>> wiccan today berankis tell you. heading into the first day of 2020. >> here at the top stories we are covering. china ramps up the credit support. increasing cheap funding to banks. to stimulate the start of 2020. hong kong starts the new year as it ended the last. protest, vandalism, and teargas in the streets. australia orders large

evacuations from bushfires as the death toll mounts. paul, after the year and going into 2020, with australia and performance above the market. let me show you that. we had japan managing to recover just enough to see hong kong, take a spot. more gains could be expected. much of the good news has been preston. -- priced in. zealand is enjoying an extended break. japan opens on january 6. trading and cash treasury remains closed. australian back online today. the aussie dollar holding early loss. holding steady.

belowfshore starting 2020 seven after weakening 1.3% at the end of a choppy year. that is the smallest move in seven years. that is for the agenda to. prices thature home will indicate the property value continues to jump higher. easing has provided support for the recovery. we will get more figures from singapore. a bunch of pmi data across asia. including a private gauge of the chinese pmi. inflation in indonesia and thailand as will. up-to-dateet you with the first world is. kim jong-un says he is no longer bound by his pledge to hold two major missile test. he will debut what he calls a new strategic weapon. the north korean leader says u.s. sanctions leave him no choice but to reconsider commitments. reaction isdiate muted.

repeating the assertion that he agreed to denuclearize. expected to speak to lebanon through diplomatic channels. according to a senior japanese official the government was unaware of details. including how he managed to flee japan and his whereabouts. countries do not have an extradition treaty. it is unclear with the japanese government can preserve. -- can pursue. thousands of tourists have been totally coastal areas south of cindy as authorities worn the bushfire crisis is going to intensify. seven people have been killed. hundreds of properties just right. the fires have been burning across australia for weeks. the scale of the disaster has fueled criticism of the government climate change policy. >> tantrums are easing around the embassy after and i ran militia agreed to a stop attacking the compound and

leave. the militia group called the supporters to move on to prospective the decision of the iraqi government. the attacks came amid protests against u.s. airstrikes. day onnews 24 hours a air and on quick take. powered by more than 2700 journalists and ellis and with a hundred 20 countries. this is bloomberg. analysts in 128 countries. this is bloomberg. talks will begin on phase two of the deal. last thing in our china correspondence. how definitive is the deal? how excited can we get? aboutt week we heard peter navarro and the trade deal was done. was expected to sign engineer. we have a definitive date from the u.s. and a place where it will occur.

the china site has not confirmed the signing date. we have yet to see the actual issue of the text. we get the deal includes the u.s. pulling back on the tariffs. as well as reducing levies. ramping up the purchase of agricultural goods and some commitment around intellectual property and currency practice. it is seen as addressing the low hanging fruit. all ofes a result of those issues at the heart of the u.s.-china disagreement. these have not been touched on. trump is saying he will travel to beijing for an agreement on phase two many critics remain skeptical any progress can be made this year during the trump administration. the trump site may be more optimistic than the china site. given the issues around state-supported enterprises and

subsidies are key to the chinese economic model. they are not areas china will ask easily to compromise on. >> a cut to the rrr. inverse -- impact around that? about $115 billion of liquidity into the system. this does not come as a surprise. this inhave priced already. cuts andld be rrr monetary policy easing. this follows expectation because there was expected to be a liquidity crunch in january given increase of bond debt issue. increases in demand for cash given the chinese you knew your is upon us -- chinese new year is upon us. is not changing their view on the monetary policy.

that remains unchanged. that is supported by data showing china's economy is stabilizing. they are easing trade tensions with the united states. issues remain. revit companies, small company struggling getting access to cheap credit. >> thank you so much. turning to hong kong. it kicked up 2020 with purpose. -- with. protets. stephen engle joins us. give us an update on what is happening. there is growing frustration on the part of the protesters. this goes on into the seventh month. we are standing in front of the

headquarters. some angst was unleashed on the iconic lien that guard the headquarter. you can see back here one of the of theatues -- one bronze statues has been defaced with graffiti. protesters are really targeted in on hsbc in retaliation for attacksy say was unfair of allies by the government. that is a nongovernment organization. they have helped raise funds for protesters. largely to help with legal fees and bail. authorities seized the accounts and froze the money. hsbc also closed the account of spark aligned agents for the defense. they say it was not their decision. it was at the behest of the client.

