>> we are under an hour away from the market open in japan and south korea. in hong kong, welcome to daybreak asia. >> our top story, optimism floods the market as the trade deal edges closer, china is reviewing potential locations for a signing ceremony.

plus huber, mcdonald's and under all fall on earnings. a >> it is decision day, a bloomberg survey is 100% certain rates will be kept at hold. >> markets have opened for trade. any he stocksouse are faring. is undere dollar pressure up a 10th of 1% with bond yields higher. a largely anticipated hold. the aussie dollar reversing a to $.70. a move let's get a quick check on futures elsewhere. futures hitting gains and a little change for the japanese markets as they reopened there. the cost could snap a three-day

event while kiwi shares are extending monday's gains ahead of vika data from the region. >> ocbc, the bank reporting at $1.7arter income billion. third-quarter net income coming in at $1.17 billion. we are seeing the interest income coming in at $1.6 billion. income at just over one billion singapore dollars. third-quarter allowances for loans and other assets coming in at $179 million. see,e expecting to particularly when it comes to

wealth related assets, seasonal benefit when it comes to hong kong, given the unrest. we will get more analysis later on. he will be with us at the bottom of the hour. let's get you the first word news now. >> christine lagarde has ecb,hed her reign at the clearing policy statements in the address, but coming on the euro zone to be strong and resolute in the face of a deepening slow the new president takes control at a key moment with economy continuing to weekend and ecb urging national governments to step up fiscal measures and structural reform. u.k. lawmakers have elected a new referee to keep the parliamentary debate in game in order. to be the new speaker of the house of commons and is promising to take a more neutral approach than his previous essar, who stepped down after 10

years on the job. he has never revealed his views on brexit, whilst perko voted to stay in the union. forcingord levels, governments to close schools and advise people to stay indoors. the air quality index spiked as high as 858 in some parts of the capital after rising above 1000. readings were considered safe 350 isthing over hazardous to health. u.s. lawmakers say boeing ceo didn't provide complete testimony when he was on capitol hill last week, leading members of the house of transportation and infrastructure committee saying he left a lot of unanswered questions about the 737 max, adding their investigation has a long way to run.

global news 24 hours per day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. get back to our top story. a wave of trade optimism is sweeping through the markets as china is said to be reviewing locations in the u.s., where the president would be willing to meet donald trump's on the first phase of a trade deal. we were just saying about the potential risk of the but -- of the president to go to the u.s., but it may happen. >> it seems to underscore the chinese determination, at least nailing down the phase one part of this trade deal. there are those risks we have seen in the past, particularly with the north koreans walking

away at the last minute. you would expect the chinese want to get some of the details locked down before they make that decision to send the president over. we are waiting to find out what location is going to be chosen on. chinese officials are looking at it are of significance. of course this follows what we have seen with this positive momentum on both sides. had agreed on principle on some of the core issues on this trade deal. there had been significant progress in terms of these talks. potentially even in the u.s., certainly of significance. it is worth reminding viewers

there are still significant about phases two and three and how much ground china is prepared to give, if any at all, on things like subsidies and industrial. which is why we are going to be focusing on president xi in the international import expo at some point between 9:00 and 10:00 this evening. this is an opportunity once to burnish china's credentials as a champion of free trade, trying to push back against some of the criticism over its policies and trying to increase the influence in this part of the world. many have critiqued as -- critiqued this whole event as -- being richer in -- perhaps one thing that could help china's influence could

also be the acceleration of art. india has announced they are calling it quits. >> as you alluded to, china has stepped on the gas on this issue involving our 15 countries. they are facing these pressures from the u.s. on the trading front. they want to step up this deal to build out an economic partnership with countries, including the likes of japan and australia. they will not be taking part in this deal. they are concerned about a flood of cheap chinese goods in their markets, which could put pressure on some of the core constituents. the 15 countries are

likely to sign this deal we are hearing in 2020. china, which has been an architect, said india is still welcome to join at a later stage. it is an example of china building out its economic and trading sites. have significance for china and its trading partners in the region. >> thank you so much, our china correspondent. as tom mentioned we will have live coverage of xi jingping's keynote speech. that will be 9:00 a.m. hong kong, don't miss it. bloomberg's third-quarter results are disappointing the investments of key metrics fell short. coming up next, decisions from with --

us next with his outlook. at is bloomberg. -- this is bloomberg.

>> this is daybreak asia. >> shares have resumed trading. aswestpac sighting as much 1.5%, falling to a low and extending losses for a sixth sense -- sixth session. jeffrey has rated the stock a new underperform. this as earnings offer little seeingwith higher costs -- higher costs seen going forward. in 2020,will fall 7.7% after the 5.6% drop we saw in the previous year. and bloomberg intelligence expects the west cash r.o.e. may spit -- may stay below.

>> we have three big central bank meetings this week with decisions coming from the rba and the bank of thailand. let's get a look ahead. signal seen the fed's that the market is pricing in a fed rate cut of 2.8 basis points. what are expecting now that we are getting signaling from the federal reserve? >> it's quite possible the fed will allow other central banks to reassess strategy for 2020.

it really is in its third day today when the market opens in europe, and that will be the driving force for central bank decisions. the decision to resell two people pull down on deals in the euro zone and that will exert pressures and other parts of the world to keep easing policy and keep up with what the ecb is doing. >> what would that do to the bank of japan? they held steady last week. >> this is the fantastic central-bank story for next year. the bank of japan is sticking to its guns. they try to maintain it the way it is. they don't like negative interest rates as much as the ecb does.

the question is once the ecb program is up and running and the euro weekends against the yen, how long can the bank of japan withstand that pressure before they will also have to start lowering interest rates or restarting the asset purchase program, which i expect we will see at some stage next spring. much doesn't alleviate of trade tensions way over the trade deal, how much does that actually take the pressure off when it comes to the demand side of things? is it going to take some time for the damage that has been done by the trade war to be undone? depends on what your expectations are about phase one. the market is quite optimistic about it. any kind of positive sentiment is boosting equity markets.

