paul: good morning, i am paul allen in sydney where australian markets have opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to daybreak asia. paul: our top stories, optimism in the air as we enter a new agreedhe u.s. and china to tone down the rhetoric and put new tariffs on hold. moscow and react will manage the oil market -- riyadh will manage to the oil markets, meeting in vienna later this week.

sterling under pressure as lawmakers prepared to debate the brexit bill, a big vote eight days away. of u.s.he 90 day hold tariffs on chinese goods being felt in the market as investor optimism is boosting s&p futures up 1.5% at the moment, building on the gains from last week, the dow and the nasdaq rebounded .8% . the s&p 500 saw its largest since 2011.ce we also got news out of saudi arabia and russia they could be cutting oil production. we will see how that plays into the energy markets this week. at the moment we are seeing investor confidence being felt in the markets with futures up 1.5%. are seeing the optimism here in asian markets as they signal higher across the board. in sydney there is a gain of .4%

for the asx 200 as markets are gaining -- breathing a sigh of relief with that truce. they say this is the best outcome that could have been helped from the trump-xi meeting. with a huge divide remaining, expect volatility ahead. let's check in on the aussie dollar, rising as much as 1% to get a four-month high. it is approaching the 200 day moving average, which it hasn't been able to break since mid-march. we could see treasuries weighed as appetite takes a backseat. we have seen a drop in 10 year treasury yields back below 3% last week, checking in on u.s. treasury yields, seeing how they fared the past week. 2.99%. when it comes to the agenda, we have japanese capital spending expected to have slowed in the third quarter with an update later in the hour. china's caixin reading expected studied, remaining in

expansionary territory pre-we will get expansion figures from thailand and others across the region. we will also get reaction to south korean export growth that came in slower than expected for november. paul: thank you very much. let's get to first word news. here is su keenan. su: we begin with theresa may facing a vote to bring down her government should the house of commons reject her deal asked week. labor says it is inevitable the party will propose a no-confidence motion should she lose the debate. that would put the u.k. on a course for an early general election with the e.u. saying the only options are the deal on the table or canceling brexit altogether. russia and saudi arabia have yet to officially confirm new oil curbs after agreeing to extend their deal to manage the market into next year. president putin announced the opec plus extension after

meeting with the saudi crown prince at the g20. the president said he is the alliance will reach an agreement when they meet later in vienna. marriott says the four-year long data breach that exposed information of up to 500 million guests will not affect its own branded chains. the company said hackers stole details linked to hotels operated by starwood before it was acquired by marriott in 2016. , saint regis,w sheraton, westin and others. cybersecurity say it is rare that a hack would last so long. macau bounced back after months of weakness tied to the slowdown in china. gross gaming revenue rose 8.5% to $3 billion u.s. from a year ago. that is more than twice the forecast. the result is a 28th consecutive month of expansion in macau.

november was the third month in a row of single-digit growth with september and october the weakest in two years. 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 su keenan. this is bloomberg. paul: the aussie dollar is higher, the yen weaker. this is after president trump a trade war escalation on hold into the new year. let's ring in erik schatzker. he has been covering this weekend of buenos aires. how did we get to this agreement? because both sides wanted to make some progress. you have heard the word troops ruce usedescribe -- tu

to describe this. it is better to refer to it as a cease. they are not putting the pistols away, just down for 90 days. the united states has agreed not to raise tariffs on $200 billion of chinese imports scheduled january 1. it will remain 10% instead of 25%. in return china has indicated it is willing to make progress on the trump administration's key beats. we have talked about it before, the forced transfer of intellectual property, the or at least of technology and then we have intellectual property thrift -- theft. cyber espionage, a number of things the trump administration has issues with, and the chinese -- theyen president xi have given president trump and assurance they are willing to do something that there is this 90 day time that takes us through

february. we have yet to see the chinese respond with more than they have already are what they have said they will do is start buying more american industrial and agricultural goods, and they will police the production and trade of fentanyl much more closely. paul: you take all that on board and consider reference to the in the was mealymouthed statement. there is an omission of the reference to protectionism for the first time. can you say it is a win for president trump? erik: it seems that way because everybody was bending over backwards to accommodate the united states. you talked about the communique from a lack of reference to protectionism that had been there. or softerbacktracking language on multilateralism, energy security. there was an acknowledgment the wto is in effect broken.

we have been hearing a lot about that from the trump administration. that was a give to the president. the chinese gave something away. united states was ready to increase tariffs on january 1, only because the chinese were willing to make some representations that they are willing to do something america agreed it will not go hide -- would not go ahead with that. the meeting with president putin president trump was supposed to have an decided unilaterally by a tweet it would not take place. on a number of different fronts it looks as though president trump was wielding a lot of influence at this meeting and buenos aires. shery: any expert on china says the chinese will not give up the made in china 2025 policy in these strategic industries. is this postponing the

inevitable breakdown of talks if they don't see eye to eye after that hold on tariffs? it is hard to believe the chinese are going to be willing to give up or two knockout the pillars of their economic strategy until now. the theft of intellectual property, or cyber espionage, and even if they are, even if they do make promises to that effect, who is going to police it, and how do we know it is happening? i don't want to sound like a conspiracy theorist, but the theft of intellectual property continues, of course the chinese government can say we are not doing it or blame it on proxies, but it is difficult to ascertain with accuracy that is what is happening. what is possibly more likely is they will reduce subsidies to chinese state-owned enterprises. that is more possible, or create

better market access, or better conditions for u.s. companies or even foreign companies to operate in china, better ownership rules. there might not be coursed transfer of -- coerced transfer of intellectual property. one, butfixing half of it is easy to understand why people are skeptical china would go ahead and give those things away, given they have a very long-term strategy that depends on being competitive in high-tech and scientifically advanced areas. shery: we have already seen that. the trump administration is really not happy with any progress china has made on these issues area erik schatzker, thank you for your time, joining us from buenos aires. also with us is stephen olson, a research fellow at the heinrich foundation and former u.s. trade

