pan asia'smorning major have just opened for trade -- good morning. asia's major markets have just opened for trade. welcome to daybreak asia. paul: our top stories this tuesday, the next nafta moves a step closer. top democrats say nothing has been agreed to yet.

can they deliver in shanghai? bet that heaking a can succeed where others failed. to japan ands get south korea, coming online. began is study. five-year auction .olding around we have not been at this level since easing ramped up. we are seeing the cost be moving to the downside about 4/10 of 1%. the korean won is on the retreat as well. a little change fluctuating after a three-day event with the aussie dollar holding steady. a look at how aussie bonds

are faring. the 10 year yield fell as much as five basis points. her marks in sydney, in which he noted that week consumption growth was a surprise but he remains confident that there will be a pickup. looking at 63uan as we are waiting for more trade details. i want to highlight mexican peso trading around a high. after -- not time to celebrate just yet. paul: let's get some more on that nafta 2.0. last minute have arisen over the new trade deal. a deal was closer, but

speaker pelosi saying nothing has been agreed to yet. canadian officials expected to join the talks. people may have been killed in a volcanic eruption after explosions in the day of plenty with eight more people still unaccounted for and 31 being treated in hospitals. house isiconic opera again shrouded in smoke today. there is an official warning, pushing temperatures over 40 degrees.

fires said to the be out of control. hong kong facing its worst economic slump. survey by the association says about a third is laying off staff. many others expect to go out of business. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. beijing will release inflation numbers in about an hour and a half. expecting a pickup. let's ring in kathleen hays. fever had aswine

number of those inflation figures. kathleen: prices are up 120% year-over-year. huge numbers of the pig herds wiped out. fact, food prices are expected to continue to rise. -- letgo into the chart me explain its eu. the ones down here look very small. the turquoise one is the food cpi. they are actually not that low. withad the food cpi up headline up. the chart needs to leave room for what happened.

is pork price is what driving inflation. people are wondering what this means for the pboc. , look, weey would say are not going to worry about ymer prices when so much is driven by pork. has aise, the consumer lot of sluggishness. they are watching what they ,hink they need to do continuing to take a toll on the economy. they have no thought on how to respond. toy still have to be looking see if the stimulus will be met. paul: that is consumer prices. kind of the opposite story here. yes.een:

this is what matters most to the people's bank of china. .e saw the latest trade report they were down 1.1%. chart,ook at another this raises an important question. the month of november, we are expecting to see less at 1.5% year-over-year. the previous month was one point express that. and 2018.17 you can see that the ppi has fallen. whenchart is saying, back there was much more severe ppi deflation, again, it

is poised to do something on either? no. but this is what we are watching most closely and hoping that something works to make a shift here. kathleen hays, thank you for joining us. we will have more on the numbers. we will also speak to j.p. morgan and the global meetings economist. still to come, coastal savings bank of china makes its debut. drawing the lowest retail demand in half a decade. fixed and ahead of income, sticking to her high-yield gun. this is bloomberg.

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daybreak asia. raising new concerns about contagions. rising to a record $17.9 billion this year. fiona, thank you for joining us. we do cede to full risk rising in china. this becoming more of a concern as the economy slows down russian mark >> we have the cautious in some of china industrial sectors.

tight for the enterprise in china, and also with the challenges from the u.s. china trade war. this is not something out of our expectation. important that we look at the temperature of the company. they do not have the guarantee, to havewill be the case more default. we see this anymore idiosyncratic case. actually, in terms of percentage . still very low, but a

record year. what would your expectations be for 2020? is there more disclosure needed? >> yes. it will continue to rise in china. in terms of disclosure, you are very right. issuers, theye may not be listed in the stock exchange. publish their financial statement. i think investors have to be more cautious about those kind of companies. shery: some are instituting tightening measures.

pheona: on the other hand, we are seeing more cities launching measures. for example, there are many cities that try to attract talent in their areas. they allow those talents to buy a flat in the city, even though they have to pay several years of back payments. this is something that we think will continue to support the company market. if you look at the contract figures, which have been very impressive, especially for september and october. we think it is supported by the structural demand. how positive is it that

we are seeing this in china? despite the fact that the government is allowing this to happen and for the markets to take over? think we always have the impression that some of the company will be saved by the local government. support some of the companies. now, they might just buy the asset of the company. investor, we as an are getting selective in seeing which one will have the support of the government. in the end, i think it is important that we look at the underlying.

paul: you do see opportunities. are there any names in particular? think we see the local currency bond. economy that has a chance to cut rates, including indonesia. also, the central bank has done a lot of good things. it seems that 2020 could be last year in reverse. many seeing yield curves. what will that do to the asian credit market? important is mostly

that we remain stable. it will be more constructive. policy, of the fed rate they will reverse the rate cut they have this year. , we will still have a low rate. chance. a for next year,t we actually prefer high-yield. thank you for your insight. one hedge fund is putting almost a third of its macro fund into investments.

