♪ good morning, we are under an hour away from the australian market open. welcome to daybreak asia. ♪ paul: our top stories this wednesday, president trump raises pressure on the fed days before jackson hole, repeating the call for a big cut in interest rates. hong kong protesters reject the governments olive branch.

and paying the price, documents seen by bloomberg say facebook's libra crypto is already under scrutiny in the eu. >> let's get a quick check of the tuesday session in the u.s., risk off day with stocks and's -- and yields slumping. every sector in the red in the s&p 500. financials and materials leading the declines. we continue to see investors pre-match focus on what has come out of the jackson hole gathering. meantime, the dow losing 100 summary three points while men nasdaq was down 7/10 of 1%. we also have a big week for u.s. retail earnings, a bit of eye divergent picture with cold disappointing but home depot -- homes disappointment but depot rallying. risk off sentiment for the day,

u.s. futures unchanged for the moment, but let's see how we are shaping up in asia. futures are nudging lower, the asia stocks could have fresh lows this week if the momentum keeps up. we have a more soft ego data today that could put on the pressure. we have stocks on 20 date exports, down every month so far this year. in wellington, stocks under pressure, a halt to a two date rise. the benchmark sliding after the earnings, the company is going to focus on china and the u.s. and leave the u.k.. stocks looking to sinceafter a best day june after a hand of further easing. bond yield has lower in australia and new zealand. the new zealand 10 year yield back toward 1%.

late yesterday, we heard from the rbnz governor on the august rate cut, saying it produces a chance of unconventional tools. we will get more clues from central banks this week, with minutes this wednesday. we also have the bank of thailand do along with trade data after they gave the nod to a stimulus package. paul: thank you for that. let's check in on the first word news. >> thailand is lowering its forecast for economic growth and exports, blaming the rumbling trade war and strengthening currency. almost a full 1% lower than rejections. a batch has risen almost 7% in the last year. italy faces a new political crisis with its prime minister resigning. the populist commission is said

to be dead. five-starith the movement and withdrew support from the government. there is hope that there will not be need for a coalition partner. thousands of people, mostly young men, have been detained during india's correction -- crackdown. 2300 arrests have reportedly been made, with the area cut off from the outside world. ashmir has had its semiautonomous status removed. protesters in hong kong have rebuffed carrie lam's all of branch, saying it fails to meet their demands. carrie lam says she will investigate complaints of police per tell the and launch a wide-ranging study into what caused the protests.

s say it may be a media stunts. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. the wallack into street" stocks fell across the board in a choppy trading session. we had low volumes and corporate news, mixed results from retailers, which are a big part of the earnings parade this week. su keenan is here. investors focusing on jackson hole. not surprising to see them on the fence. su: good reason to be on the sidelines. a lot of professionals take this time of the year, so seasonally it is low, which can lead to greater volatility, and volatility has been the name of the game. showing weakness, and if we go to the bloomberg, underperformance for financials resumes is the title of our

chart, you can find them on dtv. -- g tv. this has been underperforming increasingly as we go into this recent phase. let's look at the big movers. bank of america pacing some of the decline to sell in the financial sector. notice this has come down from its ipo build up and got a strong upgrade from jpmorgan, the only big by for the stock the investors seem to appreciate that baidu continues to rise. netflix under pressure because of apple tv. streaming video is becoming a crowded space. let's look at other big movers in the retail sector. as mentioned, home depot came in 's, a department store for discount goods, even

though they had some bright spots, suffering some department store woes. you are continuing to see weakness in that sector. t.j. maxx, which has several nationwide stores, came in beating estimates but still had enough weakness that the stock was lower. let's turn to commodities, we have oil rising, a one-week high ahead of inventory data. gold higher. su: we have that inventory data out on wednesday, expected because of a private report to show a decline in oil. immersing oil prices rise, as you can see in what has been a choppy month. check out the big picture story. we are still about 15% load the april peak for west texas intermediate. it has been a down trending month but we are up for the week, at least at the highest the week. check out gold, which has

continued to be on a bull run. the mobius adding to momentum by saying the gold outlook in his view is up, up, and up. he says you can buy into gold at any level here the county believes the bull run here just day at least for the near term. that's on the heels of the imf report showing multiple countries increasing their purchases of bullion. paul: su keenan, thank you for the update. still to come, more scrutiny for facebook. the european union regulators are probing the social networks digital currency projects. shery: next, looking ahead to jackson hole. make ofs jerome powell the cuts the president is calling for? this is bloomberg. ♪ rg. ♪

♪ this is "daybreak: asia." from wall street to the

white house, hopes running high and that fed chair jay powell will kick off the jackson hole symposium later this week with a speech that signals he is revving up for a series of rate cuts. kathleen hays is here to explain why powell may not deliver. kathleen: everyone around the -- it's notused unusual, what usually happens at the symposium, going on more than 30 years. people from all over the world gather in jackson hole, wyoming. jay powell last year gave a speech, he kicked it off as the fed chair does every year. that is him last year on the right with the president of the kansas city fed, and the new york fed president in the middle. what people expect now is come on, you've got to give us a signal that the world is waiting for. that this isn't just one rate cut, just to adjust things temporarily and see what

happens. you can see distress around the world and you are ready to do something on rates. and whyabout distress the view might be justified, jump into the bloomberg library with me, i have a good one. the new york fed probability of recession in the year ahead and they are looking at treasury spreads and more elements. it is above 30, it is at 32. whatever the recession odds are over by -- over 30%, and recession has happened, this has been since 1967, a long time. the next chart, what markets are pricing in in terms of rate cuts. we have the one on july 31, the first rate cut in 10 years of any size. this is you see here -- where the fed funds rate is, 2.1% is where it is targeted. this is where it is expected to go, 60 basis points lower. more than two bank rate cuts. traders are saying, we expect to bank if not 3 -- two if not

three by the end of the appeared 30 year bond yields with below 30% for the first time. , wereof people are saying trying to tell you something, the world has slowed down, inflation is low, global central banks will be cutting rates and the fed needs to get in step and adjust with more rate cuts. compellings the reason to act, but why wouldn't powell signal he's more for -- ready for more rate cuts? kathleen: if he, like the president of the boston fed, who dissented at the last meeting, i spoke to him yesterday. he said the economy is still is weakne, and gross overseas, let those central banks cut rates. we don't have to cut rates yet. many people are not convinced the economy in the u.s. will slow so much even if the trade war continues, to justify a rate cut. retail sales, let's look at a