negotiator. will anything be achieved in they haveys that agreed to hold anymore tariffs? >> the first point i would make is 90 days is an exceptionally to make progress on, located issues like intellectual property, technology transfer, cyber theft, non-tariff barriers, etc. if the objective is to make enough symbolic practice to allow both countries to declare peace in the trade war, that is achievable within 90 days. the real challenge for the u.s. and china is to work out a serious and meaningful accommodation that will allow the profoundly different economic systems to coexist. shery: how do you get started on

those fundamental structural reforms the trump administration wants from china? stephen: i think both countries have to start with a recognition that some compromises are going to have to remade. the united states is going to have to recognize china is going to continue to be china. unlike the assumptions that were made when china first entered the global trade system, it is not going to become just like the united states and adopt washington consensus economic rentable's. for china's part, china is going to have to recognize some of its or dubious trade practices it was able to employ when its economy was smaller and less technologically sophisticated is no longer going to be palatable and acceptable to its trade partners. there will have to be give on both sides. as you say, it is not

achievable in 90 days. what can we expect to see? do we see the moratorium on extra tariffs being pushed out or a roadmap? stephen: there are a couple of scenarios. one would be dated -- be to get ,o the end of the 90 day time and see if continue discussions are necessary. that would put the u.s. administration in a delicate position because the criticism of the past administrations has been they have allowed china to engagelk the process and in endless negotiations. the other possibility is if it is attractive to both countries to make enough symbolic progress , to allow them to declare peace and safety the issues have been solved, they should be able to do that. the key thing to keep in mind is it would kick the can down the

road. how significant are the concessions we have seen down the road on energy and agriculture? we have china buying u.s. pork again, but that is a reaction to the swine fever outbreak. i don't think we have seen much of anything so far. this is an agreement to begin negotiating. some of the purposes of agricultural products will restore previous access it already existed but was curtailed in response to tariffs put in place. the real game is yet to be begun. shery: how positive is it the bullish signals went beyond tariffs, and we have heard from the white house the means of qualcomm or semi conductors, that deal could get done even the courts and north korea? stephen: it reflects the

recognition these issues extend beyond tariffs. the trump administration, although this causes most economists to scratch their head, seems to be fixated on the trade deficit as an important metric. the tariffs issues and purchases of u.s. products are going to be imported, but getting this relationship right is going to require looking at a gamut of issues the on tariffs. shery: what does this mean for other countriesshery: like those that depend on trade with china, vietnam and the rest of southeast asia? some people thought they could have benefited from a trade war. stephen: yes. it is interesting because anytime there is a major trade disruption between the largest economies in the world, certainly there will be spillover impacts in other countries. that is especially pronounced in

east asia. it is a double-edged sword that can cut both ways. there are a lot of factories throughout asean and east issue that interfax are intermediary goods shipped to china and contained in exports sent to the united states. through the extent those exports are curtailed, that is going to have a negative implication in the rest of the region. on the other side of the coin, to the extent some chinese companies reached the conclusion that it makes sense to move factories outside of china to avoid u.s. tariffs, countries like vietnam and malaysia might be in a position to benefit. shery: you are on the negotiating team for the nafta deal, now that president trump says he is going to tell congress to terminate this deal so it can be replaced by the newly negotiated usmca. when you see the difference between the agreements, how

substantive where the changes, and could that give us an indication what sort of deals president trump wants after the 90 day moratorium? stephen: i suppose i would characterize the revised nafta butore than tweaking, substantially less than a complete overhaul which was the impression the trump administration would require during the renegotiation. i would be fairly cautious about over extrapolating any lessons from the nafta experience, through china or to relationships with other countries. to the extent of are lessons to be learned, it does suggest the trump administration, despite its rhetoric, will be willing to accept less substantial changes van indicated, but china is a unique case much and i wouldn't over extrapolating the nafta experience to u.s.-china.

shery: thank you for your insights. 's stephen olson. on fxl discuss the impact -- the latest on oil as russia and saudi arabia agreed to extend the opec plus deal into 2019. this is bloomberg. ♪ ♪

shery: this is daybreak asia. i am shery ahn. paul: i'm paul allen. on the sidelines of the g20, russian and saudi arabian leaders spoke about the future of oil. he agreed to extend production cuts into 2019, providing optimism for higher prices. ramy inocencio has the details. with oil falling 30% since -- the opec member

nations and russia are trying to get a floor, and they could be on the way to the spirit you could see the happiness there between mohammad bin salman of saudi arabia and vladimir putin. they were fist bumping each other. other delegates also gave their blessing. there is no formal declaration, but we are awaiting that to happen in vienna. the opec president, the uae energy minister, said technical teams are working on some level of cuts. mr. putin came out with a statement and said there is no final decision on volumes, but with saudi arabia, we will do it . he said it will be data dependent, they will monitor the market situation and react to it quickly. a lot of this has to do with crude. go into the bloomberg terminal. we can see for november, this is the worst fall ever since

2008 in the global financial crisis. crazy numbers. opec and russia are trying to keep prices elevated. bloomberg intelligence has already said if we fall below $50 a barrel, that could mean more doom because there is not as much support that right now we are seeing uptick. let's go into a second chart here. this is interesting because as we are trying to see a possible cuts,hrough in terms of we are seeing saudi-russian and american output still rise strangely enough. the white line is saudi arabia but interestingly russia in blue and u.s. in yellow, pretty much at tops, all sold 33 million barrels every single day. they don't want to much or they will lose market share. there is an interesting balancing act. looking ahead, also checking out to see how much they will cut and how long they will happen. shery: what are people saying

about expectations, how much of the oil production cuts are needed or expected? ramy: the number everyone is floating is 1.3 million barrels a day. this is according to an advisory group that has advised opec the past week or so. another firm has said for russia, they might be open to maybe 200,000 barrels a day. if you take that away from 1.1 million, it is a lot of oil still possibly out there. the question with saudi arabia and other nations also continue to cut production. that is a big question. investors are positive on some kind of deal. the bar chart to focus on is this one here. this is the biggest amount of money inflows into the biggest that monitors prices. ever since june 2017, the idea

is there could be inflection investors are hoping for optimism in the oil prices that could rise sometime this week. shery: thank you so much. next, washington ways delaying a government funding deadline as lawmakers continue to honor president george bush. this is bloomberg. ♪ ♪

