authorities say it is safe to fly there again? nobody knows when that will be. but when the russians invaded last year, we would be ukraine's biggest airline the week after they tell us it is safe to go back there because we will charge in there. initially, we planned to open a airport back in the european union and then within six months total months, we wanted to open up three or four bases in ukraine, and we talked about creating an environment constantly, one which we could lead the charge in a postwar ukrainian recovery. ♪

>> welcome to "daybreak: asia," live from sydney and new york, county down to the major market opens. shery: asian stocks have a new start to september as traders await the friday jobs reading. bond yields lower in the dollar holding gains. china moving to reduce payments for big-city homebuyers and urging lenders to lower mortgage rates in the latest bid to prop up the property sector. and hong kong shoots down, including the stock record racing for what could be the strongest typhoon in at least five years. haidi: take a look at information crossing the bloomberg, the judo bank australia final reading for august, still see it at 49.6 versus 49.4. below that level, it really

demarcate's expansion. this as we head into decision week. their expected to extend the rate because we saw in september, meaning we have seen inflation broadly receding past softer data. there is a surprisingly sharp slowdown in july cpa and the expected wage growth. really, just adding to expectations that we might see a big when it comes to the next week. shery: take a look at how u.s. futures are trading. we had stocks fluctuating between gains and losses. we ended the session mixed with the s&p 500 losing ground for the first time in five sessions. we saw the biggest or the first monthly slide since february. it has not in a great august, and we have seen that force hit throughout the sectors, at least

for today. we did see tech gaining ground. we saw the 10 year yield headed towards that for 10 level, given that we are digesting the latest economic data, pointing towards moderation. we saw the fed cooling down a little bit, but, overall, the nasdaq 100 seeing one of the worst months since december or so, but take a look at how we are trading in the oil markets because we are under a little pressure but still about that $83 a barrel level, giving we gained ground in the new york session. we had seen reports that russia may be preparing for further opec must cuts. -- opec-plus cuts. haidi: all of this not really adding to a strong set up for this friday, the last session of the week but also the first of september which has been a challenging august for asian stocks after their worst monthly drop since february this year. and all of the uncertainty over

china continue to add stress. today we see that disruption, as expected, from the super typhoon saola. we just saw that confirmation from hong kong exchange and clearing, announcing that the securities market on friday, including northbound trading, will be delayed due to that issue with typhoon number eight, so at eight or above, or any announcement of extreme conditions remain at 9:00 a.m. for market sessions that will be canceled, as well. we know there have been a lot of disruptions, schools have been shut and transport has been affected with that 20-hour time with flights going in and out of the hong kong international airport will be canceled, so a number of disruptions, including on the trading front. elsewhere, a downside to the start of the month. sydney up by .50% and not

getting a lift from the consumer confidence report which was better than expected earlier, so down by .50% and we are seeing maybe a little upside coming through when it comes to policy out of china and potentially investor reaction to that. shery: global markets really bracing for the u.s. jobs report on friday. this is a big focus where investors are waiting for insights on the fed's next steps. let's bring in our correspondent to go through the numbers we have seen that we have moderated and showed with cooling in the u.s. economy, what are we expecting from the jobs numbers on friday? enda: about 180,000 or jobs to be created and confirming the idea that the labor market is cooling at the margins and the pace that maybe lends itself to the soft landing debate. within the numbers, there will be a lot to keep an eye on, and any hint of significant

impacts would suggest things are softer than expected. the jobs payroll has been revised it seems like every month, recently, it all of this year area looking at the revision tomorrow -- this year. looking at the revision tomorrow, it may suggest that the waiver market is not as hot. this impacts to mouse numbers and they will reflect the company that went out of business and the hollywood writers strike that will contribute to it, as well. expected to confirm 180,000 or audit tomorrow, which shows that the labor market is cooling the way the fed would like it. haidi: outside of what happens in the u.s. economy, and what happens with china in the effort to support the question is, this patchwork quilts of stimulus measures, physical monetary that we have seen so far, is it like to be effective -- likely to be

effective? enda: it seems to struggle to gain traction so far. things might be stabilizing, nudging back towards the 50 level and hopefully construction will pick up the orders but suggests global trade is bottoming. in the china data, you look at the real fed story, and the real estate story, saying, what will authorities do? we had measures announced today that they would bring down the down payments and a couple mortgage rates, measures that will help. but it is an incremental measure. the big issue with china from the outside looking in these days is that investors are looking at confidence and sentiment towards investing there is at its lowest and probably sometime. and all the measures taken by authorities so far, will be hard to turn the mindset towards china around right now.

shery: does that mean regime risks really not being able to achieve -- beijing risks really not been able to achieve that above 5% target? enda: this is where you have to look to the flipside side of the story, it has been negative. even if you look at the wall street consensus, they have turned a forecast but the consensus is still 5%, where they would like growth to be, and when you have an economy the size of china's growing at 5% or so, that is still a reasonable demand. the china proxy that everybody used to look to, that is about $100. back in 2015, that was below $40 a ton during that scare. there are indications that they be there are pockets of strength with china story and that it is being overdone. think the biggest problem is no matter with the authorities are doing, confidence is not there and the sentiment is downbeat.

the mood on china seems set at the moment. shery: all of the challenges china faces. we have touched on the property sector. we are watching country garden. a few months ago, this was china's largest property developer. today, it is fighting to stay afloat. we are talking about that bondholder voting deadline being pushed again and now we are watching 10:00 p.m. friday, regime time, and this is for that 537 million dollar bond which will effectively mature next week and there are measures to vote on, including a three year extension plan and the grace period of 40 calendar days. we knew there was a problem when it came to the voting deadline because before the deadline extension, a group of bondholders declared to propose a default on the bond because of

the recent moody's downgrade. it comes to show you how difficult the situation is for country garden that is already posted the record first half loss of almost $7 billion. it has four times as many building projects, so it is a really big issue for china, the property sector, and for policymakers. haidi: it is pretty extraordinary. we have always looked at some of these names like country garden and evergrande as being too big to fail. the great story out from bloomberg intelligence talking about too big to fail is also potentially too to save in terms of what the government can do. as you mention, so many elements of pressure coming down on and regarding. moody's down -- on country garden. moody's downgrading them to c, highly more downside pressure on the distressed company. this liquidity process has been

at the core of the nation's financial markets in terms of the impacts on sentiment. moody's said it was a negative outlook reflecting country garden's heightened default risk as well as the bleak recovery prospects for the company's bondholders, downgrading the senior unsecured rating from c to caa. even the kind of resurfacing of the debt and asset disposals and other fundraising, moody's says even these activities carry high uncertainties and risks. it is a big, gaping hole of uncertainty when it comes to the property sector and how we can see resolution. and not just for bondholders and shareholders and developers themselves but what it means for the homeowners and whether that will have to take essentially a cut way forward. let's discuss it with our next guest who says that flows remain strong.

