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shery: er watching bloomberg "bloomberg markets: asia", do you live from new york, sydney and singapore. annabelle: we are currently down to asia's major market opens. haidi: over top stories this hour. the fed may pause this month, but not: and to its tightening cycle. i'm holding is pressing its ipo at the top of the range, in the biggest ipo of the year. plus, this is the failure of the taiwanese presidential candidate shaking up the race with an unconventional campaign, including a rap video. vonnie: take a look at how u.s. futures are trading. really small moves in the session after we saw a smaller picture in the regular session. it was a mixed finish on the s&p 500 seeing a slight pain, but the dow underperforming.

china flagging concerns over the iphone. really, reaction to what happened to the u.s. epa. , where we saw a bit of a mixed picture. we had court cpi accelerating the first time in six months, which puts into question what happens with the tightening move later in the year. perhaps not much of a change for next week when the fed decides . investors are concerned about more rate hikes to come. wish i treasury yields falling across the board, the 2-year yield falling below the 5% level. . also watching oil prices rebranding. we have seen a bit of pressure during the new york session, but we have been following the supply picture for oil. because we got iaea data saying perhaps we are going to see supply shortages later in the year, after the opec report showed we might see the tightest marketing over a decade. and of course that has

implications for inflationary pressures going forward. haidi: really fanning the flames of inflation. we got that from the cpi report. let's get analysis from our global economics correspondent enda curran. sought like there was a bit for everyone in that cpi report, right, depending on which camp you are into begin with? enda: absolutely. on headline basis, prices rose for the first time in a year. core inflation ticking up for the first time since february. a lot of that being blamed for increase in gas prices. but there were broader prices in other things like medicine costs and car insurance costs rose by the most since 19 76. on the other hand we saw some cooling for fruit and vegetable, no longer increasing at the pace it was. there is a bit for everybody there, but the overall takeaway

is that it reinforces the idea that the u.s. inflation story is not over. the fed is not expected to raise interest rates next week, but it will reinforce the 8-year that they have to come out again with a message that they could push borrowing costs higher again if they need to, probably before year-end. some economists talking about november or december. so it's a mixed bag. some places up, some prices down, but reinforces the idea that the u.s. inflation scare isn't totally over. shery: what are we expecting from the ecb? enda: the focus remains on inflation. it is expected to warn her again that inflation isn't completely under control. christine lagarde has been consistent that the ecb will not stop until they get inflation back to its target. financial market traders are pricing and over 70% chance that

it will. offsetting that is what is going on in the real world, the big industrial slump due to the legacy of the energy crisis and of course the slowdown from china. we just heard the experts reducing from germany for example. it will be a difficult call for the ecb. the ecb and all these central banks are reaching a juncture it will it will be hard to make the: raising rates. it was easier to hike rates when growth was tearing away early in the cycle. it gets harder from here. shery: our global economics first opponent enda curran joining us with the latest on global central banks. we have the latest on the world's largest public listing this year. softbank backed cheap designer arm is pricing shares of its ipo at $51, the top end of the market range. they are expected to start trading on the nasdaq on thursday. let's bring in equity markets reporter amy orr.

christ really high. but what are the implications going forward that we should watch out four sort of gauge if this is a really healthy ipo? amy: in the grand scheme of things, it is priced at the top end of the range but not as high as expected. there were talks about pricing above the range, maybe a dollar or even two dollars above the range. so generally, there is still some money left on the table, per se. the fact that it is priced, the largest ipo is great for the market because it shows there is enough investor demand for riskier assets like this. hopefully it will open the door for other growth technology companies to list. haidi: how much of that outlook depends on how well it trades obviously not just only one, but also as we get into the next few

weeks or months? amy: it is very important, because the first 30 days, there will be a stabilization from the banks as well. in that sense, they can have some shares to maneuver and if there is enough selling interest, they can actually buy some of the shares to prop it up. at the end of the day, there is only 7 million shares they can maneuver. going forward, after the first month, it will really show the investor demand for arm itself. shery: equity capital markets reporter amy or with the latest on the arm ipo. citigroup is preparing for a wave of job cuts as ceo jane fraser launches the bank's biggest restructuring in two decades. bloomberg su keenan joins us with the latest. su, this is part of an effort to reverse a years-long slump in the stock price. su: ceo jane fraser definitely wants to change that story. that shares are down some 40% since early 2021 when she first

