this is "bloomberg markets." >> numbers coming in slightly better. highestg rising to the in two weeks as developers gaining. it does not change the fact that the outlook looks pretty dim. the latest signs coming out of the u.s. contracting for the first time in three years. despite the fact the government

has come out to say that it will try to encourage more investment to boost growth. encouragement for investors at this point. turn the pages, taking a look at where the currencies are. the pound is in focus. after whate support inspired overnight. crude at 54.19. never mind that the public is looking pretty dim. gold is getting support. perhaps it will get to 1600. athaad: let's have a look what is likely to happen in india. steep losses could add to the

losses we have seen in the last few days. we are looking at a decline. when things get underway in about 43 minutes from now. the 10 year yields, not seeing that much movement we're looking at the shadow banking crisis. looking at the 10-year yields. 6.52%. hittinge, at one stage 72. that is the weakest level we have had all year for the indian currency. we have come off those lows and we are trading. let's find out what is happening trade wise. >> president trump's warning china that trade talks will take a new tone after the 2020 presidential election spirit it will be -- presidential election.

it will be a much tougher negotiation if he wins a second term. bloomberg senior editor. pressure for more xi jinping to come to the table. >> this is a pretty explicit threat. president trump says you have the option, give me a deal now and let's sign it now because if i come back, i will hit you harder. that sort of does escalate the stakes. we have talked a fair bit about the election impact. i know there are people who are making trades and moving money on the idea that president trump may be a little bit softer, more inclined to get a deal. what trump is doing is he is trying to shift the narrative to say, not that i will be softer

but this is the best you are going to get. i will be much harder after the election. thisad: i wonder how missive is being seen in beijing at the moment and how the narrative is essentially, you could argue, trying to force them into a corner. what do you think is the view? isthe thing i keep seeing commentary by china to say, let's prepare for this to go on for quite a long time. there is some talk that may be growth in china will come out a little lower than it has been projected. it is possible, and you see some remarks from the chinese side that basically say, look, let's be ready for this to go on for a long time. we are even getting that same sort of view out of other countries that are not necessarily the u.s. or china

but are susceptible to the trade war. i am thinking of singapore, where the prime minister said some of the headwinds that were trade related might go on for a long time and we have to get used to that. that seems to be an emerging view, a myriad consensus view that this is not something that will be solved fast. it will go on for a long time and we should prepare ourselves to live with that. rishaad: thank you very much, derek. let's have a look at the latest twists and turns of this brexit melodrama. rebel conservatives push for a new brexit delay. johnson's next move? he suffered a crushing defeat on his brexit strategy in his first

vote as prime minister. >> he sort of dared the house of commons by saying, if you move ahead this way, i will have to go ahead and call a snap election. they went ahead quite clearly and said we do not want you to go ahead with the october 31. now his move is going to have to be to try to move forward with plans for that election. it will not be easy. they will be able to vote him down and he is clearly in showdown situation with the parliament. he said yesterday that they are going to write whatever chances we had of making a deal with the eu. >> what are johnson's opponents doing? how might this affect brexit? votes tois now enough

try to derail his plans to crash out or to leave on october 31 no matter what. what they are going to do now is toe forward legislatively to usely get him to have january 31 as the new deadline for brexit. therefore, trying to eliminate his plans to have a no deal brexit. the concern is that a no deal brexit could be so catastrophic to the economy that it is worth waiting further paired this will depend on -- waiting further. this is what -- this will depend on what the eu does as well. this will change their strategy. boris johnson saying this wrecks his strategy. on anda: three years

still a mess. you.snyder, thank still ahead, from an underground culture, it has exploded into a multibillion-dollar industry. a companyeak to hoping to cash in. rishaad: we will look at the challenges facing the world's two biggest economies and how they affect the rest of the world. this is bloomberg. ♪

haslinda: you are watching "bloomberg markets." i am haslinda amin in singapore. rishaad: more downgrades for the chinese economy.

