's? particularly in the media, it has soured. on top of that issue, it is like in the-a-mole game

carnivals. there is a new issue that pops up. there is enough for them to handle the worst case scenario if you add up all the cash deposit, the pension funds, the state owned enterprises. they have enough to handle a worst-case scenario. i cannot see really great things from that market next year. ramy: in terms of that whack-a-mole metaphor. let's a nothing really happens at the g20 meeting. what would be the next thing to look ahead to between the u.s. and china, whether positive or negative? head, i'm not my aware of any other conference to coming up after that one.

think president donald trump wants a deal. i think the president in china wants a deal as well. individuals. a lot of people around them do not. ramy: so let's make a deal if the price is right. thank you very much. you're looking ahead to this last trading week of the month. looking ahead to december. in a moment, embattled expense for restructuring. regulators in singapore probe the finances. that is next. this is bloomberg. ♪

ramy: noble group has extended the deadline for december.

trying to address regulator concerns in the investigation to its accounting practices. leave the does this reconstruction right now? >> that is a good question. waiver be long enough to satisfy all the questions that have come from regulators? they have hired technical experts to pursue some of them. it is hard to see that this will be resolved in two weeks. they might have to go until the -- we december, but it is do not know what will happen to the reconstruction. what are we expecting in terms of the procedural aspect --sian mark >> what note procedural aspect? >> there have been some

misleading statements. it is quite complex. it is operating fully with the investigation and developers will be announced as the column. it is hard to predict what will happen. the alternative, if they cannot come it is for some reason it falls down, that is something the company has been saying for some time. we just wait and see. there always is when it comes to this company. cannot catch a break. we will continue to watch that. we will have more news in the coming days and. jim has been covering noble for some time for us. internet firms showing weakness after reporting third-quarter earnings. momentum,king about

coming up as we have that recovery in tencent. take a look at trading in the rest of the session. seen a little has bit of positivity. this is bloomberg. ♪

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haidi: we are seeing more positivity when it comes to trading in tokyo, getting quite a miss with the nikkei japan preliminary manufacturing numbers. this is a preliminary number, but it did miss the marker, 51.8. the prior number was 62.9, so seeing slowing when it comes to manufacturing leading indicators. 61.8 previous month, seeing a gain of 52.9. still well in expansion territory, but perhaps we are starting to see a lapse of sentiment from the impasse of the uncertainties associated with the trade war.

ramy. ramy: taking a look at the yen, it is unchanged holding at 112 .93. let's get to first word news. prime minister theresa may is urging u.k. lawmakers to embrace her brexit plan after european union leaders finally signed off the deal. 27 other nations took less than 40 minutes to improve the agreement which will go before the house comments before christmas. -- a you officials say it is the best for all sides and there will be no renegotiation if mp's rejected the deal. >> >> before christmas >> mp's will vote on the deal. it is one of the most significant in years. we will depend -- it will depend whether we move into a brighter future or open the doors to more division and uncertainty. >> i would vote in favor of this deal because this is the best

deal for both sides. watching that united kingdom, which is [indiscernible] leave the european union [indiscernible] tom: u.s. security forces have fired tear gas at migrants attempting to breach the border fence at tijuana. up in theere caught chaos, followed by the official closure of this crossing. thousands of people in tijuana, and the city says they cannot cope. mexican authorities have echoed president trump calling this an invasion. a former head of saudi intelligence is casting doubt on the credibility of any cia report that incriminate the crown prince in the murder of jamal khashoggi. news organizations reported the

cia concluded the prince ordered the killing, although president trump doesn't agree, and the saudi king assured him the prince wasn't involved. >> i disagree with the president's assessment. it is inconsistent with intelligence i have seen. i don't have access to everything he sees. i am not sure what he is relying on. what i have seen says this was ordered by the crown prince. tom: nasa's latest probe is on track to touch down on mars later after a marathon flight of seven minutes of terror. it must decelerate from almost 20,000 kilometers an hour to just eight when it hits the top of the martian atmosphere. mission control must rely on demand programs in before it left earth. a record for asian art could be set monday with the option of a rear -- rear 1000-year-old scroll.

it shows a tree and bamboo shoots and is expected to fetch $60 million u.s. in hong kong. the scroll is one of only two known to exist by the 11th dynasty master who is often compared to leonardo da vinci. 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 tom mackenzie. this is bloomberg. haidi: let's take a look at the asian markets and how they are shaping up. seeing bright spots coming through. sophie: some way we are seeing a mixed session for asia while futures are edging higher. we are seeing gold gaining ground and treasuries steady with the 10 year yield near 3% level. checking on oil prices, we are seeing brent above $69 a barrel.