visit daybreak asia. i am paul allen in sydney. shery: i am shery ahn. let's get a check of business flash headlines. a white house statement says china is considering approving qualcomm's $44 billion bid for xp semi. it is part of a wider agreement should -- agreement struck by president xi and president trump. they scrapped their bid for this

after a two-year wait for approval. chinese regulators declined to clear the deal but beijing expressed regret over the collapse. paul: standard chartered is cutting jobs in singapore, dubai part of a drive to reduce costs. as many as 100 positions could be involved in dubai alone including senior roles. the ceo has launched a campaign to reignite growth in standard chartered including plans to signify -- semper fi there structure and free up the quiddity -- simplify their structure and free up liquidity. shery: trying to convince investors to abandon the $60 billion takeover of london listed shire. the times says a group of to canada family members -- a group of family members want to stop this, what would be the biggest takeover by a japanese company. investors will approve the deal wednesday. paul: in the wake of carlos

arrest, macron tells shinzo abe he wants to save the alliance. this is bloomberg. ♪ this is bloomberg. ♪

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paul: it is 10:30 monday morning. markets are trading, the main benchmark pointing higher, 1.6%. the same story with s&p futures, up 1.6%. higher after trade tensions easing with the u.s. and china, not to mention we have a more dovish turn from the federal reserve. i am shery ahn in foggy and rainy new york. david: i am paul allen in sydney, where it is the first day of summer i believe. let's get to first word news.

asian stocks set to gain dollaryuan and aussie gaining. the leaders of china and the u.s. dining at the g20 and promising to halt any new days.s for 90 washington was set to impose a new round of tariffs on $200 billion of imports from january 1, with the white house debating whether to tax all goods from china. mr. trump: i look forward to the discussion. the relationship is very special, the relationship i have with president xi. i think that is going to be a very primary reason why we will end up getting something good for china and for the united states. spacex intends to go -- to go: spacex intends ahead with its launch after a delay. it is not sure what forced the

delay. the launch will put three small satellites into orbit on a mashing to scan the glover -- mission to scan the globe for pirates. the e.u. is turning up the heat on italy, demanding they lower their budget target from 2.4% to below 2%. brussels wants spending cuts of at least $5 billion to revert -- everett sanctions of breaching budget rules. the italian parliament will debate this budget on wednesday. the israeli prime minister is facing new corruption accusations with police recommending he stand trial for alleged bribery in a third case. investigators have fresh evidence he treated influence for favors, something the prime minister denies. the decision to indict will be made by the is really attorney general who has yet to rule on the earlier corruption cases.

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 su keenan. this is bloomberg. says heresident trump is open to pushing back a u.s. government funding deadline to avert a parcel shut down as washington prepares to honor former president george h w bush. ros krasny joining us now with more. we know there will be one day of mourning for the former president on wednesday. why would the deadline be pushed for weeks? ros: it is interesting one day of closing washington could post -- could push a deadline two weeks. it sounds like lawmakers want to get this done and would be willing to have a one-week delay. president trump is offering two weeks. one thing to watch for is a key

meeting between the president and the democratic leaders in congress, nancy pelosi in the house and chuck schumer in the senate. what the potential shutdown is all about is funding for the border wall, the u.s. border with mexico and how much the democrats are prepared to give ground on that. a lot of internal discussions in the democratic party. nancy pelosi is under pressure from her progressive wing not to fund the wall at the level president trump would like. forthof going back and even from wednesday when former president bush will have his funeral in washington. aside from that, james comey is set to give closed-door testimony to congress. what can we expect? he wished a public campaign to not testify behind closed doors, and his lawyers have

--ed a motion to have that it is not a hearing but more like testimony to have it in public. they lost, and now they have given ground. sounds like he will be asked about 2016 and hillary clinton's emails and how he, the fbi chief, handled it. and robert moeller's investigation into the 2016 election and possible collusion between the trump campaign and russia. he was fired by president trump in the middle of 2017. this is a very interesting event in washington because basically after this, republicans lose control of chairmanship in the house committee. for is like the last hurrah the chairman of the judiciary panel. the event could

be 24 hours, but having a transcript put out was one thing comey was insistent on, he and his lawyers, in going ahead to drop the case. ros krasny, thank you for that update. french president emmanuel macron is committed to the rental -- alliance,itsubishi despite the arrest of carlos ghosn. he said any decision must be made by the companies, not the governments. the chief north asia correspondent has been following this. what is happening with carlos ghosn? stephen: going into week three of this saga, he was surprisingly rested in tokyo on november 19. he has been some other detention has been extended. i will get to that in a minute. i want to talk about the meeting between shinzo abe and emmanuel 20 because it is

very interesting whether the government's should get involved or not. the french government has a 15% stake in renault. they have a stake in this drama. the japanese government does not , but they want to see representation of nissan better participating in this alliance, which nissan says it is under represented. the drama is escalating to the top levels of government. shinzo abe said he doesn't think this come of the future of the alliance should be decided by government. it should be decided by the companies. but i mentioned emmanuel macron 15%the french government's stake. emmanuel macron was the economy minister who increase to that. with little consultation we are being told with the japanese and with nissan. when they were caught offguard by the arrest of carlos ghosn, it is a bit of a comeuppance if

you will. shery: we heard last week carlos ghosn was denying any wrongdoing . we have more updates on his legal fate? his detention has been extended as of friday for another 10 days, so we are doing the math until december 10. prosecutors are weighing the evidence and could as well in the japanese legal system charge him or arrest him again and charge him with another crime. that would allow prosecutors to extend his detention even further. as it stands now, prosecutors would have until december 10 to indict him. given my knowledge of the japanese legal system, it is a foregone conclusion they will charge him. where we go from there is he and aguess, but former director on the nissan board remain in detention in tokyo. shery: thank you so much for

that, stephen engle. the latest on nissan. the markets that are open now in asia, all in the green. we see u.s. futures also jumping. some more optimism over trade tensions easing. like stockks investors are taking optimism and running with it this first trading day. mohamed el-erian put it, the g20 ended without fireworks and will offer a short-term respite. in australia we see stocks gaining one point 4%, sentiment not getting dented by december home prices posting the biggest drop since the crisis. when it comes to what is leading gains for the asx 200, that is the energy sector jumping 2%, tracking the rise in oil prices. brent and wti surging 2%, this as russia and saudi arabia are two extend the opec plus oil pack.