cutting the gdp forecast next year. -- all predicting 6% four predicting 6% growth. a key u.s. factory gauge, the institute for supply management, pmi fell for the first time since 2016. the u.s. economy remains relatively strong. if consumers continue to spend and global conditions do not deteriorate further, the u.s. should grow at 2%. if so, no immediate policy action would be required. puthose kind of headwinds -- could become more appreciable. i think we should react once we see it in the data but i do not think we should anticipate that it is going to happen. as long as we are growing around

2%, i do not see a need for taking immediate policy action. rishaad: what happens -- what is your read through from those awful ism numbers? let's marry that with michigan confidence index which plummeted. the consumer side falling, at least on the confidence level. what sort of picture is the fed going to paint from that pallet? >> you can already see from the asian currency moves, there was a bit of respite from the u.s. exceptionalism -- we have the u.s. going into contraction for the ism. has a lot to do

with the tariffs, putting a lot of pressure on the producers. importers,ception -- the american producers, have more cost. the prices are still dropping. headline cpi in the u.s. -- looking into this, we think the fed will need to cut the fed funds rate in september by 25 december by and in 25 basis points. we need this desperately in asia because the dollar is way too strong. the dollar index continues to rise. account deficits, the philippines, india, a bit of a

credit crunch at the moment. with the strength of the dollar anyway, it is putting pressure on corporate with bond holdings in that currency. what i was getting at, do you think this is likely to make the federal reserve more dovish? >> jerome powell likes to say the fed walks into a room making a decision about the future. orders are leading -- it has manufacturing as weak. on the consumption side, holding up. without jobs, it is going to spill over ultimately to

services and retail sales, et cetera. the fed has to look into the future. it cannot wait until we are in a recession. that is enough reason for jerome to easend the fed financial conditions for not just the united states but globally. the dollar is the most important fact there for global trade and finance. -- factor for global trade and finance. haslinda: the trade war is escalating. trump saying, if i am reelected, it will be tougher in china. for and can china brace what comes next? it seems like there is limited space to retaliate. >> absolutely. we are looking at the trade bark is much bigger than its bite.

china -- as arom share of gdp, that may look smile. then, that is an entire trade balance. on china's side, it is importing essentials from the u.s. you see a rise in pork prices and food prices in china. it cannot mitigate by importing more eared in to offset this, it has to deal with the rising food price in china. on the u.s. side, it is about the consumption goods. there is more elasticity of demand. both of these things are hitting china when it is going through a

deleveraging of the credit cycle. the private sector is still holding back on its risk appetite. a sharp decline of credit and that is foreshadowing the weakening of investment in china. haslinda: when do you see china implementing measures to head back at the u.s.? at -- we have tit-for-tat in 2018. that, it is running out of things to pose tariffs -- impose tariffs on. left -- there are

three different ones. it comes at a huge cost. the second one is they can work on the investment site. exports arese foreign invested and because investment is slowing, it is refraining from doing this. the third one, u.s. treasury, which has been reduced but a lot of people are increasing their investment as the japanese and europeans are the largest holders of u.s. treasuries. at reality is when you look the position china has, it is primarily on the fx side. rishaad: stay with us. ahead, don'tking

miss the next president of the ecb. we will bring you christine lagarde and the european parliament. we speak exclusively to the eu trade commissioner. this is bloomberg. ♪

rishaad: we are back. finalize its list for what could be the biggest ipo in the world. global investment banks are finishing their pitches. nameompany is expected to banks to leave the ipo. denying:

speculations that some stuff supported the hunger strike. it will not comment on the unrest but it supports the one policy.two systems there is two way support for reconciliation. ministers of japan and france held talks. nissan is calling for more equal voting rights. haslinda: let's get back to the markets. we have a strong dollar environment right now. is bad demand for china