protesters are extending their ire toward hsbc. attack wasid such an unjustified. that is where we are now. another weekend -- not weekend -- day of violence. it started off largely with a rally from victoria park. late in the afternoon after police saw signs of violence, they retracted permission for the march. they asked organizations to ask a to dismiss. the hard-core did not. that is when things turned violent. >> the president use his you knew address to defend the system for running hong kong. let's have a listen. [speaking foreign language] >> the situation in hong kong has been a concern over the past few months. a stable environment -- how can

there be a home where people can live and work? we hope for the best for hong kong. and for the compatriots. a prosperous and stable hong kong is the aspiration of all compatriots. as well as the expectation of the people of the motherland. kong government hoping the 2020 year will be prosperous and stable. keri lamb gave her resolution and her hope for a restoration of social order and harmony. protesters who took to the street -- at least a hard-core element whose that the kiss last -- could last a long time -- say they need a plan from the government. at least decide they are willing to talk. give into some of the demands. beginning i talked about the frustration. that is building among the

ranks. sense there is frustration on the part of the protesters. that is by the number of protesters may be dwindling. the ch rf put a number at just over one million. the police say it was close to 60,000. that is perhaps with the government is hoping for this movement is going to lose a little momentum into 2020. hard for me to say that. take some getting used to. thank you so much. still to come from auto titan to international fugitive. beginning his campaign to salvage his career, petitioner. we will have the latest development. -- stephenalth blank hallmark gives us his view. this is bloomberg.

>> i am paul allen. >> i am in hong kong. 2020 could be the year the central banks find a sweet spot after the 2018 run. the pboc had a cut. it will keep monetary policy flexible. the move will likely lower the prime rate after the central bank scrapped the benchmark one year rate. bloomberg economics looks like it will continue to frequent drops in the lpr across 2020. ?ill we see qe and 2020 if we see a cash trade.

he says this will happen budget. qe could be in effect by the second half of the appeared eight of 17 economists don't expect qe to be adopted. >> thank you. joining us we have commonwealth bank of australia director and head of global markets research, marick.all will the key driver be central banks. especially as phase one is done? >> central banks will have a impact on the economy. we have monetary policy cuts in the u.s. and australian. in china as well. central banks will continue to want to drive more economic growth. certainly in australia getting the unemployment rate dump it getting inflation into the target range. that going to

have an impact on the u.s. dollar? what the dxy has been doing recently. we see it is down for the year. you see the greenback will remain strung. what is the reason? >> we have to u.s. fed cutting in. they will sure about growth. in a presidential election year that is something the president will be focused on. u.s. economy continuing to grow strongly. particularly europe and the u.k. and japan. that strength in the u.s. economy will be supportive for the u.s. dollar. we see growth in china is for. deal looks like it will be signed. the u.s. economy looks like it might stand out as a source of more growth for the global economy than other major economies. >> stephen, speaking of bright spots, and asia we have seen a

rebound when it comes to export growth. trade numbers coming in on wednesday. indicating we saw less than expected at 5.2%. this synchronization that may be seeing a turnaround. what are you reading from this data? are you anticipating a pickup going into 2020? >> i think you are right in highlighting trade flow is a key factor. 2019 the u.s.-china trade war and whether we were going to get a deal was disruptive for asian manufacturer supply chains. if we do get a phase i deal that will be a positive. i would not say a phase i trade deal is the end of this dispute between the u.s. and china. it will be long-running. ahead of the u.s. presidential

election that will be a major focus of both the president and the democratic candidate. gostill have a long way to in terms of restoring global export growth. alongside the u.s. presidential elections a lot of folks will be on the fed as well. they have been using -- what will that mean for treasury yields? treasury yields will remain love this year. pretty similar to the current level. we have two fed rate cuts starting the middle of the year. june and september. as we highlighted the presidential election, november will be a huge driver of the economy and markets. with inflation in the u.s. below target range, the fed is going to ease policy. one of the things we saw in

