paul: good morning. i am paul allen in sydney. we are under one hour away from the market open in australia and japan. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: how top stories this friday, optimism returns on speculation of a trade truce. the u.s. may offer an interim agreement but president trump still wants an overall deal. mario draghi overcomes powerful critics. france, germany, and the

netherlands have led opposition to his plan. more signs of the trade standoff hurting local players. a gloomy forecast for chips. shery: let's get you started with a quick check up on how markets closed in thursday's session in the u.s. above 3000.closing the s&p 500 .5% away from that record high. we had some stimulus coming from the ecb package that boosted the stock market, but we had bloomberg news reporting the trump administration may be considering that limited trade deal towards china that boosted sentiment. so we have the nasdaq closing again at the highest level since july, gaining for a second consecutive session. the only sector that was losing ground, and energy stocks theing, was oil, given agency came out and warmed opec they could be facing a daunting

clue to surplus in 2020. that did not help sentiment in the oil markets. u.s. futures at the moment unchanged. let's see how we are setting up for asia. sophie: asia stocks could be set for the best two weeks since january with a regional benchmark up nearly 4%. futures in chicago hinting at gains. kiwi stocks adding .1% one hour into cash trade as we digest trade lines as well as essential bank developments for the ecb. the euro 19 lower but holding onto the overnight gains above the 1.10 handle. the offshore yuan is on the 7.06,foot, trading at extending gains for a fourth session. japanese industrial output due out later today. it could be quite in asia. paul. -- quiet in asia. paul. paul: jessica summers.

jessica. jessica: oil fell as opec and abide by agreed output curves. the agency noted the difficulty the cartel faces in trying to balance the market. futures in new york declined for a third day as traders weighed the rising threat to opec from new sources of crude. oil has fallen from a peak in april. ukip prime minister boris johnson denies lying to the queen when he advised her to support his plan to suspend parliament ahead of brexit. he spoke after a scottish court ruled the suspension is unlawful although an english court decided otherwise. brexit is doing 50 days and johnson insists it will happen with or without a deal. he says johnson is not serious. and the threat of recession in the u.s. is back with economic

indicators flashing initial warning signs. however, the message is mixed. manufacturing is slowing, uncertainty is mounting, and businesses are cutting expenditure. but unemployment is near a five decade low, stock prices are high, and the fed is cutting rates. economists say there is a 35% chance of recession in the next 12 months, up from 15% a year ago. a sick person is now known to have died in the u.s. because of e-cigarettes or vaping. the centers for disease control has tallied 380 confirmed and probable cases of lung disease associated with the devices. the deaths came in california, illinois, indiana, kansas, minnesota, and oregon. isopular supplier, juul, weighing whether to push back on plans. malaysia kept its benchmark rates unchanged as the economy shows a steady growth despite

the global slowdown. atheld its overnight rate 3%, saying karen policy is accommodative and supportive -- current policy is accommodative and supportive. they changed to 4.8%. it is subject to further downside risks from worsening trade tensions. 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 jessica summers. this is bloomberg. shery: to our top story, president trump has confirmed a bloomberg report saying the u.s. could be open to entering a trade deal with china. here is what he has to say on the trade talks from the white house. pres. trump: it is something people talk about. i would rather get the whole deal done. we have taken many, many billions of dollars of tariffs. i would rather get the entire chinese -- look, if we are going

to do the deal, let's get it done. shery: let's bring in fromberg's sarah mcgregor los angeles. ook le?uld an interim trade deal sarah: our earlier reporting spoke to theiry sources as an interim trade deal that is being considered right now, it would have the u.s. scaling back even if not putting on hold further tariffs against china. at the same time, china would agree to these ip changes the u.s. has been demanding as well as, you know, addressing the trade deficit for more agricultural purchases from the u.s. this is an idea that has been put forward. it is one of the ideas they are considering as the two sides prepare to meet. we know that u.s. deputies are meeting with their chinese counterparts next week, and they are going to lay the groundwork for hopefully the chinese official to come to the u.s. and meet with mnuchin and lighthizer. the idea is they could agree by

then on this interim deal and have something to announce at the end of that meeting. shery: we had that 150 page document going around back in may. with the trump administration saying we are very close to a trade deal. so what has changed since the spring negotiations? repeatedlyu.s. has said to china they wanted to return to that 150 page document. at the time, the trump administration said it was basically 90% complete. they accused china over 19 on some commitments -- of re neging on some commitments. september 1 tariffs taking effect. the two sides are starting to feel the pinch economic me. they are starting to feel the pressure from the u.s. business community and trump has elections coming also and closer. the prospect of tariffs, especially the fresh round on

september 15, hitting these consumer goods, that is a prospect. as trump heads into his 2020 reelection bid. say onhe president did the lawn he preferred to "get the whole thing down." how realistic is that? there are issues that have to be set to one side. there is no mention of huawei in all of this, is there? sarah: absolutely, in this year-long trade war, they have been trying to get a full comprehensive agreement and it has not been possible. it might be a recognition from both sides that they need to meet halfway on something a little bit less than the whole kitchen scenes. the trump administration, it may give them the win. for china, it would meet their number one demand, which is they want all the tariffs to be gone that have been put in place since the trade war, but at least it would prevent a further escalation and perhaps roll back some of the existing tariffs, which for china, it could be sold as a win there.

this is not agreed to. it is under consideration. trump himself often seems to change his mind on some of these things on what seems to be a whim, but this is the latest we are hearing. paul: sarah mcgregor in los angeles. thank you for joining us. mario draghi pulled out his monetary bazooka again, firing all the ecb's weapons to boost inflation and word offer session, but what surprised investors was the pushback he faced from three powerful board members. kathleen hays was watching all of this very carefully. kathleen, draghi again determined to do whatever it takes, but not everybody on board. kathleen: this is so interesting . we have seen plenty of indicators from europe, inflation running below the ecb's target and falling further away from that. manufacturing clearly taking a hit. it was not a surprise.

mario draghi has been moving closer and closer not to a rate hike in september about moving toward rate cuts, resuming quantitative easing, et cetera. in fact, they did. they got more negative. they cut the key rate to -0.5. they are going to give banks exemptions on some of those deposits that would have negative rates because they are complaining about losing profits, losing money. that is not surprising. they are going to restart the quantitative easing. they are going to buy $22 billion of bonds, november 1 and come draghi -- bonds november 1. he said there was a clear majority for this decision but bloomberg news begs to differ. speaking to some officials close to the matter at the european central bank, that there was a revolt of core countries. france, germany, netherlands,

the governors of those central restartingd back on quantitative easing. these core countries make up half the economic output of the entire euro area region, so they represented a pretty big block. basically, the argument was save it for a real emergency. what if there is a hard brexit? mario draghi got enough support to move ahead. it is interesting. our bloomberg news team covering the ecb, pointing out this could lead seeing the guard with a bit of -- christine lagarde with a bit of ahea a headache. somebody's more aggressive policies. she comes in as a respected policymaker herself. for her, early in this term, people are saying this could make it more difficult. shery: you're in chicago right now. you did an hour long interview with janet yellen at the annual fall conference. what did she say?

