haidi: i'm haidi stroud-watts in sydney. we all shery: i'm shery ahn in opening. new york. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." stories, president trump hailing the trade deal with china but questions remain. key issues yet to be resolved. do withlacking to underlying skepticism.

and china repair strains. issues such as huawei and cashmere were not discussed. let's see how we are setting up in asia. >> sydni shares gaining up a quarter of a percent. 10 year yields up six basis points this morning. onare keeping a close eye banks in sydney as they face an inquiry after failing to fully pass on rates. cuts.ave passed 57 basis shares down .7%. qe stocks are up 1.3%. u.s. dollar,n the recovering after the biggest two-day decline in four months

and gaining against sterling. 2/10 of aund up by percent. haidi: let's get first word news. >> we start with the latest on brexit. boris johnson has told his cabinet he still thinks a brexit deal is achievable. the eu says his latest plan is not good enough to be the basis for agreement. negotiations continue on monday with brussels warning that time is running out. all sides must be prepared for the u.k. took crash out of the block. leaders, including johnson, will meet thursday. typhoonying out after a left death and destruction. 21 people were killed with 16 missing and more than 150

injured. hundreds of thousands of homes lost power. violent wind and record train caused land slides with rivers bursting their banks. winse peak it was packing gusting up to 250 kilometers per hour. officerkong, a police in the hospital after being slashed in the neck after violent protests. unrest spread across hong kong with crowds locking roads, vandalizing shops and facilities and a subway stations. somelashes came despite protest groups discussing how to ease back, worried that the violence is alienating ordinary citizens. the u.s. trump warning is "ready to go" with sanctions military after its

inclusion into syria. he is working to finalize this as workers go into what he called "off-limits areas." u.s. haschin says the full ability to pose -- impose sanctions which would "destroy the turkish economy." global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: president trump hailing the partial trade deal with china but critics say it leaves major issues unresolved. he tweeted that what he calls phase one of the agreement can be finalized and signed soon, adding that china has begun boosting agriculture purchases. thomas joins us from beijing. trump hasf president been confirmed by beijing?

tom: he is right to say china purchases ofp agricultural purchases. whether or not it will get to $40 billion year are $50 billion a year is a big question but he is right to say some of those purchases have started. he was stressing that in a tweet saying it was immediate and would have an immediate effect on the farming population. there is the political and sensitive -- incentive for him to stretch that. also in this phase one deal, you have an agreement by china on the u.n. and an intellectual property. you didn't get an enforcement mechanism or discussion of industrial policy or state subsidies. listen to president trump talking about what was in and yet to be put in. pres. trump: intellectual property, a lot of agreement but we will have some included in

phase two with security companies and with certain companies have to be careful and pay close attention. we are doing tremendous business with china and chinese businesses. we have tailed it off. we purposely tailed it off but that will build up quickly again. nationalgreement on security or huawei or companies china blacklisted or humans rights. no enforcement mechanism. president trump saying progress has been made and he will sign off at the apec summit in november and then you move on to phase two, where he is hoping some more complex issues can get ironed out and signed off on. many economists and analysts are skeptical because it is not a deal on paper. it is just a handshake. there is that period of time, three to four weeks, before the

two presidents meet and negotiations could come apart. we hope that doesn't happen for proposed tariffs will not be imposed but you still have tariffs coming up in december as a threat. the fallout continues. will it continue paint an economy that is under pressure? tom: the survey suggests that it will. you are looking at experts forecasting two to 8% from a drop of 1% in august. for endpoints -- for imports, they are expected to drop. we have a stream of data out from china, not just trade data but also inflation data. tuesday, producer prices expected to contract.

consumer prices, concerns about high pork prices as a result of swine fever. at the end of the week, retail sales, production, and third quarter gdp, with a survey is for expansion of 6.1 percent. some economists say it could dip below 6%. it remains under pressure and touts a big part of that. us is a senior economist in sydney. this goes to what tom was talking about. theave been saying that steady deceleration for export and import growth. a while -- for a while, imports were picking up. is this expected to continue even if we have phase one, if you will. it seems like phase two will be the uphill battle. surprising int is

the chinese numbers is there is no sign that the stimulus policymakers have been making has actually had any uplift to the economic data in china. the fact that we have a deal between u.s. and china is a sign that both economies are under pressure and both presidents want to do some type of deal so they can get their economy back in the place where it was 18 months ago. would seeterm, that the majority of the weakness at the bottom and the fiscal stimulus coming through an interest rate cuts should probably boost growth in the near term. haidi: you talk about stimulus measures and being careful not to go to hard. if you look at credit growth, there has been a steady build. we could get numbers as early as today. are you expecting them to put on pressure more and stimulate more

aggressively? next sixobably in the to 12 months, focus on the fiscal side and doing more around infrastructure and a little more cuts to the interest rate. i feel the credit numbers should increase marginally. they are still in a deleveraging campaign which will make it aggressive onet china growth. the focus will be on infrastructure spending. shery: how much have the measures already taken help when it comes to economic growth? we get the gdp numbers on friday and how much will new measures help and when can we see them feed into the economy? great question and one we've been asking ourselves over the past six months. the stimulus measures we have had have not been boosting economic growth in china. maybe it is a sign the negatives

from the trade war and the slowdown in global manufacturing are more than offsetting or being more of a negative dampener on growth compared to all of the stimulus we had out of china. stimulation measures -- stimulation -- stimulus measures aren't as good as they have been . i think it should be evident in the next six to 12 months that we have some of the boost of growth coming through. with the trade war looking like it is pausing for now, i don't think there will be a major acceleration in negative trade talk over the next few months. the weaker yuan helped exporters? think the more pressing question for the exporters is around the negatives from the trade war. i don't think the weaker yuan is boosting export demand and that

is evident in the trade data. the weakness in global manufacturing is probably overriding some of the weakness in the currency at the moment. haidi: in terms of that weakness in manufacturing, it is not just china or u.s.. you see contraction in the euro zone and japan and developing economies. withe looking to singapore their decision and we expect them to potentially ease after being one of the holdouts in central banks. are you expecting a resolution on the train from -- trade front will develop other asian countries? diana: it will help but we need more news on trade. what we have is a mini deal and nothing actually confirmed. we need to get both countries to sign on it and we need more clarity as to what is going to happen around trade and what will happen to intellectual

property rights and protection over the next year or so. there is definitely a lot to go. that will be the case for financial markets. even though we get a boost in equities near term, but our businesses going to feel more comfortable for the outlook with this mini deal? i don't think they will update their expenditure plans just based on the first phase of the deal. we could get there in the next 12 months and i think ultimately we will come because the u.s. has the presidential election next year and it is in trump's -- to get it done. haidi: diana will state with us in -- stay with us in sydney. bel a tariff truce will enough to boost the retail sector? we will talk about that. andy: the malaysian fund