2019 was a yield curve inversion. curve inversion taken a bit of a hit? it had a slightly inverted curve for a short. of time. recession potential we should say. we see the pace of u.s. economic growth moderating. not really at risk of a recession. part of the reason is the fed did so preemptively. they were easing interest rate in 2019. when the unemployment rate was generational low. the fed got ahead of the slowdown and done a good job in showing growth continues. >> you mentioned inflation of the u.s. being subdued. we have had a number of guessing inflation is on the risk watchlist. did you see that as being the

case? >> it would be nice to see inflation back to the target range. the fed can engineer that. that is a great job. i think we are seeing a number of years of inflation below target globally. many central banks are struggling to get inflation up. to the end of next year we see hints of increase in inflation. i think that would be a welcome thing. the risk with inflation rising dramatically and getting be on target range is very low. >> inflation has already been a headache for asia central banks. given what we seen for china deflation pressure when it comes to produce prices. they have seen a pickup. and are you for the pboc chinese authorities in grappling with that situation? ease do expect the pboc to policy through 2020.

ensuring growth remains around the 6% target. target is 5.8%. authority -- we think china authority will reduce the rrr rate and interest rates to try and get the growth rate or maintain the growth rate around 6%. monetary policy across asia and the pacific is a thing for this year. onthe pboc cutting rrr wednesday. hinting they will look at making funding cheaper for businesses. what other policy tools my to anticipate they would lean on? pboc but rrr in the interest rate. the government will continue to be focused on the fiscal policy said. allowing local governments to issue bonds. funded through the banking system.

infrastructure projects especially transport. they are likely to remain a focus. to get the growth rate new the 6% level. >> i have to lend oh locally. forecast with the february meeting? are we going to see qe in 2020 ? >> a few weeks away. we have a second interest rate cut this year in august. we will be down to the 0.25%. clearvernor has made it be on the cash trade -- cash trade. qe is not in the forecast. light 2020 orf early 2021. the housing market is responding rapidly to the interest rate cut. that will be the case through this year.

in 2020.wo rate cuts not qe but a big factor. >> thank you very much. research.obal market you can get a roundup up of the stories you need to know to get your day going. subscribers get a go on the mobile. you can customize your settings so you are only getting news on the assets you care about. this is bloomberg.

>> i'm cindy camara did. >> i am paul allen. you're watching daybreak australian. let us get a look at the business flash headlam. gaining revenue slipped for the third straight month. the worst annual decline since 2015. gaming revenue is less than $3

billion. down on was 14%. casinos have struggled to lure highrollers. amid ongoing protest in hong kong and economic slowdown in china. >> there is talk of a big time up in the u.s. boards entertainment. the midea group and denver is group to buy -- the media , and denver, is poised to buy a luxury travel service. things like the super bowl. >> donald trump says his administration will soon issue new regulations on flavored vaping products. the food and drug administration set a new proposal to the white house to restrict the product. according to bloomberg sources the regulation will require a prepackaged vaping pods other than tobacco and menthol to be temporarily taken off the market. australia comes back online.

let us check in on the agenda. we are going to see if we will get indicators of how property values have continued to rise. as we are seeing december home prices on the agenda. we get singapore gdp numbers. try to avoid a recession. the city hit a speed bump on trade. they are going to get pmi data from across the region. the highlight the tyson manufacturing number. on the deck and we are waiting on inflation figures from indonesia and thailand fed global banks in focus as we go potential.ith put easing more coming up next. this is bloomberg.

, less than half an hour away. futures not trading at the moment. they will in about 15, 20 minutes' time. you see the aussie dollar above 70, have not seen that for a while, holding pretty steady. i'm paul allen in sydney. sophie: i'm sophie kamaruddin in hong kong. with australia opening at the top of the hour, the aussie dollar holding about 70, but there's a question if the advantage -- if the currency may

be looking overheated. of course, with what is going on down under, there's questions about if the rba may continue its easing path and if it might deploy unorthodox policy this year once it runs out of conventional tools. up the terminal to show you this chart, indicating what has been happening with home prices down under. we are seeing a rebound easing the given the rba has had over 2019. paul: thanks, sophie. let's get two more on what we should be watching as trading gets under way in asia. with us.h is the pboc's moves to lower the rrr. could we get any fresh impetus elsewhere today? adam: it is a statement. the pboc -- you are right, many people in the market had been expecting it, but it will come

in next week and indeed, set the tone for what people are expecting more of in terms of chinese policy that will continue to be supportive of an economy that continues to slow. the question is how much is baked into market prices. from those october highs where you saw sovereign yields in china and the final end of last year, you have kind of -- bonds have had a decent rally off that, so there is still kind of a lot of impetus for policymakers going forward to continue to be offering full support and a lot of the moves we've heard about in the last 24 hours has been around providing and support to go into the lunar new year, but as i said, it does set the support for going into the new year. we heard our guest talking about he expect more policy easing from china and expect from the u.s. as well, and that is a bit of a moot point.