chart. they have rebounded. they are not as strong as they have been in past years, but they are way up from below. will jay powell emphasize? the economy looks ok now, but look at the global developments, the global risks increasing, look at what is happening with the slowdown in germany in china and many other countries. will he signal it isn't just a cute adjustment, the rate on july 31, will he signal we did that one and we can see pressures are building and we are ready to do more? it is a fine line to walk. i don't think he wants to overpromise. if he does, people will say he is caving into trump. doesn'tther hand, if he move quickly enough and we get a recession, he won't have one either. paul: kathleen hays, thank you

very much for that. let's bring in our next guest for his take. chief investment strategist and head of global bonds for pg i am fixed income. normally in new jersey, today he is in sydney. return to one of the charts kathleen showed us in terms of market expectations for what the fed is going to do next. it appears to be rather giddy, doesn't it? what will happen if jay powell doesn't deliver? >> i think there's a good chance he won't. he's dealing with a split committee. when you look at their forecasts and projections at the june meeting, half of them didn't want to cut rates. the other half were willing to cut 50 this year. all of them solve a long-term neutral fed rate higher than it is now. i think that supported his comment that it was a midcycle correction, it was shocking they would see this as a couple of cuts before the end of that

higher interest rate. they are kind of on their own wavelength. the markets in terms of pricing, there are number of things to get priced that are accounted for. one is the expectation, the other is the international situation. internationally, people are paying to store money in europe and japan. when they come to the u.s. and look at the market with yields as high as they are at 1.5 on the two-year note, there could be capital appreciation. they are willing to pay for that and pay a little bit in terms of kerry, and then they have a intle bit of rate cut priced and recession risk. i think it is a complicated picture to bring you to the low fed fund pricing. boston fed put it well, just because other countries are we can we are strong doesn't mean we should cut rates. if we look at this other chart, we have the taylor rule saying never mind the 100 basis point

cut the president would like to see, it should be 100 basis points higher. robert: i feel like of seen this before. a notion of the taylor rule as arbitrary, it is designed for a disinflationary environment, the environment they had until 10 or so years ago where they wanted to bring inflation down. you would run a positive real rate that sucks money out of the economy, gives you a subpar growth picture but brings inflation down. we are in a completely different world. they want to stabilize inflation. so the taylor rule is too high. what we are seeing is a repeat of the early 1980's. window volcker came in, he was fighting inflation. arguably we have the most hawkish central bank in the u.s. the dollar has depreciated by 50% in nominal terms in the last handful of years.

the non-energy trade balance is deteriorating. that happened in the early 1980's, they had very hawkish policies, the dollar was soaring, it had doubled. this is not on the order of magnitude that it is the same thing where everything looks they are balancing the economy in all likelihood, and they will end up getting dragged to the market. what is going on in a place like australia, where the economy is not doing badly but they would like it to do better, their following the market lower in terms of rates. shery: what does that mean for this week? will we see the curve flattening even more given the traders will have to pare back some of the citations for rate cuts? robert: i think it's possible. i think he will introduce their review of inflation targeting is bringing them to something where they will go with a more dovish tac k. inflation has been missing on

the downside, and if they connect the dots, they would ratify the market pricing. comes other hand, if he in and stays more to the guidance they have given, which is supported by the defense of the last meeting, but the dot plots, you will be looking at flattening, maybe some risk off as the market at just -- adjusts to disappointing. shery: the financial times reported on pimco reducing positions in government debt, if you can have a breakthrough in the trade talks, we could see a violent selloff. i do factoring in that possibility? -- are you factoring in that possibility? robert: i think the markets have had a massive rally. most of what has happened in the is a marking to reality. environment in

europe and japan, the global backdrop is one where there is too much money in the system not because of the central banks entirely, but predominantly because of the demographics. it is a low interest rate environment. i think a resolution on the trade talk would give you a temporary pop up in interest rates that could be substantial, maybe 30 or 50 basis points, but eventually one half on the 10 year treasury is probably a long-term equilibrium type level in this world where bonds are likely to be in negative territory for the foreseeable future. in australia, sub 1%. u.s. treasury is likely to be back around where it is now. paul: we do have some breaking news coming out of australia. resortsfrom crown full-year statutory net profit at $402 million. that is down 20%. to 2.9 also down 5% billion.

,e have a dividend from crown $.40 for the year, in line with expectations. it's been a rough year for them, down eight -- 18% this past year. more recently, it was hit by allegations of money laundering, which crown is it vehemently denying. those results from crowned a little short of estimates with the exception of the dividend, which was in line. robert, to return to you now. i want to get to a point from your notes about negative yields. it say is not all bad, provides revenue for central banks, benefits governments, let's look on the bright side. really -- the negative yield i think is a policy mistake. i think the central banks, naturally rates would fall to zero. if the central banks want to help, they could offer money at negative rates. the really they are paying

people to take money and they are charging people when they squeeze all of the supply out of the market and push long-term rates negative. it's hard for me to imagine in a creditor block like europe that pushing yields to levels where retirees will have less income, that it will motivate them to consume more. i think they have overplayed their hand. i'm hoping 10 or 20 years from now, people will look back, or maybe sooner, saying we should take rates to zero and looking at other ways to stimulate growth structurally and negative rates are the way to do it. , thank you. tipp plenty more to come, stay with us. this is bloomberg. ♪

shery: this is "daybreak: asia." paul: facebook's cryptocurrency

thee is facing scrutiny on european union with documents saying antitrust regulators are already probing the two-month-old project. sarah frier has the story in san francisco. what do we know so far about the investigation? sarah: we know they are looking into whether there is some sort of antitrust concern with facebook having all of this power over a currency. of course, facebook is tried to make the case they won't launch the currency until they appease regulators. they are also stating this is not just a facebook project, it is a project with multiple entities signed on. thatr, they are the ones are fighting the regulatory battles before they launch. shery: will this launch at all? it was only announced two months ago and we are already seeing a lot of resistance not only from the eu, we have seen powell talk about it, president trump talk about it. we've had congressional hearings already.

sarah: it is indicative of how difficult it will be for facebook to do anything at all new or scary. this is a company that has lost a lot of trust with users and the government and its also a company that has about 2.7 billion users of its product around the world. it is really important for people to understand how things work before they happen so that get a sense can all of what is happening with our data, what is happening with other companies. they can't just go out with marketing, they have to go out with substance. shery: sarah frier, thank you so much for that, from bloomberg technology. as get a quick check of the latest business flash headlines. has taken lazard to advise on a second ipo. expected to play key

roles in the selection of underwriters and venues for the listing. lazard wasn't part of the first ipo attempt, but with the blockbuster bond sales this year, is in a position to secure a role in the ipo. paul: we work is under attack for information released ahead of its ipo. the upcoming share offer is expected to raise $3.5 billion in what would be 2019's second business -- biggest listing. the company says it has worked a critic says it is worked hard to conceal the numbers. youtube is finalizing plans to run targeted as on videos likely to attract kids. regulators asked whether the company had breached the online children's privacy act. the fec has reached a settlement but it's not clear.