with this is cameron brandt, the director of research at epf. tell us about your data. it was interesting and a little counterintuitive to at the broader narrative has been on china. cameron: i am looking at the latest week's numbers, and another 5 billion has slowed into the china funds that we tracked during the past week area it is somewhat counterintuitive, but we seem to be generally speaking and appearing in fragile optimism with the optimism based on the assumption that if we get enough news, it will force policymakers on both sides of the pacific to move closer to the market. in the case of china, the expectations are that at some point, chinese policymakers will

stop some small steps and move much more decisively. there are policymakers with a lot of edits in the bank for their preceded success with the financial crisis, and certainly in the early part of the covid pandemic. and valuations remain attractive. we are seeing definite focus on areas of perceived strength in china, china technology mandated funds have been doing particularly well overall. haidi: that in itself is interesting but when it comes to the alternatives that have been popular for outflows out of china, with japan being the big winter but india come -- winner, but india, as well, are you still seeing strength in those flows? cameron: yes.

flows to japan funds have slowed a little, but they remain positive and there has been another very solid week. there has definitely been a 20,000 foot level, a real given towards asia and emerging since the second quarter with a lot of money that continues to leave europe, which remains sort of the most clouded area and their geographic universe and flows. but the valuation, outside, is very attractive in the region and in japan, your valuations are a little over half. in the case of china, they are about half of comparable indian

ones. if you believe chinese policymakers will be spurred into action at point, there is a lot of intentional value there. shery: are we mostly talking about foreign investors going into these three markets that you have talked about or is it a broader asia pivot? cameron: it is a broader asia pivot. we are seeing diversified pacific region funds attract some money, very big close this week into dedicated new zealand funds and i am still trying to get the story as to why, but it does seem to be a wider and more favorable region. shery: cameron brandt, good to have you back. still ahead, we talk cryptocurrencies with bitwise asset management as they delay on making calls for applications . we have more ahead. this is bloomberg. ♪

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shery: the chinese president is said to be skipping next week's summit in new delhi, a snob that is likely to aggravate strains with india. we are joined by our u.s. national security team head.

what will it mean when it comes to the india-china relations because of this event? >> i think what you are seeing is a real direction of the soreness between india and china, particularly over the border. it is a hard tack away from the image that was projected a week ago, when they were at a summit in south africa and the goal there was to protect or show unity and the counterbalance against the u.s. it will certainly put a dent in that but it is an opportunity for joe biden because president xi jinping has basically never missed a g20, now president biden gets to go to its and will be unchallenged at the leader level for the u.s. to keep countries on site in the ukraine war and keep convincing companies like india --

countries like india to get further in the u.s. cap. haidi: it is interesting janet yellen will be headed to the g20 alongside president biden, her fourth visit to india in less than one year. what is a priority here? clearly, the strengthening of the key relationship is front and center. nick: again, there is that mobile battle for countries like india, brazil, indonesia that do not necessarily want to pick sides. i suspect the key issue is to try to get more of india's helping obeying and sticking with the price cap on oil. india has been a buyer, and the u.s. edited not want to completely choke up the price of oil because it will create a spite, but it does allow them to obey the push so they can tap the price of russian oil and that is absolutely at the center of that goal.

haidi: nick wadhams with the latest on the g20. nancy pelosi says u.s. and chinese leaders do not have shared values but they must reach accommodation on how they treat each other. she also told us of russia's invasion of ukraine is a threat to democracy. >> on security, what is happening in ukraine is a challenge to democracy, not just there or in nato countries, but really to the world. and what a tribute to the carriage of the ukrainian people. putin does not share any values of democracy, justice, respect for the lives of people, concern for children or anything. and he is frightening and what is doubly frightening is a person like the former president who thinks that is ok. isn't that sad?

it is so sad and extreme. it is everything to me that it is an opportunity. >> but if you look at china and with the u.s. has been doing with china and how they should treat china going forward? >> china is a big country, and so are we. we have to find an accommodation on how we treat each other. in terms of the three things i names, security, china has been a violator of it, of transferring technology and weapons of mass discretion to roque countries, and b, in terms of economics, they have been violating almost every trade standard of access of piracy, and in terms of governance, hong kong, tibet are a threat to taiwan and the rest.

we do not have shared values. we are on a shared planet and we have to work with the chinese to save the planet. now i think the biggest emitter, if not is, they are second, and they are part of the solution in all of this. shery: former u.s. house speaker nancy pelosi. you can get all the stories you need to know to get your day going. terminal subscribers, go to dayb and available in the bloomberg app. you can customize settings so you only get the news on the assets you care about. this is bloomberg. ♪

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haidi: let's get to stories we

are tracking in the tech space, broadcom fell after a disappointing forecast for the current quarter. they expect revenue it $9.72 billion, the slowest gain since 2020. sales of apple's iphone declined, and the ceo told investor call that all the growth is coming from ai-related spending. ugg is preparing to set a -- arm is preparing to set an price range, considering pricing shares on september 13, and could start treating the next day. we are told they are looking to raise $5 billion to $7 million in a listing that could value the business up to $70 billion. dell is gaining after the bell, following that are than expected sales of pcs and data center hardware, and pc recovery in the market for corporate technology. they say demand for products is for businesses using artificial

intelligence and is long-term tailwind. shery: take a look at futures at the moment. we are seeing broad downside with qe stocks declining and reversing the gains we saw in the previous session. futures are always -- also down right now. we have seen some strength earlier in the week with that risk on sentiment, but that is not translating today's session given that we did see u.s. stocks falling in the new york session. fluctuating between gains and losses in the new york session but at the end of the day, we ended up with the first month of declines since february for the s&p 500. tech managed to gain rounds, given that yields continue their downtrend. we are bracing for the u.s. jobs report. we are expecting to see slower u.s. jobs growth. and we are setting up for the mainland open, but when it comes to hong kong, that market is expected to be closed.

this, of course, coming on the back of that typhoon that could potentially directly hit the city. this would be typhoon, super typhoon saola. this could be the strongest storm to hit hong kong in at least five years. already, the city has issued that number eight storm warning. we are expecting hong kong to be closed and the $5 trillion stop arc it to be shut down for 2 -- stock market to be shut down for today's trading session. saola will be closest to hong kong tonight and saturday morning. plenty more to come on "daybreak: asia," this is nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes!

