paul: welcome. counting down to asia's major market opens. paul: here are the top stories we are covering in the next hour. china promises to step up the major issuet -- a for u.s. negotiators. the pressure mounts from fallout on money allegations.

turnout in hong kong's district elections as protests have their say on carrie lam's government and drive for democracy. stocks with these risks, are still managing to push ahead to a third monthly gain. let's check out how u.s. markets closed friday. s&p 500 closing just higher, led by automakers. stayingt weekly loss, within 1% of a record high. treasuries flat for an eighth session on friday. the curve has not yet inverted but we are keeping an eye on that. looking at the mood in asia, we are setting up for a mixed start. shares to the downside at the start of a week which brings us gdp reports from india and taiwan. and a policy decision from south korea. here in hong kong we are going to get trade data on tuesday along with alibaba's secondary listing in the city. this, after elections took place on sunday, november 24, which

also marked 50 years since the debut. sterling is testing friday's high against the euro after the u.k. conservatives unveiled the election manifesto. china said it will raise penalties on ip violations. trading made 108 levels. -- mid-108 levels. paul: let's get over now to su keenan for the first word news. su: china is to raise penalties on the theft of intellectual property to address one of the main sticking points in the trade war. washington wants beijing to crack down on ip theft and stop forcing american companies to hand over commercial secrets as a condition of doing business on the mainland. china says it aims to reduce the ip violations by the year 2022 and plans to make it easier for victims to win compensation. former new york mayor michael bloomberg is joining the crowded

race for the white house, entering the democratic campaign with moderate policies and experience in business and government. the 77-year-old launched his bid by saying president trump is an existential threat to the u.s. and his values. he added americans cannot afford any more of what he termed the president's reckless and unethical actions. michael bloomberg is the founder and majority owner of bloomberg, the parent company of bloomberg news. two the u.k., prime minister boris johnson has launched the conservative party's election manifesto. it will reinforce the national health service and cap futures. the tories hold a double-digit lead in most opinion polls going into the december 12 photo. one analysis suggests johnson will win a healthy parliamentary majority. a billionaire's dream.

new protests against fuel prices have erupted in iran with a video showing police firing live rounds into a crowd of demonstrators in several towns. the government is slowly restoring the internet after a week shutdown and video messages immediately showed renewed unrest. government officials continue to blame iranian exiles and foreign conspirators. 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 su keenan. this is bloomberg. sophie: pro-democracy candidates are policed to win the majority -- are poised to win in hong kong. our reporter rosalind chin has the latest. we had a record turnout on sunday. pretty good numbers.

numbers speak for themselves. more than 71%, 2.9 million people voting. this has been seen as a barometer, a referendum on the carrie lam government, the protests that have been ongoing so far. highly politicized as these elections have taken place against. timeare different this alone because usually these elections are low-key. many people do not even bother voting. but the turnout this time shows the sentiment has changed, that people want to voice their opinions in this democratic process. at last count we have been reporting the pro-democracy camp took 201 seats according to local press. that is seven times more than the other camp. in hong kong there are two camps, broadly speaking. pro-democracy, pro-beijing, pro-establishment.

this is a far more established and larger grouping of policies here. there are a handful of independence and those who have not stated their political preference. this time around a huge push by both sides but we have seen the pro-democracy camp winning many more seats at this point. the counting has not finished yet, though. paul: the people have spoken, then. but would beijing listen to what they have to say? would this change the picture at all in terms of the weeks of protests we have been seeing? rosalind: this is the big question. what will the government do with the results from this election? it cannot be a huge surprise to them if the pro-democracy camp wins more votes because traditionally speaking when there is a high turnout, and also this highly politicized environment, they would not be surprised if they take the majority. but the question is whether

carrie lam and beijing will listen. peopleny pro-democracy in that camp are looking for his political reform, a way to get what they call general universal suffrage. the question is how they will approach that. there have been attempts to do political reform in the past. in 2014 there were questions of how they could change the political process and those around the rejected. now the time comes for discussion about what political reform will take going into the future, if it gets done at all. sophie: we will have more on the district elections as the results come in. by severaljoined guests in the next hour. don't miss it. paul: china says it will take action against intellectual property theft to address a major sticking point of trade talks with the u.s.