oil withion is listing the worst month for crude prices in 10 years. we are seeing mining shares gained ground in sydney. this is the easing in tariffs rhetoric could take the edge off the dollar and boost commodities. the scope steel rising cost in 10 years. one big mover in sydney, graincorp jumping as much as 30%, the biggest since october 2012 after the company received a $1.8 billion takeover from long-term asset partners. the market, mexican peso and south african rand lead the market in emerging currencies near the aussie dollar rising as much as 1% to hit a form of high. advanced atg this 691 after touching 689 in the session overnight. paul: thank you very much for that.

long-term asset partners, the group of australian investors. might not run into the same trouble that they did back in 2030. plenty more to come. we will be talking about brexit and where the pound is heading. this is bloomberg. ♪ is bloomberg. ♪

asia.this is daybreak i am paul allen. shery: i am shery ahn. theresa may has one week now to promote her brexit bill, and the house of commons prepares to vote. pressure is rising with the opposition labor party saying it will propose a vote of no-confidence if the deal is rejected. kathleen hays is watching this. labor is going down the gauntlet. more and more hurdles for the prime minister. what is next? kathleen: this is the week they start debating the deal.

the vote is on december 11. what is striking here, this was on a sky news interview. the labor brexit spokesman says it is inevitable the option -- opposition party will introduce a no-confidence motion. deal isrime minister's rejected. this is something that was already sort of stirred by members of her own party, but it was a small portion of the number needed to push this in. part of the reason this is coming to a head, this would lead to another general election for the u.k., and there are so many people opposing it. opposition parties, her own allies in the democratic unionist party in northern ireland, 100 members of her own conservative party. he begins to look harder and harder. labor would like to see a second

referendum. they think that would give the british people a chance to take a look at this now they can see what the damages would be. theresa may picked up a couple of endorsements, speaking on sky news sunday. the tory party chairs said plan b is plan a, the only deal on the table. theresa may trying to launch hurt charm offensive -- her charm offensive. this is really, this is make or break time. they will debate the bill, vote on the bill. it will be very interesting to see if in a matter of what, maybe eight or nine days theresa may can pick up support, because the other side of the fence is just what mr.g lewis said, there is no other deal. take it or leave it, and if you do, you are leaving. it is an exciting time besides g20 deals and jay powell this week, clearly this is a big week

story. paul: thank you very much for that update. the next guest says opec's meeting and the uk's brexit debate means the past -- the u.s. dollar could be volatile. this is the senior currency strategist at westpac. let's start off with brexit. it is difficult to say with any certainty what is going to takes placethe vote in the aftermath apart from saying it will be untidy. let's start with the british pound. where does it go and where is the bottom? >> we have to say there is more downside on the pound than we have been thinking a few weeks ago. would bethough you able to bumble through with a compromise deal, squeeze through, but in terms of cable, the downside has been supported a little bit by the fact the

u.s. dollar has lost support over the last few weeks. if they get on a stronger footing, we do have this failure of the vote, there is no particular plan. we are probably looking close to 120. paul: where is the dollar heading? we have seen some scenarios in which people say the long rally is over. where do we go from here? is open to debate in terms of the fed outlook. we have had a predictable run with the fed hikes for some time . now the message from the speech jay powell gave last week, supported by the vice chairman and others, commentary from the top fed officials indicating after the december hike which looks likely still, there is more open room for next year. westpac is looking for three more hikes based on the strength

of the labor market, inflation and growth running, currently running 3%, well above 1.8% trend, that is arguing for rates to be around 3% or higher. -- fed is keeping it could keeping an open mind. that could limit the dollar. people are betting on it not having such a great year, but we are reasonably upbeat. shery: add the fact trade tensions between the u.s. and china are easing, and it means further downside pressure on the ust? -- u.s.d.? >> we have had a bounce in the aussie, kiwi, everything except the dollar, yen has weakened against the dollar, but it is a sharp response. i guess the asx market has been mixed. the aussie hasn't gone on with

you have tods, but regard it as good news. at --only time, a 60 day extension to come to agreement on the intellectual property, which is a difficult topic for china to address to the u.s. satisfaction, as we saw from that report that was very negative. it could be a postponement. in the near term it has been taken as relief for risk currencies, asian currencies. yuan seeingffshore a significant gain. after november it was a sideways trade for the offshore yuan. this chart showing volatility is still there, implied option volatility, pretty elevated against real-life volatility. does this mean we should expect more fireworks for the currency,

or could this deal between the u.s. and china help? i suspect it will be quite likely because this is only buying time into may be the end of february, and markets are still nervous about the prospect case of aet the worst resumption of u.s. dollar strength backed by higher interest rates, that will mean we are once again talking about the seven handle on dollar-china. and the authorities in china are concerned about what that could mean in terms of capital outflows. that would be consistent with fireworks resuming. near term, dollar-china should be under control. shery: why haven't we seen a bigger drop in the japanese yen from this temporary hold to the u.s. tariffs? the yen has been interesting the past few months in that it hasn't been as risk sensitive as it has been historically.

they negotiated all sorts of turmoil from turkey to the october meltdown in stocks, so really the focus i think remains on the yield situation. thear-yen firmly watching outlook for u.s. interest rates -- kept in recent weeks capped in recent weeks, priced into next year, 50 basis points for the fed over the next 13 months, and the 10 year yield dropping back to 3% or a little lower. unwound that rise. that gives you dollar-yen, but it should be better next year. paul: we have the reserve bank of australia's final meeting tomorrow. it is a while before there was concern over the aussie dollar, but we got -- we haven't going above the 200 day moving average. what level with that become concerned again for the rba?

a lot of it is driven by the softer u.s. dollar, the biggest move last week was in reaction to jay powell rather than what else was going on in markets. not concerned at this stage but the decline over the past year or more has been welcomed by the rba. we can see improvement in terms of the trade position of australia, even though with this great concern over the u.s.-china trade wars, australia has improved over the course of this year, and the forecast is for $3.5 billion in october, coming out later this week. in terms of supporting the trade position, the aussie has been helpful. the rba will want to see it remain on the low side, maybe a little lower. shery: thank you so much, senior currency strategist with westpac joining us from sydney.