discussing post discussion interview. this is bloomberg. ♪

haidi: this is. i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. let's start with cpi numbers core inflation decelerated to 0.3% growth in september. does this confirm the fact that we could be seeing more doj action, given they have said they would review price trends more closely at their next meeting? that morehink stimulus is priced in for the bank of japan. inhave seen no movement

inflation in japan over the past year. that hasn't been too surprising giving the weakness in the global economy. the bank of japan will follow through with what the major central banks are doing around the world and ease monetary conditions. fiscal spending is also in the cards, given they increase the consumption tax in the beginning of october and they need to offset the negative. taxy: will the consumption help with the frontloading we expect from the consumers with the upcoming retail numbers? what itt probably will will be a short-term boost to consumption numbers. i think more importantly, for japan, is really the weakness in global manufacturing and production and also the negatives from a weaker chinese economy flows through japan, and things like tourism. that is an important export for japan. haidi: if we see a resolution on the trade front, it is good news

for risk currencies and economies in australia? diana: i think in the next month or so, we will see more upsides for equity markets broadly. equities have been hit over the past week or so with the of and flow around trade and even -- ebb and flow around trade. in this environment where you are not seeing signs the global economy is going into a session, we are not there yet and we are not in those conditions and investors like equities because bond yields are low and it is hard not to be invested in equities, once you get the income yields from that. haidi: we have been discussing the inquiry into the big banks passed theey residential mortgages. is that an indication given that are increasing the more of

a drag? diana: in australia, the interest rate cuts really is what will be in the cards for the banks is how they pass through the interest rates cuts to department holders and mortgage rates. what we are seeing from the last cut is that it was taken negatively by the banks because as you get closer to 0% interest rate, it becomes more occult to pass on interest rate cuts to mortgage rates through cuts to maintain market share. therate cuts are probably key driver for australian banks in the near term. .aidi: always great to see you capital investor economist joining us in sydney. let's check in hong kong. bonds are falling across to september levels.

checking in on a mover in sydney, santos is rising 7.5% to a december 2014 hi, as conoco to sell.has agreed santos will fund from existing cash and new debt. slips for ars, gold third session below 1500. 4%.crust is up a 6.6% drop from friday's close. shery: you can get the round up of the stories you need to know to get your day going in today's asian of daybreak. gough to your terminals -- to your terminals or the bloomberg cap. this is bloomberg. ♪

-- bloomberg cap. app. this is bloomberg. ♪

haidi: this is daybreak asia. i'm haidi stroud-watts in sydney. shery: i'm shery ahn in new york. president trump says it is ready to go with sanctions on turkey. he tweeted he is working with members of congress on powerful new measures should turkish off limit. we just heard from lindsey graham at saying the president agrees with a need for crackling -- crippling turkey sanctions. what could it be? >> what nz graham said and -- what lindsay graham said and he spoke to the president and it meshes what we heard from treasury secretary and he said

the u.s. government could shut down all transactions with the entire government of turkey and it is something he could do at a moments notice. lindsey graham has talked about the most crippling sanctions since iraq and it looks like everyone is on the same page. president trump has agreed to work with congress but the mechanisms are in place with the administration. the main thing we are hearing from donald trump is stop the endless wars and get u.s. troops out of syria and that he is prepared to go with sanctions on hisbackside, even though posse has been criticized by members of congress. about what is interesting lindsey graham, he has been an ally but has been critical on the president's moves on turkey. how will that affect the

dynamics between the white house and congress? ros: it is interesting and shows that lindsey graham and trump while some say they are confidence i think president trump takes a transactional approach to his friends and confidence, especially in congress. at the same time, you have lindsey graham being very supportive of president trump on the impeachment issue. he has been quite critical and talked about throwing up talk about taking u.s. troops out of syria. very harsh language. it seems like there is only really a handful of republican lawmakers who are backing trump on the approach he is taking in syria. i think he will be able to come mind by going ahead with the economic sanctions. televisionnue to see

footage about bloodshed and a slaughter of kurds in syria, i think everything is still up for debate. there are a lot of people in washington angry at trump's policies. on impeachment, expecting more testimony behind closed doors and scrutiny on rudy giuliani. ros: one of the key people we are watching for this week is gordon sondland, the u.s. ambassador to the eu. in some veryed controversial text messaging 's demands our lack of demands or whether he made demands on ukraine. he is supposed to speak in a a paneloor session to on thursday. watch for leaks out of that hearing and watch for the impeachment process to keep

rolling along rather quickly. haidi: another big week ahead in d.c. that is our news editor. let's get a quick check of the headlines. australia's watchdog will investigate presidential mortgages. the a triple see will consider critical of them not passing on rate cuts. a final report is due by september. shery: turning to what is said to be hundreds of people who received small amounts of cash, and anticorruption commission is launching a third phase of a recovery drive, targeting recipients who pocketed $120,000 or less. haidi: california bracing for another power shut down after bankrupt utility ruled it cannot rule out further outages. pg&e will cut power across the

region in a bid to stop its equipment from stopping fires. american apparel and footwear association president talks to us about the fallout from the trade war. this is bloomberg. ♪

i am su keenan with first word headlines. we start with a bloomberg scoop, the joe biden's son is leaving the board of a chinese five it equity company and will terminate all four in work if his father wins next year's election. he has faced unsubstantiated allegations from president trump that says he wants to avoid any conflict of interest. trump has claimed biden made millions of dollars from china while his father was vice president. ecbsions widening at the with the austrian central bank governor telling local media several council members are against mario draghi's plan to

resume bond buying. they say there is a feeling the plan would bring -- would be counterproductive. draghi first floated this at a conference in portugal despite not having discussed it with council members. the world bank is pessimistic about india, flashing its growth forecast the most among southeast asian nations and below the outlook of the r.b.i. itself. a 7.5% forecast back in april. recovering to 7% in the next two years. the world bank said india's slowdown is severe. saudi arabia says it has no involvement in last week's attack on an iranian oil tanker in the red sea. iran blamed the kingdom for this fight, saying the missile came from saudi territory although it pulled back.

incident is a latest in a series of attacks on oil infrastructure and follows a missile strike on two aramco plans which were banned on -- blamed on iran. global news 24 hours a day, on air and @tictoc on twitter, 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. keenan. this is bloomberg. haidi: let's go to hong kong for a check on fx. sophie: the lira has been under pressure, earlier reaching 590 per dollar with more potential weakness ahead if president trump supports sanctions which could see the currency test the year to date a height above 620. the pound slipping against all of its g10 peers. e.u. negotiators warned boris johnson's plan is not yet good enough. the offshore yuan holding a three-day advance not far off from friday's session high of

