haidi: good morning. i am haidi stroud-watts in sydney. shery: good evening from new york. i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to daybreak asia. haidi: our top stories, beijing threatens to rotelle rate -- retaliate if the huawei ceo isn't freedom. the imf repeating warnings about trade. tradeine lagarde said the

spat is threatening global growth and wages great carlos ghosn will be charged in the coming hours. we will have the case live from tokyo. shery: the markets close, the friday session, u.s. stocks saw the worst week since march with the dow falling more than 500 points, losing more than 1000 points. utilities are the only sector that gained ground. the s&p defends its sector, big tech names like amazon falling 3%, nasdaq falling not as much. take a look at wti, opec less agreeing on further output cuts more than $1 billion -- one billion barrels a day. right now falling .8%. u.s. futures also under pressure. we had more trade headwinds as well as fed officials giving out hawkish comments. are set forn stocks

declines after losing 1.5%. in sydney we see the asx 200 losing with tech stocks among the biggest laggards. i also want to highlight adelaide, the biggest cement group, down 2.5% this morning as a statement is due on home loans data. headwinds putting pressure on aussie dollar, trading below $.72 u.s. also watching for the potential indictment of carlos ghosn by tokyo prosecutors. nissan could face indictment. apple suppliers in the hot seat again as japan display reportedly the latest to cut productions on slowing demand. southbank, one of them to watch. there was an offering apparently covered by wednesday here. also watching for reaction with china's anti-sports led deal to

sports for $1 billion. this would be the biggest struck by a chinese buyer for a european asset since june 2017. we have japan hosting the photo -- final read on third-quarter gdp. do.he home later -- data another decline expected a be at at a softer pace as the outlook for housing prices has prompted australia to be warned for a severe collapse in the housing market. haidi: the potential of a hard landing being warned. sophie kamaruddin kicking off a busy start to a week full of china data. let's get you caught up with first word news. off with the imf warning about trade tensions. work threatensde

to derail the global economy by undermining companies and raising the cost of living. they cut the global growth forecast since the first time in two years, blaming the trade war as a threat to emerging markets. >> it takes both u.s. and china to be determined to reach closure and it is important because trade is a major engine for growth. trade if it is damaged, threatened, is going to affect growth. less growth, less investment. people who are in the business of creating jobs will lose confidence. julia: china straight -- trade surplus hit a record even as export growth slowed with waning demand and uncertainty about the trade dispute. the surplus was $35.6 billion driven by a 10% rise in exports and 25% decline in imports.

is slowinglation again while gains in the consumer price index moderated. isthe u.k. theresa may entering probably the most important week of her career. there are predictions for deal is dead and she will face a vote of no-confidence. her critics are calling for her to reopen negotiations with the e.u. even the brussels has said the current deal is the only one on the table. the government insists there are no plans to delay the debate on the brexit bill. on the energy front the price of oil jumped as the opec plus group delivered bigger output cuts than expected, which defined president trump's call to keep them open. saudi arabia, russia and the rest ended two days of talks by a agreeing to removal of 2.1 million barrels a day in the market first quarter of next year. most of the production will be

shouldered by saudi arabia. >> were very forthcoming, went ahead of the curve,, a lot of oil, more than the market needed at the end of the day. we saw inventory building to dangerous levels at an alarming rate. bit late andng a conservatively. su: 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. tensions between beijing and washington are escalating and show little signs of dying down despite calls to separate the rest of the huawei cfo from trade talks. beijing summoned the u.s. speak about this.

david engel joins us in hong kong, also ros krasny in new york to cover every facet of this story. this comes at an awkward time as washington and beijing are grappling for the right response given trying to get trade talks on track. officials will hear talking about how these issues should be separated, the trade dispute and this alleged terminal case with huawei and the arrest in canada and extradition process. what we are seeing is a diplomatic row that is escalating because of the arrest in vancouver of the cfo of huawei. what we are hearing is the chinese foreign ministry has tomoned a u.s. ambassador china, and that comes a day after the canadian ambassador to china was summoned to the foreign ministry.

i know how these things work. they have to go and get a verbal , just kind of sit and take punishment. china is threatening further action if necessary. they have said, the foreign ministry said actions have violated legitimate rights and interest of chinese citizens and are bad in nature. that was the statement in reference to terry branstad. for the canadian ambassador they said file in need -- said vile in nature. they threaten action if the lady is not released. the united states is alleging she hid ties between huawei and the now dissolved hong kong company sky, but did business with iran in violation of the sanctions.

shery: robert lighthizer now insisting this case will not affect trade talks. listen first. >> it shouldn't have much of an impact. i can understand how the chinese would see it. this is a criminal justice matter, separate from anything i work on or anything the trade policy people work on. it is criminal justice. shery: difficult to imagine this case will not affect broader relations. the huawei case is supposedly about iran sanctions violations but it is really trump and his administration that wound up tariffs and height -- higher ones with intellectual property theft. it is a complicated web of we don't like what you are doing, so we will slap on terrorists. -- tariffs.

how you celebrate -- separate the items, it is difficult to cp weed won't get much of a sense from everybody. we heard from robert lighthizer, peter navarro and none of them indication much there is a fast resolution. doing a will happen to the woman? the court casew will continue monday vancouver time, and her lawyers have requested bail am a but it has not been a cited -- decided. prosecutors argue she is a flight risk, so they are arguing not to allowed bail. canada is presenting the case in a canadian court as the united states seeks extradition for her. andite the long-standing quite close extradition treaties between canada and the u.s.,

this could take months if not years if at all. in the canadian legal system she would have multiple chances to appeal even if extradition was approved. haidi: what is at the heart of the crux of the u.s. reasons as a reason for arrest? we know it has to do with sanctions against iran. talked about,n the company that is now defunct was doing this with iran, that is the crux of the matter. that is about as much as we know . the trump administration is getting pressure from congress .o act on huawei like with zte we heard from marco rubio, republican senator from florida, and he will introduce a bill that actually went nowhere in

the past congress. he will try again to stop huawei from doing business with u.s. companies. always a different lot of stakeholders in the u.s. between congress and others who want to push may be harder than the trump administration wants. another company getting factor for getting the trade talks on 10 -- on track. if you were to be a betting man, a realistic chance we will see these issues, completely separate, as robert lighthizer is suggesting, is that likely to be the view beijing takes? they would take a different view. they already have a hard enough time trying to figure out which voices from the u.s. are the ones to listen to. is it trump, congress, judiciary? issueill see this as one

