--i'm haidi stroud-watts and sydney. good evening. i'm kathleen hays. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak: asia." ♪ haidi: our top stories this monday. oris johnson prepares for a fresh attempts to deliver an october 31 brexit. he may have the numbers ahead of a monday vote in the comments.

talk -- commons. of protests in hong kong, targeting chinese owned businesses. kathleen: downbeat on the deficit. the latest trade data at this hour, suggesting exports we can further. -- exports will weaken further. ishie: taking a look at what going on with markets this morning. a cautious start to the work -- to the week. eco-data could put fundamentals more sharply in focus. getting more trading updates from australia. from south korea, third-quarter gdp due on thursday. export numbers for the first 20 days of october. trade data overdue for japan, taiwan and japan.

-- and china. let's look at forex markets. the yen set for a fourth day of gains. offshore yuan holding a two day advance. the aussie dollar, falling as much as .2%. bill evans expects the rba will rate will decide the cash lower bound is 50 basis points. in sterling this morning, halting afford again. if the brexit deal can pass this no deal scenario being priced at this month. scenario been priced in. scn-- scenario has been priced in.

haidi: boris johnson will make a fresh attempt to get a deal to take the european union out of -- the u.k. out of the european union on october 31. it is said he now has the votes to do that. we are joined in london with the latest. what are we expecting this week? is a halloween brexit still possible? thisything is possible at point. he had to send a letter for three-month extension. -- a three-month extraction. -- extension. could be looking at january 31 is a new deadline. -- as a new deadline. the real deal will be the house of commons showing up -- setting up for a showdown. he will try to get his meaningful vote on monday morning. that was delayed on saturday

before -- during a special session. what would come next is a vote on a withdrawal agreement bill. brexit, givenment time and how it would happen. this is where you could see a lot of drama. amendments could come forward, things like a second referendum or negotiating with the eu. britain andetween northern ireland. that is where a lot of the drama could develop in the u.k.. on the eu side, they still need to wait to hear back. haidi: it's such a fast-moving story. does the other votes -- does he have the votes? annmarie: that the critical question. it looks like he might have 62 votes, he needs 61.

given what lawmakers said in the comments. they can change their minds. very tight vote. need to remember is this is a prime minister who has yet to win a single vote in parliament and he does not have a majority. this is a minority government tried to push through this deal. while the math does look like it is in his favor at the moment, we have heard members of his cabinet come out over the weekend and say they have the numbers. be a tight, it could vote. happen, it will be another critical moment for members of parliament to decide what to do next. it will then be critical to hear from the eu side to make sure they are willing to grant this extension to avoid a no deal. kathleen: the times in london reporting that they are ready to improve it.

what is the worst that happens if they are gathering votes, but the eu gives them all the states, and the dates are staggered. they get many chances where they can do it, and then push forward again. annmarie: that's one interesting part of this report. they could potentially drag on into 2020. it may not even be more than three months. if it comes november or december as well. you can also see opposition in parliament, for a snap election. there could be a no-confidence vote on the government. if we don't have brexit before october 31 or january 31, we could be looking at another u.k. election before the new year. kathleen: brexit is the gift that keeps on giving. thank you so much for joining us. let's get the first word news

with selina wang. trade negotiator says talks with the u.s. are making progress and both sides are working toward a partial deal. substantial progress has been made, langan important foundation for phase one agreement. negotiators are trying to prepare a deal for president trump and president xi to sign it next month's apec summit in chile. the governor of currency says the yen is at a good level. the currency weaken past seven to the dollar in early august. he said your depreciation since then has been driven by market forces and shifting market dynamics. the far past the second level -- seven -- seven level caused the u.s. to call china a currency maybe later. carrie lam had to japan on wednesday for today weekend -- today visit after 21 -- the 21st

weekend of hong kong protests. they turned violent again and water guns and teargas were used. a peaceful march had been held earlier, with tens of thousands of people, declared illegal by police. goldman sachs investment banker face court on friday after his arrest of allegations of insider trading. brian cohen is accused of leaking nonpublic information for three years, in exchange for cash. goldman said the bank is not aware -- was not aware of the allegations until friday. it's the third insider trading allegation must against the banker in the last 18 months. -- lodged against a banker at goldman sachs in the last 18 months. global news 24 hours a day on air and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. tuuli mc scotia banks cully talks global growth concerns. have enough to

do with an increasingly fragile world economy annmarie: -- economy? this is bloomberg. ♪

>> the risks of monetary policy being too tight, and driving us into a recession exceed the risks of monetary policy being too easy. >> i would personally be more cautious bringing rates down. you are using one of the tools you have. bankers share worries that say the monetary admonition is that it ends. >> that's not to say we don't have a key role to play. we do. if you want to improved potential gdp growth, we need broader -- sounder economic policy. >> it will depend on much more than pup -- monetary policy. kathleen: big names weighing in

on the question of the limits of monetary policy. in the asia-pacific region, policymakers have their work cut out for them as they continue to react to monetary easing. and then their own unique domestic challenges. ms-65 -- tuuli mccully, head of asia-pacific economics as scotiabank joins us now. the final statements are, the imf will comes central-bank easing. they said when they downgraded everyone's growth, it could avert things. they seem to be counting on fiscal support at a time when any -- many finance ministries are not moving and they don't look like they're going to move soon. what are you seeing, particularly in asia? definitely taking

its toll on the original economy. the slump is felt throughout the region. there is a need for stimulus. both monetary policy and fiscal stimulus. it's an interesting situation and that, even of the original policymakers could implement these measures at home, the biggest driver for the economic outlook comes from the outside. it was the trade policies related to the u.s.-china trade conflict. kathleen: we can pull up a chart here. been client the global march toward lower rates. it is well underway in asia, where you have so many central banks in the process of easing. indonesia, philippines, australia, china. some of these are ready to do more if they have to. how much, in your view, can central banks to to offset something like a trade war?