707 on the partial deal. the pboc fixing will offer guidance on yuan moves this week. the reference rate is around 707 since september 17 and this could see the yuan rally against the greenback. this one is more cautious on progress around a trade deal, seeing 7.20. trump putting a positive spin on the partial deal with china while beijing is more cautious and others are more critical. the american apparel and footwear association welcomed the decision to delay additional tariffs but as the reality is everything currently being hit with tariffs is still being charged. ,his is the president and ceo and he is with me in new york. this would be a bittersweet environment. tell us how much of a relief is it at least additional increases

are not going ahead. relief at all.a we are thrilled that everyone went to the oval, had a good meeting, they are on track and talking. that is a huge win for everyone. but we feel like the team that did not win. we did not get anything out of this. we got 5% that was going to hit us in a couple of years -- couple of days not going to hit us. and 5% of $250 billion would not have rocked the boat. round that is in the started, everyone gets confused with the trenches and the round but on september 1 in the apparel business 91% of all apparel coming from china was hit with a 15% tariff. .3% of all footwear was hit

china is really, really important to our industry in america. 41% of everything in apparel comes from china. 69% of all footwear comes from china, 84% of accessories comes from china. any tariff is a hurt. shery: how much of those additional tariffs imposed because of the trade tensions have your members passed on to consumers? >> we are trying hard to get through the holiday season. the minute the tariffs hit, everyone got on a plane and flew over to asia and said help us get through the holiday because unfortunately we were feeling the grinch had stolen christmas. theave this seasonality of holiday environment where that is where we make our money, the fourth quarter of the year.

you bring 15% off of the top, we don't make any money. it is not fun. we could talk about retail earnings because it will not be a pretty picture. ask how was going to difficult is the holiday season going to be? odd environment. consumer confidence is still good. the price of gasoline is still low. unemployment, leading the low.e, almost at a 51 year people have money and are shopping. we have six less days in the holiday season. but the questions are going to come down to earnings. we will be able to sell goods in the range of 4% through the holiday season, but will anybody make money?

that is the question. as we get through the holiday season, what about next year? what is 2020 make money? going to mean? situation.ghtening on one hand we are thrilled they met. we have a truce if you want to call it that. but we need tariff relief now. they are not good or healthy or good for the consumer or the industry. they are not good for anything. we would like to see them go away and we don't know on december 15 if the last round is going to hit us. so for our industry we are in pain and we would like to get back on track and maybe this is the beginning that puts me optimistic. so for our industry we are in haidi: it seems like the trade potential, phase one, doesn't actually alleviate the pain being felt in terms of the

demand side, export markets, chinese export market. we have seen homegrown brands really over performing in recent days because of things like the nba. is it patriotic spending in the equation? rick: if we were not in the middle of this trade skirmish, the nba situation probably would not have blown up as high as it did. quite frankly the nba is in a difficult spot. they cannot play basketball on both sides of the court at the same time. it is awkward and painful. nba.se people know the we have been over there for 30 some odd years. they know who we are and what we are. i think this is a little bit blown out of proportion. because of the heightened

tensions. other than that it would be one minute on the news. now it has become a problem. haidi: heightened tensions but also relative to history recently emboldened china, plus the political situation in hong kong. what are you advising your members to do in terms of this delicate manner in which they have to navigate doing business in china but also projecting integrity and staying true to values? rick: we try and encourage everyone to not get involved with the politics. we are not political people. we are business people. home for has been a most of us. i have been going there most of my adult life. we love hong kong and hope there is a possible solution to the problem. it is painful for everybody. our members are

concerned, we tell them, don't get involved with the politics. stick to your business, do what you have to do. shery: the goal behind the trump administration's move is this would lead to china engaging in more fair trade. if that is a long-term goal, does it make sense to have short-term pain? rick: a lot of people say that. go through the short-term pain. but we don't at this point see it that way. as an industry, apparel and were 6% of all imports into the united states. prior to the trade war we have paid 51% of all duties collected. they are excruciating. it has a lot to do with the consumer in america. why do we go to china? it would be great if we could bring it back to america but

america is only 3% of the market. 41% on apparel is coming from china. why is it? china does it well. great to have you with us. the president and ceo of the american apparel and footwear association. if you are a way from a screen can find in-depth analysis and the newsmakers on bloomberg radio, broadcasting from our brand-new studio in hong kong. listen on the app. this is bloomberg. ♪

shery: this is daybreak asia. i am shery ahn. haidi: india and china have agreed to set up a new mechanism to discuss trade in weekend talks between narendra modi and xi jinping. this was aimed at repairing the

strained two-way ties. issues like huawei and kashmir were not discussed. , focusingdown context on u.s. and china. a great deal of progress when it comes to the conversations between narendra and president xi. sleeping, while we were watching developments in washington between the u.s. and china, two of asia's three largest economies were making significant progress of their own on trade. one of the things that struck me about the record -- report from the weekend is they seem able to compartmentalize trade and economic issues and national security and treatment quite separately. there is a lesson there for other negotiators. kashmir did not come up. this has been a flashpoint

between the countries. they seemed happy to relegate that to the side to make progress on the trade and economic front. pretty interesting. todi: pretty pragmatic way bring in the sensitive issues. is it a sideshow compared to the fact we are forever watching beijing and washington? >> yes and no. india's economy, while large and growing and hyped as one of the next big things, is still quite small relative to united states at a $20 trillion gdp economy, china $14 trillion and india approaching $3 trillion. a absolute terms it is sideshow. in relative terms, it is not. india has been reluctant to sign up to formal alliances or packs.