and perhaps a retaliatory measure. that is a guess. it is interesting to see how far the u.s. can go on this case and get extradition and prove as has beenwoman alleged misrepresented the ties between huawei and skycam -- sky, in those deals between huawei and iran. haidi: stephen engle there, and also ros krasny usually in washington but now out of new york. we are counting down to the revised second reading of the gdp numbers out of japan. the chief macro strategist joins with numbers as they break later this hour. shery: why our next guest is short on the s&p 500 and the aussie dollar. our guest for melbourne. this is bloomberg. ♪

shery: this is daybreak: asia. i am shery ahn. haidi: i am haidi stroud-watts. with the fed and brexit, december look like anything but quiet. the issues dictating market sentiment seem to be reaching a critical juncture, our guest says. great to have you and happy monday. it is hard to pinpoint the scapegoat for the week that was last week but all the volatility and uncertainty on the monetary policy front or trade, brexit, regardless of where you are looking it is a perfect storm for more volatility in terms of next year. >> absolutely. we are really experiencing a good correction since october. the last three months have's -- have seen volatility in markets

and issues with ramifications. what has been interesting for me is december as opposed to october and november has been more characterized by slower .lobal growth the october selloff was precipitated by fears of the aggressive fed. when you look at implied measures of inflation and growth forecast, earnings, economic fundamentals, what is driving us slower is the fears we have reached peak growth and perhaps in the next 12 months we are entering some version of an economic slowdown, how extreme it will be remains to be seen. that is driving the narrative. that is driving must asset classes around the world. haidi: i want to bring up this chart looking at volatility. you have her j.p. morgan saying their estimates for the level next year will be 15 to 16

compared 14 to 15 which is where we have been tracking much of this year. we have more communications for the fed, more live meetings where they have said they are preparing an arsenal of hedges. what is your bet for your cautious but opportunistic portfolio? >> in terms of volatility, we will see well as stability in line with historical averages, going over the last decade, easing monetary policy. , 20ill see between the 15 market with volatility averaging, but we will see times when there is quite a bit of deviation from that. spikes of volatility much like february this year and of what we are seeing at the moment. there is a lot of short opportunities, especially across equity indices and growth

proxies. at this point in time the s&p 500 looks vulnerable to pulling back factors that have led the markets to record highs. if you look at growth, proxies across the currency market, australian dollars are a terrific example be we see the fundamentals domestically support this. down side is available. that is where i am looking at the moment for what is positioned in the year ahead. anything exposed to growth, economic growth fundamentals and lookingtors, i would be to underperform amidst high volatility we are experiencing in markets. shery: we are seeing stocks get cheaper. you can see forward 12 month pe's and the s&p 500 is 15 times i handle from forward pe. $90 the euro nations would bring it back into the market --

valuations would bring it back into the market? >> the credit cycle has bolstered stocks for a long time. intohy targets are made long-term especially on the s&p, if you look at charts at this point, we had oversold over the past three or four months before we saw this selloff. similar to what haidi was saying with markets. it was driven by short-term factories like trump tax cuts last year. we got this hot rally in markets, not in global growth over the past sort of 12 months or so, it is driven by a fairly transitory factor. the fed tightens and go through the this, whereas here it is an interesting question. they will tighten seemingly. that will allow the markets to believe they are stabilizing .nterest rate hikes credit markets will be tighter

than the past, and that will take some of the steam out of markets. i will expect there will be a playback into more long-term trends for the s&p 500. there will be similar effects for the nasdaq and dow jones that will go to the downside for next year, pullback to the 24.5 for moreling back long-term averages. have we seen -- shery: have we seen the bottom of the bear market in china? >> i call that once before and got -- called that once before and got burned. the charts here are showing up there is the potential now we have seen a pretty solid bottom. assess.hat i use to the variables of the trade war and how that stands, valuations are looking good but seeing the

economic data, at least in the short-term the trade war is weighing on mystic demand and the overall economy in china -- domestic demand and overall economy in china. there will be a rough patch, and it will take time for that to flow into the data. as an investor it is a sentiment play at this point in time because really wake up from the mid part of this year was disbelief the trump administration would go with the tariffs and trade war, as they have proven to do. people don't want to jump into markets with the knowledge if things go bad, we don't get a trade resolution, we will see greater tariffs on a greater number of goods, higher rates of them. no one wants to jump into the chinese markets when there is a risk this could escalate above what you consider out of control. until we get resolution, it will not be that impasse where we

jump into the markets, despite the fact fundamentals look strong across the asx 200. shery: you will have to stomach the volatility. thank you for that, market analyst from melbourne. opec and its allies deliver a bigger than expected output cut, taking more than 1% of global production off the market next order. this is bloomberg. ♪ ♪

haidi: this is daybreak asia. i am haidi stroud-watts. shery: oil jumped at the opec plus meeting, delivering bigger than expected cuts. the political implications are profound, showing the biggest producers are ready to define president trump.

>> the decision is for six months. if the market needs to continue, we could extend, but at the same time we see the market needs more oil, we have all the instruments in place to make adjustments. we are flexible. shery: joining us is erin clark. the last time we spoke, we were could achieve a deal. how did they get there? >> it got people by surprise. the opec plus group which includes russia, they said they would cut production 1.2 million barrels a day starting next year for six months. initially a lot of people didn't think this would happen. saudi arabia's energy minister said he was dubious a deal would get done. when they announced the deal, the agreement on friday, prices jumped, brent as much as 6% to

$64 a barrel before ending at $61. this speaks to the growing, deepening relationship between saudi arabia and russia, two of the largest producers. they work together on the earlier cuts that started in january 2017 and lasted 18 months and clear to global inventory. now they will do it again. this includes other members of opec, libya, iran, venezuela. it speaks to the growing dominance and relationship between saudi arabia and russia. they are really willing to work together to manage the oil market. without the u.s., is the cut enough to sustain prices? analyst notes i have seen are bullish. people are reading this as

bullish news for the market that will limit supplies and boost prices. haidi: thank you so much for that. our asia energy minister -- reporter. we will look at nissan next. this is bloomberg. ♪ ♪