kathleen: if you have any doubt about where janet yellen, the recent fed chair, the former fed chair, worked closely with all the people who are on the board, she is kind of wondering, should they wait and see or go full speed ahead tomorrow rates? it is -- to more rates? she says them addressing downside risk. audience. very -- she did say she sees the economy and a good place. the labor market is strong. fair enough. she says the trade war is certainly creating a global downturn in investment, and importantly, this ultimately is a threat to the u.s. economic outlook as well. i asked her about recession. coming? see it she says recession risks are quite a bit higher now than i am comfortable with. i asked her if a trade war could be the shock that tilts the u.s. economy over into recession, and

she said yes, it could. she is confident the fed will move ahead. she does not think we will have a recession. at the same time, she is worried not so much about the domestic economy but the spillover from the global slowdown in the trade war, and the fed doing more. shery: kathleen hays, thank you so much. joining us from chicago. we have breaking news at the moment. $15 a share. they are now just announcing their ipo price, offering 35 million shares, $15 each, as they are expected to begin trading on the u.s. stock exchange under the symbol net. helps websites protect and distribute content and they are offering an additional 5.2 million shares that the underwriters have the option to purchase at the ipo price, less underwriting discounts. when it comes to their business,

cloudflare has lost $37 million in revenue from 120 $9 million in the first six months of the year. -- $129 million in the first six months of the year. plenty more to come. this is bloomberg. ♪ bloomberg. ♪

paul: this is "daybreak asia." i am paul allen in sydney. shery: i am shery ahn in new york. the chinese markets are away on holiday today, but so far, the shanghai composite has outperformed global peers over the past month. chinese investors seemingly immune to developments. sophie in hong kong, tracking what is happening there. what is driving this stability? sophie: the shanghai composite's relative vol to the s&p 500 has eased considerably, falling from the three year high we reached in may, sliding to the lowest level since february. trump tweeted on tariff increases.

excitations going forward that beijing will not let anything rock the boat ahead of october 1. since 2004, they added more than 4% in the month leading up to the celebrations. a string of gifts from policymakers to traders have helped them top performers. after adding 9% in the past month, the shanghai composite could be bumping up against a ceiling, eyeing the peak we hit in july, and around trump's double tweets. that could be a test for chinese stock investors, paul. paul: thanks. let's bring in our next guest for his view. he is a global head of equities and head of global emerging market equities at aberdeen standard investments and joins us today right here in sydney. thank you for coming in. we had sophie describing chinese stocks. when you are looking around em, there are opportunities, but you have got to be selective, don't you? do you see anything in china that is appealing?

>> we are still pretty positive about the chinese h-share market in particular. world'sl respond to the troubles. as a consequence of that, we are expecting improved liquidity, improved stimulus, so we think it could go higher. i would look at places like china as opportunities as an investor. in terms of policy response, there is the yuan. emch ratings is saying conflates more downgrades because of currency, because of a stronger dollar. how much does currency risk weigh on your mind? devan: you have to consider the currency risks of emerging markets and i think it is ironic, at a time when the fed is signaling lower interest rates, the dollar is going higher, and that is both a blessing and a curse for emerging markets because the lower interest rates from the fed will allow lower interest rates from the markets to be positive. sadly, because the dollar is

being relatively high or strong, you are offsetting benefits. , that shouldt-net boost economic growth. shery: given that we have seen the unfair performance -- underperformance of the indian rupee over the past month or so, and i know that your fund also has a significant allocation to india, what do you expect in that market and are you at all concerned about the geopolitical tensions over kashmir or even the independence of the reserve bank of india? we are less concerned about the geopolitical tensions on cashmere, although it does seem somewhat of a strange move by the indian government -- kash does seemugh it somewhat of a strange move by the indian government. the reserve bank of india has been extremely prudent and that has resulted in some of the benefits to the indian economy

and the ability to better stimulate. i suppose that goes to the other part of your question. going forward, india has significant opportunities to do more and stimulate the economy. against the backdrop of weaker global growth and commodity prices, particularly oil, we are comfortable with our indian decision. shery: you also have a position in brazil. we have seen some political tensions with president scheier bolsonaro. what are you asked -- president bolsonaro. what are you expecting in that region? devan: one of the key things that have occurred in brazil is changing governments. they are focused on trying to deliver the pension fund reform. we think it will be delivered in the not-too-distant future. on the back of that, we think that will unleash significant domestic consumption and investment. one of the things to perhaps remember is that it has been a quasi-recession for a number of

years and there is a lot of pent-up ability to spend and we think the stability of pension fund reform should allow that to go ahead. of focus onis a lot what the ecb did overnight. in all the noise, we have not spoken much about turkey. bigger than expected by 50 basis points. it puts -- there are interesting things happening. they are creating their own ratings agency because they are not happy with the treatment they have been getting from moody's, fitch, and s&p. do you think there is a lot of credibility in the turkey story at the moment? devan: we might have some problems with turkey. one of the things as the fact that they cut interest rates. the lira has rallied and it lends credence to erdogan's view that it is a good thing. i suspect what has actually happened is the world has moved on, and now that we have a world of weaker global growth, and

therefore, lower u.s. interest rates and the like, that has meant that the market is more comfortable with lower interest rates in turkey. that is really important because i think what we are going to continue to see is significant government interference in the turkish market. paul: aberdeen standard investments, devan kaloo. thank you so much for joining us today. now you can get a roundup of the , stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals and it's also available on mobile in the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪

paul: this is "daybreak asia." i am paul allen in sydney. shery: i am shery ahn in new york. broadcom reported third-quarter results. once again striking a cautious tone as the trade war between china and the u.s. hurts demand

for semiconductors. ian king joins us from san francisco. investors were not too optimistic about this report, and it seems they were right. ian: that is true. i mean, the hope was that things would not be getting any worse, that they would not take down the annual forecast that broadcom uses, and they didn't. at the same tim don't get carried away here. we are not seeing any evidence a sudden upswing. basically, we are going to balance along the bottom for now. shery: what did executives have to say about the chinese trade war? ian: i mean, this is a huge deal for broadcom. obviously, huawei is one of their biggest customers. tips go through china. it is as simple as that. after what broadcom makes goes through china in some way or stays there. he just said, look, this continues to weigh down on everything.

it is unpredictable, which is even worse, and we are just not factoring on things improving anytime soon. paul: how about if we look a little further downstream? is there any readthrough for apple and samsung, phone demand? broadcom is a big supplier. ian: that is a good point. again, people were sort of reading the tea leaves and hoping that perhaps, you know, the new apple phones that were announced this week, or you know, the samsung galaxy, the phones we have seen announced, he waspark optimism, but very matter-of-fact. we are getting a slight uptick in orders from apple. he won't say apple directly, but indicated apple. that is normal at this stage of things and we will not really know how well they are doing until perhaps another quarter or so's time. we will start to see more orders depending on that. paul: ian king san francisco.

thanks so much for joining us. let's get a quick check of the latest business flash headlines. whole foods is changing let's pull benefit eligibility -- changing medical benefit eligibility requirements. staff will have to work at least 30 hours a week to qualify for a health care plan, up from the current requirement, 20 hours. change would affect just under 2% of the whole foods workforce. shery: hong kong's biggest property developer posted a mere before theprofit political prices intensified. underlying profit rose more than 4 billion u.s. dollars in the year ending june 30. this slightly miss damien estimate of analysts polled by slightly missed estimates of analysts polled by bloomberg. opec coming up next, responded to growing concerns

the oil market may turn to surplus by applying more pressure to members who have not complied with curbs. will there be any progress before the group's next meeting in december? we will find out. stay with us. this is bloomberg. ♪ here, it all starts with a simple...

