paul: good morning, i'm paul just opened for trade. shery good evening, i'm ahn. i'm sophie kamaruddin kong, welcome to "bloomberg asia." paul: our top stories this wednesday, driving ahead, china to be close to luring tariffs on u.s. made cars, a climbdown by beijing. drama in the oval office. president trump said he would be roud to shut down the government if his border wall isn't funded.

nd sterling slumps as teresa may looks for help in europe while her leadership could be threat back at home. quick check to how markets colstoned in the u.s. session. before i get into the u.s. markets. the latest g huawei, we're that bail could be around $10 million canadian. bail at $10 set canadian for the huawei c.f. o. before we get into more details, we'll get you more get more details of that hearing. let's take a look at how markets closed here in the u.s. session. another day of big markets, the u.s.

s&p 500 and dow rising 1% of one giving up all of its gains for the dow to close down 1%.f the banks being the biggest on the s&p 500. carmakers are continuing to have that r as we headline out of china that we ould see tariffs being cut on u.s. auto imports. the nasdaq held on to gains and 1% higher.2 of s&p futures unchanged at the moment, although sophie with the headlines out of that huawei bail hearing out of canada. course, the key question is, ow will asian markets digest all of the news as we get uptick brexit risk and pensions in the background. we do have volatility likely to continue aside from the huawei developments. e have the rapid fire developments on the trade front.

e're keeping a close eye on auto stocks in the region after that china ers hear may pare back on tariffs on american made cars. gain of .1 of a percent. we're keeping an eye on companies as well in australia as the morrison boost ent is planning to healthcare funding and in the anking sector, an additional 300 million on its misconduct charges. ith he did have this morning from korea the latest update on the jobless rate for november to 3.8%, en further below 4% for a second straight month. agenda this morning, japan expected to post prices and core machine orders are forecasted to have rebounded in october after 80% in september. ow also on the radar midday,

malaysia, the output due in the afternoon and late wednesday, we have from india, c.p.i. and factory out put data. paul, has they have new governor, a former bureaucrat advocate for lower industry, he finance paul. paul: thanks for the check of the markets. let's get the first word news now. jessica summers. jessica: president trump has been involved in a dramatic oval seniorconfrontation with democrats where he again threatened to shut down the border wall his isn't funded. eeting nancy pelosi and chuck schumer, he said he would be proud to cut things down in washington. giving the hardening brief shutdown into january is a likely outcome. we don't get what we want, i will shut down the government. i am proud.

i am proud to shut down the government for border security, chuck, because the people of this country don't want that have nd people lots of problems and drugs pouring into our country. jessica: indian prime minister hours ured a dramatic 24 seeing his opponent seize the political momentum and changes of the reserve bank. they face defeat in three key tates that helped him to victory in 2014 and the biggest setback since taking office. meanwhile, the new governor controversial cash ban two years ago. nissan from tokyo say has begun sharing its to gations against carlos ease the climate of suspicion. have briefed yers their french counterparts why was toppled with financial

crimes. google boss sundar pichai has rejected claims of bias while company's american roots. lawmakers from both parties sked about data collection and how much information google absorbs routinely, yet pichai he sidestepped the question about whether users fully understand the terms. oogle has no current intention of launching a search engine designed for china. engaging one of the things which is important to us as a company, we have a providing ion of users with information and so we duty to ink it's our explore possibilities to give you access to information and i that commitment, but as i said earlier, on this we will be we will ghtful and engage widely as we make progress. assica: global news 24 hours day, on air and on tictoc by witter powered by more than 2,700 journalists and analysts

in more than 120 countries. this is ca summers, bloomberg. shery: thank you. china's new openness to cutting on u.s. made cars is feeding optimism about trade alks, but the potential breakthrough comes among amid concerns from the fallout of the huawei in canada. latest we have heard is that the judge in canada in that bail for its c.f.o. has in fact granted bail set at $10 canadian. more, let's get our chief north asia correspondent stephen engle who is following these developments. the details of what came out of that bail hearing already in its day.d >> as we have heard in the last few minutes at the bail hearing the judge has granted bail to the c.f.o. of $10 million canadian. there are a number of conditions, though, for this bail. must remain restricted to

the vancouver area. must surrender her passports. a lot of speculation on whether than her two stated passports, those being canadian and hong kong. some of questioned those allegations as well. hong kongard from the chief executive yesterday saying passport.e valid if she surrendered them both, she wouldn't be able to travel canada given the only land route out of canada would be through the united states. don't think she would want to go through the united states. that's speculating that she course.lee, of she also must wear a g.p.s. tracker. she must pay for the cost of her while she stays at home in vancouver. he also must consent to police visits to her home and must her to surveillance of whereabouts and her movements. it says applause

erupted in the canada court as huawei c.f.o. was granted bail. are moving across the bloomberg terminal. canada has set the next court 6.e on february she will be free, sort of, she trackerwearing a g.p.s. and surveilled at her home in vancouver. she must stay in the vancouver until this next court date set on february 6. shery: this could drag on for a long time. extradition from canada to the u.s. could take over a year. right now as you mention, that court pting in as the c.f.o. was granted bail. strong really stirred emotions in china. we have already seen the chinese both canadappeal to and the u.s. as you put a human face on these trade tensions china and the u.s.

stephen: absolutely. calling gn spokesman these detentions by the anadians at the behest of the united states of a vial nature and restrictive of chinese rights. struck a chord with the chinese as well as chinese wanting s who might be to travel to the united states or canada. of t is also ran the risk torpedoing any goodwill that may engendered between trump and xi meeting. on the trade front, both sides to bifurcate that issue and saying trade and separate.process are again, when tensions are running high, it's very difficult, at least from the chinese not think that this was in retaliation or some sort of move by the united on the o gain leverage trade front. now that being said as well, we development that is potentially explosive. that is the arrest or the alleged arrest and detention, we or maybe onfirmed it

we have confirmed it because the minister of canada has confirmed that michael, a former canadian diplomat in beijing and brussels-based hongltancy, he is based in kong and has been detained in china. we don't know his whereabouts right now. -- the foreign minister, we're also hearing minister ublic safety ralph gooddale saying we are obviously away of this situation deeply concerned. again, we are not saying that his is necessarily tied to the arrest of sabrina in vancouver, stark is a very coincidence that this gentleman you're seeing on your screen detained in china for reasons at this moment we do not know. paul: steve, as you mentioned, coincidence, you say

there has been the separation of political ry and the process in the detention and the trade talks as well. it's increasingly difficult to tease these apart. here in we go from terms of trade talks? >> the trade talks are progressing. we had the conversation between premier with steve mnuchin. they talked about the timetable plan going forward making sure they do not lose any of this momentum coming from the g-20 that might have been by this r torpedoes arrest. we had a bloomberg story break and early this morning that indeed china is pushing forward with its cut its auto tariffs on u.s. made autos into china, those tariffs

potentially from 40% now down to 15%. this is something that donald tweeted following the g-20 and it looks as though according to sources telling news that the chinese have pushed that plan on to the potential approval and we saw carmakers, in articular german carmakers overnight in europe pop up quite considerably. carsin mind, the most sold that are made in the united states to china are actually b.m.w. and s, spots of ld the top the u.s. made cars exported to china. overnight. pop up paul: steve engel thank you for watching that for us. head into 2019, the top year.to businesses next brexit amid all of the uncertainty, we are joined to discuss what scenarios could play out for the pound. this is bloomberg.

