haidi: good morning, i'm haidi in sydney. in the asian markets are just open for trade. ramy: and good evening from bloomberg global headquarters in new york. in hong kong, welcome to daybreak asia. ♪ haidi: the fed chairman's sentiment on dovish comments fueling speculation that a rate hike is closer than we thought. and the rally extends to asia after u.s. equities surged the most march, jumping more than

2%. ramy: china says global trade is at a crossroads and the world must choose. the imf forms -- warns that growth is slowing faster than expected. get a check on the markets with major markets now open. what are we looking at? are teeing up for a risk on rally in asia. it may not be all blue skies u.s. taking aim on chinese terrace -- tariffs. the caution over global growth may add to when it comes to japan, for example. the economy faces more downside risk than a year ago do in part two trade tensions -- due in part to trade tensions. most regional indices are set to and november higher with a 7% surge for the month, making it the world's best performer.

about 19%. the cost be getting a pop of 1.3%. kospi getting a pop of 1.3%. getting some momentum this had the this also minutes released yesterday, signaling a rate hike is moving. , hending the advancement can year treasury yields are keeping steady this morning. holding losses to $50 after sliding 2.5% after reports that u.s. inventories rose. putin adding to the uncertainty saying $60 oil is absolutely fine for russia. sophie kamaruddin on the

markets in hong kong. let's get to jenna dagenhart in new york. after jay powell said interest rates are just below the neutral rain, leaving traders to ratchet back expectations for the number of hikes next year. between december 2018 and december 2019, eurodollar futures fell 25 basis points, the equivalent of one rate hike. he says they are not too far off the dollar's top. are still lowtes by historical standards and remain just below the range of estimates at that level that would be neutral for the economy. that is neither speeding up north slowing down growth. the imf says global growth may be slowing more than forecast two months ago. it is urging countries to pull back from a damaging trade war. suggests things that we further. christine lagarde says financial

conditions have tightened in emerging markets. rise in significant risks are materializing. president trump has hinted at terrace -- tariffs on imported vehicles. he tweeted that the reason the small truck business is such a go to favorite is that for many years, tariffs of 25% have been put on small checks coming into the country. he added that his duties were imposed, general motors would not have closed factories or cut jobs. relief for the bank of japan, sales rose far ahead of yeartations, jumping 3.5% on year with forecast of 2.7%. figure also month smashed estimates rising 1.2%, three times higher than was forecast. the doj is hoping higher spending will help boost inflation. air said the plane that

crashed to the job as he was not fit to fly, those reports are wrong. they say it was airworthy and the airline has always held standards. a faulty sensor was expected to be checked before the fatal flight. global news 24 hours a day, on aeronautic talk on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart, this is bloomberg. haidi: reaction after jay powell dovish term. how does this benefit us and to what extent? maybe not to the extent of his remarks. i think the fact that he

cracked and admitted the possibility that the fed can respond to changes in the economic outlook and is not just locked in. we need to go to neutral and we will be considering going beyond , all of which fit in with the long-term outlook. the markets taking this as an acknowledgment that the fed is taking a look at some of the softness going on in the data and is going to be willing to adapt. at the moment, the market is next year.g in but it will be dependent on the data. it is no longer no matter what comes out we will do three hikes. ofch was always something exaggeration.

i would like to show you, i have that ready in the gtb library. take a look at what is going on with those expectations for rate hikes or lack of them next year. and how that has tended to resonate with asian markets. the rate hike pricing is inverted and that line is smaller the number. trajectory -- at first rate hikes start to come out of the picture and asian , and theicked up a bit rate hikes are coming out. outlook is worse than any u.s. -- than in the u.s. going forward, we could see other factors allowing for such

a move. ramy: this while november -- for november is poised asian stocks. into the bloomberg terminal because i was show you the seasonality function. we are up by about 3% on the asia-pacific index. after the last three months of negatives, look at october. and this black block fills in for december. >> i think the g20 meeting will be extremely key. nobody really thinks we will get trade pace in our time. easing off the tension that has been there. it might allow for some clarity and i think a lot of investors would be happy just to see some moderate moves.