the co-ceo spoke to bloomberg nc -- bloomberg. >> the opportunities that we have seen and continue to see where markets are underpriced. communitym the retail , where they look to pick up selling options. think, as soon as the end of phaseeek, we will see four be of the tariffs kicking in. think the relationship between china and u.s. on trade will be changed. i doubt that there will be anything significant on the front of what they call phase

one skinny deal. options are on current is an interest rates. for example, right now come the market is pricing in the fed in the next two meetings. that is only two basis points priced in. potentially, the trade talks falling apart. little priced in to the markets. i had to say yes. until it becomes clear what the new normal will be. theweeks ago, we had elections, which came in

publicly. in favor of the democratic party. since that point, it has not been clear what changes. the underlying unhappiness will likely continue until something is done, but i am not entirely sure what the current hong kong government can do. changed the strategy? >> we are in an environment where things feel very stable, ironically. in my view, every portfolio should look for ways to hedge details. we look to profit from certain

moves. portfolio isof the in this dislocation hunting at the moment? >> about 30%. there will be certain moments where it could be higher. maybe twice a year, but now, it might end up being more stretched out where it would be to years or three years before you see a big move. i believe it will be a lot larger than it used to be. the magnitude is going to be more. it depends on what the trigger will be. i would not absolutely rule it out. that is capital ico.

next, australia is expected to post worst profit growth in asia. more details on that story. this is bloomberg. ♪

paul: you are watching daybreak asia. posting the worst profit growth in asia next year. earnings from the index may rise by 4.2%. .hat is half the increase more on this, we are joined by our reporter. why is the profit outlook looking at bleak as that? are many reasons why it

is looking bleak for next year. it has grown at the slowest pace in more than a decade. banks make up a large portion of australia's index. there dealing with -- they are dealing with falling interest rate. it is not looking great for next year. when can we expect the economic revival to kick off? are looking very cautious at stocks. there should be a global economic recovery next year, although some are cautious about

how that will play out because valuations are looking pretty stretched. some are saying that stocks may not benefit much from the recovery, but there are some analysts that are seeing some bright spots. poised to do pretty well next year, if there is a recovery. shery: let's get into a quick check of the latest headlines. goldman sachs being asked to raise financing. -- tonk is starting to of arrange a line of credit. funding.n in in order to make the deal more palatable, softbank will be listed as a borrower. starbucks ceo kevin

johnson and could be looking at a $150 million cash bonus. be reduced andd eliminated if the stock beats its peers. bonusess says the define high caliber leadership. shery: ready to add the largest carmaker. and motor are inviting carmakers in the new audi seven. they have reached a point where they can start setting up a supply chain. as sole the group partner in china. plenty more to come on daybreak asia. this is bloomberg.

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paul: you are seeing this pictures of malvern -- melbourne. a survey for the month of november. of two ina score october. in november. industriesin all sliding, except for the retail wholesalers. some concerns that many australians are saving after the

tax cuts. the aussie dollar little changed. let's get over to sophie kamaruddin in hong kong. sophie: very much in a holding pattern with stocks and encz lower and not really budging. drop.e the leading notd decline with a five year yield. yearighest level in a where they are little changed here. not 0% level not happening just yet. towards positive territory is a foreshadow.

sliding, moving into 2020. very much in vogue with a high above 2%. you can tell by the blue line on this chart. namesre among the participating with treasury yields and a call for the 10 year to drop. on the other hand, goldman is to most there is forecast end 2020 with no action. check ont's turn for a the first word headlines. >> last-minute doubts have arisen over new trade deals. democrats saying they are on the verge of a deal. nancy pelosi is saying nothing has been agreed as of yet.

canadian officials expecting to join the talks. russia and ukraine say they are committed to a cease-fire. leastnflict has seen at 14,000. becoming more emboldened in the region. they continued to exchange fire. fed chairman has died at the age of 92. he led the bid of risk-taking in the big banks. he became a one-man cleanup crew.

mostn's exports rose the in more than a year. climbed 3.3%ments last month. been expecting an increase. russian president vladimir putin ban russiasion to for four years. the move -- vladimir putin says it is politically motivated. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. let's talk about china

now. consumer price inflation could have accelerated on year on year meetings. park has driven inflation higher this year. great to have you with us. we have seen put prices reverse a little bit lee. oft can we expect in terms consumer inflation in general as we continue to be african wine fever really affecting those numbers? 94 56 is the number actually showing. ppi and factory deflation. inflation index

sinking to a three year low. the world catches a cold as well. now we have our guests joining us from hong kong. great to have you with us. expectationt your for inflation numbers. furtherpect it to raise from 3.8 last month. on the back half, rising pork price. deflation, expected to narrow. continuing to narrow on the basis. year on year growth driven by the base. shery: what can you tell us about how these numbers will