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jessica: this is "daybreak asia ." i am jessica summers with the first word headlines. sources in washington state administration officials have discussed offering an interim trade deal to china that would delay or remove some tariffs. we are told the potential deal would, in exchange for beijing's commitment on intellectual property and purchases of u.s. farm products. however, president trump did tell reporters he still wants a wider agreement. pres. trump: it is something people talk about. i would rather get the whole deal done. we have taken in many, many billions of dollars of tariffs. i would rather get the entire chinese thing done. if we are going to do the deal, let's get it done.

jessica: some of america's closest allies are calling for an end to the trade war. they issued a joint statement calling for an end to the standoff. writing in the australian newspaper, their finance ministers warned that the post-world war ii multilateral system is under threat. they acknowledge there are legitimate issues to be addressed, but the threat of collateral damage is rising. the european central bank cut rates further below zero after president mario draghi overcame his critics. the ecb reduced the deposit rate -.5% and said it will buy debt as long as necessary. ecb governors from the core of the euro zone resisted his bid to restart kiwi. we are told opposition came from the bank of france and more traditional hawks, germany and the netherlands. indian inflation accelerated the most since october while remaining within the rbi's

medium-term targets and bolstering expectations for lower interest rates. consumer prices rose 3.2% in august from one year earlier, slightly lower than the median estimate in a bloomberg survey of 41 economists. inflation has been below the rbi's 4% target for 13 straight months. and the pro-democracy drive in hong kong hit a new tone with thousands of people belting out a protest song in shopping malls across the city. activists saying "glory to hong kong." and showing the rising creativity of the pro-democracy movement. more protests are expected this aekend and police have denied permit for one mass rally. 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 jessica summers. this is bloomberg. democrats hoping to

unseat president trump next year are in houston, preparing for their third debate, and this one will be different. in the format, the issues, and the dynamic. and the cannery joins us now from washington. so what should we be watching out for tonight? >> tonight will be different. this is the first debate since the el paso and dayton shootings and the first debate since serious talks about an impending recession on the horizon, so we are going to be looking at that and talking about the economy and gun control. whereas before, we only focused on health care and immigration. last week, there was a climate change town hall where candidates were able to give their plans for addressing climate change but they were not really able to go after each other's ideals. it will be interesting to see how that pans out. shery: this will be the first on the front runners will all be together on the same stage. how do you expect that dynamic to play out?

emma: that is more important than anything else. that is what people are watching. this is the first time that sanders, biden, and warren will all be on stage together. in the previous debates, sanders and warren have had a nonaggression pact, so they have not gone after each other, but it has been 1.5 months since the last debate, and things have changed. her and sanders are now kind of neck-and-neck, so that will be something to watch to see how they differentiate each other. they have also been attacking on biden, piling on biden, but a lot of democrats said -- democratic voters said they do not necessarily want to see all the candidates attack each other, so it will be interesting to see. paul: the media and political nerds the world over are very excited about this, but how much public interest is there in these levised debates? emma: for the first debate, a

lot of public interest each successive debate, the ratings have lowered, and tonight is the first time that they are back. kids are back in school, thursday night football is also one hour longer than the first two debates, even though it is the first -- it is only one night. it will be interesting to see whether people turn in. , thanks verynery much for joining us. we are half-an-hour away from the open in tokyo and sydney. what are you watching? sophie: keeping an eye on oil this morning. wti nudging higher this morning, up as much as .2% after losing more than 1% on thursday and switching the board to take a broader view, clued set for the worst week since july on signs of using. a drop of wti set for more than 2% this week. opec and its allies call the members. crude has slumped since the peak

we saw in april with the outlook also being dented by trade concerns hurting demand. looking ahead, the three big forecasting agencies, they do not expect this contraction in global crude stockpiles to last. shery: opec did not discuss deepening agreed supplied curves at thursday's meeting, but as a supply from competitors grow, the international agency noted in the cartel faces in trying to balance the market. >> we are going to carry our voluntary deductions until the end of the year, and definitely, we will have the meeting in december, and as i said earlier, we would review and see what we would need to do. require of measures we -- i do not want to preempt that. let's bring in our next guest for his outlook. he is a commodities analyst with

commonwealth bank and he joins us from melbourne. great having you with us. given the current macroenvironment, when at what level do you expect oil prices to bottom out? we expect oil prices to continue to trend lower, so our forecast bottoms for brent at $57 per barrel in the first quarter of next year before recovering. now, the forecast is very much in line with what we have seen in terms of current events. we have seen rising non-opec supply. not just u.s., but we are expecting norway and brazil to add supply, too. we have ongoing demand concerns. we have the potential recovery of iran's oil exports. those are weighing on crude oil over the next six months, and we are basically waiting to see how the market unravels before we see any real recovery in oil prices right now. shery: given the factors you

mention, doesn't make sense for opec to stand back and stand on the sidelines and put off a put cuts on further out at least for now? vivek: there are debates both ways. for now, it makes sense. there are two factors to keep in mind before december. one is later this month, we know that trump may meet with iran's president, and we could see progress in terms of iran's oil exports recovering. that is a big factor. right now, they are producing or exporting about .4% of global supply. at the peak before sanctions, they were exporting about 2% to 2.5%, so that is a major driver which opec needs to keep an eye on. the second factor is what is happening with the u.s.-china trade war, and demand projection into next year. we know u.s.-china trade talks

have become more positive, but the question is, in early october, are we going to get a deal or some resemblance of a deal? those are really the two factors i think opec are waiting on before they make a call on 2020. in that perspective, things are looking, you know, to wait and see, but the real concern is first half next year. if you look at all the projections from all the major agencies, the oversupply in the market is almost locked in a in the first half next year, and that is really where we could see pressure build on oil prices, so i think the call to act will certainly come in december, but pausing right now to wait for market factors to evolve makes some sense. the subject of the iranian oil question, are you surprised by the depth of the impact that we saw from the sacking of john bolton? i mean, he was a renowned foreign policy hawk, but that did not automatically mean we

are going to see loads of iranian oil suddenly flooding the market, does it? vivek: it was certainly surprising. in terms of our view, we always felt that this would stay the course for the next six months, but i feel like bolton exiting, and iran's oil exports coming back into the picture, they were not a coincidence. i feel like they were linked. that was a surprise in the announcement, but the linkage with the fact that the u.s. is improving relationships with iran, i think that is something to expect once bolton left. shery: we have seen the iea come out with their report that the u.s. briefly became the number one gross exporter of clued in the world. what are your expectations for shale output going forward? so u.s. shale output is one of the biggest drivers of non-opec supply growth. and that is something that is very much built into the idea

that the shale technology is evolving, and we are expecting u.s. oil growth to remain robust over the next two years, and probably until 2025, when we expect u.s. shale to plateau, so really, the risks for u.s. oil come in the following recounts. we have seen recounts while between 15% to 20% this year alone and that does pose downside risks to u.s. production growth forecasts. nevertheless, those forecasts is thell very strong and key supply contributor in the world right now. course, other commodities we watched closely, australia is of iron ore. we are getting china metal stockpile that might come later. we might even have it, actually. i have not checked into that. [laughter] paul: are you expecting that we are going to finally get a floor in for that iron ore price?