the market has reversed in the space of a week. ramy: the trade war gets all the attention. in defense of policy such as rating and investment driven growth. they are taking a much bigger impact. haidi: and we will get more views. this is bloomberg. ♪

daybreakcome back to asia. i'm rainy inocencio. the federal reserve got a rally in stocks and pulled the rug out under the dollar as jay powell talked it up the key rate just below neutral. a positive the rate hike next year. we're kind of building up this particular on the back of the comments. but it came as such a surprise. haidi, i think people have been may be selectively watching and listening. i think one of the reasons that this remark from powell seemed dovish is that they didn't hear what rich said. maybe they didn't pay attention when jay powell sat down with rob kaplan, an interesting conversation just a couple of

weeks ago which we took live right here on this network and on this show. last month, jay powell said the fed was a long way from the neutral rate. it is a great way to get there and the economy is strong enough. there were a lot of estimates of it. wasaid today that the fed "just below neutral." if you are just below neutral, you're getting pretty close. that means you may be ending the rate hikes pretty soon. the fed is looking for december rate hikes. fomc,recast from the where they think they will be hiking rates next year. and when asked the biggest challenge, it was figuring out the number and pace of the rate hikes.

the fed is not on a preset course. a jay powell the range of we get another rate hike on we will be at 2.5. there is a great range on the fed right now. are advising our estimates potentially with new economic data coming in. i don't think those rate hikes are set in stone. take a pause, our next guest says that if there is a cataclysm, the fed will raise rates next month. the fed governor and professor

of economics at the chicago school of business, with little inflation pressure, the fed will likely take that path. randy joins us from hong kong. december likely in play. when do you think might be appropriate then, to take that cause -- pause? on theit depends evolution of inflation. we just got the gdp report with inflation, still very modest territory below 2%. growing at is still 3% or so. i think that allows the fed to take a pause without being concerned that inflation will get out of control. it is ackley white house said they will be looking very carefully. >> the former fed governor

thinks that there will be a pause. u.n. and others were changing your view just a little bit, really. globalartly because stocks since the last meeting in oil prices fell apart for a while. you have changed your sense of what is going to be happening. randy: the new tour rate is just about 2.75 percent. after this rate hike at the end of the year, it will be 2.5. it is certainly within the range and without a lot of inflation pressure, there is a question about how aggressive they need to be. they don't want to go too far

and tighten the recovery. that is really the challenge that we have. what do they need to do to make the economy turned down? that is the debate over neutral, and how to interpret the data about where the inflation is going. is there enough to over external factors like the tariff war or the trade war. it isdifficult to see if coming through in the economic data and that there might be lag that we are not seeing at the moment. is there a risk that it will be short-term inflation rate from these tariffs and we have longer terms for the stationary impact taking place? so far, the tariffs have not had a major impact on the u.s. economy. trade is important globally. it is much smaller for china than for other countries.

it has less of an impact on the u.s. has not hadthe fed a very direct statement about how important it is because i don't think anyone in the fed like the trade war. -- in the fed likes a trade war. continuing debate on what the impact of that is going to be. it has had a very small impact war doesif the tariff get to 2019, it will not have a big impact on the u.s. but it will have an important impact. even in the latest numbers, in the domestic housing market, i should say. the fed is looking at that, looking at global growth which is currently slowing, china is slowing, europe is slowing. emerging markets is uneven. the u.s. is not an track to continue to grow as it has the last few quarters.

most forecasters would say that it is going to grow in the mid-2% range. u.s. looking strong in the in respect to most of the rest of the world. the fed is going to see, where is this going to shake out. ramy: i am glad you brought a gdp growth one more time. forecasters are going to come in at about 2.5% for the quarter. says that the economic outlook is relatively strong. isyou agree with him that it "relatively strong?" how strong kennedy three 2019. howy: i agree it is -- strong can it be in 2019? randy: i agree it is strong.