, not doing enough to boost economy. the pboc has been somewhat reluctant because there has been caught a light -- quite a lot of constraint concerning the housing bubble. but we see that the pboc has withd more accommodative rate cuts being delivered, so as the pboc has been prioritizing in the near term, also signaled there meetings, we think would be a modest five basis points cut ater this month.

so you do expect more using. as more stimulus going to be needed from the pboc? pboc reflects somewhat of a delay as the government strong loading of the will be unlikely to happen before january. we do expect more bond issuance on the way. the chapter investment, keeping pace in the coming months. , there is to for the big projects.

for have responsibilities that accumulation. so the inside structure will rebound. paul: you can see the surprise index sinking to a three year low. china exporting deflation to the rest of the world? >> the global economy had been facing a downturn. finding a way. andall demand, domestic global, in terms of where china is exporting is much less

significant than five years ago. what would a phase one deal do you for the chinese economy and local economy, if we get there? confirmedo have a deal, that clearly will help to lift market sentiment and supporting a business investment and supporting the market. -- it would also matter for the economy, as well as for currency. , we do not need higher tariffs. heard that it could affect currency ledgers.

how would that affect the chinese economy. we have heard from the pboc governor recently. they are pledging to keep the yuan flexible. way, it is in china's interest because we know the government continues to have those controls in place. so stabilize the currency, it is in china's interest. , strength of-term demand and strength of internal demand. the global economy is moving towards stabilization.

stabilizing and to some extent recovering. paul: asia specific economist, thank you for joining us. trading come, making it debut in shanghai. bloomberg. ♪

shery: this is daybreak asia. paul: i'm paul allen in sydney. shares start trading and china is a. amidarger's -- it comes tepid demand. let's bring in selina wang.

what are the expectation for when it goes public? >> we are expecting it to reflect the current demand. low turnover and low liquidity. the deal was oversubscribed. demand sinceowest 2015, shortly before the market crashed. we know that underwriters will have to pay more than $90 million. more recently, we have seen more regular. comes week after a chinese chemical company became pricerst to list its since 2012. ipo's why is buying into coming more risky?

context. to give some china's largest, listed in hong kong with the most branch networks. more than half a billion customers. it is going to be one of the largest around the world, after alibaba. in terms of the challenging market conditions you will see investor sentiment erode. u.s. china trade war and corporate morning -- earnings. take a look at this chart and you will see that turnover on the mainland market is down more than 60% in march. they low. volatility has been low. government has been easing

and bailing out more banks. you also have the government encouraging banks to step up lending. the outlook is not looking good. shery: our china correspondent in beijing. let's turn to the world's biggest gambling hub. macau casinos are poised for since 2016,decline and next year may not be much better. is our consumer reporter. selena was telling us about economic challenges for china. is this why vips are staying away? whyhat was the main reason we were not very optimistic onause trade war is going with consumer spending power.

in the middle of the year, analysts work saying that they might be recovering. there was one setback after another, a hong kong protest. more regional casinos opening up, including one operated in vietnam, by one of the biggest groups. it will be even harder for macau to see more growth in 2020 and going forward. worsttalk about the growth and gamblers. >> they are hoping that they can gamble and save the dropping. that is a big problem because

they spend a lot. there are a billion plus citizens, but they are not spending as much. it brings in more sentiments into the market. another building resource. it looks like a lotus. that -- that will be the growth story. shery: thank you. vietnameseext, autostart up trying to do something not even toyota or hyundai could achieve.

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shery: let's get a quick check of the latest headlines. apple is returning to the las vegas show for the first time in decades. discussing consumer privacy rather than unveiling a new product. apple has worked behind-the-scenes for years,

speaking with partners and suppliers. about stanley is cutting 1500 jobs around the world as part of an efficiency drive. it will also affect staff and sales, trading and research. in new include workers york and london. india's struggling bank is unlikely to reject an offer to raise $2 billion in capital. --y are expected yes bank initially fell on the news but reversed to move higher. since are down 17% november.

vietnam's richest man is driving to do something not even toyota or hyundai could do. who is vietnam's richest man and how big of a gamble is this hen? >> he is the richest man in vietnam. he told us in an exclusive interview that he plans to invest $2 billion of his fortune to bring vietnamese cars to america. that is an ambitious plan. ofwould be leading the likes hyundai and toyota. big gamble for the conglomerate in vietnam. for will be responsible

millions of dollars of annual losses for the next five years. aggressivesuch an and fast timeline? >> he said this is what they are poised to do. you go from producing fast powered cars -- they just rolled those cars off vietnamese line. he wants to bring electric cars to vietnam. very aggressive timeline. you have chinese automakers that have been trying to crack the u.s. market for years. he thinks that he can. that will be the question. is a selling point for their cars against others? the $2 billion question there.