youtube says its primary site is not for children and young people should use the youtube kids app that does not use targeted ads. next, we talk about the ongoing protests in hong kong. this is bloomberg. ♪

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♪ shery: this is -- >> this is "daybreak: asia. the european union has rebuffed boris johnson's demand for a brexit deal, saying the irish backstop is a vital part of the agreement. to arrangement was intended create a hard border with island but the u.k. says it leaves brussels holding all the cards. the two sides remain deadlocked with weeks to go until the deadline. the u.k. government may delay too bankia announcements in the latest sign it is considering a snap election. --k carney may not be named mark carney's successor may not

be named until after brexit. end ofs down at the january, having twice extended his tenure to provide continuity during the leaving the eu. a breakdown in communication and revelations that aviation regulations did not understand boeings 737 until crashes. the trump administration admits recent missile launches by north korea are a concern and talks to halt kim jong-un's nuclear program has lagged. mike pompeo said things are not moving as fast as washington would like. a japan news --

reached the moon almost a month after last off. it will reach an altitude of about 100 kilometers and then it will attempt to achieve india's first lunar touchdown. -- first ever on the moose the moon's south pole. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. we are half an hour away from the open in tokyo, sydney, and soul. i want to get a snapshot on currency markets with korean and tied trade figures, do this wednesday. you have the korean won, and underperformer in asia, the worst performer at 7.7% and it

came to negative returns for the currency so far, and that is not happen -- helping korean shipments and the contraction for exports is expected to continue. andave a strong thai baht, that is hurting thai exports in tourism and that's all second-quarter gdp growing at the slowest pace in five years. pulling up this graphic, i want to show you one beneficiary from the thai baht strength, that is 7, whichn -- comm boosted to a record second-quarter as consumers are being blurred -- lured by a stronger currency to buy smartphones and other devices. they are outpacing other consumer electronics retailers with a market cap of about $500 million you today. forcing it outpaced the likes of

australian and german companies. paul: let's stay in hong kong. more protests plan, including at some subway stations today. demonstrators and authorities china'seadlocked amid national day, and tension is expected to stay high. stephen engle joins us. is there amain, but window of opportunity opening up? stephen: that's what people are saying, there is a critical six-week period between now and the 70th anniversary of the founding of the people's republic of china. there will be a big military parade in a chance for china to celebrate. what they don't want is unrest, especially violent unrest in hong kong, to spoil the party. , pro-, butlishment moderate lawmaker in hong kong has suggested on bloomberg television yesterday that this is a golden window for both sides.

in particular, for the government of carrie lam, who did offer a bit of an all of brent yesterday, saying she will set up an independent, or facility, if you will, a way to hear from all walks of life in society, the complaints. she will set up a platform for dialogue, basically, and investigate complaints against the police. i might add, shortly after she made those comments, the main group leading the protests rejected that offer. they still want these key demands. chinese -- when asked whether this was enough of an all of branch, that chinese politician said i'm afraid it might not be enough. let's hear from carrie lam. immediately art

dialogue with people from all walks of life. this is something we want to do, in a very sincere and humble manner. i and my principal officials are committed to listen, so -- listen to what the people had to tell us. we want to reach out to the community as soon as possible. stephen: another reason why is -- why it is a potential golden window opportunity is school returns to class this week, and in the coming weeks. high school students and secondary students are already going back in some cases. there is speculation that some of the fervor and number of protesters will die down a bit. however, protesters who have spoken to bloomberg have said they have a number of class strikes already planned for september. shery: given the ongoing tensions, secretary pompeo weighing in on the hong kong issue. what did he say? stephen: perhaps he is saying

some of the strongest words in support for the right to protest peacefully in hong kong. donald trump in recent days, sort of linking the trouble in hong kong to the trade negotiations with china. you caning that up and see what mike pompeo said on cbs this morning. he said china needs to fulfill its promises. one of the challenges in the trade deal is you have to make sure that china lives up to its commitments. or the commitments it would make. in hong kong, this chinese government made a promise that it has a central understanding they are one country and to systems, and they need -- and two systems, and they need to live up to that promise. strong words from the white house in support, not necessarily in support of the protesters, but in support of the right to peacefully protest. shery: as we continue to see this play out, although there

has been a rejection of the offer from carrie lam, what is the ultimate solution going to look like? could we see beijing taking a harder stance? stephen: that is the big concern, and why the politician was careful in his wording yesterday, really making the point that there seems to be a consensus that he is hearing from beijing that september 1 is a bit of a line. the is one month before 70th anniversary on october 1, the founding of the prc. if there are still protests and violence september 1, he alluded to the fact that it could be intervention from beijing. they are not going to tolerate any protests, especially violent ones, on its soil, which hong kong is, in the run-up to the anniversary. again, a lot of fears about the amassing of troops on the border.

that has always been a threat to hong kong. whether the threat turns into reality, that's why this politician and others are saying this is a critical time right now. the more violent aspects of the protests are also restraining themselves a little bit. lull that could turn violent again, and now is perhaps a time for the government of hong kong to address those main concerns. shery: thank you so much for the latest on the ongoing protests in hong kong. oil search is looking for progress in pop in new guinea. it has been in limbo since a new government came into power, h-shares falling 18% since april on the risk of delays and political uncertainty. the managing director tells us when he sees a possible resolution. >> we are engaging in discussions now and i think those discussions have generally made progress.

i think everybody knows where everybody is on this and there are further discussions this week. broadly, we've seen a week oil price recently, soft lng price as well. is that making negotiations with buyers more difficult? >> it is the dynamic. when you are discussing lng contracts, generally speaking, there are quite a number of years. if you're talking 5, 10, maybe 15 years, this is a long-term relationship and buyers are taking a long-term view. prices have been low recently, as we go into the northern hemisphere winter, you would expect the spot price to close. the trade war is overlying oil price. again, i think the quicker we get resolution on that, the better. war casting a long

shadow over everything right now, including global growth. how much is having an impact on your outlook? >> certainly from an oil price outlook, despite various challenges in the middle east and what is happening there, challenges in venezuela, oil prices are still relatively subdued. we are lucky because we are at the bottom end generally for our productions a we are still making money. clearly the world trade situation is hanging on demand and is weak. >> the last time you spoke to bloomberg about post earnings, you said the trade war might be a blessing for oil surge. has a proven to be the case? >> in one area, if you're trying to sell gas into china, you probably can do it at an advantage to the u.s.. but if you're looking at world growth and oil prices, world trade issues are clearly

attenuating growth. attenuating the ability of oil prices to rise. it swings around about, i think. peered next,otton xiaomi is fighting for position in a shrieking smartphone market. we will run through the latest earnings. this is bloomberg. ♪