are we going to see demand recover from here? vivek: look, iron ore is very interesting right now, because we have seen prices recover this week and it is encroaching on $100 a ton. a few weeks ago, we were potentially touching $80 a ton. we are definitely seeing our recovery and it is driven by what is happening in china in terms of restocking demand. that seem remains in play. we could see some support for iron ore, but the longer time picture still spells one of oversupply, particularly as supply comes back online in increasing quantities. and the risk is clearly on the demand side, because we know steel margins and china are still very subdued. and if you cannot see a resolution to the trade war, we could see the demand situation weakening. those are the key factors dragging on iron ore, but this recovery on restocking has

certainly and aggressive than we expected. en more aggressive than we expected. paul: i want to get your thoughts on gold as well. let's pull back a little. did you see that that has hit its peak as well? are the geopolitical risks still very much alive? vivek: sure. look, there has been a pullback in gold, and really, what has driven that has been what is playing out in yields. the strongest correlation you will find over the long-term with gold is the negative correlation with long-term u.s. real yields, so so long as we see those long-term real yields bitnow crack a little higher, it is going to put pressure on gold, which is what we have seen in the last few weeks. our expectation is that yields will continue to weaken more broadly over the next six months to 12 months, and that is where we see the support for gold. we have gold rising up to $1700

an ounce by the middle of next year. paul: commonwealth bank commodities analyst vivek dhar, thanks very much for joining us. we have a major interview with rick perry. and the international energy representative. do not miss that. coming up next, yet more ipo woes. plunging on debut. we will hear from the cfo. this is bloomberg. ♪ ♪

paul: we are counting down to asia's first major market opens this morning. futures in australia are pointing higher, and in japan, we have got futures looking like this. we have seen a bit of strength in the dollar vis-a-vis the yen as well. the open now about 14 minutes away. this is "daybreak asia."

i am paul allen in sydney. shery: i am shery ahn in new york. the first real test for the ipo market in months failed to engender a sunny disposition. 20%es saint 28% -- sanked on debut. shares sank 28% on w. the ceo is more optimistic about the long-term prospects. long-termfocused on shareholder value. we served over 750,000 to date and growing quickly. our team members, over 5500 around the world and around the u.s. today, and our investors. our investors are with us for the long run. we are in this for the next several years and beyond and that is what we are focused on. >> your revenues are up 20 fold since 2016. your losses are deepening. can you tell us about your past profitability.

>> as we think about our profitability, in our view, really profitable today. our economics are strong. 85% gross margin. 30% contribution margin. every order we have, over 30% of that is dropping to our operating profit today. ebitda positive on a year-to-year basis as well. as we think about our profitability, very strong economics will drive the long-term growth of the company. >> as an investor looking at this stock today, how do you sell this to them? i know it is ebitda positive, but we still have net loss over the last year. what is the sell? >> it is an incredible market opportunity. can afford to pay $85 per month as well. less than 1% of that market has been served so we are in the early innings of an incredible market long-term. you look at our growth performance overall, incredible

revenue growth over the past several years, and all of that with the fundamental economics in the business that are incredibly strong. that is what investors are getting excited about. >> what about overseas expansion? you are in canada, australia, and they u.k. right now. what is next? >> canada was the end of last year. australia and the u.k., the past several months. we just hired our president of international to leave that part of the business wise. we have many countries on the roadmap. this is a global problem. access, convenience, and cost our global problems. 75% of the market opportunities are outside of the u.s., so incredibly exciting time for us to head in the international market. >> and what about competition? you have the first mover advantage in the direct to consumer market, but there are competitors lining up. how do you view that? >> most of our competitors are focused on front-end marketing. if you look at the barriers to success we vote in this business, we have an all-night channel presence nationwide --

presencenel nationwide. our vertical integration, we do 100% of our manufacturing in-house today out of our facilities just outside of nashville. is a captive financing program, so difficult to replicate. 250 doctors that are empowering our members and bringing access to care. many barriers to success that we have built in this business that we think will continue to support our growth. >> you do some have suppliers and asia. is the trade war affecting you at all? >> we have not seen an impact overall from tariffs. all of our manufacturing is done in nashville, tennessee. we have about 1000 team members in costa rica that are using our proprietary software to design how your teeth move throughout treatment, and those are the big locations we have today for our supply chain. >> i have to ask you about the american association of orthodontists. they sell your product poses a

medical risk. how do you address those concer? >> any time you do something disruptive, the status quo will push back against that. we are making it more convenient and cost-effective and it is really our doctors that are making that decision. we have licensed doctors across every single state around the country today. they are the ones that are interfacing with the patients. there patient, our member. they are making the clinical decisions. i think you can look at the over 750,000 people we have served to date. very, very good response online. you can look at over 100,000 website reviews. an average rating of 4.9 out of 5.0. very positive consumer sentiments on social media. and online as well. in many ways, the data is speaking for itself. smiledirectclub's ceo. now, don't forget our interactive tv function, tv . you can watch us live, catch up on past interviews, and dive

into any of the securities or bloomberg functions we talk about. you can become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. you can check it out at tv . this is bloomberg. ♪

anchor: -- paul: this is paul: "daybreak asia." i am paul allen in sydney. examining house panel deadly crashes involving the boeing 737 max 8 wants to interview staff who worked on the planes development. the transportation and infrastructure committee has written to boeing's ceo, dennis muilenburg, requesting the interviews. it says certain employees may be able to shed new light on the issues surrounding the plane and its worldwide grounding in march. paul: general electric is planning to buy back $5 billion

of bonds to lower its debt load as part of a turnaround plan. the repurchase will cover up to $2.5 billion debt and the equivalent in euro denominated notes. reducing debt is a cornerstone of his plan to overhaul ge. shery: twitter blocked the accounts of raul castro. when we asked why, twitter pointed out to its platform manipulation policy, specifically a section that says users cannot artificially amplify or disrupt conversations through the use of multiple accounts. appeals an process. they declined to comment further. paul: qualcomm fell in late trade after reporting moderate sales growth. the trade war suppresses demand for chips. 9.9% to $5.5 billion.