was -- has ar that bmw licensed engine. it was designed in italy. whether that is a convincing enough sell for american is the big question. , you have anmarket extensive and asked dealership network that he has to deal with. parts and servicing networks in place as well. huge challenges facing him. shery: the trump administration has not been happy with how much vietnam is selling to the u.s.. have you had a chance to talk about the trade tensions? >> right now, he is very focused on the future. others areany looking at it as, there can be

negative light on it, but it creates a big opportunity for vietnam. companies are really capitalizing on that. for many entrepreneurs and ceos, this this as an opportunity. shery: thank you. let's turn to sophie in hong kong for a preview of what to watch and market. we are watching chinese auto more prayers with the second straight decline. recommendation again, qualifying for subsidies on soybean futures been trading resumes. soybeaner chinese

reported by seven bulk from u.s. exporters. the chinese cpi interview. we are keeping an eye on chinese car producers as well. 2%dstuff up more than year-to-date. prices may main --may remain elevated. shery: coming up, chinese inflation data in just over 30 minutes. we will have the action with the senior economist. that is it from daybreak asia. our coverage continues and the chinese open is next. ♪

eñ >> it is 9:00 p.m. --9:00 a.m. in beijing. i am tom mackenzie. yvonne: i am yvonne man. >> let's get to your top stories. this hour brings another health check on the chinese economy. we have consumer inflation expected to rise. factory prices may continue following. -- falling. yvonne: hong kong has its latest retail slump with many shops prepared to shut down. savings bankpostal makes its mark. can the lender deliver in

shanghei -- shanghai. the divergence between consumer prices and producer prices is expected to be in focus. and to expand for the latest data. 9:30 p.m.t at divergent seems to be the theme when you look at data across asia today. exports are up. we were expecting a 3% drop. imports are down 11%. the reason for divergence was yesterday. taiwan is seeing upside and they seem to be the only one.

yvonne: it seems like the economy is humming along. we are say modest downside across the region. we are within 7% of that all-time high. analysts are saying we can the past that presidential election. of the at the rest region, it is looking slow. of tradee get any type or developments, we did see the ever cultural chief saying that it looks unlikely that we will see tariffs raised. look how the rest of the markets are looking. you can look at where the content is is where these will go toward the end of this year. -- consensus is as to where go.e will

goldman is the least bullish her e. in japan, back to zero for the first time since march. put on theis being back foot here. we are watching the mexican peso and the loonie as well. we could be getting closer to the u.s. and ca deal. >> there could be a new trade deal to succeed nafta. it looks like -- it looked like a deal was closer with the trump administration. speaker nancy pelosi is saying nothing has been agreed to as of yet. robert lighthizer will fly to mexico with canadian officials,

expecting to join talks. russia and ukraine say they are committed to a cease-fire by the end of the year. this after talks in paris. the conflict in eastern ukraine and moscow becoming more emboldened in the region. as many as 13 people may have been killed in volcanic eruptions and new zealand. -- in new zealand. five deaths have been confirmed. eight more people still not accounted for and 31 are in the hospital. there has been a from the u.s., britain, china and malaysia.

hot and windy weather is a 90 bushfires in new south wales. there is an official warning of severe heat waves. at least 80 separate fires are burning across the state. global news, 24 hours per day, on air and on quick take by bloomberg. 2700 by more than journalists and analysts in more than 120 countries. this is bloomberg. tom: economists see further information and consumer price inflation and rising food costs. original reversal suggests headline inflation could be in the coming months. factory get deflation is .xpected to continue

-- factory deflation is expected to continue. shows -- david: this shows whether the u.s. will go forward with additional tariffs on china on the 18th. the chinese finance ministry is in the process of waving some of these retaliatory duties. >> joining us now is lori. she is usually based in boston. she joins us from hong kong today. what sort of gauges are you getting from people on the ground? >> a lot of the global backdrop for 2020 will rest on what is happening with u.s. and china. i'm getting a lot of questions about that particular topic. if you look at the underlying fundamentals of the u.s., they look strong. we saw good trends in the employment data.