breaking news from japan, capital expenditure year on year 4.5% for thed third quarter after a gain of more than 12% in the previous, missing estimates of a rise of 8.5%. capital spending gaining only 4.5%. we are hearing japanese companies' third-quarter profits 6%e 2% year on year, sales on the year. capital spending excluding software also missed estimates, gaining 2.5%, missing the analyst consensus of a gain of 10%. capital spending very much a slowdown, missing expectations as well, selecting pressures ranging from natural disasters in japan, not to mention weaker external demand for semi conductors being felt across the japanese economy as we see

capital spending gaining only 4.5%, missing -- missing estimates of a gain of 4.5%. the yen is weakening .25%, standing around 113. plenty more coming up. this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. paul: i am paul allen in sydney. let's get a check of business flash headlines. graincorp has sold in sydney as it considers a takeover offer from long-term asset partners valued at $1.8 million u.s. it was a 43% premium to the grain handlers last closing price. the australian government rejected a 2013 takeover from the midlands as being against national interest.

bank's bossche doesn't expect to be targeted in a money laundering inquiry. police raided their headquarters and other offices last week. the investigation touches a private wealth unit overseen by before he by the man became ceo. but the bank conducted its own inquiry and they consider the matter closed. paul: vietnam airlines is pushing ahead with plans for an ipo in the new year. financial times says they plan to offer shares on the ho chi minh stock exchange. although the final decision will be made by the government in hanoi. it advances a plan that originally saw vietnam air aiming to come to the market the middle of 2019. shery: look at the markets trading now. the asx 200 and the new zealand on tradeining ground

tensions easing. nikkei futures and kospi futures are higher. we have a weaker japanese yen on the 90 day moratorium on tariffs on china. plenty more coming up. this is bloomberg. ♪ this is bloomberg. ♪

paul: good morning. the major markets are open for trade. shery: good evening. sophie: and i'm sophie kamaruddin. welcome to "daybreak: asia." paul: our top stories, bringing relief to stocks. the aussie dollar is also stronger. they will continue to manage the market.

softbank making history. and it could be a very positive day for markets all across asia as we see trade tensions easing between the u.s. and china. a more dovish tells coming from the federal reserve. getting a breather on the first trading day. treasuries may also move. investors are engaging the temporary relief. earlier, telling us that it is a postponement. seeing tokyo

gaining over 1%. material stocks leading the gain. to check onn currency markets. leading that rally. the aussie dollar rising as much as 1%. last check on oil prices, jumping after the worst month in 10 years. paul: sophie kamaruddin, thank you for that update on the market. let's get to the first word news. theresa may facing a vote to bring down her government should they reject a brexit deal next week.

labor says it is inevitable that the party will propose a no-confidence motion should they lose the vote on november 11. the eu saying the only options are the deal on the table or canceling brexit altogether. the eu is turning up the heat on italy. brussels wants spending cuts to $5 billion to everett potential sanctions from breaching budget rules. the italian parliament will debate the budget on wednesday. .nd the hotel chains it did not affect its own brand chains.

they bought it in 2016. the affected units include sheraton, westin and others. it is rare that a hack would last so long. after months of weakness tied to the slowdown in china, revenue rose to 3 billion u.s. dollars. it is also more than twice the forecast. the 28th expansion. november was the third month in a row of single digit growth. 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. shery: the aussie dollar is higher.

president trump and president xi jinping put up escalation on hold until the new year. eric, the stakes were pretty high for both sides going into this meeting. how satisfied should they be with what came out of it? i have been thinking about that and it depends on who is live you are looking at it from. if we are wondering what motivated him to agree to this cease-fire, you might say that a does not want to see decline in the stock market. reacting to that cease-fire over the weekend, maybe there is a reason for that. a number of other issues that need to be sorted out, is it extended and deeper trade war?

we cannot say whether the next a deal, but present this is a big step forward, given that they were prepared to raise tariffs on january 1. an additional $267 billion on u.s. goods. if you like.h, certainly, progress from where we were. paul: it was also that meeting. what was the result of that? like the trump and president xi jinping meeting. president putin met with the

crown prince of saudi arabia. theirgreed to extend production agreement, which everyone interprets as a production cut. i want to read to you in next served of what vladimir putin said in his press conference. he was asked by one of our colleagues about the possibility of joining opec in this production cut and extending the agreement that has come to be known as opec plus. onre is no final decision volumes, but together with saudi arabia, we will do it. here is another. we agreed that we will monitor the market situation and react to it quickly. they are, they are committing it. they are committing to continue to manage global oil supplies. opec is responsible for 40% of global direction. together with opec and

it wields a great deal of force. does not forget that if it result in a production cut in market is pricing that in at the moment, it will be a disappointment to president trump who has repeatedly called for lower oil prices. paul: thank you for joining us. let's see how investors like the noise -- the news from the g20. let's start with that oil story. a bear market. there are a number of moving parts. on the other hand, we had the temporary waivers to run. you are taking a long position. absolutely.

a pullback from $75. it has run its course. one of the things we're looking at is improved global outlook. we know that in the middle east, russia, production levels are at record levels. it becomes the swing factor for the short term in the market. that is what we are seeing and fighting, dig list in oil prices. bouncing off an important technical level, which indicates in the short-term, we are likely to see further gains. the meeting that opec will be holding on friday is a big part of this. lows.ect we have plunged now it is the demand side of the picture. improving, it is the

first up. i'm not sure about it. i think there is a lot of concern that the saudi's cannot afford. there is a lot of posturing going on. a factor in the stabilizing. i do not think the market is expecting a lot of moves. up -- theyces go fall, it does not mark -- move the threat. even if it keeps a bid on the market what i think the is pricing, anything could be a positive for the market. you mentioned how you are

factoring in what happens to the dollar. showing that the current bullish bet is very high level. we saw the dovish turned coming from the fed and trade tensions easing. what does that vote for? it is a very mixed picture. the yen.ins against that is what we are looking at. ongoing fluctuations. level we are about to see a bounce back. clarity, it further think we get the first rates out of the way. a chance to look at next year.

