haidi: very good morning. i am haidi stroud-watts. shery: good evening from new york, i am shery ahn. inhie: iso be hammered in hong kong. welcome to daybreak asia -- i am sophie kamaruddin in hong kong. welcome to daybreak asia. china is taking more steps to ease trade tensions, lifting tariffs on u.s. cars and revaluing purchases on american corn. investigators prepared to discuss life after carlos ghosn.

there is a meeting of the alliance shareholders. australia showing the best numbers in a decade, this ahead of a key election year. shery: let's get a check of the markets close. friday it was risk off across the board with the dow falling 500 points. that sentiment seems to be spreading to the futures market with the s&p 500 losing .2%. the s&p 500 also fell below the 20 technical psychological 600 level. we had tech stocks and health care leading the declines. health care, one sector to watch into trading this week as we saw a u.s. judge ruling obamacare was unconstitutional. we could see volatility there. the s&p 500 closing the lowest since april, the nasdaq falling for a second consecutive session, a lot of central bank decisions this week including

the boj, the boe and the fed which could raise rates for a fourth time this year. let's see how we are setting up for asia. sophie: the rate storm scheduled later, also waiting on the china policy summit that could see more easing measures in housing slippediven home prices further in november. looking at how we are setting up monday in asia, we are anticipating losses across the board. you have stocks up .2%. seeing little changed for the asx 200. bhp billiton jumping over 1% after the company announced a special dividend of one dollar cents -- $1.02 u.s. aussie shares potentially falling. looking at the aussie dollar, trading near a six-week low after the greenback posted a 2018 high.

not seeing much reaction to the midyear report. taking a look at the kiwi -- the key takeaways, the federal government narrowing the budget deficit more than 1.5 for australia. pacerowth seen at a slower through 2019 with a forecast didmed 2.75% compared to 3% -- predicted in may. we will get november trade data from singapore and indonesia are this is ahead of rate decisions from jakarta. bank of thailand also reporting later. haidi: a lot to look at. sophie kamaruddin on the markets. let's get you to first word news with haslinda amin. draghi hasario commented on the rise of populism, defending two decades

of european political and monetary integration. the president listed what he sees as successes for the single market and common currency although he admitted not everyone has benefited. he said lower prosperity in some countries is because of domestic policy choices and incomplete monetary union. >> the challenges that have a reason have become more global in nature and need to be tackled together, not alone. this is more true for europeans, both at the level of individual nations and for the continent as a whole. -- the idea of a second brexit referendum, denying the talks on the issue. the speculation of a new role has been rising since the prime minister abandoned a vote after by tonyas attacked blair for chip in being the

people's vote. nissan to pushing call an urgent shareholder governance,iscuss the indictment in the carlos ghosn affair and relations. they say this creates significant risks to the long-running alliance. the nissan board will meet later monday. more than 40 people were taken to a hospital after a parcel explosion in a japanese city. it is not known what caused the blast at a two-story restaurant one in critical condition. witnesses say there was a smell of gas in the air after the explosion. 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 haslinda amin. shery: china is taking more steps to diffuse tensions.

they will remove the retaliatory duty on imports of american-made cars and are preparing to resume purchase of corn. ros krasny is in washington. we are some weeks into the trade truce. is there any indication these moves are moving the needle for u.s. demands? ros: it is interesting what we have seen the past week or two has been a one-way street in favor of the u.s. getting concessions from china without giving much back. the u.s. has pushed back the deadline to increase its import tariffs on chinese goods from january to march. that is a big concession by the u.s., but they haven't gone tit-for-tat in terms of trying -- china buying seem -- buying soybeans and corn, the u.s. making concessions. president trump feels he has the upper hand your whether that is true or not is an open question. he feels he is playing a strong

hand and is riding that out for now. the administration was to show a win, to boast of a win. be comingssions could down the line. haidi: president trump has named and acting chief of staff, budget director mick mulvaney getting the tap, only after a number of failed courtships. what does this mean it when it comes to employment at the white house? ros: mick mulvaney is really a trump loyalist. he has had three jobs in the of initiation. word is he has always wanted to be chief of staff. now he is in and acting capacity. -- an acting capacity. look for him to do

housecleaning. it is possible cabinet secretaries could be on the bubble and other white house staff as well. i think if nothing else he will want to put his stamp on that job just as one of the candidates who elected rate -- was elected as one for chief of staff wanted to do. mick mulvaney could see some heads roll under his watch. shery: all of this happening while president trump faces legal pressure from the special counsel robert mueller. rudy giuliani said this when asked if president trump will allow the special counsel to interview him. >> good luck. after what they did do flynn, tracked them into perjury and notes sentence, 14 days for papadopoulos, i do better on traffic -- [speaking simultaneously] francine: francine: no interview. >> they are a joke, over might

that body. shery: seems like a turn who has floated the idea -- from the past where he floated the idea of a face-to-face meeting. what are these implications? rudy giuliani spent months earlier in the year kind of dancing around will he, won't he, and it seems like his position is dug in now. the convictions and sentencing of michael cohen, the former lawyer and fixer, situations with paul manafort and general flynn have really hardened the position. say andgiuliani would has said talking to robert mueller would be a perjury trap for the president. it is somewhere they don't want to go. , thank you.rasny

still ahead, theresa may set for another hostile week amid calls for a second brexit vote. jacob kierkegaard joins us to talk about what happens. 2018, could a crazy the next 12 months be better for asia and fx? speaking to the head of research. this is bloomberg. ♪ . this is bloomberg. ♪

this is daybreak asia. i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. trade tensions, higher oil prices, some of the major headwinds facing asian currencies this year. into a new year, will anything change? let's bring in the head of asia research. great to see you. when itball gazing comes to 2019. is the theme going to be the

expectation the fed will slow down its pace of hikes and that will be pressure alleviated compared to what was saw with asian currency and assets this year? we saw more hawkish than expected fed over the course of 2018 really putting pressure on emerging-market .urrencies including in asia in 2019 are expecting the fed to pause by -- cause -- midyear. that will help asian currencies. >> i want to get your views on the yuan as well. that is set aside from the rest of the asian complex because of trade and slow down issues. i want to bring up this chart. you could see this as a sign of optimism. you are looking at the risk reversal rate, and it does

indicate in the options market, traders are almost willing to bid against the yuan. is this a result of the moves towards at the top -- a detente in the trade war? >> the first cease-fire helped the yuan recover but more importantly the cause of this year, where trade tensions started to escalate, the chinese authorities started to make it clear they do not want the yuan to depreciate significantly. the seven level is very important psychologically. close tostart to get that, you saw the chinese authorities intervening in the inmarket for the first time several months. they don't want you on going beyond that. and with the trade cease-fire, if we get signs some combination can be agreed to by both sides,

they will take more pressure off the yuan. my forecast for the yuan is a recovery to 6.75. the fed pause will help, and we have the chinese onshore bonds getting included in global market indices, which will see a pickup in bond inflows going forward from april which will help support currency. we keep hearing chinese policymakers want to support the currency. since the lastr few years, not much with the one-year lending rate. when you look at what the pboc and policymakers need to do to support the economy, won't that put pressure on the chinese yuan? in some respects it should, but with chinese authorities, they have other levers they can pull.