broadcom expects revenue in fiscal 2019 to be $22.5 billion. shery: the markets open in tokyo and sydney at the top of the hour. south korea away on holiday. what are you watching? sophie: futures are poised again in sydney and tokyo. we see signs of japanese stocks with improving market breadth in the topix. overall, asian stocks are eyeing the best two week advance since january, but the yen is set for the workweek -- the worst week. we are getting given the overnight developments, and on the back of that, we have the offshore yuan extending its rally, earlier breaching 7.06 against the dollar. you can see that at the bottom panel. the euro is holding onto its gains after a choppy session in the wake of the ecb decision, so

traders assessing that dovish tone from mario draghi when he brought out that big bazooka. we did see a volatile session given the report we saw from some of the policymakers on the ecb pushing back against the immediate restart of the qe. taking a look at what is going u.s. the bond space, futures higher by three tics. tokyo securities anticipates the 10 year yield will trade within -19.52 -21 basis points this friday. to -21 basis points this friday. we are seeing the limit around -30 basis points. allowing yields to fall would contradict the boj's policy pledge. paul. paul: thanks, sophie. let's get a quick check on asian markets. new zealand has been trading for a couple of hours this friday, currently higher by a shade

under -- .5 percent.p almost south korea and china off on holiday today. more to come. stay with us. this is bloomberg. ♪ devices are like doorways

that could allow hackers into your home. and like all doors, they're safer when locked. that's why you need xfinity xfi. with the xfi gateway, devices connected to your homes wifi are protected. which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today. paul: good morning.

asia's major markets are about to open for e. shery: i'ery ahn. sophie: welcome to daybreak asia. ♪ paul: our top stories this friday. optimism returns on speculation of a trade truth. president trump still wants an overall deal. mario draghi overcomes powerful critics and revise the ecb stimulus. france, germany, and the

netherlands led opposition to this plan. shery: hong kong's larger developer says it covers the time before the ongoing protests. south korea away on holiday. let's get straight to the market action in japan and australia. sophie: ahead of japan's three-day weekend, japanese stocks gaining ground. the topics also on the advance. improvement in brent for japanese stocks. the yen trading above the one await handle, the worst week since january. we get speculation that doj may need to reconsider the lower limits of the range for the jgb yield. let's check in on the antiquities this morning. shares, a little change to the upside this morning. kiwi stocks adding 1/10 of 1%.

the kiwi dollar holding steady. let's check in on the offshore yuan which has been looking to extend its gains for a fourth straight session amid the optimism amount -- around trade. the euro holding around 110 against the dollar. checking in on new york crude. holding above $55 per barrel, set for the worst weekly drop in a month. the rally continues to cool. you have the 10 year yield at 178 basis points this morning. paul: let's check in on the first word news now with jessica summers. forces in washington say administration officials have discussed offering an interim trade deal to china that would delay or even remove some tariffs. we are told the potential deal would come in exchange for beijing's commitment on

intellectual property and purchases of u.s. farm products. trump did tell reporters he still wants a wider agreement. >> it is something that people talk about. i would rather get the whole deal done. millionsaken in many of dollars of tariffs. i would rather get the entire chinese on it. if we are going to do the deal, let's get it done. jessica: the threat of recession in the u.s. is back with economic indicators flashing warning signs. the messages missed -- mixed. manufacturing is slowing. uncertainty is mounting. businesses are cutting expenditure. unemployment is near a five decade low. the fed is cutting rates. economists say there's a 35% chance of recession and that -- in the next 12 months. that is up from 15% from a year ago. denies lying to the queen when he advised her to support his plan to suspend

parliament ahead of brexit. judgeke after a scottish ruled the suspension is unlawful. brexit is due in just 50 days as johnson insists it will happen with or without a deal. brussels says u.k. negotiators have brought nothing new and johnson is not serious. oil fell as opec and its allies to abide byoducers an agreed up at curb. they noted the difficulty the cartel faces in trying to balance the market. futures in new york declined for a third straight day as traders -- oil has fallen from a peak in april as a prolonged trade war has prevented the outlook for global demand. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

the ecb cut rates and announced open-ended kiwi. bond yields ended up rising. asia mliv editor joins us now with a look at the markets. it's really all about the u.s. economy and what comes out of the white house,? right -- white house, right? >> i don't know about that. i think there's a couple things going on here. one came out later on. it was apparent that with the initial statement. the ecb was rather divided on and making it open-ended. this is a feeling that it is their shot. they cannot do too much more than this. to a momenttself for bonds. later on, the news broke about the severe divisions within the ecb that reinforce that.

optimism,ad the trade you have to talk about long bonds. you had some stronger-thaexpected u.s. core cpi. all of that left bonds vulnerable to a bit of a correction. it was interesting. going into it, we have been thinking that if the ecb disappointed all, bond yields could ramp up. if it owed -- over delivers, it could fall by a lot. it pretty much delivered what was expected. bond yields did rise. it didn't smell like a panic in the bond market. oil: let's just talk about as well. you never know these days with trade. pricesars to be that oil are continuing to edge lower. is this still a supply story? suppliers have been the driver this week.

the longer term trend has been domino by concerns about weakening demand. that is because what has been going on with the global economy in general and the structural case for less oil demand going forward. if you are going to be -- the bond market wasn't panicking. you might think there could be panic going on inside of opec because they are facing a devastating supply wave coming towards them. probably even without what looks for thee potential relaxation of iran sanctions. the best they look to be able to do is to get their members and their allies to opec plus -- in opec plus to meet the commitments they barty made. --h the supply the situation the supply situation is worsening, if they want oil prices to rise seriously, they would need to increase our extend those commitments.

or they would need to see some sort of trade deal and optimism that global demand with turnaround. paul: asia mliv editor garfield rennert in hong kong. thank you for joining us. you can follow more on the story on our markets live blog. find that on the bloomberg at mliv . let's get a market run down in one click. there's commentary and bloomberg's expert editors. as we mentioned earlier, mario draghi pulled out that monetary bazooka again, firing all the ecb policy weapons to boost euros inflation and ward off recession. three powerful board members were opposed to his aggressive move. our editor has been watching this. let's start with what mario draghi did and why. are things really that bad in the eurozone? >> to many people, it snows of

rise that the ecb move led by mario draghi -- he is stepping down in october. he thought a year ago, he would be hiking rates. let's look at a chart. it's a very important indicator of the euro area economy which has been weakening for some time. the trade war is making it worse, especially for export dependent companies -- countries like germany. 50 see a blue line below since february. gdb down to 0.2% quarter on quarter. germany is already negative gdp. this is just one indicator of what, in simple terms, mario draghi is responding to. concern about recession. he did see recession risk rising. he doesn't think it's going to happen. that is the reason they have started buying bonds again. they will buy $22 billion of bonds per month. getting more negative. that key rate down to -0.5.

ecb giving banks exceptions from negative rates for some of their deposits that they make in that more negative rate. draghi cited geopolitical uncertainty, reductionism, inflation expectations. they are not so great right now. let's take a quick look at it. you will see a dotted line. 2%. their target is below 2%. how often has either of their belowes been even just 2%? once again, a downtrend. mario draghi is very concerned about inflation expectations getting worse. that is why the bazooka is out. shery: why did three board members fight him on this? >> you have the core europe .ountries resisting the central bank governors of france, germany, the netherlands all caps back. they didn't want to restart qe.