took over as ceo, and that is more than double the decline of rivals. so this is a major shakeup designed to turn things around. leadership roles are largely eliminated. bloomberg has learned from those close to the matter that some job cuts will likely result in mostly in the back office functions -- we are told the bank doesn't have a firm target on how many will be impacted. the executive management ranks were spanning 19, and five men will be leading businesses and reports directly to fra ser. the company will operate five businesses such as services, trading, the banking division and wealth unit, and again, in the streamlining of management, they will all now answer to jane fraser. this should reduce the fiefdoms that have plagued the firm. initially we saw shares up better than 2% on the

announcement of these moves. interestingly enough, the risk of this type of revamp is always desired departures and internal strife. there are a lot of changes now taking place at some of the executive ranks. fraser acknowledged the moves will not be universally popular within the bank, it will make some people very uncomfortable. she also said, quote, "i am absolutely fine with that." haidi: that is a mitigating -- what is the motivating strategy here? su: in part, the ceo says it has to do with her desire to make managers more accountable as she pushes to make the bank more profitable and move the needle on the stock price. if you are looking at video right now of a recent congressional hearing where all the wall street heads had to testify and you will notice jane fraser stands out. because she is the only female ceo in the ranks of major u.s.

banks, so she is not afraid to make bold moves here. she is eliminating a lot of the co-head's that have previously run a lot of the bank's largest and most important businesses. again, she says she is making big moves. not surprised that some people will be perhaps uncomfortable as a result. but her aim is to simplify the firm's's management, improve competitiveness, and free up some of the key players' roles such as in trading and in dealmaking so they can focus on doing those trades and making the deals that will move the stock higher. haidi: bloomberg su keenan there. let's get you a check of markets. belle. annabelle: just looking at what investors will be focusing on today. china property is never far away from attention. the focus is on country garden, because we have a key data

deadline looming. essentially country garden asking bondholders to delay or extend payment on other notes. that payment is due on october 21, 492 million gone. it is being asked to be extended for a further three years -- 492 million yuan. it's the last of a series of eight notes that were worth around $1.5 billion total, that is u.s. dollars. we have seen precedence for this to happen, but certainly, we have seen investor reaction coming through. investors have really liked so far, that country garden has managed to extend its debt obligations, essentially kick the can down the road. the other thing in focus is on september 14, we understand that payment on that interest has been made from a couple of sources. let's look at the broader markets today. there is still that focus on the u.s. inflation print. investors in the wall street session largely overlooked it. a bit and surprisingly when you look at futures, pretty muted.

still keeping an eye on the japanese yen. in japan today, a very important japanese bond auction is coming up. it will really tell us how investors are thinking about governor ueda's comments this week to look and we get around possibly that exit away from negative rates, and changes to the yield curve control. that is due at 8:00 a.m. this morningm coming up next, invesco's chief global market strategist thinks the fed will still pause next week, despite rising core inflation numbers. for hooper joins us right ahead. this is bloomberg. ♪ -- kristina hooper joins us right ahead. this is bloomberg. ♪

>> the trend is moving in the right direction. the market has not bought into this disinflationary trend. >> i think there will remain some anxiety as to whether there is dropping inflation that is transitory. >> on one side, we see inflation coming down, but we also see parts of it that are still up which is very concerning to consumers. >> they might still have to stay a bit harder on the brakes. >> they will not feel really good about this until they see six months, nine months of a good trend towards lower core inflation i. >> don't think we get more hikes, but they still need to keep rates elevated to make sure the service sector doesn't slow

