paul: good morning, i am paul allen in sydney. we are an hour from the market open in japan and south korea. kathleen: i am kathleen hays. sophie: i am sophie kamaruddin. welcome to daybreak asia. ♪ paul: our top stories, expected shipments show why china needs a trade deal. theal demand is hurting economy. oil is expanding three days of gains after opec's deeper out

what curves. -- output curves. kathleen: and the biggest demonstration in hong kong in months. the protests will drag on into the new year. markets have opened. what do you see? gaining .2%.sx 200 ceosurprise resignation of futures are pointing higher. policy decisions from the fed and ecb as well as aramco's big trading debut in riyadh. and the fed will close out its current session this week with prime minister of a going to win a deal. we are waiting on japan final

third quarter read which could be revised up. we will get a reading on china's credit data. seeing the offshore yuan holding steady, the weekly gain trading at the mid-levels. the aussie dollar under pressure this morning. the line of 68.10, easing compared to dwindling odds for the fed rate cut in 2020. aussie benchmark bonds are mirroring treasuries, falling for a third session and looking at cable, marginally lower but above 131 at a seven-month high. a big week for british politics and progress of brexit. more on that story, let's go over to su keenan. su: we begin with the latest on brexit. opinion polls all give boris

johnson's conservative party the lead, four days before the election. brexit is expected to be top of the agenda. those opposing expert -- exit from the e.u. are purging the taxable -- backing the candidate most likely to win a seat. the prime minister warned complacently is the main threat to a conservative victory. the u.s. and north korea, president trump downplaying recent missile tests, saying kim jong-un is too smart and has too much to lose if he ask in a hostile -- if the acts in a hostile manner towards the u.s. the north korean envoy said talks on denuclearization are off the table and pyongyang oversaw the test of a long-range missile launcher. state media didn't say what kind

of rocket was tested. qatar says it is holding talks with saudi arabia. the latest sign about the diplomatic and business standoff in the gulf may soon be resolved. news of contact comes after the saudi king solomon admitted -- and by the amir -- invited the amir of qatar. saudi arabia, bahrain and egypt cut ties in 2017, accusing doha of funding terrorism and having close ties with its regional follow, -- regional for, iran. -- regional foe, iran. in, windy weather continues australia. more than 2000 firefighters and 100 aircraft have been involved in attempts to halt the flames and threatening to join up encircle.

it was ranked worst than some cities in china as of last week. global news 24 hours a day on air and at quick take by bloomberg. powered by more than 2700 journalists and analysts in more than 120 countries. kathleen: china's exports fell last month as -- tantalizingly out of reach. markets are hoping for some progress ahead of next sunday's deadline for more u.s. -- let's get more to beijing and the china correspondent. this tell us about the trade war impact on china's economy and what it may mean for a deal? tom: manufacturing in particular has become a smaller component in china's economy but it is significant and the pressure has continued.

officials care about, they want relief from the tariffs. they have that illustrated in the data, a surprise drop in exports. pressure in terms of demand, you saw demand and nations in the e.u., but also a significant hit. you see it in the u.s. data. china exports 43%. people will be stocking up on many of these goods. bloomberg economics expect this to canyon -- to continue because the demand will remain wobbly. unless you get a trade deal and the pressure continues. imports are different. . component may be soybeans

you saw overall a surge in soybean imports into the market. they don't do it country by country what we want to know reports in china, officials have been clearing card you -- cargo from the u.s.. maybe it will move the dial on the talks. we know of course the u.s. officials are telling bloomberg there will be a deal before the tariffs deadline but we know the two sides are wrangling over how they will pull back tariffs and to what extent china will buy u.s. agricultural purposes. paul: thank you so much. risks against said china turning to the downside with the trade war unresolved and we could see tensions escalate.

