>> welcome to daybreak: asia. i am paul allen in sydney. shery: i am shery ahn in new york. sophie: i am sophie kamaruddin in hong kong. we are counting down to the asia open. paul: here are the top stories we are covering. china recommit to a further opening of the economy with easier regulations and lower financing costs for private companies. the bushfires ray john in new south wales with at least eight people died. the government denies a link to

climate change. boeing brings its failed spacecraft, at the end of a difficult year for the company. get you started with a quick check of the markets. the u.s. session on friday, markets wrap at record highs with the dow seeing its biggest gain in a week. the s&p 500 seeing the biggest weekly gain since september. we had health care and tach leading the gains on the s&p 500. strong consumer numbers out of the u.s. gave the market a boost. we are setting up for a holiday light calendar this week. most stock markets across the world will be closed on december 5. we have u.s. new-home sales numbers to look forward to on the monday session. let's see how we are setting up for the asian markets. sophie: after a lackluster friday, we are mixed this monday. they were going to be gauging

reactions to reports that japan has eased export controls to south korea. let's check in on aussie bonds at the start of cash trade. we have the aussie 10 year yield rising back above 1.3, the highest level since july 23. the aussie dollar is below 69 after crossing the hundred day moving average on friday the yen holding at 109. pound have the worst begin months on brexit concerns. i will check in on the agenda this monday. we will get trade figures from south korea, thailand, inflation from singapore. from australia, we get a gauge of private sector credit. paul: let's check the first word news with su keenan. to hong kong is back business as usual monday morning after tense scuffles saw a

police officer draw his gun and point it at a protesting crowd. no shots were fired in the incident, which escalated during a rally in the city center. demonstrators gathered to show support for china's week are minority. witnesses say police stormed the authority after a chinese flag was ripped from a pole near city hall. the indian government is defending its controversial citizenship law as protests continue throughout the country. narendra modi asked supporters to defend lawmakers from pushing the bill through and accused opponents of spreading lies. violence is on the increase with at least 17 people killed while four have died in a some and two in another town. australia, bushfires are burning out of control in new south wales, devastating farmland and disrupting thousands of people. at least eight are known to have

been killed and hundreds of buildings burned down. the fires are being stoped by record temperatures with the government encouraged -- government criticized her downplaying climate change. space has brought its capsule back to earth after a failed mission to the international space station. the capsule touched down in new mexico in nasa's first touchdown on land. the star liner made 33 orbits during its aborted mission. it took off friday but was unable to reach the iss. the star liner is designed to carry up to seven astronauts. malaysia's attorney general tommy thomas says he is ready to ratchet up a criminal case against goldman sachs for its role in the 1mdb affair. thomas told us he is planning to bring the banks' executives to court in malaysia regardless of any supplements in the u.s.

>> it doesn't matter if it is settled with the u.s.. it does not help them one bit and it does not affect our prosecution of the case. in our can see more exclusive interview in the next 10 minutes. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. we are into the final stretch of trading in 2019 and barring a huge reversal, the world's major asset classes are on course for the strongest annual performance in a decade. most asset classes have advanced this year. includes some big gains at the top. let's see if this can continue into 2020 with ig group markets analyst kyle rodda. we have seen fabulous gains. pretty much the only way to not make money was to not get

involved. the key question is, is 2020 going to be a repeat? we saw this year, very unlikely. it does depend where you draw the line in the sand. we saw markets hit lows practically this time last year. if i was sitting in the chair at 20 at this time, it would be a different conversation. it was supported by fed policy, interest rate cuts, and the bolstering of the balance sheet. whether we will see the same thing next year is very unlikely considering those dynamics, but markets are positioning for upsides. they remain bullish on risk assets at the very least. paul: we do have a second chart that points out the not so fabulous gains, if you take into advance going back to september 18. how much of those gains are due

to the big correction at the end of last year and central-bank dovishness? kyle: most of it. if you follow the core of this narrative, it is the fact we saw the selloff last year precipitated by fed chair powell trophy has a long way from neutral comments october 3. that is where we saw the fall. it was only when the fed backed away from this hawkish stance and pushing rates higher that we started to see a recovery in financial markets. 2019, take a lesson from one, you don't fight the fed. the other thing is policymakers and politicians around the world have realized how in extra goodly linked -- how an extra goodly linked the health of financial markets are to sustaining economic growth in the global economy. the fed's transmission mechanism works for asset prices and the

