>> a good morning and welcome to "bloomberg daybreak: australia." we are counting down to asia's major market open. haidi: wall street slumps to an eight week low after warning from various fed officials for the need for more stimulus in the u.s. economy. the s&p 500 crossing a threshold many see as a market correction. the tiktok drama turns another page with owner bytedance asking a judge to halt its ban in the

u.s. one report says the case has already been pulled. jack ma seeking more than $17 billion in hong kong as a dual listing. it says it does not need cornerstone investors. we have the latest on this blockbuster sale. shery: he was futures coming online flat after u.s. stocks fell to an eight week low in the regular session. warnings from various fed officials of the need for more fiscal stimulus. we saw the selloff continuing. volume below the average over the past 30 days. 11 sectors on the s&p 500, all of them lower by more than 1%. energy the worst performer as we continue to see dollar strength rising against every g10 peer to a seven week high. oil is extending its losses.

we saw some gains earlier in the new york session stop bullish - york session. gains limited by fed speak over the economic recovery. haidi: let's look at how the asian session is shaping up. taking a look at new zealand stocks, we continue to process the rbnz rate decision. a steady beat of the drum roll toward potential negative rates. a downside of 4/10 of 1%. the nikkei 225 looking pretty flat. futures in chicago, a bit of weakness in the yen as well. bloomberg dollar index jumping shy of 1% overnight. sydney futures looking negative. we will be watching westpac. westpac just confirmed they will pay a fine to settle an anti-money laundering suit.

this had been reported in local media yesterday, but now confirming they will pay that civil penalty of $1.3 billion australian dollars. the westpac ceo says he apologizes sincerely for the bank's failing and they are dedicating to strengthening financial crime capability. we are also watching australia particularly close. we saw that dive in the three year yield and rally and aussie bonds and stocks overnight after westpac's influential forecaster throwing his weight behind these ofls the rbn to a record low 1/10 of 1%. aussie dollar getting a little bit of a rebound from the weakness we saw. shery: let's discuss everything happening in the

markets. always great having you with us. in the u.s. session, it was the fed speak and concerns over not having another stimulus package. part of the markets catching up with -- are the markets catching up with the realization we will not get another round of fiscal stimulus measures? what will the repercussions be in the global markets? >> i think it is. the fact that you had jerome powell, steven mnuchin, a number of federal presidents talking about that the fed has done as much as they possibly can. they said they will continue to support the u.s. economy, but we need another to millis from the fiscal side. -- another stimulus from the fiscal side. depending on whether the election is a contested process, depending on what the winner looks to do from a fiscal policy perspective, there could be room for the market to move.

many factors beyond that, not at least a potential second wave of covid. shery: what does that mean for investors? should you stay in the relative safe havens given the tech giants with a huge balance sheet have done well during the pandemic? ann: there are a couple companies that have shown their business models have been accelerated through the covid period. i think they might move forward and win no matter what happens with a lot of global macro noise. if you take a company like doc you sign -- docusign, one of those tech businesses. that is the kind of business that is playing into a longer-range shift toward convenience. people can use that product if they are traveling. it is all about increased data

security. there are a couple models showing themselves to be favorable in this market and will stick no matter what. haidi: has it been a bit of a reality check when it comes to expectations of when a vaccine will be rolled out, how effective it will be and how quickly we can get back to reopening traits? -- trades? ann: one of the good news is that came out today was johnson & johnson moving to phase one trials of a new vaccine. we have seen this show before. months ago it was gilead everyone was getting excited about. until there is more visibility on the efficacy of a vaccine, things will continue to be volatile. there is the question of takeup. as a vaccine becomes a highly politicized process, even if you've got great strides in science, you have to win

consumer trust. unless you get there, you could see a delayed response to great scientific vaccine news. haidi: at the same time we are heading into a conditions political -- into a contentious political battle in november. is there a real sense that that added to the fact that fiscal stimulus isn't coming, that we could be setting up for the kind of lofty growth and recovery expectations not materializing? ann: it is a couple things. you touched on a great one, partly the u.s.-china dynamic. will that change if there is a change in the administration? i don't think the biden campaign has come out with a prescriptive position one way or the other. i was just in d.c. this weekend off the back of the passing of justice ginsburg.