the regulatory reforms and tax reforms, that is what the fed is struggling with. we will provide a longer term boost productivity and growth. and we have the inflation to respond to. it is still not clear. economists take a long time to figure out what is happening. it is going to take a while to see with the impacts are in the economy. we just saw a revision to the gdp report. a slight increase in business investment is something that is very important for interpreting the text changes last year, simple tax cuts. ramy: what are your thoughts on recession risks in the future? haidi: it is always a recession

risk that looms. i was on the board from 2060 2009. i never say never about anything. not gangbusters growth and not recession, but there are shocks out there that are very hard to see and the rest of the world is slowing and that poses risks for the u.s.. with 2019.to do if you know that the dots are so have those that think there will be at least three next year and we have about seven that think there won't be that many. causing, will fed this go meeting by meeting? course,ot on a preset

but is there a chance that if the trade war gets worse or things look iffy, they will keep pausing and inflation will stand 2% and think they are strong enough? randy: i think that is right. howell and others are clear that they will be looking at the data that suggest the u.s. economy is turning down and there is no inflation pressure. even that they are roughly in the range of what they consider neutral, there is no reason to be aggressive. i think the economy will continue to grow over 2019. if that is the case, we are likely to have a couple of interest rate rises. all of those dots are presented equally, but they shouldn't be of equal size. chairmanlots for the should be a lot larger than the dot plot for everyone else.

haidi: jay powell can out in his speech and confidently tackle the monetary policy issues. they later heard for the bank of england. is it kind of just noise. is intact after this? >> is clear that jay and his colleagues are just working through this. this on the number of occasions, critical where interest rates are, and i will let them do it they think is best. and they are clearly operating along that line. they will not change the way they approach things because of the criticism. they will do what they think is right. they will do what they think is

right for the economy and for the president. haidi: i appreciate your time and views. and the former federal reserve governor joining us out of hong kong. more to come on daybreak asia. this is bloomberg. ♪

quite welcome mat, world leaders are arriving into -- argentina for the g20 summit. issues like climate change in focus. erik schatzker is there and asked the economy minister about the host country's role in finding consensus. it is not to strike the deal between the leaders but broker the different possibilities. erik, what is that stake --

at stake? at stake.t is argentina needs to do everything global tradee tensions, argentina is an export dependent economy and so is the rest of the world. the rest of the world is slowing, the u.s. economy may be growing but the u.s. economy is fairly unique and as much as it is not as export reliant for as much of a share of its gdp as the rest of the world. that is why trade is a key issue, that is why there is such an intense focus on the dinner saturday night between president president trump and the hope they can resolve their differences and lay the groundwork for an agreement. a revised trading relationship and investment relationship between china and the u.s. president micron is here from

france, mbs is here from saudi arabia, leaders from around the world but it comes down to the xi-trump dinner on saturday. >> this is bloomberg. ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. grexit is a 30 p.m. in hong

kong, we are an hour away from the opening of trading day. so far, so good when it comes to the asian-pacific region. seeing some gains in sydney only to tokyo. taking -- picking up on the positive sentiment. the bond market did not react much but equity markets worked up their ears and set up -- set up and took heed to what jay powell had to say. hike may come sooner than expected. are watching "daybreak: asia."

global economy is at a crossroads as he prepares to meet with his american out apart. he said the world must decide whether to continue reporting the global system because failure to do so will lead to new barriers on trade. trump ineet president buenos aires, indicating higher transit and tariffs. and a no deal disorderly brexit could cut u.k. commercial property prices in half. the bank of england said getting out of the eu without agreement can cause worse problems. governor mark carney said the bank has scanned for all positive best possible scenarios that warns that [indiscernible] >> evidence from surveys and other u.k. authorities suggest the country is not that -- yet fully prepared for a cliff edge brexit.

surveys suggest that less than half of businesses have initiated contingency plans for no deal, less than 1/5 of small businesses have done so. >> top leaders of the renault nissan meet. the executives say they remain committed to the tie up although they want the relationship reviewed. the meeting will happen in amsterdam with deputies executives joining the call. tesla says drivers have racked up a billion miles using the cars autopilot system, the in october installed 2014. autopilot is designed for use on highways and tesla uses the later to improve new software. in one month as promised demonstrating autonomous driving on a cross-country road trip from las vegas to new york although it is not clear when that i'd happen. -- might happen.