tom mackenzie has been walking all of this in beijing. so tell us about the plan. tom: this was guidance that came out over the weekend. a few key points come from this in terms of the details. one is they said they are going to look to lower the threshold in terms of who they punished and what is punishable in terms of intellectual property theft. the other part of it is making it easier for victims of intellectual property theft to pursue claims of compensation. more broadly what we're hearing from chinese officials is they want by 2020 to significantly reduce the numbers and instances of intellectual property theft. so that is the guideline essentially. the context is over the last few itss china has strengthened intellectual property regime and mechanism. it has been a key concern from the trump administration as they continue trade talks with the chinese side. when you talk to business leaders commit european or u.s.

business leaders who have operations in china, intellectual property is falling down the list of their top concerns. but of course it has been central to the spat between the u.s. and china. so it is moving them needle at least a little bit in terms of trade talks which of course continue. sophie: where does this leave the trade talks? talks of, the trade course continue. we had this unofficial deadline of december 15 we are looking ahead to. that of course is the date at which the u.s. could impose theyional tariffs, and will if trade talks did not go the direction they want that to go. but we know both sides said they are continuing to communicate. we heard over the weekend from president trump giving an interview to fox news saying he is still relatively optimistic they can get a deal. there is also an example of both

presidents in some ways of over each other. we heard from president xi jinping friday saying he wants a deal to speak to equality, a mutually beneficial deal. trump in a fox interview says he does not like the word equality because everything is stacked in china's favor. he wants a deal that is good for the u.s. so more broadly that points to a conflict of interest between the presidents. nonetheless, in terms of the issues on the table for initial phase one, there seems to be momentum. we heard from the vice premier, china's lead negotiator saying he is cautiously optimistic. but there are details around the tariff rollbacks, the exact details need to be ironed out. and we are looking for that december 15 unofficial deadline at this point. paul: tom mackenzie, thank you for the update. will discuss, we the developments in hong kong and the trade talks with ben emons. sophie: plus we will see how the

outlook for the u.s. economy has done a 180 you turn in just three months. this is bloomberg. ♪ ♪

down to are counting the sydney open this monday morning. futures pointed modestly higher. u.s. equities closed last week. i am paul allen in sydney. sophie: and i am sophie kamaruddin in hong kong. a look back at hong kong where a record number of people have turned out to vote in local elections. let's discuss implications for the city and china and trade talks with the u.s. with ben emons. we are about a week out from the tariffs deadline. how does the hong kong situation fit into your assessment of what the trade deal may look like between the u.s. and china given the latest developments in hong kong?

ben: thank you very much for having us again on the show. this is honestly a good outcome. if it is pro-democracy, i would think from the u.s. side it would be a confirmation of the bill that passed the senate and the house of representatives that is on trump's desk right now. and he has some time to look at this bill and maybe sign it because now the people of hong kong have spoken. so it comes down to that the chinese government and hong kong government have to respond to what the people has said. and i think this is sort of the time ideally for having this become such a dominant theme of this hong kong bill, rather than leaving it up to the chinese and hong kong government. but on the trade talks, this is actually a constructive outcome. sophie: so this is not a development that could allow for investors to look more positively on hong kong? let me take up the chart, 10 times projected earnings.

valuations looking cheap enough. have things improved enough in your view? ben: it would be. it is definitely that if the pro-democracy camp has now prevailed, you would think that a large part of these protests now,d start to ease off because there will be dialogue with pro-democracy lawmakers and protesters about next steps. so i don't think you will get much more disruption from here. obviously the hong kong economy is in a recession that will linger on, since a fair amount of destruction has taken place. to your point, the hong kong stock market is very undervalued at this point. i think a lot of international investors are looking at this outcome as a positive one, therefore there will be capital coming in. there has been some inflows as well as the ipo market being hot, quote unquote. i do not think international