they have been doing more targeted easing through the course of this year. next year we are expecting more cuts so they can stay open but in terms of the yuan, the preference is clear. they don't want it to weaken. it already has significantly over the course of 2018. from their point of view, the you there is little more to begin from having the yuan weekend. for them it is more important they maintain stability in the renminbi and that look for news to support growth in two 2019. shery: how important is this week for policymakers with the policy summit and the commemoration of 40 years since the opening of the markets? announcements in terms of for the reforms the

chinese policymakers will undertake i think will be very important. this is part and parcel of the negotiations between the u.s. and china. the u.s. is after significant structural changes. they want the chinese government to open the economy further and really set up the platform for the next wave of reforms that will not only help the chinese economy but also potentially help to alleviate tensions between u.s. and china. if the trade tensions , withue to become less this move to conciliation continuing next year, does that assist in seeing a pullback in the u.s. dollar? greenback,for the the dot plots will come out this week and whether or not they

pause. it will be vitally important for the dollar given it had been strengthening on the back of expectations of no more further monetary policy. any signs the fed will be to move under the key pillars of support for the u.s. dollar. we've already seen that coming true in terms of the 10 year bond yields at 2.9%. suddenly we see slightly weaker u.s. dollar especially over the second half of next year. haidi: we have been talking about a more stable year next year with asian fx and looking at the rrr currencies, the rupiah, the rupee and the ringgit. bank andn central certainly the economy has some pretty idiosyncratic issues of its own. do you think further weakness for the rupee [indiscernible]

if this central bank doesn't become more clear next year? >> you will see the rupee coming under pressure. in our view we don't see the , for benefiting from example, as much as the other asian currencies from the fed pullback or from a recovery. that is because the focus will be on central bank independence and also the upcoming general elections that are going to happen between april and may. the reason results, it can be a tighter contest than expected. it will keep investors cautious. that is one of the reasons why in terms of one of our top traits for 2019, we are recommending our investors the indonesian rupiah and short the indian rupee. shery: we get singapore's

exports data this morning. we are expecting some deceleration in the numbers given how export oriented and vulnerable singapore is to trade tensions. the central bank over there has tightened policy this year. why is that and what would it mean for the singer orian dollar? -- singapore dollar? >> the numbers have been volatile, but export growth has been resilient. that could be due to front loading but part of that is due to the flexibility of singapore exporters in switching markets. singapore's exports to china are 30% to% year on year but the u.s. the mes has tightened policy twice because the growth potential,has been and there is increase in inflationary pressures. on -- it isses

close to 2%. we are expecting this over the first half of next year. despite growth moderating next year we still believe it will be potential that will bring mes back into play in april 2019. shery: always great having you with us. you can find the charts we throw your shoe -- through our programming on our library. gtv on the bloomberg. you can watch them, save them for future reference. this is bloomberg. ♪

asia. this is daybreak i am haidi stroud-watts. shery: i am shery ahn. directors of nissan meet on monday to discuss future after carlos ghosn. they will gather amid calls from renault for a shareholder

meeting. ramy inocencio has the story. the question is who succeeds carlos ghosn. ramy: that is one question now with renault pushing nissan to have this extraordinary shareholder meeting. they will try to discuss this as well. we are counting on the hours. the succession is the big thing now. there is one man out there we have been talking to, the ceo of nissan. people are saying maybe he could be the guy to take over for carlos ghosn. he was also the person trying to push carlos ghosn out, so there is some self interest. confidant, his name has also been thrown here. some say the nissan indictments might actually put a little bit of a cloud over mr. psy, --

corporate governance has come in as one of the biggest factors. that is also one of the issues renault might put on the table in terms of what is pushing nissan -- what it is pushing nissan to do. another issue is renault's appointees on nissan's board. what isty ceo is saying happening is creating significant risk for a no. he said it is not just nissan but also renault. we need to keep an eye on this and you need to get your act in order soon. haidi: the tensions are rising in the alliance. renault saying the carlos ghosn compensation, they were in compliance with french law. ramy: we know at nissan, carlos ghosn is out, but he is in with renault. he is the chairman and ceo, but the board is keeping him there as long as they don't find any compelling proof or evidence he

did anything wrong. they are saying there is not enough evidence and are waiting to hear ontrellis ghosn's defense -- here on carlos ghosn's defense in japan. this report from 2015 to 2018, they said nothing was amiss. after friday when this broke, saturday in asia, renault shares ase, but that is a far cry to how far they have fallen in the past year and recently the past few months. this is the gtv library. this titled trailing behind, the blue is the euro sector. renault is in white and nissan in yellow are trailing the index by a long shot. with renault it is down at a four-year low. with nissan it is a 18 month low. you can see this is taking its

toll on stocks. there is going to be some investor hope something will come out when the nissan board meets later this monday. haidi: ramy inocencio with the latest on nissan. let's get you a check of business flash headlines. reports from the u.k. say jaguar land rover will eliminate thousands of jobs with an announcement expected in the new year. they will impose cuts as part of a three-year cost-cutting turnaround land. two months ago they announced plans to lower expenditures by $3 billion in 18 months. s&p global rating cut them to junk. into: boeing has launched china. the air china bound jet was finished at the factory but in reality it airs a made in america label, having been flown from seattle. one in four planes boeing built

is heading for china. the airlines are the leading buyers of the 737. china is setting targets this week. we will go there with what to expect. this is bloomberg. ♪ omberg. ♪ ♪ there's no place like home ♪

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

10:30 in sydney, markets trading for 30 minutes locally. taking a look at how we are faring, better than expected outlook in the fiscal outlook from the government today. there were some not quite bright spots, which growth and oil being changed. during a week lead from the friday close, s&p at its lowest level since april as we get through the last trading week of the year, including major central bank decisions from the fed, the boe, the bank of japan and others in asia. shery: seeing pressure for the

s&p futures down .1%. it was really a low close, the lowest in eight months. what we need to be watching as we go into trading monday in the u.s. are the health care stocks because we had a judge ruling obamacare is unconstitutional. although some people say it could be reversed by higher courts, volatility could be there. look out for the sector monday. i am shery ahn in new york. haidi: volatility not letting up. i am haidi stroud-watts. let's you to first word news with haslinda amin. haslinda: north korea has told the u.s. sanctions and pressure will not force it to halt its nuclear program. history proves such measures don't work, they say, and washington should look at improving relations.