michelle: this is day break asia. i'm shery ahn in new york. i'm paul allen in sidney. the brexit saga throwing traders a wild ride this year causing t to touch 25 and that is the lowest since april last year fueling the spike in volatility, of outcomes yriad that the turmoil could bring. to help us unpick it all, we the head of strategy, ray, trying to trade the pound at the moment? ray: the constant refrain we have is that the pound will not now in two or three days or a week's time. $1.25.sitting here at we have fallen quite some way. if you think about the two xtremes in terms of the parameters that we're playing with in terms of how this thing extreme, you one

got potentially rescinding another referendum and brexit.ally no under that scenario, well, the pound should easily get back to here it was in mid 2016 which is $1.50 compared to $125 now. another scenario, this ends government down and we have a general election nd potentially we have a socialist government and that really is the market's worst fears and on that basis, it's that the pound could be testing parity against the u.s. dollar. $1.25, sitting at potentially neither of those ones that that happen, you cannot assign probability, that's the cause of volatility. it's increased fears there isn't a change of deal, prime minister and maybe there s a hard brexit who takes over from teresa may where she to lose the no confidence motion. that increases the risk that we no deal and with with the hard brexit scenario plays through. that is the underlying cause of that we have seen

in sterling this week. aul: a whole range of possibilities there. do you have any probabilities or even a gut feeling about which is most likely? raye: i have a gut feeling and probability. assign a greater than 50% probability to any of there are five or six possible scenarios. my gut feeling is that we're oing to end up with no resolution. i think may's withdrawal of the bill is going to struggle to get through parliament. is not going to get any significant concessions in her current mad dash around europe. unlikely that that passes, we're confronted with the clock ticking down, saying, look, can we suspend article 50 or have a suspension. we're going to end up with the vote.'s that to me is the one that i think is the one that's going to happen. hand on my heart, would i buy the pound on that basis no.ay, the answer is that's likely. the risk if we get another referendum, it doesn't presume outcome change the

that we saw in 2016. shery: so far the market is the bank of england won't be able to hike rates in environment. how many will fundamentals play into where the pound goes from here? certainly playing second fiddle. the risk is that we started to see that in some of the numbers least as far as business investment is concerned. obviously the bank of england is threatening that in an environment where sterling really does fall that inflation the be pushed higher and bank would have no choice but to react to that. seeing a little bit of volatility relating to that. small compared to the volatility outcomes or the range brexit mes relating to uncertainty that i still think it's a little bit of a side show and will continue to be the case time being. shery: on the other hand, let's take a look at the dollar. e continue to see this very bullish position on dollar on the bloomberg just showing that at record highs.

i wonder if this narrative will new year?nto the ray: well, at the moment, it's very clear that the dollar has reasserting its kind of safe haven support. equities ve seen u.s. in particular under downward pressure, it does seem to be hand in hand with looking, whether you're at the indexes, they seem to be drawing a degree of safe haven support even though we have seen this progressive erosion of fed tightening expectations as far as they're not what the fed will next week, but what they might do next year. t's interesting how much rate expectations have come out of the u.s. curve and the dollar has been extremely resill gent. of has been because increased concerns of what the rest of the world is going to being ke and what we see able to start normalizing policy next year which is the crept guidance. got something there that the u.s. rate story is pulling the dollar down, but the rest of the providing some also

a degree of support for the u.s. dollar on the basis that it looks like the least lyingly duckling at this stij it. thoughts on the the e dollar, changing forecast to a cut, a handle for the aussie? ray: where we to get that cut, we could see it below 70 cents. we put the forecast on friday, q11 at 70 for the end of next year, the election uncertainty is introduced into equation. with the rate cut, we could be around 70. aussie doesn't like it there, we wouldn't sustain a on a multimonth basis. aul: we have to leave it there. k, we do, of course, have that ews out of the

news out of the vancouver court today about the bail hearing for the huawei c.f.o. bureau chief. natalie was at that hearing. i understand there was quite a reaction in the courtroom when bail was granted, albeit with some pretty stringent conditions. > the window to grant bail was announced by the justice, the in ic gallery erupted applause. the conditions for the bail are, know, quite restrictive, here originally proposed by defense. i'll run through them. the top line is she has to come with $10 million in canadian in bail. that is going to include $7 cash and the rest put up by acquaintances that she has local area who will also act as her guarantees. five s to come up with people who are those guarantees that will insure that she will bail terms.

other things she will have to do s wear a g.p.s. ainge let, police are able to knock on her door at any time. he'll be under 24-hour surveillance. she will get to move around the city. it's not house arrest. to sort ing to be able of get around the downtown vancouver area. while she awaits a potential extradition to the a really could be protracted process. right now next step in this legal case? natalie: that's right. long going to be a very process. the defense has said that she ntends to hotly contest the allegations made by the u.s. and these things can take years. for, she ate to watch has to present herself again in february 2 and presumably by then, the u.s. has to turn over the full extradition request to canada evidence at orting

hich point extradition proceedings would begin. shery: thank you very much. india because the prime minister has wasted no r.b.i. chief, new a former bureaucrat who oversaw cash ban.versial bloomberg global knicks and policy editor kathleen hayes is at the headnew look of the central bank. finance rked at the ministry and he actually pushed for cuts during his time there? kathleen: yes, he did. as the the same length chosen verys he was quickly. let's take a look at just a small part of his resume, yes, is impressive. he was the economic affairs 2015 to 2017. mportantly, this is when modi

and he oversawn, it. he is a currently a member of the finance commission. india's so representative at the g-20. he is well connected, well circles.d in indian what is his challenge? he may be more aligned with the modi team. he knows i'm sure how important it is to be the head of the central bank. want more control over the r.b.i., the functions, particularly when it comes to banks and the deficit. intertwined.what the government has also been r.b.i.s to loosen up on weak banks. as rtheless, he is seen someone who can ease some of the tensions that have built up with the government. what about is, r.b.i. independence? he stepped why