investors are ready to step in and support the market. the: ben, in terms of investment to the hong kong policy act of 1992 that is now sitting on president trump's desk awaiting his signature, should he sign it, how will that change the picture for trade talks? because of course this is an extremely sensitive issue for china. ben: as i mentioned, i think some -- i think trump has some time to wait given the outcome of the elections. therefore, there may be an incentive on his part, just like with the eu tariffs, he let that sit on his desk for a long time and ultimately let it pass. in this case he might let it sit there for a while and not have it affect trade talks. that was sort of his comment last week, he wants to make this thee deal happen, and yet situation in hong kong is

something that needed to be addressed from the u.s. side. but the outcome is a good one. so i do think this is constructive for the trade talks at this point. at least having this not becoming an overarching theme in the trade talks all of a sudden that by signing that bill if the outcome was different, and therefore it got more attention. so i think markets will take it like this and see, ok, there will not be much of a disruption in trade talks from here until the end of december to move this forward. to bethere does seem quite a lot of optimism around trade talks at the moment, that at least he phase one deal will get done. markets appear to have price that in. do you think there is a risk the rug could be pulled out again? ben: the way that would happen is that trade talks to break down because the structural issues are just not resolved. and the phase one deal as president trump himself described it as 60% of the deal, suddenly becomes 10% of the

deal, something really dramatic. then i think the trade talks break down and we will go back to the idea of we have to escalate the tariffs and the markets will price that in. i think the markets are pretty convinced that this phase one deal will happen because there has been formal guidance given around the trade deal and trade talks. we know it is phase one, phase two, set at 60 be front -- set a 60%. there has been effort to make the deal work. the news just came out about id theft. -- ip theft. so i think there is a genuine effort to this to the finish line and therefore markets will stay optimistic. other than that, the talks could break down again. so far it doesn't seem to be indicating that is the case. paul: all right. ben, stay with us. we are going to discuss the u.s. economy's 180 turn in a moment. you can get a roundup of the

stories you need to know in today's addition of daybreak. bloomberg subscribes go to dayb on your terminals and find it on mobile. customize your settings so you get the news you care about. this is bloomberg. ♪

sophie: what a difference three months can make. the outlook of the economy has seemed to pull a 180 in that brief amount of time. our economics editor as it up. -- adds it up. pete: in august, all the indicators were bad. the bond market was signaling a recession was in the making. and a trade war between the u.s. and china would not go away. if you didn't panic and sell everything, it has soon gone from doom to boom.

u.s. stock indexes are setting records almost daily. an sentiment has changed. according to a survey in august, global fund managers overwhelmingly expected slower growth in the coming year. now, in november most of those surveyed expect stronger growth in the coming year. what is the biggest reason? a change in central-bank policy. almost a year ago the fed was planning on three quarter-point interest rate increases. instead it cut rates three times this year, two times this fall. the european central bank become more dovish. still, economists are not complete we sold. they see business investment lagging. they wonder whether the recent strength in the economy is sustainable or the last gasp in expansion past its prime. that was bloomberg businessweek's peter coy there.

ben emons is still with us from los angeles. i want to pose the rhetorical question at the end of that segment, is this sustainable? as he pointed out, a lot of this optimism does have to do with fed dovishness and easing from other central banks around the world. so are we set for another leg higher or is it reliant on fed sugar? ben: i think it is relying on the liquidity of central banks. i think what he was saying, trade was really dominating the sentiment. if you actually look at the surveys that have come out theytly from businesses, held back investment the first half of the year and trade is on top of the list. in concerns about tariffs going forward. as those concerns are easing, as the phase one deal presumably is coming together, i think there is pent-up demand for investment and inventory to be rebuilt. the fact you are getting an

inventory cycle restarting would lead to re-acceleration and the stock market is sensing this while the bond market is still in the low yields because of the downward pressure of the trade war inflation globally. i think it is not so much a sugar rush, but more about economics. i think the acceleration of growth may be coming in the next few quarters. paul: we are going to have some gdp figures for the third quarter out soon. i know you have been watching the atlanta fed gdp now numbers. numbers are real-time, so to speak. it is a proxy estimate, but it shows that gdp has decelerated quite a bit. today it is about .5% growth. the actual gdp number that is published on wednesday will show something like just around 2%. but it is definitely at a trough here. in the past, gdp now is a