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high-profile companies are dealing with crises. qantas faces court action for selling tickets where a rate was canceled, and we are joined now with more. it has not been a great week for corporate giants. >> the cfo was appointed three months ago and is not cfo anymore. we also got the news that the nonexecutive director of fortescue future industries is also going, not surprising since he was dealing with help issues, but the ce was also leaving after a few months, and andrew forrest gave some explanation at a conference on wednesday. he alluded to different directions around the fortescue agenda and discussed some of those executives with the zero

emissions mining plan, and he said there probably will be more coming because he described fortescue as a massive company and the transition. it is spending a lot of money, $1.2 billion projected, but hemorrhaging executives. 12 now in the past three years, so the lack of transparency is not a great looking leads to on comfortable questions -- look and leads to uncomfortable questions. shery: lots of uncomfortable questions. haidi: this is really the latest pi headache for qantas. paul: meant to be a victory as alan joyce steps down, but just crisis upon crisis, and the big one was the consumer watchdog in australia announcing a lawsuit yesterday, selling tickets on flights that have been canceled. 8000 scheduled flights between may and june last year, and it continued selling tickets on an average of two weeks before when

they knew the flights were canceled, and then delayed telling ticketholders. they took out a statement saying they take the allegations seriously and there was operational upheaval coming out of the pandemic, and also facing pressure for canceling flight credits built up during the pandemic. a few minutes after the lawsuit was announced, all of a sudden, the flight credits that had expired during that time had been remade, and they will make up their mind on the generous announcing of that timing. and earlier in the week, the assistant treasurer made a comment about quiet truths' profit -- qantas' profit. but then you take on some of these other scandals around canceled flights and expired flight credits and then the

mergers that the government had blocked from adding 28 extra flights into australia after pressure from qantas. another bit of seasoning for the story, we have known for some time that the prime minister's son, a 22-year-old, has been a member of the chairman's lounge of qantas. you have to look at all these other factors and it is starting to smell pretty bad, reaching the government, as well. haidi: bloomberg's paul allen. stayed with corporate news, after announcing record profits, ubs outlined as cutting targets. speaking to bloomberg, the ceo said that steps included 3000 job cuts in switzerland over the next few years. >> our industry is very difficult to restructure and the deep restructuring is necessary at credit suisse without going

through people in that count. having said that, there was a big element of the cost, driven by real estate planning, legal entities, and by i.t. platform shutdowns. on the account front, first of all, we are counting on natural attrition and on retirements, at a long-term ability, and shifting to our permanent external account ratio. and of course, we will have to take some actions in redundancies in the years to come. >> dalian switzerland? >> no, -- mainly in switzerland? >> no, i think it will affect our entire workforce. in switzerland, we expect a proactive round, and around 3000

jobs will be made redundant over the next years. 1000 are part of our decision to integrate the swiss bank. if we would have chosen to spin off the swiss bank, we would have had to reduce it i 600, so the downturn is 400 people. then we have 2000 people who needs to be or will go through our redundancy, and because of the need of the restructuring. we are lucky that we have a very health labor market in switzerland, according to the employer's in the baking industry, there are more than 6000 jobs, open jobs. in switzerland, it is a healthy mark, and -- markets, and so we are also helping the people affected with financial,

retraining, and so we try to mitigate the decision. of course, it is the painful part of the job, to go through this exercise. >> overall, 35,000 jobs? is it too soon to see what your final headcount will look like in two years? >> we are not talking about headcounts, other than the specific situation because of the size of the country, and the relevance of both organizations to the country, we would like to be specific about getting clarity on the decision. broadly speaking, you will see as the quarter goes by how the workforce is changing. what i can't tell you is that since the beginning of the year, we already have 8000 reduction in workforce between external and internal, a consequence of the cost measures that credit suisse initiated itself, recognizing the need of a restructuring.

we have been accelerating that in the second quarter. shery:shery: that was the ubs ceo and francine lacqua from bloomberg. we have an alert on the bloomberg, bank of china is cutting their deposit rate. authorities have been encouraging lenders to lower rate. at least four banks, including icbc, had cut your deposit rates after regulators late thursday announced, and bloomberg reported that the largest banks were preparing to cut rates, not only on deposits for existing mortgages this week. when it comes to deposit rate cuts, this would be the third time in a year already that these lenders are lowering their deposit rates. plenty more to come on this is bomberg." ♪

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now getting dressed is so easy. -you just get me. -they get me. -you just get me. -and they'll get you, too. take your style quiz today. haidi: take a look at current and you can blame it on liquidity's, seasonality, but we are seeing bitcoin closing out its second straight month of declines, even as we really saw some optimistic developments when it comes to legality as well as literary aspects from this week. we had that rate for months

until the big drop in the middle of august, and that was seeing a turnaround as we saw the price drop low $26,000. a big part of that was what we saw in the bond deals, as well, and the liquidity, but at the moment, with that decision, bitcoin up by .2% and some of the other players are seeing modest games, but the sec delaying these decisions when it comes to invesco and the other etf decisions is not helping sentiment either. shery: especially on the week when we had seen bitcoin really get super excited about the latest developments when it comes to the court ruling potentially paving the way for the first u.s. etf. we are joined by sue with the latest. we just talked about the delays in the sec approvals, but at the same time, we had a grayscale victory, so it is going on? >> there are a lot of factors,

seasonality, it could be traders on vacation and there are technical issues causing bitcoin to retrace that again we saw earlier in the week and that is probably why you are seeing a lot of red, both for bitcoin, which was up 6% earlier in the week on the court decision from grayscale, and grayscale was up 17% on that day. so there was an awful lot of excitement in grayscale's court victory over the sec, overturning the agency's rejection of the etf application that has been viewed as a watershed moment. many are saying that clarity is needed. let's take a look at the five-day chart and you will see how bitcoin, after its jump, returning back really to the range bound trading we have seen. if you look at the bigger story, bitcoin fell 13% in july and august, and that was after surging in the first half of the year by 80%.

grayscale ceo told bloomberg that the firm now after winning this decision is not sure whether it needs to refile an application with the sec and whether there is going to be more in the decision that the court issues, typically the appellate court issues mandates and other details 45 days after its initial ruling. grayscale took a very long journey to get to the point to where it is now. so, again, lack of clarity is an issue to quote what analysts are saying but they are still keen on taming the wild west of the financial world, and the story could be a lot more drawn out. haidi: more drawn out when it comes to the sec delays on decisions on a range of other etf coin applications. su: as mentioned, many analysts were expecting the sec to address the appellate court decision.