there were declines after the worst week for oil in three years. energy players are the biggest drag in tokyo and sydney with asx 200 heading for a third day of declines while japanese shares are fluctuating and the cost be adding half a percent. we count down to the boj decision with a rate hike expected. we got 50 down .3% as retail sales figures for the third quarter coming in disappointing. we have consumer staples stocks like nintendo and others rising in tokyo and seoul, perhaps an expectation holiday fueled shopping could boost sales, but rebel group is sliding 10% in sydney. forallenging christmas australia's discretionary retailers. people in tokyo want to fallingt olympus, companies that used this, they were found to be infected with

superbugs from 2012 and 2015, so this adds to the allegations of financial impropriety. also want to highlight this stock gaining ground, 6.5% in tokyo after announcing a buyback. ramy: all right. let's go to china's tech sector because the internet sector wrapped up third-quarter earnings with its slowest growth on record. has written about the challenges of alibaba, baidu and others in the latest and joins us from taipei. in a nutshell, what is going on with chinese internet stocks? they are slowing down. to get an aggregate, alibaba's tencent, they have put together and ran the numbers. third consecutive quarter of slowdowns, passing 30% year on year revenue growth which is not bad. it is nowhere near where it used

to be and is a continuation of this slowdown we are seeing in the china tech sector. that is something investors need to look out for. you point out that growth rates are strong. why are investors worried? the key issue investors need to look at is the bottom line. everyone has been caught up in the growth story always about topline, 50%, 60% for some companies. that is awesome. everybody loves it, but the need to look at the bottom line. at the end of the day, top line doesn't matter if the bottom is not growing. not only is it not growing, we are seeing a second consecutive quarter in a decline in operating profit. that is because we are seeing, even though there is somewhat followed revenue growth, operating margins are shrinking to the lowest on record, really low levels. this topline growth is coming at

the cost of profits. they are buying this topline growth, and that is hurting bottom line. that is where investors need to be looking. haidi: can we blame this on the trade war? >> i don't think we can come in on a first level, first-degree effect. these are companies that get little revenue from the u.s. they are not hardware companies, so tariffs that are not impacted directly through any kind of import tariffs or even vice versa into china. these are china domestic plays. the bigger impact is china domestic economy and the fact they are already large companies , and they are having to buy growth because of headwinds in the macroeconomic conditions of china itself. haidi: finally something we cannot blame on the trade war. thank you. more to come on daybreak asia. this is bloomberg. ♪ this is bloomberg. ♪

asia.this is daybreak i am ramy inocencio in new york. haidi: i am haidi stroud-watts. president trump and his chinese counterpart are indicating they are ready for a highly anticipated meeting at the g20 in buenos aires later. tom mackenzie joins us from beijing with a look at what to expect. what is the chinese side saying in the run-up to the talks? is there positivity? tom: there was an attempt by officials in this briefing they constructiveo be leading up to this. they say they hope the meeting between the president's goes smoothly. they say their officials were working closely with u.s. counterparts which echoes larry kudlow. they also are prepared to me to the u.s. halfway we also heard from the vice

commerce minister saying he thought the u.s. was ready to make some kind of agreement or deal, preparing to move in that direction at least. that mirrors what we heard from president trump speaking thursday. he said he thinks china wants to make a deal very badly. be mood music appears to good even if the posturing continues. whether that was mike pence's hawkish speech at the apec summit or the report on intellectual property violations as the u.s. painted and continued to drive text transfer out of the u.s. -- tech transfer and a strong response from the chinese. there is posturing but also positive mood music. likely to be top of mind for investors as this gets underway -- what is likely to be top of mind? tom: they are looking whether

there is any move to stall come a put on hold, cancel these proposed additional tariffs or ramping up from 10% to 25% on january 1, which is what the u.s. is on track to do. if you are looking at 25% tariffs on a number of goods targeted 250 billion dollars, you are looking at a reduction in gdp of 0.6%. throw onmised to tariffs across the board. that could be a cut to china's gdp of 1.2%. that is what investors are looking at israel -- moves to reduce those or put them on hold and a framework that would continue any substantive talks between the sides would be seen as positive. we heard from bnp paribas saying if you had those measures, it could be dollar negative and positive for em market assets. certainly it will come down to whether or not the chinese are prepared to put more on the table than they have or whether trump will be so concerned about

volatility he has prepared to softened his stance or a mixture. you can we get some kind of movement on the trade issue, but it is worth reminding viewers economic disputes and geopolitical disputes, security, that remains areas of attention likely to continue down the road. the question of who blinks first, outlining all of those assets are you tired it -- china --respondent time mackenzie tom mackenzie there. let's get more on the challenges facing companies doing business in china. our next guest has 30 years of experience advising multinationals, governments on china strategy. joining us is john hoffman, cofounder and principal at consultancy exceptional resources. good to have you. your deal in into

china, to what degree do you think donald trump and the white house is going to be successful in inflicting the pain it has on china to get whatever they are trying to get in terms of success? >> i would say the physician of the -- position of the american administration has been clear for a while. ingredients for some form of trade deal between the united states and the prc exists. the question is a question of and the domestic pressures on both the american and chinese president, from their point of view. ramy: what do you say is the biggest challenge facing companies trying to do business in china today? aside from the trade war, trade dispute aspects?