down, he said it was personal reasons, the former head, just a bigle of days ago, that's a question hanging over markets. tensionsthleen, easing with the government is that code for the r.b.i. just doing what the government wants? kathleen: that's what people are afraid of. mr. das has to prove himself. in the last 24 hours or so. hailed as a hero. what the times of india said in an editorial that they latest d just in the edition of the paper. let me read it to you. the government's attention now run-up to sed on the the general election, excuse me, like it or not, pardon me, lots of great quotes here. message went out loud and clear that government pushback guns one ofautonomy the most respected valuable institutions in the country has reached intolerable levels. go.re you he has to fill some big shoes, mr. das does. more willing to cut interest rates. would be less

hawkish. it does show that the key rate was high,p, inflation the currency was weak, you can see how inflation has fallen target.ow maybe that does open the door. the question is, part of the r.b.i. had to be raising rates and be so on this rupee was so weak. finally, just a couple of things very week, big meeting of the r.b.i. board on friday. going to be it's probably more discussion about the level of capitol r.b.i. could it pass some of those on to the banks. the deputy governor had spoken about central bank independence and kind of brought this battle between the r.b.i. more d the to a boil, so we'll be waiting next. what he does a very interesting time for the r.b.i. and central banks in it.eral, isn't shery: a harsh speech in october from the deputy governor. thank you so much for that.

let's get a check of the asian markets. asare seeing a bit of upside we hear from the court in canada that huawei c.f.o. has been granted bail. this is bloomberg. place, the xfinity xfi gateway.

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sydney. the main benchmark pointing higher. up by about one third of 1%. shery: it is 6:30 p.m. in new york. s&p futures unchanged at the moment. we got more positive headlines huawei case. there could be a breakthrough in trade talks between china and the u.s.. paul: let's get the first word news now. the arrested ceo has been granted bail in vancouver. concern wasid the

her chinese and canadian passport. bail at 10 million canadian dollars. he ordered her to agree to police visits. said to be moving towards lowering trade war tariffs on imported american cars. that's something already claimed by president trump after talks at the g20. hasre told the proposal been submitted for official review. our sources also say this step is in final and could still change. the european union is digging in on the brexit deal. officials are fearing the u.k. will make repeated calls for concessions. while theresa may visited --ssels, diplomat stressed

sterling fell to a 20 month low against the dollar after the prime minister abandon the brexit debate in the comments. ruling -- ruler has lifted curbs on political activity. a royal statement says the ban on gatherings of five people are immediately while the election commission confirm that voting will happen on february 24 to get a former army chief sees power after violent popular unrest. cosmonauts have been outside the international space station to inspect a mysteriously. a small hole was discovered back in august and quickly sealed. testnauts were hoping to the thermal insulation covering the whole and take samples for later study. it's not known was -- what caused the leak. global you -- news 24 hours a

day, powered by more than 2700 journalists in more than 120 countries. this is bloomberg. shery: thank you. back to the u.s. market close after stocks rallied and faded. finishing the session almost exactly where they began. we have more on the latest riot on wall street. we are seeing trade tensions, brexit risk rising. president trump talking about a government showdown. i'm not surprised that investors were searching for direction. >> those holding on our holding on with white knuckles. traders continue to say how difficult it is in this environment. we really focused on the way the stocks ended the session. they don't tell the full story. indexiladelphia; under shows you where the tech strength is. crude, we're seeing it

move higher in extended trading because there's a report on a gain in supply. that has been a wild ride. if you look at the stocks that moved the most, a lot of it had to do with earnings. crudedsw came in beating estim. down, they came out with an in-line sales forecast. one of the most popular ipos continues to be under pressure. , automakers up as china signaled that it might lift tariffs for the automakers quickly. of -- an autos surplus with china. investors took that as a glass half-full on china wanting to work things out with tariffs in terms of its deal with the u.s..

let's go to oil. a roller coaster ride, down from 4% on monday. better than 3% in the session. " only a gain of half that. a report came out that there would be a bigger than expected build in the wednesday inventory report. we have seen oil rally but traders continue to say the opec enduts are disappointing oil remains under pressure. all right. thanks very much for joining us. let's get a check in of australia markets. on thise just waiting screen to refresh right now. we are seeing stocks in australia going up 10%. led by health care and tech.

health care companies getting a boost on the government's plan to spend an actor 1.2 5 billion aussie dollar's. this amid accusations that have been savage cuts the hospital spending over the past five years. here are some stock movers of note. this is new zealand's largest online marketplace. the board has agreed to a takeover offer. adelaide bank is slipping this morning. is the mostk overweight mortgages among peers. 71% of the loan book is morgan shery. of cross australia have dropped 5% this year. blackrock sees a prolonged slump for another 18 months.

market potentially falling another 10%. as for the uptick in home loan approvals we saw in october, blackrock reckons folks are buying ahead of the change of government. the labour party has signaled the removal of tax breaks that favor real estate investing. the outlook is looking dark. shery: thank you. fought off claims of bias and data tracking before u.s. lawmakers in washington. he faced questions on the search giant's plans in china. here are some of the highlights. a it snowquester been's that company dedicated to free flow of information was founded right here in the u.s.. >> does google track my movement? does google, through this phone, know that i have moved here and moved over to the left? >> by default. there may be a service you have opted into use.

there is not possible for groups of employees to manually our searcher -- manipulate our search results. we have no plans to launch in china. we don't have a product there. >> do you believe google has done enough to be transparent? >> we always think there's more to do. it's an ongoing area of effort for us. shery: our bloomberg technology anchor joins us now from san francisco. this is the google ceos first appearance in congress after he skipped a hearing in september. what is the reaction? china are someon of the most newsworthy from the testimony overall. he would not commit to not going back into china. he would not say whether or not google has had conversations with chinese officials. i spoke with a representative who asked a series of questions about google's plans in china. i asked whether he was satisfied with the responses. take a listen to what he had to

say. >> i was very disappointed with the answers. it is inconceivable to me that andle could launch in china at the same time honor its commitment to universal human rights. they would be used by the chinese government to collect information, to engage in surveillance and censorship. 50 humans rights organizations have come out strong against this. i hope that he would say that google doesn't intend to do it. he didn't say that. clearly there are outstanding questions about china. congress remains in strict said -- interested in google's plans. the other issues where data privacy and claims of anti-conservative bias. something that president trump himself has railed at google about. , spoke to the representative

the chair of the house judiciary committee, and asked whether he was satisfied with the answers about whether or not google's bias. take a listen. bias, he wassue of not very helpful in determining whether or not when they rely on third parties like the southern who haveaw center, been sued by at least one entity and had to pay multimillion indicatesgment, that to me that this is a problem that google is still wrestling with, has not resolved. >> obviously, google has a lot to work on in the view of lawmakers. it will be interesting to see what legislation comes out of this. a representative told us he would like to see the ceo come back to testify in addition to

other tech ceos. he would like to see some tougher legislation when it comes to privacy. can a democratic house and a republican senate come to any sort of agreement on actual legislation about how to regulate or legislate these companies going forward? paul: i guess that is the crux of it. where do we go from here? what sort of regulation could potentially come out of it? >> representative cicilline was pretty clear. he is running the antitrust subcommittee. he would like to hear more. appearances, it has been quite a year for tech executives in the hot seat. i think we can be looking at a lot of conversation about the handle big tech coming forward in 2019. paul: bloomberg technology anchor in san francisco. thanks for joining us.