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haidi: it is 10:30 in sydney, markets have been trading for 30 minutes. looking at the major benchmarks, one point 2%. seeing weakness in the aussie dollar, week inflection numbers out of china -- weak inflection data out of china. we had one, fixed asset industrial production -- the latest piece of the puzzle in , trade warlowdown narrative. we are seeing s&p futures

falling. this was after the worst week in u.s. stocks since march. a clear day in new york 6:30 p.m., not lucky for the southeast where the winter storm is hitting. 1300 flights have been grounded. i am shery ahn in new york. haidi: stormy weather in the markets and on the ground as well. i am haidi stroud-watts. you are watching daybreak asia. let's get you to first word news. su: china has summoned of the canadian and u.s. ambassadors over the rest of the chief financial officer from huawei, threatening unspecified action if she is not freedom. she is accused of defrauding banks by hiding the status of a company subsidiary called sky com, alleged to have reached u.s. sanctions on iran. washington said this is not connected to trade talks which

should continue. >> shouldn't have much of an impact. i can understand how the chinese would see it that way. it is a criminal justice matter, separate from anything i work on tradething that the policy people work on. it is criminal justice. nissan, carlos ghosn remains in custody in a tokyo jail cell with reports saying the chairman will be formally charged with understating his compensation. there are conflicting stories what led to his rest -- arrest. wall street journal citing unnamed sources, that he wanted to shake up senior management and replace the current ceo. people close to the matter say there were no such plans even though relations between him and the ceo were strained. emmanuel macron is set to address the nation later after another weekend of violent

protests across the country. his approval ratings have plunged with the so-called yellow vest protests which were begun to fight fuel tax prices. critics say he needs a grand touster -- grand gesture somehow convince skeptical opponents. more protests are expected next weekend. it could be a rough landing, australia being warned of soft landings in housing markets are rare. they should be prepared for the threat of significant drop in prices. 9% oecd said it could drop next year, leading to a gradual pickup in wages and inflation. as housing slowdown remains little, but they warn of household debt being potential problems. 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. let's look at market action as investors get started in asia. sophie kamaruddin is all over it and unsurprisingly not a lot of conviction. it is a big week in terms of data points. sophie: headwinds just from that weekend. we have events, u.s. futures taking it on the chin this morning. december contracts falling as much as .9%, and the yen firming octobertrongest since 29. markets assess the fallout from the huawei ceo arrests, so more pain looking likely after the worst week since march and looking at asian equities as well. the slide in u.s. futures reminding fuel for the aussie bears, the aussie dollar falling

against all g10 peers. had been pushed to the lowest since october 31 against the japanese yen. we have more small economic indicators from china and pressure likely ahead as home loans are excited to full -- fall albeit at a softer pace. stocks resuming declines, the benchmark asx 200 off 1.3%. tech is the biggest drag. leading the sector higher. on the other side of the spectrum, looking at laggards, you have this group losing the most ground, a poultry, products producer. a supply people throughout australia and new zealand. they are off 1.5%. holdings is off after the plunge on friday. the chairman is stepping aside

as regulators launch proceedings against the company last week. -- launched proceedings against the company last week. vodafone, the venture coughed up the most for its you haveding 1.6% but it down 3.7% this day. after months of wrangling, the u.k. parliament is ready to vote on theresa may's brexit bill. kathleen hays is here with the latest as voices of opposition grow louder. a lot of pushback on this. kathleen: most are convinced it will go down in defeat after much to theresa may's dismay, 17 months of negotiation, the most important deals, negotiation the u.k. has entered into since world war ii. she is determined to get the vote tuesday as planned. it is interesting.

many people speaking on the sunday news shows in the u.k., including boris johnson, far foreign minister under theresa may. he said this deal means that you have the power to intercept -- in effect blackmail the u.k. we will stay under their power for too long. steven barclay, the current secretary,uitry -- no plans of further vote, we prepare for a hard brexit but this would be undesirable. as for the you, in france the foreign minister saying talks are close, it is up to britain to decide. donald tusk saying i had a phone call with theresa may. it looks like an important week for the faint of brexit. i would say that is the understatement of the day. theresa may has her work cut out for her. it is hard to say how she could

do anything to change opposition. be 48 no-confidence votes for people to challenge her leadership as prime minister. only 24 are public. -- get the feeling shark sharks are circling, and when the deal falls, more confidence will go out. haidi: feel like we have spent the last couple of years in the constant state of what if. what if it fails, what if she steps down and what after? waiting: there are many in the wings for that moment to stay, -- say, i am here. if we look at developments over the weekend in terms of what is in the news, john trickett from the opposition labor party saying they are ready to form a minority labor government as soon as wednesday.

members are not ruling out they would run for the conservatives to get the prime minister job for themselves. the brexit secretary, conservatives will not split over brexit even as more step down. theresa may told the daily mail that her party, the conservative risks helping labor push for power if the bill is defeated. that is a risk they have to face as well as a second referendum. are her loyal supporters looking at the possibility this is what will happen and they are talking about two possible versions. it would be let's look at again. you want to leave or do you want to stay? a more interesting version would be, do you want to stay or leave, and if you want to leave, what deal do you want? would you accept theresa may's

or one that keeps with wto? surprising thing would be if theresa may decided not to have a vote tuesday after the e.u. has reiterated the hard stance, have the vote, move ahead. big -- haidi: big risk with investors. thank you so much. kathleen hays with the latest peerless go to japan as carlos insn remains into -- custody, he could be formally charged with the state of his relationship with former employees. there are disputed reports that he planned to oust the ceo of nissan. us fromrter joins tokyo. this comes on the broader wekdrop of -- first of all get an indictment today, what does it mean for carlos ghosn?

>> the first thing to remember about the japanese justice system is 99% of indictments late to a guilty verdict. if carlos ghosn is indicted this afternoon, he could be sure to be found guilty at some stage. the charges against him, they lead to maximum penalty of up to 10 years in prison. this is a serious situation. in the shorter term he will not be released because we believe from local media reports he will be rearrested on a separate charge relating to a separate , similar charge, and that allow him to be kept in custody for another 20 days. so it would almost certainly mean christmas in jail and not seeing his face in public for quite a long time. shery: he remains at the head of her know still. what happened to the alliance? the longer he is absent as a

unifying force, the longer this is called into question -- more this is called into question. renault is looking at whether or not senior managers were reporting their income correctly , and carlos ghosn is among those being examined. this has been a point of controversy in france for a long time. there could be something new at renault. the power shovel continues. nissan is unhappy with this weak position it has versus renault, and many people would .ant to reorganize that having said that the two governments, french and japanese, are keen to keep it together. we have had repeated calls from prime minister abe and macron that this should stay together. it is complicated. haidi: our asia government