american companies have been active in china since the open door. most of the companies that want to be in that market are already there. they have been dealing with those challenges. it is a question of our their higher-level opportunities to enter new sectors as a first mover, or is there an opportunity to expand into other profitable businesses? that is the challenge. now is a window of opportunity to engage with the appropriate officials no matter what your business is. and we have seen several large multinational companies and several countries push ahead ladenncharted opportunity transactions in the last month. last week.

have you seen a deterioration of interests in chinese investment? i think the general mood given the geopolitical relationship between the united states and the prc, people are being cautious. i think you have to be careful of the timeframe. we are not through the process of the political and economic reset that is in process. to make a decision prematurely instead of engaging the opportunity of upside and downside i think right now to come to conclusions is not a sensible thing for companies or countries to be doing? -- doing. to what degree are you optimistic looking ahead to the summit?

what needs to happen for the ball to get going? john: we will know after they meet whether or not what we are looking at is continued confrontation and difficulties or if there is a new, durable framework both sides agree to work on related to trade. those are very different outcomes, and it will have a different effect on businesses and government perceptions. but i think we have to wait and look at that. i am a positivist, a possiblist. but i don't think we have the data to begin to guess what is

possible. confrontation or a new modest operandi are modus possible. haidi: wildly different. hopefully we will know more by the end of this week after the g20 leaders summit. don't forget our interactive tv function. you can watch live, catch up on previous interviews you might have missed out on, do a date -- deep dive into the functions we talk about and join in on the conversation and send us instant messages and questions you have for guests during the shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

haidi: this is daybreak asia. i am haidi stroud-watts. ramy: i am ramy inocencio. let's get a check of business flash headlines. a fugitive's presence at a one and be -- one mbb board meeting was erased. the current auditor general said it was done at the request of the principal secretary, the former prime minister, but it was before the report was presented to a parliamentary committee to prevent opposition using information against the government. haidi: alliance has won the

right to be the force -- first foreign company to hold in china. they will establish within a year according to a statement from the banking and insurance regulator. they will open a unit in shanghai. the president has pledged to improve market access to encourage foreign investment in china. ramy: davidson kempner was the source of and $80 million loan last month to hna unit para technology. it included specialties like trans investing and analysts say the deal is another side -- sign tech tara is struggling. they have been ditched by bank of america and goldman sachs and it cuts deep into junk by moody's. haidi: the sunday telegraph says istish airways owner preparing a bid for fly be. put the head against

richard branson, the owner of virgin atlantic, also in discussion about a takeover. fly be confirmed earlier it is in talks with several parties because it is facing stress from rising oil prices. the future of taiwan's first female leader is in doubt after voters dealt her party a steep loss in local elections over the weekend. the pro-independent lost several cities to the party which promotes improving ties to china. let's look at this with our analyst. this is a stunning blow for the president. could she go down as the first one term president? that is a possibility. the blue wave may not have swept across the united states, but it certainly hit taiwan over the weekend. thisuling party, led by woman, was expected to lose one

or two cities it had controlled, but the extent of this loss swept past anyone's expectations. these were local elections, mayors and county magistrates in the various regions around taiwan, but the party was never expected to lose its traditional strongholds like this county and not the southern port city which went to a candidate for the first time in 20 years. most analysts point to a number of things. she appears to have alienated people on both sides of the political spectrum through a series of bungled reforms and poor communication. reform pensions for civil servants, police and the military some of these are people that traditionally support her party, were very unpopular among the opposition,

but she didn't help herself either for example by failing to follow through on things like same-sex marriage, legalizing it, and flip-flopping on labor reforms. does this mean the voters than want closer ties with china? are local elections, so they have little to do with national policy or international policy. these are usually fought on local issues, things like big topics in this election were air pollution. they were wages and things like this. people have stressed this was not an election fought on china policy. the big challenge for the president now is there are 14 months to go before she stands for reelection in january 2020,

and this election has done nothing but re-energize the opposition guarantee that she swept from power comprehensively two years ago. can she do to turn things around? what are the topics that could be pressuring her? she has to reach out to her own base and re-energize those people, young people and progressives. a couple of people have suggested she try to push harder even with reforms, the election on saturday there was a number of referendums including same-sex marriage that was comprehensively voted down by the electorate. one thing suggested what she should push harder on reforms like same-sex marriage to reach out to her base and re-energize young people. our taipei bureau chief,

thank you very much. before we hand it over to bloomberg markets asia, let's look at how markets are trading. you can see a mixed richer. the nikkei is up .25% after we got a preliminary reading on pmi that missed, but it was only preliminary. the kospi is up. the asx 200 following the lead from u.s. markets, down .4%. the u.s. markets definitely were in the doldrums on friday. haidi: the worst thanksgiving weak performance that have seen since 1939. taking a look at futures now. that is it for daybreak asia. this is bloomberg. this is bloomberg. ♪ loomberg. ♪