it's not just like our cyclical slowdown. tuuli mccully, head of asia-pacific economics at scotiabank there is -- tuuli: there is still room for easing. comes with a boost in confidence. the slowdown is not happening because interest rates are so high. it's true the uncertainty. that bynly alleviate boosting confidence. a little bit of room left. definitely not significant. --haidi: the domestic activity from china last week was about the resilience of the chinese consumer. retail sales were the best thing out of the data releases. the same situation the u.s. as retail sales have remained that right spot there. when you have something like a

trade war, how long can he rely on the domestic consumer to be unaffected? good question. the consumers driving the u.s. economy right now. what happens over the coming months will be a critical factor for the outlook. i think they will remain elevated through 2020. i don't think there is a significant escalation in the trade dispute at this point. what policymakers will do over the near term will play a big role in the outlook. haidi: looking ahead to some data points we are getting. we are always looking at canary export -- exports for being the canary in the coal mine. we just see at the -- dismal numbers of out of bounds.

-- the think it will get worse in asia in terms of demand? joe: i don't see any signs of a turnaround yet. we will likely have a few more months of struggles. tradee sectors related to will struggle over the near term. policymakers are becoming increasingly concerned about the economy. it's not about the export center. onfidence has been softening the domestic demand side. is a risk of the slowdown becoming more bridal. kathleen: even the countries that are as expert dependent as a south korea, the fourth biggest exporter in the world, are having their exports hit. bank ofrnor of the

indonesia says it is a problem for them to. this does seem -- them, too. many countries suffering from this. tuuli: absolutely. we have seen a collapse in trade volumes. of -- global demand has been slowing. there are all these ripple effects from the u.s.-china trade war. the supply chain impact as well. is really broad across the region. haidi: we will talk more about china in a moment. get over to hong kong, to sophie, who is watching movements in the early part of the session. dropping 11% two extended declines we saw last week. on thursdays halted

after being targeted by a short seller, which alleged in the reports that they had overstated products -- profits. ech has rejected. treasury wines sliding 7.5% after the ceo is going to retire. this is bloomberg. ♪ 20 mourad. this is bloomberg. ♪ haidi: this is "daybreak: asia."

kathleen: we will take a quick check of the latest business flash headlines. softbank is assembling a rescue financing plan for we work that value the office sharing company below $8 million. -- $8 billion. that is a fraction of the 47

billion dollars they demanded in january. the terms could change after wereping its ipo, they considering rival financing plans from softbank and jp morgan. haidi: boeing says it told u.s. regulars multiple times it had expanded the role of flight control software that was later fatal 737 max 8 crashes. they say faa personnel are -- observed the system before it was certified. it followed last week's revelation that a senior boeing pilot had described the system to a colleague as egregious. --kathleen: quanta ones to begin -- boeing to begin its sydney 16,000 kilometers journey in 19 hours. during the flight, crews were given medical checks and questionnaires to observe the

experience. haidi: let's get back to our conversation on the global economic slowdown. looking for more signs of the slowdown in china. new home prices are out after gdp growth slowed to 6% in the third quarter. tuuli mccully, head of asia-pacific economics at scotiabank is still with us. the numbers are lackluster when -- despite the consumer being strong. what do you think when it comes to the housing sector, given that over the last 10 or 20 years, it has been a strong driver of growth? now investment is falling as well. we will still see increases in housing prices. situation thant what we had a few years ago. now it seems the gains are led

by lower tier cities, not the big ones, like it used to be. uncertain, given housing isrts -- outpacing sales. that is a concern from an inventory report review. -- inventory point of view. haidi: we started the conversation by asking you what is left in the toolbox of central banks? what aut this t we are watching out for today? at 9:30, we will be getting that announcement on the one-year loan prime rate. the latest tool in their toolbox. do you expect that to be lowered again today? think the loan prime

rate will be lowered. we will see five basis points lower rates. the people's bank of china will probably use reserve rate requirement cuts on top of the interest rate cuts. they still have some policy room there. kathleen: we are showing these rates again, and there are so many tools in terms of borrowing rates that the pboc can use. when i spoke to the asia has aor for the imf, he big focus on china. if they needed more stimulus, should they be cutting these rates more? ,ven cutting the rrr rate agani he said no, he said they need to focus on things like tax cuts, things that will directly affect consumers and businesses.

what do you see? it's a valid point. it's probably a more direct way is to be leading the economy, because it goes directly to the consumer or businesses. one key thing china will continue to do over the coming quarters and years is to reform the finance sector and the way of monetary policy is conducted. right now, it might not be the most effective way to stimulate the economy. he has a point there. kathleen: i have a gdp chart for china. it goes way back. it even lower than it was at this point of the great recession. the forecast looks better for this year than where china will

finish potentially. retail sales, where they hold up and keep the bulk of the economy going? the weekre a sense of manufacturing and the trade war will pull -- sense the weak manufacturing and trade war will pull down further? tuuli: it will slow down even further, because they are going through a long-term structural the economy is becoming more services and hospitality -- and consumer oriented. that will slow things down. they also have the trade war which is having a significant impact on the manufacturing and export sectors. growth will slow. there is definitely a risk if it escalates further, then growth

rates will drop below 6%. absolutely. haidi:haidi: does that continue to play out in the currency? yuan continue to see the be a barometer of progress or lack of progress? we heard the governors saying, since it weakened beyond seven to the dollar, it has been a dependence level for the moment. -- been at a balanced level for the moment. tuuli: it will stay fairly stable over the coming months. i think the central bank will support the currency. it is important that it remains stable. the level of the currency is a talksal in these trade between the u.s. and china. haidi: great to have you with us. tuuli mccully, head of asia-pacific economics at scotiabank.