with that in the kai-chen manufacturing data later today, that will give investors a pretty good read on how the chinese economy is playing out. sophie: calls favoring on u.s. equities. that could prove a crucial decision this year. markets -- our markets outside the u.s. likely to perform better? adam: it is a big call, but we have heard this from a number of people over the last few months, that there may be a full valuation for u.s. equities and you should be starting to look at rotating out of what has been, of course, an incredibly well performing market relative to the rest of the world if you take the last 2, 3, or five years. getquestion is if, as we into 20/20 20, that can continue , and certainly for bob dole, who has been around in markets for a long time, he is saying that, really, that is one of the

big calls he has for 2020, that you will get an outperformance of some of the non-u.s. markets. you might see em markets, notably china, sitting on pretty cheap relative valuation relative to global markets with increased policy support, maybe offering upside potential alluded to u.s. equities that as we saw the back end of last year cap out some really stellar performance we had not seen for many years. call, and much remains and hangs in the balance , but with the fed wisely expected -- widely expected to remain on hold, although as we heard from our guest before, there are some of the market who expect some easing from the fed, i think growth is going to be reasonably hard to come by for u.s. companies, and that will remain a pretty tough thing that will weigh down on the potential for u.s. equities. as we start off the year, there are plenty in the market saying

just time to trim off u.s. equity gains and move that into some of the other markets. sophie: still some hurdles to clear. thanks so much. take another look at some of the charts we've been talking about at g tv on the bloomberg terminal. north korean leader kim jong-un has declared he is no longer bound by his pledge to help major missile tests and will soon debut a new strategic weapon. initialt trump's reaction was to insist he and kim have a good relationship. >> he did sign a contract. he did sign an agreement talking about denuclearization. singapore, andn i think he is a man of his word, so we are going to find out, but i think he is a man of his word. : what is this -- what does this so-called strategic new weapon mean for talks with

the u.s.? >> yesterday in kim jong-un's statement carried by state media, he said he is not bound to this promise or moratorium is how it is -- how it is interpreted by many analysts. kim announcing to the world a white -- they might be witnessing a strategic new weapon also shows that he might be stepping away from this promise he made with donald trump. donald trump, as you played earlier, said kim jong-un is a man of his word. he also said that he expects kim jong-un's christmas present to be a vase. donald trump is rather playing down kim jong-un's escalated rhetoric. however, many are saying this could signal a resumption of testing of icbm's and nuclear tests. paul: how about how this message was delivered on north korean

television? what does that indicate? >> one thing that was interesting was this message followed a four-day plenary jong-un's major party within north korea. it also indicates that north korea is considering the in a very serious manner, and it is followed by the statement that was supposed to be considered a big announcement towards the u.s. kim jong-un hinting he will be walking away from this promise to halt icbm launchers could be a big indicator for north korea. state television also carried footage of missile launchers as well as a photo of outer space of earth which could also indicate he might be testing a satellite any time soon. sophie: let's get to first word

news. china's central bank is starting the new year with a stimulus drive to increase the supply of cheap funding to banks by cutting the amount of cash they need to hold for reserve. the reserve requirement will be reduced by 50 basis points. hong kong has kicked off the new year with renewed protest, vandalism, and teargas. riot police and demonstrators clashed again on new year's eve after tens of thousands of mostly peaceful protest took .art in an organized protest president trump says he will sign the first phase of a trade deal with china on january 15 at the white house. he has been planning to go to beijing to begin talks on the second phase. the first part of the deal will seal the first part of the deal to increase purchases of american farm goods. a new year trade deal between