>> in hong kong, welcome to bloomberg markets china open. >> caution is the word at the start of a new week. stocks have opened mixed. futures indicate a lower open in hong kong. >> washington and beijing say they are ready for what could be a crucial meeting this week. >> theresa may winning eu backing for brexit. lawmakersif british reject the deal.

brexit drama rolling on. we have traded toward the end of the week here. beijing says washington wants to deal, washington says china wants to do a deal. >> midweek we have the fed minutes. several speakers. hopefully clarida. powell obviously. >> i like that. clarity from clarida. and mixed picture when it comes to equities here today. we will be focusing on the political situation in hong kong. resounding defeat from the dpp. more trouble from the president of taiwan leading up to national elections. taiwanese stocks seeing an upside. 0.3% higher. singapore slightly higher. malaysia seeing downside. we will talk about that in a little bit later.

your nikkei back from holiday slightly higher. when it came to the big week when it comes to the fed, g20 as well -- but your treasury market pricing in, or should i say pricing out the possibility we could be seeing fed hikes in 2019. take a look at your u.s. 10 year. the lowest we have seen since september. really far from the peaks. earlier this year. that curve still flat. we are holding around 42 basis point at the moment. it has been that story about oil as well. take a look. the worst weekly drop we have seen in three years last week. we have seen brent below $60. wti below $50. as we count down to the opec meeting him across the vienna, doubting the fact saudi's can

cut production. we have president trump tweeting -- it will be interesting to see how this g20 meeting shakes up as well. you are going to have mohammad bin salman as well as vladimir putin there. potential we could see sideline talks between the saudi's as well as the russians. crashrings us back to the back in 2015 were oil fell below $30. certainly some concerns. hang seng futures are following the downtrend, down by 31 points at the moment. for those of you expecting a breakout to the upside when it comes to chinese stocks, we certainly saw a floor a couple weeks ago. friday seems to indicate things were heading the other direction once again. the shanghai composite had the biggest fall in more than a month. a little bit of upside in futures.

>> let's have a look at these investors as they stared down a turning point for markets. jay powell speaking in new york. officials are dovish of late. a rate hike is still expected. >> the big event of the week in , between the two andidents, president xi president trump on the sidelines of the g20 at the end of this week friday in argentina. both sides will be able to show willingness to sit down and negotiate, hold off further escalation on tariffs. here?t are we looking at what free was going to be the most important thing?

>> we still do not really know what the blueprint for brexit is from the may administration. we have to look at known uncertainties. >> let's look to the end of the week. trumpe looking at this xi- meeting. do you think there is too much emphasis on this? politicalay be more --as another venue for that for each president to shine to their voter base. we get the feeling the current cold faced interactions on the tariffs and so forth, even if they continue, trump to some indirect.mostly a playbook from the chinese. part of the contention that trump really can't go head-to-head with is the

subsidies domestically within the chinese economy for private corporations that effectively one them an advantage pricing and production going to markets. we still have not seen the trillion dollar infrastructure plan. we have not seen tax reform. there are opportunities for him here if there is a long ahead ahead in thech cold faced tariffs. connections will be focused on the supply side in the u.s. to counter it. >> is that going to be bad news judging by how the foreign tax cuts 1.0 played out this year? along with the fed, obviously. how bad is that going to shape up? >> you touched on a very important point of the whole ecosystem. that is monetary policy and central banks. just to the point about sending

more dovish, i think they are trying to be on the hawkish side. they really don't want to raise rates. i do not think we will see an acceleration of policy purely because you were excited to hear central banks come out last aekend comment we may see 1970's-style interest rate spike , which communication tools have a big impact on the psychology of future investment decisions. capital forw impact spending. there is a really organic mix going on at the moment and coming right up as the potential government shutdown, spending for the war, let's say. that is part of the infrastructure side of things. fed doesn't want to be seen

as checking up rates at this point. >> is that the reason you think markets have been pricing out? >> there is also comments, you have the head of bridgewater, the big hedge fund -- he made a fairly staggering comment. the fed will now start focusing on asset classes as opposed to -- that is literally hijacking their communications. that is really what they are mandated to do, what their core should be. going to be some influences in relation to what asset prices are, but only internal operations. i think it is the communication tool that has proven time and moreagain that has much than physical action. we saw that for the bank of japan. the markets went haywire. they realized how strong their communication tool is.