let's turn to today's top corporatesoftbank keeps music and forth -- focus. pins hopes on the rising tide of streaming and music listeners. bring us up to speed with both of these stories. let's get started with softbank. intimating that come the start of next year, they may be looking at selling their whole stake in nvidia. possibly making a profit of $3 billion. basically, we have been following the chipmakers. taking because of the-china trade war and for lower demand for those chips moving ahead. that's pulling down on the outlook. nvidia sharese down by 2.4% here on this news. you can see exactly when it fell when the news fell.

right before the 3:00 hour here in the united states eastern time. it was able to recoup a little bit there. if you go to the year-to-date chart, you can see how far it has fallen ever since the early part of october. shares have fallen by nearly 50% since then. thatrms of the stake nvidia is getting, $3 billion. you might think that's a lot of money. sellftbank have decided to in the early part of october when shares were up their record high, they could've taken in $7 billion there. they are on track to get back what they put in. one saving grace here, softbank has a collar trade which protects the company from any major fall. if the exercise that, they could get $6 billion. major corporate

story, tencent music listing on wednesday. this coming at a time when tencent is not doing great. >> not really. that is extending into the storyline here for tencent music. there are a whole slew of negatives that are happening right now. one is a lawsuit. another is a share price of one of its peers, spotify. another is current market sentiment. let's take a look at spotify share price. peers, evert these since spotify went ipo in april, it is now underwater by under 3%. what does tencent music have that spotify doesn't that it think they could actually survive in this kind of environment? -- ilawsuit immense and mentioned, and exited -- and executive is suing the company for fraud because he was trying to sell his equity stake of $1.2

billion. that's how much of the be worth right now. another one is market sentiment. hop into the bloomberg sentiment -- the bloomberg for this. we know how things are going with stocks. in the msci, over 50% of stocks are down 20% or more. that means that is in a bear market there. there's one reason for optimism. tencent music is already profitable. net income of $400 million in the first nine months of this year. a lot is riding on this. tencent has that 60% stake. spotify, the second-largest holder of tencent music with about 9%. shery: thank you so much. coming up, markets have been on a wild ride this year. it's probably not going to end anytime soon. we take a look at the top threats in 2019. this is bloomberg. ♪

shery: i'm in new york. paul: and i'm in sydney. political risk is not going away in the euro head. the trade war increasing data regulations and the continuing surge of nationalist politics will be among the top challenges facing businesses in 2019. a ceo joins us from singapore. this is your largest annual risk map report, you have climate change coming in a number four. say trade is topping the list as one of the easier ones to resolve? >> yeah, it certainly is. years, this is probably the toughest year we calibrate andy to

decide what really are the top risks for business. it is such a crowded field at the moment as we draw towards the end of 2018. some new things happening. obviously, the trade war. the economic relationship, what that means for the future. it speaks for itself as being the number one risk. europe withook in brexit, what's happening in france, there's a huge amount of s bucking up against business. it's a complicated world at the moment. paul: we have seen evidence of this today. ceo making huawei bail in canada with heavy restrictions. the u.s. insisting that the judicial manner and it's completely separate from the trade issue. we have michael corbat being arrested as well in china, saying it's at separate issue. is it really?

it is about the rise of a new superpower. there's no reference in history on how to manage that. >> yeah. endlessly asulate to whether these judicial issues are." incidents -- pure coincidence. -- paul: what we have seen in the last few months is, from a chinese perspective, a position where they looked at the trade report, we can probably navigate our way through this. this is about short-term political gain ahead of the

midterms, shoring up the base, saying the right things on protectionism. movement on things like steel and aluminum. china thought, this is a rough ride. we have been doing this a long time. we understand the motivations. something changed in the last few weeks, i guess. there are other agendas at work in the united states be on those purely of the president who don't see this as short-term, sharp elbow activity. they see this as part of a more long-term rivalry about who's going to control the global economic agenda. particularly around technology into the future. that changes the game. that changes the game for a multinational client. shery: investors have been in asia for a long time. really have more experience dealing with protectionist

policies in the region of asian countries. does this give them a competitive edge? >> it may do. this is a new world order. new world order without a name at the moment. people are striving to describe this post-cold war world. runningk is, if you're an international company, it's not to be distracted by all the noise that you hear on the geopolitical level. it's easy to get completely absorbed. all these high profile, dramatic asnts that are unfolding 2018 draws to a close. and not to get your eye completely taken off the ball. if you are doing business in itself,, vietnam, china

there is plenty that kinship -- trip you up right in front of you. the temptation, because we are living in volatile time, for spending myink, i'm whole time wondering what's going to happen to the pound, the euro, in congress. they somehow take their eye off of the road right in front of them. shery: we are getting the latest headlines from president trump telling voters that he would consider intervening in the case of the hallway cfo being arrested in canada if it would serve national security and health -- help with the china trade deal. year, we arenext headed towards a divided congress with the democrats taking over the house. i wonder how much this political gridlock will affect trade policy coming from the white house. interesting that the president said that.

he does think differently in these matters. he takes a transactional view to these kinds of issues. thinking, is there some way i could get involved? is there some way i could do something that would help give me some advantage in the wider talks going on with china? his previous sensors were unlikely to voice that view, they may do these things privately. this president says what's on his mind. sure, there's a whole raft of things that get very complicated given the impasse between the white house and congress. we saw that yesterday with the meeting in the oval office ,ecoming somewhat ill tempered probably theater for the television cameras.

you get an indication that domestically, let's will be difficult. increasingly, like many presidents towards the end of their first term, this president will be looking internationally to try to boost his agenda through the political process and internationally. most of the focus will remain china. shery: thank you so much for your time. the ceo of control risks. we have breaking news out of japan. the latest ppi numbers year on year growing 2.3%. this is a slowdown from the previous month of october with producer price inflation rose to .9%. it's missing estimates of more growth in producer price numbers. core machine numbers coming on month on month. growth of 7.6%. that's missing estimates as well.