stock market. that is what we saw as the theme in 2019, first of all the stopping of interest rate hikes at the end of last year gave us the base. progressively we saw the rhetoric change from one where the fed was on hold, the one where the fed was cutting, and now the fed will be on hold for a longer period of time going into 2020, underwriting this market, as well as the removal of headwinds around global trade. that is what we have to take away. the fed put us in the position and saved the day, as well as others central-bank policy, and that is why we saw outstanding returns across many asset classes. shery: on the removal of trade headwinds, are you on the view that we could have more pent-up demand going into next year because the trade risk has been removed? four could it be we have already frontloaded those gains, expecting trade tensions would get worse?

kyle: i think there is an element we are looking for a turnaround in fundamentals. i don't think we have seen a great deal of upside surprise in the data. the fundamentals are there to wetify the valuations that are currently seeing, but on the same token, once we do start seeing the data, the upside should come from that, and the earnings growth that should come along with it now that the major markets in the world of 2019. the real question is how much upside is there. a reboundd seem to be in the global economy playing out. business activity is starting to lift. we are starting to see markets that underperformed three 2018 -- underperformed through 2019 pricing out the risk premium in the evaluation, particularly in asian indices. we are seeing a rebound in growth in the united states.

that is where the supposed growth is going to come from in 2019. there is justification to say the fundamentals are turning, that we have not seen confirmation in price or data yet. the risk is good to the upside, but it is still tentative. we are still looking for confirmation. shery: you say the one market that could outperform in 2020 is the hang seng index and hong kong. that market has been really volatile, subject to every headline that comes from the protests going on for seven months. thegtv chart showing you economic fundamentals are for the bad now we are in a recession, so where do you see the upside coming from? kyle: my point on the hang seng is more that it is tied to the global markets that provide the best risk/reward ratios based on the headwinds we are seeing removed from the market index. you would be looking at the

nikkei and kospi in particular, the economies that have been hurt by the trademark as well as the slowdown we have seen accelerate in the chinese economy this year. it goes back to the point we were making before. if you look at valuations across even european indices -- u.s. stock markets are a great example -- the markets pushed a strong growth rate down. if you are looking for risk/reward, it is on a trading basis. effectively the hang seng has a little bit of upside to a base valuation. if we start seeing the risk around domestic issues. the markets in the asian periphery is where it is going to come from. the chinese driven turnaround in the markets throughout that region will be -- relative to other benchmark indices around the globe. paul: ig group markets analyst

kyle rodda, thank you for joining us. still to come, we take a look at the chances of a phase two trade deal next year with christopher nixon cox. shery: next, the malaysian attorney general says he is ready to prosecute goldman sachs in connection with the 1mdb scandal. our exclusive interview coming up. this is bloomberg. ♪ ♪

paul: we are counting down to the open in sydney. futures currently looking weaker. witharbor reasonably clear winds keeping the smoke away, but it was a difficult weekend for the bushfires. i am paul allen in sydney. shery: i am shery allen in new york. china is taking more steps to open up sectors ranging from energy to telecoms medications. jen one you says the government

will offer tax breaks and lower financing costs for private companies, which accounts for half of the mainland economy. we have our china correspondent selina wang. we have heard from beijing they will be opening up their financial sector. how much farther does this go? statementcording to a reported by a news network, this is part of a broader market using recommendation targeted specifically to help these private companies. it is also part of an effort to open up industries from oil and gas, telecommunications, railways. private companies have gotten squeezed with tougher access to capital as china's economy has slowed and we are seeing warning signs and the banking sector as well as a crackdown on shadow lending. small companies have gotten squeezed very hard in particular, so this plan also includes efforts to further lower the cost of financing to these small companies and the creation of financial