they were saying, let's save it for an emergency. what if there's a hard brexit? there were other members who dissented. mario draghi said he had a clear majority. they usually don't take a vote. ahead with that anyway. another thing that is important, christine lagarde taking over in november. some members already concern that she is not an economist. mario draghi was a very strong leader. the position where she's inheriting the mantle from mario draghi to have this aggressive stimulus at a time when powerful members are pushing back. shery: you interviewed janet yellen in chicago today. this as the fed gets ready to debate the need for another rate cut. whose side is she on? >> she's on the side of those who say, the was economy looks fine now. it's in a good place. the labor market is strong.

coming. see more rates one or two cuts. she is quite certain about that. she's looking at the global slowdown. she's looking at the ecb taking this aggressive move today. she said trade war is creating a global downturn. that's ultimately a threat to the u.s. economic outlook. i guess are about recession risks. she says, they are higher than i am comfortable with. i asked, could the trade war be the shock that helps push the u.s. economy into recession? she said, yes it could. she's concerned about inflation expectations. she's afraid that they will get anchored lower and lower. you don't want to be like japan where they have actually had deflation. it's interesting when it comes to central bank independence. clear, donaldy

trump suggested the fed should let key rates go negative in the u.s. to help pay for the budget deficit. she said that idea was rejected a long time ago. so far, trump's picks had looked good. that could change in the future. a lot of interesting things from janet yellen. if you wonder which side she is on, it is not, wait and see. she is in the camp of, let's move now. we can see the downside risk on the horizon. kathleen hays, thank you. still ahead, jpmorgan asset management says markets are -- when it comes to the u.s. china trade situation. we will talk with a strategist, next. paul: plus, we speak with one of the most regulated cryptocurrencies in the u.s.. the cofounder is with us later on. this is bloomberg. ♪

paul: this is daybreak asia. i'm paul allen in sydney. in newi'm shery ahn york. mario draghi has ruled out his big guns, cutting rates further below zero and resuming bond buying. attention turns to the fed with markets pricing in another cut. let's look ahead at that meeting with jpmorgan asset management strategist. great to have you with us. are we expecting the fed to continue supporting markets next week? toi think the fed is poised deliver 25 basis point cuts. whether or not that's going to be totally supported for markets considering it is already priced in is an open question. certainly the fed not cutting rates would be a disappointment for markets. because of where markets are priced right now, they are not looking for -- it will take a lot more than that to surprise and give markets another shot in the arm. will matter in the fed is a little bit about the messaging around the expected rate cut.

it depends on how the fed is seeing the economy. they sound more positive about the future. that could deliver it for markets. shery: we have seen the msci asia-pacific rallying 4% just in september. is there further room for upside? >> there is certainly room for further upside. it will depend on how investors are feeling on a particular day. a trend we have seen this year is increasing volatility as optimism or fear wins out day-to-day. that will depend on more than central banks. prettyxpectations are giddy around the fed cutting in september. that seems to be baked in with more to come. if you come back to this idea of dependency, things in the u.s. don't look too bad. in some respects, the markets expectations are on the high side. is there a set up for disappointment here? >> i don't think so.

even though data looks isatively ok, the fed reacting, trying to get ahead of further weakness. we have seen some weakening and survey-based measures indicate we will see further weakening and u.s. economic data. cutting rates in september looks like an appropriate move. for ron, i'm expecting one more rate cut. we see markets whip sawing between expecting one more after september and two more. the fed is data dependent in that case. it's not just the hard economic data around its mandate. it's not just inflation and unemployment. they are trying to get ahead of that data by looking at leading indicators of what could suggest the path ahead for inflation and employment. paul: one leading indicator you are watching his business investment. you see a slump which will potentially mean a slump in employment. at the moment, the consumers are very strong. is there a risk that the

consumer is the last domino to fall? >> there is a risk to the u.s. consumer ahead. it's going to be entirely reliant on whether or not hiring falls. we are seeing a slump in business investment that is worrying. you are seeing the drag on the manufacturing sector. 2015, you could have a slump in the manufacturing sector without dragging down the economy as a whole into recessionary territory. you certainly get a hit to growth but not a fatal one. from the consumer side, it's going to depend on what that hiring element does. when you look at businesses from a survey data standpoint, which isn't always the most reliable, you are seeing a slowing. businesses aren't planning to add more positions. in the u.s. economy where you have a tight labor market, that's pretty natural. what will determine it for me about whether or not we should look for a rollover in the consumer is whether or not businesses start cutting, not

necessarily just increasing -- or failing to increase. shery: let's talk about japan. we continue to see the japanese stocks rallying. the nikkei is up for a ninth consecutive section -- session. goldman sachs is saying he is long japanese yen. what if it continues to strengthen? not only for the equity markets but also for the boj. when it comes to the direction of the yen, that is going to be the determining factor for what the bank of japan is going to do in terms of further policy moves. overall, the japanese consumer is looking relatively ok but still weaker than the boj would like to see. they are still a long ways away from their inflation mandate. there is some weakness in external demand related to trade. japanese economy relies upon that. the bank of japan watching the direction of the yen. they will be incredibly

important. if we see further strengthening, we see the bank of japan getting more creative with policy. shery: the shanghai composite is near its peak. where are wesaw -- expecting china to go in terms of monetary policy as we continue to see this -- these more targeted moves? i think you can expect further easing from the government in china. inle they are being targeted the way that they are going about enacting that easing, markets are interpreting the signal as easing coming through. we all know in china, that determines one of the biggest drivers of asset market performance. from an investor sentiment standpoint, you could see further optimism onshore as the government does move through the rest of the year to ease policy further. even if it isn't in a nuanced and targeted way. paul: thanks very much for

joining us. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go on their terminals. it's also available on mobile in the bloomberg anywhere app. customize your settings so you are only getting news on the industries you care about. this is bloomberg. ♪

♪ paul: this is daybreak asia. i'm paul allen in sydney. shery: i'm shery ahn in new york. its allies urged members to stick to agreed production cuts but did not discuss deepening those curves. let's bring in our energy reported. what was the biggest take away from the meeting and i would be -- in abu dhabi? >> the biggest take away is that it will be business as usual for opec. they are not make any any changes. they urged folks like iraq and

russia to hit their cuts. they haven't quite hit them yet. by hitting those cuts, they could maybe take out 500,000 barrels a day from the market. besides that, there wasn't much movement. no talk of concrete action towards deeper cuts. i'm on oil minister did say they could talk again when they meet in december to deep in the cuts. this comes on the backdrop of the iea putting out a report in the last a saying, we are facing a supply in the market duty u.s. shale production. therefore, there needs to be action from opec plus. it was a bearish sentiment in the meeting over the last day. respondw did the market to that news? since we saw prices fall,

while there was a lot of expectation of not that much going into the meeting, well we were expecting the new saudi oil minister wouldn't be rocking any boats, oil prices still fell yesterday. it is still down a little bit today. what we are expecting now going forward is, the market will be looking for more bullish sentiment from opec. they will be looking for other ways that they will try to potentially growing divide between the u.s. and china with a trade war. also what will happen with the u.s. and iran if the u.s. were to remove sanctions and allow to a run to lose -- iran boost their exports of oil. paul: all right, our energy reported. thanks you -- think you for joining us. we have a major interview later on with rick perry and the international energy agency. don't miss that.