the u.s. and japan has officially kicked in. japan is reducing tariffs on u.s. beef, pork, and other agricultural products. japan is still pushing to reach its goal on reduced tariffs on auto parts to america. israeli prime minister benjamin netanyahu says he will ask parliament to grant him immunity for prosecution on corruption charges. called itatement, he a cornerstone for democracy and pieceso tear two allegations against him. currently, netanyahu's request does not appear to have majority backing in parliament. >> dear citizens of israel, immunity law is meant to protect elected officials from tailored lawsuits, from serving political cases whose aim is to undermine the will of the people. the law is to make sure elected officials can serve the will of

the people according to the will of the people. paul: thanks very much. 's dramatic escape to lebanon continues to pose more questions than answers. financial times is reporting the press predicted the return of the chairman. first of all, let's talk about this escape attempt. do we know anymore about how carlos ghosn managed to get out of japan? >> we are two days into a guess carlos ghosn's new life as an international fugitive. still no confirmed theories about how he managed to pull off this amazing escape. you could not make this up, could you? it is straight out of hollywood. plenty of unsubstantiated conspiracy theories, if you like, on the internet. the most attractive one possibly from lebanese media, a tv

station reporting carlos ghosn somehow managed to re- transported out of turkey in a musical instrument case that was used when a band came to his apartment in tokyo for a christmas show. you know, what kind of musical instrument could that be? double bass? heart? difficult to imagine how anybody could get into a musical case, and then he was transported out of tokyo onto a private jet. more credible reports saying that his wife was instrumental in orchestrating his escape. it's difficult to imagine how a single person under close scrutiny under house arrest in tokyo could pull this off without weeks of planning and an international network of assistance. sophie: i guess those escape theories abound.

japanese authorities looking a little sheepish. when they speak with lebanon, what are they likely to discuss? >> they will probably have some questions to ask. i mean, how did this happen? and what are you going to do with our men? any concrete responses from any of the governments involved. nothing from france, nothing japanese or lebanese that suggest they know much more than we do. japanese government official telling us they are going to seek talks with lebanon through diplomatic channels, which is really the first indication of how they are going to approach this. through political channels and also, i think it highlights just how this story goes beyond carlos ghosn as a corporate fugitive, as a criminal fugitive.

involves politics, government, international relations at the highest level. because carlos ghosn is a citizen of france, lebanon, and brazil, he has potential to draw all those governments, brazil accepted possibly, -- brazil pted possibly, into this saga. carlos ghosn said in a brief statement he was looking forward to speaking with the media, which he has not been able to do since his arrest. sophie: a story we are tracking closely. up next, china and the u.s. are preparing to take -- preparing to take the trade deal to the next phase. we speak about challenges ahead. this is bloomberg. ♪

: i'm sophie kamaruddin in hong kong. paul: i'm paul allen insignia in you are -- paul allen sydney, and you're watching "daybreak australia." joining us in sydney, we have the institute of global finance director. thanks so much for coming in today. phase one going to be signed probably in a couple of weeks, the low hanging fruit now gone? will face to be a whole lot difficult -- a whole lot more difficult? >> that's exactly right and unknown if phase two will be done during 2020 when we will see, if you like, and election in the united states and at the same time, phase two is far more complicated simply because there are currently significant

restrictions on investment, capital flow basically to china, as well as exports of high-tech products such as artificial intelligence, and of course, some of the other so-called nontariff barriers will remain, if you like, in place at the moment, so it is a little too early to speculate the impact of, if you like, the current phase one deal, if it is going through, and the impact of that from the second phase and its dynamic consequences. paul: even with phase one, are there still risks around interpretation and enforcement? i use the example of -- it is a theory, really, that china is going to reach this 200 billion mark by counting some hong kong imports as chinese imports. that's not exactly abiding by the spirit of the agreement, wouldn't you say? >> that's exactly right, and

also unknown entity of the capacity of, if you like, china in this instance. other places where trade ever urgency's will take place. in other words, china importing from other countries as a result of the trade war and what is the consequence of trade diversion would be a big issue on economic activities around the world, and that should not be underestimated. sophie: a truck -- aside from trade diversion, the u.s. also other friends it has been battling with. what kind of movement are we seeing on the u.s.-eu side of things when it comes to that trade relationship? will we see more protections policy from the u.s.? the issues we of have to wait and see during 2020. for instance, the argument is that the u.s. may 1 of all embarq on major trade challenges