institutions to serve these types of companies. to ease the burden of financing, the government is backing bond issuance for those companies as well as lowering the threshold for new convertible bonds. it is imperative for the chinese government to help these private companies, given they employ hundreds of millions of people. they also account for about 60% of china's economy, and these broader market sector opening plans and efforts to boost private companies also fits into program,boot, one road which is an effort to boost these private companies in the infrastructure brands -- plans that increase china's political clout. paul: china is hosting a summit with japan and south korea. one is on the agenda there? selina: japan is hosting the trilateral agreement with japan and south korea. ahead of that is you have some

easing of tensions with japan and south korea. the long, protracted trade war has caused significant pain to its major trading partners, which includes south korea and japan. you have increasing tensions between japan and south korea when it comes to trade, national security issues, disagreements around compensation for wartime forced labor. economic and trade issues are high on the list. an agreement should happen to speed up negotiations around the free trade agreement. you also had china's commerce ministry calling for more trade cooperation. on top of the economic and trade issues, the issue of north korea and its nuclear missile test are also likely to be high on the agenda. you had china along with russia arguing to the united nations security council that sanctions should be lifted on north korea, but it is unclear if japan and

south korea are going to take sides with beijing against the u.s.'s demands. paul: selina wang, thanks for joining us. malaysia is top prosecutor says he is ready to ratchet up the criminal case against goldman sachs. attorney general tommy thomas spoke to bloomberg about reports that goldman is in settlement talks with u.s. authorities. how that might affect malaysia's case. cynical about all the press releases. i wonder whether they are self-serving and self generating by goldman sachs. the last time i office spoke to the doj, they said they were far away from settlement. at the end of the day, each country decides what they must do in respect of its national interest. as far as malaysia is concerned, we are not terribly concerned

about what happens in the u.s. or singapore with relation to goldman sachs. nation, we will do what is right in malaysia's interests. >> does the latest development with regard to the u.s. front affect 17 goldman directors for malaysia? mr. thomas: it doesn't matter really if they settle with the u.s. it doesn't help them one bit and doesn't affect our prosecution of the case. >> when might malaysia see a deal? mr. thomas: so far as malaysia is concerned, it is public knowledge there have been talks, rounds of negotiations, but they have not gone anywhere. there is still a pacific ocean gulf between malaysia and goldman sachs. we are concerned the door to settlement is always open. they know where we are. they can come see us if they want to find us.

we are proceeding with preparing the case for prosecution. as any trial lawyer will tell you, whether it is civil or criminal, you can settle on the first day of trial or in the middle of trial. as far as malaysia is concerned, it is conducted in -- we prepared for the trial and if there is settlement talks, we can do it simultaneously. sophie: should there be a settlement, how much can malaysia get? there have been many numbers bandied about. mr. thomas: one mbd was borrowing $6.5 million against government guarantees and goldman sachs was structuring that. our loss, as far as we are concerned, malaysia's primary physician is we did not need -- primary position is we did not need those bonds. it did not serve malaysia's interest in 2012 and 2013 to

have those bonds. they were thrust on us. we are now saddled with repaying those bonds. the people of malaysia, because of the government guarantee, have to repay the bond. with interest. the principle is 6.5, so with interest, eight or nine. essentially malaysia's primary argument is you have to pay back the principal and interest. sophie: a settlement with goldman is one avenue. in the past you have said you have a strong case against the bank. what kind of leverage to you have to prosecute effectively? mr. thomas: as far as we are concerned, we are preparing for trial. we are hoping to have a trial in the middle of next year. ,hen i prepare a case for trial i am not too concerned about what our opponents are worried

about. the burden is on us. we are the prosecution. how goldman and their lawyers respond is not my concern. shery: malaysian attorney general tommy thomas with sophie kamaruddin in kuala lumpur. plenty market, on "daybreak: asia this is bloomberg. ♪

shery: you are watching daybreak: australian. 2019 has been a particularly bad year for boeing and shareholders. the 737 max remains grounded with no sign of a return soon. while a software glitch caused the new starliner space capsule to abort a mission to the international space station. what went wrong? su: this space capsule was an opportunity for boeing to reestablish its technical prowess. it appears to have done the opposite.