♪ shery: this is "daybreak: asia." profitiaomi missed estimates after a slowing chinese economy depressed phone demand. sophie joins us with more on this. struggles for what was once china's start up sweetheart. sophie: xiaomi is funny to maintain a position in a

shrinking smartphone market while trying to go for higher margin businesses. income slid to $278 million in the second quarter, while there was sharp deceleration to 50% from the -- 15% from 20% in the first quarter. going forward, monetizing internet revenue streams, a key area of the business wants to grow. that may be limited due to sluggish monthly active user activity. shares of face more pressure, trading at about half the ipo price. seen any strategic new initiatives to drive recovery. pressure indeed for china's tech giant. shery: let's continue discussing xiaomi. kong, eric.rom hong not such great numbers out of

xiaomi, but could we say the bottom is near for its share loss when it comes to the smartphone market? especially as we see xiaomi gaining some shares from wally -- huawei. >> i think this is definitely a mixed results. i think what happened is after seas, being section over they don't the smart -- dumped the smartphone price. lossd to a market share for xiaomi in china, but they made it up overseas. it is the global market share, it went up. they are trying to grow high-margin businesses such as connected devices, online content. how are they doing on that front? eric: one positive and one negative. the positive is the bright spot a device they are

growing 44% this year. this business has tubing parts, television have seen some slowdowns and that's one of our concern areas, that the smart , iotes, refrigerators enabled, it is doing really well. a are continuing at more than 50% growth for several quarters. the negative part is the chinese economy. xiaomi, this quarter they have a negative growth. i think the outlook is improving but it's still under pressure for the year. our view on xiaomi is they have hit the bottom, but still probably a couple of quarters to turn the corner. paul: in terms of some potential

upside for xiaomi, they just got another license to sell a second 5g smartphone. how critical will that be to the outlook going forward? impactg is not going to the growth outlook until second quarter of next year. initially, i think people will asslow in reception to 5g the technology starts to improve itself. also, what typically happens, is 4g and 5g,and 5g, -- they further depress the 4g price. i think the market outlook will be challenging. paul: i want to bring up a chart we have a the bloomberg terminal, this shows some of the ipo's that really grabbed had kind -- headlines in hong kong but have not done particularly

well. , stilllow line is xiaomi well below list price. but you did say a moment ago that you think it has hit the bottom. at what point do you think the line will turn up and when will it be above the ipo price again? the second question first, above the ipo price will take some time. i think you can see that. the challenges they are facing, some of them are cyclical. internetle, the services part, they should rebound with everybody else. i think the smartphone business is probably facing the most challenge, and basically we are seeing xiaomi competing against quality -- huawei. xiaomi is partially a technology company a partially a marketing coming. globally they are at a severe disadvantage. , where theypot is

are showing specific strengths, is the iot business. the question is, when does the iot business grow to be a large enough portion to warrant investor attention? right now, it's about 80% of the revenue. we think it will become 25% by the end of next year, just by going faster than the rest of the business. shery: let's talk a little bit about the broader tech earnings season this time around. we've seen a bit of a mixed picture, whether it is alibaba and i do doing better than expected, but tencent not so great. what would your takeaway be? eric: basically, what we have , alsohis quarter is that about six month ago, the consumer is resilient. see advertising is weak

across the border. the regulation is getting really hard. sectorsally impacting that are being affected negatively. commerce, theyew are using subsidies to attack the second and third tier markets. and illicit a response from alibaba. that has really driven up the growth. doing pretty well, basically by penetrating the low tier markets, but when will be end?dy war and -- it will take away one of the drivers of e-commerce. i think that will show up in the growth numbers next year.

another chinese tech company out with earnings today, zte. what you watching out for? thinkon't -- i zte, you will be watching on how the business is being impacted with sections in the u.s., and -- sanctions and the u.s., and how the competition for the overseas market is shaping up. i think it will impact both xiaomi and huawei as well. huawei has actually grown revenue by 23%, even faster than xiaomi, and at larger scale. isch means that huawei squeezing everybody at this point. , thankll right, eric wen

you for joining us. don't forget our interactive tv function, tv go. you can dive into any of the securities or bloomberg functions we talk about and you can also become part of the conversation by sending us messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

♪ ."ery: this is "daybreak: asia paul: let's get a quick check of the latest business flash headlines. forrk under attack information released ahead of its ipo. the share offer is expected to raise $3.5 billion in what would be between 19th second-biggest listing. but another ceo says the company has worked hard to conceal the numbers underpinning the plan. hasn't commented on the

accusations, including calling the prospectus a masterpiece of all peace geisha and. . obfuscation >> the only reason this is an issue is the question of burden of proof. you would think it would be motivated to make it really easy for investors to understand why they should hand over $3.5 billion more to you, but they decided they didn't have to do that. shery: facebook's new digital currency project is already being scrutinized by regulators and the eu. they are investigating whether they proposed system would unfairly shut out rivals and create issues over the use of data. facebook has previously promised to appease all regulators before launching the cryptocurrency. we have breaking news out of south korea. we are getting the numbers for

exports in the first 20 days of august. exports falling 13 point 3% year on year. were talking chip experts as well as -- in the first we days of august, dropping twain 9.9%. imports falling 2.4% year on year for the first 20 days of august. this coming after eight months of contraction where we saw july export numbers drop. this is an indicator for global demand. in tokyo,ening seoul, south korea as a top of the hour. the yen is steady ahead of a string of risk events unfolding this week, including trade talks between u.s. and japan. the fed meeting minutes and the how speech at jackson hole, as

well. a lot of risk events weighing on market sentiment today. checking in on the aussie dollar, holding as gains sparked by the rba meeting minutes, and bond yields marching lower as the rally continues in the debt space, tracking treasuries overnight. this is bloomberg. ♪

shery: good evening from new york. i'm shery ahn. i'm sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: our top stories this wednesday, president trump heaps pressure on the fed days before jackson hole. he repeats his call for a big cut in interest-rate. hong kong protesters reject the government's apparent olive branch. the offer of talks is deemed unacceptable. state we will examine the

of the market in china amid the trade war and the slowing economy. first, let's get to the market action with sophie in hong kong. as anticipated, we are seeing weakness in equities in tokyo. the nikkei 225 losing euro .9%, the same for the top base. paree seeing risk assets their week to date gains. particularly in the superlong tenor aria, global funds mean buyers all but one month this year. boj stimulus to boost yields and boost inflation. goldman and j.p. morgan have turned more of a positive in buying longer dated. checking in on the kospi, under pressure this morning. august bit of data with