global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's take a look at how asian markets are faring so far. >> asian stocks are set for a fourth day of gains, a decent and two november with most regional benchmarks in the green mscihe month putting the index set for the best month since january. as the dow holds is overnight retreat, the yen firming up after hitting a two week low before powell's speech and the korean won is building on the weakness heading into the uk's rate decision on friday. the kiwi dollar had to retrace his overnight climb, as business confidence remains subdued and a the secondtern in half of this year. the aussie dollar looking fairly steady after the best jump in

four weeks, trading near at hand a high with the state for the quarter not [inaudible] and we got the number coming in lower than expected. includesterly basis anticipated traction we saw in the second quarter. a silver lining to be had, firms are planning to spend more than estimated in the 2018 to the 2019 time, let's look at some stock movers, i want to highlight a story and banks are gaining ground as the fed pause could have implications on costs that have risen and gaining ground in tokyo, the company has day,d to pay to boost its one of asia's biggest private hospital groups. us --e want to highlight segment that is under pressure, japanese consumer staples like shiseido, this despite retail sales rising more than expected

in october. as we well know, shinzo abe [inaudible] tax --g before the sales hike which will be one of the pressures on the economy and the fund says it says -- he sees more downside risk in a year ago. members of the renault-mitsubishi alliance meet on thursday, the first time since the drama began. has told bloomberg his company remains focused on selling cars and developing electric vehicles. the diaz was speaking at los angeles auto show. >> the focus right now is business as usual, the alliance is intact and direction from the mothership in japan as well as direction we are giving to our dealers and employees here in , stay focused on the business at hand, selling cars, and taking care of our consumers.

>> when you talk about doing business as usual, i want to talk about your car lineup and specifically where the mitsubishi brand is headed specifically in the u.s. and if there are any plans to expand into more fuel-efficient vehicles, primarily electric vehicles. yes, the vehicle you see behind me is a prototype, it is a concept vehicle and this is the design inspiration for where mitsubishi is going in the future. as well as the technologies that this vehicle has which is going to be part of the future when the alliance platform and synergies kick into gear and the products are showing up in the u.s., a two to three year time span. we are excited about what consumers are going to have from an electrification standpoint. every product we ring forward will have an electrification platform as part of that vehicle. >> is the u.s. from a place that

you want to add manufacturing capacity right now? >> what we need to do is get to a point where any one our products that we bring to market particularly with the alliance humming forward, once we can get to a point where we are manufacturing 100,000 units of any credit, the business case becomes robust relative to a positive reason why we would bring manufacturing back to the u.s. as >> how important are subsidies at the moment, this is something we hear being fired at gm in terms of electric subsidies, is this something you need as part of the industry or something you depend on? >> it is not something we depend on, it is something that the consumers depend on and it makes the vehicles much more intriguing. with the synergies we have with the alliance and as we continue to make more of these vehicles and are able to bring the cost down, we will be able to get the manufacturing costs to a point where we might be able to

operate without the subsidies and the consumers will not need the subsidies. they are important as electrification becomes something consumers are more comfortable with. and avoid any of the range anxiety issues that are quickly becoming not an issue anymore. we are in good shape going forward. remy: that was fred diaz. still more to come. this is bloomberg. ♪ ♪

haidi: this is daybreak asia. >> the chinese leader made comments ahead of the weekend talks with president donald trump. our china can't -- gores on -- correspondent is here. what is he trying to send ahead

of the g20? >> it is a message we have heard before but the timing is important giving -- given we are counting down the meeting. in spain saying we are at a crossroads, you have to orry -- choose globalization protectionism. you will see more barriers going up around the world. in china's case they are opening up the market, making market access more easy. there is another motive to him being in spain the on the deal, it is about taking from that stage and portraying him and the chinese leadership in china as being on the right side of history in this trade debate being aligned with the likes of the european union when it comes to the trade. the reality is far more complex,