suffice to say, it's an improvement from the month of september when we had some typhoons and earthquakes impacting the numbers and contracting those machine orders out of japan. producer price inflation, slowing much more than expected given that we had this rapid drop in oil prices in the month of november. let's see how things are looking for the open in japan and south korea. a check of the markets. >> with that data down from japan, we did get the jobless rate falling further to 3.8% for november. quite a bit for investors to digest. mckay futures up over 1%. we could see again at the start of the cash trade there. prepare for a choppy session as u.s. futures are fluctuating this morning as we digest the latest headlines on quality -- u huawei.

city forecasting more strength for the yen. that has cut japanese stocks to neutral. we are keeping and i on auto shares in japan and korea. they may track u.s. peers higher on the prospect of china paring back tariffs on u.s. car imports. mitsubishi motors was upgraded to buy. the company will be setting up a compensation committee. $6.7 billion through 2030 to raise production of fuel cells by more than 200 fall. panasonic, they may use their bought -- batteries for electric vehicles in china. paul: thanks for a much for that check up on the markets there. let's see what's happening here in australia right now. we are seeing green on the screen on the new zealand index. positiveointing a very

direction. moment asve more in a "bloomberg daybreak asia" continues. ♪

paul: good morning. asia's major markets have just open for trade. shery: good evening from new york. asia.come to daybreak paul: top stories this wednesday. huawei ceoay -- except spell. the indian prime minister anders a dramatic 24 hours. his party faces key election defeats.

president trump says he would be proud to shutdown the government if his border wall wasn't funded. wall street seeing another very volatile day. going into asia trading, things are turning greener. we have a check of the markets. sophie: green across the screen this morning. kkei adding 1% this morning, snapping a two day decline. leade seeing them take the from stocks in sydney as well as in wellington. u.s. futures fluctuating this morning. it looks like the latest developments around huawei providing some optimism on the trade front. we had a bunch of data this morning from the job -- from korea. we had data dump from japan.

as coreng in as well machine orders for october. they came in slightly less than forecast. 18%as a rebound after the slump we saw in the previous month. when it comes to stocks to watch, keeping an eye on softbank this morning. the stock fluctuating this morning after rising 2.5% yesterday. we are keeping an eye on this company with the prospects that it may sell its stake in nvidia. the chipmaker shares continue to fall. we are getting assessment of the recent outage that hit softbank in japan. the outage affected as many as 30.6 million accounts. paul: thanks for a much for that check of the markets. let's get the first word news. president trump has been involved in a dramatic oval

office confrontation of his senior democrats where he threatened to shut down the government if his border wall isn't funded. ,ancy pelosi and chuck schumer trump said he would be ready to shut things down in washington. a brief shut down into january is the first -- most likely outcome. >> if we don't get what we want, one way or another, i will shut down the government. i am proud. i am proud to shut down the government for border security. the people of this country don't want criminals and people that have lots of problems and drugs pouring into our country. >> at least four people have been killed in a shooting in a christmas market in a french city. the suspect is thought to still be at large. he's a 29 euros man who had already been considered a security threat by the authorities. the city center was closed off.

the european parliament building placed in lockdown. nissan from tokyo say has begun sharing its allegations against carlos ghosn with partner renault in hopes that this wacko limit suspicion. renault say they have been kept in the dark since the arrest. google boss has rejected claims of bias while stressing the company's american roots. lawmakers asked about data collection and how much information google absorbed routinely. the ceo says google has no current intention of launching a search engine designed for china. the indian prime minister has endured a dramatic 24 hours. seeing his opponent sees on

political momentum. defeat inelectoral three states that help them to victory in 2014. a new r.b.i. governor oversaw a controversial hash band two years ago. global news 24 hours a day on air, powered by more than 2700 journalists in more than 120 countries. this is bloomberg. huawei cfo has been granted bail by a canadian court. it allows the executive to stay in her vancouver home while she waits for potential extradition to the u.s.. natalie, she has bail. but with pretty strict conditions. it looks like me she -- she may

be considered a flight risk. >> the canadian judge in a dramatic bail proceeding did agree to release her, saying that they would impose a number of restrictions that offset the flight risk. it's a long list. she will have to wear a gps anklet all the time. she is restricted to a certain area within the city. she's not going to be under house arrest completely. she will be able to move around with a designated driver and vehicle under 24-hour surveillance by two security officers at a time. she's going to have to pay for all of that herself. the topline figure is the bail set at $10 million, canadian. that includes $7 million in cash that she will have to pay. as well as $3 million canadian that will be called together from a group of friends in

vancouver who are acting as her guarantors. date isr next court february 6. do you know will happen about appearance and how long this process could drag on for? >> yes. this is just the first step of what's going to be a very long process. that was one of the reasons why the defense had asked the judge to consider allowing her to be released. otherwise, she would've been spending a long time in jail. these things can take years. the next date that she has to appear in court is in the first week of february. between now and then, the u.s. has to hand over its full extradition request to the canadian authorities. that is the official extradition request with all the supporting evidence. the extradition proceedings can proceed and her defense has already said that she intends to hotly contest all of the

allegations. shery: tell us more about the allegations. this is to do with some connection between huawei and a company that could of had transactions with iran. >> that's right. proceeding is not going to try to determine whether she is guilty or not, whether the u.s. has sufficient evidence or not. what comes down to, canadian authorities will try to determine whether what the u.s. is saying is considered a crime also in canada. what the u.s. is saying is that she conspired with others in her company to do from the banks. that she lied to them and told them that huawei did not have any relationship with the om thatary called skyc was doing business in iran. the banks continue to offer banking services to the company,

clearly millions of dollars of transactions related to a ron that were in violations of sanctions. that's what the charges come down to. shery: thank you so much for that. our bloomberg vancouver chief. let's look at the bigger picture here with our chief north asia correspondent. asian markets so far seem to be liking the news. this comes on top of news that we could see china cutting tariffs on auto imports from the u.s.. than thisre likely could ease tensions on the trade front? diffuses tensions a little bit. a little more clarity on her legal fate and situation. ,he will be allowed to go home highly surveilled over the course of the next few weeks. we are getting a few more statements. huawei has come out with a

statement saying it has confidence in the canadian and u.s. legal systems, confirming what we knew transpired in that courtroom in vancouver. canadian authorities have agreed to release it ceo -- cfo. issues, thethe two disputeaga with a trade with china and the united states. we have donald trump intervening, he said he could intervene in the u.s. case against huawei if necessary. asked --n to say, when whatever is good for this country, i will do. if i think it's good for the largest trade deal ever made, a very important thing, was good for national security, i would certainly intervene if i thought it was necessary. he went on to say, china has not called me.