down. shery: bloomberg tv guests reacting to their latest u.s. cpi data. our next guest is looking towards the university of michigan inflation expectations numbers due later this week for more clues on what the fed will do next. kristina hooper, chief global market strategist at invesco, joins us from our new york studios. right to have you with us. the numbers today were not necessarily a goldilocks scenario. could the inflation expectation numbers move the needle? cristina: i think so. my frame of reference, the reason i am saying this is, if we go back to june of 2022, you may recall that in advance of the fed's meeting, the messaging of the fed, what they were suggesting was that there would be a 50-basis-point rate hike. then we got two data points two days before the meeting, the inflation print, and michigan inflation expectations. those two data points shifted the fed to 75 basis points in

hikes. that day. at the june meeting. i think something like that, there is that potential for michigan inflation expectations to tip the balance. i don't think what we saw today could do it, but if longer-term consumer inflation expectations were to be significantly higher, that might be enough to get the fed to not sit on its hands. now that is not my base case, but i think michigan is going to be an important data point. shery: it seems consensus right now that what we will continue to see is volatility, especially when you are heavily dependent on data every time. what can we gauge in terms of sectors, like cyclical, smaller caps, for example, when we know for a fact that households' budgets are under pressure? kristina: it's a great question. we know not only that household budgets are under pressure, but

they will become increasingly under pressure as time goes on because of the lagged effects of monetary policy. rate hikes only started in march of 2022, so we are likely to see more pain. so i think consumer discretionary could come under pressure in the near term. i think in general because we don't know when the fed's rate hike cycle will come to an end, although i believe will not see anymore rate hikes, markets. know that. they can't be sure of it. as a result, we are likely to see more defensive areas perform better, but i do believe we are likely to soon see markets start to discount an economic recovery and that would mean smaller caps and cyclicals, particularly materials, industrials, energy, even some parts of financials performing well. haidi: i know you have talked about the risk of overplaying

geopolitical risk in terms of your investment thesis. does that kind of change your view when you see something like the chinese government's ban on iphones for chinese government staff use, is that something that you see is more of a risk given that it is spilling into the corporate sector into a major american company? kristina: well, i think we can't put too much importance on geopolitical risk, because while they can move markets any given day or even in the week, what we tend to see is no material impact over the long-term when it comes to geopolitical risk. so, yes, this announcement can be surprising, it can be jarring . it wouldn't be the first time we have had this happen where there is significant geopolitical risk , surprises, you name it. but when we take a step back and

when we look at markets over time, it has very little to no impact. and that is what we have to keep in mind. otherwise we can alter asset allocations to our detriment. haidi: if you take a look at what we have seen with the farm ipo, of its leaders quite a lot of investor enthusiasm and interest in it. we will have to see how well it trades in the first few days and weeks. does that give you any more incentive to be doubling down on ai chip stocks given the valuations being so stretched and how much of a run-up we have seen in that space already? kristina: there is a lot of excitement around ai, we have seen this actually since the introduction of chatgpt last year. now some of it is being driven by the reality that when economies are slowing down, we tend to see investors go to

where the growth is. when there is not a lot of growth. so it makes sense that ai and anything it i-related has been very, very popular. that could very well continue. we know that valuations and not to be predictive in the near term. certainly over the long-term, we see adjustments. we tend to see a reversion to the mean when it comes to valuations. but it is not predictive in the short-term. so i think we could see continued popularity of ai and ai-related names going forward, again, because look at today to see a slowing of economic growth which is likely to, in the near term, drive investors to areas of secular growthm would it also drive investors to areas outside of developed markets? i know you are quite interested in potentially seeing the rally continuing in india, and in japan, these are investor darlings. but do you expect those flows

being perhaps diverted out of china, to continue going into these markets? kristina: i would like to think we are going to see an increased allocation to asia. because there is a lot of opportunity there, especially as we see definitively that the fed has ended its rate hike cycle. that is when i think we are likely to see the u.s. dollar start to weekend, which would be one additional tailwind for asian equities. especially asia e.m. i think there are some compelling growth stories there, so i would anticipate that investors increase overall exposure to the area. shery: so you are not necessarily talking about shifting from china towards other markets like india or japan. i know that you also like japan in itself because of the outlook there, but we had comments from boj governor ueda earlier this week that perhaps hinted at the end of negative rates.