with theable to dock international space station and landed in new mexico six days ahead of schedule, aborting the original mission. in terms of nasa history, most space capsules land in the water. this was the first time there was actual landing, a successful landing, but on land. the take off on friday, the launch, went quite well. the ceo was there. it was a moment of pride for boeing. butted off well enough, according to those close to the situation, it soon ran into problems that resulted in the vessel entering orbit, as one analyst called it embarrassingly off course. that began to raise further questions about not only their engineering prowess, but completing the mission, so it ended within two days. if you check out these stocks are for boeing, you can see the rough ride it has been for the company. andmax jet remains grounded

last week it was announced the 737 max production would be temporarily suspended, so all of this has raised questions about what's ahead for boeing. paul: quickly, how does 2020 look for this ceo dennis muilenburg? can he decide -- can he survive? su: that is a big question because just days before the mishap with the spacecraft, several publications -- you are looking at pictures of muhlenberg who had to testify in washington on the 737 max jet fidelity's -- publications raised questions about his handling of the 737 max going so, publications far as to call for his ouster. the board has expressed confidence in the ceo and many close to the matter point out it might be adding to turmoil to

replace him at this point. shery: su keenan with the latest on boeing. let's get a check on the business flash headlines. qantas is reported to have reached an accord with pilots on its planned ultra long-distance new york and london flights. the cindy morning herald says the agreement will clear the way for a final deal that will allow project sunrise to proceed. the carrier is said to be confident the union will support a new payer court after more than 18 months of negotiations. paul: the personal information of millions of facebook users has been exposed on a searchable database by a group in vietnam. the research firm security discovery says the vietnam-based site was trying to charge for access, but a software flaw left the information open to all. the majority of users effective -- affected are in the united states. the company says it was before its recent upgrade in data protection. still to come, deadly blazes

continue to ravage australia as prime minister scott morrison downplays climate change as a cause. the latest next. this is bloomberg. ♪

paul: counting down to the market open in sydney for the shortened and broken trading week. we are 30 minutes away. futures pointing weaker 5.4%. i am paul allen in sydney. shery: i am shery allen in new york. . we have sydney opening up the top of the hour. let's turn to sophie for what to watch. sophie: we are keeping and i on the hp as the ceo's retirement date is brought forward to march 2020. minors also in view as the commodity seeks -- sinks back into the 80's as we get bearish outlooks for iron ore. we are keeping an eye on cba on

reports it is set to hire 120 business bankers. qantas has reportedly reached a pay deal with its pilots union after more than one and a half years of talks. paul: thanks, sophie. let's get more on what we should be watching as trading gets underway in asia. looks like a quiet day as investors count down to the holidays. let's get more from the global markets editor. it is safe to say volumes are not going to be terribly high this week. >> we are going into a very calm period last week that we had the phase one trade deal, which is what dominated investors. most of this year, we got brexit out of the way. have been calm somewhat ending 2019. also receding fears of a u.s. recession, something investors

were talking about a lot two months ago. 10 year yields have come down significantly this year and investors are looking at 2% as being the level to watch. this time last year. . they were thinking it would end 2019 around 3.3, but they had the more dovish stance from the fed and the rate cut. even though that is lower, the u.s. yield curve has been inverted back to steepening. now investors are winding back those recession -- those fears of a recession and it looks like the spread between three and 10 years is on track to end 2019 about where it began. when you take all this into consideration, trade receipt -- trade, receiving fears of u.s. recession, economic pickup, definitely going into january with more soothing nerves then we started this year. we will have to see in january. there is a lot of uncertain us.

shery: what does that mean for the dollar-yen? we continue to see narrowing interest rate differentials for the dollar-yen. what does that mean for 2020? >> that's right. analysts expect the yen to trade the ¥10 range in 2020. that ranch was very narrow this year, around eight yen, probably the narrowest year for about five decades. analysts do expect a steady rise in the currency, which should keep volatility subdued. that is because the bank of japan fiscal stimulus is expected to take some pressure off the bank of japan to ease monetary policy next year. meanwhile the fed is still expected to keep its dovish stance, still expected to keep interest rates negative next year. if history is any guide, january seems to be the time to short

the dollar yen. traders who have back on dollar you'll -- dollar losses versus the yen in january have posted gains in eight of the last 11 years, so that is something else to keep an eye on that is possibly going to be supportive of the yen going into january. shery: thank you. andreea charts on the gtv in the bloomberg. su: we are going to start in china, which has confirmed it will continue opening its economy, using regulations and lowering finance costs. ching why news says the government will offer more tax breaks and incentives in sectors ranging from energy to telecoms and transports. china has at least 27 million private companies employing 300 million people accounting for 67% of the economy.