-- pacts. if china can persuade india it is in its interests to sign up accept a china backed regional trading bloc, it is significant. shery: i know that you mentioned kashmir was not in the talks but i wonder if india is in a position of direct rule over kashmir a problem for the leaders in the future? be. it certainly could for the moment they are prepared to put it to one side. that probably rests on the assumption things don't escalate or deteriorate from here. who knows where they go. you are right that this offer has been floating away at -- around for a while in search of a mission. it seems to have taken on some extra life as u.s.-china trade

relationships have deteriorated and the u.s. withdrew from tpp in 2017. get india to sign on, it gives new momentum behind this other group which has been drifting. shery: bloomberg opinion columnist joining us from singapore. sterling fell after e.u. negotiators said boris johnson's .rexit plan is not good enough the prime minister says a deal can be achieved by the end of the month but will need support to push it through parliament. lloyd's of london told bloomberg the company is ready for brexit with or without a deal. >> we thought we should get ahead of the curve. we have been exit ready since january 1. european businesses are being europe.in continental we assume brexit has already happened.

i think most financial services in the u.k. have addressed the problem in advance. know all the look at your business but also the financial sector as a whole, and the u.k. do you think everyone is prepared for the possibility that should a deal not be worked out, everything will be able to go as planned? >> i do. it will be bumpy. 20% of the gdp is financial services. any form of uncertainty creates a problem for the customers. it will be bumpy but in terms of mechanics to connect with europe out of the u.k., especially lloyds, we are ready. i want to go into your numbers particularly your combined ratio which 98% recent reading is pretty high. what is putting it there and how do you get it down? ande had a challenging 2017

2018 and put work into performance management in the last 12 and 18 months. we can begin to see improvements in the numbers. when you break them down we can see control around price and risk selection. it will take time to come through. the expectation, other things being equal is it should be better by the year-end and continue to improve. london ceod's of john neil speaking. we look at the malaysian prime minister after delivering a budget which will see the deficit all further into the red next year. down to the release of singapore's third-quarter gdp numbers and a rate decision from the bank which could see the central bank ease for the first time in years. this is bloomberg. ♪

shery: this is daybreak asia.

i am shery ahn. haidi: australia's major lenders are facing a new investigation into why they have not passed on the rba's rate cuts in full. what are the details of the inquiry? >> this is coming from the government who want to put pressure on the bank to pass on in full the interest rate cuts from the reserve bank. it is 75 basis points. past on 57r banks basis points. there has been political criticism why the banks are not passing savings on in full to the borrowers. the treasurer once competition really deleted -- competition regulated. shery: why have they not passed on the cuts? >> the banks argue they are funding -- funding costs are not based on the interest rate cut. one of the problems the bank is

facing, they relay -- relate -- they rely on the funding base for home loading. as rates get near to zero it is hard to cut the deposit rates which are down around zero and they don't want to know into negative territory. there is more to the bank's funding cost. they are saying they are passing on as much as they can while trying to maintain profit margins. haidi: it is about the government wanting to loosen up money for spending given the property market starting to heat up and people under pressure. the banks used to extraordinary possibility -- profitability. there is a political stunt, not much the government can do to force banks to cut rates. what they want them to do. banks have to maintain profit margins and return to shareholders. that is what they argue. they can't be passing on these rate cuts in full at the moment. haidi: thank you so much.

our asia investing editor there with the investigation into the big four aussie banks. shery: chinese sportswear company leaning is on a tear in the stock market. the stock has tripled in hong kong this year, making at the top performer on the msci asia-pacific index and the best among clothing firms globally. last week morgan stanley lifted them to overweight and raised the share price target 33%. isdi: the boeing ceo increasingly seen as a fall guy in the next 737 drama. he was removed as chairman of the board and directors say this will let him focus on bringing the plane into service. boeing's reputation has been battered since the crashes killed 346 people and prompted

the global branding. shery: volkswagen denying reports it was considering the spin off of lamborghini. bloomberg said last week volkswagen was repairing an overhaul focusing on the three main marquees, vw, audi and porsche and an ipo for lamborghini could be a possibility. vw announced that is not on the agenda and any speculation is unfounded. markets opening in seoul, japan offline. what are you watching? sophie: a risk on move is taking hold. checking on the risk barometer the dollar set for the first gain in four sessions, rising the most against sterling and the yen. treasury futures opening little changed near a one-week low with cash trading shut this monday. and aussie bonds

falling with the yield climbing across the curve. in a few minutes we will earn how singapore's economy fared in the third quarter as growth stagnates. central bank expected to ease its policy stance with and if aty how much reduction to zero is in the cards. the sing dollar is on a firmer footing with the exchange rate staying above the mid-point of the estimated policy band. most economists expect weakness or the currency on the -- we will get lots more on that. in the next hour of daybreak asia we are breaking down the third-quarter gdp print. also expectations at the central bank, policy decision coming out and it will be on the side of easing. selena laying will be joining us for her analysis. we have the market open next. this is bloomberg. ♪ from the couldn't be prouders

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>> good morning. asia's major markets have just open for trade. >> good evening. i'm sorry on print >> welcome today back asia. -- welcome to daybreak asia. >> president trump health a partial trade deal with china but critics say questions remain and key issues have yet to be resolved. hong kong another disco weekend, police and growing debate over

the level of violence. mom is away from singapore's latest gdp numbers. recession may be avoided. >> breaking news out of singapore, gdp numbers. you're in a growing 0.1%, which is slightly below expectations, but in line with the previous quarter. the second-quarter growth was 0.1% as well. quarter-on-quarter it did managed to not slip into a technical recession, growing 0.6% on the seasonally adjusted basis. fromwould be decelerating the expectations of 1.2% growth but still growth instead of a contraction that was on the second quarter. the second quarter has also been revised to a contraction of 2.7% breaking news from the monetary authority of singapore as well. they have eased policy and reduced the slope of their currency band in line with estimates.

earlier seen core cpi and the lower half of 1% to 2%, the estimate range. this following their april meeting, where they left the policy settings unchanged. now we are seeing they have eased policy and reduced the slope of their currency band. there currency band is their main policy labor. in 2019, the core cpi is seen by the monetary authority at the lower end of 1% to 2%. they're also saying the 2019, all items cpi is seen at .5% for it again, the monetary authority. singapore reducing their slope of their currency band. this would be effectively monetary easing. this after the increase in the slope last year twice and then left it unchanged in april. not surprising given we have seen a decelerating economy with a gdp year on year coming in at

growth of a 0.1%, and slightly missing eight technical growing 0.6 percent quarter-on-quarter. the monetary authority coming out and saying they are ready to recalibrate policy, should the need arise. that's right, seeing 2020 core inflation coming in at .5% there and we are getting more from the monetary authority of singapore saying all cpi from half a percent to 1%. joining us now more reaction out of singapore we have selena ling head: treasury research & strategy oversea-chinese banking corp ltd, (ocbc) we were expect some form of easing. is it surprising they did not go further for a flat state of the slope? context weake in the are not in a technical recession

or looking at a full-year recession, i think it is a calibrated move. there is no need to jump the gun in the sense. if you recall in 2018, it took them's two steps to get to where we are today. i expect the war but -- the rollback would be at a measured paste -- would similarly be at a measured pace. it comes as no surprise that they flatten the slope rather than take back all they did in 2018 and one move. that said, the growth for the first quarter still looks fairly weak. we are expecting that even though we escaped a tackle recession i the skin of our teeth for the third quarter -- escaped eight technical recession in the third quarter, in the fourth quarter we may see another quarter contraction. throw out this chart on the bloomberg terminal looking at cpi. an external demand implications that come from the trade war and global demand for singapore's manufacturing. industrial electronics has been a horrible subset of that as