we are favoring u.s. assets because we think the u.s. economy is more resilient right now. david: it is expensive. the u.s. is one of the reasons that has kept pace with earning expectations. what else can you do? when interest rates are zero or negative, it still says up for pricing. yvonne: given the milton that we have seen in u.s. stocks, a lot of it is already pricing in this havetion -- meltdown we seen in u.s. stocks, a lot is already present in this inflation. lori: as you said, we are getting that rating. if we get earning in the 5, 6, 7%.ange, equities could be

tom: we were just discussing the data and inflation numbers. extent does that constrain monetary policy? >> with a policy makers have been pretty consistent in using the tools at their disposal. the fed has said they believe the policy is right in line with where they see the growth trajectory. distal have some available firepower -- they still have some available firepower. fiscal policy also has to step into this. there is only so much monetary policy can do. in >> terms of this december the -- tom: in terms of this december the 15th deadline, is there more upside if we get some sort of agreement?

lori: we continue to see de-escalation. at least not additional escalation. the markets can find some footing. most people have assumed there will be a long-standing standoff between the u.s. and china. there will be ongoing intentions. -- ongoing tensions. >> if we don't get something, what changes? u.s.: it seems to me that equities are the only game in town if you have to be exposed. changes, doappetite you as equities suffer? u.s. equities suffer? lori: if trade goes off the rails, all bets are off. we have a fed that is going to step in and accommodate more. the limits of what they can do is pretty minimal at this stage.

if we continue to see escalation, it is not just the u.s. and china, it could be the u.s. and latin america. these kind of trade tensions are really distressing to markets. the real question is do you get a feedback loop where companies start to cut payroll? then we can get nervous about our equity position. yvonne: what about upper bonds? most forecasters think that yields are not going ahead 2%. can you still buy bonds in 2020? ofi: there just is not a lot yield in sovereign bonds. we did select credits. there are high yields and investment rates. we don't think there is a lot of risk of default at this stage in the cycle. leftist talkvid:

about. we are trying to figure out where we will go from here. lots to get through here. yvonne: still ahead, we are talking about one of china's biggest ipos in years. we will look at the debut of the postal savings bank amid the lackluster interest from investors. tom: next, we look at the top economic risks that markets need to watch for in 2020. including the u.s. elections and brexit. this is bloomberg. ♪

quite welcome back to the show. you're watching bloomberg markets china open. just minutes away from the open. in hong kong, we are waiting for the fix. quite inflation data coming out in the hour as well in china.

a lot of things to look ahead to. -- the next policy decision takes place on thursday. u.k. pose a general election under the shadow of brexit. it's their general election since 2015. tom: still with us is lori. if the polls come, good. if boris johnson was the majority, to what extent does that clear the way in terms of brexit? you still have to have that discussion in europe. does that make you look at europe equities market? >> it is the end of the beginning. there is still long process that

has to be gone through to figure tradeat the long-term disposition will be post resolution here. at least it takes some of the more extreme outcomes off of the table. you could see a pound rally. gradually increasing our way to europe. we have seen some geopolitics using. this has been a pretty attractive by given inflation levels. >> is there betting on what expects to be additional stimulus in europe? the geopolitical tensions are starting to dissipate. also to the degree that u.s. and china does not continue to escalate. that could set up a bit of a euro recovery. germany has been very damaged by the trade. those things give the current pricing levels attractive.

fiscal would be even more of a catalyst as well. we would like to see some of that as well. that is not something we are seeing a lot of enthusiasm for at the moment. this is quite a rarity. -- david: this is quite a very. 7.04 is the fix for today. lori: we believe the dollar will be in a secular decline. especially as other parts of the world start to keep pace with the u.s. and the fed seems to be in a much more dovish position. it is still a bit of a safe haven currency. it is hard to see what the catalyst my paper and he kind of major correction for the dollar. we think it might be on a slow decline for the next couple of years. does the dollar have anything to do with the fixed treasuries? lori: if you look at where bonds are priced, there is not a lot

of upside. even if you get some sort of equity market correction. it is the gold that provides that interesting hedge. equities are going up dramatically and oftentimes, gold will go up as well. isthe downside, there negative data and that could be an interesting buffer. tom: you're saying you could see a tick up in volatility. how do you manage that? what has been shocking throughout the last couple of years is how lowball it has been. we think we might see a lot more volatility in the rates markets. things thatveral could come through. gold, long bonds could provide a letter. also looking within asset classes things like lower

volatility, higher quality. withg to find those places a risk and reward is a little bit more attractive. tom: you say one of the greatest risks for investment portfolios is climate change. not just the obvious big polluters but it will affect a multitude of asset classes. how do you plan your portfolio around that issue? that crisis? lori: these are things that investors need to be much more mindful of. you have to incorporate those into your analysis just how you would any other financial information. climate change -- not only applications for energy companies but resiliency of supply chains. we have seen a lot of extreme weather events. s in californiare and australia.