a look at taking japan's trade balance with her later on this hour. this is bloomberg. ♪

asia.: this is daybreak global finance ministers and central bankers pledged to use all of their tools including fiscal policy to support what they call a highly resurgent outlook and elevated risks. a communique issued by the imf panel. this is during a week after they made a straight cut -- 5th street cut, the weakest expansion since 2009. president trump claim to replace his active chief of staff. -- acting chief of staff. he is assembling a roster of

candidates and putting matthew whitaker and chris christie. hisaney has not offered resignation and thought he was doing a good job. minister'sn prime liberal party has a narrow lead over its conservative bridal -- rival. respondents favor liberals versus 30 for the conservatives are you it is one of the closest races in the country's history with the winning likely to not have an -- a majority. the indonesian president will announce his lineup monday after being inaugurated for a second five-year term. oath of office in front of heads of state and representatives from 150 countries. he aims to eliminate poverty and make indonesia one of the top five economies by 2045. 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 selina wang. demonstrators in hong kong set fire to rail stations and what was the 20th straight weekend of protests. at least 350 people -- 350,000 people took in the peaceful but rally.-- unauthorized what happened over the weekend? there is no sign this is losing momentum. is the 20th consecutive weekend of violent demonstrations. you can see the aftermath behind me. entrance to the station. this is the heart of the main shopping district, filled with mainland tourists. those numbers have significantly dropped off. there is tons of graffiti all around. some of it we can show you, some

of it we cannot. the reason we are on this street corner is the main islamic mosque here. this was the epicenter of the violent clashes yesterday. the reason the mosque is in focus, not because it was attacked by protesters but because the water cannon came out by the police and some of the leaders of the islamic community say the blue dye the went intoon shoots the compound. that raised concerns by the members of the islamic community. there are banners put out all around like this one from the protesters telling the islamic community that they are not targeting the muslims here. we will not damage the mosque. we will not damage the mansion just down from here.

they will not target shops owned by south asian civilians. as they haveget repeatedly over many the past weekends, companies with perceived ties to china or with ties to china or perceptions they are supporting the local government and police and are against protesters. we had firebombs thrown at a xiaomi shop, a mainland filmmaker, as well as these shops. this is a medicine company. and this japanese operator which is owned by or operated by a hong kong-based franchisee. thank you for sharing your thoughts and the video. the -- us now is

before we get into your survey, there is so much more concern about where hong kong is and where it is going. now,u look at where it is how does it feel to you? is this permanent damage or is it something that can be changed? protests carryhe on, the longer chance of permanent damage. on a day-to-day basis in terms of commuting to work, such as today, it is possible to keep going. these images and disruptions week after week, day after day, start to seep into the bones of everyone here. we don't see a solution in sight. there is a feeling this is never-ending. that is starting to weigh on people here. in one of the stories

i read about this, this survey has been so widely viewed, so significant to see deterioration. an economist in hong kong is quoted as saying a lot of it can be laid at the doorstep of carrie lam and her decision to go ahead with the extradition bill which she has tabled. is that shared by the business community? >> the business community is large. in beingre very vocal against the extradition bill. we recognized it would be troublesome. we were not happy to see the protest. we were happy to see the bill shelved. it was also the straw that broke the camel's back. there had been so much concerned, so much unhappiness weighing underneath the surface. it was the last straw.

it is hard to put that back into the bottle. people have started to vocalize, no sense of anyone coming in to provide leadership or a sense of direction or to talk to people. until we see some sort of dialogue and meeting of the ways, it is difficult to see how this will end. haidi: it seems the intractability is the biggest concern. one of the biggest numbers of that study, half of the respondents are worried about the long-term prospects for hong kong. it is not just concern about a short-term dip in economic activity or concern of logistics of the city being affected. have you already started seeing indications that there are people thinking about taking their investment away from hong kong and looking at other asian hubs like singapore?

fort is disappointing long-term prospects. on the positive side hong kong is quite special. it is hard to just carbon copy a business people have in hong kong somewhere else like singapore. people would like to see hong kong succeed. its location, its efficiency and connectivity are points that people who live and work here appreciate. underneath the surface there are many pain points from increased security risk to anxiety among staff and worries about families in the long-term that people are putting backup plans in place. they are not talking about them openly because they want to see how things progress. all ofother side of this, you don't just pick up a huge business and move lock stock and barrel over the space of a couple of months.

some of the major headquarters here have as many as 1000 staff used in hong kong. it will take time to see the real effect, how many people believe, whether people will downsize headquarters. it is too early to cut and run. there is too much at risk in losing hong kong as a hub. i understand. how much of a concern is political sensitivities from a corporate perspective? i am looking at the headline -- is thatthe mba something businesses are aware of in terms of they put political allegiances values out there and see repercussions? very difficult now for companies to navigate in this type of environment.

hong kong is a place with free flow of information and free press. people are used to expressing themselves here. they feel caught between a rock and a hard place. it is easier to keep quiet which is disappointing in a city which is known for its dynamism and east meets west. times. it is not just hong kong but the greater u.s. china trade friction. that puts pressure on companies. many companies started years ago , operating in china, that works in china. hard navigation and it could continue to go on for some time until we see some sort of conclusion both to protest and the wider trade friction. very interesting story, and we are speaking to you after the next one.

show, brexit breakthrough proves elusive. boris johnson is forced to seek a delay. the u.k. begins its no deal preparations. we will look at the prime minister's political options this is bloomberg. ♪ just ahead.

kathleen: markets have been trading for half an hour, getting right back to sophie. what are you watching? a third day of losses. the nikkei 225 going for a soft open after closing at a december 2018 high on friday. in less than half an hour we will get trade deficit which may have expanded. we are waiting on flash export data which comes as the finance may emitsaid growth the -- missed the target.