to be orchestrated rollout of information to the market, which is quite jittery. we are in that slowdown period where there is less trading velocity, which means there's going to be greater volatility. combined, wengs are in a really interesting period. >> we heard from clarida speaking to your point. parry stays with us from investment group parry global. >> reports from japan say prosecutors have learned he did the formeronally -- chairman denied all accusations of wrongdoing as will questioning began. a junior alliance partner at mitsubishi motors will meet on a

proposal to remove him as chairman. taiwan's pro-independence leader has just over a year to win back public support if she wants to avoid becoming the island's first one term president. the progressive party suffered a elections.egional seven cities and counties including traditional strongholds. the next presidential election is in january, 2020. >> as a leader of the ruling party, i am taking full responsibility for the results of the election. from now on i am resigning from the head of the democratic progressive party. andid not work hard enough let our supporters down. >> saudi aramco says it remains committed to an ipo. really question is the timing. speaking to bloomberg, the ceo also acquiring

another company and to cannot happen at the same time. the listing has been essential to saudi arabia's attempt to diversify its economy. the ipo is still seen as happening next year. >> these two cannot go concurrently. you cannot risk one. the acquisition makes a lot of sense for us and we need to do it right now. >> italy is hinting at a possible copper mines with the signals aeo salvini willingness to alter the deficit tax. the goal of 2.6% has been defended until now. solving he told reporters it -- salvini told supporters it need not be set in stone. global news 24 hours a day on

air and on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am paul allen, this is bloomberg. >> still going to be discussing may's brexit hard-sell. a deal with the eu signals what is happening with italy. the deficit target. >> plus a fearful market awaits the outcome of the g20. a possibility of relief from a roller coaster that is this year. this is bloomberg. ♪

>> before christmas, mp's will vote on this deal. it will be one of the most significant votes parliament has held for many years. on it will depend whether we

move forward into a brighter future or open the door to get more division and uncertainty. >> inviting those who have to rectify this deal in the house of commons to take this into consideration. this is the best deal possible for britain. it is the best deal possible for europe. .his is the only deal possible >> the agreement must now be ratified. it is time for everybody to take , to take theies trust and confidence needed for our unprecedented future relationship. >> u.k. prime minister theresa may, european commission president jean-claude juncker, michel barnier speaking all in brussels. theresa may has taken her political future on driving this through the house of commons, having been told there can be no

renegotiation. catherine, what are the challenges ahead? it is a tough one. a hard sale in the house of commons. >> it certainly is. theresa may is embracing ahead on. she said today at a press conference that she looks forward to taking this brexit campaign to the house of commons. she said she has achieved everything for the u.k. she can, about 70% or 80% of what they hoped to get. she is ready for the battle. she knows she's going to have one. from the eu side, it was not just john claude juncker and michel barnier speaking. many leaders spoke including the prime minister of the netherlands saying if there was anything better, theresa may would have gotten, she would .ave done so

even so we have to listen to jean-claude juncker. this is the only deal. if there is a no vote, people will be instantly disappointed. angela merkel saying she was sad about the brexit divorce. theresa may said, actually, i am not sad. she did not answer questions from reporters about what happens at the deal does not pass. will you step down, for example. this is a strong possibility to the extent that we know the conservatives in her own party, the eurosceptics, already feel this is not the right deal because it keeps the eu potentially under the u.k.'s orbit. they are ready to check it out right away -- chuck it out right away. >> a few weeks of negotiations according to the prime minister. kathleen, thank you. gavin harry still with us. -- parry still with us.

are we closer to a revolution? -- a resolution? >> there are a lot of headwinds ahead, a lot of uncertainties. given the antics of spain, they have scuttled this. how internal to the eu -- there is still a lot to get to any perfect unity. it is probably more about the economics. the eu is dealing with two things at the moment. the situation with italy, which is an issue, that it is still a crisis there. --le brussels needs to take the situation in france, they need to use a feather duster. within the eu there is a lot of difference in policy. purely because of the politics.

that also brings into contention how the ecb can act. that is more important to us. gavin, this is wonderful. within this brexit deal, this is article six. all member states shall be read as including the united kingdom. but does not sound like you have left the eu. on top of that, no representation in parliament. no judges in the ecj. tois a very difficult sell both remainders who would like to be fully engaged and of course brexiteers who are saying, hang on, this is not actually a departure. we're going to pay the price for this. it is a halfway house. it does not please anyone ultimately. >> i think you are right. u.k..y needs the it is's largest market. i assume having wording of the

united kingdom is part of that eu is helping ensure the trade flows continue. also is onehe u.k. of the largest economies within their times of. -- timezone. from what the prior comments were, they may have negotiated for financial access. from a political point of view, maybe it is putting a definition their of some kind that germany can access the u.k. car market. i do not know how that comes out. it is really to economical side of this playing out. that shows in negotiations. don't have ations vote in the city of london, a u.k. citizen does -- most of the conversation at the politician level has been corporate's, corporate's, corporate's. you think italy is going to push the ecb not to do anything?

it is priced out all the way to 2020, the first rate hike. >> this is why cable for us particularly, but also euro, is the trade for us. they have had the pleasure of access to a weaker currency being part of that dysfunctional -- >> that has helped them expert -- export. there is no way in and economic situation where they currently are -- they still have the pleasure of that over the decades. now they are paying the price of being joined to a group that does not need interest-rate increases, but they typically do. there are these trade-offs coming on. thesituation really has largest debt market in europe as well. string asthat little

well, we cannot let our bond markets fall over. this got into open to such a degree that it makes it harder for brussels. they're going to have to use different methods of people. >> always a pleasure. parry group.from ahead, look at the trials and tribulations as we look ahead to the start of the first trading day of the week in china.