at thereally look negotiations and the details, i don't think anything substantial to come out of this phase one. if phase one is buying more soybeans from the u.s., we could have had that a year ago. the issue is much more enforcement, which the u.s. wants and the chinese will never accept. i don't see a solution in the way the u.s. is raising this problem. it is a very temporary boost to equity markets, but i don't think anything substantial will change. >> you say that china, regardless is doing fine. the economy suffers as much as other economies. this look at the euro zone,

where growth is a lot weaker than in china. part of the world that has borne the brunt of the trade war. the chinese government has been able to stimulate the consumer side of its company. look at the difference of the manufacturing service pmi's. that tells a similar story to what we see in the euro zone, and a similar story to what we see in the u.s., where manufacturing is weak but consumption is strong. i think china in that regard is doing fine. >> manufacturing is weak in the u.s.. some business investment being pretty awful, i wonder, given all the political uncertainty here in the u.s., like the impeachment issue with president trump, and heading into the 2020 20 elections, how much of a downside risk will that be for the economy, and are there implications for the global

economy? >> i don't think the downside risks are that large. nobody is cutting back. but we are seeing is an extended period that is now in the 14th month of business is sitting and doing nothing. they have not cut back on orders for durable goods but they are not growing those orders. what we need is a sentiment boost. and the three rate cuts have gone a long way to providing that. i think once the fed resumes the rate cutting early next year with a greater emphasis on focusing on providing that support and boost the business sentiment in the u.s., i think businesses will unleash some of that pent-up demand in durable goods orders and investment we have seen building up right now.

>> thank you for that. we will stay on the impeachment inquiry and political risks here in the u.s.. the inquiry is becoming more partisan. the house has now begun releasing transcripts from their closed-door conversations. how much will the transcript advance the democrat case for impeachment. >> it will be providing context for the case. we could begin to see hearings with some of these same witnesses beginning as soon next week. so transcript we have gotten far, which include the former u.s. ambassador to ukraine, former top eta secretary of state mike pompeo, offered no new block dusters in terms of the information they had.

there were some details that will be critical for the democrats to make their case. then we are looking forward to tomorrow, we will be seeing the testimony from two people who were very central to the white house back channel effort with ukraine, that is the former special envoy to ukraine, as well as the administration's ambassador to the eu. thanwere much closer to it the witnesses whose transcript we saw today, and we have seen them in their public statements trying to distance themselves from an effort that was allegedly run by the president's personal lawyer rudy giuliani to pressure ukraine and dig up some other issues related to the campaign. inwill see how far they go

their actual testimony and whether or not republicans may be able to find some evidence that would change the direction from their standpoint. >> we got some advice on how to deal with the president. would come is not much of a surprise, but the former ukrainian ambassador asked do to what she could defend her position. he advised her she could tweet as a way to get on his good side.

>> thank you for that. , uber remains optimistic on it's everything strategy as third-quarter results disappointed investors. we take you through the numbers next.

uber slumped out of the bell, reporting third quarter growths and booking fell short of estimates. us from san francisco. what we gleam in terms of investors disappointed across a of key metrics --

there are supplement -- a lot of ways you could supplement that business. because of the nature of that business, it is a commodity competition, it is fierce. you could see somebody coming in and taking out that competition, some of those extra players in the food delivery. we don't know what he was referring to there. there are certainly possibilities. they have a lot of cash they are sitting on.

>> how heavily has that weighed on investors mind? >> that is a factor weighing on the stock. bite these results on another day, this were not two days before the lockup, might these results have landed better with investors? you talk about profitability and discipline. these are things people have wanted to hear for a long time. >> i have to think, and i'm speculating that the lockup, this 1.7 billion shares that are going to become available is weighing on investors right now. >> bloomberg technology joining

us from san francisco. under armour erased its gains for the year. the latest on that and its earnings as well. this is bloomberg.

>> we have positive nude on the trader deal. >> the tree tensions have been on the back burner. >> we have a lot of risk appetite coming back. from a 20%going chance of a deal to 60%. >> the market has been lurching back and forth between positive and negative developments. wave ofd down, optimism, pessimism. if, the market continuing to respond to much to those moves. >> it doesn't look like we are going anywhere. >> there is not going to be a grand trade deal.

>> we are skeptical. >> there still a lot of uncertainty. certaintyst issue is and a lack thereof. >> some of our earlier guests weighing in on the twists and turns of the trade front as we wait to see if there will be a compromise with plenty of uncertainty remaining. global stocks have tracked higher, pushing into overbite territory. trading at the most overbought level in 21 months. one bullish signal indicates there may be more to go. the asia stock has performed a golden cross pattern. asian shares could be on track to consolidate gains with aussie shares rising freight word street session. nikkei futures pointed being higher, while the yen holding onto a two day drop.

now they have raised the forecast for december on trade see itm, but does not sustainably above 70 for the back half of 2020. steepening, the rba will keep rates on hold. they expect no material changes to the rba statement with regards to macro economic forecast. the recent data providing no catalyst. >> thank you so much for that. most armour plunged the since july and the maker confirmed it is under a federal probe into its accounting practices. su keenan has the latest on this. no wonder investors were not happy. >> when the news came out, it came out over the weekend, but they had to confirm this morning when they came out with results they had been cooperating with both the sec -- the fcc and

justice department. chart,o to the five-day they paired the loss by the time the market opened. the loss compared to their average trading range was significant. has been under pressure for a variety of reasons. it just fell off the cliff in this most recent session. what they said was they are lowering their full-year year outlook for revenue, but they did report solid results, it looks like the real focus was what was this investigation all about? check out the statement the company had to issue on sunday when the wall street issue reported this story of the accounting probes. they say the company began responding back in july 2017. the two-year length of the probe is what came as a shock to many. they say they don't believe they did anything wrong.