reporter in tokyo. shery: uber is said to have t in filing forf an ipo. they submitted information to the sec for which could be one scc for witest -- could be one of the biggest things. what do we know so far? uber filed late last week, confidentially, paperwork for an initial public offering. this comes at the same time where their biggest competitor in the u.s., lift, filed on the same day, but uber is the international behemoth that it is. thoughts onn to wall street, one of the five all time.o's in morgan stanley has announced

they pegged this on an optimistic end as high as $120 billion. haidi: in terms of timing, we have markets in turmoil. doesn't someone like a good time but are there incentives for dara to do this before next year? >> there is a number of things on the finance side of the company. they have an insane amount of debt. they lost more in a single year than amazon at the peak of the -- dot combble bubble. some shareholders could sell on private markets if they don't go public by a certain time. dara has been saying they plan to go public next anr, but the timing is

acceleration of what he has talked about. given they have already filed the first round of paperwork, we could see an ipo in the first half, possibly the first quarter on an aggressive kind -- timeline. haidi: big start to the year in .he top five check reporter there joining us out of san francisco with the filing.n the uber ipo we are going to get a snapshot of the japanese economy, third quarter gdp out in a few minutes time. i should say things could get worse before it gets better.

this is daybreak asia. -- haidi: this is daybreak asia. shery: we are likely to see a

deeper contraction in third-quarter gdp numbers for since the nuclear disaster at fukushima. the slumped with a series of typhoons and an earthquake that knocked down for -- down power in the north. thank you so much for your time. how much of an impact are we going to see from natural disasters, and if we do see one, does it mean because of the efforts and rebuilding after disasters, we could see a big rebound in the next quarter? third-quarter -- yeah, and the third quarter we like to see a little deeper with data that indicated would go down, so we are expecting something like 2.3% reduction, but in

fourth-quarter we are likely to see rebound as you indicated. we should see rebuilding activity and rebound in consumption. in japan, there is no 300,000 workers allowed to actually get involved in sectors that face a labor crunch. impact? be the it is a difficult and long-term issue. ofare facing really a kind real shortage now. it is a step in the right direction, but we need to see what kind of impact on the aspect we would have. that is something we need to say. anyway it is a right step. politically sensitive.

i wonder if we attribute what we are seeing in terms of the with a string of natural disasters plainaying bad luck, -- bad luck, or is it a slowdown of animal spirits? you are not seeing much of an impact with reflationary pressure. >> that is what we are concerned with. at this moment we have seen little evidence the recent trade dispute between the giants have begun dampening business sentiment. machine orders have been relatively strong by these kind of uncertainties. but -- [speaking simultaneously] haidi: hold that thought because we are getting gdp numbers, second readings, gdp final reading coming in, contraction

.6%, slightly worse than .5 percent. adjustedhe seasonally porter on quarter. annually there is a contraction of 2.5%, worse than 2% expected. nominal gdp quarter on quarter contraction of .7%. the deflation number we are expecting .3%. we are also getting more, private consumption quarter on quarter at .2%. than-- little weaker projecting. business spending, 2.8%, a lot worse than the estimates of 1.8%. getting your first reaction to those numbers, across the board, a little weaker than expected. is this seasonality? talking about a series of natural disasters, or are we going to see a pickup?

it is mainly due to the impact of disasters. we need to check the details of the data, not just the first quarter cory but last year categorye are doing -- because last year we are doing large. we should see, we could see some fiscal change in this. remain dueer should to disaster affect. we should see rebound in fourth-quarter. things like 2.5%. also getting the current account surplus narrowing less than expected coming in at ¥1.3 trillion. the expectation was it would be ¥1.2 trillion after a trade of ¥1.8from september trillion. a lot of it has to do with export numbers that slowed more than expected in the month of

october. when you are factoring in the japanese yen and what happens to exports, what is your outlook? regarding exchange rate, the level of the yen is favorable to exports from japan. i think it should be somewhere around 95. around 110 is a comfortable level of foreign exchange rate for foreign exporters. we see probably we should see even forternal demand this quarter as a result of the slowdown in the global economy. for the next year we are seeing mostly, generally neutral exports for the economy. shery: we also are expecting the tankan survey very what are your expectations about sentiment on

manufacturers as we get global trade headlines and concerns about global growth? that is right. we are expecting some declines 14, 15 in the tankan survey for december. that is widely digested in the markets. more important should be slump for the fiscal year. -- capex slump for the fiscal year. haidi: given the factors shery just mentioned, trade war impact on demand, the asian supply chain, critical for japan's exports, do you think there is resilience? to go window closing through without a disastrous impact like we saw last time? >> the impacts of the trade dispute is mild at this moment.

if this is effective temporary, and if fiscal policy would be conducted as planned, we think japan should be able to show resilience to the rising rates next year. haidi: thank you for joining us. mitsui hashem it -- asset management and we had japan second reading of the second-quarter gdp with oil being lackluster, underperforming. let's look at market reaction into the open of trading in tokyo and in the soul -- in seoul. sophie: after gdp numbers and the slide in private consumption we can anticipate softness for equity markets. futures indicating a drop of 2% for the k2 25 while the -- nikkei 225.

the yen is rising as risk taking backseat. we are seeing futures pickup while treasury futures are rising, pushing through fridays highs in early asian trade, implying it will open two basis points across the curve lower. keeping an eye on reaction to the parliament passing the trade deal with the u.s., setting up a process from limitation january 1. also infrastructure, no progress on plans for kim jong-un to visit seoul just yet. holdings being bought for $275 million. a move it is considering a second car battery plant in china and we are watching samsung after citi forecasted fourth-quarter earnings lower than market consensus because of the memory chips and downside is expected.

in tokyo we are keeping an eye on recruitment after the upper house of the diet past to allow more low skilled foreign workers to be injured the country -- enter the country including agriculture and expected to allow as many as 345,000 foreign workers in. haidi: a plethora of risk off factors, spooking asian investors. take a look at tracking australia, continued down i'd. here with the aussie dollar, the yen seeing -- quasi-yen seeing a big -- new zealand also off close to one person. in terms of futures, nikkei futures down 2% as we had disappointing miss across the board for gdp third quarter and the kospi looking lackluster going into that open.

we will go over some of the trade data out of china over the weekend. the commonest for standard chartered joining us. we will talk trade huawei. this is bloomberg. ♪

haidi: good morning. i'm haidi stroud-watts in sydney. shery: good evening from bloomberg's world headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." ♪ haidi: our top stories is monday. beijing threatens unspecified action if the huawei cfo is not free. -- freed.