katrina, let's start with the trade numbers tom was talking about. big decline in exports. they could be worse to come. katrina: there is no upside risks. it is weighted to the downside. the downside risk is coming from the trade war. the rhetoric at the moment is both sides are working strongly towards a deal. the risks that there could be escalation again, as beijing and washington are trying to sort out these tricky issues of treatment of foreign investment and that sort of thing, it is a concern for us. paul: we have seen this time and again the equities price and resolution only to be horribly disappointed. decemberxt flash point 15? katrina: absolutely. and as we go to the next point, that is where tariffs increase

and we hope there will be meaningful progress. if they are implemented it will be concerning because a lot of the goods that are being targeted are u.s. consumer goods. we know from looking at the u.s. economy the consumer is the bright spot in the economy. if they get hit with these increases, it is bad news not only for the u.s. economy but the global economy because the u.s. is an important stimulus for global growth. i wonder if these weak don't numbers for china potentially give the u.s. more leverage does the consumer is holding up and is buying things in spite of tariffs while china is expected to slow down next year and without -- with more tariffs put on, they would be in a bad position. at that pointare of the trade war where it is in

the interest of both sides not to escalate further. we know that even though the u.s. economy and consumer could there is aup ok, vulnerable and fragile position. want to push too hard because it could be a weak point with theripple effects broader economy. and going into the presidential elections in 2020 or the economy is a key issue, they don't want to be pulling back to much. -- too much. let's say we don't get a trade deal for there is a trade deal but tariffs are not removed much. what does it mean going into china? how bad for the slowdown get? >> it is hard because it depends tariffser the existing

would be removed. if we don't get a deal, some tariffs are removed or additional ones are implemented, it would be bad news for the chinese economy because we know export engines, manufacturing engines and broader production is hurting the tariffs. if there are further tariffs, it would be bad news. it could even force policymakers to abandon the piecemeal measure approach to stimulus and get more aggressive to keep china's engine going forward. you anticipated my next question. clearly you don't believe it is. what needs to be done? >> if we can get a trade deal, the pboc, chinese government can

continue with its piecemeal approach. if we don't get that trade deal thing we are craving, the pboc -- we might have to do more infrastructure spending. kathleen: we will look at hong out in force on sunday. anti-china demonstrations will drag on into the new year. police put the figure below 100,000. there is a call for a general strike monday. our coanchor yvonne man is in the central business district. what are you seeing? showe: this was a stunning of people power.

it was not deja vu to the days back in june. about 2 million, 3 million people to organize back then. 800,000 is no small number. it is the first rally since august which was actually approved by police. perhaps that prompted a lot of people to show up. we saw families as well. if you look at the damage reports around the city, not seeing much of it. there is trash, graffiti. behind me you see protesters threw petrol bombs. not seen that before. it is the most of the damage we have seen around the city. what we saw over the weekend is police didn't have to fire tear gas. the water cannons were out but it was only here for standby. they didn't end up deploying

them. this was pretty tame. or overfore this rally the weekend which started at victoria park, police did arrest 11 people and seized a list of weapons including a nine ,illimeter semi-automatic gun pistol, bullets and knives. police were suspecting it was an extreme group out to protect police and create chaos at the rallies. there was nerves going into the event. paul: there was a suggestion or a call for a general strike on monday. any evidence of that happening? or is it a quiet week? yvonne: you see it on the graffiti on the walls where people say december 9 is a day for the general strike. we have not seen much disruption when it comes to traffic. police goingriot

into the stations around the nothing hasd, but escalated. we are expected the morning commute could be impacted in some way. rochester's are vowing in the fight to continue into 2020. the next flash point could be a legislative council elections. momentum is on their side. the democrats won overwhelmingly. president trump assigned this bill. they will continue to pressure the government. we will see what carrie lam says with a weekly press briefing with reporters. thank you for joining us. we will have more analysis throughout the day. david webb will be here in the next hour and we will have the

former hong kong member joining us later on. minister bin salman delivered on his affective you. takeaways from two talks in -- his debut. takeaways from the two talks. kathleen: shinzo abe unveiled a massive stimulus plan. we discuss all of this and more. this is bloomberg. ♪ this is bloomberg. ♪