they say trump should act up frequent claims about wanting better ties with north korea. leading u.s. politicians say a government shutdown must be avoided at all costs and it is up to president trump to resolve the issue. ofmade this the price funding for the border wall, saying he would be happy to bring the federal agencies to a halt if he doesn't get his way. the leading senate democrats say the president must understand he will not get what he wants. mr. trump -- >> there are not the votes for the wall in the house or senate. he is not going to get the wall in any form. haslinda: the global environmental movement is bracing for a fight with populists after the latest international climate talks. the meeting and pollen wrapped up with an agreement of 200 countries on rules that implement the 2015 paris accords but green groups want people to implement deeper cuts ahead of the u.n. leaders summit next

september. a new survey says a clear majority of people in japan agree with the government decision to ban chinese equipment from the public sector. the nikkei poll found 61% of respondents support the move with 21% against. reports from japan say they called on businesses to avoid buying technology seen as vulnerable to leaks and shutdowns. 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 haslinda amin. shery: it is an important monetary policy week. we have the boj, boe and federal reserve making a decision this week and expected to hike rates for the fourth time this year, coming when concerns on growth are growing. we had the ecb talking about economic risks.

let's see were we are opening up in asia. sophie kamaruddin looking at australian markets. a heavy week for asia with losses across the board. that is the week for aussie c-shares off .1% after losing 1.4% last week. looking little changed, the aussie dollar, trading near a six week low. not much reaction to the midyear outlook report which didn't deliver much in the way of surprise. stock movers in sydney, arjun's leisure rising the most, climbing nearly 7%. mineral resources rising after the debate -- the definitive agreement to join in western australia. seeing pressure giving back some of the 11.8% jump as investors are assessing if the company is heading for a turnaround after refinancing debt on wrapping up sales of the offshore assets.

cignalian pharma and health care under pressure after surging friday as investors are competition regulator could give the green light for a proposed merger of the two. westpac and another have been roped in to help fund the bid for sigma and want to highlight sigma -- australian pharma downgraded to hold at morningstar. on the trading agenda, i want to highlight items of note. looking at november exports from singapore, it looks as vulnerable to trade tensions. domestic export growth expected to have slowed to 2.3% from a previous read of four .2%. from indonesia the trade to visit expected to have narrowed $1.870 million u.s. versus million prior. front, keepinge

an eye on these shares, the company nearing a deal to buy ,0% of abb's power grid unit valuing them at $11 billion. we could get more on that front later. full weekinal busy, of the year. sophie kamaruddin. let's take a look at china, big week for beijing as policymakers could announce additional stimulus measures when they meet priorities.year's this comes as trade tensions and the mystic slowdown take their toll on the u.s. -- chinese economy. looking at what to expect now in some fragileainly -- fragile balancing the needs to be done. tom: there is more attention focused on this meeting. but we have spoken to, there seems more than and other years.

they are setting the direction of travel for the economy for 2019. they normally set themselves targets which are released in march next year, but we will get , we expect a statement on the back of this meeting that outlines some of the priorities policymakers are setting up for, and we expect additional fiscal stimulus measures. we could get more details on tax cuts. we could get a change to the budget deficit ratio as well. that will be relaxed or loosened to allow more fiscal wiggle room . in terms of opening up we are expecting additional measures that will be announced on the back of the meeting of opening up the services sector according to bloomberg intelligence. they say there will be a focus trying to attract more capital flows into the chinese market, foreign direct investment. bloomberg intelligence saying on the monetary policy front if they come out with a line saying

it will remain neutral, that will be disappointing for some looking for more support. we had a regulator saying downward pressures are increasing, but the bank will remain supportive. all of these headwinds in you touched on, trade tensions, economic data, consumer demand starting to slow, the real estate, auto market, all of these are coming to a front and policymakers are under pressure to prove and show they will be addressing those issues into 2019. shery: you have been talking to one of china's leading economists and money managers. what is his prescription for the slowdown? an interesting conversation. he is the former head of goldman sachs in china. he is now the founder and head of primavera capital. he said fiscal measures and monetary policy measures will not be enough to support the economy long-term.

he is urging china's policymakers to address structural reform. listen to what he said about key risks he sees going forward. >> the risks are significant. they are not robust, effective policy responses, those risks might well lead to further downward momentum. and then what you see with business and investor, consumer confidence, it will be a vicious cycle. means deregulation. the state needs to step back. he's to release what is the straitjacket around the private sector, and he said it is not enough for policymakers to pay lip service to supporting the private sector.

he said they need to cut regulations, free it up a, create a level playing field because it is not just those atside china who want to see level playing field, it is private sector businesses who have to compete with the state sector. they need to level the playing field, cut regulations, and that will support the economy. the question is whether or not they have missed the opportunity to do that. he said it is not clear whether they have been taken or would in time. so what we are seeing now, he compares to what he saw in 1989, 1992 when you had south china pushinginvigorated and through brutal reforms at the state owned enterprises. he says you need bold leadership to track all -- tackle the leadership and make sure the economy doesn't slow to quickly, fast. quickly, too

haidi: watching out for economic policy headlines dropping later as well. the australian government sees the cash deficit shrinking in the next fiscal year and a larger surplus in 2020 thanks to stronger than expected tax collections. the growth forecast has been .rimmed to under 3% the wage growth remaining ever more muted as well. just a couple of years ago we were talking about what happens if australia loses its aaa credit rating. things looking robust. >> they have been fortunate in some respects. i was looking at the document, they are conservative on call estimates, the prices of coal and iron ore taking off today, which australia is dependent on commodity exports to generate growth, which boosts the terms of trade of the country and brings in additional income. that has been good fortune. -- as you say,

sitting there, they have had to face, which a lot of countries have, weaker wage growth and that puts pressure -- a question overconsumption. they have done well in a short time. as i was saying before, it reminds one of the time before the financial crisis when there were upgrades to forecasts at budget time and in the immediate post it was always downgrade after downgrade. shery: this coming at a time when the government is heading into an expected election in may. will this budget make a difference? >> it is a tough question because on one hand it should. they have done a good job. australia's electorate judges the government's economic performance by if they have a job, if the economy is growing.