>> this is bloomberg markets. with a fugitive malaysian erased ear -- financer from a report on the troubled fund in 2016. request of at the the principal secretary to the former prime minister.

it happened before the report was presented to parliamentary prevent the -- opposition from using that against the then government. one the bid to be the first for a company to launch -- in china. the company will be able to establish the operation within the year. >> the source of an $18 million loan last month. the deal may be another sign they are still struggling. hna's tech outsourcing arm has already been -- by bank of america and goldman sachs. deep into junk status.

>> we are counting down to the open of the markets in london -- a mike redmond land china. -- in mainland china. upsidetures still seeing -- theyat was a pretty on friday. the worst slump have seen in a the u.s. iscerns pressuring when it comes to technology. we could see rebound here today. your offshore rmb came in a few weeks ago -- in line with estimates. reflecting dollar strength we saw on friday with that oil prices slump. take a look at oil majors in china today. .own about 1.4% petrochina down 1% at the moment. before i go i will look at hong kong bank stocks as well. morgan stanley saying 2019, get ready for that recovery.

start buying these battered stocks. concerns of slower growth in hong kong could be offset by what we could see next year, which is basically low valuations. hang seng bank up slightly higher. this is bloomberg. ♪ ♪

>> right here in part of hong kong, we are counting down to the start of a trading across china. looking at the mixed picture for asian stocks. a lot to digest. we have a hard sell for theresa may as she brings back a deal from the eu. will it be enough to satisfy lawmakers in parliament? italy's accommodation for brussels. we are looking ahead to trade with trump and xi on the sidelines of that conference in but a series. buenos does a race --

aires. >> a 31% drop in oil. oil at $50. that theut with a note output for the property market will be stable for 2019. we have the open. >> all signs pointing to upside here today when it comes to hong kong. the hang seng up 0.6%. we broke above that 26,000 level which has been resistant. we will see if we stay at these levels throughout the session. a-shares up 0.6%. a-shares flappy up in here after that 2% plunge we saw on friday on concerns of trade. most of asia in fact is turning slightly positive here. you have the likes of the nikkei turning positive the last couple minutes with the exception of australia as well as malaysia.

taiwan having a good day today as well. large caps up 0.25%. share pledge these lawsuits. before some china fund news, this is a publication, they were in --g -- saying a level 11 brokerages have shoot -- have sued it -- have shareholders. here's what we are watching out for. biotech as well as internet information, these are the companies among the stocks involved in a dispute. also pacific securities and industrial securities. these are the brokerages that are demanding -- the highest amounts at the moment. you are seeing movement there. i also want to look ahead to some of these power companies. a pretty good month when it comes to china power companies. the likes of china resources

power up about 0.5%. there is now more optimism we are seeing a quiet come back because of where the coal prices have been. the key fuel here is headed for a drop. companies that burn coal to produce electricity have risen in hong kong since late october. we are seeing downside by 1.4%. perhaps we could see more room for higher movements moving forward. we will see how things go at the session. >> absolutely. >> lots of things to look forward to. powell, wehave mr. have mr. clarida. >> minutes as well. back to paul allen. he has the first word news. >> a former head of saudi intelligence is casting doubt on the credibility of any cia report that incriminate's crown prince mohammad bin salman in

the murder of jamal khashoggi. several news organizations have concluded the princeton ordered the killing. president trump says he does not agree. >> i disagree with the president assessment. it is inconsistent with what intelligence i have seen. i do not have access to everything the president sees. i am not sure what he is relying on. the intelligence i have seen suggests this was ordered by the crown prince. party leads the government in a new york city poll. a positive move from the nato leader, his party also scored a win. some analysts and mps think the defeat has been a backlash against the scandal. warships --rainian

the ships were targeted after they attempted to enter the water by and three were captured. russia says it used measures to stop the ships from violating its borders. the ukrainian president held an emergency cabinet meeting. nasa's latest mars probe is on track to touch down after a marathon flight and what scientists call seven minutes of terror. the lander must decelerate from almost 20,000 kilometers per hour to just eight. cannot, mission control intervene and must rely on commands programmed before. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. >> coming up, signs for the

chinese financial sector. a look at alianza's plans. this is bloomberg. ♪

>> let's have a look at the week ahead. we have fed speakers of the g20 meeting to talk about where we go from here. the bank of singapore head of rates is with us out of singapore this morning. good morning. thanks for coming on the program. i want to get started with the fed. six,ricing in these recent maybe seven weeks, has been to price out several of the rate hikes projected on the dot plot. basis think there is any for why the markets have been pricing these rate hikes out? had raterket has not

hikes in line with the dots for quite some time. i think we saw in the third quarter, the market sort of creeping closer. gettingthe 10 year three and a quarter, just touching 320. that aligned itself to some extent. it is almost like back to where we were. i do not think the market has ever taken on board fully where they have been trying to guide them. the forecast, the analyst community, there are enough voices believing the fed, it is looking for the market prices. there is this dichotomy going on. though, thatem, when you look at what the markets are pricing in, two rate hikes for the entirety of next year, something seems to be amiss. had that say, we have dichotomy before. it started to normalize.