they are talking to my people. that was in response to a question from reuters on whether he had spoken to the chinese president about the huawei case. china and the united states both trying to separate the two issues. they brokered a truce in argentina. it's very difficult to split those two issues right now when sensitivities are running so high. shery: especially when it comes to chinese action on the canadian diplomat that could be seen as a response to the huawei . -- the huawei case. >> there's a lot going on because of the drama in vancouver. we have the canadian foreign minister confirming that the

minister confirming that the canadian in question who perhaps has been detained is indeed a former diplomat who now works for a brussels-based consultancy. friends and family are saying he has disappeared. very likely has been detained. whether this is a retaliation for the detention of the huawei cfo is not clear. ofare hearing of a number chinese companies calling for boycotts of american products. on social media calling for boycott of apple iphones. goose parkas. there's a bit of a backlash. from state media, there has been a few heated headlines coming from state media. one calling it a despicable rogue approach from state media.

my experience, having lived through the 2012 backlash against japanese products fix of disputes in east china, this is a bit more muted by the chinese government. it doesn't seem like they are fanning this discontent by consumers because there is too much at stake given the trade dispute. just quickly, i wanted to return to those comments from president trump. that he would intervene if he thought it was necessary. that's a direct quote. could that potentially cause some domestic difficulties for the president? an independent judiciary is one of the cupolas of democracy. pillars of democracy. >> that is something we should put to the president. he has tried to intervene in other matters. ,an the president intervene

even the u.s. trade representative has said it's a criminal justice case? he will tweet that he will try to intervene. whether that means he will push to have the case dropped, i don't know. a lot of moving parts to this story. thanks for a much for keeping across all of that. wasting no time in naming a new r.b.i. chief. we will go through the risks facing india later this hour. shery: first, we speak to the head of europe's largest asset manager. we will talk the latest in trade and brexit. this is bloomberg. ♪

paul: i'm paul allen in sydney. china's openness to

cutting tariffs on u.s. made cars is seating optimism about trade talks. recent history gives reason to because is about expecting a deal by the march 1 deadline. let's bring in the head of macroeconomic research who joins us now from singapore. it's great to have you with us. authorities changing their policy mix around the summer of this year. are we expecting the government to continue to be as supportive going into the new year? >> yes. the chinese authorities will do whatever it takes to stabilize the economy. we would expect the trade tensions to be early 2019. we have to disentangle the legal presidio in canada. dispute, the trade they reach an agreement in early

december. i think they will respect this truths -- truce. trade tensions will ease in early 2019. we have to keep in mind from a strategical standpoint that trade tensions are here to stay. they will be much more elevated than they were in the next few years. shery: we have seen aggregate theal financing data, broadest measure of credit in the chinese market, take a dive in october. you're seeing it bounced back in november. the numbers doubled for the month of november. when you look at the latest credit data out of china that we overnight, how supportive has the monetary easing been in filtering through the chinese economy? mix whichpolicy includes inside fiscal policy,

the depreciation of the currency. i'm not saying that it's very healthy for them to see this reaction from the chinese authorities. it is important for china to stabilize the economy in an ordered deceleration of the economy. in the short-term, we should not be excessively worried. you have a stabilization of the chinese economy likely to be seen next year. can we talk for a moment. sorry. i wanted to ask you about your there'seport, you said a 70% probability of a multi speed slowdown. i wondered if you could explain what you meant by that and lay down the scenario of how we get there. not a global economic

slowdown that we are seeing. global risk is disintegrating. have different domestic dynamics at the global level. global trade is under pressure for sure and will remain so next year. it means that the domestic demand will play a very important all -- role in domestic economic cycles. you have very different economic cycles across the globe. we expect the u.s. economy to decelerate. we are in the middle of a deceleration in the eurozone. the chinese economy is decelerating. in 2020, we would expect stabilization in e.m. markets. em marketsbetween and domestic economies. while the peak of growth has passed, the u.s. is very different across the --

at some point, the u.s. will stop decelerating. the dollar will stop appreciating. investors will look more carefully out what's going on in the country -- on a country by country basis. paul: if i can focus on the u.s. for a moment. what has been happening there is driven by fiscal policy. what does this mean for the fed? reserve, weederal believe it will hike rates in december. what about the first half of 2019? it is clear that the u.s. economy will decelerate. having said that, it's not a recession. the yield curve is not a good indicator of what's going on in the united states.

at the end of the day, given the recent tightening in financial conditions in the united states, the fed will probably be more careful than it was in 2018. it will slow the pace at which it hikes rates. less are tilted towards rate hikes than expected. markets have started to realize that we were getting closer to the end of the tightening cycle in the united states. that's not the end of the u.s. economic cycle. it's important to understand that. a slowdown is not a recession. another big headline right now, the brexit risk. how important will the may european elections be for some direction of where the financial architecture of the eurozone is headed? that european elections are going to be key next year. we expect a lot of political --

and europe. while there is a rise in protest parties, we believe mainstream parties will keep the majority in the european parliament. you will for sure see some political knowledge in the short term. especially before the european elections. stabilitywould expect and clarity about the agenda in the eurozone. regarding the financial architecture of the eurozone, it's hard to expect anything new for the second half of 2019. you have the leadership of emmanuel macron diminished by the recent protests in france. you have a new leadership to expect in germany in 2019. ecbhave some changes at the

and european commission next year. we will be back toward the agenda of further reforms in the eurozone. it will take time. we must wait until the second half of next year. shery: thank you so much for your time. of the get a roundup stories that you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to your terminals. also available on the mobile app. you can customize your settings to get the news on the industries and assets that you care about. this is bloomberg. ♪

shery: we're getting the latest alert on the bloomberg tencent. tencent music has been fixed at $13 per avs. that's in lower end of the

range. it was between 13-15 each. at $1.2 would be valued billion. tencent music expected to begin trading in new york on wednesday. this is the online music arm of tencent. tencent owns 59% of tencent music. we're getting conversation -- confirmation that the price has been fixed at $13 per share. paul: thanks. let's get a quick check of the latest business flash headlines. has a chilling warning for its peers, saying winter is coming for banking stocks. the carefree days of rising rates may be coming to an end. moving on to say the industry must not ignore the growing risk of a credit market in the coming year. the market is valuing bankshares as the economy is heading for a slump. having am a is

dramatic impact on two of the world leading apparel stocks. 20%.a goose has tumbled more coming up. this is bloomberg. ♪ ♪ there's no place like home ♪