the budget is important, and it is unusual. the electorate does hold the government accountable whether they are running a budget surplus. the economy has been expanding 27 years. but this government in the past three years or so has been plagued by infighting. the polls show scott morrison's government is trailing the labor opposition quite heavily. one thing they do is give them the opportunity to spend cash before the election. they have brought forward the budget, so there is a good chance they will offer tax cuts and these things. whether that can override skepticism about the pet -- the capacity to govern its self, saying if you can't govern yourself, you can't govern the country, that is a big question, and if the budget surplus can change that is debatable. oury: thank you so much, australia economy reporter. theresa may's no vote.

she hits down and calls for a second brexit referendum. we will discuss the issue. this is bloomberg. ♪

shery: this is daybreak asia. i am shery ahn in new york. haidi: i am haidi stroud-watts. let's look at stories that are trending across the bloomberg universe. on bloomberg.com we are leading with a view with boeing and indonesian carrier lion air. they scrapped a deal worth $22 billion. looking at the most googled search terms of 2018. terminal subscribers are leading -- reading about the brexit drama as theresa may is pushing back against reports they are warming to the idea of a second referendum. checking out on those stories on bloomberg, online and on the terminal.

shery: let's talk about brexit with jacob kierkegaard, senior fellow at the peterson institute. he joins us from washington. we have theresa may denying they are warming up to a second referendum but if she doesn't get her deal past through parliament, that could lead to a carbon government -- jeremy corbyn government. if they don't want that, isn't the referendum likely? >> it is a possibility but if you are going to have a second referendum, it will have to come by the votes of probably some conservative mp's. i doubt the leadership and theresa may and the government will support it because they know a second referendum will be deeply divisive in the conservative party. in my opinion they risk splitting the party and create another sort of party on their right, a ukip style pre-brexit

party which under the british election system would be very damaging for the long-term prospects of the conservative party. it could happen but not with the support of the tory leadership. the leaders didn't budge during the meeting in brussels, and so theresa may going back and facing the house of commons, what is next for her? >> she has announced their is going to be a vote on her deal in early january, then we will see. mp's can make be, amendments to the vote, so they can, they could, maybe there is a majority including tory mp's for a second referendum. maybe there is a cross party majority for the norway option, rather than theresa may's deal. it is very uncertain.

maybe she calls a new general election. it remains. opinion, itt in my remains more likely you will see theresa may's deal past or across party agreement, looks like norway before you get to a second referendum. haidi: i want to throw out this chart, tracking the spike in political risk measures for the u.k., now really above the g7 political risk which is relatively flat in the white versus blue being united and him political risk, the to and fro and lack of binary results we might get out of the brexit drama. that is not to disregard the levels of risk we are seeing across the rest of europe. we are getting this line through that italian lawmakers have reached a deal on the budget. it would go the way of closing the gap with the e.u., which

contemplating financial penalties for budget regulations. does italy and i guess the broader question of the rise of the far wing party in europe remain a major risk going into 2019? >> they are certainly there. it is certainly as you indicated remains far more likely than not there will be a deal between european commission and the italian government. andeed to look at the deal its fine print. it will be there. we are probably seeing the peak of the yellow vest movement in there is a european election in may. i will expect many far right parties to do well in that immigration remains an issue. it is not going away but battled to the potential over brexit in the u.k., i would

say political risk in continental europe is relatively contained also for 2019. get your viewso on some developments over the weekend. in australia we have had the prime minister, scott morrison naming west jerusalem as a new israel.of it has been condemned by a number of allies and regional countries. it comes on the back of president trump doing the same thing. is this the start of a trend, or is it part of australia trying to continue to respect the alliance with the u.s. by playing follow the leader? >> it seems to be the case. there has been some short-term --tralian domestic electric politics in that but following the trump administration's lead

on recognizing west jerusalem isn't going to earn australia many friends anywhere outside the trump administration. it will be condemned by large parts of the american political spectrum as well, not to mention europe to the middle east and asian countries. you andlways appreciate your views. jacob kierkegaard of the pearson institute for international economics. market open in japan and south korea, sophie kamaruddin is here. sophie: we could see muted enthusiasm in korea and in japan, futures pointing to pressure. that could trickle into sentiment here in asia. we have stocks under pressure in area, and the yen looking at risk sentiment. we have little changed after the biggest losses in a month. we are waiting on meetings with

the boj and more. looking at seoul, shares on a report that hyundai is removing plants to list. the oil bank -- due to limited time to raise the target of 2,000,000,000,001. also looking at -- 2 trillion korean won. said it is notay at all considering the possibility of selling its business. reportsin response to it is in talks with chinese companies that could include a stake sale. the stock jumped 35% friday in light of the speculation. shery: thank you. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb on your terminal, also available on mobile in the anywhere app. you can customize settings so you only get news and industries

and assets you care about. this is bloomberg. ♪

asia. this is daybreak i'm haidi stroud-watts. shery: i am shery ahn. let's get a check of business flash headlines. deutsche bank set quarterly revenue has been hit by the recent police raid on its frankfurt headquarters. the cfo told us the snap inspection hasn't held especially in the current market environment. deutsche's stocks fell to a record low following the raid at the end of november. it is down 50% this year. investors are unconvinced by the turnaround plan. haidi: swiss engineering company abb is near the sale of 80% of its power grid. this would be $11 billion. they make power transformers, transmission systems and energy storage and would lead them --

leave them focus on automation. the deal could be announced monday. shery: qatar petroleum is buying stakes in three offshore mexican oil plots as they moved to a global position after leaving opec. the fields will produce 90 billion barrels of oil a day and hold 2 billion in reserve. qatar is already working on another offshore field and is waiting on approval from mexican authorities. taking a look at the state of trading with asian markets, a tepid start with monday trading, week lead from wall street, u.s. stocks the lowest since april. if trading days left, seeing weakness for australian -- a few trading start -- new zealand also off half a percent. nikkei futures looking pretty flat open, slightly to the

downside getting into the start of trading in tokyo. will be speaking to the chief asean economists. this is bloomberg. ♪

haidi: good morning. i'm haidi stroud-watts in sydney where markets have opened for trade. shery: good morning for bloomberg world headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to "bloomberg daybreak: asia." ♪ haidi: our top stories is monday, china is taking more steps to ease tensions lifting tariffs on u.s. cars and restarting pressures of american corn. theresa may faces a hostile week amid speculation of another brexit referendum. aides say there is no way that will happen.

bulls versus bears as we look ahead to 2019. trade geopolitics and the global economy top the list of challenges. weighing onncerns the markets as we see risk off sentiment spread across the world. let's see how we are setting up in asia. ishie: taking a look at what going on in the terminal, we have a mixed bag for stocks in the region. we have the nikkei 225 coming online higher by 2/10 of 1%. the cost be gaining ground. the kickoff track changed -- trade. the mood is looking bigger and you look at the antipodes. stocks under pressure in sydney with another financial helping to lead the decline. by .5%and wellington off this morning. a mixed bag so far. we have a big week when it comes to central bank decisions another key event risks. the chinese economic policies on it later this week. taking a look at currency markets, checking in on the aussie dollar, trading near a

six week low pair not seeing reaction to the mid-report. there was not much surprise. you have the government saying it is on track for a government surplus. although we did see a revision lower for gdp growth to 2.7 5%. i want to highlight the mexican peso making moves early in the asia section -- session. the turkish lira however is continuing to slip after the bulls took flight on the central banks dovish tone on inflation that has struck the last week. this monday, we will get output data from turkey. more contraction anticipated for october. the yuan keeping steady. the start of a qb for chinese policymakers. not much reaction to the weak data we got over the weekend. ine prices slowing further november. that came after the forecast growth we saw in retail sales and factory output announced last week. haidi: sophie kamaruddin there on the markets. let's get you to first word news

with haslinda amin in singapore. mario draghi has commented on the rights of populism descending two decades of european political and monetary integration. the ecb president listed what he sees as successes for this in the market and the common currency, although he admitted not everyone has benefited. he also said lower prosperity in some countries is due to anestic policy choices and incomplete monetary union. >> the challenges that have arisen have become ever more global in nature, and it need to be tackled together, not alone. this is even more true for europeans. both at the level of their individual nations, and for the continent as a whole. haslinda: u.k. officials are picking -- pushing back at the idea of a second brexit referendum denying talks on the issue.

speculation of a new vote has been rising since the prime minister abandoned a parliamentary vote on her deal with brussels. tony blair attacked for championing her so-called people's votes. she faces more intense questioning in the comments later on monday. renault is set to be pushing nissan to call an urgent shareholder meeting to discuss governance, it's indictment in the affair, and the relations with the two companies. renault has written to me something last week's indictment creates enough and risks for the stability of their long-running alliance. the news on is scheduled to meet later on monday. more than 40 people were taken to a hospital after a parcel explosion in the northern japanese city. it,s not known what caused which left one person in critical condition. one witness told look media that there was a smell of gas in the air after the explosion. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm haslinda amin. this is bloomberg.

shery: thank you. china has taken more steps to diffuse trade tensions with the u.s., confirming it warmer remove retaliatory tariffs on u.s. autos, while preparing to restart purchase of american corn. it comes ahead of a meeting of china's top leadership to set the economic priorities for next year as a slowdown and trade tensions weigh on the outlook. our china correspondent tom mackenzie joining us from beijing. what is likely to top the agenda? really the focus is on how much fiscal stimulus policymakers here are prepared to inject into the system to support growth, given the weak data we have been seeing coming out of the economy. the slowdown in the auto sales, we are at the first slowdown in almost three decades. you have the real estate sector

as well under pressure. how much fiscal stimulus, how much support? bloomberg intelligence thinks you may get additional tax cut measures and other say you may also get changes to the debt for gdp ratio. possiblyso expecting announcements around opening up further sectors, likely in the professional and financial services area. and a push to and trapped more investment, more capital inflows into the chinese market. we are also listening to what, if any freezing or changes around monetary policy can we heard from the pboc governor speaking last week about the increasing downward pressures and saying the central bank would remain supportive. any clarity on the pboc's role in supporting the economy will also be in focus. there any indication that moves by china on tariffs are making any difference in terms of diffusing the level of trade tension we have been seeing? of course we have heard

from those officials in the u.s. and the administration, wilbur ross saying you need a verifiable set of addresses are issues they can check in a time frame. to be able to ensure that they are confident on the u.s. side, that china is living up to the agreements they made at this g20 meeting. certainly, there is a sense from some here that things are heading gradually in the right direction. of course, china can't buy its way out of this trade tift. steps to increase purchases of soybeans and corn, will not be enough. addressings around monetary policy made in china 2025, the reduction of tariffs on u.s. autos, those will be seen as positive. the u.s. administration has been making sounds in the last few days and weeks adjusting they want to see verifiable actions by the end of these 90 days. the u.s. has also said come march 2, they still plan to on 200e tariffs to 25%

billion dollars worth of chinese goods unless there is progress in this timeframe frame. between now and march's first. -- march 1. i have been speaking exclusively to fred hu, chairman and founder. he is a former head of goldman sachs in china. he says one way to address the u.s. concerns in the trade war issues would be for china to aggressively the regulate its private sector and create a level playing field. take a listen to what he had to say. >> the risks are significant. they are not robust. tose risks might lead further downward momentum. and consumer confidence did that could be a vicious cycle. it appears that the chinese policymakers now have recognized

the weakness that is building up in the economy. actions rying to pick to address that. tom: we have seen those measures from policy makers on the monetary policy front. what additional measures do you expect to be implemented to try to support the economy? fred: my assertion [indiscernible] you need additional credit expansion, nor fiscal stimulus. points to, it deregulation to continue to reduce interference by the state in the economy. to remove many of the outdated regulations to set the economy free. to let it expand. with greater freedom and

independence. deregulation. headwinds facing the chinese economy, whether it is the trade war, softening consumer demand, whether it is the drop in auto sales, real estate market, where do you see opportunities? isd: the new economy technology enabled. i think it is tremendous potential to do is remove the straitjacket. there are still too many rules. we have seen lip service paid to the private sector, by giving tax relief and this and that. obviously, you have more regulations imposed. that is incoherent.

which is why i'm not fully convinced. on the other hand, as economy faces significant downward pressure, and external [indiscernible] it is not been fully resolved. the going is getting tougher. we want to take off some of the bureaucratic complacency. tom: what is your view on china's equity markets? do you need those headwinds whether it is domestic headwinds or trade war to be muted before we can see any further upside for chinese equities? fred: it has become more attractive. long-termr a investor, it will attract opportunities for chinese equities. haidi: that was capital founder

speaking to fred hu tom mackenzie. still ahead, we will be discussing the outlook for china. the future has never looked so tough for beijing. shery: we focus on saudi -- southeast asia with an economist. this is bloomberg. ♪

shery: this is "daybreak: asia." haidi: i'm shery ahn in new york. haidi:i'm haidi stroud-watts in sydney. way 19 is shaping up to be a testing year for the global economy. the trade war on certain geopolitics around, the bulls are arguing global demand remains solid. inflation is very much under control. any slowdown will be shallow. let's balance these vias with our asia economy managing editor malcolm scott.