they said they were viewing it, but it does have the option of approving, rejecting, or delaying these etf applications. so, it has chosen to delay. in fact, bitwise application was to be considered friday. some thought there would be a decision ahead of labor day but that has been deferred. invesco, valkyrie, blackrock also deferred, but a total of seven applications now put on hold. it is interesting to note about the sec's rejection of grayscale was arbitrary, so it was a real rebuke of the fcc chairman gary gensler. shery: we would like to continue this conversation with katherine dowling, chief compliance officer and general counsel at bitwise asset management. thank you for your time. could you give us an update on what is happening with your etf application and what is next with the delay? katherine: absolutely, and thank

you for having. i agree, this is a watershed case and a landmark movement. we should definitely embrace that, and we are. the delays were absolutely expected, it is part of the natural review process. on margin, we review this decision, that was also expected -- those of us in the industry who were watching the hearings when he occurred, it was a very tight hearing. you could listen to it, or those who read the transcript after, and see that it was not going to go in the sec direction. it is nice that they have a decision finally. i think what we are going to see is that the sec is going to look to line all of us up at a similar timeline so that they are not creating a scenario that we saw occur around the futures etf's that was created where it was a little bit less organized. i think that is what we are going to see. one effect we can look at is what we are seeing currently

with regard to the futures products. those are also aligned around the similar time ring. so this point to the sec being a little more organized about getting us all out at the same time, but with this decision, that was expected, we are pointing in the right direction to get a product out that those of us in the industry have been working on a long time. su: let's talk about what grayscale argued, was that the sec approved these bitcoin futures etf's, your company has several, and yet it is denying bitcoin's spot etf's, arguing that the products are very similar, and the court agreed. can you get into that? katherine: rights, and it was a tight and well reasoned decision, which in line with the themes brought up during the hearing. you need to treat it like a life, and all roads lead to spots bitcoin, so treating the futures one-way and treating spots bitcoin another way was

not consistent, and the court called the sec out on that in their decision, and now we have the sec is going to have to look back and they can either review, again, and potentially attempt to come up with new grounds for denial that are different from the ones the words pointed out as arbitrary, or they can look to appeal. obviously, we are in that moment where they have 45 days to consider appealing. they can go one of two routes. they could look to ask for an en banc review with a larger panel in the d.c. circuit, or they can look to appeal to the supreme court. i think it will be tough for them to come up with different ground. if you look at prior rejections, there are not any other grounds looking and those that were not aired already, so i think that will be a tight move or a hard move for the sec if they look to

appeal this decision. haidi: the more elongated the process is, what is the risk to dragging sentiment further? because you already see the downside in the price action, i am wondering if the crackdown has had a meaningful negative impact on investor interest? is there still elevated interested? katherine: i look at 2022, akin the empire strikes back. 2023 has been more like return of the jedi. i think all of the positive moves we are seeing, we are seeing the court step in, two judges make positive comments and decisions in the crypto camp , and making statements along the lines of regulatory clarity is needed, asking congress to step in. at the same time, we are also seeing congress making a lot of positive events. we have mchenry thompson, a lot of motion in the house, all

positive, but i think the institutional investors are looking at that and saying, changes coming. it is slow, but it is coming and it is positively trending in the right direction for crypto and forgetting products out there, like spots bitcoin etf, that makes a lot of sense for investors. it is a product that is regulated. you have a lot more information on these products. it is within a wrapper that accounts can hold and it makes sense on many levels that can give investors the exposure to bitcoin that they have been looking for for a long time. su: i will ask for a short answer, you are a former prosecutor. is there anyway you can put yourself in gary gensler's shoes? for two years, he has been raging war on the crypto industry, so does he throw in the towel or double down? katherine: the grayscale case is part of a normal process. you have the courts looking at an agency action and making a

decision on that basis. if you are gary gensler at this point, i think it is time to take a step back and reconsider and say, ok, let's find an organized way to get these products out to market, and i think that is what you're going to see happen i think we will see a lot of movement in early january around these products. su: two answers in terms of years, how long do you think it will take before we get there? katherine: for spot bitcoin? su: yes. katherine: next year. su: all right, there you have it. shery: katherine dowling, good to have you with this, chief compliance officer and general counsel of bitwise asset management. we are waiting for japan capital spending numbers. we have been watching eco-data recently, including china, where we have seen manufacturing pmi surprise to the upside factory output has been slow across the world, and that has hurt japanese numbers. we will see if we continue to see that upside that we saw

after the covid reopening, especially in the first quarter when we had japan capital spending seeing a boost of 11%. take a look at the second-quarter numbers, year on year growth, 4.5%. that is really a much lower figure, a much lower rate of both that economists expected. actually half because the expected growth of more than 8% year on year for the second quarter. if you look at capital spending, excluding software, it is a growth of only 4.4%, down from 10% in the previous quarter company profits. year on year at 11.6%. we have more to come on "daybreak: asia." this is bloomberg. ♪ fabulous surroundings... but eve's ing at thes for financial insights from merrill. is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home.

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it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. haidi: today bloomberg big tech takes a look at how the west may be strengthened in the geopolitical struggles with the current struggles in the world number two economy. there is a feeling that this is certainly an element of being a structural slow down. it is interesting because we hear the sentiment from the american chamber of commerce or british chamber of commerce saying there is more of a receptiveness to foreign investors in this environment. >> yeah. we have put some reporters to

work in the g7 capitals to try and get inside the power of this one because we have seen with the outside economists think and there is a concern that this is not just a cyclical slowdown but there are structural issues here and it will be a hard fix for china. we wanted to see what those in policymakers circles thought, and it was a view echoed from those in policy circles, a view that this is more than just a little stumble but bigger for china and it could undermine the big narrative of recent decades of this inevitable demise of china, and the rise to where they thought it would displace the u.s. and become a beacon of growth for the developing world. that narrative is shifting and there is more confidence in these capitals that maybe perhaps this is a longer-term struggle here for china who may indeed impede that march. shery: no wonder we are seeing a

caution in g7 capitals about low back on their own economies. is that a uniform view? malcolm: we heard different signals from different parts of the world, so in the u.s., i think there was this view that, ok, china is struggling and we do not necessarily need to stick the boot in. we heard that when there are curves on outbound investment that were announced last month, remember, they were softer than some thought they would be. we also heard there was no real fanfare rolling that out, in part because the u.s. does not want to be seen as taking the boot in it now. china in many ways is doing that for them in some of the measures they have taken against the private sector. there is a view that that in itself is a deterrent to investment in china, so the u.s. does not necessarily need to push that hard. especially does not need to be seem to be pushing that hard. on industrial policies, there still the determination to

diversify the supply chains. haidi: welcome scott joining us from sydney. we take you live to hong kong. we are not necessarily seen a lot of rain right now, but brace yourself because hong kong is closing down as we are expecting a potential directed of super typhoon saola. the $5 trillion stock market is shutdown today in the city has issued that number eight storm warning. this could be the strongest storm to hit hong kong in at least five years. we have seen that impact already in other parts of asia, and we are expecting that to hit hong kong today and saturday morning. this is bloomberg. ♪ baby, only on game nights. you know you are retired right? am i? ya! the queen sleep number c2 smart bed is now only $999. plus free home delivery when you add a base shop now only at sleep number.