you are watching daybreak asia. it is another busy week for bloomberg economic data. in addition to the tariff increases sunday, investors will be eyeing signals from the last fed decision for the year. let's bring back our guest. pivotal week for emerging markets. i know you covered china and

australia but you also cover indonesia and others. some people say the dovishness, if we hear the ecb and the fed are not ready to cut rates will they will sit tight. this could be a big deal for emerging markets. >> what is the case. we have seen -- and that is the case. we have seen the bank of indonesia has been aggressive with dialing back the stimulus they introduced in 2018. now the fed looks like it will be an extended pause. they have really taken a pause. they are not introducing the same level of monetary stimulus they were earlier in the year. it is the case for other places. they don't have the same flexibility to release monetary stimulus why can the second whener and third quarter the fed was looking more dovish.

where do you expect to see this playing through the most? there is the question of being able to provide stimulus and not worry about currencies getting hit, but each country is different with inflation rates. where will it have the stronger stamp act? -- strongest impact? >> indonesia. indonesia, they have done quite to stabilize. they are working with the account deficit. hopefully if global risk aversion kind of comes to light again, there is a hope they won't be so vulnerable to the

tide turning on emerging markets. we would expect to that in indonesia and india to be the worst hit because of their heavy reliance on foreign flows. paul: and in australia we had disappointing growth numbers. only the most hopeless optimist would expect -- the bank has a high threshold but will it have an option in 2020? >> it is difficult in australia because we know monetary policy agoot as potent as a year because the cash rate is low. they have a potent impact. shift to whats to more can the government do to -- that havee

relieved some stimulus for them for structure spending. there is a lag time when it comes to infrastructure spending. expansionarye more fiscal policy rather than keep the focus that day. paul: you said china could see boosted infrastructure spending. could that lead to australia with a decrease of fight -- increase of iron ore demand? >> yes. beijing has shifted to want more stimulus. they have increased infrastructure spending. we have seen imports of -- exports of iron ore from china -- from australia to china picking up. for would be beneficial australia. kathleen: i want to ask about new zealand because the price of last year with aggressive rate

cutting, can they sit back and relax, or do you expect more in 2020? katrina: they will have to deliver more monetary stimulus early in 2020. i don't think any central bank in asia-pacific can really comfortably sit back and relax now. we have this festering trade war that doesn't want to be resolved. the tension in between beijing and washington is so stressed. we have got central banks watching on and being directed by how the trade war plays out. if the trade war escalates again, it is bad news for a global growth perspective. it will get them to act more aggressively than what would be suggested. paul: thank you for joining us. you can get a roundup of all the stories you need to know to get your day going in today's edition of daybreak.

bloomberg subscribers go to dayb on their terminals. this is bloomberg. ♪

asia.en: this is daybreak i am kathleen hays. paul: i am paul allen in sydney. let's get a check of business flash headlines. goldman sachs ended the week on the high that it could end up playing -- paying less than expected in the 1mdb scandal. federal agencies have discussed the $1.2 billion. [indiscernible] goldman shares rose on the news. the stock declined 30% this year. fineden: nissan could be $20 million as part of the carlos ghosn affair. the securities and exchange

commission is ready to advise the financial services agency. the man was arrested a year ago accused of falsifying documents and adverting company money for his own use. he denies wrongdoing. up topsbc is shaking management ahead of the arrival of the new ceo. they will announce the retirement of the chief risk officer and split the leadership of the investment bank. the first strategy could also see hsbc focus on the asia-pacific but reckons he can make a general return on shareholder capital. the saudi energy minister delivered on his opec debut. deep cuts and a bullish outlook on aramco. you will have the takeaways from the talks in vienna. this is bloomberg. ♪ is bloomberg. ♪ when it comes to using data, everyone is different.

which is why xfinity mobile is a different kind of wireless network that lets you design your own data. choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to other top wireless carriers. and now get $250 off when you buy a new samsung phone during xfinity mobile beyond black friday. plus, you can save up to $400 a year. click, call or visit a store today.