the international monetary fund repeating its warnings about trade. the u.s.-china threatens global growth, jobs, and wages. shery: carlos ghosn is expected to be charged. we will have the latest on the case live from tokyo. on wall brutal selloff street with u.s. stock seeing their worst week since march. u.s. futures on -- under pressure. at one point, falling as much as 1% or we could be retesting the lows as back in february and april around 25.50. let's see how markets are trading. it is still heard -- barely, but how are we looking? early, but we are red across the board for asian stocks. the nikkei, losses over 1%. adding to declines we saw last week. ofn 1.5% over the course last week. it looks like more pain ahead for asian equities. when it comes to data today just, we have japan's gdp refer the third quarter coming in lower.

you have business spending and private consumption also coming in weaker than anticipated. that is likely denting sentiments for her japanese investors. in australia, losses of one point 8% we are counting down to data due at the bottom of the hour for october. there has been concern over the slump in housing prices. that has prompted oecd to warn australia to prepare for a severe collapse in the housing market. for investors, they will have to react to the parliament passing the trade deal with the u.s. setting up the process for implementation on january 1. taking a look at other assets, over to s&p it futures, down this morning. we had december contracts fall as much as .9% are you have the yen looking form -- firm of this morning. keeping and i on treasury yields, trading at 2.83% this morning. giving this risk off tone. sophie kamaruddin

checking on the markets. for more on what we're watching us markets gets underway, let's bring our reporter here. it has been more naughty and nice is here. looking like a current december. >> no presents under the christmas tree. lots of coal. 500 brutal week last week. futures were reflecting that when they closed for asian markets in friday and new york. over the weekend, it was pain point after pain point. case and the huawei u.s. ambassador which is a big cloud over everything, but we also had two sets of weak china data. we have the french protests going on, more brexit concerns, everything looks bad. then we get on monday morning and what happens?

more pain. japan's gdp is even worse than thought. i was just looking at the job -- of the drop in business expenditure, the worst since 2009. which was a frightening time. that started,e since well before they begin the project to cure the japanese economy. it is all looking extremely grim. , shares ares dropping, yields are dropping, it is looking like another painful week. haidi: and even these look at your dollar futures curve, looking at one hike next year. that is not giving the markets very much confidence at this point. garfield: the markets have been serial offenders when it comes to misjudging where the fed is going to go. especially ever since jay powell became chairman. the strong expectation is they will raise this month. and they will probably -- they

are likely to stick to, if you have a flight of doves at the fed, you might get a reduction to a consensus for two rate hikes next year. instead of three rate hikes. that is a situation where the euro-dollar curve is pricing for about a 50-50 chance for one hike next year. occasionally slipping to less than 50-50 chances for a hike or you are still going to have the market at odds with the fed. in terms of what happens with china, we are seeing weak numbers. whether on the export numbers or factoring consumer price pressures showing sluggish domestic demand. isn't that a good thing for equity markets? then you can be assured there will be government support. garfield: the problem is the government has already been trying to introduce support. and it is also in a hard place

because the chinese authorities know that they need to reform their economy. they need to shifted toward a more consumer demand led economy industrial model is not what they need anymore. that was why they did the deleveraging. that is why they have been trying to take the heat out of the property market. that is why even admit everything, the pboc has been to let thattant dropped. the problem is if you are moving toward a consumer led economy, the sentiment becomes so much more important because consumers are less biddable to say, you need to make more cars, more of this, so we can ship it to the u.s. that was the old regime. now it is, we would like you to liquor, by more toys, buy more electronics, to pump up the economy. when you have got doom and gloom headlines about trade wars and

about everything else that has that can make it hard for the economy to get traction, even when the authorities are trying to loosen things up. you look at australia, those have record low interest rates. we are still struggling to get real traction in the economy here. there is a lot of differences between china and australia but china is moving toward that developed market model. that is when you get sentiment playing a bigger role. the sentiment at the moment are not particularly happy. thank you so much. garfield reynolds. you can follow his commentary on markets live blog. you can get a market rundown in one click. there is analysis from bloomberg's experts editors and you can find out what is happening to your investments right now and let's go back to sophie kamaruddin. she is checking one stock that

is seeing big swings. sophie: that is the case. japan display is slighting 10.6% following the most since of may 2017. it is sliding to the lowest level on record. this is on the back of a news report on sunday that the company began reducing the production of lcd panels for apples, iphone, as sales of the model are said to be weaker than apple had expected. tokyo-based panel expected to cut production by 30% compared to levels prior to those reports. investors reacting quite significantly to the news we saw on sunday from the nikkei regarding japan display. sophie kamaruddin there in hong kong can let's get you to first word news.

we are getting audio problems there. let's get you caught up to date with the us first word news headlines. we are talking about opec. it was a deal struck to remove productions from the opec plus group. that saw oil prices jumping cat that was a bigger expected -- that was bigger than expected. saudi arabia, russia, and the rest of the alliance ended two days of talks in vienna by agreeing to remove 1.2 million barrels a day from the market in the first quarter of next year. the vast majority of the reduction will be shouldered by saudi arabia. were very forthcoming and ahead of the curve and gotten more than the market needed at the end of the day. and we saw inventories, buildings, at a very alarming rate. if anything, we are probably acting a bit late and very conservatively. theresa may is entering

the most important week of her career with predictions that her brexit deal is dead and she will face a vote of no-confidence prep the prime minister's critics are calling for her to reopen negotiations with the eu even though brussels has repeatedly said the current deal is the only one on the table. government insist there are no plans to delay tuesday's debate on the brexit bill. china's trade surplus with the u.s. hit a record in november, even as export growth continue to slow on waning demand and uncertainty about the trade war. than $35.6 was more billion driven by 10% rise in inorts and a 25% decline imports. other data showing that china's factory inflation is slowing again while gains in the consumer price index -- index is moderated. carlos ghosn remains in custody with report saying he will be charged later on monday with understating his compensation. there are differing versions of

what led to his arrest. the wall street journal says he wanted to shake up senior management. sources tell bloomberg there was no such plan even the relations between the two had been strained. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: tensions between beijing and washington are escalating and show little sign of dying down despite calls to separate the arrest of cfo from trade talks. over the weekend, beijing summoned the u.s. ambassador to arrestn protest over his in vancouver. for more, we're joined by chief north agent correspondent stephen. we are hearing that his health could be failing. >> that is right. on friday there was a bail hearing that did not reach a conclusion. canada time, to address the plea