you can see that is becoming an enormous factor into which way this election will go. the other piece of this too is looking at this global interconnectivity and maybe what happens in europe. we are seeing signs of further outbreaks. the u.k. has locked down again. until there is more clarity on how there might be a coordinated approach to containing covid further, with or without a vaccine, it will be hard to call how this plays out. shery: we continue to see dollar strength. this chart illustrating just that. with dollar strength, we are seeing metals prices getting hammered. gold, which has been a favorite for investors, falling to the lowest in two months. what would be the global repercussions? ann: it is hard to say. a month ago the conversation was that the dollar was really week and that boded -- weak and that

boded really well for those who had investments in international markets. the pace at which the dollar is moving makes it hard to make any long-term bets on the currency alone, and by extension the commodities. haidi: our cornell capital partner ann berry. let's get it over to karina mitchell in new york with first word headlines. trump adds thent senate should confirm his nominee to replace ruth bader ginsburg. he criticized mail-in voting big, -- again, saying it is vital to have nine justices on the court bench in case the result is "more political than it should be. the president is to announce his pick on saturday. the grand jury has indicted one policeman in the killing of breonna taylor but declined to

file murder charges against any involved. an officer is charged with wanton endangerment for firing into an apartment, but two officers avoided charges. taylor died during a no knock raid. it was the wrong address. antigovernment protesters in thailand are expected to rally thursday. lawmakers debate possible amendments to the constitution. parliament will vote on proposals to review the military written constitution after the 2014 coup. thousands of demonstrators gathered in bangkok, ending limits on the monarchy and scrapping of the army appointed senate. the u.k. government is warning of enormous freight disruption and what it is calling a brexit worst case scenario. a cabinet office minister told ons -- could be cut if

operators are not prepared for new controls. global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haidi: still ahead, count goldman sachs among those calling for an rba cut. an new zealand economist tells us why he sees a move in the next two months. tiktok owner bytedance asks the court to block president trump's ban has the deadline comes ever closer. the details are ahead. this is bloomberg. ♪

haidi: tiktok's chinese owner is asking a federal judge to temporarily block the trump and ministry and from removing it. one case says it has all ready

been pulled. tom mackenzie joins us from beijing. what is bytedance hoping to achieve with this injunction and what do we know about the status of this case? execution a stay of is what bytedance is looking for. if there isn't a deal this weekend around the oracle plan, in theory their app will be pulled from app stores in the united states. that is linked to an executive order signed by president trump affecting that app because of national concert he -- of national security concerns about data being accessed by china. what we are hearing is the case will be heard later today, if indeed we get to that point. as you said, there is contradictory reporting as to whether this injunction has been pulled by bytedance.

is arguing is the trump administration has overreached and this ban on the app would cause irreparable damage to the business, that it would affect them very badly and that the administration has exceeded its authority. tencent filed a similar injunction and won that preliminary injunction, arguing a similar case and as a result wechat the app in the u.s. has not been banned. oracle -- i pointed to the uncertainty. it still needs to be signed off and needs crucially the backing of china. shery: also complicating the tiktok deal, china's shifting stands on that agreement? what do we know? tom: state media, including the china daily labeling the plan,

the tiktok deal as a dirty and underhanded trick. it is a change in tone for the media, as you say. earlier on the back of the steel we had -- of this deal we had others be grudgingly accepting the terms of the deal. what has changed is you have bytedance coming out after treasury secretary steve mnuchin described the details of this deal. 20% ownership by walmart and oracle in this new global tiktok business. the data would be held in the united states. the algorithm would remain in china and remain under the ownership of bytedance. bytedance said we will continue to be the majority owner. then you have president trump saying if bytedance is the majority owner, i am not going to sign off on this deal. consequently you have china state media saying if you are

going to force this tiktok selloff to majority ownership by the u.s., china is not going to stand for it. there are broader input patient beyond this deal -- implications beyond the steel, that -- this deal, that beijing does not want to be setting a precedent over technology and the competition we are seeing. it is looking uncertain. the opinion piece in state media saying if bytedance is forced to give up control, china is unlikely to sign off. shery: coming up, in the bag. confident it can pocket nearly $18 billion in a hong kong share sale. details ahead. this is bloomberg. ♪