looking at aussie bonds, yields continuing to rise while the dollar edging lower after a three-week gain. bill evans in a report said the rba could decide that lower bound is 50 basis points. the yen this morning edging higher for a fourth session, the greenback firming up after slipping to the weakest level since july friday. the pound is losing ground, snapping a four-day winning streak after developments. implied volatility continues to rise as traders prepare for swings for the currency. watch for signs of strain. cable has dropped from 122 to 129 on optimism for a deal. let's stay on brexit. the next guest is a senior lecturer in politics and international relations at monarch university. great to have you. feel like groundhogs day when we

talk about brexit progress and the dramatic events of the latest parliamentary vote. are we getting closer to a resolution or some certainty? it does have its own sense of time where a lot has happened and nothing changes. closer to some sort of resolution. it is going to -- it is very marginal. there are people in the united kingdom who are frustrated by this process. it is important to get it right. because brexit is a break -- a big deal, what this amendment was about was to make sure boris johnson does not get britain out without a deal. he has got this deal but it is not impossible either in the next week or so or the next two years in a transition with the -- europeangdom and

union and united kingdom no deal could happen. somee getting close to sort of resolution. it is difficult to call it or even see which of the possibilities might play out. haidi: in terms of the turnaround from the aup, what are your expectations, now that we are hearing from labor, that their door is open? is that a likely partnership saying in the past of the dup was not interested in a public vote? >> there are all sorts of unholy alliances around brexit. the dup feel boris johnson's deal left of them out in the cold. what they fear is brexit might be the first step

towards a reunification of ireland. it is something they are opposed to. it depends how aggrieved they feel, whether they feel a second referendum would be a price worth paying to keep this johnson deal in touch. all of the machinations around which party aligns with who, whether they want to delay the seek aet it through or second referendum, all of the moving parts are in play. we have the likelihood of another meaningful vote on monday london time. lots of negotiations taking place. kathleen: has boris johnson accompanist anything theresa may did not? all of these hard-core brexit people so we could not stay in a

customs union. even temporarily, to resolve this problem, she never got her deal through to the parliament. is it seems boris johnson ready to throw northern ireland under the bus if you can get the bill passed. -- he can get the bill passed. >> it goes do something which is important underlying this area the englishness of brexit. -- brexitout written is a misnomer. it should be called engexit. it is driven by english concerns. push comes to serve -- shove, mp's and grassroots voters would rather that the u.k. exited the e.u. rather than stay together. this is an inadvertent price northern ireland, the dup, are

paying for the english concern for driving brexit. we see something similar in scotland. scotland voters and the governing national party are opposed to brexit. we are waiting for one of the scottish courts -- they have a different legal system -- one of the courts to make a ruling whether boris johnson, rescinding these letters, has their courts. this got into the supreme court thing about parliament. scotland is an important motor. kathleen: is there any doubt the e.u. will grant this extension? it goes out in 2020. do you think it is going ahead? will that hurt or help johnson? that is hard to say.

it would be difficult for the e.u. not to grant extension. emmanuel macron is not inclined to do it. hurtnk an extension would him in the united kingdom. haidi: thank you so much for joining us. international relations, ben wellings out of melbourne. we are getting breaking news with the trade picture in japan. japanese september exports at a contraction of 5.2%, the worst contraction expected. analysts were looking at 3.7%. the trade balance is a contraction of ¥123 billion, more than twice as bad as what was expected. adjusted exports are up from august. the trade deficit adjusted ¥97 billion. the imports number looking interesting. up 1.1%.

slowly better than expectations. let's get reaction. thank you for hanging around, scotia bank head of asia economics. we were expecting -- this is a worse than expected outcome. >> the japanese exporters are definitely suffering from the weakening in global demand. it is the only the export data. manufacturing pmi's are in contraction rate territory. industrial production is declining and export volumes as well. it is a challenging situation for the japanese economy. kathleen: governor kuroda set a couple of times we will continue our easing. we will hit 2% inflation area he also underscored steepening the yield curve. you expect at the meeting next

week they will announce some kind of change to steepen the curve, cutting negative rates more, pulling back on bond british it -- purchases? tuuli: i think policy makers in japan will consider additional monetary easing measures. it remains to be seen if it happens now or later in the year. there definitely is need for stimulus. we will see if it is about lowering interest rates or if it is about boosting the want to date of easing or maybe some unconventional measures. lend toral bank could banks with negative interest rates which would be a subsidy for banks so that they can lower their lending breaks to their consumers. with so many tools, they might need to come up with

more. scotia bank head of asia-pacific economics. we have a lot more coming up. this is bloomberg. ♪ ♪

breaking news on south korea's economy, exports 20 days through the month of october down 19.5 percent. that is not as bad as 21.8% in september. it is the 10th month in a row korea has had year-over-year declines. seeing declines in the exports. imports also lower, reflecting weakness in the consumer, down 20.1 percent in the month of september. there is 20 days of a -- october exports. south korea exports are a bellwether across asia. it is another reason why the numbers resonate so much. haidi: no sign of bottoming out

despite being slightly better than the previous time, but it paints a picture of asian demand continuing to suffer, given we had the japanese export number with contraction of 5.2%. it does appear when we come to the trade war, it continues to bite. we will see the market reaction pretty quickly. the business flash headlines in the meantime. the malaysian government considering paying $1.8 billion to buy the countries toll road -- the country's tollroad operator. malaysia is considering a plan that involves financing so the government won't have to pay cash for the purchase. sovereign fund may end up making the purchase on the government's behalf. kathleen: the creators of south sharend viacom expect to

half $1 billion on streaming rights. a half-dozen companies are bidding for exclusive u.s. rights to past episodes of the show which has run since the 1990's. it is the latest beneficiary for rerunning popular past series. qantas wants to begin its sydney to you nor -- new york flights. they completed the first test sunday. a boeing dreamliner completed a 16,000 kilometer journey in 19.5 hours. throughout the flight passengers and the group were given a series of medical checks and questionnaires to analyze their experience. let's get a check of the asian markets this monday morning. in new zealand we are seeing the downside of .25%. also downside with sydney, building on fridays decline of half a percent. when it comes to the futures

picture in japan and south korea, looking a bit brighter but still flat trading as investors digest the portrayed and export numbers out of seoul and tokyo. this is bloomberg. ♪ ♪

>> a very good morning. it shows major markets have just open trade. evening from bloomberg's headquarters in new york. >> welcome to daybreak asia. >> boris johnson prepares for a fresh attempt to deliver brexit and he may have the numbers ahead of a vote in the commons. a 20th weekend of protest in hong kong. violent demonstrators once again

targeting chinese owned businesses. finance chiefs promised to use all their tools to revive growth. you will hear from the imf asia-pacific director. let's get to the market action. what are you looking at, sophie? sophie: a weak set of data from japan to chew on with exports falling more than forecasts, extending the longest declining streak since 2016 and widening that trade deficit. we are seeing stocks in tokyo gain ground. the nikkei and the topix up 0.3%. the yen easing its earlier dissent with trade data on tap. in australia, you are seeing a shares up by 0.3 percent, and the aussie dollar on the back foot here as bill evans expects the rba will decide the effective cash rate could be at the lower bound -- could see a

lower bound of 50 basis points, and that the rba will meet that level in february after skipping a move in november. the kospi adding a third of 1% after a two day decline. the korean won gaining, heading toward that 1180 handle against the greenback. exports data came in weaker. korean officials also anticipating more downside risk for the economy. the finance minister reportedly expecting gdp expansion to miss the government's target this year. he ok calculations see the trade growthmming 0.4% off this year. investors willing to see the bright side. haidi: let's get more on the markets. the double dose of dismal data if you will from south korea and japan. how are market participants taking a?

-- taking it? >> the numbers are bad. worse than i expected. signs in korean exports which means global trade will stabilize. every month, the core global manufacturing data has been pushing the global economy to a physical point, we are at a point now where we are going to see the global economy slumped heading into a froms, or we could rebound the range of the last decade. beritical point is going to a trade deal between china and the u.s.. can be reached is looking very crucial at the moment.

over the weekend, the chinese there haser has said been potential progress in negotiations. how this can pan out will be really critical to the global outlook. >> the stock index has touched an all-time high. is there any sign of a rebound in the semiconductor industry? >> looking at the breakdown over still it is semiconductors in a double-digit decline, but better than last month, the 40% slump for the same period. still, it is not really encouraging. optimism in the semiconductor industry. have workedy levels

out to normal. laid the foundation for a demand recovery. recoveryeing a lot of in all areas, including ai, 5g, and cloud. prices have rebounded with all eyes now on the sector recovery. investors are waiting for data turnaround in the semiconductor industry. whether the data can rebound or not will be key. in september, it is a key to watch for. >> we will watch that very closely. thanks so much. now we are going to get the first word news. >> the bank of japan governor

kuroda says the country's economy has improved significantly, and for the first time in 16 years, it is no longer in deflation. kuroda said the stake for monetary easing may have become limited. the central bank continues to extend easing policies as they are showing tangible effect. >> the bank's monetary easing, introduced in 2013, includes all three elements. after its introduction, short and long-term real interest ,ates fell to a level far below and powerful easing effects have been observed. china's top trade negotiators had talks with the u.s. are making progress in both sides are working towards a partial deal. the vice premier told a conference progress had been made, laying the foundation for

an agreement. negotiations are trying to prepare a deal to sign it next month's apec summit in chile. the yuan is at an appropriate level with capital flows staying balance since the currency weekend in early august. this statement from the imf says depreciation has been driven by market forces and shifts in market dynamics. nameall prompt the u.s. to china a currency minute you later. hong kong chief executive carrie lam heads to japan on monday for a two day visit after a 20th straight weekend of protests once again turned violent. cannons on water sunday. the clashes came after an earlier peaceful march by tens of thousands of people that police cleared illegal. -- declared illegal. 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. this is bloomberg. >> thanks so much. boris johnson will make a fresh attempt to deliver on his pledge to take britain out of the european union on october 31. supporters say he has enough votes to get that deal through parliament. hasu.k. prime minister reluctantly asked the eu to delay brexit. when boris johnson gets up later today first thing in the morning in london, what is at the top of his list? tothe top of his list is convince parliament to bring the deal to about, which he was dealt a blow on saturday when they decided instead to delay this vote. he wants parliament to be able to vote on a meaningful vote, which means, do you agree with the deal i struck in brussels? any of his backers say they have the votes for that. if he is able to get that through, the main thing to watch

would be if parliament is going to debate the withdrawal agreement bill. this is where you will see things heat up and become dramatic. amending theart bill. maybe you hear someone say they want a second referendum. maybe you hear someone say they want to renegotiate with the eu. the border between northern ireland and britain is right now under this government in the middle of the irish sea. on the european side, we need to wait to hear what the eu says back to boris johnson's request. he begrudgingly asked for an extension. the times of london is poised to say he did not get the deal through parliament. they will grant the extension for him. are the key things to watch on monday. we should note this timeline is a very fluid.

>> does boris johnson have the votes? >> very fluid in terms of the support he has, right? does he actually have the votes right now? >> we have seen this story before. theresa may has brought meaningful votes ahead of parliament as well. bloomberg according to our calculation, he needs to persuade 51 members of parliament to get this deal through so he does not -- which he does not have. has 62.ament, he he would have had 10 of the dup. they have reservations regarding northern ireland. we need to make the point that this is a prime minister who is running a minority government. he has yet to win a single vote in parliament. loses, it is by a very few votes.

the math is very tight on this. his supporters, michael gove, dominic raab, were out saying they think they have the numbers to get it over the line. >> we will see very soon. thank you for taking so much time with us today from london. next, a broader outlook on china and its growth prospects. >> later we will be speaking to the executive chairman of chinese global investment platform about the surge of interest coming from hong kong. this is bloomberg.