muilenburg dennis has reportedly been personally reviewed by the aviation regulator for the way he has handled the grounding of the 737 max. the new york times says the faa criticized him in a private meeting last week for trying to pressure the agency into letting them ask fly again. the faa said boeing should concentrate on providing information about its software upgrades for the max. north korea is reportedly expanding a missile plan, raising concern it may resume testing weapons that could threaten the united states. abc satellite imagery shows a new structure on the site that may be used for accommodating the launchpad of long-range missiles. north korea has threatened a christmas present for america if it does not win nuclear concessions by the end of the year. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. paul: thanks very much, su.

bushfires continue to burn out of control in new south wales. the death count rose and more property was destroyed over the weekend. ed johnson has the latest. what's the situation today? another terrible weekend of fires across the country. ,ustralia in the adelaide hills the lovely winegrowing region, about 86 homes were destroyed. a man lost his life, bringing the death toll nationwide this both wire season -- this bushfires season to nine people. in new south wales there are about 100 bushfires. there is a huge fire system to the west of sydney. they are separated only by about 20 kilometers. it is a massive system. further down the coast, about three to four hours south of

sydney, we are really starting to see an impact on tourism. vicki holiday season and the rundown to christmas and people are canceling their holidays in droves because of the bushfires, because roads have been closed, and it is simply not safe. that is having a huge impact on the regional economies that rely on tourism at this time of year. shery: what about the impact politically for prime minister morrison? ed: it is an interesting time for the prime minister. he at the weekend canceled his family holiday to hawaii and return to australia, amid intense criticism that he left the country without making any public announcement that he was going away, and criticism that he left the country at the time of a national crisis. he was busy yesterday trying to repair that pr disaster. , visitingiting homes

people who had lost their homes in the bushfire. he was visiting rural firefighters, many of them volunteers who were facing the brunt of these blazes. he has been under criticism for his climate policies. the government is an ardent supporter of the coal industry. he is sticking to his guns, saying he is not going to be changing policy, that australia will meet its paris commitments keepsting emissions, and stressing australia is only responsible for 1.3% of global emissions. paul: politically he is not coming under a huge amount of pressure from the opposition on that climate policy. ed: not a tremendous amount. the are nipping around edges, criticizing him for being away. someone has been trying to style himself as an alternative later particularly last week when the

prime minister was out of the country. three years away from elections. he won a convincing victory, unexpected victory, just seven months ago, so politically he is safe. shery: thank you. our australia managing editor. coming up, the u.s. and china are arranging a meeting for the formal signing of the phase i one trade deal. we will tell you all about the latest discussions. this is bloomberg. ♪

shery: i am shery ahn in new york. paul: i am paul allen in sydney. you are watching daybreak: australia. new documents show president trump question u.s. military aid to ukraine months before his controversial call with the country's new leader. roz presley joins us from washington with the details. do these emails tell us anything new about the president and ukraine?

os: having gone through impeachment and having heard from so many officials over many hours of testimony, i am not sure they do, but they certainly put a finer point again on the fact there was something going on in the white house about ukraine and that it seemed like the president knew a lot and had interfered a lot even before this all became public. frommails you referenced the centers of public integrity, published on saturday, heavily redacted, but trump inquired about ukraine aid as early as june and eight was put on hold an hour after his now infamous phone call with the president. the administration is on record now saying it is meaningless. democrats say it is illustrative of the broader problem but may not add much to the paper trail. shery: house have said for months it is a matter of urgent national interest to have

president trump impeached. pelosi now want to hold back the articles of impeachment? what will this achieve? ros: it seems like losey, who has a master tactician i believe, is trying to get leverage over the senate process. she is trying to pressure mitch mcconnell into allowing for witnesses to speak at the impeachment trial. among the names, john bolton, the former national security advisor, mick mulvaney, the acting white house chief of staff, and two other names. i don't know if this will work. i don't know if holding the impeachment paperwork back will really sway mitch mcconnell, but if it seems like something pelosi is willing to try -- historically, it is the holiday season. congress is adjourned. i don't think too much is lost by not sending over those articles until the new year. i guess wait and see.