now we are back to that level. the market is taking a fairly dim view of growth. -- not thets forecasts, but certainly the pricing, the discounting, is cyclical. the fed is saying growth is one part of the puzzle, but we need to normalize. we see signs of price pressure. these things are going to push us to neutral and possibly a little bit higher. there is an argument going on. no doubt about that. >> what is neutral? >> an excellent question. i was at -- i wish i knew the answer. best guess is we are below. december gets us closer to neutral. maybe one more. after that you can start saying monetary policy is no longer loose. it makes the balance sheet reduction by sometime q1, thereabouts. you start speaking about more

neutral policy. we need possibly one or two more hikes before am going to be willing to say we are at neutral. we are still at level where it is probably still leaning toward the end of being more accommodative. >> the first half of this year we had that in asia amongst emerging markets. money flow to the u.s.. does it return? do you position yourself in terms of asset allocation as a fallback? >> i think patience is going to be rewarded. there is certainly a lot of cheapness going on in asia. that is one area where we are looking. that sucking sound is a problem. a stronger dollar, that dynamic does not always play well to emerging markets. let's think about it as christmasy a good bargain.

we think some of the issue markets are starting to look interesting and some of those areas where we have had the drawdown, the big sucking sound you mentioned. no rush. take your time. we are not looking for a sudden snap back in the next few weeks. you have time on your side. >> you look at what is happening in the chinese bond market. in whatever form that may come, markets are expecting more easing or stimulus measures out of china. is it too early to talk about a rate cut in china? or is that not needed at this point? >> i do not think it is too early to talk. you have certainly seen the policymakers trying to get the furthero think about easing. there may be more of this to come. timing is very difficult. a major challenge for chinese policymakers is trying to get the sense of how to balance things.

they are trying to assess the damage from a trade war. they are trying to assess how slow the economy might be -- or not, in the absence of a trade war. they have signaled they would be willing to think about additional leverage and additional easing. it is not too soon to think about it. getting the timing right from a forecast point of view or as a policymaker, i expected to be really challenging. >> what are you most convinced of? what are you must worried of, let's put it that way, next year. be derailed with people being far too sanguine about inflation in particular? interesting. i think inflation -- if you look at how the market price is now and you go back to that dichotomy, the reason why the market isn't really buying into what the fed is saying is they

are possibly looking away from inflation. there are not many forecast as low as where the fed is for core inflation. that may be something of a surprise. we are not looking for an inflationary shock. thus not going to happen. the actual outcome may be ahead of expectations. that might force the fed to stick what they have said. that is subject to quite a bit of disappointment. i think there's quite a lot of uncertainty going on in europe. certainly a combination of to whats not helpful looks like an economy that is struggling to get on its feet. there are enough things to worry about. i would also say on that side the last six to seven weeks has been a progression of bad news. surprised toquite see this level of news flow on the downside for a prolonged period.

oil.o mention oil is not great for credit markets. it has been a steady stream of news coming into the market. not all of which really immediately is relevant for the early outlook. i would not put my bearish hat on just yet. >> i have a question for you. oil has been -- well, has seen better days. 32% drop them across the last six weeks. -- two had 27% drops seven percent drops. wei think in the short-term have seen this in previous downturns. it is no longer the case is on our good for markets -- unalloye d good for markets.

especially on the high-yield side. it puts into question the solvency of some firms. it also helps those countries which have a balance issue where they are major importers. my guess is in the short-term it undermines some of the market. it undermines valuations and outlook. longer-term, if it stabilizes, maybe not such a bad thing. have, let's say, a deflationary move that possibly helps, maybe in the u.s.. , note immediate short-term quite right yet, but certainly amber in the space of credit and also the energy sector. >> the oil does quite literally grease the wheels of the global financial system. >> in the long run, exactly.