that, like most people, i am expecting dollar appreciation. thank you so much. still ahead, economics president joining us to discuss all things oil ahead of this week's opec meeting. paul: up next, morgan stanley's chief economist is here. why they see growth divergence swinging in the favor of local markets. this is bloomberg. ♪

paul: this is "daybreak: asia." the u.s. and china have declared a trade troops. when does it lead to a trade deal? kathleen hays is here with more.

does this make the job easier for jay powell? challengeshatever they have in front of them, they practically all remain the same. they are just trying to gauge when it needs to stop raising interest rate. the people's bank of china, there is a question of how to manage an economy that is slowing down? at the same time continuing to rein in leverage. the trade war, this back-and-forth has complicated the deal. reserve, the minutes were out last week and i want to give you a sense of the kind of things that used he. trade tensions are weighing on global stock market sentiment. this is investment.

more than expected. citing conversations with businesspeoplemore than expecte. . it has gotten worse. so far, if you look at the data, there is no sign or very little sign that the trade war has hit the economy. maybe he will get some questions on this as well. perhaps in ay are tougher position because they are having this trade deal, trade war uncertainty. decision on make a if they need to give more stimulus to the economy. suchconomic slowdown is that the forecast for pboc rate is still unchanged. as the economy is expected to

to see more are starting rate cut in 2019 from the people's bank of china. it seems that their task is a to makearder, trying sure that the economy does not go too fast. the people's bank of china still has a big task for 2018. hays, thank you for joining us. an update on the markets now an update on the markets now with sophie kamaruddin. sophie: looking at the market reaction to that tree truce of the weekend, we are seeing positivity. leading a rally. they are gaining ground. tailwind going into 2019.

they will hop back into the driver seat next year. joining us now from hong kong, thank you for joining us this morning from singapore. taking the lead next year, that is one of three divergences that you are anticipating. willipation that the fed upon. -- that the fed will pause. the actions of the weekend is definitely a positive. essentially, the way that we inrate in our analysis growth sentiment, because of the trade talent, we tend to say that whatever is announced, we will build into our numbers. to 25.rom 10

we have a downside to our growth because of that. it brings the upside. what do you make of china's on? that stimulus continuing, does that seem to be the case? what will china do going forward? there is a lot to be done. the road ahead is still very bumpy. they will come up with adjustments that they will need to make. onromise of protection issues. liberalized for the economy. shery: we had surprising marks from jerome powell that we are just below that remark. what do you make of that and

when do you think we could reach that so that the fed can indicates runoff as well. >> we need to keep in mind that the u.s. growth is going to move on. we think that the fed will cause when it reaches the mutual range. we expect three more rate hikes. level,sun reaches that it will be about 2.5 for the mutual range. the fed will pause and that will be the indication that we have gone. is there a risk that the u.s. economy heats up, the fed decides it is no longer below the neutral rate and they decided to hike up more, what is the risk then? >> that would be a risk. the risk to the u.s. outlook is more to the downside than

upside. because of the fact that you are going to see fading. we are already seeing the monetary tightening. .ery sensitive sectors the trade tensions have taken a positive. it is weighing on business confidence. risk is to thehe downside rather than the upside. we are now hearing that saudi arabia and russia could be extended or output cut when it comes to oil production. how will this play into your expectation for the price trend next year? they are more focused on the inflation. they got that number to be a little softer than expected. the inflation risk is more balanced.

it is really the growth outlook that will be the focus of the fed. >> -- sophie: what is your outlook for the dollar as well? >> we expect the dollar to be weak. growth is going to slow. we think that creates a backdrop 2019. to weaken in with the divergences, we have already touched on e.m. and you are seeing federal popping while others are hiking. we have an out of consensus view on that one.

around the second quarter of 2019. they are quite conscious about negative interest and the fact that it is making the financial system not so much effective. inclined to believe the boj will move in may 2019. shery: disappointing expectations slowing down a lot from the previous quarter. more negative numbers coming out of japan. is this something that we should be concerned about? >> third-quarter numbers have been influenced by multiple natural mishaps. we have to wait a few more months to see whether there is a trend or is it is the effect of whatever happened during those months with the weather conditions. we think japan is ok. there will be improvement in growth in the first quarter.

we think something similar is happening in europe where production has been affected because of emission standards. shery: thank you so much. sophie kamaruddin joining the conversation as well. plenty more to come on "daybreak: asia." ♪

shery: this is "daybreak: asia." let's get a quick check of the latest flash headlines. becoming the first security firm to get approval to take control of a local joint venture. buy aiss banks one to

third to take its interest to 51%. it underlines a long-term commitment to china. also seeking control of joint ventures. shery: the white house says china would consider approving the bid if it is presented again. it is part of a wider agreement struck by president xi jinping and president trump. almost a two-year wait for approval. later expressing regret over the collapse. standard chartered is said to be cutting jobs in dubai. sources say as many as 100 positions could be involved in dubai alone. bill winters just launched a campaign to reignite growth, theuding plans to simplify

structure and free up liquidity. macron tells abe he wants to save the alliance. this is bloomberg. ♪

paul: 8:30 in hong kong, an hour from trading there. i am paul allen. shery: i am shery ahn. let's get to first word news. su: asian stocks are set to gain with the u.n. and -- the yuan and aussie dollar going to rise with the tone down in the trade rhetoric. president trump and president xi tariffs forhalt new 90 days. washington promised to raise duties on $90 billion of imports starting january 1 with the white house debating whether to tax all goods from china. mr. trump: i look forward to the discussion.

the relationship is very special that i have with presidency -- president xi. it will be a primary reason why we will probably get, and updating something that will be good for china and the united states. su: russia and saudi arabia have yet to officially confirm new oil curbs after agreeing to extend their deal to manage the market next year. president putin announced the opec plus extension after meeting the crown prince of the g20. the president of opec is optimistic and alliance will reach an agreement on production cuts when they meet, when opec meets in the anna. vienna. benjamin netanyahu is facing election allegations with police recommending he stand trial for alleged bribery in a third case. investigators have more evidence he treated influence for favors, something he denies. decisionion -- the

lies with the attorney general who has yet to rule on prior cases. 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 su keenan. this is bloomberg. it is time to z how asian markets are shaping up a let's get to sophie kamaruddin. sophie: it is a decent start for asian markets on the first trading day of december. we are seeing moves across asset -- across asset classes. you have commodities jumping 3% on the back of russia and saudi saying they will extend the opec oil packed. you are seeing treasury yields going higher, the 10 year up over five basis point as risk appetite is back in the mix. looking at the broader market, we see equities gaining ground, stocks in tokyo and seoul rising