trying to evaluate some of those areas under which companies might be exposed to various kinds of risks, that is something that we think they will have to take a lot of attention to. >> thank you for joining us here. that was lori. coming up, a hard look at the hong kong economy. >> speaking of outlook here. the survey for 2020 is open for clients. where youking to see think nine different asset classes will end up. this is bloomberg. ♪

tom: you're watching bloomberg markets china open.

a quick check of the latest business flash headlines. hsbc is overhauling senior management. the ceo positions himself for the job on a permanent basis. coming ahead of a widescale restructuring next year. they could see the possible closure of the hsbc retail unit in france. goldman sachs is being asked to help find new financing. a pledge to of offer $5 billion in funding for we work. we are told that in order to make the deal more palatable to other lenders, softbank will be listed as a bother -- of borrower. morgan stanley is cutting about 1500 jobs around the world as part of the year end of efficiency drive. the losses are mainly intact and

operations. cut thel also workforce. yvonne: street protests continue to disrupt sales in hong kong during the festive season. retaily by the management association says more than 5.5 thousand jobs could be lost with thousands of storing closures instore the next few months. david: take us through the key highlights. thatis survey shows us retailers are saying they plan on cutting 5600 jobs over the next six months. we are seeing that the crisis is entering a new phase with retailer saying that we can't do this anymore. we will be closing stores and laying off people. that was an escalation of

before. we are going to try to get over the top. we are entering escalation here. >> when should retailers expect an uptick in terms of sales? >> we are seeing that retailers are saying this season is make or break for them. this is supposed to be the peak through the year. protesters basically shut down the city. this is one of the few weekends before christmas. you are seeing shops and they when they should be packed. >> you have heard some analysts say that structurally speaking, things are changing. perhaps the damage is done. hong kong may never be that luxury hub where people come to shop. always been has

such a retail industry because of the power of the chinese consumer. big there asking how metro size of the hong kong industry is without that chinese demand. people are realizing they are going to have to confront that new reality. david: that is 80% of your tourist traffic. good stuff. at the big ipook here. 550 was your prize. this is across the region. -- 550 was your price, this is across the region. they had a massive spike up.

see, the last four weeks or so have spiked. it is not back yet. yvonne: perhaps they had a peak. that ppiy can narrow -- those ppi prices. david: let's have a look at what here.be moving this is the 10 year japanese bond yields. if we get above zero, we are very close to it. -.105. yvonne: we are tracking what else is coming up. we are not thinking the fed is going to do anything. they largely telegraph to that they may be ready to pause these

economies in a half glass full type of mentality. despite the lackluster demand we have been seeing, we will track it next, this is bloomberg. ♪ here, it all starts with a simple...

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yvonne: you are watching bloomberg markets china open. we are watching the trade headlines and a big listing here. postal savings bank debuting in the asian market. look at the initial market, we are up close to 2% here. demand, the low demand from retail investors -- lowest demand from retail investors in decades. the stock market is not looking too good.

tom: it is the lack of enthusiasm in the markets. shanghai has barely move since the end of may. the time you want to be investing in a bank like this? it has a massive footprint in some of the branches. onare waiting for data consumer and producer prices. that is a big number for up.umer prices .his is the highest number they had been a key driver in terms of the higher consumer prices. question the fact that these consumer prices keep going up. have beenrices

dropping. the input prices in terms of other commodities and oil have weakened. we have seen this in terms of profits being squeezed. another question is their ability to pay down debt. that divergence remains. up iner prices ticking november. we had a flat close yesterday. the csi 300 is down 3/10 of 1%. shanghai and shenzhen are both down. we can move it on in terms of the currency. we are looking at the fix. this is over three days. we are looking ahead to that december 15 tariff deadline. we heard from the agricultural sector in the u.s.. they said that the u.s. will hold off on those additional tariffs.

year, thef the 10 benchmark, currently at 3.21. we have seen a bit of upside in terms of yield. not a lot of movement in the last what it for hours or so. and to whaton data extent it does constrain the pboc -- >> i will he with a big number. 110%. we will talk more about that with j.p. morgan. this is exactly what we are getting here. 6/10 of 1%. world's fifth biggest trading day of the year. the offer price was at 550. this still looking at

massive inflation coming out. yvonne: let's look at the gauge from j.p. morgan. portrices, we thought -- prices, we thought we were seeing inflation. >> that trend will unlikely be reversed anytime in the near term. you're looking for this to go up further. to touch and break 5% in the first quarter of next year. is problem with these prices it doesn't seem like this will improve for anytime in the near term. through the first half of next year, we look at very high levels of port prices. -- pork prices. this will hold through the first

half of next year until the second half. then things will slow down. by the fourth quarter of next year, we are looking for headlines to come up something like 2%. next year, it will be a pretty high level of cpi inflation. david: this pulls up other meat prices because people switch. have you seen any evidence that chinese consumers are spending less on other things? food prices are a little higher compared to last year. grace: that is something that we are concerned about. if you look at regional numbers, auto sales was that were dragging down over retail sales. retail salesths, have been on the weak side.