the best thing to do is to preemptively lower the production to make sure that we could deal with this stocking as we go on to the end of 2020. >> this was best on analysis of the market and we expect the that will revenue improve from this stabilization, we might end up with a better reward. >> everybody realized the fact that these cuts are good for us because we needed to tighten price. paul: the key opec figures

speaking to opec in -- bloomberg in vienna after they pledged further cuts. james, is the market likely to react to the output curbs? >> we haven't seen a lot of folder in the price -- falter in the price. the market was aware of the cuts in the u.s. on friday. we saw a strong rally into the close. reflects a lack of follow-through. we are relying on the cuts being complied with by the recalcitrant nations who haven't really followed this year. the classic case in point, iraq, pushing for an extra 400,000 barrels cut. they were one of the worst in following through. puttingsee the saudis

pressure on the nations to follow through. evidence, thelear market will be hesitant to push through. kathleen: what was their motivation? any idea for aramco? uppermostmco deal was in the saudi oil minister -- he has had a strong hand in this meeting. wasn't a great expectation. it was so quiet from the leading members going into the meeting. even as the meeting was going on little leakage. expected to launch in the saudi market with the valuation of 1.7. it wants to get up to $2

trillion. this will help push prices north and get that valuation closer to $2 trillion. that is like what we saw announced friday. kathleen: let's get more on aramco. saudi arabia is predicting the energy giant will soon surge valuation2 trillion the kingdom want to before last week's ipo. the energy minister spoke to bloomberg in vienna. >> he is a proud person. all alsoat he made us proud because he took a good decision. these decisions you seek, you have seen it now. timesught us 4.6 oversubscription. i think we will all be proud as

, when this company trades. you see that his calculation of what aramco is worth would be there. so-called evaluated -- it is already going to be sold for 4.7. that would be more than assured to believe that it would be very much higher. reporter: wall street money managers do this every day. what you think all straight -- international people don't get about aramco? >> it is the difference between in london andcity being down to iran and seeing a culture of 60 years, a company endowment.rs of well

a relationship between a toernment and a company and ants image, assets endowment that has in terms reserves. how on earth somebody can compare aramco was almost 60 ability toen-ended billion of oil, god knows how many cubic feet of gas, which a good chunk of gas we would be surprised we would be producing it over some years for now, this is a heavily well endowed company with reserves, with a long concession agreement, with a talent, human

resource, well developed, the every persontract that can help. good training programs. good investment internationally. more clarity of what this company will do in the future, very well diversified portfolio. that would be even enhanced and more diversified. paul: that is the prince speaking to our reporter in vienna. sophie has been keeping an eye on oil. sophie: james widen out, nothing much reaction. mostly they are maintaining the advanced after opec outlined details of deeper supply cuts. a 2020gold raising forecast.

boosting brent outlook for 2020 by 5% to $63 a barrel. i want to highlight stocks that are moving in sydney and wellington. i want to check in on a two milk because the stock is falling as sydney, as much as 7.7% in wellington out of the surprised exit of the ceo less than 18 months in the role. this one is under pressure, probably the most in 15 months after trading updates. they are flagging a drop in occupancy rates and a slower than expected rise in revenue. mcmillan shakespeare moving to the downside. friday more than 12% in sydney as they signaled challenging conditions in new zealand and the united kingdom. regulatory changes affecting products. to suen: now we go

keenan. su: we start in hong kong where hundreds of thousands of people joined the biggest demonstration in months. this is a sign that popular unrest will continue into the new year. protest organizers say 800,000 people marched through the city sunday while police downplayed the number, putting it below 200,000. the rally was the first promoted to the human rights fund to win an official permit since august. chinese exports fell unexpectedly, another sign the trade war is putting the economy and global demand also flipped. -- hurting the economy. we are down 23%. it is the worst reading for exports for america since february and the 12 consecutive monthly decline. shipments have been expected to increase .8%. china's third richest man is