by her lawyers to have a bail. the prosecutors of the crown have argued that she is a flight risk. so the bail request should be denied. we are hearing people close to the matter through reuters news agency that she has argued that she has hypertension as well as other health concerns. while incarcerated in canada. it is high blood pressure. she apparently is telling the court that she was treated at a hospital for hypertension after being delayed. she was flying from hong kong to mexico via vancouver when she pulled off -- arrested, i should say, the airport. then these charges have been filed against her. that is where she stays right now, in jail, in vancouver. waiting the possible bail decision as well as a possible extradition to the united states

which could take months coming all., or not at she would have the right of multiple appeals if indeed she worked -- if it was decided she would be extradited to the united states. being flowhat huawei -- vocal against the arrest and the chinese government? what are we hearing from them? hearing theare chinese foreign ministry has summoned a u.s. ambassador to china. these typically are 10 lashings by the chinese foreign ministry to the ambassadors who have to sit there, take the time lashing, then go back to their embassies. on saturday, the canadian ambassador to beijing was also summoned to the foreign ministry. we had a statement from the ministry saying the actions by theunited states violated "legitimate rights and interests of chinese citizens and are extremely bad in nature." a similar statement when they summoned the canadian ambassador and it was vile in nature

threatened canada with grave consequences. if this court proceeding against meng continues. they also threatened further action if necessary. to the united states. if they pursue legal action against sabrina meng. sabrina being her english name. we do not know what those further actions might be. given the level of how beijing feels agreed to by this is going to jeopardize is already uncertain trade talks? stephen: they could. obviously the markets have been seeing it that way because we had a tenuous truce coming out of g20 with xi jinping and donald trump. lo and behold, when they were having dinner, this arrest happened. we heard from robert lighthizer saying these are separate issues and it is not the -- the huawei is not one that he is dealing with, he believes it is a notinal justice case i'm a

a trade rectification matter. they will say the right things but as far as beijing is concerned, they have always complained about which voice do they have to listen to from the united states on policy whether it is the president or whether it is congress, now the judicial system, they will probably lump them all together. a great deal of uncertainty further complicated by this huawei case. stephen engle with the latest in hong kong. coming up, we will get the latest in the saga. he will be formally indicted for we will be live in tokyo. factoring -- as trade with the us hits record surpluses peer group will discuss that with someone next. this is bloomberg. ♪

shery: welcome back.

let's get a check of this one stock plunging after news that it will be taken private. sophie kamaruddin looking at that. pioneer, theis japanese maker of av equipment. it agreed to be taken private in a $904 million revival plan. the stocks lighting the most in september of 1981 falling to a record low. this appears to be a modification of a deal struck and december and it is supposed to put pioneer back on a stable dispel uncertainty and stabilize operations p we are seeing the stock take a hit as investors react to the update. haidi: thank you so much. china's trade surplus with the u.s. hit a record $35.6 billion in november, despite overall exports flowing on waning global demand of uncertainty over the trade war. factory gate prices slowed further. consumer inflation saw moderation. let's put this into concept -- context and we are joined by ding shuang, chief economist for

china and north asia. great to have you. when you take a look at the trade surplus, the overall slowdown in exports and the lackluster impact we are seeing when it comes to imports, does this give you a sense of the trade war or is it really a structural slowdown that was already hitting china and that continues to play out? ding: i would say though weak trade shows week but demand -- weak demand. trade tensions. in the meantime, china's trade to 45s jumped in november billion u.s. dollars. and that is on track to shift china's current account balance fromderate annual surplus a deficit in the first three quarters. ironically, china's surplus with the u.s. expanded by 17% in the first of the month, despite the trade tensions with the u.s.

looking ahead, the soft external and the payback of the frontloading of china's export may continue to weigh on china's export, but the important may be supported by china's tariff cuts, of u.s. agriculture products. and to boost domestic demand spirit as a result, china's current account balance may shift to an annual deficit in the year of 2019. we expect the government to maintain the fiscal policy to offset the external ideas. haidi: we are going to get a full or picture throughout the of the week.se we are expecting data and domestic activity indicators toward the end of the week. thisrucial for getting piece of the slowdown puzzle. if none of those show a breakup,

does not paint a picture of the pboc having more of a window to ease further as we get into next year? most with inflation likely in the 2% to 3% range pboc,f the time, for the it is driven by things other such aslation maintaining financial stability. in that sense, it would be more wrong for the monetary policy to be more accommodating. but i would expect in the upcoming central economic world conference, the government will play a major role. the budget deficit for example is largely to be increased to 3% of gdp in 2019 from two .6% of gdp this year. more importantly, the local whichment issuance quota

records a shadow of a deficit may be increased further by four point percent -- by .4% of gdp to deal with the undesirable consequence of u.s.-china trade negotiations. you morees that give hope about the economic prospects for growth in china, given the boost that they are expected to receive from the fiscal side? ding: yeah, we are less pessimistic about china's economic growth in 2019. we forecast a moderate slowdown of gdp growth to six .4% from an estimated 6.6% this year. mainly because of the fiscal stimulus and on the monetary policy side, we think the pboc will stick to the neutral monetary policy which would require about two percentage points of cuts. if the macro policies are not sufficient, the government may

actually select -- selectively ease it. those actions, does that mean we are expecting further weakness for the chinese yuan then? stephen: we seep -- ding: we see depreciater it to for the current account deficit next year. but also because of the diversion of monetary policy between the pboc and the federal reserve. in the near term, we think the government still has an intention to keep the currency stable against a basket of currencies, especially during the 90 day tariff when the u.s. -- when china and the u.s. will continue to negotiate on a trade deal. we already see that in the past few months, even with the depreciation pressure, the central bank is trying very hard to keep it a currency from depreciating against the u.s. dollar. haidi: very quickly, you say

that huawei issue was a timely reminder. does that mean you are not optimistic these trade talks will eventuate in a true a taunt next year? ding: yes, indeed. the huawei incident is a timely manyder that there will be twists and turns along the way during the 90 day negotiation. and the rivalry between the countries will foreshadow the relationship in the decades to come. but that does not mean that these two countries are locked in their collision course and we see intention from so -- from both sides to escalate trade tensions per which increases the chance of a trade deal during the 90 day negotiation. case, there are intentions from both sides to separate it from a trade negotiations. always appreciate your insights. ding shuang joining us there

from hong kong. you can get a roundup of the stories you need to know to get your day and week going. today's addition of daybreak, go to dayb on your turn among -- on your terminal. we are getting the latest on the huawei case. it is available on the bloomberg anywhere app. this is bloomberg. ♪ rg. ♪

shery: let's get you a check at the latest business flash headlines. japan is falling despite denying that is reducing production of ld panels for the iphone with sale seen weaker than expected. the nikkei news is the company would cut production by 30% and hold output completely for 10 days over the new year period. haidi: the spanish government has failed to join a legal complaint into madrid's 2013 sale of thousands of low income

apartments to the local partner of goldman sachs. they say the court has missed petition saying the state was not a victim of the sale and was not affected directly. lots more to come here on "bloomberg daybreak: asia." this is bloomberg. ♪ ♪ there's no place like home ♪