their accounting practices and disclosures were appropriate. what is interesting is the wall street journal reported in its sunday story, that the probe is focused on whether under armour inflated sales from quarter to quarter. the sports apparel maker based in baltimore was also reported by the wall street journal as recently being questioned as last week. it has been a difficult year for under armour. this is really news that investors are paying a look -- paying an awful a lot of attention to. >> the timing is pretty bad now as well, increasing competition, the stock price and the revenue outlook. they just had an internal leadership shuffle as well. >> part of what is happening is the founder will be stepping down as the ceo, he will stay on

on the board. if you look at the five-year stock chart, how the company is when to be restructuring they really had guided lower for revenue forecast. the new ceo will be taken over at the beginning of the year and is promising a louder brand. take a look at how major competitors have performed year to date. adidas and nike have had great stock returns and are now negative for the year. >> su keenan in new york for us. let's get you the rest of the first word news. >> beijing says hong kong's and battle leader retains the confidence of the chinese government, despite almost five months of popular unrest. tolddent xi jingping has the president to trust her and

approved of the way she handled the long-running crisis. reports that she said lam has led hong kong's efforts to stabilize the situation. india has dropped out of the china backed asset trade deals. the prime minister says he confirmed the adverse impact the deal could have on indian workers and consumers. that includes japan and australia, which has been ignored by the u.s.. the number ofased advanced iranian centrifuges it is operating in a further operation -- further violation of its fragile nuclear deal with world powers. fuels 10 times faster than existing models. president is expected to announce further moves later this week, news comes as the

islamic republic marks the 40th anniversary of the u.s. embassy siege in tehran. overseeing thee struggling pg&e is to manning information on the wildfires the company's powerlines may have caused this year. pg&e has order to see how much damage has been done and how they live have been lost. the largest has burned across the lot -- the northern california wine country for a week. 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. the financial times reporting that trump administration officials are debating whether to remove some existing tariffs on chinese goods. from the key demand beijing delegation.

not only delaying those tariff heights -- tariff hikes. according to the financial times they talk to five people that have been briefed on the discussion and the white house is considering whether to rollback tariffs on $112 billion. this will include tariffs imposed on clothing. sources also telling the financial times washington would likely expect something in return, such as beefing up provisions on intellect to a property for u.s. companies. losses a quarter percent. reversing weakness we have seen before this report. are seeing that reaction across the rest of the market as well.

we are seeing a decline in the japanese yen as we see that risk appetite decrease for -- increase further. the key question, you hit the nail on the head as to what washington would want in response. >> we will get you more on that story as details become available. soaring provisions for bad debt, overshadowing high income for lending and wealth management. in an equityng analyst who covers the signet -- the singapore banks. we were expecting this boost

when it comes to the wealth part of the business. how much comes from the hardships that hong kong has been going through? >> thank you very much for having me. two of the banks are reported in numbers. we are -- we are seeing a that otherend drivers are keeping the revenue growing at a's -- at a low simulated space. at a system-level we have seen some deposit growth. one can say there is regional flows. contributed to this impact on wealth management. towe were expecting margins continue under pressure. does the bad loan provisions

surprise you? >> we have been expecting the rate cost to go up. the slowing revenue growth and the loan growth aside also impacts these banks. it's not really a surprise. margin sidens -- the strength of decline is surprising to me. they have shown eta klein in the margins, which we thought would be more of a 2020 phenomenon, but is starting to impact from second half. in my view it can be a result of the two factors. also the decline in interbank rates. will be the guidance

into 2020 as to how the margins can go down. a benign view of the overall market environment. it they were able to offset those swelling provisions with profit growth and wealth management and ocbc wasn't able to pull that off? >> third quarter we see a ofference in term noninterest contribution. it is one quarter impact. ofyou look at the cost side the equation they were able to perform better. we need to look at the bottom line. originalack to my thesis, which we spoke about in the last quarter. margins and costs are declined.

what we need to look at from the singapore banks is, we have a flatlining of the bottom line, but we have the healthy capitals now given thend extent of income investment from that standpoint. if we don't get that it will be a different story. >> how helpful is it we have seen foreign currency search to a record in september and how

much is that because of what is happening in hong kong? >> we do not have the split as to flows in various parts of the world. singapore is a financial sector. you can attribute some of that impact toward uncertainty and hong kong. i think the numbers is about four to $5 billion. it is a pretty small portion. data is big but in terms of impact for the system it is not so significant. be the invoking of assets, which helps the banks. because we do not have any it is tough to pinpoint that it is coming from one particular source. we need to look at overall impact on the system. or need to have other drivers as well. from your side of

the equation and keeping a close eye. >> clearly the new battle we are seeing with a lot of investment going into creating a hub. is one emerging as a future leader? >> there have been different points in time. but they have also caught up, if you see the announcements over the last 40 years. investment continued , i think they will be investment mode it likewise. one to not say there is be a clear leader.

to income andt cost to assets and how they go down over a period of time. howfrom a structural side it goes down. they have done a trees -- done a decent job. i would like to see them going down a little bit more. that is what we need to be about. >> joining us there in singapore. officialsnistration apparently considering whether to remove some of that 100 billion dollars of goods subject to tariffs, to remove some of those tariffs that have been subjected onto beijing as part of an accelerating progress toward getting this trade deal signed.

>> when it comes to s&p ee, we are seeing a fresh record high. the yen is moving back toward the 109 level. this while the aussie dollar could be heading toward the safety nine cents level, just now coming off of that reef pop. forecast,mes to the 69 by december on trade optimism. --are washing for that watching for that seven handle. this is bloomberg.

a top ski resort operator is opening up a -- is hoping a

flurry of chinese enthusiasm will drive growth. >> the emergence of the middle class in china and really pan asia represents one of the biggest opportunity for growth and participation in the resort industry. in those people go to their local resorts like in the valley outside of beijing and fall in love with the mountains like people around the world do. mountain for the next and often they find china. soon they will be traveling on an airplane to the world and our resorts in north america, the resource we want to be affiliated with will be a recipient of that growth.