leading integrated -- indicator for growth. as it dips, you have a correction coming. these are the same science we are seeing today. bottomedow has already ahead of the inventories that are now bottoming. signs of gdp growth becoming better, the fed on wednesday, it probably shows a soft number given what gdp now is at the moment. and that itself will be a good sign for the quarter ahead of stronger growth. sophie: and as you noted, downward pressure has been seen globally, but in the u.s., could we see a turnaround? breakevens could pick up and the fourth quarter. but there is some of that, i would say there is a fair bit of deflationary pressure globally still. that will take some time to work that off. so you get first acceleration of growth, and that will drive

mostly bond yields higher, then the inflation story follows. if you look at the import pricing globally, they are in negative territory. that has a lot to do with the slowdown in china. see forould have to that reason a lot of recovery of global trade, which i think is a real macro catalyst for next year, for the short-term, for the next couple months. it will probably be more like growth picking up again in the u.s. and following and some parts of europe, and that will pull up yields before the inflation picture comes into play. sophie: treasury yields have been on the flattening trend. how could the strategy be going forward? ben: i think the yields itself are still depressed because of the uncertainty. so if you do get a rising yields more sustainably, really above 2%, probably that gets you on the high side given where the inflation picture is. the current point where we are, about 1.75, it pushes back to

the two range, that is better reflective of an economy that is perhaps on a strengthening trend again, rather than what we are seeing in a recessionary scenario at the moment. paul: all right. ben emons, thank you so much for joining us. let's get a quick check of the latest business flash headlines. they have agreed to buy drugmaker medicines for almost $7 billion, snapping up a promising cholesterol treatment and adding to a recent string of acquisitions. shareholders will pocket $85 a share, a 45% premium to last monday's close. jersey-based medicines had already tripled in value this year. sophie: pressure continues to from bankingpac regulators that would have the power to disqualify executives. moneyre accused of

laundering and failure -- the bank said it expects more than $50 million u.s. in costs. more coming up, with china -- this is bloomberg. ♪ is bloomberg. ♪

paul: counting down to the market open in sydney, less than half an hour away. futures pointing higher by about .2%. this of course follows u.s. equities higher as well after friday's close. slightly clear skies and city today. of course it has been blanketed in bushfire smoke for much of the week. i am paul allen in sydney. sophie: and i am sophie kamaruddin in hong kong. let's get the first word news with su keenan. su: we are going to start with pro-democracy candidates, they have taken an early lead in hong kong's district council elections, including -- according to local media.

the early counts suggest a group.de win for the a record number of voters cast ballots sunday in the first opportunity to comment after months of protests about greater democracy. chinese state media meanwhile says the u.s. is quote, the biggest destabilizing element in hong kong. the official news agency says riskcan politicians pushing the city into a more dangerous abyss as they use what is called the hong kong card to contain china's growth. the commentary comes as president trump deliberates signing into law a bill that would require annual reviews of hong kong's special trading status. to israel now, where prime minister benjamin netanyahu is to face a leadership challenge from within his own party as the state prosecutors decide whether to lend him a government amid

accusations of government corruption and abuse of power. the newspaper says they will hold a primary election within six weeks. israel is still without a government after two inconclusive elections this year. finally, the sumatran rhinoceros has become extinct in malaysia. this, after the last of its species died of cancer on saturday while living in captivity. the sumatran rhino is the smallest of the five announcers species which once roamed across asia, but it's numbers reduced drastically due to deforestation and poaching. it is estimated there are only 80 animals left in the wild, mostly in indonesia. 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 su keenan. this is bloomberg. check on how get a

asian markets mayfair this monday as we head towards the open. tokyo after an drop on friday. light on the asia calendar today. little that can budge the dial. timely's investor output do this monday. offshore yuan holding around 7.04 after a second weekly drop. the yen just barely budging. open we do have markets this monday, that is new zealand edit has recovered somewhat early losses, kind of currently trading flat. futures in australia are poised for gains. we will of course be keeping an eye on one of the big four banks currently embroiled in a money laundering scandal. 23 million incidents of foreign transactions under investigation. setting aside $80 million to deal with this.