well. do expect the downward pressure to continue, so long as we do not get a substantial improvement in the trade war? i think global growth prospects look fairly weak going into 2020. even though you may have the phrase one of at you -- a phase one of a trade deal, the substance will have to come in face or phase three. that is where the structural challenges to u.s. china relationships remain. justwe are seeing today is a deferment of the upcoming trances of tariffs -- trench of tariffs-- tranches of tariffs. we do not see the leading indicator like pmi never showing any bottoming yet. probably we are starting to see the second round effects where manufacturing and trade war has effectively spilled over into business confidence and consumer confidence. we are starting to see softness

in the services sides as well. going ahead, the key to watch out for for singapore would be the strength of the labor market. how resilient labor market, especially unemployment and retrenchment never's can be going to 2020. >> yes the monetary authority saying the 2020 gdp growth will improve modestly, the output gap has turned to slightly negative. we have seen the singing dollar gain .4% after this decision. is the fact that we are not completely there, we are not in a technical recession, we have missed it slightly. the fact that the monetary authority did not do more it comes to re-centering or widening the currency band. signalink they did essentially they remain on a more cautious side, potentially being dovish going into the april, 20 20 mps meeting as well. it depends on how the global

growth story plays out. we are seeing today that the softening is not really on the u.s. economy side but we are starting to see signs of weakness come from europe especially germany and the core economies. and brexit saw remains even though there are people who are hopeful until can be cut before the 31st of october. and you see the slowdown story in china as well. it is starting to hurt the chinese economy. looking into next year, even if the trade war is partially or fully resolved, i think it will not come fast enough to turn the entire global growth story around. so in that sense i think actually you're still going to be skating on relatively thin ice in the fourth quarter and possibly the first quarter of next year. and services for singapore is starting to show signs of weakness. if you look at inflation numbers, both core and headline inflation coming in ahead of the forecast range. it suggests that a place neri pressures are not the pressing issue at this juncture.

inflationary pressures are not the pressing issue at this juncture. to promote growth and also contained in inflation, at this current environment there's little monetary policy can do to change the overall story, but it is going with the global tide of monetary policy easing. it is into string -- >> it is interesting you mentioned services industry. it has expanded year-on-year but with the deceleration of previous quarters where we saw growth of more than 1%. should we be worried that there more than just external headwinds, also issues with structural competitiveness within singapore? at the services sector, it is a mixed bag. your financial services and insurance and business and professional services that seem to fare better, even in a slow down story. and you have retail and wholesale trade that is optically feeling the effects of the trade war and the tech war

and to a certain extent the tightening of belts by households. they see the negative headlines every day. there's a bit of caution setting in into the mastech conception story -- consumption story. -- domestic consumption. 1% and that should be food for thought going into 2020. i think the onus is for pickle policy -- fiscal policy to step up in the 2020 budget. a mores room for fornsionary fiscal stance growth. you mention for 2020 the official outlook is for a modest improvement. i think we are in accord with that pretty we think growth will be bound to one to 2%. some of it is technical. this year's growth will be very around .5%, it is more technical result. >> with an election year as

well. quickly i want to take a look at what the msa is given as makes planer for their decision. some disappointed they do not move to that flatter slope. say this measured in dos meant to the policy -- is measured a judgment is consistent with policy given the economic outlook. given the mood and numbers we see trickling in on the gdp front, where the two tightening measures last year with a policy missteps? -- last year where they policy missteps? monetary global tightening was the theme of the year. so i do not think they were out of sync in that sense. i think they were very much looking at tightening in the mastech labor market that could pressure some of the core inflationary pressure coming true. but the overall external environment has taken a sharp u-turn. which is why you see economies like germany sinking back into a possible recession, and all

these joe flacco problems in hong kong and the middle east. these way on business sentiment and confidence. -- geopolitical problems. as i mentioned earlier consumers take stock of what is happening externally and say, maybe it is time to tighten the belt and be more measured in terms of spending patterns. we see this clearly in discretionary spending numbers in the retail sales numbers as well. >> thank you so much, head of treasury research and strategy at ocbc bank. and you can term to bloomberg. to get analysis from bloomberg analysts and editors. the sing g in on dollar, as much as 4% this

morning as it seems able to withstand the mas easing. then the 1% dip klein in past three months it has perhaps priced in the easing. -- decline. we have in seoul the kospi rising 1.2 percent with chipmakers providing the biggest boost. the korean won on a firmer footing, gaining ground to the firmest level since july. the asx 200 this morning higher for a third straight session where we are also seeing the before lenders gaining ground even as they face a competition inquiry into market pricing. let's get a quick cross asset check looking at aussie bonds, there falling this morning 10 year yield falling sick to seven basis points. the british pound is under pressure, falling against all 10 peers as you leaders warn that boris johnson's brexit plan is not enough. and the labor -- layer out with more dental weakness ahead if -- the lira with more potential

weakness pending sanctions against turkey. >> let's get more on trade and the markets and what we expect to this trading session. idea ofg kong, this phase i versus versus phase two, phase one seems to contain the low hanging fruit. does that mean arc its will be muted and their optimism? -- markets will be muted in their optimism? there is not a lot of criticism about what was achieved last week. nothing of substance, nothing on currency,thing on nothing on structural issues such as industrial policies or ip protection. bys month tariffs are off decembers remain. market reaction last friday was positive. goldreasuries, the yen and

altar hit while stocks and commodities advanced. i think asia stocks are set for. trumpief rally until cans xi jinping and they sign a trade deal. , weink this is more about had a round of talks that failed but this round of talks and future talks in the right direction. and the market wants to focus on the positivity. if you look out the previous when evere know that [indiscernible] was made, the markets rallied. i think the markets will continue to focus on the chance of a trade deal. and cyclicals will make further

headway, especially after treasury yields rose. the president said a currency deal is a key part of these talks and we have not seen key -- detox of the currency will not seen the tells about much at all. what are the applications for that direction of the yuan? >> i think that you and will front side. where looking back in the previous months and the yuan broke through and broke below the key seven level. the u.s. named china as an fx manipulator. and mnuchin last week said the u.s. would consider removing china from the manipulation [indiscernible] what is that mean for the yuan. i think you and direction will be crucial in gauging the chinese authorities' well to reach a deal.

any currency deal is not likely 1985 in the [indiscernible] if this can be reached, it means the yuan will have to strengthen. >> we are now seeing the tenure yelled back about 1.7% we have seen a lot of volatility in the treasuries market pair what are expecting the impact to be once the fed -- are we expecting the impact to be once the fed starts qe which is nuts must be qa. >> that's right. the qe thatd -- the fed did not call qe was overshadowed last week and i think is positive for the rest market. does fight this as a purchasing plan, the treasury yields soared. i think there is a growing level of anxiety and the bond market.