>> how is that going to reshape the industry? the president has mandated there will be 300 new winter sports a few zs's by the 2022 olympics. >> president she. -- president xi. >> and the china -- and china 150 millioney asked chinese around the world looking for places to ski. inhow may people ski here the united states? how many in europe? >> in the u.s. there has been between 50 to 60 million skier by 12 per year, created million actual participants, 12 million compared to some large number in china. in europe, not sure how many unique visitors, but to million visits, it is a tremendous positive impact on visitation

for mountains around the world. >> what are you doing to position yourself for this wave of chinese demand? >> the first was to build a platform, not that it was entirely about china or asia, but here in north america. as somethingbed what we call internally the latter. people find a local mountain they want to go to and a ski. people become enthusiasts and they ski there more often. they take their first overnight trip and they will drive to a regional resort. there sometimes for several years, they will take their family or friends and jump on an airplane and go to the final level, which is an aspirational resort -- aspirational resort often out in the west. inthink the behavior pattern the marketplace plays out globally and the chinese are a

big piece of that, as are the rest of the asians that are adopting skiing as a pursuit. >> coming up next, melbourne is gearing up for one of the richest horse races in the world. there is controversy hanging over this year. that is next. this is bloomberg.

one of the biggest boarding events in the world. the melbourne cup is a huge lower for owners and -- alike. let's bring in our up -- our reporter in melbourne. what does it mean with regard prize money and prestige?

>> it is still one of the world's biggest events. is 5 millionze dollars, or 8 million australian dollars, which puts it in the top 10. it's lost its place as australia's richest horse race. offers $14event million. when you look at the world's biggest, it is going to be top next year in saudi arabia. the winner getting about 10 million. while the melbourne cup is a pretty rich person -- >> the race has become controversial. what impact will this have? a differenthas feeling to it this year. there has been a rise in animal cruelty concerns surrounding the racing industry. there have been a series of reports about the mistreatment

of retired horse racers. we are seeing that flow through to the impact on the race itself. betting revenue is down, which is due to a few factors, partly ways punters are approaching the race. this has been a new tax on state, which is presenting another challenge. >> thank you so much for that with the latest on that melbourne cup. kiwi stocks higher today, gaining for a third consecutive section -- session. care andeing health consumer discretionary stocks leading the gains. decision,e rba rate the expectation is they will hold. apan is coming back from holiday futures looking higher by 3/10 of 1% while cost of

futures are unchanged at the moment. plenty more on daybreak asia, this is bloomberg. sometimes your small screen is your big screen.

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>> a very good morning. i am haidi stroud-watts in sydney. asia's major markets have just opened for trade. shery: i am shery ahn. welcome to "daybreak asia." haidi: our top stories today, u.s. futures are moving higher after the financial times reports that the u.s. is considering removing some tariffs on china. pacteijing backed trade aims for completion next year but india is saying it is

worried about the impact on workers and consumers. 100%berg surveillance certain that phil lowe will keep -- on hold later. korea japan and south coming online. we will see a risk on day across market on asia. you want to see the nikkei gaining more than 1%. this is playing a little bit of catch-up after coming back from that holiday. the japanese yen weakening for a third consecutive session on the risk on mood. we have the ft report saying the trump administration was considering removing existing tariffs on chinese goods. topic acts higher by 1% while the 10 year yield is holding ground at the -.1%. take a look at how class b is coming online, up .2%. this would be the highest level since june in the third session of gains. the korean won at one point rose to the highest level in four

months. we are seeing downside pressure for the south korean won this morning. the asx 200 being led higher by andth care stocks as well energy stocks as well, gaining ground on the asx 200, up for a third session as well as kiwi stocks. let's get the first word news with ritter to do cap. -- ritter could do cap. ritika: -- the tecau group to -- ritika: she is calling on the euro zone to be strong and resolute in the face of a deepening slowdown. the new president takes control at a key moment with the euro zone economy continuing to weaken. lawmakers have elected a new referee to keep the parliamentary debating game in order. be the newle is to speaker of the house of commons and is promising to take more neutral approaches than his

assessor. he would step down after 10 years in the job. he never revealed his views on brexit. u.s. lawmakers say boeing's ceo, dennis muilenburg, did not provide complete testimony when he was on capitol hill last week. leading members of the house say he left a lot of unanswered questions about the 737 max 8, adding their investigation has a long way to run. it was consistent with a culture of concealment and opaqueness. from brazil say top managers received an anonymous email warning about the safety of its mining two weeks before one collapsed and killed almost 300 people. dow jones says authorities are looking at the ceo's response, where he pursued the identity --

the january disaster was the deadliest incident to hit mining in more than half a century. 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 ready. -- i am ritika gupta. this is bloomberg. heidi. -- haidi. optimismwave of trade sweeping through markets as they are considering removing chinese tariffs. china is said to be reviewing locations in the u.s. where president xi jinping would be willing to meet with donald trump to sign the first phase of a trade deal. let's get the latest from our china correspondent, tom mackenzie, who is at the international import expo. we have seen the reaction across risk assets in response to this report that potentially the removal of tariffs could be a sweetener before we get a deal. absolutely. of course, this has been central

for china, the removal of tariffs. they said if you want to get a comprehensive deal, all of those tariffs will need to be removed, and if you want to get to phase one, two, three, they have hinted they want to see some of those tariffs moved back. may be u.s. is considering lifting the tariffs that were imposed on september 1 at $110 billion worth of chinese goods. by the valued at 15%, way. the debate continues in d.c. maybe that is the price the u.s. is willing to pay in order to get presidency to the u.s. to sign off on the phase one part of the deal because we have heard that chinese officials are considering that and that the states of iowa, alaska, and hawaii are in play in terms of locations for signing off on the preliminary stage of the trade deal. it focuses on the purchase of things like agricultural products, energy products, and currency commitments from the chinese side and opening up

their financial services market. the again, it does build on fact that these two sides are moving closer, it seems. any trips to the u.s. would not be risk-free for president she, which is maybe why we are hearing the u.s. is considering removing tariffs. in terms of the importance for china, they want to relieve pressure on the manufacturing sector. many of the data points here in the mainland point to a continuing slowdown across a number of fronts. the manufacturing sector very much under pressure. we are seeing some job losses and some of the parts of china where manufacturing happens. their focus on tariffs has been reiterated and it was once again state media over the weekend. they will take some heart from this reporting that may be the u.s. is considering moving some of these tariffs heading into a presidency and president trump president sign off -- she and president trump meeting to sign off. haidi: what are we expecting?