the ceo is still in his job, but the government calling for accountability of the scandal. taking a look at the aussie 89.lar, also flat at 67 adam schiff says the investigation of the trump administration will continue after a house committee submits its initial report. let's get that it is from ros krasny. what are the next steps in the impeachment drama? ros: house democrats are working very hard now to try and compress a tremendous amount of information into their report on their impeachment inquiry. they have five days of dramatic postel -- public testimony that many saw. and a hefty document collection. they are trying to roll that into a report that would then be sent to a judiciary committee. one of the problems in getting this done is information is

still emerging. it makes it very difficult to shut the door on the inquiry, tae bo around it and get things moving as the democrats would like to do. even this afternoon the washington post reported there has been a trove of emails .iscovered in the white house whether the withholding of military aid to ukraine was legal or not. is that bubbles to the surface, that makes it difficult to just say we are done adam schiff did not rule out having more witnesses or more private depositions but it sounds like nothing more on the plate for 2019. he also suggested certain individuals like former national security advisor john bolton show the same kind of courage that some of their staff have shown and coming up to testify and not holding back materials for a book.

but basically the bottom line now is this still looks like a very partisan inquiry. democrats say they have ironclad proof. republicans saying they have nothing. paul: sounds like rudy giuliani might have raised eyebrows as he was talking about his insurance policy. what is that about? ros: very interesting. as you know, rudy giuliani has had many eyebrow raising moments since he started working for trump last year. whether tv interviews, tweets, or other venues. on fox news he talked about the idea of insurance policy when asked if trump at some point would basically throw him under the bus, given that he has been called a hand grenade john bolton and many of his actions in ukraine have been a focus of the impeachment inquiry. would trump tire of him and basically toss him out. and he basically said yes, i

have an insurance policy. later in the day he flipped that around to take the focus off trump and talk about joe biden, saying if i disappear, i have dirt on biden that will then come out. of response to that. theories and people saying well if he has something, why doesn't he come out with a now? he is already a colorful character at this point. so i do not expect rudy to be disappeared at any point but it sounds like he has a plan. paul: all right, watch this space. ros krasny, thank you for joining us. alongside the impeachment saga of course is the trade dispute with china. beijing seems to be offering a compromise, saying it will raise penalties on violations of intellectual property rights. joining us now from washington founder oforah elms,

the asia based center. china saying it will raise penalties, lower the threshold on ip violations. the issue is enforcement of ip valuations which is really the problem. >> i think it depends on who you talk to pete from washington it is a whole range of issues attached to international property rights. from the rules to the enforcement of the rules, the u.s. is claiming the chinese followed none of it and the chinese are arguing that in fact they have sufficient rules, they ms. -- issues for from enforcement in the past but that is being stepped up. this is another issue where the chinese are saying we have done what we can to satisfy the u.s. and whether that is enough is unclear at this point. paul: it is a conciliatory move. how does it impact the traut -- the timing?

how could we see some sort of phase one deal? deborah: i remain a skeptic on this one, having done a lot of discussions on u.s. china back in washington yet again out of singapore for every other month now for what seems like forever. i do not personally think we will see a deal until february because there are a lot of holidays, a lot of arguments as to why this will not happen. what they are trying to do is have just enough progress of the -- so they can postpone the tariff raised by the u.s. whether this is enough is unclear, but that is the goal is to suggest to markets that sufficient progress is being made to indicate at least a cease-fire with arrays of tariffs on december 15 and eventually we might see a phase one of some sort. but i am really not holding my breath. sophie: i would like to turn our attention now to another relationship, japan and south korea. they are now to coordinate a