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shery: this is "daybreak: asia,"

and we are counting down to asia's major market names after mixed finishes in the u.s. losing ground for the first time in five sessions, but it was a tough august. the first monthly decline since february and still so much to digest today. we have china's pmi numbers out later, as well. haidi: of course, all of this is continuing to paint the picture of steady deterioration in the chinese economy. we have seen the piecemeal efforts to put in supportive measures, the cutting mortgage rates which just passed through from the bank of china or more measures to support the property market more direct. all of this is related to this point of failing to have a material effect, certainly on sentiment. we are also seeing this when it comes to demand for other economies, especially an economy that is so externally vulnerable

to the likes of south korea. we knew the numbers would not be rate, but that august export number for south korea falling 8.4% and the estimate was for contraction of 11.8%, so a little bit less bad than expected but imports felt 22.8%, slightly softer than the expectation of a decline over 23%. that trade surplus narrowing to $870 million. we were expecting a trade deficit of $560 million, as well. that early trade data already showed us that that export doom and gloom really continues on the back of that double-digit form. china sales are continuing to slump in the data we saw earlier this month, so it will be interesting to see the breakdown. china has been struggling to jumpstart the economy and, of course, the country remains the number one buyer of korean products, even as the share slowly decreases. really, we have yet to see the easing of the facilitation of

more chinese travel adding much of an impact to the south korean economy. looking at those trade numbers and how they will play into market sentiment with about one minute into the start of trading, we are expecting a pretty mixed to lower start of september trading. down by about .1 of percen -- .1% area the wan has been holding pretty steady before that korean exports number. a little move when it comes to the dollar-wan. we are also getting that effect of exporter month and dollar sales as the element of protracted yuan weakness and dollars been persistent, as well. shery: take a look at the opening in japan with downside pressure, especially for health care communications that are

leading the declines. the energy sectors and financials are up. wti and broader brent gained ground in the new york session. japanese investors are trying to digest the latest numbers. second quarter capital spending rising only 4.5%. the estimate was for a gain of more than 8%, and it is also down from the previous quarter, so you can see businesses being a little more cautious when it comes to spending, and the japanese yen holding steady at 145, perhaps a little consolidation and a little caution given that we do have the u.s. jobs report coming out on friday, so we are bracing for that, as well. the 10-year yield in treasuries holding at that 4.11 level. not a lot of movement but we did see the losses in treasury yields today falling marginally for five sessions already, even though we have moderating eco-data all week.

haidi: take a look at the situation as we get into the start of trading in australia with a couple of key starts. we are watching the fortescue story and other topics days after we saw the ceo being replaced, as well as other board members stepping down. qantas is facing reputation and legal woes over canceled lights. we are waiting for those stocks to start trading. a staggered open, down about .2% here in sydney with relative stability when it comes to bond trading, we had the reaction to china pmi numbers so watching for those numbers today for more of a reaction. the aussie-dollar using under 65 u.s. cents. shery: let's bring in our next guest, manishi raychaudhuri, always great to have you with us.

we continue to see these measures coming out of china to try to support the economy and the stock market. how have you really reposition in the market? manishi: retail remained overweight in china. and we believe that these measures that are being taken, particularly those supporting the stock market of late are important. domain jump in front of policymakers in china is to restore the confidence of consumers and private investors, and, of course, the overseas investors into their financial mark. as far as our china allocation goes, the most important change we have made was to move away from the chinese banks and more into chinese insurance because we believe that in trying to

support the property sector, the banks, which are cutting the mortgage rates and other lending rates now, that could lead to significant dilution in the net interest margins going forward. quality for the banks is also on descendants, and this way is on allocation as the demand for fixed or returned products of insurance companies is likely to see a game going forward. so that is something investors would have to make room for, so we remain selective. shery: bank of china lowered the positive rates by as much as 25 basis points. all of this really stemming from the property sector, despite the fact we see support measures, is there anything in that industry that you might like? manishi: we do not have any

exposure in the chinese or in the greater china property sector right now. we think that the concerns surrounding leverage and historical overbuilding in that property sector are likely to last for a while, so why these measures are being taken, it would be difficult for the problems in the property sector to be overcome in a short time. in the new term, we would possibly stay away from that sector. haidi: where do you see divergence in terms of asian equities versus reformers like the u.s. and other developed markets into the rest of the year? what are the key drivers going into september given how challenging august was? manishi: the most important variable, as far as asian equities are concerned, a part from the local ones, which is

surrounding china mostly, are how do u.s. bond deals and interest rate expectations and the global central banks monetary policy expectations, how does that pan out? the whole trigger to this with the downturn in asian equities was despite the bond deals from late july from the third week of july to early august, and spiked almost 55 basis points. even the recent relief to asian equities, if i may use that race, has come about in the wake of almost 20 basis points declined u.s. trade for years. it is this monetary policy expectation and how it pans out that would be a key variable. we have had jackson hole, that is behind us now. we are now looking forward to the september monetary policy meetings, going forward, a point of it still remains that the fed

would possibly remain at the present level of around 5.5% on the upper end of the scale, and they would continue with this well into 2024, possibly until the first or second quarter. it would be data-dependent. if we still continue to have very strong payroll numbers going forward, we may have to revise our forecast, but we think that as far as the u.s. treasury yields translating into asian equities, that is possibly the worst -- there were so that is possibly behind us -- the worst of that is possibly behind us. haidi: are you optimistic when it comes to popular markets you have seen those coming out of china, india, and japan? manishi: in a sense, india is, if you look at the japanese universe, india is on the opposite end of the spectrum

compared to japan -- compared to china, rather. india has not only been benefiting from consistent rise in gdp growth expectations, and corporate earnings expectations, most importantly. in fact, we have not only two markets, india and korea, which has estimates increase over the past three months or so. there is a policy tailwind in india, which is leading to private corporate cycle in addition to growing investments and infrastructure we have already seen. so all of these things are falling into place in india right now, and on top of that, the market is supported by a strong domestic flow from the domestic retail investors, so fluctuations in the foreign institution closer not really mattering that much to that market. shery: you mentioned korea, you

are not worried about the continuous contraction of exports? we are talking about exports declining for almost one year already in an export heavy market. manishi: true. that is no doubt a concern and exactly how it would turn out to be, and what would be the duration or the debt of the recession that has been talked about, these are important considerations for markets like korea. at the same time, we are seeing korean tech and particularly a degree of supply demand balance that is coming in, a consequence of the severe supply cuts we have seen earlier this year and late last year. we think that memory prices might actually stabilize later this year and possibly more so early next year, and that is what makes us positive and

constructive on a large segment of the korean market, the korean technology side, almost 40%, as long as we have bond yields going out and staying up, korean banks and yields could also remain actively resolute, so those are the two sectors that we are playing in korea. in other words, yes, we are overweight korea, but we are very selective. haidi: always great to chat with you about your trading strategies, manishi raychaudhuri at bnp paribas. still ahead, getting you the manufacturing data from across asia in a few minutes time and a closer look at china stumbling recovery with signs of deflationary pressures that could be positive. this is bloomberg. ♪