speech is front and foremost in terms of what is the most important element of today's proceedings at the china import expo, expect to kick off at some point between 9:30 and 10:00 a.m. local time. it is the second time presidency will be attending this event for the second year and it is an opportunity for him to again burnish china's credentials as a place of free trade and to push back against some of the criticism for some of his trading policies. they can build influence in the region. in terms of his speech, we will be listening for anything he says on the trade front, anything he says about opening up new sectors of the economy. expanding market access for foreign firms pay or there is a debate for how much this is about symbolism versus substance. we are going to see about 3000 companies here. everyone from tesla to ask jenna, -- to alibaba.

you have the likes of president macron from france who was here for this event. how much detail every going to get in the speech and how much detail are we going to get in some of this dealmaking? the e.u. chambers of commerce put out a statement saying that last year, 50% of the companies attended signed deals but many of those deals never came to anything, so the e.u. are saying we want some concrete answers on issues like state subsidies, on issues like the by china first policy. question marks over issues like data and intellectual property. they still want them addressed in a more concrete way. they are hoping president she will move the dial on some of these issues and some of the dealmaking becomes more concrete than some of the dealmaking that took place at last year's event. there's a lot of companies that are taking part in this event and of course, speech is central to all of this and whether xi addresses trade issues is

something we will be looking at when he takes to the podium in about 1.5 hours time. shery: tom mackenzie, thank you so much for that. we will have coverage of that keynote speech by president xi jinping at the shanghai import expo later today at 9:00 a.m. hong kong. let's get more market reaction to these latest trade headlines. next turned to markland field -- mark cranfield. the trump administration could consider lifting existing tariffs on chinese goods. we saw the market reaction being pretty swift especially on the offshore yuan. mark: indeed. we have seen it go a little bit lower. it will be close to that seven line, the number that was a bit of a ceiling on the dollar yuan rate. just aost reach 720 few weeks ago and we have drifted back down.

the optimism was rising that the u.s. and china were going to do the so-called phase i deal which looks as though it could be signed this month so already, the markets are in a pretty good mood about that anyway. the dollar yuan exchange rate will be a very good indicator whether or not traders are taking this seriously or not. if we see dollar yuan go back below seven, it is a good signal that traders do believe there is a serious chance that some of the old tariffs could be removed and we could be eyeing this completely new phase between the united states and china. it will take a lot of convincing. people are right to be skeptical. there's a lot of back and forth between the u.s. and china and assets fluctuated accordingly. it really needs to see something concrete on the table between the u.s. and china before yuan traders get really convinced we are into a new period. we will probably see dollar yuan fluctuate close to this certain

area without convincingly moving one way or another. we probably need to see the u.s. and china announce how they are going to trade off these changes between the old tariffs. otherwise, this is generally a good move for markets. we are coming off the back of what we saw last week. that mood can continue for a while as the company earnings come through, but we are pretty reaching a point where that is starting to run out. we need to see something new to take the market along way forward from here. fed,: when it comes to the does that mean the likelihood of it doing anything in december gets even lower? it makes it easier for the fed to argue a case that they can take a pause in december. as richard clarida was saying at the end of last week, that is the preferred stance of the fed. they have done 75 basis points worth of cuts. they would like to see how that feeds into the economy. they would not mind a little bit of time to sit on their hands and see how the data plays out.

if there is a big improvement on the trade situation between the united states and china, equities rising, bond yields relatively stable, and the currency markets relatively calm as well, all of that would certainly help the fed's case. we will probably hear more fed speakers coming out over the near term, saying the pause is how they would like to go. the trade move between the u.s. and china is a good one, it certainly makes it much easier for the fed to convince the market that they really want to take a pause in december. you will probably see the interest rate markets completely pricing out any chance of a fed cut in december. what is left of people expecting lower rates for this year, that's probably going to reverse and we probably can ease into that december meeting in a very neutral position which the fed will probably be pretty happy with. haidi: thank you so much for that. still ahead, the rba.

we will take a look at whether rates have gone to levels where they are now doing more harm than good. takes us next, monica through the opportunities to be found on asian credit. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: the u.s. dollar is trading slightly weaker the u.s. reports that is weighing whether to remove tariffs on chinese imports. the greenback is about 1.8% off its september high, which is the strongest level in two years. for a look at what dollar levels could mean for emerging and asian bonds, let's bring in monica shao, joining us from hong kong. thank you so much for being with us today. we have seen this week dollar

story. how much help does this give to the pressure we have seen in dollar funding in asia? weaknesshe dollar coming off of the fomc last week i think would be the main story of support for the emerging helps in bothat the emerging-market currency market as well as the bonds. this relief of funding pressure gives the emerging-market a lot the room to rally emerging-market countries. ony will have less pressure their funding channels for the dollar as well as not having to worry about reserves depleting. be the this is going to main story of support for us and

that includes for asian credit markets as well. shery: we have seen relatively low default rates in china, which is really interesting. does that accurately portrayed a c.'s creditchina in profile? monica: our default rates are around 2%, and yes, it's lower than that of what is expected in the u.s. as well as --- i would make two observations on the default rates year to date. it startled the market last month that there was a china soe that defaulted and this was china's largest state owned potash producer. granted it was in a weaker province that was heavily debt laden. it did flag for investors that

they needed a lot more cautious about assuming state or provincial support. that is the first thing i would note. second is that, interestingly, onshore, onlyault about 4% was in the property sector, and within that, the vast majority of that was actually in property services related companies, not property developers. and i think this is one of the reasons we have been calling a buy on high-yield property bonds , because i think this lends technical support still for investors to see that this is a sector that still has a good recovery value, and a sector that people feel relatively safe in. shery: monica, do the numbers match up when you take a look at