there are policy makers who are as unhappy with the trade practices and the lack of reciprocity and china as their u.s. counterparts. those issues remain but this is an opportunity for president xi to get on the global stage and drive home the message that china is supporting globalization. even if the reality is somewhat different. you are at one of the centers of manufacturing. how does the speech tie-in in terms of what you are seeing at the moment? imagine thed to province is not near the forefront of his mind when he goes abroad and talk about the need for globalization pushing back against protectionism even that the provinces that are central to the export machine,

this is a province that is extremely successful, the growth rates are incredible, they are starting to slow, they faced wage hikeserms of and pressures, competition from southeast asia. they have to confront tariffs and those are starting to chip away at the export growth coming out of this province. the are part in central to aim to industrialize the nation to create an ecosystem that includes artificial intelligence, robotics, electric vehicles. you come here, that is where you have the likes of tencent and huawei. the challenge is china needs the experts and the technology from europe and the u.s.. it has been successful in adopting and in order to meet its long-term goals will -- to avoid the middle income trap.

that is important for the president ensuring they do not get stuck in the trap that has afflicted so many markets. they have to put a bottom under this trade dispute. technology is central to the concerns coming out of washington around intellectual property and tech transfer. as it seems like it will be unlikely to be resolved. maybe they can address some of the concerns. emily footing comes to investors. tom mackenzie. investors are counting down to the g20 and the anticipated meeting. trumps top economic advisor said the u.s. is hopeful of a breakthrough but it is ready to impose more tariffs if the talks do not yield progress. bolding is a

bloomberg columnist, you always have a good contrary and point of view, what are you expecting coming this weekend? christopher: the likelihood is that there is -- we will impose tariffs january 1. there is that indication that china is ready to make any concession of any consequence. there -- they are dealing with the henry kissinger's and hank paulsons of the world. grasp that there is profound discontent with their trading practices. let's put aside the trade war, we talk length about that every day but if you look at what is going on structurally, how much of that can be blamed due to the external forces and how much as i suspect you will comingre the chickens home to roost? christopher: very little of what is happening in china and be blamed on the trade war.

if you look at the drop in credit growth that we have seen over the past year, that is about 30 times larger than the impact on the trade war. that having much larger impact than anything donald trump can do. i think there is a lot of concern in china that this is -- the slowing of credit growth has had an impact on asset prices and an impact on investment, consumer spending, all of these issues and that is causing a lot of concern. a lot of analysts in china are expected of a stimulus package the only question is how will it be and where will it go exactly? they made for the dinner, what might be any source of detente, definitely it will not be technology, i presume, but where do you think they could look some low hanging fruit? trumps rand maybe

daughter who speaks chinese could be a good entryway. it is difficult to see what, where they can move forward. theindications are that chinese side, there were reports about the chinese side believing they know so well with the americans want and how to resolve this they still seem to be missing that there is profound discontent on a bipartisan basis area there was a quote from chuck schumer from what he is expecting from a chinese deal. there is profound discontent between republicans and democrats, even if they disagree with trump rhetoric. and some of his methods. they are great about the problems with china. greatearlier we had a roundtable and he was saying that the only person who could speak on behalf of donald trump in these talks, and this dinner date is trump himself but also other folks have been saying

[inaudible] can nominate to speak for them. >> there has been a lot of lower level back and forth that does not get reported but it is going to come down to what donald trump wants to do. i think the diplomatic both the official diplomatic establishment and the foreign-policy establishment in the u.s. is much more willing to pressure china on these issues but they are right that it is donald trump that makes what deal they are going to strike. your daughters are fluent as well so maybe there is a bright future in trade negotiations. until recently you are living in china, you are a professor of economics at the business school, do you see beijing as resorting to the old ibook in terms of stimulating growth