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haidi: friday's u.s. jobs report is the next big focus for markets and investors looking at stimulus announcements out of china. our life contributor is here in sydney, as oil as our

chinese economy contributor. what are we from traders and how they are prepping for the job sprint, particularly bond traders and investors looking at more short-term pay? >> they are worried that more short term pay might be coming. part of that is some pretty obvious signs that there is extreme position is going on, there is a shortage of two year notes and cover shorts put on fresh shorts. that is a concern. we have had this sort of cautiously optimistic week, where yields have come down every day this week so far, but only really came down strongly on tuesday for the u.s. outside of that, there has been up and down, and we are stuck on this 4.1% level on the 10-year, which is towards the bottom of the very recent ranges. it is still in the uptrend that

has been going on the last few weeks. it is just towards the bottom of it, so that underscores how pivotal this jobs report could be if it is shockingly weak, you could see the 10-year yield break out of that up trend, and then you would have a test of 4%. critical back under 4%? which would -- could it go back under 4%? which would unwind that the fed will go on being hawkish we biased because it is confident it is not breaking the economy. so thinking about if those are breaking out w on aeak jobs report. on the other side, even if it is in line or if it slightly beats particular numbers that people see is on, you could see us go back towards the top of the uptrend we have going back towards that 4.3%, 4.35% level,

which it topped out earlier this month. that would bring into play this strong skepticism that some of the big investors think 4.5% is a more likely short-term to medium target for the 10-year yield. shery: a different macro picture from the u.s. compared to china. we have seen so many rate cuts, whether it is on mortgages, deposits, and even downpayments being reduced. how effective will all of this be in trying to shore up the economy, especially the important property set? >> at this point, the announcements that came overnight, allowing cities to lower them is critical. depending on the city, you have got some really high barriers of entry for homeowners in china. the other thing, too, is financial institutions are cutting rates on existing mortgages.

this is a massive stimulus measure on its own, but in combination with policies that are coming out of china can actually be fairly effective. bloomberg economics estimates the latest mortgage cuts, larger than expected to, and could potentially contribute to the same impact to the economy as a 15 basis point policy rate cuts. cutting rates earlier in august, there are expectations there will be additional stimulus edgers, including potential policy rate cuts through the end of the year, maybe a reduction in the ratio to the amount of cash kept in reserve. all of that could effectively contribute to maybe providing around a one percentage point with gdp, so a substantial amount of support when you are

combining this feed. i think it is certainly helping, but we are not seeing any kind of giant flashy bazooka style stimulus out of china, but that is enough to help so far. haidi: certainly the property sector needs a big fix. you look at country garden, what are we seeing in terms of pressures that are continuing to build? especially with the moody's downgrade. >> the moody's downgrade was incredibly surprising considering the earnings this week. country garden is at risk of default. you have the yuan dominated bond saying they would like to declare that essentially in defaults because of liquidity troubles. this is one of china's largest property developers, and we have been hearing about their issues for quite some time. it is similar maddock of all institutes in the property sector. it is incredibly important in the industry within china, and

we know it has been a massive drag on the economy and gdp this year. at this point, it is encouraging to see the stimulus measures come up to support the sector but the question is, how much action will they take to turn things around? small steps are helping, but you have examples like country garden sitting there, with defaults we are still dealing with. it seems like we have a ways to go. haidi: do even touch on the pmi numbers we are getting? how many adjusters -- how many traders look at all of this in a trading day like today? >> quite a few investors might decide they do not want to give themselves indigestion by taking a right out of markets -- bite out of markets that will be awash with contradictory signals. the pmi will be interesting, especially because we just got manufacturing today, and the

manufacturing, the official pmi was the one that beat on the upside. we are looking for signs there that may be it is not -- maybe there is a bottom to be found for parts of the chinese economy, especially with these measures. unfortunately, we will also have muted market reaction with hong kong close today because of the weather. that would have been a key venue where you could see some reactions there. with, again, the start of the month, so we might have had some rebalancing going on the last couple of days. payroll is looming, and, of worse, u.s. labor day holiday on monday, honestly, a lot of traders might decide that it could be time for a relaxed friday. [laughter] haidi: i love that analogy, marcus getting indigestion. shery: maybe we should all have -- markets getting indigestion. maybe we should all have pepto-bismol.

of course, you can get a roundup of all stories you need to know to get your day going in today's edition of "daybreak." it is also available on mobile and the bloomberg anywhere app. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪ j.p. morgan wealth management knows it's easy to get lost in investment research. get help with j.p morgan personal advisors. hey, david! ready to get started? work with advisors who create a plan with you, and help you find the right investments. so great getting to know you, let's take a look at your new investment plan. ok, great! this should have you moving in the right direction. thanks jen. get ongoing advice; and manage your investments in the chase mobile app.

haidi: let's look at stories we are tracking across the tech space, broadcom fell after disappointing forecast for the current quarter. chipmaker expects revenue to come in at $9.72 billion, the slowest gain since 2020. sales of apple's iphones have declined, and the ceo told the

investor call that all of its growth is coming from ai related spending. arm holdings is preparing to set a price range for its ipo next week before taking off an investor roadshow. the chip designer is considering pricing their shares on september 13 and could start treating the next day. they are looking to raise $5 billion to $7 million in a listing that could value the business up to $70 million. dell gaining after better-than-expected sales and hopes her recovery in the market for corporate technology. dell says demand for products that help is this is use artificial intelligence are a long-term tailwind. shery: take a look at how futures are trading, investors are sitting on the sideline, given that we are bracing for the u.s. jobs report. the expectation is for job rose and wage gains are cool, but, really, it is about that number.

it has already been a difficult august. i talked about how the s&p 500 saw its first decline in a monthly basis since february, the stock 600 futures in europe also saw their first monthly decline since may. we have been tracking the euro closely, given that we have seen some strength on the back of dollar weakness in recent days, but we continue to watch the latest when it comes to earnings in that market, as well, because we have ubs jumping on the outperformance in the broader financial sector, as well. it really has to do with the jobs numbers out of the u.s. on friday. haidi: jobs numbers will be front and center when it comes to where we had for the dollar from here and currency pairs will be affected. we did see some gains, 1.8% for the bloomberg dollar in the previous month, and we are seeing in this session, not a whole lot of moves to the

upside, dollar-yen shy of 146, and theyuan pretty steady after deteriorating exports, albeit they were better-than-expected. thousand-dollar under .65, and expectations next week that they will go into another meeting. and watching trader sentiment bearish for now for 51 days. taking a look at what is going on in hong kong as they brace for super typhoon saola. we have seen a cancellation of trading, as well as a 20-hour trading, as well as a 20-hour cancellation it's an amazing thing

when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. haidi: pre-jobs here in asia as we look to this next key data