$2ept -- is that for a billion windfall. he will earn the money after the property developer and electric car one of the declared a record dividend. the board is proposing a payout of one yuan 42 a share. in ever grant means he will pocket most of the cash. indian lawmakers set to approve legislation to prevent muslim migrants from gaining citizenship in the latest move in narendra modi's hardline hindu nationalist program and seen going against india's secular constitution. it allows citizenship for hindus, sikhs and buddhists who come from pakistan and bangladesh, but muslims are excluded. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

i am su keenan. this is bloomberg. democrats making their final arguments for the impeachment of president trump with a simple refrain, nothing less than the integrity of the 2020 presidential election is at stake. joining us now is bloomberg washington editor ros krasny. final attempt to the democrats to convince main street of the importance of the time and energy they have put into this? ros: that is right. much of the drama has been so partisan. there are polls that show american majority don't favor impeachment and others say many people think donald trump has done something wrong in his actions regarding ukraine. the arguments that we are likely to hear tomorrow will kind of

hone theill kind of discussion more. democrats will bring out the councils for the intelligence committee and judiciary committee to make their case again. we will hear from republicans, likely a high drama hearing. kicking into high gear extremely important week for trump's presidency. ,lso president trump on twitter he has had close to 100 tweets, retreated all's every republican lawmaker on his side, every pundit. he is taking out every stop to make his case. a lot of drama tomorrow. we think the way it will go down, the hearing tomorrow, democrats spending a few days to punt -- deciding on articles of impeachment. possibly a vote on impeaching the president next week and then we would go over to a trial in the senate.

we think we know how it is going to go down but there could be twists and turns in this extraordinary process. in terms of getting to the senate, it is a big roadblock. ros: the senate is not the roadblock. with a. partyline vote the democrats could impeach president trump. he would be the third to be impeached. mitch mcconnell, the majority leader in the senate has said there will be a trial. how the trial is conducted and how long and what it looks like is another thing. there has been no break in the firewall trump has among republican lawmakers in the house and senate. there is no lip service to say we will listen to the evidence. they basically reject the democrats' approach. is aawmaker, he said this

two decade long attempt to pay back republicans for the bill clinton impeachment. there is a lot of bad blood which would take away the focus from what the inquiry was about, trumps access -- actions ukraine which democrats feel they have a strong case. republicans reject that and want to go away from the evidence and to the way the impeachment process has been conducted. krasny, thankos you. we are minutes away from japan's final third-quarter gdp print. october current account figures. a wisdom tree -- this is bloomberg. ♪ ♪

yousef: -- kathleen: daybreak: asia. i am kathleen hays. paul: it is a big week for japan with final growth figures, trade and current account data. laters ahead of figures this week. sophie has been focusing on the japanese markets. sophie: let's get viewers up to speed. this could be revised upward from .2% to .6% according to bloomberg economics thanks to stronger investment and the potential rebound in machine orders. last three months of 2018 the contraction could be anticipated in light of the sales tax. the latest survey this week likely to reinforce the picture of business confidence going to

sink. we are watching the fourth -- large manufacturers likely to keep below 110. picturepending in the but without immediate impact. it is easing expectations for more stimulus. that is pushing benchmark yields closer to 0%. when we cross -- we cross the level it will be the first time since march. kathleen: for more on all of this we are joined by the wisdom tree chief of japan. is a veryent you made interesting piece. they are lauding the japanese government for taking this fiscal step nobody else will take. it is true. however they put through the 1986,ption task hike, they have slowed down the economy. given much credit, or are they

trying to not get in trouble with the tax hike? >> you have got structural reform. , the collects on indirect consumption task and it is -- tax it is to ensure prosperity. it is the right thing, it costs herelled in volatility but you have the prime minister going to put together a record spending package to make sure the damage will not be too long. mitsubishi, they just talked to the stimulus announcement the move will be good for japanese stocks because that is what we have seen historically when the government has made a fiscal move like this . 30% in the year after this happened. do you agree? absolutely.