subsidy.entially you have this location of spending away from oil, towards things more consumer driven. the market in the short run is going very quickly. the high-yield spreads, that's going to very -- the happens now, that happens today. you are quite right, the oil price does have something for retailers and maybe luxuries. some of these will be supported. that comes later. when the actual cash flows are impacted. >> the majority wins, let's put it that way. they keep coming -- thank you for coming. let's turn our attention to china. the bid to one establish an insurance holding unit. the first foreign firm permitted

to do so in the country. >> this is a company based out of munich. an executive editor joins us from beijing. is this a further sign of beijing keeping his promises and open up the financial industry? is.t step-by-step, china is allowing greater access to foreign companies. allianz is getting approval to start this holding company which they say is going to give us more flexibility for the future. right now, they are all done under graham corporation with the local partners. macron cooperation -- in cooperation with the local partners. forward, this holding

company should be giving allianz the flexibility to make those moves looking into the future. the flexibility to make those moves looking into the future. >> the disapproval come faster than expected -- did this approval come faster than expected? >> if you ask for in insurance companies, many will say it could have been sooner. china has always said, we want to open because it is good for china. obviously the foreign companies have a different perspective on that. the chinese announced these banks and brokers to take on greater shares of their jvs. they give a little more detail earlier this year in april. the have steadily started to step through the actual steps that are going to allow these to happen. >> foreign insurers face an uphill battle in china.

maybe a fairly nascent market. there is a lot of interest and a lot of competition. people, i mean, the economy has grown. there is a huge pool of savings. people are looking for alternatives for what to do with their money. opportunity.t of that is why allianz and other insurers are interested. we have really big chinese insurance companies that are already well-established. china life, probably the best-known of the. -- of them. they're going to have to find ways to get to the end customer. local chinese insurance companies have those established channels. allianz is going to have to work on those. >> and of course we will see where we go from here if we do get another one. we will find out when that gets announced. thank you so much. on that note, we will be looking

at chinese insurers and how they are faring this monday. this is bloomberg. ♪

>> welcome back. let's get a quick check of your business flash headlines. answer things up with shimomura. shares down after the 12% slump in november. of automated winter clothing. -- warm weather hurting sales of autumn and winter clothing. the company hoped for a 2% gain. morgan stanley has cut its price target for the stock to ¥8,000. >> the sunday telegraph saying the british airways owner is preparing a bid for a british-based airline.

richard branson is the partial owner. confirmed they were in talks with several companies be is facing financial stress from the higher price of oil. boxisney breaking the office with the return of wreck it ralph. internet tookhe in millions internationally. that helped the five-day holiday total cross $300 million for the first time. >> let's have a look. what is the sense we are getting? >> things are looking more positive then at the setup. here is what we are looking at in terms of tech names. hon hai is one to watch. there were reporters over the

weekend, they stopped to ask about the fallout from the iphone demand essentially. he said, look, the business will remain strong until january. why the timeframe? some analysts say this is not exactly a better-than-expected iphone demand forecast. he is affecting the boost in sales for the rest of the year on customer requests that perhaps they could be frontloading more shipments of pcs or server components ahead of more u.s. tariffs on chinese goods. the taiwanese market rising the most this month. more on the politics, the local elections we saw, that resounding defeat on the dpp party. we are seeing taiwanese tech shares rally. pegatron up 2%. taiwan semiconductor also up 2%. >> lenovo is also in the mix.

they were down 5%. , there were reports this court case in the district court in california basically gave the go-ahead for lenovo to reach this $8.3 million settlement to end this class-action lawsuit which basically accused the company of ad software which was exposing computers to security concerns. their software was getting access to the likes of social security numbers, security and financial information. some people were saying this is just not one of those things, as they are trying to go through and gather this treasure trove of customer data, they run into these privacy concerns as well. -- hat about >> we got an interesting one here in hong kong. >> a lot of them this year.

siteis is a china travel that raised $180 million in hong kong. pricing was near the bottom of the market range. we did see optimism in the great market. it jumped as much as 10% of the open. we are paring back gains. we will see how things go throughout the session. we have long talked about this year. --n the hottest ipos >> xiaomi. >> xiaomi has been one of the worst returns for investors. we will see how these investors turn out -- ipo's turnout. >> coming up here, lots more to talk about. stephen as joins us to talk about the fed. he has a very interesting target here for bitcoin. stay tuned for that one.

>> bitcoin has had an absolute cake, cryptocurrencies having a tough time -- absolute cake -- kick. cryptocurrencies having a tough time. ♪

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>> it is 10:00 a.m. in hong kong and singapore. this is bloomberg markets. >> markets are moderately positive despite caution in the air. a $14 tumbled this month. >> bitcoin continues to fall. a long way from january's steady peak. >> theresa may is winning european union backing for brexit with brussels warning there is no plan b if bridge lawmakers reject the deal. -- british lawmakers reject the deal.

>> you have got to wonder. there is no plan b, but what happens if it gets voted no? >> that is plan b, i suppose, a hard exit. -- shehas not ruled out is not the rule out things that she might be quitting. it is trade at the end of the week. looking of course that meeting on the sidelines of the g20 taking place in one of sarah's -- buenos aires. jay powell is talking. equities on the way up despite the proposition of a mixed start. we are looking for a soggy start to the day.