industrial profits in china? the numbers are still really horrible yet defaults are looking fairly moderate. are you even anecdotally hearing perhaps behind closed doors restructuring conversations going on to avoid on the books defaults in china? that theook, i think default rates are relatively low , partly because i think they are either -- there is still despite what i mentioned earlier sioe the province having an support is for the sector bonds where we have not seen any defaults yet. there is going to be forms of structuring in the form of debt for equity swaps, for example, that happens through

negotiations with state banks. i think with respect to the weakness of the pmi, i think more of thends potential for china to have the intent down the road to either their rrr.r adjust that chinahave seen has been rather slow recently to further ease and i think there is a reason for that because the chinese government has recognized there are some issues with the capital transmission mechanism so i think they are taking a bit of a pause to address that. meanwhile, you know, on the others, the silver lining to this is that we see this wide differential between the sovereign rate of china and the

u.s. rate, u.s. government rates, and that differential has widened to 1.6% right now, which gives chinese government plenty of room to maneuver, to adjust rates for loan prime their medium-term lending facility rates. short of this is that there is a lot of tools at the government's disposal to continue to stimulate the economy. not only in infrastructure spending but also monetary easing. haidi: monica, thank you so much for joining us. ofica hsiao, cio and founder a company. uber reacting to disappointing earnings, saying it will be driving discipline across the country. -- the company. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. bookings fell short of estimates. in sanring in tom giles francisco. uber did expect to turn a profit in 2021. what was the big issue that investors did not like? tom: there's a couple things that worked. investors were looking at a couple of those metrics. one of them is gross bookings. and second of all, mostly active users, so both of those numbers came in below expectations, so there's a bit of disappointment there. you have to wonder whether there was also -- there is also some concern about the fact that this lock up x. , these restrictions that were put on certain early

shareholders and their ability to sell the stock is going to be lifted in a couple days and that vast number of uber shares to the market and that is possibly weighing on the stock. you figure investors were looking for -- there have been blowout numbers today. maybe the concern about the lockup would be abated a little bit, but the numbers again, there was a little bit of disappointment. this way to profitability is a well-worn story. was there anything new to give investors some hope for optimism today? naming 2021 as the year that they would become profitable on an adjusted basis, that must have been encouraging to some investors. we are looking at the numbers and there were some analysts who were still expecting them to be unprofitable on that basis in 2021, so if you were one of the people who was very pessimistic

about their profitability, the ceo comes out and says, hey, it's happening. that has to be encouraging to you. also, another theme on the call was this adherence to discipline. getting out of businesses, getting out of areas where we cannot be number one and number two. you know, taking the kinds of cost-saving measures that people have said in uber needs to take for many years now. that also must have been encouraging. haidi: tom, appreciate your time. tom giles on uber. let's get you a quick check of the latest business flash headlines. under armour plunged on the news that federal officials -- it lowered its forecast for falling revenue but raised other projections after solid record of results. under armour says it is cooperating with the fcc and the justice department and insists it has done nothing wrong. shery: international

third-quarter profit missed estimates and is lowering projections as demand slows. adjusted earnings for share came slightly below the average. in the quarter5% from one year earlier. marriott is offering a forecast for 2020, projecting revenue for room will be late or down or slightly up. about toamonds may be be an even cheaper best friend. the world's biggest producer is slashing prices for the first time in years. it is cutting by about 5% in a bid to help profits. of those key customers are running on wafer thin profit margins because of low prices and a glut of -- kong marketxt, hong pmi numbers coming through for singapore as well over the next

couple of minutes. particularly key as that economy slipped into recession amidst the ongoing pro-democracy protests and the disruption of the asian business hub. we will bring you those numbers, next. this is bloomberg. ♪ berg. ♪ here, it all starts with a simple...

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shery: breaking news when it comes to hong kong pmi numbers. 39.3. i am having to kind of look at that again because that is a drop from 40 1.5 p or obviously, deeply in contractionary territory. the hong kong pmi numbers for the month of october. 39.3 is the number we are getting at the moment. thee clearly reflective of dismal business conditions that are deteriorating. slippingconditions into recession. high expectations that those recessionary conditions will continue into the fourth quarter.

that pmi number for hong kong coming in at 39 point three. sherry. 39.3. 48.3 theat is from previous month of september, so again, we have seen nonoil domestic exports in singapore contract for the past seven months. we are seeing this impact on the market singapore pmi numbers. 47.4 would be the third month of contraction. they have been in contraction territory since august, and despite the fact that we have seen some positive sentiment around factory output returning to expansion, it is not reflected on that october singapore pmi coming in at 47.4. singapore, yes, you are contracting, but you are not hong kong. i have to go through that number again. 49.3 for the market hong kong pmi. that is an all-time low. shery: i heard you say 30

something. we were already at a record low. i do gp on our bloomberg terminal. it is a nosedive, isn't it? haidi:haidi: i am waiting for a written -- haidi: i am waiting for a correction to come through. let's take a quick look at the markets. clearly, that is going to weigh on china markets when the hang seng starts trading in china later on today. let's take a look at how markets are trading. it has been a good news picture when it comes to this latest report from the financial times that potentially washington is considering a sweetener going into the signing of a phase one many trade deal -- mini trade deal. a separate report saying that china is reviewing the listed locations were president xi jinping could potentially meet donald trump in the u.s. to get this deal signed. we are seeing the nikkei 225, japanese stocks playing catch-up, up by one .5%.

we are seeing a pop when it comes to the u.s. equity futures. pretty muchlar trading sideways. when it comes to the trading in the yuan, a little bit more circumspect. waiting for more certainty on this report. one of the movers in australia that we are watching, westpac bank resuming trading today. plunging the most since november 2018, after the bank reported the first profit decline in a decade as well as almost 1.5 billion dollars worth of new shares sold in a capital raising effort. that's the market that's get you up -- that's the markets. ritika: president trump has begun the process of withdrawing the u.s. from the paris climate accord. it is a move that will take another year to complete. the administration submitted formal notification of its withdrawal to the united nations but will continue to work on the

issue with "a realistic and asthmatic model backed by real-world results." air pollution in new delhi remains near record levels, forcing the government to close schools and advise people to stay indoors. the equality index spiked as high as 858 in some parts of the capital after rising above 1000 at the weekend. meetings of 50 are considered safe with anything seen over 300 as hazardous to health. it is home to 10 cities with the worst air quality in the world. iran increased the number of advanced iranian centrifuges it is operating. it added 30 upgraded machines that can enrich fuel 10 times faster than existing models. president rouhani is expected to announce further moves later this week. the islamic republic marks the 30th anniversary of the u.s.