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"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. paul: it is 8:30 wednesday morning here in hong kong. i am paul allen in sydney. shery: i am shery ahn in new york. let's get the first word news with jessica summers. cfoica: arrested huawei meng wanzhou has been granted bail in vancouver. the possibility of her fleeing the country, consenting on the condition she surrenders her passport. he set ballot 10 million $7.5ian dollars, about million u.s. be movingaid to towards lowering trade war

tariffs on imported american cars. that is after talks at g20. to proposal to lower duties 15% has been submitted for official review. it would be seen as a major climb down by beijing. they also say the step is not final and could still change. the year. union is digging in on the brexit deal with officials fearing the u.k. will make repeated calls for concessions. theresa may -- sterling fell to a 20 month low against the dollar after the prime minister abandoned a brexit debate in the comments. thailand has lifted curbs ahead of elections in february. the ban on gatherings of five people or more and and con painting -- campaigning end

immediately. voting will happen february 24. the for me army chief seized power after sometimes violent popular unrest. two russian cosmonauts had been outside the international space station to inspect a mysteriously. --mysterious leak. they were hoping to check the thermal installation covering the patched up whole and take samples for later studies. it is not known what caused the leak. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. time now to see how asian markets are shaping up. let's get over to sophie kamaruddin in hong kong. are seeingweek we

stocks gain ground after a two-day decline for the region. today we are seeing the nikkei lead gains up 1.5% this morning. we have gains across the region up 1%. we are seeing the dollar falter this morning. the korean yuan among the gainers and offshore yuan leading regional events trading below 690 against the greenback. developments against the trade front. november data showed monetary easing. that is having some effect. that might provide optimism. switching now to check in on the bond markets. we are seeing that rally continuing to stall while stocks tick higher. treasuries are holding steady with a 10 year yield below 2.9%. commodities we're seeing upticks for crude. new york crude trading higher by about 1% this morning. let's check in on stock movers.

auto stocks in the spotlight. japanese and korean auto companies climbing on tariffs. u.s. auto levies on japan and saying thatp position will hinge on trade discussions with those parties. they climb for mitsubishi motors. the stock was upgraded to neutral. the company is reportedly taking measures to improve corporate governance by setting up a compensation committee. that has been an ongoing dilemma for japan inc. motors climbing to the highest level since october 22. spend $6.7r plans to billion through 2030 to boost fuel cell production by more than 200 fold. also announcing a reshuffle of its executive management. i want to highlight nissan getting ground in tokyo. halting a four day decline.

shery: let's continue the conversation on nissan, carlos ghosn remains in a tokyo jail. his case has received little public symphony -- sympathy. but they have bought him a mattress for his prison cell. what is his connection with lebanon? dave: he is a lebanese citizen. hasof the mansions that been brought up as an issue in this case is in beirut. his $3 million home he owns. he commutes part of the year there and visits frequently. it is part of his background. one of the things that gives him such a broad background in terms of cultures playing into that. the lebanese ambassador has apparently visited him in jail

in japan three times and brought him a mattress. there is a lot of connection there. there is even a billboard in beirut saying we are all carlos ghosn and has a portrait of him. there is a lot of feeling in lebanon now of support for him. shery: what is the difference with sympathy in france? dave: exactly. a big contrast. france is very much having its own troubles now. there are massive protests across the country. they are just now settling down from that. it has been described that he epitomizes, he embodies much of what the protesters are against, a kind of globalist elite 1% extremely wealthy taking advantage of his prerogatives. in france, the government is reeling from these protests.

it is not in a good position to go to bat in his favor, even though it might have been inclined to do so under other circumstances. nissan finally sharing the details of the case. why has it taken so long? explained whyever they delayed providing that information. one would have thought at the outset at the arrest that that would have been the first step for them to get to their partners and say here's what we have. they repeatedly asked for information and said it was not forthcoming. now they have provided that, but without giving a reason for the timing of it. you could put two and two together and come to a conclusion that the politics in france have something to do with that. the french government does own 50% of renault -- 15% of

renault. they are not necessarily in a position at the moment to go to bat for carlos ghosn. by providing this information, which potentially could be minimal, could be the kind of information the government could set you do not have much of a case here. as we noted, they are not really in a position now to go to bat in a big way for carlos ghosn given he is unlikely to be unpopular in the country in a time at this. paul: carlos ghosn of course now deeply enmeshed in the japanese legal process. what is next for him? detention hass been extended. december 20 now is the date. government,een, the prosecutors do have ways they can extend that detention. him, or re-arrest simply give a 10 day extension.

it looks like it could be 2019 before he gets out or before there is even a bail hearing. typically within 40 to 50 days of an indictment you would see a trial. so, the indictment was a couple days ago. it could be february before he sees a trial, as late as february. paul: all right. dave mccombs in tokyo, thank you for updating us. coming up next, india not wasting any time when it came to replacing the central bank governor. we're going to tell you all about the new boss. this is bloomberg. ♪ s. this is bloomberg. ♪

paul: this is daybreak asia. pointed a new head of the reserve bank less than 24 hours after his predecessor

abruptly stepped down. he quit after a long battle with the government over policy, particularly steps the prime minister wanted to force -- to support ailing banks. kathleen hays is here with a look at shaktikanta das, the new man in charge of the r.b.i. time as finance minister we heard he saw cuts from the central bank. kathleen: definitely he mentioned that is what he would like to see. wasexactly his job when he economic affairs secretary, but anything he has said and is saying now about interest rates, about what the r.b.i. should be doing, will be more scrutinized than ever. that makes good sense. he was the economic affairs secretary, which is part of the ministry of finance from 2015 to 2017. he was -- he then oversaw will be moving forces towards a

program which is still controversial. was it needed? nevertheless he has been a member of the finance commission and he was one of the sherpas at the last g20 meeting for india. he has a lot of experience in government. what else do we know about him? put it in the context of his challenge, they want more control over the r.b.i.'s functions. they particularly want help with the budget deficit ahead of the general election next year. this is a very important thing for mr. modi. pushing on the reserve bank of india to loosen curbs on the weakest banks. i think what is interesting is to look at some of his tweets. a lot of scrutiny now. here is a recent one from september 13. macroeconomic -- india's macroeconomic numbers need to be further strengthened. targets will continue to be the main focus.