let's get a quick check of the latest business flash headlines. amazon's whole foods unit is changing medical benefit eligibility requirements that could leave almost 2000 workers with no coverage. leastwill have to work at 30 hours a week to qualify for health care plans. up from the current requirements of 20 hours. the change will affect just under 2% of the whole foods workforce. fell in lateom trade after reporting modest quarterly sales growth and reiterating the bearish annual forecast they gave three months ago. diminishes demand for chips. japan's long-suffering sailors will have to put up with virtually zero interest rates but at least bank accounts are free. jpmorgan says lenders may improve maintenance fees for accounts if the bank of japan deepens negative interest rates. the board member warned that

lenders may have to consider such a move. how the unrest in hong kong is affecting the fortunes of the city's biggest property developer. that's next. this is bloomberg. ♪

jessica: first word headlines. the european central bank cut rates further below zero after mario draghi overcame his critics. they reduce the deposit rate -.5% and said it will buy debt for as long as necessary. ecb governors resisted draghi's bid to restart qe. opposition came from the bank of france, germany, in the netherlands. malaysia kept its benchmark rate unchanged. the economy shows steady growth despite the global showdown. they held its overnight rate at

3%, saying current policy is accommodative and supportive. it kept its growth projections unchanged. it says that is subject to further downside risk from worsening trade tensions. alliesl as opec and its called on producers to abide by agreed output curves. the international energy agency also noted the difficulty the cartel faces in trying to balance the market. futures in new york declined for a third straight day as traders weighed the rising threat to opec from new sources of crude. oil has fallen from a peak in april as a prelaunch trade war has dented the outlook for global demand. u.k. prime minister boris johnson denies lying to the queen when he advised her to support his plan to suspend parliament ahead of brexit. he spoke after a scottish court ruled the suspension is unlawful although when english court decided otherwise. brexit is due in just 50 days.

johnson insists it will happen without or with a deal. russell says negotiators have brought nothing new and johnson is not serious. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks. let's get a check with the markets now. sophie: asian stocks are looking little changed except for a three-day gain. we are seeing swings for japanese stocks. backing green territory. currencies.on the yen is back above 108.

more weakness for the currency on easing macro risks. that could cnn winding of the and long positions. this as investors review expectations for future policy moves from the eurozone. we are seeing a near 70% chance for a 10 basis point cut next month. checking in on bonds in the region. jgb's under pressure ahead of the boj next week. the 10 year yield rising about 2.5 basis points while the 30 year is adding 10 basis points this year. treasuries drifting higher. a quick check on commodities. oil extending a decline, set for the worst week in two months. amid prospects of easing sanctions on iran and opec calling on members to comply with out the cuts. paul: thanks.

sources in washington say administration officials have discussed offering an interim trade deal to china to remove some tariffs. the deal would come in exchange for beijing's commitment on intellectual property and purchases of u.s. farm products. president trump says he still wants a wider agreement. >> well, it is something people talk about. i would rather get the whole deal done. in manyken and met -- billion dollars of tariffs. i would rather get the entire chinese done. if we will do the deal, let's get it done. are asia economics correspondent joins us now from singapore. we are hearing some mixed messages here. where does all this leave us on the prospect for de-escalation? >> >> >> is typical whiplash. you have some of the doves and

hawks. one key notable hawk was john bolton. there's another senior ministration official denying that this would ever come to fruition. this sort of interim deal. we see this gameplay back and forth. we know the only vote that matters is president trump. he is coming out with this message that it is possible but he always likes to be unpredictable. he's keeping options on the table. he knows this helps markets. s&p rising to its all-time high yesterday on this news. it is a furtherance of the message that things -- people are talking. u.s. and china are both coming to some agreements, hopefully. nothing on paper yet. nothing concrete in the timetable ahead. shery: any more clarity on wednesday -- when they will --r talking

>> those are the three that have led the senior level negotiations. the threee goal for to come together and come to an understanding off of -- after all of this back-and-forth. that is one of the things we will be watching. october 1 being the anniversary of the founding of the people's republic of china is a very key date. trump recognized this. that is why he delayed those tariffs. they would've taken effect that they. that's another date to watch. we have more in the distance. the summer 15th, the delayed date of some of the tariffs that were more consumer heavy. we are watching that one in particular around christmas, the plans that businesses are having to change around shipments to

get around those tariffs in order to not put them on the american consumer. it's a very high profile time of the year for consumer customers. -- companies. shery: thank you so much for that. let's turn now to hong kong. the city's largest property developer says its results are likely to be uncertain in future years given the unprecedented unrest. reported profit below estimates. our senia asia real estate analyst joins us now. talk us through the latest set of earnings. earnings increased 7% year-over-year. ,he main reason is that residential sales are doing pretty good in hong kong. i think the more concern going forward would be on earnings from the hotel business which constitutes a percentage of the earnings. also the retail needs.

that is a major concern here. paul: how about the output? these earnings didn't cover this period of unrest we have seen in hong kong. how will this affect home sales in the coming year? >> the problem is not for residential sales. it's a bit challenging for them. [inaudible] the mortgage rate in hong kong is relatively low. 2.6%. they just raise the rate a little bit. is --re concern [inaudible] safety. be a concern on protests or teargas or whatever.

they will stay challenged to meet their target. especially due to large -- luxury home sales. paul: secondary home prices have fallen, so what is the expected home price in the coming months? >> we see home prices coming down a lot it. if you look at this underlying index, it comes down by 2.6% since late june. going forward, a couple months, we may still see some downside for home prices. the main reason for that is more on homebuyers becoming more conscious. seethe mass market, we also a gradual increase in launches over the next couple months. they will launch a new project. investors would hopefully follow. paul: the hong kong government

might implement a vacancy tax on developers with unsold apartments soon. how will that affect the property outlook? >> on the luxury side, a big impact. [inaudible] in general, we see lots of unsold units. projects, even some high-end apartments. that will be a huge hit. for the mass market, it may be better. [inaudible] 2-3 percent overall. still not that bad. paul: bloomberg intelligence

senior asia real estate analyst patrick wong. thank you for joining us. shery: here are some key invest -- events investors will be watching. china's data dump will kick off a busy few days on the economic front with markets looking for any signs of stimulus asian -- stimulus in the world's largest economy. the main event will be on wednesday with the fed's rate decision. markets are expecting another 25 basis point cut. they are growing increasingly worried that policy makers may be less dovish than expected. the central-bank action continues on thursday with a number of other decisions do. the boj faces a dilemma on whether it should term -- turn on stimulus again. the bank of england is expected to stay on hold as the governor ways the latest brexit twists and turns. plenty more ahead on daybreak asia. this is bloomberg. ♪