embassy see it tehran. siege in judge -- tehran. a federal judge is demanding information on the wildfires that pg&e may have caused this year. they are ordered to say how much damage has been done and how many lives have been lost. utility is under investigation for several fires in recent weeks, the largest of which has burned across the northern california wine country for a week. 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 ritika gupta. this is bloomberg. haidi: thank you. it is rba decision day with the bank expected to keep rates on hold after cutting them three times so far this year. i want to show up this chart before bringing in michael for more on this story. it is one of your charts. you are looking into the

reversal rates. the more households are freaking out, thinking something is wrong, better not spend. michael: there was a warning about this. mentioned at westpac the spirit he was questioning whether they would go for back-to-back cuts. going by that chart, that is exactly what looks like has happened. you know, it does take time. 12 to 18 months for rate cuts to make their way through the system, but confidence has dropped in four months of the five months since they started using. retail sales were shoppers. doesde of house prices, it not look like a lot of birds are coming out of that. as for the rba today, everyone is confident that will hold at this meeting. as i mentioned, they are waiting to see how things flow through the system. jobs numbers, the latest jobs good andere pretty

inflation was not bad. it was not terrible. they basically can use that as a basis to hold. it is more watch and wait. one good thing for them is that signal from the fed that it is on hold for now because that reduces some of the upward pressure on the aussie dollar which the rba has been trying to counter with its own three rate cuts. it has been basically matching the u.s. with rate cuts and does not have to worry about that so much. that is a health. the other thing is that australia is basically probably -- they probably only have one cup left in conventional ammunition. people think that .5% is the lower bound. is thatral thinking february of next year, the first meeting of 2020, that they will probably go again. shery: goldman sachs going as far as saying as they could be drawn into quantitative easing. they don't want to go into negative interest rates. what are we expecting on that front? michael: yes.

in recent weeks, there's been a lot of discussion, a lot of reports out on friday, looking at how australia might approach qe. there is a sense down here that it's a matter of when, not if, given the only do have one cup left. the government is reluctant to step into the breach with fiscal stimulus. it will be left up to the rba. they got one cut left. perhaps to cuts. and then wait to see how things go. the governor is an eternally optimistic man. they are saying australia is at a turning point. he says one of the reasons consumers were not spending was house prices. house prices revived in sydney and melbourne. we have seen that since may. government tax cuts are coming through as well as the rate tense. they are due in subsequent years. plus, the dollar is lower, exports are bit better, and a preliminary deal between the

u.s. and china would not hurt anybody. he is adding that perhaps things are bit better than people are thinking, that we may be through the worst, but the general sense down here is that there is another client and then qe really does come onto the table there. shery: thank you so much for that, our australian economy reporter. is meeting the bank of thailand tomorrow. kathleen hays is here with a preview. you can see that they are expected to hold. why? kathleen: it's not because they do not have problems, because let's remember, malaysia, a big export. malaysia is the world's 18th biggest exporter. 70% of their gdp depends on exports. definite export dependent. pointian exports fell six 8% year-over-year in september. we curse shipments -- we curse

shipments of everything can all of their big exports suffering. manufacturing exports down 6% year-over-year. let's take a look at the bloomberg library. ok. whatn pull up and look at has happened to gdp growth. i want to show this to you because if you look to the far right on this chart, we can see that in 2018, you know, growth was lower. 2016, 2017 also bad. back up to 4.9% now. what is going on is that malaysia has several things on the fiscal side that are helping their economy. cut ind a very large tax 2018, a massive tax cut. that is coming through this year. tax refunds on their goods and services. -- they areing now benefiting from that. that is where they are expected

to keep their key rates. if they were to cut their rate, they are a little bit wary. they were put on the watchlist and they may get worried about tariffs being put on the united states if they get worried about that. it is another reason for them to sit tight and all these fiscal steps, so important, are going to bear fruit. shery: we are looking ahead to the bank of thailand tomorrow. no change expected? kathleen: the survey from bloomberg shows there is a chance they might cut to 1.25% and it is because they are having a problem with the thai baht. it is getting very strong, and it is one of the things hitting their economy along with the trade war, hurting exports, weighing on gdp, and in fact, another chart from the bloomberg library shows you just want a problem this has been for them. look at the middle of the chart. look how strong their manufacturing and exports were.

look at the far-right. this is the intent of the trade war. what they can afford is a stronger baht. bloomberg economics things they will forgo the rate cut because they don't want to bring on of theof the -- the ire united states. they will use more foreign-exchange measures instead. thank you so much for that. kathleen hays, our global economics and policy editor. coming up next, the bank is set to price its shanghai operating later today. it could be the biggest mainland ipo this year. this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. china will price its shanghai listing today in what is widely expected to be the onshore

markets biggest ipo since the stock bubble burst. us from beijing. how do the financial results stack up against peers/? somee bank of china has solid fundamentals, one of the whitest branch networks in the world. 40,000. it guarantees very low cost of itsing, and we have seen profits rise 16% for the first nine months but it is rarely seen among these banks, so it is performing quite well this year. about 24% onre up the hong kong exchange and it is one of the best-performing chinese banks this year. why has therei: been this eagerness recently? with theyes, so along

reasons, we know that china's economy has slowed to the slowest in nearly two decades so banks have a lot of pressure to vent to smaller enterprises. higher riske profiles. we are seeing that there npl's -- their npl's are stacking up. we are risking a lot of banks going to the debt market and the equity market to raise funds. haidi: thank you so much for that. lucille liu, our china financial regulations reporter. the world's biggest money market fund, which once offered annualized returns of nearly 7%, is now on track to lose its crown after shrinking by more than $120 billion in just over a year. our next guest says the growth of chinese money market funds will come under pressure in the