it reminds me of how mark said a few weeks ago that everything is horrible or everything is great. always two parts. a split on what 2019 holds. malcolm: the bears seem to have the upper hand at the moment. consensus is wrong. as we headed into 2018 remember, we had the first rather quiet year from a trump presidency on trade. he did not deliver on calling china a currency cheated that he threatened to during the campaign. he headed into this year thinking, maybe trump will not start a trade war. then it happened. none got worse and worse. now we have this potential trips. trade has been a real theme of this year. it will be a theme of next year. to call who will be right on that, the bull or bear, is not even possible to tell. the evidence looks like china seems to be doing a lot of signals and suggesting that it wants peace. but then again, we have the huawei k's and things like that

blowing up on other fronts. it is very difficult to call which way it will head. right now, the bears seem to have the upper hand. shery: what about where the u.s. economy is headed? the boost from tax cuts, that relief, people expecting it to fade into next year. now that seems to be weighing on equity markets as well. we see the selloff. that's right. of course, the fed. it is all about the fed. see the moderation in fiscal boost come, that may be a bearish time to hold on. maybe that will help. then the fed would have less reason to hike interest rates we will see a hike this wednesday. that is a must locked in. what about next year? we are still only just at about a neutral, zero real interest rate. this will take us into the positive territory. the real interest rate in the fed, where does i go? that is the big one for global markets. for the u.s. economy. we have already seen markets and

many economists start to doubt the fed chair directory. -- fed trajectory. if we see the moderation in the u.s. economy, maybe that is bearish. hold on. it might be supportive for global markets. we see a less active fed. haidi: what about brexit? i think we have a flow on what the different results could be. malcolm: absolutely. that is why it is great to be a journalist a not an investment manager and make calls in this environment can how can you? you have so many balls up in the air and brexit is a huge one. theresa may is doing her damnedest it seems. but whether she can pull off this brexit deal that speaks to at least lessen the blow to the economy and markets, who can tell? a secondssibly referendum. but they are denying it at this stage. malcolm, great to have you back in sydney. atcome scott, taking a look

what lies ahead for 2019. uncertainty when it comes to central-bank policy as one of the biggest risk factors going into next year. our next guest says rate hike cycles in indonesia and philippines are approaching a conclusion. thailand is likely to hike this week. joining us from hong kong is joseph incalcaterra. great to have you. give us an indication of what you are expecting from what the asian section banks this week, marketlarly as market -- participants believe in this weeks hike from the fed could maybe even be the next year. joseph: indeed. we do think the fed's hike is coming to an end. but not yet. we see a hike in december. then two more next year. in terms of asian central banks, this week we think the dot, bank of thailand is going to hike, not necessarily because of inflation, but because of its desire to build a future downturn. something that has been a top priority for the central bank. america, whilef

its hiking cycle is coming to an end, has one more hike to deliver and it will likely be this week. haidi: the brought -- will the broad narrative be with a more dovish fed next year, perhaps receipting with these trade tension concerns and the blow on the asian supply chain, but you will see overall less pressure on emerging asian assets next year? that is precisely our view. we have been expecting decelerating growth for some time. we actually have not revised down our forecast much as of late. most of downward revisions happened months ago. if anything, a less hawkish fed provides quite a bit of breathing space for some central banks and economies in the region. in particular, those with current account deficits, namely indonesia and the philippines to the two banks which have been the most prolific and hiking rates this year. i would argue the changing tone some of fed will offset

the other headwinds that have been emerging over the last few weeks. shery: we have seen an aggressive stance from indonesian policymakers. this chart showing the rate hikes. also showing the group year has been under pressure. you can see the ruby under pressure. see another if we rate hike this week we could actually see some support for the indonesian rupee at? so.ph: i think i think bank indonesia has been partly using rate hikes to counter negative sentiment. as much as a test been doing to control real economy variables. if you look at the surprise hike in november, it had a positive impact on the currency. ultimately, what the central bank does is not clear. while we expect one more rate hike, there is a risk that it is delivered in the first quarter of next year bank of indonesia has two main reaction functions. one, the real yield spread. also, it is the balance of

payments. the deficit has been a concern this era. november, we have the october data which surprised the downside. today, we will have indonesian traded a for november. i think if we see a negative surprise there, a whiter than expected trade deficit, that could be a key driver for the short-term reaction function for bank indonesia. shery: when it comes to trade, we are seeing economies in the region that could benefit from these trade tensions between china and the u.s. who are they and will the trend continue into 2019? joseph: indeed it for sometime, we have been saying the three main benefactors would be malaysia, thailand and another. looking at the data that does come across since, they have revealed interesting takeaways. firing on multiple cylinders. that is because of a pipeline that was in place. new capacity moving to vietnam.

we expect that to continue. maybe an upside surprise has been malaysia where trade data, particularly electronics trade data, has been surprising in the third quarter. even industrial production has been quite strong. this is one of the key areas where we are saying upside surprises and it is definitely going against what the trend is for the rest of the region. will be part, 2019 of the election year for tylan we have been talking about these elections in thailand for so long. economy thatof an has marched long despite political uncertainties. does that meaningfully change your outlook for thailand depending on what the result is on how the military reacts? we will not comment directly on politics but there has been a strong degree of resilience in the thai economy throughout recent political cycles. if anything, i think this might enhanced because the current

administration has been pushing forward a relatively robust fiscal agenda. they have a nice pipeline for projects in 2019. what they are trying to do with this economic corridor is sign as many contracts as possible to my get as many projects in the implementation stage before the elections happen. short-termlways economic impacts from election campaigns we do not see this as a large factor in our growth or inflation forecast. haidi: thank you so much for your time. throughout the course of this year as well. joseph incalcaterra, chief economist there and hong kong. don't forget to check out our tv function. at tv on the bloomberg. you can watch us live, catch up on past interviews and i've been to any of the securities or the talkberg functions we about. become part of the conversation and assigned us instant messages during our show. this is for bloomberg subscribers only. check it out. tv . this is bloomberg.