news for emerging markets. >> absolutely. the strong dollar is tightening much more than is being talked about. emerging markets in asia depend on this. onn in china, we depend external funding. result, we see despite countries like indonesia, the philippines and india have very limited exposure to this trade , they are slowing on the investment side and that has a lot to do with capital flow. reversing foreen many of these countries. that has had a negative impact. we also have weakening of china demand as well for the region. when you look at the data for

china, it may seem that china is having a soft landing, this is very hard for industrial countries such as south korea. even countries such as indonesia, it has been hard as far as export demand. is weakening demand from china, which has been a huge source of growth for many of these asian countries in the lead up to the recent slow down. haslinda: there has a lot of talk about how southeast asia will benefit. will that be enough to compensate for the slow down? asia is considered one of the areas, along with india, that should benefit in the medium-term for the diversification out of the crosshair of tariffs between the u.s. and china. it is a place for

diversification for slowing grow. this structural trend has to be supported by policy and the two countries that have supported policy are very clearly thailand and vietnam. the data shows that thailand numbers have been rising. the vietnam side has labor-intensive policy, liberalized trade policy. been going ons -- 2011-2012ly when it tried to move out of the banking sector prices. he was talking to us about how sri lanka is benefiting from the trade war. when you look at the tariffs, i

was just looking at where we are. yuan,ginning of 2018, the 14% depreciation. that is covering up a multitude of these -- >> yes or no. because china has a trade surplus, the imports are rising. rishaad: the imports are very value-added. smartphones, et cetera. areor example, imagine you a chinese exporter, you have a double digit depreciation. however, some of the imported goods are higher and you have cost from wages. beencosts in china have rising. profit margins are being squeezed. the import slow down in china is

quite material for the rest of the region. rishaad: we have to go to commercial. ♪

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we are in the middle of the trading day. given all the protests in hong kong, 13 weeks of that, hotels and restaurants could benefit from increased tourism. we are talking about entertainment, food as well as culture. paul: the u.k. is heading for a snap brexit election after boris johnson was defeated in the

house of commons. denied the prime minister the right to negotiate the split from the european union. he has threatened to sack all rebellious tories from the conservative party. >> it means parliament is on the brink of wrecking any deal. hand control of negotiations to the eu and that would mean more delay and more confusion. paul: the australian economy is still growing but at its slowest pace since the financial crisis. 1.4% onuarter gdp rose last year. figures are in line with expectations.

interest rates were held at a record low of 1%. the iranian tanker socked by the u.s. has disappeared -- saught by the u.s. has disappeared. the last signal came on monday, according to tracking data compiled by bloomberg. the ship is thought to be carrying 2 million barrels of oil. saudi arabia is inching closer to allowing tourists to visit kurt it is planning to open -- visit. it is planning to open visa applications later this month. the kingdom has long been one of the most difficult countries to visit. the kingdom said it wanted to develop tourism to boost the economy. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more

than 120 countries. i am paul allen. this is bloomberg. rishaad: let's have a look at the markets. this is where we find ourselves. hang seng, 1.2%. you can see what is happening. the nikkei is flirting between gains and losses. the gdp number we had out of australia, 1.4% growth, that was as expected. caused a bit of consternation. indian markets quickly looking at that, here we go. the rupee is the story, hit the lowest level we have seen. we get price discovery and the openness 13 minutes away. unmoved, twos are basis points to the downside.

our guest is still with us. the big story has to be the rupee. and what some people are calling this indian quasi-recession. >> india is going through a credit crunch at the moment. if you look beyond some of the growth numbers, investment slow down is significant. -- you the slow down have a credit crunch in the shadow banking, similar to china , really driven by decline of shadow banking. the shadow banking sector -- rishaad: they are getting funding from abroad. >> capital outflows out of india as well. in terms of equity outflows. this is one of the reasons we

highlight the strong dollar and the fact that india has its own credit story and is putting a lot of pressure on india. our key point about india, which is very similar to indonesia, it needs a trap for it to capture the arbitrage out of china, particularly manufacturing. leveraging on manufacturing. if you look at where it tracks that with thesing country a fifth of its side, which is -- a fifth of its size, which is vietnam. that is something that india can do much more because what does it have a lot of? it has a lot of people.