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

this is daybreak asia. we are seeing declines when it comes to the aussie dollar, particularly as we get a reaction to the low inflation numbers out of china and the huawei case continuing to cut -- cast doubt for the futures of beijing and washington, leading into uncertainty in australia. looking at numbers across the bloomberg with aussie home loan data from the month of october .ith a gain of 2.2% pretty upbeat on the contraction of 2.4%. investment lending out .6% and

the owner occupied value 3.5%. good news given it has been some concern from contractions, particularly in capital cities that have seen a strong run-up in prices. the oecd sent out a warning saying the property market crashes are rarely soft landings and people should be ready to wait and react. let's get to sophie for market reaction. we had a little bit of good news. does this one count? sophie: it doesn't because stocks in australia are taking a hit. the aussie dollar continues to climb, back below the $.72 u.s. level. we did see home loan approvals rising better than expected but overall the slump in the housing market is raising concerns. oecd warning australia to

prepare for a collapse in housing prices. we do have japan leading the , this after2.3% third-quarter gdp numbers came in disappointing. business spending also lower than forecast. we are seeing declines for the nikkei 225 along with the kospi lower 1.5%. with the currency space, the yen picking up momentum while others are on the backside. korean won of leading the decline among asian fx. this is down after the best week since late january. ratcheting up trade tensions, potentially on the arrest of the whole why way -- the huawei cfo feeding into this. look at u.s. futures because we see a move lower for the december contracts for s&p futures falling 1% this morning. we have quite a few had to contend with and catalysts.

before i go i want to highlight the movers. pioneer under pressure on the 30% -- falling 30%, the most since december 1981 on the back of the company being taken private by bearing private equity. japan display at a record low as it denies reports that came out sunday that it is reducing production of lcd panels for apple's iphone x are. .- iphone xr we saw analysts coming in with a weaker forecast for this company as it is trading longer growth. and this one is down 1.7%. ines of the game came disappointing. s holdingsend on ioo down in sydney as the german is

stepping aside as realtors are proceeding against the company, looking at five executives from the company amid allegations on misconduct. stock the individual scores not helping the market. sophie kamaruddin now with the latest. let's get to su keenan. imfwe start with the warning about trade tensions, saying the simmering dispute between the u.s. and china threatens to derail the global economy by undermining business confidence and raising the cost of living. they cut their global growth forecast in october for the first time in two years are blaming the trade war as a threat to emerging markets. >> it takes both parties, u.s. and china to determine closure on this and is vitally important because trade is a major engine for growth.

if trade is damaged or threatened, it will affect growth. less growth, less jobs, investment, because people are worried, people in the business of creating jobs will lose confidence. is set toel macron address the country later monday after another weekend of violent protests. he has seen his approval ratings plunge with the so-called yellow vest demonstrations that began with a protest over fuel tax hikes continue. he needs a grand gesture to get rid of the next, stick to his mandate and more. more protests are expected next weekend. on the brexit front, theresa may is entering the most important week of her career. predictions are her brexit deal is dead, and she will face a vote of no-confidence.

her critics are calling for her to reopen negotiations with the e.u. even though brussels has said the current deal is the only one on the table. the government insists there are deal vote. delay the 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. ♪ shery: japan's economy contracted more than forecast in the third-quarter as natural disasters hit business investment. what does it mean for the boj into the final meeting of the year? hays is here with the numbers. could this just be taken as a one-off with the earthquakes and such? kathleen: certainly the severity of the decline because it was a asse than forecast a decline

the boj revises its first number already down 1.2%. economists were forecasting something like minus. looking at how weak the spending was, they were looking for -2.0. it was -2.5. look at this chart. you can see how important it is for the country and boj because one, 2, 3 -- eight straight quarters of gdp growth, small decline. they rebounded, then natural disasters. , consumerending down spending down much less. each of the numbers, more severe than previously reported. japan's gdp is expected to rebound. the risks are you have trade tensions and japan is an export dependent country. it will affect them and business sentiment. china is slowing down, an

important trading partner and destination for japan's goods. they buy a lot from china. the tankan survey, the bank of japan tankan survey could seem softer. they are holding their final meeting on december 19. there is no monetary policy report being issued, so no change or big statement on policy as they wrap up the year expected. a lot of focus looking at bb.chases continue to ade rumor what governor kuroda -- remember what governor kuroda told us, watch the yield curve control to watch the target of zero. then they are changing policy if it changes. we shall see if he clarifies more at the meeting in a couple of weeks. also looking for clarity

december 19 when the fed wraps up its meeting. it has been a big week -- a big year for jay powell. what do we expect? kathleen: we had a two contrasting speakers on friday. one of them, a member of the board of governors, is closely allied to jay powell. when he stopped -- stepped up to the chairmanship, this is who he leans on, get her opinion on where things were heading. she is less dovish that she used to be. she is endorsing near-term rate hikes but in september she was looking for further gradual hikes for the next year. she looked at the jobs report friday has assigned the economy are strong, labor market, 155,000 jobs were created, less than forecast. wages rose, hourly earnings, hours worked fell.

she is on board for this near-term rate hike. i have to say jim bullard is not a voter, he is the president of st. louis fed what he has been palpitating about the fate -- he said the fed is getting hawkish and there is no reason to risk inverting to preempt inflation. it is a signal they have been aggressive, but he says they are getting hawkish. it looks like one more in december, then we will see what they signal at the december 19 meeting about next year. so much uncertainty about 2019. let's look at the oil patch, crude is trading lower. we had seen a spike in oil prices friday after opec and its allies delivered a bigger than expected production cut. the russian oil minister told bloomberg moscow would need a few months to reach the full level of cuts.