people familiar with the impending blockbuster deal listing say the firm is confident in demand for the $17.5 billion portion of the ipo won't be strong enough. we are joined in hong kong by our chief north asia correspondent stephen engle. what do we know about the level of certainty they see here? stephen: they are confident demand is going to hold up. by all indications, it looks like that will happen. $35 billion total listing is with the company will seek to raise in this mega ipo. $29 will top saudi aramco's billion. if market conditions are favorable, they could get $17.5 billion from hong kong and $17.5 from shanghai. shanghai regulators approved it. we could see the listing by as

early as october. why no cornerstone investors? this is what we are hearing from people familiar with the listing here in hong kong. because the demand is said to be high, they may save or invite those cornerstone investors for the shanghai portion of the listing to help mitigate against some of the more common price fluctuations we see on the mainland. deveined in hong kong from institutional and -- demand in hong kong from institutional and retail investors could be enough. cornerstone investors are more common in hong kong than other markets. they provide stability. monthhange for a six lock-in period. it doesn't always work out. i believe budweiser brewing asia-pacific tried to buck the trend and got burned. ant financial, this is a

behemoth. this is a company that could be u.s., up to $250 billion twice the valuation of citigroup. only of the u.s. maine financial companies, only j.p. morgan chase would be valued at a higher valuation at $290 billion. shery: that would be the valuation of the financial institution or the tech company? stephen: that is the big question. it straddles both. billionpany had $10.7 u.s. dollars in first round revenue. online payments is a bulk of its business. in junelion dollars worth of online payments. they are going more into these quick consumer loans. companies and quick consumer loans have helped china's

spending on the which in turn feeds into alipay, which in turn feeds into the parent company alibaba. they have the ecosystem wrapped up in tech, and now a financial juggernaut. shery: we will be watching closely. let's get a quick check of the latest business headlines. j.p. morgan is poised to pay almost $1 million to resolve market manipulation investigations by u.s. authorities into its trading of metal futures and treasury securities. sources tell bloomberg the settlement could be announced as soon as this week. the payment would end probes by the doj and the sec to whether jpm traders rigged markets. peloton rose after amazon said it is not working with echelon fitness on a rival home exercise bike. machineunveiled a $500 it said it developed in

collaboration with amazon. that price is under have the tag pellet gun -- half the tag peloton charges. amazon denies the link and has told hi echelon to stop selling the bike. haidi: three women have snacked senior positions under japan's prime minister. one of them is hoping to challenge them for the leadership next year. the exec of acting secretary general spoke exclusively to bloomberg about her approach to the new role. corner is a job in the of the headquarters. you have to keep the prime minister's office and party instep. i don't think we can lead the ldp has it is. it needs internal reform. that is my role. at the same time, ,i stand in for the party's leader and secretary-general to convey to the people of this country

through the media what the ldp has to offer. >> after eight years of the abe administration, which often talked about empowering women, we have a new cabinet with only two women in it. what message does it convey to japanese women? >> even though prime minister abe took the lead and talked about women's empowerment for nearly eight years, i think people around the world understand how little japan is able to empower women. let's not forget he was the first ldp prime minister to talk in public in parliament about how women's empowerment was needed. but both men and women need to be aware of the depth of the problem and find answers. the fact that there are so few women is a result of the fact that women are not seen as necessary in politics. that is why there are few female lawmakers. when women become cabinet ministers, unlike male

lawmakers, they are required to have some skill. no one knows what this skill is. for japan to gain the diversity it needs in the face of a shanking population -- of a shrinking population, i want to be beside the prime minister to support working women. >> you have not been able to run in this ldp leadership race so far in your career. i believe there is an opportunity a year from now. are you aiming to run next year? >> i think all lawmakers, not aim to become prime minister when they enter their career. people in this country don't think women are qualified to be prime minister. if women don't do it, we will be able to stop the population falling. that is the flag i want to waive as we head -- wave as we head to

the next party leadership election. >> do you think at some point japan might have a female prime minister? >> if you look at japanese mythology, women are seen as strong. japan will have a bright future if women can take control in a powerful way, not just an emotional way. ahead, we will hear from a tokyo-based d.c. fund that raised nearly $18 million from overseas investors. its partner joins us in the next hour. here is what markets are looking like. u.s. futures pretty flat with kiwi stocks falling 0.5%. this as we saw kiwi stocks at a three week i. -- week high.