i don't think too much is being lost and may be policy feels like she has time on her side even if ultimately she is unsuccessful in pressuring mcconnell. paul: away from the impeachment drama, president trump has been tweeting about the progress he has enjoyed with china, the phase one trade deal signing. do we have a date yet? ros: we don't have a date. we think we have a place, possibly washington, possibly the first cap of january. it is good news that trump is indicating full steam ahead because he is always the biggest wildcard if he feels china is not buying enough agricultural goods or they are reneging on their commitments in some other way, he could try to upend things. it seems everything is on track for robert lighthizer, the u.s. trade representative, and his chinese counterpart to be in washington and sign in january.

i think the thing holding up the process, if it is being held up, but one of the things going on is a painstaking translation of an english document into chinese. sometimes contentious issues can arise at this critical level. there is no indication so far from our sources that that's happening. wilbur ross, the u.s. commerce secretary, said on bloomberg television on friday that the translations are taking time. they have to be done to a sharp point. everything seems to be more or less on track. as we talked about last week, still waiting for something to be shown about what will happen iih phase two and if phase can kick off as soon as this document is signed. we will have to wait and see. that's where we stand coming into the holidays. shery: that document supposed to

be 86 pages long, so we would not be surprised if there is issues with translation. ros krasny, deputy managing editor in d.c. joining us in new york is the vice-chairman for asia public policy for brightsphere, christopher nixon cox. great to have you with us. this phase one trade deal would be a huge political win for president trump, but what can we expect in terms of a phase ii and phase three when we are headed into the election cycle? christopher: it will be difficult with an election coming up, the political silly season, democrats and republicans arguing over impeachment. it will be difficult for a phase ii agreement to have any rapid traction between now and the election. there could be some talk, but it is in china's interest to see how phase two develops, see if there is a new president, see how strong a majority the current president has. political questions need to be

answered for china to decide how to move forward. i think the 20 election will be difficult for china. i think many democrats and republicans will be beating up on china. it makes for good political commentary for the democrats and republicans to try and show themselves the stronger dragonslayer. i think that will be what dominates headlines over the next nine months. shery: a surprising consensus when we usually don't find any in washington. let's talk about the details of the deal. we don't have everything yet. we know we could see imports from the u.s. into china up to $200 billion worth for the next two years. is that a feasible amount, given it would include $50 billion of agricultural goods per year? that seems to be a lot. christopher: a number can be agreed to and will that number be hit? it might be difficult to get to

that number. if you look at dry bulk shipping of agricultural goods around the world, china and much of the world has moved supply chains to places like south america, and i think those supply chains long turnaround on a dime -- supply change won't turnaround on a dime, so it may be difficult for the chinese to ramp up procedures -- purchases. there is also a question of how motivated they will be to ramp up purchases to a high number. so there is a question of how motivated they will be to live up to the promises in the agreement. with the political silly season, i think there will be a wait and see approach. paul: there has also been a suggestion that china could potentially reroute some shipments that currently go to hong kong and bring them to the mainland instead. is that not exactly abiding by the spirit of this agreement and could that be a reignition of the dispute? christopher: i think you are expected -- you are absolutely right.