it will have the most people in the world in -- rishaad: the right age as well. .> that can be a huge liability if it does not have enough jobs for these young and energetic people. there are two key points we want to make regarding india. the short-term story, whether there is a fight between the central government and sentra -- and central-bank. and the credit crunch. how does a country like india have sustainable funding? foreign direct investment which takes a longer-term bet on the country. manufacturing of

looking for a home at the moment and india is the only country that is really comparable to china. how deep is the slow down? -- how deep is it? where do we go from here? from what you say, all indications are that it is going to get worse. >> the fear is that the spillover will take beyond into sectors such as property and the consumption sector. consumption is sticky, supported by demographics. what is really the volatility of indian growth, we have a boom bust investment cycle in india. this is one of the reasons why

it cannot sustainably grow and its gdp target paired it needs to get -- it's gdp target. it needs to get the investment down. in order to have this, it has to sort the financing side of the equation. it needs to boost savings and to track capital abroad. in order to do so, it needs an aggressive policy to make investing in india very attractive and there are key challenges at the moment, which is the labor law and the land reform law. moving at a very slow pace for what is needed. to have the effect china has, capital from

southeast asia, capital from mexico moved to china because it created such an incentive to absorb the labor that needed capital. this is exactly what is needed at this juncture in india. target,ve the 2% gdp there is a lot more that needs to be done until then, we will have a lot of volatility. that has a lot to do with this financing gap. haslinda: how much can the r.b.i. do? it has cut rates four times. what else can he do? more rate cuts. anotherl cut rates by 40 basis points, 5%. there is more room for rate cuts

if the fed helps with cutting rates, easing the pressure on the rupee. that will only help on the margin because the issue with the credit market is it is a fragmentation of the market which is not dissimilar of some of the emerging markets, to be fair. the reality is the central bank can only do so much. we really need fiscal policy and reforms coming from the modi government. it needs to make a comeback and a 2.0 version. rishaad: i will completely turn -- getting back to the question we had at the end of the last segment about trade between china and the united states. >> absolutely.

it still needs essentials. china is a net importer of key commodities, soft and hard. the trade tariffs, for china, the tariffs are hurting the consumer. it is raising the import cost. it has not been able to offset the swine and some of the agricultural problems. on the others, if you look at the u.s., most of the imports are intermediate. on the consumer goods, it is more discretionary. it is likely to hurt u.s. producers more than consumers. this is the reasons why you see ism stalling. meanwhile, consumption is robust

and is likely to be supported if the fed eases interest rates further. what we are seeing is a different impact on trade and also the depreciation of the yuan and the strength of the dollar. sandad: any lines of the -- any lines in the sand for the yuan weakness? about how trade develops. china can use the buffer, the ways it can of the do that is shelter. you can see imports have declined much sharper than exports. exports,arely growing we have really strong growth of the trade balance. we have capital outflow so that is really supported. , it hasook at the data

been doing relatively better than retail sales on a trend basis. what is a soft landing for china is a very hard situation for guys like south korea. look at imports from china, declined greater than 20% in the latest august figures. rishaad: how does it all end? >> we hope the fed will cut rates. rishaad: will it make a difference? >> it will make a difference because the dollar is much more important than people think. it is key for the global economy. marginal cuts will be helpful because it helps with trade credit and financial conditions and ease a lot of pressure on the emerging asia. rishaad: always a pleasure.