f 1%.i futures up 1/10 o richard clarida says the u.s. economy still in a deep hole. we discuss. this is bloomberg. ♪

haidi: you are watching "bloomberg daybreak: australia." a u.s. judge will hear tiktok's call for president trump's ban to be halted thursday. chinese media say the oracle deal is "a dirty and underhanded trick." forcing an unreasonable deal on a legitimate company. the global times calls the oracle deal a gambit and accuses washington of extortion. the u.s. is tightening sanctions on cuba. travelers will no longer need to be allowed to bring home cigars and rum at hotels owned by the

government. the president says the new measures will ensure u.s. dollars don't flow into cuban authorities, but reach ordinary people on the island. cuban expats are a crucial voting bloc in florida. leader claims he has enough support to form a government. the prime minister rejects that and is challenging him to prove his claim. malaysia has been in turmoil. a subsequent coalition has just a small majority in parliament. alibaba founder jack ma has lost his tight to his wealthiest -- tie to his wealthiest person in china. a bottledn usurped by water and vaccine tycoon. he is nicknamed lone wolf for his dislike of policy and business groups.

haidi: federal reserve officials sent a strong signal to congress that more fiscal stimulus is critical to the u.s. economy as hopes that -- hopes fade that a new package could be passed. kathleen hays is here. given the state of american politics, what are fed officials saying could be the risks of not getting another round of fiscal stimulus measures? another: any hopes for stimulus package are fading rapidly as we approach the presidential election. let's start with mentioning jay powell. before the senate now to talk about the criticisms they have of his steps, from the fed, also from the treasury to help with virus relief. he said more stimulus would be

needed as congress has $3 trillion worth of stimulus already. not quite so subtle. she said more fiscal stimulus is needed to help the economy dig out of a deep hole. temporary have some job losses. we have layoffs, but they could be comparable i -- become permanent if there is not more fiscal spending. another saw a pretty good looking economy, but his forecast depends on an additional $1 trillion worth of stimulus. that does not look forthcoming for a while. the president of the boston fed thinks it may take another wave of virus infections to get prompt stimulus action. it is pessimistic.

we will hear more from him in a minute, vice chair of the federal reserve. he too said more stimulus is needed. what caught the attention of markets was the extent to which so many fed bank presidents talk ing to businesspeople are concerned and making their voices heard. we had the st. louis fed president earlier on this week. he had a different view from jay powell and his colleagues. kathleen: interesting, because i never expected him to say what he said when i asked about fiscal stimulus. he says he thinks there is enough stimulus already in the pipeline to support continued growth, at least to the first quarter of next year. let's listen to what he said. >> i don't think there is as much of an imperative for a new fiscal package as there might mighteen in july or as it

have seemed in august. it seems like, at least in some broad macroeconomic calculation, we have enough resources to cover this. kathleen: when i asked him to d the firsts, he sai stimulus package was calibrated to deal with a drop in gdp of 8% to 10%, so we borrowed up to 14% of gdp. he said by the end of the year it looks like household income is still weak, but not anywhere as big as it was. that is why he says there is nearly enough stimulus to get us to the first of the year. by then, people think the virus cases will be receding. interesting to get another view from a top fed official who many people follow closely. haidi: interesting to get that

chorus of other names: for fiscal stimulus -- calling for fiscal stemless. we have seen president trump conclude his daily press conference, saying cryptically he needed to leave to take an emergency phone call. prior to that, president trump interestingly said the white house will be the body to decide on the fda's vaccine rules. the u.s. food and drug administration is supposed to be considering new rules when it comes to authorization for a covid-19 vaccine and oculus and's some have done -- and calculations some have done show this will push this beyond election day. this will dash the president's hopes in terms of getting people to the polls saying the vaccine will be ready by november 3. we heard that from president

trump. we heard he would be speaking to the kentucky government when it comes to the breonna taylor case, talking more about some of the therapeutics and vaccine developments. also confirming he would put forward that supreme court nominee at 5:00 p.m. saturday to replace ruth bader ginsburg. let's look at u.s. markets. the fed issuing repeated calls for additional fiscal support. the fed vice chair richard clarida was one of them. he said the central bank would keep rates near zero until it hits 2% inflation and full employment targets. >> what we are saying is perhaps in a normal recession, or if we were back in february, obviously be within 2% would our forecast horizon.