short-term to medium-term. joining us now is the fitch ratings head of funds and asset mea and group for e aipac. we are talking about the rise and fall of that. what is going on in terms of the impact of the broader domestic slowdown we are seeing? >> so the chinese money market affected them extremely rapidly from 2013 until some point of last year, and then growth began to slow down. we have seen the combination of factors affecting the development in a chinese money market fund industry. we are seeing central bank tightening having a distinct effect on these funds with veal yields, adjusting for inflation, actually turning negative. that has led to outflows from these funds. it has been one of the factors causing the fund to lose its

crown. haidi: is this a redistribution, in a sense, or perhaps an adjustment? are things expected to get worse? alastair: we anticipate that growth will slow down in the industry as a whole, but let's not forget that this is a very large industry, so the chinese money market fund industry only really starts in 2003. since then, it has grown to become the second-largest in the world, trailing only the u.s. money market fund industry. we think there will be a slowdown in the industry overall. we think the yield pressure will be a key driver there. thisng specifically at -- fund has suffered the biggest outflows of any fund in history, losing 100 billion u.s. dollars in assets but a lot of that money has not left the platform. it has gone out of the fund and moved into other funds on the platform. it has a total of 28 funds on it

and many of them have incurred very significant inflows as money flowed out of the fund into other funds on the platform. haidi: we have a chart that shows those asset outflows we have seen from them. $120 billion since their peak. give us some of the characteristics of this fund. leftoverled the treasurer. what are some of the risks and characteristics of it? alastair: it is a great example of a chinese money market fund and it gives a lot of information about how the wider industry incorporates. the number one feature i would highlight is that you distribution channel. this has been extremely successful and engaged directly with retail investors via their mobile phones. it has led to very significant inflows to the fund. now, back in 2018, the fund imposed limits on the ability

for investors to subscribe, so that has put new money into the fund. that was one of the reasons that money started flowing out of that fund and started favoring flows into the other funds. it is worth saying that the risk profile of an average chinese money market fund is very different to the risk profile of one in the u.s. these are low risk vehicles in general. they invest in bank and government securities. one of the key characteristics for chinese money market funds is the ability to engage in leverage of up to 21%, something you would simply not see in a u.s. or european money market fund. shery: does that mean that they pose higher risks? alastair: yes. the risk profile of money market funds is significantly higher than the average u.s. money market fund. leveraged, at the that's clearly a risk factor. these funds can take more interest rate risks than a comparable u.s. fund can take. they can run with lower levels of liquidity than a u.s. my

market fund could, and then return to credit quality. we have seen some signs of stress and the chinese onshore market. they skipped over earlier this year and that is a good example of some of the stress that might start to appear in lower tier chinese banks and feedthrough to stress and money market fund portfolios. haidi: we always talk about the rolling ball of investor money in china given the nature of the close. assets.limited types of where is the money going? alastair: yes, that's a great question. so the money market fund industry is large. it is slowing down a little bit. we have seen a modest amount of outflows. but there is still a lot of money trapped -- caught up in the money market fund sector. we would anticipate their continuing to be a higher volume of money there. we might also see competition from other products, so in china, the wealth management

products have been a competitor to money market funds. recently, we have seen a new varieties of these wealth management products launched, which aim to emulate or be similar in some regards to money market funds, and as such, can be a competitor. however, the profile of these funds can be quite different, even to a chinese money market fund in terms of the types of instruments they might hold and indeed the level of transparency about the holdings of these vehicles. haidi: alastair sewell, thank you so much, joining us from fitch trading. if you missed any part of this conversation, tv is your function. you can watch us live, catch up on past interviews, and dive into any of the securities or bloomberg functions we talk about. you can become part of the -- this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

haidi: this is "daybreak asia." i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. let's get a quick check of the latest business flash headlines. more bad news for mcdonald's. the hr chief is leaving. for having dismissed a relationship with an employee. thatald's will not say reporters are linked. a former ceo will talk -- he will forfeit millions in

stock options. andi: microsoft japan size august experiment with a four-day working week boosted productivity. short-term meetings for maximum of 30 minutes. the experiment cut costs with 23% less electricity used in 59% fewer pages printed out. 90% of workers said they were pleased with the scheme. isry: societe generale considering a brokerage in china as beijing celebrates a liberalization. socgen's previous plans include investing $150 million to obtain 51% of the local brokerage. the lender is becoming more ambitious as it seeks growth amid a sluggish european market. just before we handed over to "bloomberg markets: asia

" the china open, it has been a pretty optimistic handover after u.s. stocks surged to record highs. the nikkei 225, japan stops playing catch-up after being closed on monday. mccloskey is treading water. i is treadingp water. the market has dipped into negative territory and of the reserve bank of australia decision today. for aussie ground trailers. new zealand seeing downside of about .1%. shery: let's get a quick check of futurist ratings at the moment. u.s. futures coming off -- u.s. future trading at the moment. we saw the trump administration officials debating whether to remove some existing tariffs on chinese goods according to the financial times. we are seeing the offshore yuan slightly stronger. that is at 7.02.

we saw the pop higher as we got those results or that media report from the financial times. now, chinese futures closed four hours ago or so. they were down .1%. that's it from "daybreak asia." stanleyp later, morgan strategist jonathan gardner will join "bloomberg markets." haidi: , and we will have live coverage of xi jinping's keynote speech. you don't want to miss that. perhaps he will talk about trade. standby for "bloomberg markets." the china open is almost upon us. this is bloomberg. ♪

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beijing not :00 a.m. in and here in shanghai -- not :00 --. in beijing and here in 9:00 a.m. in beijing and here in shanghai. >> here are the top stories. more gloom for hong kong as the economy slumps again. its lowest level for 11 years. the city protests are having an impact here and abroad. u.s. futures moved higher after reports that