♪ this is bloomberg. ♪

let's get you a check of the latest business flash headlines. a land from the u.k. say rover will eliminate thousands of jobs within an announcement expected in the new year. they say jail will impose the cuts as part of a cost-cutting turnaround plan. if you months ago, and announced plans to lower expenditure by more than $3 billion within 18 months. to junk last cuts week on the back of these headwinds. boeing has launched its foray into china, handing over the first 737 max from its southeast of shanghai. the jet was finished up a factory. in reality, it bears a made in america label. given it was flown over from seattle. roughly one in four planes that boeing builds is headed for

china. this airline -- these airlines of the world's leading buyers of the 737. canada is delaying its flagship store in beijing amid escalating tensions caused by the arrest of the huawei cfo in vancouver. the company wrote that it was being postponed due to what it referred to as construction reasons. the message came after such a meter users threatened to protest outside the store over the detention of the cfo. let's take a look at asian markets. firing so far in the monday session. a mixed picture. positivity coming through from the likes of japan. about .5% higher. 2/10 of 1%rading higher. in australia, no joy despite the government projecting the budget to return to soap -- two surplus for the first time since the global financial crisis p we are seeing new zealand trading lower by 6/10 of 1% in what is a big

week for global central bank decisions coming up. next, the no referendum rerun. theresa may's team pouring cold water on calls for a second brexit. calls for a second brexit.

day init is a foggy singapore. we are awaiting export numbers out of singapore, getting them now breaking on the bloomberg. exports have been more of a open economy.he we are seeing nondomestic exports falling 2.6%, really decelerating much more than expected. the expectation was for exports to rise in november year on year 1.8 percent. they have contracted 2.6%, and this is a huge deceleration on the previous month when exports rose 8%. we have seen electronic exports year on year really being quite

weak but this time they grew 4.5% in the month of november after contracting 3% in the past month. we have seen a lot of frontloading of exports in these economies, very trade dependent tradeies with u.s.-china tensions. we are seeing that have faded in singapore with nonoil exports contracting 2.6% on year. we have seen electronic escort not be that great, really contracting the last month since november last year but this time around, we are getting in the positive, in the green rising 4.5%. a little bit of a surprise in terms of latest trade numbers. haidi: we are pointing out it is typically pretty volatile series that don't allow the mystic export numbers out of singapore, given the swing factor from the

pharmaceuticals element in the city state. looking at asian markets. the heads with monetary policy and a mixed future. sophie: it was slow going with muted gains for the kospi and nikkei 225 but seeing that pick up. the nikkei adding .7%. energy still offsetting that advance. in seoul the kospi adding .3%. health is weighing the most. financials gaining ground. risks are seen rising for korean banks with weekend economic -- weaker economic growth. , no share% last week really coming through for the government saying it is on track for a budget surplus next year with gdp growth being revised

lower 3%. in sydney, anzks the biggest laggard. this is bell potter. the stock is the most exposed to the rbnz proposal to double capital buffers for bank owners in new zealand. and taking the stock here to a november 1 low, this ahead of the listing of its mobile unit. japan display losing four .3% after jumping 35% friday, this amid speculation they are in talks to partner with chinese companies, but on friday they said it is not considering the ofsibility of selling part its business. that is japan display. on this stock gaining ground, jen day heavy industries. -- hyundai heavy industries. they will drop some shares --

kamaruddin.e let's get to first word news with haslinda amin. toldnda: north korea has the united states sanctions and pressure will not force it to alter its nuclear program. the state news agency said history proves such measures don't work and washington should concentrate on improving relations. the agency added president trump should back up his frequent claims about wanting better ties with north korea. leading u.s. politicians to say a government shutdown must be avoided at all costs and it is up to president trump to resolve the issue. he said he would be happy to break the federal agency to a halt if he doesn't get his way. the leading summit -- senate digress of the president must understand he will not get what he wants. >> president trump should understand there are not the votes for the wall in the house

or senate. he is not going to get the wall in any form. haslinda: the global environmental movement is bracing for a fight with populists after the latest international climate talks. the meeting wrapped up with an agreement of 200 countries to implement the 2015 paris a cord but green groups and diplomats, like-minded businesses want governments to have deeper cuts ahead of a human leaders summit next september. a clear majority of people in japan agree with the government's decision to ban chinese communications equipment from the public sector. the poll found 61% of responders support the move with 21% against. reports from japan say the abe administration has called on businesses to avoid buying technology seen as vulnerable to leaks and shutdowns. 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. amin.aslinda this is bloomberg. shery: senior aides to theresa may are pushing back against reports they are warming to a second referendum on brexit. she also hit out at tony blair for championing the people's vote. jodi schneider joining us now. really we have seen speculation of a second referendum growing since prime minister may postponed the boat, so not surprising to see lawmakers embracing this new idea. >> there are lawmakers doing that. there were thoughts even theresa werend her supporters trying to push for this, but they made it clear. she said former prime minister tony blair was undermining the process to move the brexit by getting involved and pushing for

the second referendum. the reason that is on the table now is simple. there isn't anything else. if this vote cannot get through parliament, the package theresa may has put together in consultation with the e.u., if this can't get to parliament and doesn't look like there is a vote for it, there is nothing brexitcept a no deal march 29. this is really the logic behind pushing for a second referendum without anything else. let's go back to the voters and see what we can get. haidi: how much public support is there for a second referendum? >> there is some public support and also from people who don't want to lead -- leave the e.u. so that is a real risk to vote for the brexiteers that they may not get this. one of the things that has been put out is perhaps by this

speculation for a second vote, it could push people to go to parliament to take on this issue and perhaps vote for the deal on that ise, but right now a long shot. there are not a lot of other alternatives at this point. that is why this keeps coming up. shery: we have prime minister may's deal, if she could not find concessions, and the other thing is are there anything else that could be discussed and on the table? >> he doesn't appear that way. she did go back to the e.u. they made it clear when they came up with the deal that there would not be concessions. they were clear and stuck to that. one of the things some people someaying might propel votes for the deal that is before parliament and is

expected to come to some kind of be the january would fact leaving march 29 without a deal could be catastrophic to the economy. british authorities have said leaving without a deal that could cushion the blow could mean a 25% drop in the pound and 30% crash in home prices. the thinking amongst some is as it gets closer to march 29, they deal soke some kind of there is not a new deal brexit. there isn't anything else on the table. the package money in parliament don't like is what is before them. that is all there is. our senior international editor in hong kong. this week marks the 40th year of china's opening up and the start of the economic reform plan.

the changes have transformed the country and economy but also sowed the seeds of many problems they face today. when xi jinping came to power in 2013, it was hoped he would be a leader. but he has reasserted the control of the state in an effort to become a global superpower. reporter has written on the country's financial system including talks with capitalism and more. future that country's has never looked so tough. let me start with some reflection given it is a momentum milestone since the ,pening up strategy for china on the balance of things. on one hand it is the most extraordinary growth story, the ofting of people -- lifting people out of poverty.