>> we will be reaching our goals over a number of months, not immediately. this is connected to the fact we have some difficulties and challenges which we have to navigate the group, unlike our partners in the southern countries. we will of course try to reach our goals as fast as possible. i will not give you the exact case right now because we need to finalize calculations with the companies. we have almost 200 companies in russia, so we need to find out the schedule. ofwill this last to the end june, or are you looking for adjustments second-quarter? >> the decision is made for six months. extend it.we could

we have this option. if we see the market needs more oil, we have all the instruments in place to make adjustments. a lot will depend on how the uncertainties which we spoke about in the press conference, how they unfold and develop. one of the questions is sanctions against iran, where there are a lot of uncertainties and lack of clarity. trade wars and protectionism will grow and develop, so we have an impact. tose factors are difficult predict and forecast but at the same time they have a huge markets. the markets if we go back to november for example and try to remember what the situation was like back then, we can see the market was expecting deficit in november, december 2018 around sanctions. now the situation is completely different because the uncertainty didn't play out as

the market expected. i won't be surprised if in april 2019 the reality differs from forecasts. iranwant to ask about because you had a private meeting before or during the opec meeting, and it seemed you for him toucial role make a deal in his own organization. what did you talk about? we did have a meeting with the man. we discussed a number of topics through we focused on bilateral relations, which we have a lot of mutual cooperation but at the same time we have devoted time to discussing the market situation and what needs to be made in order to stabilize it. i supported the notion iran should be exempt in a way because it is subject to very harsh sanctions, so it is a special situation, and is

reduction has fallen significantly. at the same time we have come to a mutual understanding corporation is to continue, countries need to act together in order to prevent further destabilization of the market and a much worse situation in the future. on iran, in november, the unit there is helping iran soil -- sell oil was in the ministry. is this still happening? are you helping iran sell oil? >> a russian company was indeed .ubject to sanctions recently isstrongly believe this illegal. iran and russia have been partners for a long time in various aspects of the economy.

these relationships are developing and will continue to urgewe support iran in its to create economic ties with other countries and we will continue to do so. shery: the russian energy minister speaking to bloomberg in vienna. after three weeks in a tokyo jail, carlos ghosn could be formerly charged monday. we will ask what lies ahead for the outgoing nissan chairman. this is bloomberg. ♪

shery: this is daybreak asia. i am shery ahn. haidi: reports from tokyo say the former is on chairman will be formally charged monday, bringing to a case something that sent shockwaves through the auto industry. if we get this indictment today, what does it mean for carlos

ghosn? sophie: in the japanese criminal justice system, 99% of all indictments eventually lead to a guilty verdict. prosecutors are wary of investing or indicting him. they feel confident they will get the verdict. on charges he might be facing if he is indicted today, there is a penalty of 10 years in prison, very serious. if he is indicted, we don't expect he will be released because we believe prosecutors will rearrest him for a separate three-year time of alleged underreporting of remunerations for that sets up another 20 or so days of questioning. it has been a lonely -- it could be a lonely christmas. it was what the architect for the nissan-no alliance. -- renault alliance. where does this leave them? sophie: people in nissan felt it

wasn't fair anymore, that it was too weak compared to renault. but since carlos ghosn's arrest, members of both governments from france and japan say they think it is important that this remains. itself is carrying out a probe into executive from an including that of carlos ghosn. we could see develop its sin but certainly he made it his mission figurehead.a the longer he is absent, it raises questions about the viability of the alliance in the future. shery: thank you so much. let's bring in janet lewis, macquarie group research manager. concerns about- governance. great to have you with us. does this mean your assessment is the problems nissan could

have been systemic instead of isolated to mr. ghosn? >> that is correct. it appears that through the board of directors he concentrated too much power within him as an individual. there were no committees dealing with nominations to the board, compensation, he headed compensation. details were missing from the report area the reason they were missing was because the committees didn't exist. shery: we are hearing from nikkei news nissan could be indicted as a company. with that affect their operations? i don't think so not for a day to day basis. but the longer you have a sense of turmoil in senior management, the ones probably involved in trying to make changes, then you get divergence from the core

business, trying to produce great cars people want to buy. haidi: one of the reports that came out recently, delving into why this came to a head was upere could have been a co situation. how much credibility do you put to that, and does that impact your view on whether the leadership is on the right track or same page with nissan? >> whenever you get a situation like this, everybody is looking dagger? there a cloaked it is not that relevant. what is more relevant is a looking at nissan as an analyst, there have been a degree of discomfort with nissan's previous pursuit of market share in the u.s. they had been pulling back from

that, trying to reduce what was high incentives. it wasn't really working. we have seen sales in the u.s. come down pay we haven't seen incentives come down but this is a problem where one of your largest markets isn't profitable, you need to address. some of this pursuit of market share was ascribed to carlos ghosn. that was one of the signs we had saikawa. psy, -- mr. was not in agreement. the question that gets thrown out by the case is how much progress has been made on improving corporate governance in japan. we have had toshiba and others before that throwing into the life of the internal reporting and transparency, whether it has an issue at these companies. what would you need to see from the sun to convince you

[indiscernible] a credibleactually one because these improvements have been made? the board ofat directors level, we need to see a much should -- much more transparent policy how directors are nominated, what the criteria is further background in terms of ability to guide nissan's management team. we would like to see handled by an external independent directors, not by the chairman or ceo. those would be the commonly applied guidelines of for boards of directors that are typical in western companies. another thing would be a good diversity of background. this is something japan has been poor at is bringing in a variety

of people that can bring management experience or relevant experience to making sure the company is going in the right direction and representing shareholders. that is where they have been the weakest. shareholders are the ultimate owners. that is where renault has a stake, but there is also minority shareholders to be represented as well. shery: nissan wasn't happy with the power dynamics with renault. with the ouster of mr. ghosn, what could the new alliance look like? isat a fundamental level it big for both companies. they are one of the biggest automakers when you bring in mitsubishi. able to of being combine resources for developing next-generation technology, it is important to work together. a lot of the technology was

coming more from the nissan inside. reportedly nissan filed twice as , to givents as renault you an idea. you have this situation where renault has big ownership of nissan. they rely on nissan's earnings. the flipside is nissan was the most profitable and technologically stronger side. shery: we will have to leave it there. plenty more coming up on daybreak asia. this is bloomberg. ♪ mberg. ♪

asia. this is daybreak i am haidi stroud-watts. shery: i am shery ahn. let's get a check of what the markets are doing. c.phie: keeping an eye on tsm in hong kong watching semiotic all as a shipment fell in november. reaction to china's deal to acquire another sports company. the mass order for [indiscernible] that is ahead on markets asia. ♪

>> this is "bloomberg markets: china open." this new start of week, investors are concerned about the trade tensions with china. typhoons and an earthquake affected spending last quarter. >> china's foreign ministry summons the union ambassador -- u.n.