again? >> i think that is the thinking within the chinese research establishment. thet now we are looking at central economic working group which is due to meet in two to three weeks. that is the target day for some type of stimulus announcement. if you were remember back to 2015, that is when they announced supply-side reforms they would embark on. a similar typeg of announcement in two to three weeks as to what type of stimulus and the concern is that beijing has led the market to believe that a stimulus is coming and so if they do not announce something, there could the backlash if something is not announced. just donaldnot happening.i what are your thoughts as we head into the summit in terms of the future of the g20 with regard to all the strong leaders, strong voices saying my

country first. christopher: one of the things is i think there has been a slight evolution in the trump administration and that realizing that allies and institutions matter. you have seen them start to file some wto cases, you have started to see them say we could not -- should not anchor our allies, and i think even in europe, there is this growing sense that we need to take a step back and we may not agree with each other, but there are bigger threats out there to the world andarge than donald trump, france and canada have an agreement on a much wider range of issues. to christopher bolding, coming to us from ho chi minh. don't forget our interactive tv function, tv , you can watch and i've into any of the

securities are bloomberg functions we talk about, you can anyme into -- a part of conversation by sending us message during our shares, this is for bloomberg subscribers only my check it out at tv . this is bloomberg. ♪ ♪

>> welcome to bloomberg asia. haidi: let's get the check on

the latest business flash headlines. the revamp was hit by slower jewelry demand, same-store sales rose by have what analysts were expecting. tiffany is still in the impact of lower spending by chinese tourists, the jeweler has been trying to attract younger shoppers the result sparked questions about the strategy. wall street has lost one of its most prominent characters, embodying female empowerment, moved to her place staring down the charging bulls and will move to the front of the new york stock exchange by the end of the year. since the charging bull was created he said having a girl faced on his work has turned the bulls power into something negative. weibo adr has jumped after third-quarter net revenue beat

estimates and monthly active users rose by any million. let's look closer at this with our asia tech reporter. tell us more about these third-quarter numbers and what stuck out to you. >> what really stuck out was all thate key online leaders left the platform for flash year and newer social networking platforms have been coming back in droves, china has an uncertain market and in times of uncertainty, they want to come back to what they know. we have wired to be one of the oldest and most stable platforms. >> fourth-quarter guidance fell short of expectations coming in at $480 million to 400 might -- 490. what is going on? thehat was reflected in mother company's numbers which is down 6% or 7% for the full year. it is a reflection of broader uncertainty in the chinese economy. a lot of small to medium

businesses, car companies as well as gaming companies have had such heavy-handed regulations they have had to scale back advertisements and business. what does it tell us about the broader chinese economy as we look into 2019? isit tells us that everyone scared, scared of the government, scared of the macro economy and a point that was made on the investor call is that unlike previous downturns and cycles we have experienced, this is the first one where china's internet giants have reached some level of maturity. chances are they are going to be affected more than any prior downturns before. we appreciate your time. reporter taking a look at the coming 2019. look at what is coming up over the next few

hours. yvonne man is not scared of anything. we are watching the fed. the market is tearing on the news from the comments of fed chair jay powell talking about rates are just below the neutral rate. areing a dovish tilt, some saying it is a must like a 180 from what we have heard from his speech in october. we will break it down with michael. what does it mean for bonds? he will be joining us out of singapore and the bond markets got a right in pricing against rate hikes for 2019. where does that leave yields? we did see the u.s. 10 year go down and back up again. g20, nowng up to the becoming an author with a book out called "china trade

asking the question, was this a mistake or was there a mistake in that it failed to get china to make political change, asking that question. haidi: a lot of great conversation to had. we are and it over to bloomberg asia.szz' we are seeing energy stocks gain and we saw a decline in oil. free much in a good mood thanks to jay powell. remy: grin across the board with taiex futures up. this is bloomberg. ♪ ♪ ♪ there's no place like home ♪

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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. >> welcome to bloomberg markets, the china open. >> the fed chairman lifts the mood, jay powell's dovish comments fuels speculation that a rate hike pauses closer than thought. >> the regional benchmark pricing for a fourth day. earlier u.s. equities search the most since march. warning growth is slowing faster than anticipated. ♪