how do you rate the structural embedded problems for the economy and society? over 40 years the changes are tremendous but let's not forget the communist already came to power in 1949. 70 years of their rule and the last 30 years have been fixing the problems of the first 30. the last 40 years have been tremendously different times of reform, progress, obviously a lot of experimentation, backwards steps. not some grand plan they ruled out -- rolled out 40 years ago. but we have all benefited and they more than anybody in terms of the government getting out of the way and allowing market forces and entrepreneurs to come to the fore. is a saying that gets applied a lot to the chinese economy and policy that if you take one step and see how you go. is there a sense they are learning, and you say two steps

forward, one step back or the other way around. is there a strategy as they grapple with the idea of a trade war which wasn't an issue couple of years ago? but is being too generous. if we are being honest about where china has gone under xi jinping, we are talking [indiscernible] it, has ended. the focus has changed. the four meter was ringing in a general rule of law and bringing that getting rid of arbitrator decision making. that changed under xi jinping. he centralized power to himself, the party, emerged lines between the party and government, state and private sector and those were always blurry, but there has been a distinctive change. it is one party rule but it would be wrong to think this is variations on a theme. there has been a definitive change, and i think it is taking

china in a backward course. haidi: one of those -- shery: one of those has been to make out china's ambitions. going against the dictum that des hide your strength, bi your time. is there any soul-searching going on now? >> there should be. the trade war has taken china by surprise. they had been used to basically a west and american political system that went along with china for 30 years and allowed it to go and supported its growth and invested a lot and bought exports. now things have changed. people in the west, not just the states but europe and elsewhere are fed up with china skirting the rules or bending the rules in their favor, not playing fair. now china is bigger and richer,

people are pushing back. that has been a wake-up call to the center in beijing. xi jinping understood, but i am not sure. a number of his advisers must be worried in the path of confrontation that is taken with the states. shery: has this impacted his hold of money and power in the country? is underea that he attack is wrong. his position is very secure. territorial -- dictatorial positions are secure until they are not. i wouldn't expect political revolt at the top anytime soon. that is not going to happen. shery: you are sticking around. fraser howie, he will be back with us. coming up next, we take a look at china's property was with predictions that investment and growth could drop 10%. the end of the bull run?

this is bloomberg. ♪ ♪

haidi: this is daybreak asia. i am haidi stroud-watts. shery: i am shery ahn. the growing list of problems facing china includes property, some saying real estate investment growth likely to fall 5% to 10% next year with the market reaching the end of the bull run. joining us from beijing is a senior economist and executive -- also and although fraser howie is with us. this chart on the bloomberg that we are showing our viewers showing property prices have been cooling, second and third tier cities coming down, not first as much. what does this tell you about the broader property market? have we reached the end of the bull run?

thinki have to guess, i we are likely reaching the end of able run. muchso-called bull run is longer than expected. in only policy loosening 2014, 2016, economic reflation in 2017, but the last leg down from reconstruction related purchase. also these three factors will deteriorate. we are seeing some bearish signs for a third and fourth tier cities with transaction volume and price. telling something us about chinese buying power and income growth, or is this a result of the deleveraging efforts we are seeing in the past? is all cyclical

and structural in a sense because we are set up for an extremely high base for transaction volume. it is an over lasting factor of policy, flipped up and loosening 2014 and 2016, then economic reflation where growth was accelerating and leverage was going up. then we had tightening on both property and policy and the developer cash flow and at the same time we had nominal growth coming down, going to go down more next year. financial tightening rates extending funding costs, mortgage and developers. all these factors combined, it will generate a more cyclical downturn in the next -- in the past 12 months we reached transaction volume, up $1.7

billion. that was between one to 1.2 five years ago. the factorsed by but also temporarily propped up by the 300 million purchase from government for construction in 2017. all these things will go away. haidi: in terms of the discrepancies we have seen between first, second, third and fourth tier cities in china and the pricing and property market, are you expecting the diversions to close in 2019? >> no. both the macro and property team views are the opposite because we are seeing more restriction, a lot of capction,

on property price. in some of the leading tier cities. when the property cycle starts to soften we expect some of these to loosen. that will relieve purchasing demand in these cities because they have been pent up for much longer. as i mentioned before, a lot of the artificial factors propped up. fourth tier cities demand more than where it naturally is. we see a divergence between performance of first and second tier versus third and fourth in terms of price, transaction price and volume. in the investment side we will see acceleration in first and withd tier cities deceleration in third and fourth next year. haidi: thank you for your time. executive,onomist at

director joining us on the line. let's ring back fraser howie in singapore to talk about -- bring back fraser howie. tradewinds,t the but it is really domestic agenda that is continuing to threaten domestic growth we are seeing. certainly that is true. the deleveraging campaign. you did that segment on properties sector, everything is tied up with leverage because so much of the property sector is driven by it leverage and borrowing by other local governments or property companies or homeowners. there is this very difficult balancing act trying to clamp down on deleveraging and worrying and too much bad debt in the economy. same time keeping growth going, the party the show on the road. muddling through is the best

scenario china will get. shery: will all of this economic slowdown in china push beijing ,o reverse economic reforms instead of opening the markets, trade tensions will cause the opposite? i don't think so. they are already refolding -- rolling back reform in some ways. they need for money. they no longer have the surplus they once did. they need to attract funds. that will continue. harderill be harder and place to do business partly because of the political environment under xi jinping. shery: thank you. the co-author of red capitalism and privatizing china. more daybreak asia next. this is bloomberg. ♪ ♪

haidi: this is daybreak asia. i am haidi stroud-watts. shery: i am shery ahn. for more to watch, let's go to sophie kamaruddin. movers in japan, hoche is augie extending a slump, losing and sliding to 8 february 2016 low after the stock was put under review after it missed friday's deadline to submit a third-quarter report

and will face delisting if it doesn't submit that by december 27. sunday motor under pressure, seeing the biggest drop since -- a class-action suit against the group, saying a defect can cause failure and fire in some engines. japan display losing after friday.35% they did say it is not considering the possibility of selling part of its business amid speculation they are in talks to partner with chinese companies. with stocks to watch over the next hour, keeping an eye on this, one of apple's three major assemblers, unaffected by china's ban on some models because the company did pay a fee to license the contested qualcomm software. apple is in initial talks to's shift -- talks to shift to older [indiscernible] kamaruddin,e looking at the early monday

morning session. next on bloomberg markets china open, the director of sovereigns andrew fennell will be joining us on the program. a lot to look ahead to when it comes to a busy week for central banks, not the least of which, the bank of japan, the boe but then also decisions from this part of the world. shery: thailand, indonesia, those decisions later this week. ther the dovish turn from ecb, looking for a two to expect. that is it from daybreak asia. the open in hong kong, shenzhen. the china open is next. ♪

place, the xfinity xfi gateway. and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today.

rishaad: 9:00 a.m. here in hong kong and shanghai. china is taking more steps to ease tensions, lifting tariffs on u.s. car imports. recycle the nissan director is prepared to talk about life after carlos ghosn. yvonne: theresa may faces another difficult week. ♪