shery: this is daybreak asia. the people's bank of china is poised to become the first major central bank to issue digital version of the one. -- yuans joining us now from hong kong is the cofounder and ceo. thank you for joining us. are you working closely with the chinese government on this? >> well, thanks. no. circle is not working closely with the people's bank of china. what i would say is, we have been impressed with an closely following the work the pboc has been doing over the past four years. really, unlike any other central bank of a major global currency, the pboc really seems to be

quite far ahead on this issue. i think it's a pretty strategic move for china as it looks to expand its role in trade, its economic activity and the role of its currency and global economic activity. what are your plans in china? could they put you at odds with the pboc? >> our approach really has been servicesplatforms and using cryptocurrency as a technology. we have started with the u.s. dollar. last year, we launched the new consortium and standard for issuing u.s. dollar coins. cryptocurrency versions of the u.s. dollar that are fully backed by funds held with the federal reserve in monte center banks in the u.s.. dollars the power of currency. inexpensive, secure, are party risk.

we are really looking at this from the angle of, we think there's a tremendous opportunity for central money to operate as digital currency. we are building standards for that. we've created a platform with u.s. d.c. where there's already been over $1 billion of ustc issue. u.s. dollarld where coin and euro coin and other digital currency via -- versions interact with the trouble -- each other. what china is doing with their digital currency is a major step towards more global convertibility and interaction with r&b on the world stage. shery: how will that change the international monetary system? in particular, commercial banks. well, i think there are a few things. we are seeing the early stages of a new model for what we think of as the base layer of money to exist in an entirely digital form.

it to a way which allows have the reach of the internet. we are really accustomed to a world where we can instantly communicate and interact and share data with anyone on any device anywhere in the world. we are starting to see that introduced to money. when you have the ability to move that around freely, that really opens up new kinds of economic it -- opportunities. it will change the role the commercial banks play. , worldwide, more and more financial technology companies who are building services on top of things like digital money that will ultimately compete with commercial banks. i think we are seeing this changing of the financial sector becoming much more of a technology sector. shery: what do you make of facebook and libra? they are getting a lot of pushback from lawmakers in the u.s. and regulators. i think the libra association

and project is very exciting and ambitious. , think it represents potentially, a huge step forward for how billions of people can exchange value around the world. we do believe in the long-term vision of global basket currencies that are cryptocurrencies. we have a slightly different approach which is really to start with the major reserve currencies, make cryptocurrency versions of those, and eventually get to a basket. the government interest is very high. government has interest in facebook, given its market power. this intersection between major technology companies, cryptocurrencies, and this brave new world, it is bringing a lot of scrutiny. that's a double-edged sword for folks like circle. we have been working with policymakers for six years. it is bringing those dialogs much more forward.

optimistic that government and policymakers will embrace this technology because it really can be transformative to the global financial system. that it's my understanding , on the invitation of a fellow, you will be going to lunch with warren buffett who famously called bitcoin rat poison. i would wonder if you have or hearst your pitch yet. -- or hearst your pitch yet. >> that lunch was postponed. what i would say is, we look forward to talking to mr. buffett about cryptocurrency and crypto assets. if you have watched the rise of the internet over the past 20 years and you have seen how that infrastructure has transformed media come communications, retail, commerce, what we are seeing now is the birth of cryptocurrencies. it is very similar. over the next 20 years, the

transformation to the global economic system will be as significant as the internet. i would like to talk to mr. what i think that transformation looks like and what opportunities that creates. shery: thank you so much for that. if you missed any part of that conversation, tv is your function. catch up on past interviews, watch us live, dive into securities are functions we talk about. become part of the conversation by sending us instant messages. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. paul: i'm paul allen in sydney. the democrats hoping to unseat president trump next year have begun their third debate. this one is different. the number of candidates on stage to the dynamics between them. bloomberg's senior editor joins us from singapore. you spent many years in washington. what you watching for? >> well, it's really interesting. this is the first time that joe warren, andbeth bernie sanders have all been on the same stage together. it's an opportunity to hear contrast from the two or three candidates who have together to find -- defined the top tier in

this race. that's a really interesting development. we are not having proxy fights anymore. they can go back at each other directly. debate, itt of the was a question on the health care plans to get joe biden talked about his being rooted in and suggesting that warren and sanders were not going to be able to pay for their ideas. warren and sanders came back and basically said that not enough people are being covered under joe biden's plan. that his was not reaching far enough. it's a really good crystallization of the start of this over the progressive versus centerleft debate that has defined the primary so far. shery: who is dominating in the early debate session right now? well, it's a mix of those three right now. 30was almost 34 minutes --

full minutes until somebody that wasn't them talk. there's a big debate you will hear a lot more of outside of this. that's from progressives who are trying to redefine the issue of cost. when you talk about cost in the u.s. government, you are usually talking about how much you will pay in taxes. bernie sanders and elizabeth warren wanted think about a different league. what they are looking at is not just how much you pay in taxes but what your overall spend on that sector is. be it in taxes, at home costs, things of that nature. health care is a giant and growing part of the american family financial pie. if they are able to shift and reframe that issue of cost, that gets to health care and a whole bunch of other things. green new deal among them. they now become possible to do because you have shifted the window of what is considered plausible to do, plausible to pay for in this country.

tacticy, it's a debate straight out of what republicans did to pass their tax law. shery: how important will the state of the economy feature in this conversation today? everything.t's we've talked about the economy, some college costs, the ecmi impact of america's legacy of slavery and racial injustice. is all hour one economy. that is what you would expect it to be with a slight deviation to talk about guns. foreign policy has not come up much. china has it come up yet it all. shery: thank you so much for joining us from singapore. let's get a quick check of the latest business flash headlines. twitter has blocked the account of raul castro as well as the

country's main media outlet. twitter pointed us to its platform and if you listen policy, a section that says users can't artificially amplified or disrupt conversations due to use of multiple accounts. twitter ads, there's an appeals process. generaleneral -- paul: electric is buying back $5 billion of bonds to lower its debt load. the purchase will cover up to $2.5 billion debt and the equivalent in euro denominated notes. the ceo was attempting to overhaul ge after one of the worst slumps they've had in the 27 euros. shery: chinese markets closed for the midautumn festival. let's get a preview of what to watch in markets later this morning. sophie: we will be watching cafe after the cut was neutral. reportg the carrier on a

that cathay had to freeze hiring. let's check in on properties. hong kong developers reacting to news that a tax bill will he introduced to let's go today. quickly checking in on ftse. they continue to grind higher overnight to an april high amid trade optimism. after ade is closed week to the comp is it that brought the index closer to a july peak. more coming up next. this is bloomberg. ♪

a.m. in's not :00 beijing, shanghai and singapore. yvonne: we're counting down to the open of trade here in hong kong. david: it's friday, let's get it on. optimism returns with the trade trump stilldent wants an overall deal. yvonne: mario draghi powerful critics. tom: