haidi: a very good morning. under an hour away from the market opening in japan and south korea. shery: good evening from new york. sophie: welcome to daybreak asia. haidi: we start with breaking news out of south korea. we have third-quarter gdp numbers. quarter on quarter growth of 0.4% for the third quarter, which is really missing analyst xmas. it is also -- analysts

estimates. line with estimates and the same level as in the previous quarter. in the second quarter of the economy grew 2% year on year. quarter on quarter numbers is -- missing estimates. not surprising we are seeing significant pressure for the south korean economy. exports have continued to slide. we have seen 10 months of export declines. first 20 days of october, exports falling almost 20%. let's discuss what is happening in the south korean economy and bring in from seoul, standard chartered bank of korea head of economic research. great to have you with us. we are now seeing the south korean economy slowing down. that is a bellwether of global trade and tech. we are seeing trade tensions continue to weigh on this export vulnerable country. what are your expectations for future growth, and how the bank of korea can react to this? guest: ok.

today is pretty much aligned with the market expectation. i expected around 2.5. we expect korea will grow 1.9% by the end of the year. that is more or less the market consensus. surprise a little because government has been advocating 2%. today's number, from the market perspective, is not horrible. pretty much aligned with our expectation. next year we are more positive about the korean economy. we think ip cycle is going to end early next year. it will help the up cycle next year. construction has been really negative for korea the last two years. government policy is also changing.

the government is trying to support the construction investment. -- also the government's budget will be helpful for korea. more allocated growth sector. more positive. i think korea will grow around 2.4% next year. shery: you just said you expectation is for 1.9% growth, which is still below their own growth forecast of 2.2%. i do wonder how much room the be ok has to act. this chart shows south korea has entered deflation for the first time ever in the month of september. could we see the bok moving further after the rate cut we saw earlier this month? chong: yes. i expect one more cut will come probably next year. the market expecting one more cut in the first half. reason for the -- i think it

will help sentiment. [inaudible] i think the b.o.k. will cut it. we expect a further cut probably next year. haidi: we also heard from the b.o.k. government saying last week if they run out of room when it comes to interest rate cuts they are looking at other contingency plans. they are constantly studying some of the unconventional policy tools being used by other central banks and countries around the world. his qef possibility for korea? chong: -- is qe a possibility for korea? when all thek tools are adopted they will think about it. but right now i do not think

it.a is thinking about i think they will emphasize more fiscal policy for next year. shery: how much room is there on the fiscal side given that we know household debt is such a big issue for the country? debt isousehold actually an issue. the overall household asset is quite big and korea. almost six times bigger than household debt. i don't think household debt will cause financial instability in korea. shery: it is interesting you mentioned the ip industry to recover and south korea. results laterng showing what chipmakers are doing these days. potential for the bottoming out of this industry? we have continuously talked about a bottoming out and it still has not come. chong: that is true. supposed to be a bottoming out

around this time. we have not seen it. but 5g will be implemented. it is the investment cycle. the country is about to implement 5g. so then there'll be more demand for i.t.. cycle-wise,think the beginning of the new up cycle will, eventually. are talking about more optimism when it comes to the i.t. industry. i do wonder how much of the weakness we have seen in the south korean economy stems from real fundamental issues with the south korean economy as opposed aboutt overall pessimism south korea given how exposed it is to so many external factors. yes, somehow i think the past and is in towards korea is a bit overblown.

because when you look at the number, korea's exports started to decrease around november last year. -- often sober even with trade tensions i think this is a normalization of last year's growth. --bably from november the market will say there has been too much pessimism towards korea. prime minister abe will be meeting today. [indiscernible] haidi: we also expect the japanese prime minister and the korean premier to be meeting today at about 11:00. is a thawing of geopolitical

tensions giving people optimism for the economy as well? chong: i think so. there has been a bit of worry. we are importing key ingredients from japan. it is not hurting korea's production. it is a market, not a supply issue. thank you so much for joining us. aussie markets have just open for trade. sophie: taking a look at aussie shares, up .4% this morning with tech and energy leading gains. this morning we had flash pay line numbers from australia, which could underscore concerns that easing is not enough to see a turnaround in the economy.

elsewhere, futures in tokyo nudging higher. potentially opening flat this morning on a very busy day ahead for korea. missed estimates for quarterly growth while medium forecasts were 2% year on year extension. .lso have earnings going lower want to check in some early movers in sydney because we are seeing moves this morning. we saw a quarterly update from the iron ore minor. shipments rising 5%. . shery: let's get the first word news with ritika gupta. rebecca. is liftingt trump sanctions against turkey after they agree with a cease-fire agreement. his decision shows

to withdraw u.s. forces has paid dividends. but the move was criticized by republicans and his own envoy to the syrian crisis. ambassador james jeffrey said u.s. forces have not completed their mission of defeating the so-called islamic state. mark zuckerberg has warned congress if the u.s. does not take a lead in tech innovation and cryptocurrency, then china will. zuckerberg took a grilling from lawmakers on the house financial services committee over fact checking political ads, prevention and manipulated videos, and online child exploitation. he defended plans for facebook's libra cryptocurrency. >> this project is too big for any one company to do on its own, which is why we sent up this independent libra association with other companies and nonprofits. it is a very complex project. and as you say, it is risky. ritika: google says it has built a quantum computer that performs a calculation in 200 seconds

that would take the fastest conventional supercomputers about 10,000 years. rather than storing information onzeros and ones, they rely ones that can be zero and one at once. researchers disputed whether google has really achieved something normal computers cannot. china is taking another step to opening up to foreign investment. allowing foreign firms not already engaged in the investment business to conduct equity investment in domestic companies. it is really latest in a series of moves to make it more attractive and convenient for foreigners to invest. regulators announced a timetable for foreign financial firms to take all control of chinese -- global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. haidi: coming up next, ford is

cutting its profit outlook. earnings bonanza. shery: and we are joined to break down more key numbers out of south korea. sk hynix is set to report its latest earnings in under one hour. this is bloomberg. ♪ . thi

haidi: this is daybreak asia. shery: tesla shares are surging in late trading after earnings share, as $1.80 per blowing away average estimates foray $0.24 loss. we are joined now. we saw the first profit in about a year. what drove this? there are a lot of things to dig in here.

the cost-cutting elon musk has been doing the last year really sort of came through this quarter. that is at least how the company is putting this forward. there are a lot of questions we have about things like a deferred revenue that they recognized during the quarter. they were able to do that by activating a certain autopilot feature. there is always a bit of a question about just how much credit revenue helped them. that sometimes comes out of the 10q after the earnings report. but you do have to look at what the company is at least putting forward, the idea that the cost structure has been resolved to a great degree, the fact that they are selling a lot of higher priced model three's overseas and they will work their way down the prices in those markets. that is all helping. but there is still a lot of unanswered questions about exactly how they got there. we have been here before where

they really surprise the market they profit nobody saw coming. haidi: they have also talked about the shanghai factory, saying that would really help the revenue. so what else i we heard about the chinese market? craig: that plan is very interesting. has a story about the idea this is a plant, it was a field of mud at the beginning of this year. it is just starting trial production now with the model three. this is a really crucial factory for them because they need to be able to price the model three more competitively in that market and they can do so by invoke -- avoiding import duties. they will also get more favorable tax treatment as part of elon musk wining and dining folks in the shanghai area recently. so that is really going to be helpful for them in the coming quarters. haidi: how is the solar part of the business looking? it has been a pretty ugly quarter.

is there any mention if they are still sticking to this possibility of installing 1000 solar roofs a week by the end oa lot about that on the call which is still ongoing. ae energy business has been really struggling part of the company for a while now. to your point, the solar installations have been trending down for quite a while. there have been doubts about whether acquiring solarcity was the right move a few years ago. it was really looking like the answer was no. but he is making the case that the company had its hands full getting the model three out, they had to take resources away from the business and they are putting more attention on that part of the company now. they did make changes with how they position that business during the quarter. it is still a little early to say just how successful that will be in the long run. but he is talking about the energy business being a significant part of tesla going

forward, far from abandoning that business which is something that the bears have speculated may be possible given just how much they have struggled. haidi: craig, thank you so much for that. you can also turn to your bloomberg for more on this. get commentary and analysis from bloomberg's expert analysis. staying with autos, ford has cut its four-year profit outlook after a quarter that saw sluggish sales in china and higher costs in north america. shares fell in extended trade on the warning. why was this such a terrible period for ford? >> basically the third quarter was difficult for many automakers about ford had a particularly troubled quarter due in large part to the plagued launch for a major vehicle for them, the explorer suv.

it is a major breadwinner for them and it is important that they get out that project and get it right. the ramp up of their production has been nothing short of disastrous so that really tripped them up in the most recent quarter. haidi: and guidance was really disappointing. is this because of the worries we have seen in china? chester: it is a big part of it. the ford ceo on the conference they realized there is a problem. they lost $281 million in china in the quarter. he said one thing they would try to do is launch more products tailored to the needs of the chinese market specifically. that 1100re are we in -- $11 million restructuring? chester: that is a very good question. a lot of people are wondering that after these earnings because the company has been promising this turnaround like the promised land but it seems to get farther and farther out.

there is always something that trip set up. they are making some headway. they have a few new products coming out. getting closerre to turning the quarter but if you just look at the stock price, we are still quite a ways out from anything they could declare a victory about. shery: chester, thank you so much. let's now get to hong kong for what to watch in markets this morning. are seeingsydney we some stocks movers. off nearly 4% this morning. the carrier reported a 1.8 percent yearly rise in first-quarter revenue thanks to international operations. it did flag caution around the impact of hong kong protests which could bench first-half profit by millions. afterfi is gaining ground affirming its fiscal 2020 guidance. it registered an increase in

australian sales for the first quarter and expects -- ground, nearlyng 3% after posting a 5% drive in first-quarter shipments. demand from china is still strong. first-quarter volumes putting them on track for their annual target. work's leadership this is bloomberg. ♪

shery: this is daybreak: asia. the end of one of the more dramatic business debacles in recent history page softbank has come to the rescue of we work.

now the startup will sunday next month putting together a plan that will prioritize profit overgrowth. brass had a meeting with employees. know?o we >> we know there was a big all hands meeting at we work this morning eastern time in which all staff were addressed by the new executive chairman of wework. he is someone who is coming from softbank and his big message is now we have funding in place and we are secure for the time being. we need to make big changes going forward to really focus on the core business and pursue profitability much more fervently than before. and at the expense of growth. haidi: what will they start doing in order to prioritize profit? >> as part of what he laid out today in the meeting, there will staff,cuts to wework's

somewhere in the thousands. this company has anywhere from 12,000 to 14,000 employees depending on who is counting. there will be major cuts. also looking to cut side businesses. looking to selloff acquired businesses the company has picked up along the way along with other things that may be more symbolic such as the $60 million gold stream jet the company bought last year to let adam neumann fly around the country. they are just making changes. they really want to say this is a new chapter. haidi: but tightening the purse brings doesn't mean -- ellen: the two co-ceo's have secured severance packages for themselves. they do not anticipate leaving but it seems that is something that was part of this deal was soft tank to protect them in case they are leaving. and as you mentioned there has been a lot of ire among wework

employees for the exit package given to adam neumann, the founder and former ceo. basically he was given the option to sell up to $1 billion worth of shares as well as a 100 -- as a $185 million consulting fee which they framed to staff today as a necessary fee they had to pay in order to get adam to agree to a noncompete and agreed to have him step down from the board. that has produced a lot of anger among the staff. we had a story yesterday with references from internal slack channels where employees are saying you have to be kidding. this guy comes in and takes our business and he is walking away a billionaire. that may have all been legal but it really stunk to a lot of employees. haidi: quite a bit of outrage. ellen, thank you. let's get you a quick check of the latest business flash

headlines. crown resorts says the ip turnover at its resorts slumped 50% last quarter compared to a year ago. showed marginal gains. the company dismissed what it called sensationalist allegations surrounding an investigation into corruption claims surrounding its highroller program. a federal investigation into the claims is due to begin next week. 23%y: gold output dropped from the previous quarter to just under 5120 ounces. cash will be substantially lower as a result of maintenance showdowns and the acquisition of a mine in canada. but it beat earlier forecasts on the additional output. haidi: dominion energy and smithfield foods are expanding a bet. the virginia-based power company in the world's largest pork

producer plan to invest as much as half $1 billion to capture methane from hog farms into natural gas used for heating or power generation. the ceo says the plan is audacious economically viable. this is bloomberg. ♪ is bloomberg. ♪

haidi: this is daybreak asia. busy day for south korean earnings. let's turn to sophie for what to watch. sophie: an eye on sk hynix which is due to report a steep drop -- drop in profits anticipated. hyundai motor's third-quarter numbers expected to come and stronger on the year but litigation costs may way. -- weigh. when posco reports later the focus will be on guidance around

fuel prices. as korean earnings season ramps up, here is a picture on profit estimates which have been cut by 30%. the fastest since the global financial crisis. that is not boding well after all companies lost estimates. no bottoming out yet. worston track for the growth since 2002. little optimism on top of the gdp did which show the economy grew at a slower pace in the third quarter and adding worries around investment plans. haidi: sophie kamaruddin in hong kong. let's get you the first word news with riddick a group to. pro establishment lawmaker in hong kong has confirmed beijing is considering a plan to replace carrie lam as chief executive. information the chinese government is considering candidates to fill hong kong's top job next year.

the chinese foreign ministry reiterated its long-standing position of a central government still supporting lam. it is a political rumor out of ulterior motives. the federal government will fully support carrie lam and the hong kong a ministration and records to the law to stop violence and restore order as soon as possible. ritika: china is planning to sell euro denominated bonds amid a slump in the currency. it would be there first and 15 years. they are below .5%. close to a record low hit in august. china returned to the china bond market two years ago after a gap of 13 years. the european union has left u.k. burn -- prime minister boris johnson hanging as officials in brussels debate whether to grant him a third extension to brexit. u.k.agreed to give the more time but could not decide on how much. france wants a tight deadline,

but other countries preferred january 31. a decision has been deferred until friday. putinn president vladimir has called in more than 40 leaders and so she at the first-ever russian african summit. negotiating deals to tap into diamonds, uranium and oil. insia is following china expanding its influence in the leary -- in the region. global news 24 hours a day on air and on tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. shery: president trump is seeking to take credit for a cease-fire in syria, saying it is a victory for his foreign policy. it is part of the agreement to move all u.s. sanctions imposed after turkey launched its military operation. >> these sanctions will be lifted.

unless something's happens we are not happy with. this was an outcome created by us, the united states, and nobody else. let's cross to d.c. with our reporter. termught the longer cease-fire had been brokered by turkey and russia. how is the president framing this as a victory for u.s. foreign policy? greg: president trump is trying to put forth the argument that he is removing the troops, that u.s. troops are not in danger, and that there is actually some kind of historic peace here. but that argument is not lending would lawmakers on capitol hill, who met the announcement with a range of skepticism about whether the cease-fire would hold, to criticism. said the dealkers appears more likely to benefit russia and turkey than the u.s. at all. complicating matters even more, trump's envoy to syria was on capitol hill today and said the

deal had the possibility to bolster the reemergence of the islamic state group. he also said around 100 islamic state detainees had escaped. that is not likely to help president trump with his support among lawmakers. shery: and congress will not be happy about already the president has lifted all u.s. sanctions on turkey. what are we expecting on that front? greg: that's right. president trump did lift the sanctions he imposed after turkey invaded syria. he also warned he would be willing to reimpose sanctions, though congress does seem to be moving at their own pace. house democrats have already said they plan to keep moving forward on sanctions legislation. on the senate side there have been some vocal proponents of doing a sanctions measure. but the senate majority leader mitch mcconnell seems to have cooled to that, warning there should be serious debate before sanctions are used as the first,

last, or only tool. shery: when it comes to the impeachment probe, the latest was quite a bit of commotion among gop members of congress today. greg: that's right. it was quite a scene. to hearators were set testimony from a deputy assistant secretary of defense. she was going to talk about the delay in military aid to ukraine. but that was postponed almost five hours as about two dozen republican lawmakers stormed the secured area where democrats have been hearing testimony from some of these witnesses. typically lawmakers have to leave all their electronics outside of it. they created quite a scene, including screaming and shouting. one gop lawmaker released some audio from what he said was within the skiff. apparently they did this with president trump's blessing. they told him on the plan last night, they gave him the

blessing. they are upset they are not involved in some of the hearings. but it is only members not on these committees. and democrats have vowed public hearings. shery: thank you. we have breaking news out of south korea. sk hynix third-quarter earnings. we are seeing net income coming in at 293.2 billion yuan. this is a bigger beat than expected. the estimate was 297 billion yuan. third-quarter operating profit also upbeat. sales alsouarter much higher than expected at 6.84 trillion yuan. we will have plenty more and break down these numbers after the break. this is bloomberg. ♪ oomberg. ♪

shery: this is daybreak asia.

to thoseing back breaking figures from sk hynix which delivered a beat on operating profit. this get immediate reaction from seoul. better than the dire picture we were expecting. the headline numbers are pretty much all upbeat across the board. are we seeing the bottom of this terrible period right now? guest: good morning and thank you for having me. 15% aheadumbers were of the recent expectations. and it is clear the memory cycle has bottomed. bythink this was driven higher than expected shipments. [indiscernible] another line saying

capacity will be full in 2020, indicating they will be cutting capex. so far the supply side has not made too much of a difference given samsung doesn't seem to be doing much of the same. is this picture going to change. seen dm growthe across the industry. for dm capex this year would be down about 25% to 30%. next year we expect it to decline by 5% to 10%. so almost all dm makers have taken measures to control supply this year. that is why we are seeing overall better -- earlier than expected clearance of inventories and price declines are softening now. shery: what about demand? sk hynix is saying 5g smartphones will contribute to

memory demand growth. sanjeev: yes. in the third quarter the dm shipments were up 23% versus initial guidance of 8% to 10% growth. so definitely this was a big beat as far as shipments are concerned. this was primarily driven by this 5g related smartphone inventory built up by the chinese smartphone makers. this will continue. we are expecting billable 5g shipments to be 275 million next year. this means demand for dm from 5g handsets, which typically consumes much higher amounts of dm compared to 4g headsets, to be very strong. mobile demand from 5g will be a key driver for dm and demand next year. shery: sk hynix also sing a deer data --

saying orders have increased. let me asking about the stock price levels. we have seen sk hynix gaining 28% year to date. this chart on the bloomberg showing that chipmakers have led the gains among asian tech stocks. this is the ms ci tech index against the asia-pacific index. how are we expecting chipmakers in asia to perform this year when we have already seen so much upside for their shares? we think the outperformance by chipmakers will continue because this is backed by earnings upgrades. consensus earnings for samsung and hynek's bottomed in the third quarter and now recently we have started seeing upgrades. if you look at land pricing it has been somewhat better than expected. and we think for next year there

is a high chance that demand growth will exceed supply growth and price increases could be higher than expected. that is likely to drive consensus earnings higher. in the past we have seen a very strong correlation between share price and he consensus earnings and we think that will continue. shery: what about the geopolitical factors? we know up to 15% of the revenue comes from huawei, which has been the subject of a u.s. ban. there are also raw materials challenges. will these be issues going forward? as far as the japanese curbs are concerned, we did not see any impact on chipmaker production in july, august and september. and the governments of the countries are working on some solutions. so i do not expect there will be

fromroduction disruptions japan going forward. as for the huawei issue, definitely there is opportunity. stability -- there has been some instability. the trade spent has hit huawei's overall shipments not as much as markets feared in may of this year. for next year we think 5g shipments will not have much impact overall on the memory demand outlook because china will be calling for 150 million units of 5g smartphone shipments. shery: thank you so much. as the u.s. china trade war continues, we have discussed not

only the japan and korea tensions but also the china and u.s. tensions taking a toll on many industries. let's see the impact it is having on technology. crawford, thank you for joining us today. let's discuss how the u.s. china trade -- trade tensions are reshaping trade tensions. tariffs delayed until december. how much more leeway does this give companies to stockpile on supplies? crawford: thank you for having me. i think it gives them a fairly significant leeway. we have seen this over and over. the impact the tariffs had was very little on i.t. demand in 2018. into 2019 it has also not really had a significant impact. where it has had an impact in areas like personal computers. last quarter personal computers we saw single-digit growth in that market. and that is because of some

stockpiling we saw. what we found is the u.s. list of products that would be affected by tariffs has been very cleverly constructed. it has been constructed not to include things like smartphones yet. knock to include things like pc's yet. that means we are seeing consumers and enterprises buying ahead of potential tariff impact which is had a positive impact. of course if the tariffs go into effect later this year, that would have an impact going into 2020. but right now we have not seen a huge impact. shery: how flexible are supply chains at the moment and will it have an impact on the i.t. budget? crawford: yes. thatupply chains are not flexible but there has been some time to adjust. we have seen some manufacturers be able to start to adjust production and where they actually do final assembly a products. but the reality is that going

forward, this could affect overall demand. and the overall supply chain can only take so much. so for example, we are looking 4% somewhere around 3.5% to overall i.t. spending growth versus traditional products in 2019. if we were to go to a tariff escalation scenario, which is kind of where we are today, that could take maybe a half a point off of overall growth demand by the end of the year. going into 2020, if we did kick up tariffs, you could see a point, maybe two points reduction in overall i.t. spending as the market would slow and he would not see that sell through a products going forward. upbeat phasehad an one, markets and investors are feeling good about things, how

quickly does it take to unwind the damage that has been done sentiment-wise when it comes to capex investments? crawford: i don't think it would take much. and i think that would happen relatively rapidly. ishink what you would see that companies would continue to spend or we would be fairly resilient in terms of their spending. and in that scenario i think we would continue to see maybe a half a point increase in overall spending, something in that 3.5 to 4.5 band. i think overall enterprises and their spending have not been that significantly affected. so i think their ability to say you know what? the coast is clear. we are going to continue to spend. i think it would be more steady as the market goes. i don't think he would see a major snapback yes the impact has not been that strong. haidi: in terms of the

negotiations, many rounds of talks for this trade war. is largely seen as a strategic competition between china and the u.s. do you see a meaningful compromise possible or is it that we are really looking at this kind of existential split between a world of technology created by china, and then the u.s.? crawford: yeah. i think going forward it really comes down to what technology you are talking about. , i think that when you look at how overall technology has developed, poor microprocessor technology and the demand for those kind of those will notnk be as significantly affected. if you look at chinese demand for products going forward, what

we see is chinese demand for products tends to be much more hardware-centric. thingsnd to purchase like classic personal computers, servers, enterprise infrastructure and those products. aside, we continue to see those products be strong. robotics,e ai, augmented virtual reality. the chinese does not spend as much on things like enterprise software and not as many enterprising products. what wethat over time will see his china will continue to be relatively hardware-centric and continued to buy the same kind of products we buy in the western world. is areaswill change like potentially 5g, where there you could see different

suppliers supplying 5g technology into the chinese economy versus other economies. so you see huawei selling potentially a lot locally whereas outside of areas where huawei does business you would see a benefit to companies like ericsson and nokia for 5g infrastructure. but i think overall where we are likely headed here is some kind of a deal, where we see a market much like the market we have seen in the past, where everyone is competing on the same traditional markets. shery: thank you so much for joining us today. more ahead on daybreak asia. this is bloomberg. ♪ bloomberg. ♪

news when itng comes to the believer -- beleaguered wework situation. we are going to get more details but we know we work will be

spending the next month putting together a plan to try and get back to profit overgrowth after softbank really was successful with its restructuring deal. this is the latest twist and turn we have seen. from a former high flyer when it comes to the silicon valley dollar after the ipo did not work out and it is now bleeding cash. softbank is possibly part of its restructuring efforts for wework to be seeking a u.s. national security review of the deal put together essentially to save the company. shery: i was wondering why they needed to go with this. this is with the committee of foreign investments in the u.s. as you said, as we work goes through this massive restructuring, we have the new chairman who joins from softbank. let's not get a quick check of the latest headlines. google has dismissed employee claims it is developing an internal surveillance tool to

monitor your -- worker's attempts to organize protests and discuss labor rights. employees say they discovered a new tool for the custom google chrome browser installed on all of their computers. google said the claims are categorically false, and the tool is a pop-up reminder about how to use the calendar. saudi aramco is said to be exploring ways to reward loyal investors to ensure that record share sales are not followed by a wave of selling. one plan under discussion is bonus shares to keep holdings for six months. aramco is looking to reduce market volatility as well as benefit saudi investors who expect a windfall. shery: in the it will spend about $6 billion on two unprofitable state run telecom companies in a bid to help them take on competition. the government is combining the plan.ies as part of the

they have reported losses in nine of the past 10 years, according to data compiled by bloomberg. markets open in tokyo and seoul at the top of the hour. let's turn to sophie for what to watch in markets. sophie: futures are nudging higher for tokyo stocks. korea very much in focus after the latest gdp figures which may add to pressure on the b.o.k. to ease further. korean earnings in the limelight. sk hynix beating estimates. samsung delivered a miss and sales of lg displays posted a bigger than expected loss while offering a conservative 2020 outlook as lcd prices fall. studiowatching asian makers after caterpillar cut their profit while deferring guidance. we are going to see whether we see pbi for china and construction outlook remain in tandem on the back of that. next hour,ext on the

speaking with a jp morgan senior economist joining us to weigh in on the limits of central-bank policy. the market open is next. this is bloomberg. ♪ s is bloomberg. ♪

♪ haidi: i'm haiti stroud-watts in sydney. good morning. shery: good evening from bloomberg's global headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin. welcome to "daybreak asia." ♪ haidi: and endings bonanza on wall street for microsoft, bumpy road for ford and tesla. in south korea, raising hopes the chip sector can ride out the

trade war. shery: and while mark zuckerberg faces a congressional grilling out whyra, we found another project is the future of finance p let's get to market action. sophie. nikkei gains on both the two to five and topics. keeping an eye on earnings such as tokyo steel and disco. the yen sticking to recent lows. today traders will be watching for 20 year option. let's check out australian shares. the asp 200 set for a fourth fortescuegains, rising after posting a 5% rise, but qantas on the back foot. turning to south korea, gains for korean stocks this morning, the cost be adding one third of 1%, and the korean wy -- the

yuan rising, third-quarter gdp data shows the economy growing at a slower pace. morning jumping 2% after offering optimism the chip cycle has reached a bottom, they focused a less than forecast 93% drop in profit. that beat estimates. shery: sophie, thank you. where watching softbank. we have breaking news. a group planning to seek approval of its wework bailout package with the u.s. committee that reviews corporate deals for national security risks. let's bring in our national security reporter. we know softbank is taking over 80% of wework, but japan is one of the strongest allies of the u.s.. could this in fact get some

issues with that review from sifius?-- softbank ambitions vis-a-vis wework have been known for quite a bit. back in january we heard they were trying to acquire a majority stake. at that time the division fund and limited partners balked. internally there has been opposition. you can imagine that a lot of the groundwork, especially when it comes to regulatory approval, probably dates back more than this particular deal. so i think the chances of getting approval are fairly good. good: they haven't had a track record when it comes to getting these things through, in terms of not being able to field two board seats, and huber also, -- didn'te sify us

have regulatory approval. could this signal they might run into trouble? >> this is an apples to apples comparison. uber was a slightly different issue because of the timing and the restructuring plans that was put in order. wework is by all means a rescue package. softbank had little option but to throw in the hat and give the money to the company. so while they might not get the board seats they want, adam neumann still gets the byortunity to appoint two, any standard with 80% ownership in being so financier of the company, he is in full control. shery: we know softbank has its own issues, trying to set up its own vision fund. how much of a distraction will be -- will it be to get this deal passed through sifius?

even though originally it was planned as a quick acquisition and merger with t-mobile, instead it dragged out into a three or four year battle that they admitted was a bigger drag on ambitions. now that wework is going to be on the softbank balance sheet, at least in terms of operation, it is a good question whether he will delegate more of thatnow tk to somebody who has a good record turning around sprint, or will it eat up more of his personal time and distract him from other pressing issues, like 80 other companies on the vision fund that also need money and probably operational support, and whose prospects in this shrinking, free cash flow market are increasingly uncertain. shery: thank you for that, joining us in tokyo. let's get first word news with written a group to -- with

ritika. ritika: officials in brussels debate on whether to grant boris johnson a third extension to the brexit process. eu ambassadors agreed to give the u.k. more time, but couldn't decide on how much. other countries are preparing for january 31. a decision has been deferred until friday. president trump is lifting sanctions against turkey after it complied with a cease-fire agreement with kurdish forces in syria. trump says it shows his decision to withdraw u.s. forces from northern syria has paid dividends. the move was criticized by republican and -- by republicans and his own envoy. ambassador james jeffrey tilde house committee u.s. forces have not completed their mission of defeating the so-called islamic state. facebook ceo mark zuckerberg warned congress that if the u.s. does not take a lead in tech innovation and cryptocurrency, then china will.

zuckerberg faced a grilling from lawmakers on the house financial services committee over fact ads, andpolitical manipulated videos. he defended plans for the libra facebook cryptocurrency. >> this project is too big for one company to do on its own, which is why we set up this independent libra association with other companies and nonprofits. it is a complex project. and it is risky. google says it has built a quantum computer that performed a calculation into's -- and 200 seconds that would take the fastest conventional supercomputers about 2000 years. quantum computers rely on qubits, which can be both zero and one at the same time. however, ibm researchers have disputed whether google has really achieved something normal computers cannot. global news, 24 hours a day on air, on tictoc and twitter, powered by more than 2700 journalists and analysts in over 120 countries. ritika gupta.

this is bloomberg. markets, positive news from the s&p 500 march above 3000 in the overnight session, pretty positive earnings results out overall. let's get more on what we are watching in this asia session. our bloomberg reporter joins us from singapore where there has been busy news, is gdp seenighed, because we have the cost be when it comes to semiconductors up by 2% in early session? think the korea gdp report will be more influential. the consensus is it was a smallness. a couple of days ago, the president of south korea said the economy faces a grave

economic future. the gdp report maybe wasn't as bad as all that, but growth is slowing. it wasn't great. turning to the cosby, the kospi is up 2% this year, which isn't great. compare that to the japan topix index, up about 10%. overall will continue to struggle and lagan bank of korea will continue to cut interest rates. shery: a big earnings day for markets in the u.s., 1/5 of the s&p 500 index reporting earnings this week, tons of earnings coming out of asia. so how are we expecting these numbers to play into market levels? : you know, i think the microsoft positive earnings will be influential. at last look, that helped s&p 500 index futures squeak out a little gain here in asia, but

more notably nasdaq futures were up zero point 4% last time i looked. that is a pretty good open and will provide a tailwind for asia shares. turning to the s&p 500 index in the u.s., which has been struggling to reach a record, i think it is within 1% of a record, the largest component of the s&p 500 index is none other than microsoft. so with that tailwind, maybe it can get to that record. wes, thank you. wes goodman, our bloomberg live asia reporter. shery: follow more on the markets live blog on bloomberg. you can get a market run down in one click, and there is commentary and analysis from bloomberg's expert editors. let's check what is moving in the market. sophie: high makes moving this morning, up 2% -- this stock

moving up this morning after beating forecasts by analysts. hynix, isker, sk seeing new growth on idc client capacityessie coming down for 2020. japan, the stock jumping as much as 13.6%, biggest rise since late june after the display maker said it reached agreements with customers, including allowing more favorable terms. j.d. i also said it has resolved concerns over its future by billion in0 financial aid. haidi: after six hours of testimony, u.s. lawmakers aren't convinced facebook can be trusted to handle its planned libra currency. shery: but with mario draghi

up ang out -- heading meeting thursday, we guide you through the central-bank action for this is bloomberg. ♪

♪ policyll know monetary is really reaching its end. we really are at the end of the road on how much more pure monetary policy can do. >> activity has somewhat declined. >> central banks are inviting fiscal stimulus. >> it is time for fiscal policy to take up slack. >> central banks are probably going to urge governments to step in. >> they are inviting governments to borrow and spend. >> we wouldn't expect a change of policy. >> it is difficult to find anyone who has capacity to get fiscal thrust through their government. the only place you see capacity and some fiscal stimulus is

china, but how much are they willing to do at this point in the cycle? ♪ haidi: earlier guests weighing in on the limits of monetary policy. let's bring in ben jarman, senior economist at j.p. morgan. the bank of korea governor, aba, really starting to talk more about what we can do outside limitations of traditional, conventional policy tools. are we getting to limits? are getting close. this has been a building thing for years now. monetary policies have been left to do much of the heavy lifting, because fiscal policy has been very much focused on consolidation, somewhat constrained by political factors as well. but as you start to get towards very low rates and there is not much left in the kitty in terms of further stimulus, it is natural that pressure comes back on fiscal policy, and they can't

stand behind the central bank when there isn't much firepower left on the table. people are stuck between a rock and a hard place, australia, the property market, how much fiscal space the government here has. you look at china, they are supposedly deleveraging, we are looking at transmission issues on monetary policy as well. what are these unconventional tools looking like? ben: it depends on the context. australia, the company will ultimately get to -- the bank will ultimately get to a position where rate cuts are used first. they would get to 0.25 before they would really look to unconventional measures. we think rate cuts work better than anything else that is on the table. if you have exhausted all those bullets, uae options come the table, but we will be thinking it will be very much focused on

lowering expectations, rather than what central banks have done and more crisis-like climates, where you are fueling markets that aren't there, buying mortgages, trying to narrow credit spreads, etc.. shery: when it comes to fiscal policy, very few places are as constrained as europe. we are heading to mario draghi's last ecb meeting. what you expect his legacy to be as he has over the reins to christine? legacy in theig sense that the existential threat the euro area faced under mario draghi' s regime, they were great, and he let the committee to express their dissent and not totally give way and create more issues. in that sense, it is a very large legacy. his last meeting will be a difficult one though, and the sense that we have been disappointed by the data even since the last meeting in september. so there is a sense there is

probably more that should be coming in december if not later. so the question is, how and outgoing head of the council will lay a path toward future -- easingch at without tying the hands of his successor. shery: one of those hands is very low inflation. what will the biggest issue before christine lagarde? ben: we do think it is raising inflation. the previous regime under mario draghi has done a good job of putting out more structural issues in terms of supporting banks indirectly, supporting sovereigns through fiscal repair, but at the end of the day, the performance on the inflation targeting has not been good, there are expectations they are moving down on consumer and market measures for a number of years. really, the job is trying to show a willingness to do more,

but they have already used a lot of options on the table like negative rates, qa, obviously introduced, so it will be tough to raise those expectations. shery: a fourth straight rate cut is in the cards for bank of indonesia today. it and expectation that rate differentials will give them space to keep moving? thatyes, a sense this year central banks, particularly in asia, have been moving toward rate differentials. particularly on a month-to-month basis, the action central banks has been very much limited to what central banks in the developed world have been doing, or expectations in terms of market pricing. the backdrop seems relatively benign for easing. in asia we have slight weakening in dollar impulses coming through, we have oil prices that are pretty well contained. in that environment, it will be how much pressure does a start

up put on central bankers and how much work is fiscal policy doing? shery: there are structural elements to the slowdown. if we assume must -- if we assume optimistically that phase i gets done next month, and that brexit finds its way out of the parliamentary whole, are we being pessimistic? are at a point in banking where how much of the production data has slowdown. pmi's in production or oral -- weak,and production look so we have seen a broad slowdown in trade related sectors of the global economy, but if you look at the pmi's you are seeing signs of bottoming out. think there will be a lot of sensitivity to any kind of breakthrough in the short-term on the trade story. jarman, j.p. morgan senior economist, thank you.

roundup of the stories you need to know to get your thursday going in today's addition of daybreak. it is also available on the mobile at bloomberg anywhere. you can customize your settings so you get just the news on the industries and asset classes that matter to you. this is bloomberg. ♪

♪ shery: you are watching "daybreak asia." dominated u.s.s training today, microsoft and ford stood out. ford cut outlook and microsoft beat highest estimates. bloomberg's su keenan has more. let's start with ford. the $11 billion restructuring doesn't seem to be paying off. one analyst said investors are getting impatient with this. that certainly had a role.

let's look at after hours. the decline we saw in ford. they pointed to weakness in china, sales volume lower, among other issues. so that also was one thing that they cited. look at the big picture chart for ford. you will notice it has been under pressure, profit down nearly 60%, it cut $500 million sff the forecast and it adjusted etf came in below what had previously been guided for. they are cutting on the basis of the fact that, you know, chief executive officer jim hackett is going to take more time before the promised pay off of his massive restructuring plan. the forecast comes amid higher warranty cost, elevated inventive spending in north america, they still have those huge incentives, and lower sales in china, achy region for growth.

in all, though, it wasn't a bad quarter. one analyst said the upside likely comes later in the year because you're likely to have more new crossovers, suvs coming out. on the call, we think q3 was a good quarter, progress also indicates we have more work to do, but the lowering of the for-your forecast, some say, could be the last straw for the s and p, rating service which gives it more ammunition to downgrade ford's credit rating. moody's already took action, cutting forward to junk last month. very different story for microsoft, stronger-than-expected quarter, all about the cloud. beat the hours it highest estimate. we didn't see a huge bump in the stock because of a lot of that pricing in, perhaps. but let's look at the microsoft year, significantly stronger. billiond unit saw 11.6

dollars in revenue, up 36%. first order revenue up 14%, the man for cloud very strong, but analysts pointed out the takeaway is decelerating. officerf executive spent the past five years building up a cloud service. in all, they made migration from core enterprise software to the cloud focus, one analyst said, look at the cloud, expanding margins, and the pc market was better than expected in the quarter. there.su keenan let's check business flash headlines. vip turnoversays at australian resorts slumped 50% last quarter compared to a year ago. gaming showed a marginal gain. the company dismissed what it called sensational allegations into corruption claims surrounding its eyeball or program. newcrest mining says gold could drop 23% from the previous

quarter to just under 500 12,000 ounces. it is warning forecast free cash will be substantially lower as a result of maintenance shutdowns and the acquisition of a mine in canada. however, it sees for-your gold production meeting earlier forecasts on additional output from its red crisp operation. next, theing up latest bank of japan pmi figures after five months below the 50 mark contraction from expansion. are we going to see a turnaround in october pmi numbers for manufacturing in japan? up next. this is bloomberg. ♪ here, it all starts with a simple...

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♪ haidi: you are watching daybreak asia. ranking news. bank of japan pmi numbers come through for manufacturing, the gauge for october coming in at 48.5, down from 48.9, that mark the fastest paced of contraction in seven or eight months. pmi services number also declined steeply, just above the level of 50. 50 point three for pmi services bank of japan, declining. that had been a bright spot amid decline. at composite pmi leaves it 49 point eight, falling below

the 50 level, falling from 51.5, again, falling into contraction territory. these are ugly numbers. they continue to show the broadening impact of trade tensions between the u.s. and china, brexit, as well as other geopolitical factors, and the cyclical slowdown affecting sentiment for japanese manufacturers, and also now the services industry as well. let's look at how markets are taking all of this, sophie, in hong kong. sophie: japanese stocks maintain their of vance, nikkei two to rise from the october 2018 high, the yen marginally higher this morning at mid 108 levels eerie the australian dollar, off 1/10 of 1% after flash pmi readings from the cba which showed pressure there although numbers remain in expansionary territory. theoul, the cost be --

kospi. and south korean gdp reports are slowing. hynix,heck in on sk rising 2.8 percent this morning and soul beating estimates in the third quarter, which may signal a bottoming out of the and cycle amid capacity steady memory chip demand from server and smartphone makers. pricing poses a challenge, further declines expected. sk hynix said it is cautiously planning production giving uncertainties which may see customers exposed to the trade war. shery: let's get first word news. ritika: china is taking another step to opening to foreign investment. it will allow foreign firms not engaged in the investment business already to dr. equity investment in domestic

companies. it is the latest in a series of news to make it more attractive and convenient for foreigners to invest. earlier this month, regulators announced a timetable for foreign financial firms to take full control of chinese ventures. ♪ china is planning to sell euro denominated bonds amid a slump in the cost of the currency. it would be china's first a euro bond issuance in 15 years. close to a record low hit in august. china returned to the dollar bond market two years ago after a gap of about 13 years. ♪ a pro establishment lawmaker in hong kong confirms beijing is considering a plan to replace carrie lam as chief executive. the lawmaker says he has information china is considering candidates to fill hong kong's top job next year. the chinese foreign ministry reiterated its long-standing position that the central government still firmly supports lam.

>> it is a political rumor. the central government will firmly support chief executive executive carrie lam in the hong kong administration to stop violence and restore order. ritika: russian president vladimir putin is courting more than 40 leaders of african nations at the first-ever russia-africa summit. putin hailed the continent's ,normous potential for growth including diamonds, uranium and oil. russia is following china in expanding influence in the region. global news, 24 hours a day on air, on tictoc and twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪ shery: thank you. facebook ceo mark zuckerberg faced a grilling from lawmakers on the house financial services committee, over fact checking political lads, preventions of manipulated videos, and the

libra cryptocurrency project. arey commitment is that we not going to launch the libra payment system here or anywhere until we get approval from relevant u.s. financial regulators. bloomberg financial reporter kurt waggoner was at the hearing and joins us on the line. your assessment of mr. zuckerberg's performance this time around. : i think he felt or looked a little more comfortable, to be honest. that is what happens when you have already been through 10 hours of this kind of questioning, which is what he did last spring. day, itit was a long lasted more than six hours. by the end you start to hear a lot of repeat questions, so if you could go back, certain things may be could have been pounded a little bit harder, but

for the most part he got his message across, which is that facebook is not going to do anything with libra until regulators approve it. and that is what a lot of politicians want to hear. shery: one criticism put to him was that maybe facebook shouldn't do anything new, like this libra cryptocurrency, until it can fix its existing problems. at felt like it was open season for all sorts of airing of grievances related to facebook. : it was. there was no requirement any of these politicians ask about libra, so we did see a whole slew of questions, election apps being one, fake videos in the facebook policy about that, and a big scene that came about was that a lot of people brought up company issues around privacy and election security has reasons maybe they are not the right stewards for a project like this, like libra.

i think was alexandria ocasio-cortez who said something along the lines of, we have to look at your history in order to determine your future behavior, and you haven't really shown us that you are responsible enough for this. a lot of people think that simply because this idea is coming from facebook, that in itself is a red flag. one of the arguments mr. zuckerberg presented to lawmakers about why facebook needed to put forth libra was the china threat, that the u.s. could lose dominance in that sector to china. how did that play out? not: this is an argument just with facebook's libra, but with other initiatives, and it is really playing into this trade war the u.s. is having with china. and they are playing into that by saying, listen, if you stop us from building this new global currency, the chinese are going to do that, and the chinese don't have the same morals or the same ideas around freedom or

free speech that facebook might. and that is a real threat, and that politicians should be afraid of doing that, and giving facebook a reason to fall behind. haidi: an interesting approach. thank you, bloomberg technology reporter kurt wagoner joining us. as mark zuckerberg faces scrutiny over the facebook libra project, one of the largest cryptocurrency exchanges is looking to partner with governments to form its own cryptocurrency that may compete with libra. selena joins us from shanghai. this is exactly what mark zuckerberg was alluding to, that competition from china is very real. you spoke to the co-founder. what does she say about her

ambitions? s -- toina: they are looking create an open chain product called venus, and a thomas regional version of libra. -- co-founder of by finance cofounder of binance says they want to develop this roughly along the lines of where the chinese belt and road project but this other project is helping -- is designed to help countries with financial stability, on the other hand, libra is designed to reduce the cost of money transfers. listen to what she had to say. >> we need more currencies to be involved to hedge. we need more commercial

institutes to help ordinary people dilute financial risks. we need to make sure people who have not received financial service to have a service. so we started doing venus project. venus thee called libra,d road version of but the chinese government outlawed initial coin offerings, so how do you plan to work with the chinese government in that environment? >> china has been rapidly developing in mobile and internet and we can see the chinese government is supportive to the whole blockchain industry. we have called venus a belt and road. it means, in which region people really need a project like venus. there are still many people suffering from a lack of financial services. for example, they don't own a bankcard.

selina: china plans to release its own system for cryptocurrencies. what do you make of that project? >> we believe all countries will release their own cryptocurrency in the future, and they will roll out strict measures to supervise the industry. values where binance lies, to help them supervise the cryptocurrency industry and and sure stable, sustainable development. selina: you've heard facebook argue chinese effort to launch cryptocurrency is a threat to u.s. influence, but the source and my interview argues one-day countries around the world will have their own digital currency. face similarlikely scrutiny to facebook libra, but she tells me they are learning from facebook mistakes and taking a more conservative approach and will focus on more regulatory compliance at the outset. wang, thank you so

much, our china correspondent with an exclusive interview. coming up, and exclusive interview and high expectations on central bankers to bailout economies. this is bloomberg. ♪

♪ shery: this is global news, 24 hours a day on air, on tictoc and twitter, powered by more than 2700 journalists and analysts in over 120 countries. -- the global economy continues to falter. the mas responds by easing for the first time in three years, although the move was smaller than expected. executivery authority director -- managing director told us it was unfair for central banks to shoulder the growth burden alone. >> because of what they did andng the financial crisis, subsequently in holding up the

global economy and global financial system, there were tremendous unrealistic expectations placed on central banks. monetary problem -- every problem we run into, monetary policy won't get it -- get us out of it. that is wrong and it is wrong for central banks to feed that expectation. it can't be that every slow down, every risk, has to be addressed by monetary policy. fiscal policy has a strong role to play and that has not been sufficiently addressed, partly because too much of the weight has been placed on monetary policy. we need a better balance. otherwise it is exceedingly unfair on the central banking community. haslinda: speaking of the global economy, the talk about a looming global recession possibly, singapore escaped a eastsion and the mes monetary policy, but not to the extent some expected.

east monetary policy, but not to the extent some expected. what is driving optimism? >> you want to keep powder dry and not deplete your policy buffers, because both monetary and fiscal policy buffers are quite good. let's see the data over the next two quarters. a key assessment to be made is whether this is bottoming out, and whether we are going to see a modest recovery next year. if that is the case, then i think we are in pretty good shape. what if things take a turn for the worse, i think than you need some buffer, some ammunition. so keeping some powder dry, and as much as necessary we are prepared to use it. but there is still space. what policy tools have not been used? central banks are saying right now they are willing to cut rates, willing to go to zero, go to negative, they are talking about qe. lookingapore, how might qe

? >> we have a fair amount of policy space on the monetary front. we are not having to think about qe. haslinda: in may the u.s. treasury put singapore for the first time in the watchlist for monetary practices, currency practices, and by rule in its upcoming report, what is your take on whether there is a misunderstanding of how -- singapore currency practices? >> we have been in close contact with the fed and they understand how monetary policy works. in the report there is a smalldgment that in economy, the exchange rate matters. that means sometimes you have to

intervene in both directions. haslinda: given uncertainty of the trump administration, is there concern it could be used in the event of a trade war, for instance? a tradetually run deficit with the united states, so there ought not to be a complaint on that front. i don't see this becoming an issue. and we know where they are coming from, we understand their concerns, they understand where we are operating from, so i am pretty hopeful that being named in the report is one thing, but will it lead to adverse consequences, that is quite another which i don't think is likely. the mas managing director. the u.s.-china trade war driven exports down across asia for 10 quarters, one reason why bank indonesia is expected to cut its key rate just hours from now, and why many investors are bank got -- are betting on the bank of japan stimulus move next

week. kathleen hays joins us. kathleen, start with the bank of indonesia. you spoke to the deputy governor, and even after three back to back cuts, he expects more. kathleen: exactly. it surprised me, you might have thought he would sit and wait, but the deputy governor did not signal any such thing. in fact, he said that the door remains open. he thinks that there are risks domestically and globally. the room for another cut is open. looking for accommodative policies already there, we also , i think we are as longmake another cut as the risk coming from global and the risk coming from domestics will not destroy.

kathleen: the economy has been stuck at 5% since 2014. that is the message here. the imf thought they would do a little better, 5.2% for the year, down to 5% on the target, so it is not that they are so worried about the growth rate, even though it has come down from around 6%. another reason they have the green light, according to the deputy governor, is that the current account gap has gotten a little smaller. end after getting their currency beaten up -- and after getting the currency beaten up last year, this will support the bank of indonesia in another rate cut. what about indonesian exports? how well this drive the narrative for bank of indonesia? kathleen: he was clear on that. he thinks the biggest external risk is the fact that exports have been down 10 months in a row. look at this chart.

you can see the unexpected drop in the trade surplus into a trade deficit, but this is the one i think it is -- i think is so important, the exports line, the white line, -10 months in iraq, imports holding up nonetheless. he also said, driving consumers is not going to work, you have to get rid of this asked -- get rid of this export risk. and if you can't, you cut rates again. numberse just broke pmi for japan dead that were roundly terrible. willhave flagged they introduce extra measures. do we assume next week they will be adding stimulus? kathleen now, we don't. there's quite a debate, but i can't help but think these numbers, the jet boon bank purchasing manager' it index used to be called the nikkei index. looking at the manufacturing one 48.9ont of you, dr. 48 .5,

come already negative territory. but services slowed sharply, now down to if the .3, barely above the yellow line area when you fall below it, you are contracting and 52 a. in the composite index as a result fell below 50, 49.8 from 51.5, and this is a preliminary number for october. what is going on with the boj? the governor opened the door when he said boj at this next meeting is going to take a look at how the trade war is affecting their attempt to keep price emitting going and keep that 2% inflation target. since september, things have improved, but the trade war, japanese stocks look pretty good, but the bottom line is that there is really no guarantee either way. a number like this has to make them think about what they are going to do. at this point, i don't think anybody knows for sure. and i bet at the boj they are

still making up their minds. hays, globalen economics and policy editor. still more ahead on "daybreak asia." this is bloomberg. ♪

♪ haidi: this is "daybreak asia." i'm haiti stroud-watts in sydney. shery: i'm shery ahn in new york. together a plan

prioritizing profit overgrowth, including cut. they gave an overview of their vision since -- for the first time since wework announced a takeover by softbank. ♪ haidi: google has dismissed employee claims it is developing an internal surveillance tool. employees say they discovered a new tool for the custom google chrome browser that is stored on all worker computers. google says the claims are categorically false of the tool is a pop-up reminder on how to use the calendar. on two$2 billion unprofitable state run telecom companies in a bid to help them take on competition. the government is combining the two companies as part of an indian plan.

one company as reported losses in nine of the last 10 years, according to data compiled by bloomberg. let's turn to sophie in hong kong for a preview on what to watch in the markets. sophie: we are watching china mobile today. the hong kong government says the telco and dates katie will win five ge sector in the latest option. also watching companies due to release reports today. " reminder of what is on the agenda thursday. later this morning, bank of indonesia may cut its key rate to 5%, which would make for the fourth back-to-back easing move. hong kong trade data for september, likely to show continued declines in exports, although what a slower pace, while imports probably sell faster than august. haidi: sophie kamaruddin in hong kong. before we had to bloomberg markets, let's check on how

markets are trading. thursday, a pretty good session, tracking gains we saw on wall street, optimism on earnings, off a 225 up, shrugging poor set of japanese pni number -- pmi numbers, manufacturing and contraction for six months. lower despite really great results from sk hynix. new zealand is bouncing back from the massive decline yesterday, up by 1/10 of 1%. a big day ahead for central banks to be continued. monetaryndonesia has a policy decision, and lots more earnings as well. ♪ china open is next. this is bloomberg. ♪ devices are like doorways

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