summit in china next month. we are seeing a flareup in mutual animosity. how are you gauging what has been happening between them? deborah: this has been interesting to watch. this is a historical challenge they have faced the comes up from time to time. typically the u.s. is one of the key parties that steps in and says let's calm things down. with the united states distracted, to say the least, they have played less of a role. the u.s. would argue they have laid a perfectly good role. but it is clear that the japanese and the koreans have at least allow this to escalate beyond where i think either side intended this to go. so now what do we do? how do we solve this particularly -- this particular problem? both sides have recognized the dangers that they are in and trying to rein it back in, at least on the economic front, before this escalate. but it is hard. there are emotional issues

attached, national pride at stake. so getting both japanese and korean to sit down together and amicably resolve long-standing challenges, it is hard. tohie: japan were able cooperate when it comes to the rcep talks. does that bode well? rcep is out a critical juncture right now. deborah: rcep is closed. so the good news is we have a trade agreement in asia with 15 countries. they are prepared to find -- sign the agreement in february or march of next year. the japanese and koreans worked together side-by-side to help promote that agreement. i think that is very important. it shows that the two countries can put their differences aside, especially in a larger setting. that is very important. but the bilateral relationship remains tense. and i think both sides i think are looking for some way out of this particular challenge. because they recognize the potential for it to escalate,

rollover, become more than just a war of words and to impact both the economic and security relations, which both sides would prefer not to have go any further than it has already gone. another majorhave meeting this week, the summit happening in busna. -- busan. what are you watching for here? deborah: asia in general, contrary to many other parts of the world, have been very active in signing trade deals to keep trade links open. i think what they wanted to do on the korean side was announced three separate deals with malaysia, with indonesia, and with some others. at the end of the day it has proven a bit more challenging than anticipated to lock them down. so they will only sign with indonesia this time. but what it shows and why this

is important is that a sean continues to see trade as an important mechanism for getting economic growth. integrationl of between asian countries and asian countries and the rest of the world, singapore came last week, these are important milestones in continuing to treat -- to keep trade links open at a time of otherwise increasing uncertainty. and i think that is necessary and relevant and worth paying attention to because we have -- of course i am sitting in washington, so we have a lot of disruption in washington -- but we see trade links being maintained and expanded across asia. and i think that is what they say here do in busan, is yet another place where we can focus on trying to keep economics open for business as

much as possible at a time of increasing turbulence. of regionalrms dynamics, i just want to get your thoughts on some remarks that henry kissinger made during the economic forum last week in beijing when he said the u.s. and china could be in the foothills of the cold war. does that seem like a reasonable assessment to you or is it outplaying the situation? whorah: i think it is very, wants to argue with kissinger on this one. but i think it is very challenging for the rest of the globe certainly, and especially for countries in asia who have job of done a very good navigating potential polls and have tried to make sure they are friendly with everyone. and that gets harder and harder ened the positions

come, especially between the u.s. and china. that navigating between those positions is going to be very challenging and very difficult, which is partly why i think asia has moved forward with rcep in particular, to say if we are going to have the world splitting up into different areas, then asia at the minimum nice to have a platform for conducting discussions about economic issues for asia. and he developed of trade lanes for asia trade, inter-asian trade that has never really existed before, because if in fact we are going to start splitting the world up in ways that we have not seen before, then we need to have some fallback positions. let me stress, no one thinks this is a good idea. this is not the best outcome. the best outcome is to stay united and to make sure the multilateral system works. but if that is not going to be the case, then you need to start taking the plan b, c, d, and e.

for asia, part of that is how do we have integration between asia, between bilateral members, with europe. because otherwise, it gets to feel very uncomfortable and a very trade and economically-dependent state. how do you balance a world that could be splitting in ways that we have not seen before? sophie: multilateralism being put to the test. thank you so much. next, the crown jewel. tiffany's move closer to a deal. this is bloomberg. ♪ s is bloomberg. ♪

two companies likely to be in focus on merger monday, lvmh and tiffany's. a deal could be cloture after they sweeten its bid.