point for the fed to mull over. we are seeing just a carry-on of that session on wall street ahead of the jobs reading later to gauge the outlook for policy. the any kay some pretty respectable gains .3% higher. the kospi also in the green despite another set of pretty dismal export numbers for the most recent month. and really going through these declines to what just about a year of downside when it comes to export demand. we are seeing declines, though, when it comes to the australian stock market. off by about half a percent there. fortescue and quantas both seeing downside. fortescue losing another key executive, two key executives and one board member as well as wantos facing a slew of reputational and legal and regulatory woes. kiwi stocks down by .3% and what we are lack tag is trading in hong kong. the stock impact being shut do as the city races for a hit what could be the strongest storm to

hit hong kong in at least five years. and we are of course looking ahead to some of the other eke owe data that we're watching. shery: look at those p.m.e. numbers out of asia. and i'm watching the philippines manufacturing p.m.i. because it's now fallen into contraction territory. it was in expansionary territory for almost two years. and we're now seeing that 49.7. which would be the lowest since august 2021. now, malaysia continues to be in contraction territory. south korea also actually weakening more. south korea has been in contraction territory since july of last year. and japan's final number has also been downgraded slyly. -- slightly. indonesia very strong numbers out of indonesia. manufacturing p.m.i. rising to the highest since november of 2021. so a bit of a mixed picture here and there. but of course the one that we're very much watching is the p.m.i. numbers out of china later this morning, haidi.

haidi: let's focus on the macro outlook had when it comes to china, sherri, because that's front and center for markets and regional economies suspect independent andy xie joining us and you always have interesting news when it comes to china. is this a structural slowdown or a cyclical one? >> well, a bit of both. and we have this post-poland trader session. it's because of the demand is gone and also electronics, electronics products were overbought during the pandemic. so we're experiencing an adjustment. that's a cyclical -- it takes a while to bottom out. but there is a bit of more longer-term issue that china is dealing with deflating property sector. and that is happening slowly. it's likely to take many years. haidi: let's address some of

these key issues. the property market obviously is a major one. and we are seeing increasing stresses even with the marquee names like country garden and vancur. what can they potentially do? because this is one of the structural issues. you actually say the risk is kind of to panic and potentially reflate it. andy: well, i think that the issue is the property sector is too big. and needs to shrink. and needs to shrink by at least half in terms of volume. so far it's down about 10% in the last two years. so it's got a few years to go. and for anybody that it wants to survive, you be need to really shrink down really quickly. and a lot of people are still trying to -- waiting for the government to stimulate, to bring everything back. and people like that are likely to be washed out. shery: andy, what are the implications of a shrinking property market for households

who have accumulated wealth in the real estate sector? andy: there's going to be contraction in paper wealth. we saw that similar experience seeing other asian countries before like japan, like a taiwan, like hong kong. and it is painful. but in terms of a real economic impact, it's hard to tell. it's -- you're -- you live in the house anyway. the value goes up and down. it doesn't really change anything on the ground. i think that it's more psychological. so the main thing is still the property sector itself. it needs to become smaller and become healthier. but in terms of the knock-on effect on wealth, and the consumption, it's temporary. shery: so andy, what do you think of the latest measures by beijing to have focused on reducing rates for existing mortgages, for deposit rates for lenders, also cutting down the

down payments for home buyers? andy: well, the government is doing a few things to ease the pain somewhat that i believe. but it gets -- it's different from trying to bring it back, trying to stimulate efficiently so the property sector would go like -- gangbusters like before. i think this time it's different. the government is accepting the inevitable reality that the property sector is not sustainable. so what you can do is ease the pain. maybe slow down the adjustment a little bit. but you should not change the direction. i think that the government is doing the right thing. haidi: andy, how much are you watching? and are you concerned about what's going on with the trust firms and the shadow banking sector right now? andy: yeah.

i think the shadow banking system is very important for the property sector. because that -- the banks actually -- maybe 50%. so developers need to find half of their financing somewhere else. like the bond market and shadow banking system. and paying very high interest rate. so that -- that shadow banking system i think the banking regulator started cracking down a few years ago, and then again began the proper sector trouble. -- property sector trouble. there will be a lot of losses. the government is trying to protect a small -- the small savers, who bought some wealth management products and maybe local governments will help out. and make them whole. but for a lot of rich people who have bought at a high risk product, there's going to be a real wealth destruction. we're talking about the cash

that they gave out is not coming back. so it's -- that is a big impact. it could be trends. trends. shery: what will be the impact of a potential default by country garden? we know that they have four times as many building projects under way as ever. andy: the size is not as big as ofgrand. -- of evergrand. the system has coped with something like that, the financial system. in terms of the construction, the government's pay book is to keep financing for ongoing construction. and do you have a special vehicle for financing ongoing construction? so the people have prepaid for their properties will get them eventually. so this is for social stability. the government has -- has tools to handle that.

haidi: do you think homeowners will as part of the eventual solution for the property sector have to accept lower prices? and i guess i do wonder how that feeds into consumer confidence, household wealth, you talk about the risk of reflating parts of the economy that need to be restructured. but what is the risk of entrenching deflationary mindset for the consumer and the household? andy,: the impact of deflation is really overrated. the issue is income. you look at the japanese people. expected the cent to lose out in competition. -- the country to lose out in competition. that's why their future income will be low and that's why they held back. the chinese people are still optimistic in terms of the country's competitive position. so i don't think that that -- that's going to be structural. but if there is any income

issue, chinese economy is too much biased toward government. and investment. and the government has no -- no intention to change that. because it wants to focus on technology, competition, geo political competition. so we are not going to see con sums led boom anytime -- to see consumption-led boom anytime soon. the economy is going to be very local for a number of years to come. shery: and we're searing global investor confidence pretty shaky on chinese financial markets, right? despite the fact that we saw that cut on stamp duty for stock trades and so much more coming from beijing. when will this become a global problem? andy, well, i think the issue is a confidence issue. but there's also a reality that so many companies making money in a bubble situation and the

situation has changed. and so the income expectation i. but there are a lot of other companies that are coming up. the -- china is entering a new phase. companies that are going to win out are those like a b.y.d., they want to lead the supply chain. the chinese companies were happy to join the supply chain. working for somebody else. i think the profit there, is it going to be limited? so we are seeing chinese companies that want to lead the supply chain and offer branded products. and i do believe that the market when it comes back will come with a different businesses and companies. so i think that for investors, certainly china is -- the economy, it will grow. it's very large. so any -- 1% of growth is very

big. and at the -- capital income, there's still kind of an easy growth ahead. and china can double that in 10 years. so there are a lot of opportunities. but opportunities are not with the existing -- some of the existing players. they will be new players. haidi: independent economist andy xie there joining us from shanghai. thank you very much. we do have more to come on "daybreak asia." this is bloomberg. how can you sleep on such a firm setting? gab, mine is almost the same as yours. almost is just another word for not as good as mine. save 50% on the sleep number limited edition smart bed. plus, free home delivery when you add a base. shop now only at sleep number.