exports for the first 20 days of the month falling 13% on a yearly basis. chip exports slumping nearly 30% and shipments to china slid 20%. weakness particularly with chip exports. .et's check in on the entities off one third of 1%, giving back the gains in a wake of the rba meeting minutes that hinted at more easing, potentially. we have the aussie dollar under pressure this morning, marginally lower while bond yields are off by about three basis points when it comes to the benchmark note for australia and kiwi stocks, still heading lower earlier, off by more than 1.5%. paul: thanks, sophie. let's check in on the first word news. >> for italy, facing a new purple -- political crisis with the prime minister resigning and

saying the populist coalition is dead. he blamed the anti-immigration .eague for his decision after it split with the five-star movement. win a snap election and rule without the need for a coalition partner. the european union rebuffed boris johnson's demand for new talks on a brexit deal, saying it is a vital part of the current agreement. the arrangement is attended -- intended to prevent a hard border with ireland. besides remain deadlocked with weeks to go. johnson insists brexit will happen with or without a deal. government may delay key announcement in the sign it is considering a slap -- snap election. mark carney may not be named until after brexit. there is speculation the budget may be pushed back until next year. carney steps down at the end of

january, having twice extended his tenure to provide continuity. protest leaders in hong kong rebuffed a chief executive's olive branch, saying her offer of dialogue failed to meet demands. brutality of police cause questions into the protests. her opponents say this may be a media stunt and a waste of time and money. the 737 max 8ing was certified. it expects to note a breakdown in communication amid revelations that regulators didn't understand key design features until the fatal crash. sources say panel has yet to find evidence that ruled the plane was approved in 2017. global news 24 hours per day, on air and on tictoc on twitter, powered by more than 2700

journalists and analysts. this is bloomberg. tory: asian equities close -- making a third run at resistance levels that have been held twice a for this month. .e go to mark sentiments not helped by president trump making it clear that he is not ready to make a deal with china as of yet. investors are getting a bit tired of this on-off talks between china and the u.s. a few days of optimism, sounds as though china and the u.s. are getting closer to having some real negotiations and equity markets look better, then you get trump claiming he is ready to make a deal. -- not ready to make a deal. he appears to be timing it carefully and investors want to see more concrete steps. they want to say these talks in washington in september will be material. they will bring real changes

between the two countries and they are moving towards hopefully dismantling some of for.ariffs, put in place we are just now hearing it is more of the same. it adds to the uncertainty around markets already. people were nervous because tariffs were suddenly imposed, then it is delaying some of the tariffs to december. there is uncertainty over huawei , who can deal with the man to can't. the secretary of state says there could be other chinese companies which are affecting american national interests, not just huawei. it is every day, there seems to be new things that investors have to consider from a negative point of view. it will dampen the mood for people and it will be hard for them to get back with enthusiasm for equity markets while this is going on. no wonder people are considering that we will slip back towards the recent lows in equity markets. all hope seems to be

clinging on central banks coming to the rescue. could we be disappointed from jackson hole? is a high chance when jerome powell gives the key address, he will push back on the idea that america needs to speed up interest-rate cuts. , thes said for some time data isn't too bad in america. the economy is doing well. the key things he watches, employment and inflation, are at levels not to troubling. he gave what he described as an insurance rate cut in july but he doesn't sound like a man who is willing to go too much further than that, even though president trump is calling for much bigger rate cuts. it sounds as though jerome powell is happy with the idea at a timesis points is more than enough to keep things going in the american economy. makeard he is not ready to a cut again, so he may well be one of the people that objects, as he did in the previous meeting in july.

there is no unanimous voice from the federal reserve governors. it is unlikely we will see a big rate cut in september. jerome powell will probably endorse the idea that another cut is desirable. he will probably want to get away from the idea that there was a long series of rate cuts coming. he probably wants to look for another opportunity to signal a pause before the year ends. not what markets want to hear. it will be a steady as you go approach. paul: if markets don't get what they want to hear, what will that mean for equities markets, not just in the u.s. but beyond, to asia? >> it will probably dampen the spirits of people over the weekend. lots of the speeches will be digested and it could be that i the time people coming next week, they won't be in a good mood. we are looking ahead towards the fourth quarter, when economic data is already expected to be pretty soft for the fourth

quarter. we are seeing this buildup throughout the year. purchasing manager indices have been poor across the world. it is feeding into gdp. germany had a negative quarter, singapore is leading the way on the downside. we have seen another weak export number from south korea. seems to be no relief in korea and they are one of the countries at the forefront of the trade war between the u.s. and china. this will build up to potentially a week fourth-quarter across the globe. that hasn't been priced into markets yet. at the moment, doesn't look good. paul: thanks, mark, for joining us. you can follow more on this story and today's trading on our markets live blog on the bloomberg. you can get a market rundown with one click and commentary and analysis from bloomberg's expert editors. find out what is affecting your investments right now. -- says guest is the

the fed has plenty of policy space and sees good value in u.s. bonds. let's bring in amy. thanks for joining us. let's talk about the good value in u.s. bonds idea. i want to bring up the chat on the bloomberg terminal. you can see the direction of bonds globally is heading in one direction. when you see good value, you are comparing it against fairly dirty laundry. >> absolutely. i think as far as the u.s. is concerned, to what you were talking about earlier, a fed seems to be -- the fed seems to be cautious. the general tendency of central banks these days, i would say, is to try and read the fine line between not disappointing markets because of the havoc that would wreak, not only through bond markets but risk assets more broadly am a but also not to go into the competing dovish spiral.

more recently, you have seen europe signaling they want to do a larger than market expected package in terms of qe and further easing. immediately, the market prices this in. for the central bank to go above the newnd what is now expectation of markets becomes even harder. that continues to be the find line the fed treads. there is plenty of policy space in the u.s. and as the data unfolds, they will judge how and when to use the policy space. tol: i keep on returning data dependency and the data in the u.s. is relentlessly and inconveniently rather good. president, saying just because everyone else is doing badly, that doesn't mean we are. a compelling argument for doing very little. >> this is what the fed used to do.

you could argue that is what central banks should be doing. it should be data dependent on forward-looking data. unfortunately for most central banks in the world, as we get closer to the zero bound, you see this coming off the fed, it is about having such little policy space and therefore, when you are close to zero, should you [indiscernible] or holdback? for most central banks it is about the idea of uncertainty. you have seen the rba allude to it and the rbnz allude to it. the idea of global uncertainty, making them act more preemptively in those cases. for the fed, jerome powell said the u.s. economy in and of itself seems to be ok, but what lingers on the edges is the threat from further trade tariff acts collations and -- escalations and what that would do to business conditions in the u.s.