1%, and currency markets getting a lift as the dollar continues to retreat, given a trade truce over the weekend we have stocks in sydney also gaining ground when it comes to what is helping the leaderboard peerless check in on stocks there because we have graincorp also on the up while we have others like mining stocks gaining ground in sydney. let's check in on the stock movers this morning. we'll see what else is moving. graincorp earlier jumping as much as 34% as the company received a takeover offer values it at $1.8 billion with the offer price 42% premium to the last close. bluescope steel jumping the most in two years after the easing of tariffs rhetoric could weigh on the dollar. also want to highlight softbank rising 2.7% as we got indicative

pricing coming in for its listing due out this month. shery: sophie kamaruddin, thank you. let's talk about softbank because it is set to make history with $21 billion ipo of its wireless unit, said to be the first to debut in tokyo without a price range. this is a reporter who covers softbank. what does it say about this ipo it was able to list without a price range? it comes across as a sign of confidence that they can move the shares they want at that particular price. this has not happened in history of tokyo stock exchange. they arehe reason is heavily targeting individual retail investors, and you can sort of imagine the mom and pop will not be thrilled if the price were to go up or go down, fluctuate.

so they don't want to scare off people less familiar with the ipo pricing mechanics. it is also fair to expect when the final price is set on december 10, it might not be changed, and the listing will happen december 19. shery: we know the telecom industry in japan has been under pressure with the government asking companies to cut fees, so is there confidence justified? their confidence justified? reporter: there are some threatening clouds on the horizon. the unit seems to be slightly overvalued relative to its competition. if you start to take into account the rates are under pressure, government has made, government officials like the cabinet officers have made confident -- mark -- comments about the market, docomo is

already following through. it is not clear whether softbank and others will follow through. but there is one other problem, the entry of a wireless giant into the market, and the potential that their strategy would be to launch a price war to put a crimp on earnings of softbank mobile. paul: how has investor demand been? colleaguelast week my published a story saying the underwriters already met their ¥2 trillion sales target. if you are here, you cannot avoid tv commercials for the ipo which is unprecedented for companies going public. this company has about 35 million subscribers. it is perceived as -- the yield it is offering is 35% payout ofio which sounds like 5%

the ¥1500 price. it is hard to be in a country when there is negative rates in the savings accounts that deliver nothing. as for his individual net is concerned, it seems good. softbank will get what it wants. our technology reporter in tokyo, thank you for joining us. the french president and metal macron is committed to that renault, nissan alliance despite the arrest of carlos ghosn. he discussed the issue with shinzo abe on the sidelines of the g20 meeting in argentina. stephen engle has been following this drama. what is the latest? stephen: the latest is shinzo abe and emmanuel macron met on the sidelines of the g20 meeting in argentina. they said all the right things you would expect them to say. emmanuel macron saying he would like to see the success and

further continuation of the alliance. people say have the better end of the deal. and they have a 15% stake in renault, which has a 43% stake in nissan with voting rights whereas nissan has 15% and no voting rights. it is believed the nissan board minus carlos ghosn would like to see a revision of more equitable relationship in the partnership. it would be a logical step for the governments to get together and talk about it emmanuel onron wants more information the investigation going on in japan. shinzo abe, he said it should be up to the companies to continue to resolve this dispute rather than governments. but emmanuel macron has his the economyis as minister a few years back before he became the president. he orchestrated the increase to 15% by the french government in

renault. they have a huge sway in the company, including in france. 50,000 employees, some workers. it is a political hot potato in france. shery: we know japan's legal proceedings and investigations are not the most transparent. do we know any at this point what will happen to mr. cohen -- carlos ghosn's legal fate? stephen: prosecutors are putting together their case and the prospect -- the court has approved another 10 day extension of his detention. after this time expires, prosecutors are required either to let him go or to indict. it is a foregone conclusion he nextbe indicted, but the 10 day extension should go until december 10. that will be a week from today, another seven days. what we are hearing from local

media, they could, prosecutors could rearrest carlos ghosn if they wanted to buy more time, reinvest -- rearrest him on other charges which could extend to the end of the month. he and greg kelly, former representatives director, still in detention. greg kelly is interesting. he was the left and right arms of carlos ghosn in nissan. he controlled the chop. he had various departments reporting to him including human resources, public relations, legal compliance, auditing. it will be interesting to see if or greg kelly strikes a deal remains loyal to the top man, former top man, carlos ghosn. shery: stephen engle with the latest on nissan. next, oil jumps as riyadh and moscow agreed to extend

management of the market. we will ask what it means for long-term prices. this is bloomberg. ♪ is is bloomberg. ♪

this is daybreak asia. i am paul allen. shery: i am shery ahn. russia and saudi arabia have agreed to extend their deal to the oil -- manage the oil theet, opening a deal for opec meeting in vienna. we are joined by the president and chief economist at prestige economics. great to have you with us through we have seen a horrible november for wti prices, the worst in a decade. now we are seeing this slight uptick because of this deal. the chart showing exactly that. i wonder what will we need to see on this meeting in vienna for this spiked to be

sustainable. >> there are a few things. on the one hand you have the trade concerns looming large, casting a big shadow over the oil price. i think it hints there could be durings in the armistice the u.s. and china, holding off 90 days before increasing tariffs. even this morning it has oil prices, copper prices up and on equities futures are up quite a bit. that is something good going into the opec meeting for the folks at the table. what you want for more oil isprise -- supply support members and nonmembers working to keep an i on production and inventory levels and keeping them tight. truce,you mentioned the how bullish will that be for the commodities market broadly? lastme of it was priced in