because of the depth of the shock, the economy has to recover. that recovery relative to last downturn will occur within about three plus years. until we get to that point, overshooting is just an academic point. we want to get the economy to 2% inflation and maximum employment. we think with fiscal support that can happen. >> fund manager after fund manager has said we are at risk of creating an asset price bubble, if not already. how does not figure into when to tighten policy? anfinancial stability is important consideration. we get regular readings on financial stability. we are very attentive and attuned to that risk. it is important to remember we have a dual mandate from

congress, maximum employment and price stability. if hypothetically we were to become concerned that price stability put our employment goals at risk, we would have to factor that in. we believe raising or lowering rates is a pretty blunt instrument. our preference at the fed is to work with other agencies on regulation, supervision, bank liquidity and other dimensions than simply raising or lowering rates to deal with financial stability. >> how effective can the fed thatthout another round injects direct aid to individuals? indicated, wewell believe fiscal policy is for the congress and executive branch. when asked, we do think additional fiscal support will likely be needed. it is very clear that the cares

historicrch was response to a historic crisis. a $3 trillion package provided significant support to the economy. the economy has made a lot of progress. about 11 million jobs have returned. we still have a very high rate of unemployment. we have a lot of small and medium-sized businesses suffering. additional fiscal support will be needed. haidi: that was said vice chair richard clarida. more central-bank action ahead. growing expectations in australia that the rba will announce more easing next month. goldman -- whon things it is more likely to happen in november. this is bloomberg. ♪

haidi: expectations are fast-growing the rba will cut interest rates again. our next guest is also in that chorus that sees more easing but says there is more uncertainty around the timing. andrew boak joins us. you published your commentary earlier. -- i want to bring up

this graphic that shows how the rate cut probability really jumped in yesterday's afternoon session when looking at expectations in the markets close to 1% by the end of this year. is there a lot more uncertainty and variables depending on how well the recovery goes, how well victoria potentially opens up? andrew: thanks for having me on the show. i think there is still a little uncertainty as to whether the further, policy whether it is october or november, but whether they ease at all i don't think is contingent on the victorian recovery at the moment. what we have learned from the rba over recent weeks and months is they now want to be seen to have given maximum support to fiscal expansion. there is no surprise this

dovishness comes ahead of the commonwealth and state budget period. we think it is not just about incrementally cheapening borrowing costs for these governments and rate cuts, but more importantly about giving a public green light for these governments to take on more debt. the mostnovember is likely time period we will see this policy package revealed. haidi: i want to get your views on how the rates market will price th in into next year. i want to look at a chart on the australian three year bond yield, falling to a total record low when we had these revised expectations. is that also because we heard pointing out all the other negative impacts of the policy options that leaves us with a rate cut more or less as the

main option on the table? does that mean there is further downside when it comes to bond yields? andrew: i agree with you. the cash rates -- top of the priority list for the rba. don't of the government will rule out a more quantitative easing package alongside that interest rate cut. certainly he did indicate that would have some impact on the currency. a recent rba article, they do believe conventional qe would have an impact. cuthey do a package, a rate associated around $100 billion worth of easing, there is

absolutely further downside risk to yields. we think that broader package could compress yields by 30 to 35 basis points. to be clear, we have seen some of that move already play out given the signaling from recent rba announcements over the past few weeks. haidi: we have the new zealand trade numbers out when it comes to the august trade deficit coming in at 353 million kiwi dollars. exports pretty much bang on expectations. 353 millionn of dollars i should say, the trade balance deficit. also more in line with expectations there. this comes after the rbnz said

they would be launching a new stimulus toward the end of this year, seen as a precursor into going into negative rates. shery: does that make sense that the rbnz held steady, but are morning they might go into negative -- warning they might go into negative soon? andrew: the rbnz has been consistent in their dovish bias over the recent years, more dovish than the rba. they do not have any hangups about doing negative rates, even though the guidance is clear this is not something they are expecting to happen this year. they have been very consistent. a powerful impact on financial conditions. i think it has been relatively successful policy from that perspective. our view is negative rates --there is a good chance that is what they do early next year, we