shery: the signals from the pboc seem to be different. could this mean we are not going to see broad benchmark rate cuts in the what does that mean for the market levels? >> absolutely. i think the interest rate reform from the pboc is something that they have been signaling for quite some time. they have been mentioning the need that chinese interest rates, policy in general should be more market orientated as opposed to date hated by the government and the pboc -- dictated by the government and the pboc. the reform is about creating a more transparent and visible focus point in the market. , all borrowers alike drop a chinese economy. at the outset i don't think the intention is to lower rates dramatically but rather, that by focusing the attention on the

, as well as including more banks into the setting of the lpr every month, it is to encourage the system itself to bring down credit spreads. it is about lower borrowing costs for corporate in china lower rates across the board. this is a point of frustration for many in the market to have been looking for a more concerted sign of easing from china. shery: how would you rate chinese policymakers handling the challenges this time around compared to 2016? 2015, thed to slowdown is comparable, but the magnitude is a lot less severe this time. the policymakers' response this time has been at times uncoordinated, but a lot more coordinated between different sections of policymakers and in general, doesn't seem like 2015 again, where the chinese

authorities and the pboc had lost control of many of the leaders regarding the economy. their approach has been trial and error, trial and improvement, fine tuning at the edges. you could argue once it gets bad enough, this kind of policy response will longer be appropriate. -- no longer be appropriate. for the chinese policymakers come i don't think it has gotten bad enough yet. shery: we will continue to watch that closely. amy, thank you for that report. coming up next, spider-man's place in the marvel universe could be in danger. ♪ china's rate reforms and speculation on what could come next. this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. paul: i'm paul allen in sydney.

china's reforms focused attention on when and if military easing will begin as the economy slows. the one-year loan prime rate launching at just a few basis points lower than previous benchmarks. analysts wonder when the biggest stimulus may come. asian economyur managing editor, malcolm scott. the temptation is to look at the rate through the lens of stimulus. if we look at how it was said yesterday, 4.24? >> 4.25. paul: to what degree was that easing? it isis for new loans and about 10 basis points lower than the traditional benchmark we are used to in china, the one-year lending rate. than the previous lpr, which existed but it wasn't a feature like it is now. this monetary easing is proud a

week -- probably monetary tinkering. the lpr is attached to policy , the from the pboc one-year mlf rate, the rate of which the central bank lends other banks. if we see a reduction in the mlf rate, that would signal that the lowerl bank wants borrowing costs pumping through the economy. so far, that has been restrained. they don't want a re-escalation of credit growth to the extent that it adds long-term risks. we know there is staying -- they are existing in china. they recognize the need to get more money to private enterprise especially, and banks aren't really pushing that through, so this tinkering of the rates mechanism is designed to try to of credit to small parts town. is it a stimulus? not yet. shery: the mlf, we will have to

keep a close eye on those loans maturing into september. if we are not as of yet seeing more easing steps when it comes to monetary policy, what can we expect in the fiscal side of things? spending.ve been we broke news this week, reporting authorities are considering allowing the provincial governments to sell more bonds, and that is used to fund infrastructure. that is a quasi-fiscal mechanism to get more money into the economy. ,oney is spent on roads, rail bridges, that ends up in the pockets that helped fuel consumption. ofsumption is a derivative these other elements in the economy. there are steps to do that. there has already been some fiscal support, tax cuts coming through the economy. growth from the policymakers' perspective, if they can keep it above 6%, keep unemployment from

ballooning, they may be happy given that there is a desire to keep a lid on debt overall. shery: malcolm scott, thank you for that. more protests are planned in hong kong, including at subway stations. demonstrators and authorities remain deadlocked the head of china's national day on october 1 and tension is expected to stay high. our chief asia correspondent stephen engle joins us with more. critical a moment is this? not only for the protest movement but for the government. opportunity to find common ground perhaps, because you alluded to the october 1 national day holiday win xi jinping will have a big military parade and it will celebrate the founding of the prc. there is a golden window, is pro-s tablet meant but moderate lawmaker in hong kong,

the golden window, he says is perhaps for the government to address the main demands of the protesters while there is a lull in the violence. i'm not suggesting the violence will pick up but even the opposition lawmaker says us is a that the more militant protesters agreed to exercise restraint. now is the time for the common ground somehow to be reached. there was an olive branch given the chieflam, executive. she wants to set up a platform for dialogue and investigate complaints against police. shortly after she made that olive branch, the main opposition groups pretty much rebuffed the offer. the thinking is, as students go back to school in the coming weeks, perhaps they will lose some of their fervor for protest. however, they are promising class strikes over the next few weeks. , mike pompeo has

weighed in, perhaps giving the white house's strongest comments in support of the protest. how will that play out? >> pompeo is backing up what donald trump has sort of said over the last couple days, linking what is happening in hong kong to the trade tensions between china and the united states. ofing support for the act protesting, not necessarily for the protesters but their freedom of the right to protest. this is what he said. china needs to fulfill its promises. one of the challenges in the trade deal is, you have to make sure china lives up to its commitments, that it would make. he goes on to say basically, the chinese government made a promise to hong kong under one country, two systems, and they need to live up to the promise. stephen engle, chief north asian correspondent in hong kong, thanks for joining us. we have plenty more to come on

"daybreak asia." this is bloomberg. ♪

paul: this is daybreak asia. i'm paul allen in sydney. shery: i'm shery ahn in new york. a check of the latest business flash headlines, milk is tumbling in new zealand trading. full year profits came in at $184 million u.s. dollars. that is $6 million lower than forecasted. the ceo tells us she is positive forrogress and the plan spending is paying off, including the way it is capitalizing on growth in the so-called die go middlemen market. >> we invested in the second half of the year significantly in building the brand in china. we are conscious of the mix of channels that are important to consumers in china. our strategy is multichannel into china, and you can see in

our results that that is really proving to be successful. a record number of newly qualified cfa graduates this year, more than 21,000 people past the final level three exam in june. that is just over the -- half the number who tried. the institute's expanding faster in asia with new test centers in cambodia and myanmar. more women than ever are taking the tests, with australia one of few countries reaching gender parity for participants. shery: tesla plans to make cars in china, and is on track. the global vice president says building work on a plant in shanghai plus free trade zone is a most completed and installation of machinery has begun. china is the world's top electric vehicle market. tesla will pay more than $300 million annually to make cars there. coming up, singapore's slowing

growth started to hurt company profits. we break down what is happening in the lion city, next. this is bloomberg. ♪ from the couldn't be prouders