, if you don't call it trade war, with the european union as a result of some of the tensions from the last two years. with regard to trade diversion, the question here is if the u.s. basically is going to export more now to china as part of phase one trade deal, are they going to basically export less to other countries, and the consequence of that if you like on the economies or trading partners of the united states as well as trading partners of china, so it's going to be very convoluted, if you like, environment in 2020 until we get a better, if you like, direction withase two of trade deal u.s. and china. sophie: while we wait on how direction may play out, looking a global growth for 2020, you are penciling in a 3.4 percent pickup, an improvement from what we saw in 2019. emerging markets seem to be the bright spots for the global

economy. where in particular are you seeing that growth being driven? >> i think one of the things we are aware is the dynamics of the asian economy. we know that in asia, we are going to see something around 5% in5.1% or 2% economic growth 2020. we know economic growth could potentially perform better if you like and 2020 and at the same time, we know that european zone and particularly euro may do much better in 2020, to many other things. we talked about economic growth of 1.8. there would be some areas of the economy which could perform better in 2020. paul: what is your outlook for the eu economy post-brexit? that something we don't talk about quite so much. it's always about the impact on

britain. what about the impact on eu? inthere are uncertainties the european union as well as the united kingdom. given the shortness of time that the united kingdom would like to exit from the european union is going to create uncertainty. at the same time, if there is no deal by december 2020, there will be significant impact on the economy of the united kingdom, but also it would have significant impact on the european union. for instance, in the case of germany, the german economy 0.4% if therefor is no proper deal within the european union and united kingdom. sophie: turning back to this set of the world, we have seen the latest data from south korea showing a minor turnaround when it comes to that trade picture, due in part to shipments from

china. i would like to focus on what has been happening with korea and their relationship with japan. we saw some of the impact from trade tensions there. do you see the korean economy perhaps turning a corner or bottoming out, given some of the recent data we have seen? this is one area where we should be optimistic in 2020 because the forecast for the korean economy is about 2% economic growth, and i think that is healthy growth given the tensions we see -- given the tensions within japan and korea that we have observed. at the same time, we know the chinese economy is going to grow given the fact that we will have phase one of trade with the u.s. from 5.8% to 6%. that could have a positive effect on korean exports to china, so therefore, the korean economy could perform, if you like, much better, i would say,

in 2020. paul: thanks very much. come, thousands of tourists are told to flee astralia's south coast officials forecast deadly wildfires will intensify. this is bloomberg. ♪

paul: extreme weather in the coming days is expected to intensify australia's bushfires. the death toll is rising and the military has scrambled to help thousands who have been cut off along the coast of new south wales. bloomberg australia's managing editor is here with more. ed: as you recapped nicely, it a difficult few days. several people died on the south coast of new south wales including a volunteer firefighter. on hisson has been dead

property in the eastern corner of victoria. it really has been a crisis. it has played out on social media as people posted images and footage of the fire bearing down on their communities. there really are quite terrifying scenes of walls of fire, of the sky being turned pitch black, of embers raining down from the sky. firefighters are trying to take advantage of cooler weather over the next couple of days to try to get those main roads reopened strandedo move holidaymakers out of the danger zone. sophie: what is expected in the coming days? ed: in the coming days, authorities are warning that extreme temperatures and strong wind will exacerbate that threat

and by saturday, we will be seeing terrible conditions again down on the south coast. service hasfive issued an unprecedented appeal to the public, in particular to tourists, in about a 200-kilometer strip from bateman's pay to the border with victoria, urging people to get out now while they can, but that is easier said than done. power has been down. communications have in down the last couple of days and roads have been closed, and people now trying to leave those areas are facing huge queues as cars snaked down the road waiting to get into petrol stations so they can get fuel for their escape journeys. paul: australia managing editor ed johnson, thank you for

joining us. tribecabe joined by investment partners' portfolio manager and get her outlook for the road ahead. futures now trading in australia, off about .2%. this is bloomberg. ♪

paul: good morning. i'm paul allen in sydney were markets have just open for trade. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak asia." ♪ paul: our top stories this thursday, china ramps up its credit support increasing the supply of cheap funding to banks in a bid to stimulate the start of 2020. hong kong starts the new year just after the end of the last one with vandalism, protests,