is, it means, basically reduces chances of aggressive cuts in the future. together with this phase i trade thingst means a lot of that will work against the treasury. to normalizeet has and then we will see yields moving higher further from here. our mliv u, reporter joining us from hong kong. you can follow the story and get all the day's trading on our market life blog or you can get a market run down and one, and there is commentary and analysis from bloomberg executive editors. let's not get the first word news with su keenan. >> we start the latest on syria. president trump's warning the u.s. is ready to go if sanctions on turkey over its military incursion into syria.

he tweeted that he is working to finalize measures against ankara should its forces go into what he calls off-limits areas. treasury secretary steve mnuchin says the u.s. has full authority to impose sanctions that could include ending u.s. transactions which would in their view destroy the turkish economy. to the u.k., prime minister boris johnson has told his cabinet that he is still thinks a brexit deal is achievable. however the e.u. says his latest plan is not good enough be the basis for agreement. negotiations will continue on monday, with brussels warning the time is running out and all sides must be prepared for the u.k. to clash out of the block. a you leaders including johnson will meet thursday. out after theg typhoon left a trail of death and destruction. ,t least 21 people were killed 16 went missing and more than

160 injured. while hundreds of thousands of homes lost power. hurricane -- the typhoon brought violent winds and record rain as well as mud flows and landslides with 20 rivers bursting through their banks. wasts peak, the typhoon packing winds gusting up to 250 kilometers per hour. to hong kong, police officer is in the hospital after being slashed in the neck during a weekend of violence protest. on hong kong sunday, blocking roads and vandalizing shops, public facilities and a subway station. the clashes came despite some protest groups discussing how to ease back out of concern the violence is alienating regular citizens. global news 24 hours a day and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan.

this is bloomberg. >> still ahead, malaysian finance minister joins us next to discuss spending plans. our interviews just ahead. this is bloomberg. ♪

shery: this is daybreak asia. haidi: northern california is bracing for a power shutdown after bankrupt utility pg&e noted it cannot rely for their outages. six weeks left in the wildfire season, pg&e says it will cut power across the region in a bid to prevent it took women from sparking fires. last november, a damage powerline sparked the deadliest fire in california history. chinese sportswear

company li ning is on a tear and in stockmarket terms the hottest brand at the moment. the stock has tripled in hong kong this year, making it the top performer on the ms asia-pacific index and the best among clothing firms globally. last week, morgan stanley lifted hits rating on li ning to overweight and raised its share price target. the watchdog who investigates prices and residential mortgages the investigator says he will look at how banks make pricing decisions including movements in the rba rate. banks be criticized for being failed to pass along the rate cuts in full. a final report is due next september. you can get around of the stories you need to know to get your trading day going in today's addition of daybreak. bloomberg subscribers go to dayb on your two myrtles. terminals. -- in

you can also customize it so you get the news on the industries and assets you care about. this is bloomberg.

>> malaysia dover the budget 20/20 friday with plans to spur growth and plans to allure investments. >> the world bank call is that a prudent budget, malaysia choosing to delay fiscal consolidation for growth. let's get perspective from malaysia's finance minister tuan , lim guan eng who joins us from kuala lumpur. you have said you have a contingency plan measures to put into place to help the budget,

to health growth if needed. could you share with us what the measures are? >> i think we are having plans for any necessary primped of matters. global economy worsens. we are hopeful the latest arrangement, i do not know if i will call it a deal. half a deal. for what it is worth. we'll be able to stabilize global markets. that has lessened global anxiety. this helps to boost growth. which is prioritized by the present government. >> see have been encouraged by the small deal struck by trump and xi jinping. >> at the present moment we are grateful for little movement per any progress toward some sort of resolution is better than nothing at all. >> minister, given the

government is deep in liabilities, how much fiscal space you have to overcome macroeconomic shocks. there is a reason we expanded the budget slightly and also increased the fiscal deficit target for next year. 3.0 and we there fixed it up 3.2. provide relaxation, to room to do what is necessary in the event that the global uncertainty worsens. deficit of 2.2 percent of gdp, when do you inspect damage or -- balance your budget? >> we are looking at the medium-term of reducing the fiscal deficit. again that is contingent on a global growth and of course, trade.

moment, ournt projections are dependent on the resolution of the trade dispute between both united states and china. >> is it fair to say there is no clara see -- no clarity when a balanced budget can be achieved? >> if the trade issue is resolved, i think we are confident of achieving that within five years. moment, we would prioritize growth. we should allow ourselves that fiscal room. to ensure sustainable growth. >> we are looking at your gdp projections, tweaked to 4.7% this year and 4.8% next year. that's pre-upbeat compared to productions from analysts and the world bank. what is driving your optimism? >> initially private consumption. we are confident that the trade and investment will bring to evidence to malaysia.

-- compared to projections. >> at the same time the cost rationalization will also allow us to generate some savings. that would also push the economy growth forward. >> would you say that risks are being skewed to the downside, given still the uncertainty of the u.s. china trade war? and also, over the weekend, it was reported that india may review its imports of palm oil from malaysia. palm, an important sector in relations exports. >> palm oil is important. -- in malaysia exports. but if you look at the structure of the malaysia economy, nearly from demanded manufacturing and services sector. we are optimistic that these problems can be resolved. what is more important is that we stick to the market

framework. in resolving any disputes. as long as there is a multilateral framework, which brings about stability and certainty, there would be growth enough to go around for everyone. >> how much damage can india impose on malaysia, should it put the limit on palm oil imports echo india being the biggest import of -- importer of palm oil. >> i would not want to speculate. >> are you concerned? >> if there's any dispute that brings about a negative impact on our trade. but i would not want to speculate. i have not received any information or notice from india. so i would say that if there is any dispute, we believe both bilateral and multilateral frameworks should be an place to resolve this issues. >> noted taxes announced during

the budget as you had suggested before is that sustainable, going forward? given declining revenues. >> i think our numbers have been stress tested. that's what about the world bank and moody's of course understands the necessity to have an expansionary budget and also stress the importance of sticking to the fiscal consolidation plan. leeway,iving ourselves which is necessary moving forward. i think this will also give confidence to investors that while the government prioritizes economic growth, we are also equally committed to fiscal consolidation. .2% different -- and just at 0.2 percent difference, only 20 basis points, i think that is reasonable.