there have been higher food prices. that is going to be there through the beginning of next year. consumption, in the near term, it would have some lingering in negative impacts from the high cpi inflation. having said that, if you look at other parts of the economy, we do expect some stabilization and even more improvement in the other cyclical part of the economy. we are talking about the trade tension. the are looking for december 15 trade tariff to be suspended. lead to somekely stabilization in the export sector. they are looking for growth to into 2020.ng a little bit of positive news

there. on the domestic side, we are looking for frontloading of bond issuance supporting after structure investment. think thetogether, we export sector, the infrastructure sector, you would likely have some stabilization and modest improvement going ahead. tom: stabilization. we have the producer prices down. marginally better than the forecast in terms of thing starting to turn around. when do you think they start to stabilize or bottom out those prices? what is the biggest drag? cap? the squeeze on grace: if you compare to the last time when we had a sustained. of ppi inflation, that was through 2015, act than, the main issue of ppi deflation was

overcapacity. around, it is more of a shoe -- more of an issue in global commodity prices that is dragging on the deflation. next year, the key question is priceslobal commodity and trends will be. commodity prices will likely stabilize going into next year. china'st implies for ppiinflation is that deflation would narrow going forward. we need ppi to come back to must it -- to moderately positive territory. that would be helpful in terms of the sums revenue profit trend and therefore helping to stabilize the manufacturing investment growth. that has been a crucial part of total investment in the economy.

>> another key driver for the economy is the housing sector. you said it may be some regulatory changes in the pipelines for 2020. run us through what those might be in the impact it might have on real estate. we are actually a little bit more cautious. if you look at real estate investment, that has been surprisingly on the upside for the past two or three years. real estate investment is a key factor to helping to support total investment in china for this year. given the fact that you have seen some meaningful slowdown in sales this year, new housing stock has come in generally. we do think in terms of the overall investment picture, the manufacturing side will stabilize.

real state investment will have slow going into the second half of next year. on the policy side, we don't see major change in terms of housing policy. the local specific measures will continue. yvonne: thank you for joining us, grace. su: we are going to start with the governor. he says he is surprised that -- at australia lower consumption. south --on rose 110 1/10 of 1%. the savings ratio jumped. the government says too many people have too much debt.

comes down, they will start spending. to russia where vladimir putin is dismissing a decision from the world anti-doping agency to ban the country from the olympics and other international competitions for four years. putin is saying the move is politically motivated unless russia has the right to appeal. the chairman paul rocher has died. later, he led president obama's attempt to avoid risk-taking at the central banks. he was a cure for runaway inflation and a response to the housing collapse that triggered the financial crisis. and we just want to clarify an

earlier report on dimon asia capital. the hedge fund told us that it is positioned so almost one third of its macro portfolio would benefit from black swan market events and dislocation. was -- dymon was put in almost a third of its macro investments there. than 2700more journalists and analysts in more than 120 countries, -- powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. tom: that just crossed the channel. -- tenureond yields japanese bond yields rising for the first time since march. we had that this go stimulus last week and then that better

than expected growth number in terms of the third quarter gdp out of japan. now you seeing those 10 year yields rising for the first time since march. moving onto another story. a lifting and mainland china. postal savings bank, one of the biggest banks in mainland china, they started at 5.6 u.n. -- yuan. marginally flat or other positive for the open. this listing was done pretty well. in our guest. this was challenging to the postal savings bank. >> we are seeing very modest and slight gains. there were concerns that it could fall below the existing price in this high valuation compared to the valuation of other things. we know there was an adequate investor demand.

for years, debuts in china have been this slamdunk trade but we have seen flops that did not bold well -- bode well. you had a chinese chemical company, that was the first company since 2012 to close the listing price on the first day of trade. >> why are they listing now? what was the significance of the timing? why did they think investors might be enticed by this offering? >> they have the widest network of operations. they have .5 billion customers. the timing is particularly terrible. as you mentioned earlier, we saw investors leading the way in the

markets. -- weak have week corporate earnings. i want to look at this bloomberg chart. markets are down about 60% from those march highs. not a lot of excitement there. david: i will give you a little bit of excitement. thank you so much. that was our china correspondent. lowthat is how you'll -- yields were. tenure yields were above zero for the first time since march. were aboveyields zero for the first time since march in japan. yvonne: we have won out for the longer end of december 17 as well. we'll see where that appetite will be. we will continue to look at what has been going on.

all things japan ahead of that fiscal stimulus package that kicks off. take a look at british business. a look at how sentiment is going in china. pledge to level the plan called for foreign firms. this is bloomberg. ♪

tom: welcome back, china's economic slowdown, ongoing trade war and brexit are weighing on foreign businesses operating in china. this could be seen in the latest chamber of commerce sentiment surveys. the proportion of optimistic businesses has fallen. let's bring in the chairman of the british chamber of commerce in china. they give her joining us on set. less optimistic than they were in 2018. what is behind that?