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shery: this is daybreak asia. is cancelingtrump a scheduled trip to denmark next month because the government is refusing to discuss handing .reenland to the u.s. the prime minister said the island isn't for sale and the discussion is absurd. greenland also rejected the idea. moveresident said he would talks to copenhagen for another time. thailand lowering its forecast for economic growth and exports, blaming the rumbling trade war and strengthening bhat. the gdp would expand by 3% this year come almost a full percentage point lower than earlier projections. the estimates indicate thailand

for its biggest annual growth since 2014. the bhat has risen almost 7% in the past year. thousands of people, mostly young men, have been detained during india's crackdown on a region. 23 hundred arrests have been made. tensions remained high with firing across the line of control, killing six indian soldiers and three pakistani and civilians. the trump administration admits missile launches i north korea are a concern and say talks to hope the nuclear program lagged -- halt the nuclear program lagged. mike pompeo says things aren't moving fast and the tests -- the test firings were a worry. a japanese news company says the north produced nuclear warheads. an indian spacecraft has entered lunar orbit.

the craft reached orbit almost a month after blastoff. the moon until reaching an altitude of but about -- of about 100 kilometers, then attempts to reach a touchdown at the moon's south pole. global news 24 hours per day, powered i more than 2700 journalists and analysts, this is bloomberg. time now for a market check with sophie. climbingsian bonds are while stocks are set to snap a three-day decline, the biggest losses seen in wellington, off 1.2 5%. the asx 200 under pressure. just off a session low. both benchmarks lower on the back of concerns about chinese earnings growth.

in seoul, the kospi looking a little -- looking at little change while the korean won is under pressure against the dollar. trade data this morning, south korean next boards for the first 20 days of august putting it on course for a ninth straight monthly decline. the bond space, treasury future under marginal pressure. the curve are covering slightly after the flattening we saw amid ongoing recession fears. most strategists warn the annomic war could push to five-year treasury yields to zero. bond traders will focus on germany's 30 year bond sale set at 0% on the coupon for the first time. that will test demand for assets with the whole of germany's yield curve in negative territory. lack of appetite for the upcoming sale could trigger a selloff similar to the one in april 2015 so german 30 year

yields, under close focus. shery: company earnings in singapore have taken a hit from the lion city cost slowing economic growth. the trade war intensifies between its two biggest trading partners. stocks editor joins us. what are we seeing this season? .> it is not a pretty picture the company is listed -- the companies listed on the index have reported a first profit drop in six quarters for the june quarter. by a little margin of 0.1%. meanwhile, i would say my than 70% of the stocks on the gauge have cut their earnings forecast for the year, according to credit suisse. comes after singapore governments lowered the gdp forecast for the year to almost zero on the back of the trade escalation, trade tension escalation between the u.s. and

china, which lower the global demand. singapore is an economy that is heavily dependent on trade. the trade volume in singapore is more than three times the gdp output. index -- the sti index has fallen. how is the outlook for the benchmark the rest of the year? >> lower gdp growth leads to earnings cuts, which lead to lower price targets. that is not good for the index. the index has fallen by about 5% this month, which is leaving this whole index at about, up 2% year to date. although it is still better than its neighbors, such as malaysia and indonesia, it is lagging behind thailand and vietnam. investors are expecting or stimulus, including monetary and physical stimulus coming from policymakers. so far, they have held off from

doing so. valuation for the the index. it is trading at 12 times forward pe, which is lower than the 13 times forward pe for the past five years. are asia stocks editor, thank you for joining us. still to come, the trade war and domestic slowdown putting the brakes on china's vehicle market. how the biggest names are faring . this is bloomberg. ♪

shery: escalating trade tensions are taking a toll on consumers in china. one telltale sign, auto sales fell more than 5% in july. local companies are being hit -- reportingny did

lower demand. there's a potential bright spot. china is a leader across electric vehicle segments. the sales are in white here at the bottom. they will reach 2 million in 2020. we forecast global sales to grow exponentially over the next few years. china will likely remain the main battleground for electric carmakers for the next two firmss, with many defending home turf against nissan, volkswagen and tesla. anchor spoke to the he ceo of human horizons, and electric vehicle member -- maker, who says the field is getting crowded. [indiscernible] are talking about real developing in this area, 10 to 15 new companies.

just the name of some companies [indiscernible] big names, byd and julie reporting -- and geely reporting earnings. bill, thanks for joining us. start with this company, they had a good year in 2018 but a profit warning in july. profits may be down 40%. the sales target has been cut for geely. julie has had to it -- had to had to adjust. >> chinese carmakers are facing structural changes in the market. china implemented a new emissions standard ahead of schedule. stage five to stage six in certain cities. that caused a heavy discounting to sell down the inventory of models that didn't meet the new emissions standards.

that caused foreign companies to lower prices significantly and that eroded many of the local brands'sales in the first part of the year, and certainly byd and geely work and -- were affected by that. you mentioned admissions standards. the government cut subsidies for electric vehicles, as well. can we park some of the blame for the declining picture at the door of a weakening chinese economy and maybe the trade war? >> there are a few issues that need to be separated. the market overall in terms of economic growth continues to expand, how be at at a slower pace than in the past. mobility demand is expanding, but how people are serving it is different. they are increasingly booking cars for ride-hailing services -- through ride-hailing services or shopping for used cars, selling at a record pace. people are remixing how they

serve their mobility needs and it is not favorable to new car sales. the local brands in particular have been hit hard because they tend to sell in lower tier regions of the country, more susceptible to economic movements. in a weakening economy, lower tier city sales are disproportionately affected and that affect the local brands in particular. shery: how they compare how chinese manufacturers and local brands are doing versus foreign brands? subjected to the same set of market conditions. because of inventory adjustments coming out of the year and where where -- the year end people reselling it to the dealer stock, the first half of this year they have had to slowdown the wholesale into the inventory, and with the addition of the emissions standards, wayounting has affected the the sales performed in the first half of this year. i think the first half of this year is a week year-over-year

comparison. when we look to the second half, when the slowdown began in china, you will see more favorable numbers although i think you will see foreign experiencing weaker than expected market in 2019. shery: chinese authorities trying to invite more investment into the auto sector. how's that changing the picture for the industry? then response to some of trade pressures, china has relaxed some of its policies, in particular a leveling foreign brands to own more shares of passenger vehicle joint ventures. some companies have taken advantage of that, like tesla with their factory. bmw increased the share of their joint venture. you will probably see more openness in the commercial sector, as well. not givenmpanies have up on china's growth prospects. i think it will take a little bit more time for the market to

sort itself out given the short-term anomalies we are seeing. byd, have they enjoyed profit at all? their rivals have been struggling a bit. byd is a credit positive company. that is a tradable asset to have. byd sales and that every electric vehicles, more than 200% over the previous year. they are the main beneficiary. one of the thing that is interested about the market, there doesn't seem to be a middle of the market. inyou see a green plated ev china, it is a locally branded car usually in a fleet or a mobility service. there is a big market for mobility services, electrified vehicles. there is not really a consumer middle market. there is an upper end niche