>> that is not to say no new taxes will be put into place in the coming years? >> we have proposals for new taxes but these are something we will not advertise. because higher taxes does not really attract investments. i think the message out there would be that we would -- we do not intend to increase unnecessary taxes. just for the sake of ensuring carry out certain infrastructure projects. we want to spend within our means. at the same time, we want the power sector to lead economic growth and for the private sector to drive economic growth. i think increasing taxes on them is not the way. it is not sending out the right message. apart from giving matching grants, we wanted the private sector to be our partner, to drive malaysia's prosperity forward. >> you are mulling over a new

band for the richest 2000 and the country. how much are you looking to raise from that? >> i think that is also a suggestion, from many international bodies including the world bank, that our module tax rate for the soup -- our marginal tax rate for the superrich is lower compared to other neighboring countries. so even by increasing the marginal tax rate for the superrich by 2%, we would still amongst the lowest in the region. we would be looking at 2%, so the talks that -- the top tax rate would be 30%. >> is there a risk the rich would leave malaysia? how do you view the rest. >> i think 80% difference would not have that impact peer it we are confident that malaysia is 2%ll attractive -- i think a

difference would not have that impact. we are confident that malaysia still attractive. and should be more than enough to cover such an increase. >> we are in an environment of rates coming lower. the rates in malaysia still among the highest in the region. how much pressure is there on bank negara to push rates down, to boost growth. >> bank negara, the central bank of malaysia is independent. give anyd not like to advance signals per it i'm sure the central bank will know what is best for the economy. if necessary they will make the necessary adjustments. so far, i think our growth rate has been sustainable. for the second quarter, we have performed better than the first quarter and malaysia is one of the few countries in the world where we have high growth rates in the second quarter compared to the first quarter. we hope that can be maintained through this year. so we are looking for .7% growth.

4.7% growth. and when many of our infrastructure projects get online, this is when some of the growth will come from next year. >> you're comfortable with where it is now? >> it is a double edged sword. if you have a stronger currency it is negative toward exports and reserve pit on the other hand, a weaker currency would invite inflation. ringgit isugh the where it is now, it can be stronger. we are looking at 1% this year and a maximum of two next year. for ak there is room -- four a ringht eight weaker than it is now for us to be able to prevent any cost push inflation. the ringgit e of

would be the actual situation. as i have stressed earlier, we will let the market side. either way, we feel that malaysia's growth is moving and fiscal measures are in place and malaysia is still the best place to invest. minister, and your budget you talk about one a to attract more fdi from china. despite talked about special channels. can you elaborate on that? >> we find many chinese investors are let me awesome numbers. offstment -- let me real numbers. the investments for united states around 12 but in dollars for the first half of the air compared to china and less than five in dollars. china's malaysia's largest trading partner. if investments from the united

states can be a 12 he and $12b, there's no reason china cannot grow with foreign investments to commend one reason we discovered was that they are unable to get the alsosary access and decision-making within their timeframe. that is why we decided that if we set up the special channels to make it easier for chinese investors to comedic eight, then we would be able to encourage more chinese investment to come in. how far you willing to go and what timeframe are you looking at and matching the fdi from china to that of the u.s.? >> in terms of incentives, it is the same for every foreign investment. that theld think problem is to communicate what malaysia has to offer. and malaysia has a lot to offer.

course, veryof strong advantage, not only in terms of our labor force, but also our rule of law. in our ip protection. i think for chinese investment, just like any other foreign investment, we want to be assured that investment's are secured and protected. at the same time, the problems they face and encounter. so special channel would help overcome any problems they may face, whether communication or understanding of the incentives we have to offer. american companies are very familiar with malaysia like from china. i do not think they face the same problems that the chinese investors encounter. i think we must also understand that chinese investors only started coming out in a big way after the u.s. and try not trade dispute disrupted the a year ago. they're looking for safe havens,

just like compass from the u.s.. i think we must facilitate that. realistically, how much can fdi from china grow in the next two to three years? >> we feel that it should be comparable to investments from the united states and also from europe. they are already our second large investor. we go from art. not just from china, but all -- we go for more. not just from china but up from all western countries. havenia is a secure, safe for these foreign investments. >> minister, let's talk about the outlook for asset sales. even where revenue is now and beef up your coffers are there plans to sell some of the state assets? assets wouldsal of

be decided of course by the prime minister's office. but it is contingent upon complying with open tenders. in the past, these divestments were actually, what we describe as an outright award because there was no open tender print we feel that it is not only a disservice to malaysia but we have lost out, in terms of gaining higher revenues. so any disposal or divestment must comply with international norms. there must be an open competitive tender or auction. international norms, so we can get the best price. >> so are you looking at selling assets at this point? let's take a look at malaysia airlines are you any closer to making a decision on whether he will sell it? jal has expressed interest it

has been reported. >> i would not want to go in specifics. in my budget speech last week, i mentioned that divestment of assets that were approved by the pretty's government will proceed on an open tender basis. we expect to get around 3 from the sales. whether they will be additional sales, we will make an announcement in due course. suggested that because anna may be looking at selling its assets. -- there's been the suggestion of the possibility of selling assets and malaysia. >> i will let the prime minister make that decision. i will stick to what i've said on the budget. we are looking at sales that will bring us around 3 billion ringgit based on the open

tender system. >> by when? let the necessary process go on. what is important is that for investors are also welcome to purchase these assets. on an open tender basis. >> let's talk about bond issuance. in your budget committee talked anotherybe, perhaps, set of bonds in 2020. how much are you looking to raise and why this kind of bonds? >> this is because of the close relationship between the pie minister and the japanese government. they have offered -- between the prime minister and japanese government. the first transfer -- the first was $2.5 billion.

they have offered a second trans-at a reduced rate of 0.5%. we are negotiating with the japanese government to see if we can get an even lower rate. of course, the size of the bond issuance we announced next year. >> is likely to happen in the first art of next year? >> yes i think within the first quarter. >> how much would you need. how much you hope for? >> again, i think that is subject to discussion with both malaysia and japan. we are comfortable where we are now. we are looking at securing a loan which is lower than some of the loans we are paying, so it is more question of retiring some of the more expensive bond issuance and replacing it with cheaper ones.

we are comfortable where we are now. whether we can do or do not bonds.hese because of good relations with countries, there's no harms and having or itching of and at the slope -- or issuing a bond at this lower rate. >> aside from that type of bond would you consider other bond issuances in 2020? >> it is always a pricing issue. >> what could interest you? >> for me to say this public would not be in our interest. those financial institutions or even other countries knows what we are looking for. again, as i stress, this is a pricing issue. allre willing to consider offers, provided the price is right. oneinister, you touched on mdb earlier print what is the

state of the settlement with goldman? in our conversation they did say they want to settle it and want to be happy. what is the status of negotiation with no goldman sachs. >> i hope they backup their words with deeds. so far we have seen only pronouncements. but there's been no follow-up. we are still continuing with legal proceedings. .gainst goldman sachs 17 of their we hope that if they want to make malaysia's happy -- malaysians happy, then back it up with reparation payments. >> what are you looking for? just are looking at, not the fees they have received, but also the size of the bond that was issued and then misallocated foreign affairs purposes. >> which amounts to how much? >> 7.5 billion u.s. dollars.