>> you are watching "daybreak asia go -- daybreak asia." in the crosshairs of a short

seller which alleges a tech company overstated profits and organic growth with european revenues also being overstated. it will remain in place until wise tech's response. >> china's economy may be ready to stabilize according to some economists who specialize in watching the world's second-largest economy. that is more upbeat following data last week showing china continued decelerating as investment weekend. investment weakened. are you optimistic? the slowest growth since 1992. i'm wondering if consumer sentiment starts to falter as well. >> that is a good question. it is important to remember one number does not tell the story. 6% is the slowest growth in the

last 30 years, but it is still 6%. that is still a solid number. when you look at the pattern of chinese growth through every quarter that has been implement a deleveraging campaign, you have heard many courses where the first two months have been slow. the chinese policymakers give the economy some time to establish a rhythm. only when needed in the last month should some smoothing be needed. ofit of stimulus at the edge -- whether it be fiscal. that's what has gone on. >> does this mean china has seen the bottom? i cannot see it get in the data. the consumer being a very strong pillar may begin to falter if employment terms the worse. you will see a couple of worse quarters going ahead, but does that mean it is bad news for

everyone? i don't think so. what china has been doing is managing down the growth cycle. and quarters growth numbers septembers activity numbers demonstrate that is what they are doing. >> the one data point is in the tip of the iceberg in terms of deeper structural problems beijing has put on the back burner for now. >> yes. what are those problems? those problems are unemployment. rather than releasing a high level and employment statistic nobody really knows where it comes from or what goes into it, now there is an unemployment survey. that survey also does not tell the horse that's the whole story. there are shifts happening. unemployment is a problem because it is the foundation of support for the status quo in china. the structure of the economy in terms of the debt loads,

obviously a lot of that has been addressed within the deleveraging cycle. local governments are leveraging up again. absolutely right. there are problems underneath the surface we have to address. >> right on the surface, looking at the key measures of the interesting, you are not convinced the economy is bottoming yet. manufacturing, like every manufacturing economy around the world, service is holding up fairly well. arguing this is why the government, the pboc may be willing to sort of sit and wait before they engage in more stimulus. i have a chart up. you can see the services pmi is around 54 even though the manufacturing number is just below 50. new export orders are down around 48. services still holding ok?

>> services are holding. this is not just a china story. this is a global story. everywhere in the world you have seen the manufacturing cycle take the biggest hit. the epicenter of that was not so much trade wars, but china's deleveraging campaign. services has been holding a better everywhere else in the world as well. the crux to that link between the manufacturing side of the economy and the services side, that cannot persist indefinitely. manufacturing cannot continue strongng with services being oblivious to the manufacturing cycle unless unemployment -- or the labor market can continue to be strong. if you see on appointment turn, and this is a global story, it unemployment tarts to falter, the services and consumer parts of the economy will follow. >> more central bank easing as well. when you look at asian emerging markets, so many of them are already easing, some doing rate

cuts, cutting reserve requirement ratios. we've got sort of a screen that shows you just a handful of the ones that are already easing. the philippines, the bank of china is, australia, going to do potentially. does this depend on the federal reserve continuing to be accommodative? last year currencies were getting slammed, this year currencies are more stable. how do you see that playing out? >> that is a really interesting question. whether emerging-market central banks continue to ease on the whole largely does depend upon the fed easing cycle as well. as you mentioned, when the fed was hiking, it placed an arm's pressure on emerging markets. it sucked liquidity out of the system. is a tough environment for

emerging markets to be in. china has enough of a capital account system, it still has enough levers to try to smooth the path of its currency depreciation, but it does not quite have the march to the tune of what the fed is doing. even with correlations between global markets, asian economies such as south korea and other more interest-rate sensitive economies have been exhibiting high correlations with the u.s.. china, less so. china's markets are moving to the rhythm of what the pboc is saying, which is that we stand ready to deliver stimulus, we are not ready to deliver a lot as you mentioned earlier. will the rba do purchases the alco we have such a small sovereign debt market compared to the likes of japan were the u.s.. what sort of challenges or opportunities with that potentially present?

>> certainly on daybreak before we have chatted about australia doing q. week, but following from the governor's comments at the imf this weekend, he has gone out with a very upbeat representation of the economy. whether or not he will do qe sounds imminent. for australian, that link between manufacturing and services does falter. unemployment starts to falter. taking thet only cash rate, what is priced right now, a 50 cash rate, but looking at the levers of qe. what can australia's a with qe? the economyend on at that time. through the buying of infrastructure bonds, for example, it allows governments to engage in more infrastructure activity. that could help stabilize the

australian economy at that point. or it could be spending qe funds onrmbs or abs depending whether they are the sectors of the economy seeing the most stress at that point. haidi: great to have you on today. you can get a roundup of the stories you need to know to get your monday going. on yourg subscribers terminal. it is also on mobile. ♪

kathleen: this is "daybreak asia." one of apple's key suppliers is looking to turn around profit data from falling 50% over the last year.

with apany has struggled shift to energy-efficient panels, but is looking at revamping its product. >> we have some new products the oled side. that i think we can prove to the outside that our technology has -- is now ready for mass production to serve our customers. some unique fingerprint sensing technology which we also plan to put in the market soon. these growth drivers will help money,- once we get the come out strongly to go into the black side as soon as possible.

concerns the biggest for japan display is the shift of the mobile phone industry from lcd panels to oled. what is your strategy? >> we are seeing changes regarding the market trend. due to the point that the price competitiveness and also all of the customers -- many of the customers shifting from selling smartphones to recurring factor in lcdsey having a tendency to be used due to price competitiveness. changesthose kinds of will help us going forward. having said that, we will keep flexibleand try to be going forward. >> when it comes to the mobile

phone business, capex is the name of the game. up withou plan to keep the company's spending billions of dollars on their own fabrication equipment? past, we did not manage our balance sheet as well x expected in these cap oriented industries. market, wee oled should be more smart soionalizing those things that we can not use our balance sheet, but enter in a wise way. the japan display ceo talking to a bloomberg tech reporter. coming up, asia-pacific deputy director discusses the headwinds facing japan's economy. this is bloomberg.