thank you very much. coming up, from underground culture to a mainstream sport. we will dive into the world of chiefts and speak to the operating officer. this is bloomberg. ♪

markets fromty india just opening up. let's get straight to mumbai. let's look at how the session is panning out. all.t great at the selling pressure looks like it will continue. reboundare suggesting a

by 40 or 50 points. we open in the red. very close to the mark of 10,800. index, which has been underperforming. sellingee massive pressure for the public sector. year, bothlendar nifty are down. forthe router markets, -- the broader markets, just a flat opening. also talking about the currency rupee, 1.4% yesterday to the dollar. some strengthening, but not much. consumption -- gdp is

at a six-year low. certain parameters we are watching right now. haslinda: will you take us through some of the stocks you are watching today? >> some interesting brokerage notes coming out. it has initiated fresh coverage. of 575.e target price demand is the reason cited. the eps toxpect decline by 5%. the next one is hdfc. the stock has outperformed for the year.

haslinda: thank you so much for that. southeast asia is the fastest-growing gaming and e-sports market in the world. a global provider of games and e-sports analytics and says the market will grow 22% this year to $4.6 billion. ampverse is hoping to capitalize on that and is launching in thailand and singapore. let's bring in the cofounder charlie baillie. good to have you with us. an explosion in e-sports and southeast asia. -- in southeast asia. penetration is huge and growing. fuelctivity is helping to the fire. there are a number of factors from a technology perspective.

technology and gaming developers are innovating. all of these factors are playing apart. haslinda: we talked about 20% growth. is that pace of expansion sustainable? charlie: absolutely hurt we have seen 22% -- absolutely. we have seen 22% year on year growth. there is no sign of slowing anytime soon. there is no sign of the market slowing anytime soon. haslinda: safe to say there are ucks.rowds and big b charlie: brands are certainly starting to take note. brands have been more cautious about how they enter the gaming space. as the market is maturing, there

is a whole host of ways brands can participate in the space. that is why we set up ampverse. we are starting to see some great traction. rishaad: what does ampverse actually do and what made you created? charlie: it is a gaming any sports media company headquartered in singapore and focused on southeast asia for the time being. we identify support and growth talent. there is a wealth of talent within the gaming and e-sports in southeast asia. on the others, we are building out a media business to really help create content and tell the story around the communities involved. there is a lot of great activity in the space and we hope to tell

some of those stories to the content we create. rishaad: it is not just somebody in a room playing a playstation or a switch. it has now gone into stadiums with people watching. what are the opportunities there? charlie: there is a real myth that gaming equals teenage boys in dark rooms exclusively. that is not the case. 40 are seeing a 60- split between males and females. the ecosystem is starting to mature. asiaf gamers in southeast are into e-sports now. stadiums are starting to be filled. there is lots of growth to be had but it is a dynamic and interesting space.

haslinda: how will 5g change the gaming landscape? charlie: 5g has the ability to have a huge impact on gaming. gaming is very much around the experience. the experience streaming music today is pretty good and will benefit from greater connectivity through 5g. the experience you can build on experience.reate haslinda: as it becomes more mainstream, it will require regulation. how do you see regulation playing out? new business,any we are starting to see more professionalization of the

ecosystem in terms of the regulation and sponsors. i am sure there will play out. you need to get people to recognize that these games represent rants and brands -- brands and brands want to be associated with them. what about the people who play these games? are they going to be the influencers of the future? charlie: it is the start of that. certainly starting to see the way that this talent builds audiences. take southeast asia, you have building audiences in the millions and super

engaged fan bases. we see these audiences start to grow. partnerds will want to and we have seen that recently in the u.s. that is testament to the fact that major brands are starting to see gamers on the same level as sports stars and movie stars. rishaad: thank you. ampverse co-founder charlie baillie. samsung's latest attempt into the world of making their phones foldable. this is bloomberg. ♪

haslinda: let's do a quick check of the latest business headlines.

it sees china as its biggest overseas markets and says it expects business to thrive in the city when it opens the doors in november. brands often do well when things become -- withng is pushing ahead its folding phone technology. phone with a on a 6.7 inch display that slams down to a small square when folded like a clamshell. samsung is hoping to make the gadget more affordable. on how welll hinge samsung does with the upcoming launch. gain, upthe biggest

over 7.5%. this is the position, the nikkei pretty much flat. eastberg daybreak middle is next. ♪

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