>> you talk about how goldman needs to back up their words with deeds. are you not in negotiations? >> not in negotiations. but legal proceedings. >> are you in talks with goldman executives? >> no. we are talking about active discussions on a resolution, no. that is why a mentioned we are continuing with legal proceedings. if they are sincere or serious about making the necessary restitution, to make malaysians happy, please back up your words with action. >> fair to say than that goldman has yet to say -- yet to approach the malaysian government for talks to settle? >> i do not want to say they have yet to approach. but at the moment, at present moment, we are continuing with legal proceedings. do this no point to continual legal proceedings unless there is a serious commitment that you want to

resolve and make the necessary payments. >> so far, malaysia has 1.45bered $1.45 billion -- what is the target for 2020, and how do you hope to recover the rest of the money? >> i cannot fix number because it is all dependent on the outcome of the legal process and sometimes it takes time. the fact that the - >> the longer it takes the less chances of recovering the money, isn't that true? >> for identifying the assets it is only a question of ensuring this is all done properly and legally. assets have of the been identified. we are still searching for some more and we will continue to do so. for you to ask me to fix a [--]r, i think this is

playing mind games, whether it will or will not happen. for me to fix a number now, and if we do not achieve that, i think that would not be responsible. >> what has been the biggest challenge in recovering the money? >> again, the legal process. because we are talking about cross-border transactions. and sometimes that cannot be civilly pushed forward. we also have to respect i think the sovereignty issue, different laws prevailing globally. >> what is the plan to take the issue forward, how do you make more programs -- progress on it. in a conversation you talked about red lines being drawn, that more scandals have to be highlighted. toce then, there has been

others. are you close to being done in your negotiations and those cases involving corruption? >> i think we have done the necessary detoxification also salvaging and rescuing these institutions. i would say we should be done either by the end of this year or by the first half of next year. have a three-year fiscal roadmap to put malaysia back on track. in 2021.would end so far, i think the process has continued as planned. now it is a problem to try to get the money back. i think, again, this is dependent on not only the laws, but also complying with the necessary procedures.

we do not want to get something back after that and then we are being determined to have not done things properly. this is an action taken by a government. so i think we must make sure that everything is done properly. and every thing is done in place. >> and you have been satisfied with the process? because in conversations, even with relations they have expressed exasperation at how long it is taken. >> i think i'm also equally [indiscernible] but due process must be complied with. we must be different from the previous government. we cannot be the same peer we cannot just do what we like. it is exasperating in terms of the length of time taken. but you have a government that believes in the rule of law, i think we have to respect due process. to wrap up, i do want to touch on how malaysians feel about the new malaysia.

like of people here feel they have been disappointed by the current government, because of perhaps the lack of progress, mdb but in terms of one how in terms of growth and life is in the country. what is your response to the people who have been disheartened by the concept of the new malaysia? cannot undo the excesses of the past 51 years in one year or two years or five years, it takes time. it is important is that the people can see progress. there has been progress. in all sectors. some of this progress has painful. theuse you have to overcome necessary beer craddock roadblocks and make the necessary -- necessary roadblocks and make the necessary changes.

at the end of our term, four years from now, i think the people will be able to see real change. ithink this is where matters. what is the outcome after five years of relentless efforts. all of us are working very hard to break about that change. and the people know that. that we are working very hard. but we are impatient to see substantial change. at the same time, we hope they can understand it does not happen overnight. again, the process takes time -- the protest we started, we are making progress and will get there. real >> change specifically after five years, what can malaysians expect? can you quantify it? >> for a start, we should get back the money that was stolen under the one mdb and very scandals. and you can see the mega info structure projects following

cost structure rationalization that we have saved at least 46 nearly 12 ine, -- $12 billion u.s. , and the benefits accrue. and you're looking at institutional reforms. you will see a cleaner, more competent and more transparent government. that what you see is what you get. and of course, this will also generate greater confidence among investors. finally, most important, the people benefit. this is a people centric government. are working very hard to ensure that the people are confident that their children will live better lives than themselves. and they shall live better lives. >> one final question before we let you go. it is such an uncertain environment out there. domestically you are facing a lot of issues as well. what is the biggest issue for you that keeps you up at night. >> there are many issues that

keep me up at night. wondering whether there are any more surprises, nasty surprises, from the financial mismanagement of the past. i think we have done the necessary containment. and what is most worrying is still the global trade and economic situation. it is very uncertain. trade dispute is resolved, it is hard for us to make planning and projections. of course, domestically we face many challenges, to ensure that the national and social fabric is maintained. but i think what is comforting is this, the people of malaysia and foreign investors know that this government is the only government that can hold things together. the only legitimate government that can rule and represent every malaysian citizen. as malaysians say, malaysia

.ole malaysians finance minister joined me life. you, i why spending conversation. let's get up markets check. sophie: malaysia futures are rising joining the wrist and mood. gold buyers in sydney's tracking the drop in bullion prices this morning. aussie bonds falling across the curve. checking in on currencies, which yield politics and play, sterling retreating from a four-month high on doubts over boris johnson's brexit plan. lira bearers are on the move -- lira bears are on the move after the marching currency with more losses likely if president trump follows through with sanctioned threats. the dollar up .2% from her after the mas did not go the full mile to flatten the slope and offshore yuan this morning. just holding a three-day gain

with the pboc -- pboc fixing, a stronger fix that could spray rally toward seven for a dollar for the currency. shery: that is it from daybreak asia, and markets coverage continues as we look ahead to the start of trade in hong kong, shanghai and china. haidi: that is it for bloomberg markets. we do have a optimistic start for the trading week as asian markets i-8 potential phase i trade deal for china and the u.s., short on details but still the optimism permeating through the early part of the session. this is bloomberg. ♪

tom: welcome to bloomberg markets china open. i'm tom mackenzie. yvonne: i'm yvonne man. we are counting down to the open of trade in hong kong and mainland markets. david: let's get to your top stories monday morning. president trump hails a partial trade deal with china but details are sparse and critics say key issues are yet to be resolved. yvonne: singapore eases monetary policy for the first time since 2016. the economy narrowly related recession in the last quarter. tom: and japan recovers after the battering from the most powerful typhoon to hit the country in decades.