week, which is what we expected. even now you are seeing markets priced in more. what is weighing on commodities, it is the trade war, since march we have brought our forecasts back. we have such a bearish view on copper and aluminum for the year. metals grindn the down, we see the rise, but it will depend on whether this is going to lead to something or not for oil prices, but strong driving season. we know the grind down has come as a result. this diminishes, you could see more upside. our guest earlier was saying the oil story is a demand story now. things that might be driving that, is it sustainable? >> demand can shift a lot

quicker than supply in the oil market. it was a demand story in q1 and q2. use of the u.s. summer driving season, a major driver for the global market. that pushed prices up there it unemployment in the u.s. the lowest since 1969. that is the strong demand from the summer but now it is a question of what is going on in the global economy. the chinese manufacturing pmi that comes out this evening, that will be critical for expectations, for what happened $50.ovember, at or below what we see the next few months, does china go into manufacturing recession? does the caixin go below $50? you could have seen a recession coming to china's manufacturing sector. now there is a lesser chance,

but it doesn't change what the conditions are now. china an important part of the demand story. but we were also seeing pictures of mohammad bin salman giving high-five to vladimir putin. this might be something we see in vienna later this week. s it is aaudi catch-22. you cut production, then there is a risk of flying up the economy. really depends. the calculation is something they are looking at, price times quantity and total revenue. there is demand as a structural component. in china the biggest net , they are suddenly seeing the potential for slower growth in additional marginal oil demand. they might pull it back because in 2014 when it china slipped into a manufacturing recession which might -- went through the middle of 2016, opec didn't have

those responses. global inventories built significantly. that build up in global oil inventories, the overhang is what has kept oil prices depressed. only recently have inventories gotten down to the five-year average. they achieved that this year only to see now china slowing down at risk to produce additional demand. the future biggest source of demand is china. shery: what does it mean for natural gas? marketral gas, the u.s. looking at that, very different story, even though we have exports. natural gas is still a market that is on an island. if we look at the u.s. and see all year long prices were depressed, although there was a trend higher beginning february, it was unbroken throughout the year and resulted very recently in massive price spikes for u.s.

ofural gas prices because cold weather at a time when inventories have a massive year-over-year deficit below the five-year reach. as with oil, it is a demand story. we see a pretty mixed dynamic with oil prices because -- gold prices because equities and the dollar higher last week and gold rising. what is happening? >> it has fallen for a number of months during the year. only the last couple of months have we single prices rise. those movements have been muted, even though in the past couple of months we have seen priced higher. that will be a choppy market i think going forward. what we are looking on the macro side or potentially hard and levels, especially if some more complete level of

trade detente is reached between the u.s. and china --. shery: jason shanker, coming to us from austin. and new zealand cracks down on foreign homeownership and the region popular with wealthy americans feels the pain. we will look at the impact of kiwi property rules next. this is bloomberg. ♪ this is bloomberg. ♪

shery: this is daybreakshery: t. i am shery ahn. paul: i am paul allen. let's get a quick check of business flash headlines. bring corp. has soared in sydney as it considers a takeover offer from long-term asset partners of valuing it at $1.8 billion u.s. it wasa 43% premium as less closing. the australian government rejected a 2030 takeover offer from archer daniels midland being against the national interest. the deutsche bank boss doesn't plan to be personally targeted in the money laundering inquiry. police raided the headquarters and other offices last week. the investigation touches the private wealth unit overseen by the man before he became ceo. the bank conducted its own

inquiry and considers the matter closed. vietnam airlines is pushing ahead with plans for an ipo in the new year. the financial times says the carrier aims to offer shares on the ho chi minh stock exchange in the first quarter although the final decision on listing will be made by the government in hanoi. it revises a plan that originally saw the anon air entering to come to the market by 2019. this region of brazil and has been a popular place for wealthy foreigners attracted by the skiing, golf and vineyards. the crackdown has begun to affect the market. average price has fallen. let's go over to the bloomberg charts. what does this say about property in new zealand? reporter: the report clearly shows people in queenstown in particular, they put their houses on the market in october before the ban took effect,

hoping perhaps a foreigner may be interested in their property. now the following month, maybe they are taking those off the market. it is early to know how much of an impact the new legislation has had. there is a lot of different dynamics in the property market, low interest rates, the reserve bank last week announced easing of the restrictions. on the other side, lower buildings with government programs. so the outlook for next year is a pretty soft market i think. fall: we have seen prices 20%. you talked about really not yet seen the impact of this foreign buyer legislation. what exactly does this legislation do? the legislation

requires any foreign buyer buying residential property to prove that they can add something to the economy, very similar to what we always had for farmland and those assets. it is another hurdle for foreigners to overcome, and particularly in the big areas of auckland, their largest city, reportedly a lot of asian interest pushing up prices. it will be difficult for those investors to target properties here. mean news this zealand's days as a haven are over? reporter: it will be quite difficult for a billionaire to buy lakefront property with a helipad. but there is a process for foreign investors to go through, to convince the regulators the

proposal makes sense, and if they want to buy a farm or vineyard or another has said, where they are going to invest money, hire people, benefit the economy. people would be happy with that. shery: thank you so much with that. now for a look at the next few hours on bloomberg television, david, what are you watching? david: we are watching the risk on really. but a 50 futures are already trading 130 points to the upside, good omen. in china we are watching soybeans. that starts trade, under $900 a bearish -- a bushel. lots of talk about mark tinker and the question a lot of people have in mind is whether or not we get a v-shaped rally, how long does it last. at chief china economist

j.p. morgan will be here to talk about implications on the economy and strategy when it comes to chinese equities. a member of he is china's state council. that is the group that meets regularly to decide where the large economy goes for lots to talk about. you mentioned risk on. that is what we are seeing with up 1.5%.ere, the asx pretty strong gains on the upkei, south korea's kospi 1%. shery: other futures also higher. this is bloomberg. ♪ this is bloomberg. ♪ ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪

rishaad: 9:00 a.m. here in hong kong and shanghai. yvonne: risk appetite returns to the market as the u.s. and china agree to tone down the rhetoric. david: oil johnson as well. they will continue to manage the market. local producers me in vienna to this week. rishaad: the latest reading of satisfactory floor. expect marginal expansion at best.