actually lean slightly towards them holding off on the policy towards the end of next year. we have more of an optimistic view on the new zealand recovery and the impact a vaccine would have on broader sentiment. shery: when we look at the aussie kiwi dollar, this divergence clear, the aussie dollar gaining ground. where is this divergence factoring into fiscal decisions? kiwiw: we think the aussie can probably weaken a little bit delta on theen the policy shift is changing somewhat. clearly overnk recent weeks is becoming increasingly dovish. our base case is rate cuts and a

substantial qe program in november. observedew zealand, i the hard data when you look at gdp growth and high-frequency data have all beaten expectations. i think the vaccine news is getting better globally. on rbnz calibrates meaningful arrivals until 2022. to the degree that our view is right and we achieve herd immunity in new zealand through the course of the next year, borders open up, pressure for the rbnz to do negative rates should ease. that should be a kiwi dollar positive dynamic at the same time the rba is turning more dovish. that is where the balance of risks lie at the moment.

haidi: always appreciate your time. andrew boak there. westpac says it is paying a acord $1.3 billion to settle money-laundering case. we get the details next. this is bloomberg. ♪

haidi: we have breaking news

from that white house press conference. white house economic advisor larry kudlow saying he doesn't think there is a need for another broad stimulus package, that there will be targeted measures only, that they need to be smart about those measures. this coming on a day where we had a parade of federal reserve officials stressing more fiscal stimulus is critical. chair powell calling fiscal stimulus unequal by anything else. larry kudlow saying they would very much like to help the airlines, but there has to be more targeted measures and not a broader stimulus package. the debate has switched to the supreme court justice nominee as president trump says they will be going forward with putting

saturday. haidi: political capital being focused on that instead of getting the stimulus package over the line. westpac agreed to pay a record $1.3 billion aussie dollars to a federal regulator. this is a much larger settlement than westpac originally budgeted for. what are we hearing from the ceo? >> saying he sincerely apologizes for the bank's failings. this relates to a case last november when a regulator accused westpac of 23 million breaches of anti-money laundering laws and even including failing to vet thousands of payments linked to child exploit payment -- exploitation rings. a chairman took early retirement. late yesterday westpac directors were holding a call to discuss the settlement. $1.3 billion, the largest ever. the previous record was 7

million. for this,dgeted $900 so the settlement outstrips this as well. have beennt products closed down. the transactions have been reported. this agreement provides certainty for stakeholders going forward. australia's banks have taken a beating due to poor behavior. is there a sign those days might be coming to an end? >> when the coronavirus broke out, the treasurer called on the banks to both do their part. they have been doing that. they have been offering loan deferrals. the treasury praised them for the relief. also passing on rba rate cuts in the fall, something they have not always done. after the misconduct wrapped up, things keep on happening.

we have this westpac case come out a few months later. national australia bank got hit with action as well. this sort of stuff seems to continue happening and the headlines today definitely don't help. shery: paul allen in sydney with the latest on australian banks. let's get the latest business headlines. an asian insurer banked by a hong kong billionaire has planned its hong kong ipo that could raise as much as $3 billion. it selected goldman sachs and jp morgan, morgan stanley and hsbc to work on a potential share sale which could take place as early as next year. fw'd ipo would be the largest insurer in asia -- malaysia airlines is seeking to defer interests and lease payments as they try to mitigate the impacts of the coronavirus

pandemic. the carrier is set to be in discussions with companies about deferring an estimated $240 millions in payments. malaysia airlines was already struggling to turn business around before covid-19 devastated the global airline industry. hong kong disneyland has been stripped of its expansion plans after local authorities decided not to renew an agreement to develop land on a neighboring plot. the purchase option expires later thursday and will not be renewed because of what the hong kong government calls prevailing economic conditions. the parcel of land has been reserved for disney since the year 2000. coming up in the next hour, we speak with a partner about developing markets, especially as the dollar gains strength. more m&a action through 2021.

plenty more ahead on "bloomberg daybreak: australia." this is bloomberg. ♪

♪ haidi: good morning. we are counting you down to asia's shery: major market opens. "daybreakome to asia," wall street hitting an eight week low on fed calls for more fiscal stimulus. crossed a threshold many investors see as a market correction.