i think in this case it would not be in the president's interest to reignite the dispute because the president needs a strong economy to run on. we will see how the chinese approach that. there will be ways for them to get around the agreement. issues with translations and things could complicate the agreement and make it less specific than the u.s. side would like. there could be ways around the agreement. you mentioned hong kong as being a very good one. the chinese will try and say they are living up to it, but ultimately the u.s. government -- the trumpet administration will be focusing on other things, so this issue will almost drop into the background as the trumpet administration focuses on impeachment, the growing economy in the united states, and other issues in the campaign. paul: let's take a more optimistic view. you say the long-term bipartisan approach is going to be needed

to deal with china. it has worked with the usmca. could it work with china as well? christopher: absolutely it could. i think china is the major question of the 21st century. about the real issue is can democrats and republicans get together and have a bipartisan approach to china that is not solely confrontational? that is the challenge. whereas democrats will want to say they are being tough on china and republicans will want to respond, that is political silly talk. we need to have a realistic approach to china that sets the tone for the next century as to how we will deal with china, deal with trade. , we we peel back the onion will see there are many areas where china and the united states have agreement. environment cleaner , in growing the world economy. there are many others where china and the united states will

agree on many things, and those are areas where we can easily work together. there are other areas where the united states and china will disagree. that could be places like the arctic. places --openings for for countries who have not been alive with united states in the past, such as russia, and that could strengthen the u.s. negotiating stance against china. there has to be a comprehensive, bipartisan approach that will span republican and democratic administrations. shery: that strategic approach to china was supposed to be part of the transpacific ownership, the reason the u.s. wanted to leave that. now we have this summit between japan, china, and south korea this week. how much more significant do these other meetings and alliances become? christopher: it is a very significant irrelevant. you see beijing leading the discussion between to find a -- between china, japan, and south

of korea -- and south korea. part of the u.s. withdrawing from tpb has been a strengthening of china's relationships in the region with some countries you wouldn't expect. this shows the united states needs to reassume leadership in the reason -- the region. i think that will be important as we go along in the years and will determine how strong we can be as we deal with china. it is important united states remain a leader in this region as that has led to peace for many decades in northeast asia. the united states plays a key role in that part of the world. paul: we are nearly out of time, but i want to get your thoughts on libya. you see that as a potential flashpoint for 2020. christopher: i think it is an interesting part of the world. it is part of the world europe is interested in, part of the world energy markets follow. when you see turkey potentially deploying troops to libya, and

egypt, you will have a nato ally and a u.s. ally on opposite sides in a combustible situation. that could lead to instability that could disrupt energy markets, lead to mass migration to europe, and a war where the united states would have allies on both sides, a very tricky position. it is something i think requires the attention of the drop administration and someplace where the united states can play a constructive role. shery: great to have you with us. brightsphere investment group's christopher nixon cox. get a roundup of the stories you need in today's edition of daybreak. subscribers, go to dayb on your terminals. also available in the bloomberg anywhere app. you can customize your settings so you get the news you care about. this is bloomberg. ♪

shery: i am shery ahn in new

york. paul: i am paul allen in sydney and you are watching daybreak: australia. let's get a check of the business flash headlines. the carlyle group is planning a takeover of the you k's howard wealth management group according to sky news. the report said the deal will be announced at the london stock exchange later on monday at a price not expected to represent a big premium to howard's friday close. no official comment from either party. shery: metlife care shares are halted in new zealand after it received a revised takeover bid from an unnamed buyer. last week metlife care rejected a bid received in november, saying it felt the offer did not value it highly enough. now it says it negotiated better terms and is carrying out due diligence. shares have surged in the past couple of months since talk of the takeover began. paul: mazda may be feeling the strain -- but the car maker is

shifting the production of an suv back to japan because of the currency's continued strength. mazda has capacity to make about 135 cars -- 135,000 cars a year in thailand. there currency has climbed against the dollar, hurting thailand's export economy. shery: the bank of america ceo is warning of overleveraged loans on the global economy. the bank tops the table for u.s. leveraged loan is sewage and is walking -- is watching the market closely for strain. he said the best way to manage the risk is by focusing on underwriting terms. >> companies tend to have problems when their work slows down. that is economics 101 or credit underwriting 101. we have to underwrite them with the right amount of debt turns. shery: coming up, more analysis

on what lies ahead for global central banks next year. plenty more still ahead in the next hour on daybreak: asia. this is bloomberg. ♪

paul: good morning i'm paul allen in cindy. we are -- in sydney. shery: good evening from new york. i'm shery ahn. : i'm sophie kamaruddin in hong kong. welcome to daybreak asia. paul: our top stories, china recommit to a further opening of the economy. lower financing costs for private companies. more clashes in hong kong as an officer draw