>> you are watching "daybreak asia. whererning to japan, growth has been resilient. more monetaryning and fiscal stimulus may be needed. the asia-pacific deputy director tells me the economy is in good shape at least for now. >> so far so good. if you look ahead further, clearly this is a negative for the japanese people. analysis.e outlook trade conflict took 0.8% out of gdp globally.

it is a very significant factor. japan is a very good global citizen. it has been getting multilateral trade agreements. they took the lead getting the tpp. clearly these types of agreements have offset the impact. to do more fiscal steps then monetary policy steps, broadly, in a nutshell? a package.o be japan needs to adjust its policy because of the high debt. monetary policy needs to continue to be accommodating. the challenge of monetary policy is to make it more sustainable. there have been concerns about

profitability in the financial sector because of interest rates. there have been concerns about stability in the financial markets. --addressing those issues for example, financial sector , regional banks, their business models are outdated. ahead, underlying change rather than monetary policy. fiscal monetary policy should be part of the package. it needs to be sustained. the imf asia-pacific deputy director at the imf annual meeting in d.c.

let's take a look at markets. what are you watching? sophie: asian stocks are trading mixed with aussie shares for a day of losses. stocks are eking out gains in tokyo as well as seoul. the korean won is at a high despite dismal export data in the wake of more warnings over global growth slowing down at the imf weekend meetings. the cycle may have hit a bottom. some anticipate a catalyst for exports going forward. now i want to check on some assets on the offshore yuan. , this is thew you pboc governor, saying the rates are broadly stable. jgb's are falling across the curve with 10 year yields hovering above -14 basis points of the you j -- boj buying. halting haunting --

retreat from a five month high. boris johnson's brexit deal hanging in the balance. kathleen: let's get more on brexit in the first word news with selina wang. >> thank you. boris johnson will make a fresh attempt to deliver on his pledge to take britain out of the european union by october 31. the u.k. prime minister's backers now say he has the numbers to get his deal through parliament in a vote that could come as soon as monday. saturday, the commons approved an amendment seeking a further brexit delay, forcing johnson to make a formal request to the eu for extra time. president trump may be planning to replace his acting chief of staff mick mulvaney. the president's team is assembling a roster of candidates including former acting attorney general matthew whitaker and former new jersey governor chris christie. mulvaney says he has not offered his resignation and told

reporters he thought he was doing a good job. justin trudeau's liberal party has a narrow lead over its conservative rival. found just over 32% of respondents favor the liberals versus 30% for the conservatives. expected to be one of the closest races in the country's history with the winning party unlikely to command an absolute majority. willndonesian president announce his cabinet lineup monday after being inaugurated for a second five-year term. intook the oath of office jakarta ahead of -- in front of heads of states and representatives of more than 50 countries. he says he aims to eliminate poverty and make indonesia one of the world's top economies by 2045. 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. this is bloomberg. >> thank you.

jamie dimon says jp morgan's spending $11 billion on technology this year. his morgan stanley counterpart says his budget is around $4 billion. the banking heavyweights discussed the importance of fintech during a panel hosted by the institute of international finance in washington. >> technology has been at the forefront of us changing things for customers and offering better, fast, quicker, cheaper. you would not have mutual funds if you did not have computers. the cost of doing business has been coming down. you get automatic services, apis, you can, buy and sell things on your phone, you can get information on money all over the world. that is competition. that is different is it is faster now. ai is real. digital is real. cloud is real. it is faster.

creates new that risk. cyber risk. are these new critical infrastructures in need of a regulatory regime? >> i'm not from going to advertise -- recommend new regulatory regimes on stage. it is in everybody's interest. we will put more stuff in the cloud. we are managing more data, investing in big data, ai, machine learning, robotics, all the things you need to be. i don't know that it is regulatory framework so much as common standards. tohink that is starting come. company,t a technology but in technology infuses everything we do.

>> the innovation that is getting a lot of headlines is libra. sustainable, not sustainable? real, not real? [laughter] coins.lready have stable dimont is a jamie speaking in washington. next, how the process in hong kong is driving investment abroad. we are speaking to the executive chairman about the impact from the cities unrest coming up. ♪

kathleen: this is "daybreak asia." haidi: demonstrators in hong kong set fire to shops and parts inrail stations on sunday

the 20th straight week of protests. 350,000 people took part in an earlier peaceful, though unauthorized rally. stephen engle was on the streets this morning. it seems like after carrie lam's address last week, it did very little to appease people who turned up. >> that's right. right here on the street corner of cameron road and nathan road is where some of that violence last night culminated, including -- i will step back. you can see the subway station , the stationup closed yesterday, closed again right now for the morning commute. this is the only graffiti we can show you that is not filled with profanity. we are on this corner because the islamic mosque, kind of the

epicenter of some controversy yesterday. the protesters did not unleash their ire against the muslim community, however, the police, when they brought in their water sprayed toks, disperse the protesters, and some of that water got into the mosque compound. that anchored the local islamic community. the local islamic community. you can see the blue dye all up and down the road here. people are on their way to work right now. the morning commute is going on. however, none of this -- the stop lights and the traffic lights in this intersection and down the road are not working because the junction boxes were lit a fire by protesters. already seen the hit

hong kong's economy has taken. new data coming out this week. what are we expecting? >> the numbers are not going to look pretty. --had the financial sector financial secretary telling the saturday morning post as he is visiting washington, d.c. at new york, selling hong kong, he was saying the hong kong economy has been resilient, including of course the stock market and some of the money outflows are being overblown. however, the numbers are telling a different story. tomorrow we're going to get export and import numbers. they are expected to fall again. down 7%. in august. hong kong is more of a re-expert center, a proxy for the china trade. exasperation from the trade war, not just the protest here.

we are also going to get inflation numbers. cpi inflation, not surprising. a further dip. 3.3% surveyed, three point 5%. it is not a dire situation, but it is under further pressure. engle joining us from hong kong, thank you very much. staying on the unrest, wealthy citizens are increasingly looking for new passports. golden visas in exchange for a sizable investment. joining us now from kuala lumpur .comeorg chmiel, the juwai executive chair. juwai means home overseas. major chinese communities in taiwan, hong kong, singapore. where is the greatest demand coming from?