su keenan has the story. we might have news later this monday. su: we are expecting there might be an announcement on merger monday. we know according to people close to the matter the boards of both companies met on sunday and that what we are hearing is the bid was sweetened to $135 a share, valuation of about $16 billion. which would make this lvmh's biggest ever take over. shares up in the last couple days. according to people close to the matter, lvmh sweetened its beta couple days ago to $130 before going to $135. the big picture chart shows tiffany's was trading above the initial offer price since bloomberg first reported talks were taking place in late october. richestvmh is europe's --ury dealer and it is also it overseas don perron jan

champagne and others. salesrfs tiffany's in with more than $50 billion. it is not as dominant as tiffany's is in the jewelry realm and many appear to be excited about this combination. you will notice several analysts had been protecting lvmh would even take its bid as high as $1 60 a share. that was the cowan prediction. it will be interesting to see if they can reach a deal at this price. but a deal is expected to be announced later on monday. paul: su, tell us about the synergy. what does each company potentially gain from the merger? su: tiffany's is a storied company enshrined in a movie called "breakfast at tiffany's." it is 182 years old known for boxes.bins egg blue

but it is seeking to revamp its brand and go after a younger customer. europe'sh, which is biggest luxury goods dealer. they would like to have access to u.s. luxury shoppers, and they are much more dominant in the fields of fashion and cosmetics. they would love to have a foothold in the jewelry offerings that tiffany offers, with midpriced offerings. chain in theart range, which is much lower price. this would expand assets to the u.s. customer. paul: su keenan, thank you very much. don't forget, if you are away from a screen, always find in-depth analysis and the day's newsmakers on bloomberg radio,

broadcasting live from our brand-new studio in hong kong. you can listen via the app, bloomberg radio plus, or bloombergradio.com. this is bloomberg. ♪ this is bloomberg. ♪

sophie: i am sophie kamaruddin in hong kong. paul: and i am paul allen in sydney and you are watching "daybreak australia." the embattled leadership of west bank is in the size of australian regulators amid allegations of breached money laundering laws 23 million times. our reporter has been watching development. , the ceo still has his job at can he stay there? weeks wouldext two be crucial. this is a time when the chairman anyway would be going around

with reelections for the board and everything. those meetings will take on a decisively different tone then we might have expected a couple weeks ago. investors have been telling us privately about development. they didn't expect it would be this bad, even though they were warned they were being investigated. the question now is what to expect. sophie: the fallout will likely deepen given that the phase probes by banking watchdogs as well as the prudential agency. emily: yes. when you have allegations of this magnitude you would expect every regulator to be looking into it. the prudential regulator got relatively new powers last year. looking into whether there are any potential breaches with that.

the treasurer told us last night. we understand the securities regulator is also eyeing the allegations to see if there are potential breaches of companies that might mean they have to launch their own investigation. all in all, there's a a lot of pressure on westpac right now. there.yone who works paul: let's take a look at these 23 million transactions. not all of them, obviously. they took place within six years. $7.5 billion. how did this not get picked up? emily: we don't have an answer yet but we have some ideas. most of these were essentially international transfers. they used a network of corresponding banks. into australia via other bank accounts. it bank, as they stressed, had monitoring systems in place. but they did not pick up what

they were meant to be picking up and they did not report this over a extended amount of time. regulators want these transactions to be reported so that they can track for any evidence of money laundering, terrorism financing, etc. onall eyes basically are now what did westpac know and when, and what to do about it. is i.t. problems, visit the regulator called out -- they claimed there was a difference in senior management. that is something west bank -- westpac has pushed back on strongly. when we get more details on who knew what and when, that is when we will get a clearer picture in the future of the management and board. certainly inac focus as we count down to the open in sydney. plenty more ahead in the next hour. strategist eleanor creagh joins us with a look on equities. paul: and we will have the

market open here in sydney in a moment. futures pointing higher by about .3%. all the action in daybreak asia up next. stay with us. this is bloomberg. ♪ s bloomberg. ♪

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paul: good morning. australia's markets have just open for trade. sophie: we are under one hour away from opens in japan and south korea. welcome to daybreak asia. our top stories this monday, china promises to step up the fight against ip theft in a bid to break the trade war logjam. it has been a major issue for u.s. negotiators. more pressure on westpac as the fallout from money laundering