>> there has been a drop in into his him -- in optimism. this is driven by the market potential across china at this point in time. there is a degree of positive reaction in regulatory reform in openings. they had noticed market opening through the last year in sectors. that is driving that optimism. there are still challenges in the market. that includes cybersecurity areas. those areas are things we are still focused on. the optimism is very palatable right now. >> in terms of a level playing field, it is kind of a cliche term that both sides have talked about. the chinese side is that things have improved.

are things starting to improve in terms of market access? >> that is with the sentiment survey indicates. one of the interesting points that surprises us in this result of the top three challenges that copies are facing. last year, ip, potential of intellectual property. it has dropped out of the top 10 list. that space to the positive work that chinese authorities have done over the last few years. this really trickles through into the operating environment. david: it does not mean if you sell to china that you have to make things in china. we have been talking about how companies have been diversifying their supply chains. have you seen more of that this year? >> it is evident that a lot of

companies are looking and evaluating at what they need to do with their supply chains. what we can see from this sentiment survey we just completed is that optimism is very strong. there are suddenly companies that are looking to diversify. whether that is in southeast asia. it is bringing it back to the makeup of the british businesses in china. we see about 62% of members are in the services space. it is only 38% better in the goods environment. the professional services and the service delivery, we see a significant amount of companies still engaging. that is not about moving businesses offshore into other markets. yvonne: we are looking ahead to this u.k. election -- u.s. election. -- u.k. election. what sort of competitive edge could they have with you

exporters? -- eu exporters? >> i think the latest numbers indicate trade across the chinese mainland of hong kong almost reaching 100 billion sterling during the 12 month cycle up to july this year. that is a significant increase. it makes china one of the most critical trading partners of the u.k.. would it produce genuine benefit here? nearly 50% of people that are already engaged in china feel there would be a strong benefit should we be of it to negotiate one. >> when you talk to chinese officials, what would you say are the key priorities for your members looking to 2020 and beyond? >> members want a competitive neutrality. >> that is still not happen?

>> there is evidence that the state on sector is getting strengthened. that is called out in the results of the survey. that is the third biggest concern. that is something we continue to talk to officials about. how do we create a level playing field? even all that concern there, there are still obstacles. we are not saying there is a beautiful environment. i think the optimism was there. when we ask members if they will increase investment, 60% of investors said they plan to increase investment. tom: thank you very much indeed for coming on set and talking through your second survey. the is the chairman of british chamber of commerce in china. the u.s., must go and china will on tuesday.ca

officials from washington are flying over to discuss. this is the u.s., mexico and canada. dollar versuse the mexican peso is falling. we have much more coming up, including carrie lam's weekly presser. also, that massive protest over the weekend. that is all ahead. this is bloomberg. ♪

this is a weekly thing. we are checking in on carrie lam and her press briefing to reporters. this is on the back of that massive protest we saw over the weekend of 800,000 people that took to the streets. the one line we are getting from the chief executive is that the government will continue

safeguarding human rights in hong kong. this is also in response to what we have been hearing with this hong kong bill that was signed into law in the u.s.. david: she just started speaking. we will get you that once we have a bit more. the apple daily suggesting that maybe beijing would look at replacing some officials in hong kong who have little appeal will -- low approval ratings. that is something we will have to continue to watch in terms of these developments. we are going to leave that there. bloomberg subscribers can continue watching that live go. later this week, as well as some of the events you missed and may have missed earlier. 20 more on that. check in.

much more in terms of the market, -- plenty more on that, check in. much more in terms of the markets. this is bloomberg. ♪

rishaad: in hong kong and singapore, this is "bloomberg markets: asia." soars: chinese inflation again, the fastest increase since 2012. david: a positive and modest start for the postal bank in shanghai. only lukewarm interest from investors. rishaad: what will the new year bring? we will polish blackrock's crystal ball with its chief investment strategist.

david: inflation is up 110%, crazy. lukewarm reception for the savings bank ipo. we were talking about the gdp market as well. positive 10-year slightly. yvonne: we are also watching the press conference for carrie lam happening right now. rishaad: a lot on the horizon. we are treading water to some extent, down in the session. shanghai down 0.3%. this week across these majors, we are in wait-and-see mode because we have the fed and