>> certainly there has been an increase in the demand from hong the to certain markets like demand for australian properties, about 50%, and some other countries around the world. , the situation in hong kong is not affecting the property markets to the same extent as the media coverage would suggest. property markets tend to respond kong in itshong past 20 years has had a couple crises. those.weathered quite strongly. >> you are getting buyers from across greater china, i guess you are saying. most soughtwho is out, certainly the u.s. is on the list, japan is on the list, taiwan -- thailand at number

one. right now, where are your chinese buyers most likely to look for a new property? >> chinese buyers are most likely to look in asia. this has changed over the last two years. two years ago it was the u.s., u.k., australia, canada, and thailand. now it is thailand, japan, australia, canada, and malaysia. two of the top five countries for chinese buyers are southeast asia. this is a reflection of a couple of factors. one, the trade war, which obviously has strengthened the low labor cost markets of southeast asia. beendly, there is also significant investment in the markets of malaysia, thailand, vietnam, and others.

real estate investments usually follow the investments into industry and infrastructure. the first thing is, our markets in southeast asia are quite affordable. in the philippines, you can buy an apartment for 100,000 u.s. dollars in the capital city, which is impossible in most western countries. the number of factors which have strengthened our markets, i would to the hong kong protest has not had a significant impact on the demand. real estate investments have been popular among all chinese buyers. >> it has been like teflon. it is one of the main reasons we have seen so much anger among young protesters about living affordability and housing affordability. i want to throw up this chart showing resilience of the hong

kong property markets despite multiple financial crises. since the up 90% handover. there has been an impact on demand. we are seeing greater numbers of hong kong people looking to buy abroad. >> that is right. diversifying real estate investments, a trend which happens across countries more and more, when real estate asset sharesglobal in the share market. protests have intensified the demand for overseas property. the local property is impacted by a combination of a fairly low supply and a steady demand in the markets. the overseas market certainly

gaining attractiveness. some golden visa countries as well as other hotspots for real estate investments. sales to chinese buyers dropped to an eight year low this year. are you expecting that trend to continue? is that because of geopolitical visa tensions between the two countries? is it simply portfolio diversification? >> diversification is due to the others,r and on the countries in southeast asia like malaysia, vietnam, and thailand which are growing at gdp rates of 4% to 6%. it is two factors coming together. the trade war as well as growth in other parts of --

>> who are the chinese who are buying? are they super wealthy people? are they people buying second properties? are they people who are ready to leave china? what can you tell us about the purchases? >> a are various segments of demand, people who want to invest overseas by diversifying their investment for folios. -- portfolios. the second is people who invest for theiries children. also retirement is an important segment. certain countries are retirement destinations. there was an increase in overseas demand in retirement destinations, then also the migration element, which is the element of moving overseas and

making lifestyle choices or starting a new career in a new market. >> thank you so much for joining us. away forget, if you are from the screen, you can always find in-depth analysis on bloomberg radio, now broadcasting live from our brand-new studio in hong kong. the app, bloomberg radio plus, or bloombergradio.com. ♪

>> the imf has downgraded its global growth outlook to a decade low. it slashed its outlook for china for 2019. i spoke to its asia-pacific director and asked him what is driving this slowdown. the third quarter, we are focusing china by 6.1% this year and 5.8% next year. see slowing down for two reasons. one is the pressure from the trade tension. at the same time, china is moving from high-speed growth to the more sustainable growth. it is part of their more now facing the

pressure of trade tension. depending one, china's growth, if they can change. >> china's growth is already lower than what the imf and many people had expected for this year. if you see awar -- deal, the damage does not go away right away. investment does not pick up at instant. is it possible growth ahead into 2020 could continue to be less than expected a? >> that would be bad news for the world, not only china. need a trade deal more than a trade truce. truce, wetrade -- they cana has rely on fiscal stimulus to offset it. at the same time, they have many other policies.

have a negative impact on their plane to move from a high-speed economy to a high-quality growth. in terms of the short-term growth prospect, we believe the trade tension escalates further. have a policy room to offset >> let's getarea you a quick check of the latest business flash headlines. softbank is said to be assembling a rescue financing plan for wework that may value the company below $8 billion. that is a fraction of the $47 billion valuation the start of commanded as recently as january. bloomberg sources say the terms could change. boeing told regulators multiple times and expanded the use of software that led to crashes. the plane makers that faa personnel observed the system

operating a flight test before the max were certified. beginsays it wants to marathon flights as soon as 2022 after competing its first test on sunday. a boeing dreamliner touched down in sydney after completing the journey in 19 and a half hours in the process. passengersflight, and crew were given medical exams to -- their experience. let's get a preview of what we are watching later this morning. watching reaction to china allowing unsure investors to gain access to dual class shares in hong kong for the first time. rules will take effect october 28. we are also keeping an eye on chinese property stocks, which could extend a rally into next year on the great outlook.

jumping into the terminal, we are waiting for the pboc to set the low prime rate in a half-hour which has the client 11 basis points to 4.2%. bloomberg economics sees the pboc tilting toward easing. another cut of five basis points today. >> thank you. that's it from daybreak: asia. our markets coverage continues as we look ahead to the start of trade in hong kong, shanghai, and shenzhen. standby for bloomberg markets, the china open is almost upon us. picture.a divergent upside in the japanese and korean markets, but the shocking trade numbers, sydney trading to the downside. ♪

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tom: welcome to bloomberg markets china open. i am tom mackenzie. yvonne: i am yvonne man. we are counting down to the start of trade. david: top stories this monday. on boris johnson bounceback brexit? -- bounce back on brexit? a possible monday vote in the comments. yvonne: no respite for investor concern in hong kong after a 20th weekend of protests. tom: signs of progress in trade talks, china's top negotiator said things are going well and a partial deal is in the works.