haidi: singapore heading to the polls for the city's first presidential election in over a decade. following political controversies that rocked the asian business hub. let's get more from our markets co-anchor and chief correspondent for southeast asia. has has. has linda has. this is a very significant selection. >> shery, usually the presidential race is insignificant. and non-event. because we know that it is a ceremonial post. and not much is attached to it. because the president pretty much invites and welcomes foreign dignitaries. but time around it is quite different.

it comes against a backdrop a slew, a string of political scandals involving ministers in the ruling party. and that backs the question about the integrity of the leadership. and in a recent gulf poll survey two thirds of sing importants say integrity -- of singaporeans say integrity,ups the kind of pay that they command, they command among the highest salaries in the world. it also comes against a backdrop of escalating property prices. surging cost of living. and there is great unease among the people. so it is seen as a litmus test on the leadership right now. also bear in mind we're on the brink of the leadership transition, lun expected to step down as prime minister by 20 at that. and we have a new 4g leadership. amid all of that backdrop, we're going to this presidential polls. and it could be seen as a way to

i guess daje whether or not singaporeans are happy with the government right now. haidi: who's expected to win, and when will we know? >> well, it's a tough one. there's no pre-polling. so there's no initial indication of who is leading the polls. there are three candidates. and all three are seen as being proestablishment. we have garatnum the former company at this prime minister. also the former chairman of the central bank. he's seen as leading the race, tried and tested, well respected on the international stage. but the question really is how big of margin will he win if he does win? now, if you take a look at how he did in terms of the general election, the last general election, he had a majority of 75%. whether or not he can repeat that performance remains to be seen. but also other candidates, unkuk

sung former chief investment officer of g.i.c. a sovereign wealth fund and he says he is an independent choice. and if you take a look at the debate, the presidential debate that happened and he seems to have swayed some people on the ground according to conversations, anecdotal evidence. so it's likely to be a tight race. if you take a look at the backdrop of the issues, the challenges that singapore is facing right now. haidi: co-anchor and chief correspondent for southeast asia has linda amin there. chinese president skipping the summit in new deli. a snub that many could aggravate strains with india. meanwhile, u.s. treasury secretary janet yellen will accompany president biden to the meeting. her visit could offer another opportunity to engage with chinese officials as concerns mount over the economic slowdown. the former u.s. house speaker nancy pelosi says u.s. and

chinese leaders do not have shared values. but they must reach accommodations on how they treat each other. she also told us that russia's invasion of ukraine is a threat to democracy. >> on security, what is happening in ukraine is a challenge to democracy, not just there, not just in the nato countries. but really to the world. and what a tribute to democracy that the courage. ukrainian people are. what's frightening is that putin is -- does not share any values of democracy, of justice, of respect for the lives of people, concern for children or anything. and he's frightening. but doubly frightening is a person like the former president who thinks that's ok. isn't that sad? but it's so sad. and it's so extreme that it's everything to me, not frightening but an opportunity.

>> an opportunity but when you look at china, for example, if you look at what the u.s. has been doing with china suspect how they should treat china going forward? >> well, china is a big country. and we have -- and so are we. and we have to find an accommodation on how we treat each other. but in terms of the three things i named, security, china has been a violator of transferring technology, of weapons of mass destruction, to rogue countries, a, b, in terms of economics, they've been violated -- violated almost every trade standard of access of piercy, w.t.a. rules and the rest. and in terms of governance need i tell you hong kong, tibet, we are a threat -- a threat to taiwan and the rest. we don't have shared values. but we have shared -- a shared planet and have to work with the

chinese to save the planet. because they're now i think the biggest emitter of -- if not us they're second. and they are part of the solution in all of this. shery: former u.s. house speaker nancy pelosi and you can watch that full conversation on leaders with laqua at 9:30 p.m. new york time on september 27 in the u.s. we have more ahead. this is bloomberg. when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh

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take your style quiz today. haidi: hong kong is closing down its stock market along with the city as it braces for a possible direct hit from super typhoon saola. for more asian transport reporter danny lee joins us from the city. danny, how bad is the situation on the ground and how bad could it get? >> yeah. it all depends on where you live and how sheltered you are from buildings and taller buildings. right now, i mean, the situation is very, very calm. and so it's -- it can be very misleading. however, web forecasters have already warned that the weather will deteriorate rapidly on friday. we're going to be seeing heavy squallish showers and we're also going to see, you know, very, very strong winds as well. the authorities yesterday were

not -- did not hesitate in fact to say that they would be willing to raise the storm signal from the third highest to the highest. and that is something that's rarely done in hong kong. so we will be watching out for that. and the sources have already said they may raise to high level of storm signal by friday evening. but this is of course a dangerous storm that is going to take a direct hit on the asian financial hub. haidi: yeah. we've seen that disruption when it comes to industry sectors and of course as you mentioned financial markets today. >> yeah. we're seeing hong kong's $ five trillion stock market will be closed and schools closed. people will be working from home. so very much everyone is prepared just like during covid times. on the transport side of things, which is more of my expertise, we will -- we have already seen 180 flights out of 309 flights

canceled departing hong kong today. shenzhen airport across the boarder -- border, that is suspending operations from 12:00 p.m. and haven't given a resumption time because of the trajectory of the typhoon. that's something the authorities are still waiting to determine just to see how safe it is to resume flights. cathay pacific in hong kong have said they are going to be suspending flight operations from 2:00 p.m. friday until 10:00 a.m. on saturday. so in terms of other more specific impacts as well, and we're seeing metro services also reduced or curtailed. and services on metro lines are now reduced to 10-minute intervals and hong kong's high speed cross-border train services with shenzhen and the gong dong province will be suspended from 12:00 p.m. today. haidi: our asia transport reporter danny lee with the

latest on the supertyphoon saola looking to affect hong kong and some of those disruptions to markets. hong kong not trading today as we spoke about. but rest of the markets that are online for the first day of the month, really struggling to shake off the woes of what was a really challenging august for equity investors. we are seeing some green shoots when it comes to economy there. the knee chay 225 up by .4%. the topix looking to extend and advance and even as we see these broader market conditions cool a bit. that relatively weaker yen continuing to act as a booster -- a boost to company profits and second quarter profits rising 11.6%. that was a big beat on estimates of a slight contraction. so we are also seeing that resilience playing through when it comes to some of the other parts of the markets. including the kospi, not seeing much of a downside despite again some pretty depressing trade numbers out earlier. we are also of course watching when it comes to futures trading

going into a key jobs data day for the u.s. the u.s. futures about .1% there. we are seeing tech also just keeping its head above water and dow futures up by .1%. and small caps seeing a little bit more momentum than the broader markets. that is it for "daybreak asia." our markets coverage continues as we look ahead to the start of trading in shanghai and shenzhen of course, hong kong, will not be trading today on account of supertyphoon saola which is bracing for the impact of that. but so many of the disruptive elements are already in play including that 20-hour closure for cathay pacific flights going into saturday morning. this is bloomberg.

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