market for brands like tesla but there hasn't been a maturing of the middle market demand, consumer demand for ev's yet. paul: there is plenty of potential carmakers could do to satisfy the middle market. 500 ev startups in china right now, that has got to be too many. does that need to be brought under control? >> absolutely. competition,early this is china, lots of fragmentation, lots of people chasing after incentives. the maturing of the market will come. it will be consolidated probably thend byd, geely, mass-market chinese brands. the probably be new mobility players. there are many of them out there, hundreds of them out there vying to enter the market. i think the early movers will struggle of bit at the beginning, but we will see as the regulations kick in requiring ev sales. you will see a few leaders them

are -- emerging out of the pack. the foreign brands, volkswagen has announced intentions to blue -- to bring a full ev portfolio to china. the game will be competitive for some time. ,hery: thanks for joining us bill russo, with the latest on the chinese car market. if you missed any part of the tv is your function. catch up on past interviews, watch us live and dive into any of the securities or bloomberg functions we talk about. become part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out on tv . this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. paul: i'm paul allen in sydney. oil searches hoping for progress on its lng project in papua new guinea. they have been in limbo since a new government came to power, but shares falling more than 18% since april on the risk of delays amid lyrical uncertainty. peter told us when he sees a a possible -- resolution. >> we are in discussions now. discussions have generally made progress. i think everybody knows where everybody is on this, and there are further discussions later

this week. paul: we have seen week oil prices. there have -- has been a soft lng price. is that making negotiations with buyers more difficult? >> when you are discussing lng contracts, generally speaking they are over a number of years. if you are talking 5, 10, maybe 15 years, this is a long-term relationship and people and buyers are taking a long-term view. clearly, prices being pretty low recently as we go into the northern hemisphere, winter, you would expect spot price and contract pricing to close. of course, the trade war is overlying oil price and maybe the quicker we get resolution on that, the better. war casting ae long shadow over everything including global growth. how much is this having an impact on your outlook?

>> i think certainly, from an oil price outlook, the slight bearish challenges in the middle east and what is happening there , challenges in venezuela, oil prices still relatively -- relatively subdued, we are lucky that we are on the bottom end of the cosco for making money but from a sentiment perspective, clearly the world trade situation is hanging in demand is weak. paul: the last time you spoke about post earnings, you said the u.s.-china trade war might be a blessing for oil search. >> it is a blessing in one area because if you are trying to sell gas into china, you probably can do it at an advantage to the u.s. but if you are looking at oil prices and world growth and the it istrade issues, clearly attenuating growth, attenuating the ability of oil

prices to rise. it swings around. shery: oil search managing director right there. a quick check of the business flash headlines. office space sharing company we work is under attack for the implementation it released ahead of its ipo. the share offering, expected to what about $3.5 billion in would be 2019's second-biggest listing. a research ceo says the company has worked hard to conceal the numbers, underpinning the plans. we work has been commented that hasn't commented on accusations including calling the ipo prospectus a masterpiece of obvious station. on.obfuscati >> i'm confused about the economics. this is an issue for this company because of burden of proof. you would think you would be motivated to make it really easy for investors to understand why they should hand over $3.5

billion more, but they decided they didn't have to do that. paul: a revamped volcker rule on wall ruled out street. investors wanted to clarify which trades were prohibited and layout limits for banks to follow. the rule changes are being seen as less of a shakeup than expected. during that time, bank trading has been radically reshaped by advancements in technology. shery: youtube finalizing plans to and targeted ads on videos likely to attract kids. the ftc reached a settlement, but it is unclear if this move is a result of the deal. youtube maintains its primary site is not for children, saying young people should use the youtube kids app, which doesn't use targeted ads. has picked aramco

two people to advise on its second attempt at ipo. the boutique investment banks selection ofitial underwriters for the listing. rd was not part of the first ipo attempts, but it is in pole position to secure a role on the ipo. the dispute between disney and sony is threatening to end their coproduction of the spiderman films, throwing the future of a beloved character in the air. dave has the story in tokyo. what is happening? what is at stake for sony and disney? >> for disney, the primary stake has to do with money. agreementexisting they were getting 5% of the gross box office from spiderman films while they were producing them, and the marvel mastermind

was sprinkling his magic dust and making these movies a big success. disney was pushing for a higher percentage of box office revenue , and sony apparently couldn't come to an agreement on that. for disney, there is also a spiderman hashat been brought into the universe of marvel characters. spiderman plays a role not just in the movies, the spiderman movies, but in other films produced by marvel that have been an important part of disney's success in the filmmaking business. these films are critically important for both companies because they are very predictable. can accurately measure how big these films will be. they are not all huge hits but it is much more reliable than other types of films and they have become the mainstay for hollywood, especially disney. likewise for sony, spiderman is its tentpole. this is the franchise sony has noted on to have big hits

every single time out but at least they know they will get some blockbusters out of this character. the last coproduced film with disney, the last spiderman film, did over $1 billion, a record for the spiderman series. this was a successful franchise they wanted to keep going. shery: this adoration has been hugely popular. how did sony and up owning rights to the spiderman character? inabout two decades ago, 1998, marvel, before they had started producing movies, had some financial trouble and needed to raise cash. they were looking to sell the rights to all of their characters. disney had a chance to buy iron man and all the characters in one deal, and they looked at it and said, we will take spiderman. they picked up the rights to the spiderman character and produced a couple films that were not success is. they did ok but nothing like the blockbuster success they were looking for that could be a

tentpole for their studio. they creatively formed an alliance with marvel and kevin friday -- kevin specifically to include spiderman the marvel universe, and it has been a big success since they marked that agreement. all indications were that this was successful and they wanted to keep it going, but disney having acquired fox and the onen franchise, it has a lot its plate in terms of these characters and figuring out how they work together and which of the films can be rolled out in succession. looks like it is the end for this agreement. itry: fingers crossed that works out for all of the fans out there. dave, thank you so much, bloomberg conglomerates editor. a check on what to watch in markets that are this morning. sophie: it will be a busy day for thailand watchers, around

9:00 a.m. we will get the bank of thailand minutes for its august decision. a surprise rate cut. july exports figures. we will see potentially a 2% drop in shipments, the fifth monthly decline. also on tap, a bond sale for 2035. the thai baht holding onto a two-day gain. one option bandied about is the bank of thailand allowing thais to invest overseas more freely. to china and hong kong, we have a busy day of earnings ahead. geely, among the results do. this is bloomberg. ♪ - my family and i did a fundraiser walk in honor of my dad,

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