this looks like a perfectly smart and responsible thing for the head of a central bank to say. india's economy was going over 8%, slowdown at 7%. --ll the flash this fastest-growing economy in the world. on september 16 he called for a strong commitment to the fiscal deficit target. that is also responsible. i would like to move onto another tweak. -- tweet. with current macroeconomic numbers looking stable and strong there is no need for offshore nri bonds. basically those are bonds that have been used on rare occasion to help support the rupee. here is what is interesting. he knows the rbis reserves are still around $400 billion. they have a lot. focus should continue on studying the banking sector. the question this raises is is he in the camp that says the r.b.i. has so many reserves that

they can afford to put some of those reserves behind the banks, put more liquidity out there. this was the big recent battle. this will probably be discussed on friday when the r.b.i. board meets and they have their new chief. a man who has been at the finance ministry, obviously mr. modi's pick. the big question is for him is -- sinceh patel quit, patel quit, he was pushing back against the government. he had to be independent. the only way he could maintain that was by leaving. so what position will mr. das be in now and what will it mean for central-bank independence? a lot of people apparently hold that very dear in india. paul: patel quitting for personal reasons, which is a rather opaque comment. while we bring in the senior economist and strategist at credit.

kathleen running us through a background on the new r.b.i. governor, shaktikanta das. does the governor now have its man at the r.b.i.? darius: it remains to be seen how compliant mr. das will be with the wishes of the government. but certainly his background a long muchwill go farther with what mr. modi wants the central bank to do than mr. patel has in the past. -- fory be good for our near two long-term growth. if he pushes for lower interest rates, which is not clear but he might come it would be support been a swell, something important for the government as they headed to elections next year after losing regional elections in recent days. shery: is your expectation that

given that das is well-known in government circles that in fact he could ease tensions between the r.b.i. and the state, helping financial markets, or could he be a drag on markets given that investors will be concerned about central bank independence? willsz: i think investors have lingering concerns for a long period of time regarding how independent the r.b.i. will be now that we have basically seen two governors in a row step aside earlier than they have had to. although he served through the end of his first term, he could have stayed longer and chose not to. athaps investors would cheer closer alignment that is likely now between the government and central-bank. a lot depends on the signals that mr. das will send, his demeanor, the way he

communicates with the markets. this may be reassuring to the point where people forget mr. patel had to leave for reasons related to government pressure. in any case in the near term it seems we have a good new governor who will steer the central bank well. and even if he yields to government pressure to shore some reserves, to be stringent on bank capitalization, perhaps the markets will forgive them that until there is evidence that it was a mistake. but it may never happen. perhaps the banking sector will do well. shery: that is certainly a good point. i guess there is quite a debate role of central banks and trying to clean up central -- troubled banks. we had a crisis about 10 years ago where u.s. banks were a big part of that. of course patel stepping down,

ragu was not reappointed. i was having a conversation earlier with david via email. he was talking about gold and the fact that india is such a gold culture. if we are going to have an easy rbi chief, a man compliant to what the government wants, if that is going to actually potentially be bullish now? dariusz: if people in india do not have confidence in the inflation potential of the central bank, certainly demand for gold might increase. but it remains to be seen whether this confidence declines under governor das. surenk he will try to make that the population believes in the inflation target. he will not change it. it will still be plus-minus 2%. oil,o recent declines in

we continue to come down. today's data will show a low reading. i do not think we need to worry about people's perceptions at this point and i do not think old will rise as a result of what indians think about mr. das. paul: so what do you think about mr. das? what is your investment and outlook strategy taste on in the developments in the last 24 hours? dariusz: we are negative on the rupee in the median term primarily because of the growing current account of india. that is not something the central bank can really take care of. for current accounts to subside you either need a big economic you need a boost in investments in india which would raise manufacturing capacity and exports. that is something which would take a long time. it is currently headed towards 2% gdp at a time when there is still risk for fed tightening,

the rupee will be under pressure. while that is unlikely to be dramatic, it is one of the currencies in the region which will continue to trend lower against the greenback. you mentioned political reasons why the government would not allow a slowdown. of course we have the state elections this week not looking great for the prime minister modi's party. what would it mean for the economy if we see more populist barges -- policies coming from the government to shore up support? dariusz: the short answer is yes. are at india's heartland and should be naturally inclined to vote for him, but they did not. that bodes ill for the government to continue to rule after the general elections in april or may next year. obviously mr. modi will do all stay ino ensure he will

power. focus has to be on fiscal policy. after the first seven months of the year, india's budget deficit exceeded the annual target. after seven months. there is still a lot of time to go. i think they will do a new budget. why would be another reason the rupee will be under pressure, because you will have concerns about higher current account and higher deficits. you're talking about this tendency for the w00t -- the rupee to weaken. patel and his team did a good job. they tightened up, inflation came down. the stage is set for a cut. but how can they cut if the rupee remains under pressure? seems to me that is the problem for thinking we're going to be going rate cuts from mr. das anytime soon. dariusz: actually in this case i would agree with you that there

will be no rate cuts. temporarily when inflation falls below 2%, pressure to reduce rates will be strong from the government but it would not be a wise thing to do to lower rates now, because you will have a rebound later next we're -- next year. perhaps food prices will not cooperate. they should not be cutting rates. we do not think they will. we think there will be prolonged stability. this will make things already difficult for the rupee because put,.s. will be staying but they will be stable for a show, waiting for data to how significant inflation decline is. as the fed hike and r.b.i. stays put, that is another reason there will be capital outflow from india and pressure on its currency. shery: president trump right now telling voters it was a mistake for the fed to boost rates next week.

thank you so much for that. still more ahead on daybreak asia. this is bloomberg. ♪ is bloomberg. ♪

paul: this is daybreak asia. shery: we had latest headlines coming from president trump in an interview with reuters he needshe interviewer rate flexibility amid this trade battle going on with china. it would be a mistake if the fed

boosts rates next week. it would be foolish to raise rates, president trump telling voters it would be a mistake if the fed boosts rates next week and he needs rate flexibility amid this trade battle is china. let's get more from sophie in hong kong. sophie: we could anticipate some share wind markets in hong kong as china opens up given the huawei and trade of elements helping to boost the offshore yuan. keeping an eye on chinese automakers. bmw.have tieups with also walking other auto dealers. also keep taken i on tencent after a listing of tencent music. macau on the radar after deutsche bank warned winter is coming for gaming revenue for the company.

bracing to see if it can extend advances after its stock jumped wednesday. tradend investors can now by the shunk on -- paul: thank you. before we hand over to bloomberg markets: asia, let's get a quick check on how markets are trading. the nikkei higher by 1.6%. the cost be better than 1%. in australia we have the asx stronger than half a percent. shery: take a look at asian futures. pressure for singapore, but taiwan and malaysia higher. plenty more coming up. the china open is next. this is bloomberg. ♪ ♪

paul: -- rishaad: this is bloomberg marcus china open. david: huawei cfo wins bail. president trump says he is ready to intervene if it would help with a trade deal with china. rishaad: china is set to be lowering tariffs on u.s. made car imports. a major climb down by majoring. -- beijing. leadership could be under threat from back home.