japan is the second-best after the u.s. which is a rockstar. majoris the second-best market year to date. the fact you have got this meansus coming very fast expectations for 2020, which is what the market is starting to discount, expectations are too low for economic growth and more importantly corporate earnings. the stimulus package is all well and good but did the abe government have much of a option? the boj is out of ammunition. supersededs long this debate about the central bank and fiscal policy. it is fiscal dominance. the bank of japan is linked with the fiscal authorities. unlike europe or the u.k. or the

done japan can get things in a very fast and pragmatic way which is what prime minister abe is doing. it is very important because monetary policy, you cut interest rates, stuff is supposed to happen. with fiscal policy, you know where the money will be spent. it will be for good use in japan. kathleen: i want to share breaking news on the third gdp number coming in stronger than forecast at 1.8%. it is the annualized quarter over quarter number from 0.2, the estimate. we are getting the current account balance coming in. 1800 ¥16.8 trillion. that is up from the previous month, showing some improvement as well. course withion of

the gdp number is it would be driven by investment. business spending was up 1.8%, previously 0.9%. a one quarter wonder? it is very interesting. it is not a one quarter wonder. this is a key point about the japanese economy. corporate japan is getting the program. they are increasing business investment in expenditure in japan. they are not building factories outside. it is in japan. they will modernize and put in new i.t. systems. for 2020 the payoff is going to be a massive productivity boom which means profits in japan could very well rise by 15% to 20% because of the solid momentum. we have got business investment

expenditure. outlook.t is a bullish one of the things you are culturefor is a startup in japan. how achievable is that? >> this is the key point. over the weekend they announced a wonderful tax policy to encourage more startups, specifically if japanese corporations invest in a startup , then 25% of the investment can incomededucted against statements. it is a good move which will ensure new animal spirit culture, startup culture in japan is hurting to come through for sustainable economic growth it is not about fiscal policy or monetary policy. it is about animal spirit and startups. about 70% of all new jobs are

created from companies that are less than two years old. that is where the boom of employment in the u.s. is coming from and hopefully japan will emulate that by creating startup nation japan. paul: you were talking earlier, lauding the government for its package. it does what it can. structural reform still in the two hard basket? reform -- too hard basket? >> you have got to do little things. the fact you are focusing on entrepreneurship and creating a start of culture, the fact that for example you may have seen also great news, softbank tying up with tokyo university to set and new ai research

incubator lab, these are the sort of seeds you want to see to get true structural reform. kathleen: more investment, strong japanese economy, what does it mean for the boj? they might have to add more stimulus. the japanese get rid of stimulus? -- could the japanese get rid of stimulus? boring for has been the last three years. there is nothing to do. the bank of japan is doing its job but for all intents and purposes nothing will happen. the bank of japan is steady as she goes. we want to talk about it because they have a meeting every month but when you focus on the bank of japan, they are doing nothing, nothing will happen, you are missing the point. structural policy,

entrepreneurial policy and large corporations actually responding to activists and raising dividend, increasing payouts and very importantly divest its are and m&a activity. it is one of my big themes. you will see a massive boom of m&a activity in the japanese in economy. restructuring number 5, 6 and seven players, merging. as a result of that, industry becoming more efficient. upbeat.: very thank you so much. wisdom trees head of japan. more ahead. this is bloomberg. ♪ oomberg. ♪

minutese just a couple away from the market open in japan and south korea. futures for both markets are in positive territory.

this, after we saw a strong close for u.s. equities on the back of a bumper jobs report. new zealand, kind of flat. with energy 0.4% stocks leading the way as the oil price recovers. this is bloomberg. ♪ rs. this is bloomberg. ♪ everyone uses their phone differently.

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paul: good morning. i'm paul allen in sydney. kathleen: good evening. from bloomberg's global headquarters in new york, i'm kathleen hays. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." paul: our top stories this monday, optimistic numbers from japan. the economy grew more than expected in the third quarter. weaker than expected shipments show why china needs a trade deal.