does that alter your calculations at all? kristina: it doesn't, because i don't think we are close to the end of negative rates. certainly not any kind of significant tightening. i think the bank of japan is going to be comfortable and willing to tolerate higher inflation. and i don't see any kind of significant tightening anytime soon, that is one more tailwind for japanese equities. shery: christina harper, good to have you with us, chief global strategist at invesco, with her market calls -- kristina hooper. you can't get a roundup of all the stories on today's edition of "daybreak." terminal subscribers, go to dayb , also available on mobile on the bloomberg anywhere app. you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

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shery: here is a look at some of the top corporate stories today. the head of the united auto workers union says they remain far apart with carmakers. the members of the union are planning strikes at some facilities belonging to general motors, ford and stellantis if a deal is not reached before contracts and end on thursday. the north american head of mercedes-benz, for his part, hopes the strike can still be averted. >> we are not directly affected from the potential strike, which we wish does not take place. our two factories are not under u.a.w., but obviously any disruption or any issue will have, will give some shockwaves out to the whole industry. shery: sources tell bloomberg that caesars entertainment. tens of millions of dollars to hackers who broke into the company's systems in recent

weeks, and threatened to release the company's data. caesars is set to be expected to disclose the cyberattack in a regulatory filing. the bridge comes as another giant, mgm resorts, announces that it was hacked earlier this week. starbucks founder howard schultz is stepping down from the company board. he bought starbucks from its original owners in 1987 and build the company to a global coffee powerhouse with more than 36,000 locations across the world. he also served as chief executive officer three times, coming back twice to the company after it faltered under his successors. haidi: take a look at trading, we are half an hour away from the start of cash trading in australia as well as korea and japan. markets coming online as well in the next hour. features looking muted. it's a pretty mixed picture as

we look across the region. that reaction to the release of u.s. inflation figures which still showed some stickiness when it comes to inflation pressures in the u.s. watching diane as well, we have seen the yen trading at multidecade lows, but surging early in the week when we heard those bank of japan governor's comments, now looking for direction and any further commentary from the boj will be key in the yen's next moves given we have seen a pullback in the strength of the u.s. dollar. a bit of upside when it comes to trading in australian and new zealand bonds, looking to follow the direction that we saw with u.s. treasuries. this is bloomberg. ♪ ♪ dear moms and dads,

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shery: take a look at how

futures are trading, we are seeing not a lot of movement at the moment especially when it comes to sydney futures and kiwi stocks losing ground after their first gain in nine sessions, so we are still around the 11,300 level. nikki futures pointing higher, the nikkei fluctuating throughout the week. it fell yesterday, but we have been watching the japanese yen extending its decline despite gains we saw earlier in the week after the bank of japan governor aired the possibility of ending negative rates. we continue to watch u.s. futures pointing to slight upside after we had a mixed passion in your with the s&p 500 slightly higher. we are looking forward to that china property developer country garden facing a new debt deadline. bond holders must vote by 10:00 p.m. thursday in beijing on whether repayment of another yuan fund may be extended.

annabelle is tracking the latest. there is some precedent for this being approved. annabelle: we have seen this a number of times, in fact, seven if you were to count them in total. the security that is in question is one that has got near about 500 million yuan of outstanding principal due october 2021. if you bring up the graphic, it is halfway down the list. essentially, country garden as a number of debt obligations due over the coming months, that was issued by a unit of country garden, guangdong construction. what a country garden ones to do is stretch of the payment, not just by a better -- a matter of months, we are talking three years. we have actually seen this group or note is the last known group of eight notes in total, and the other seven have been delayed. around $1.5 billion in total

based on previous successes, even though we saw bondholders initially pulling back and votes extended for those nodes in question. it does seem country garden could be successful here. any sort of delay or any sort of delay on extension would leave the company facing sizable repayment pressures, and that could have a big ramifications for the china property market more broadly, because we spoke so much about evergrande when it defaulted back in the end of 2021. country garden has four times as many projects as evergrande, and a lot of those are in lower tier cities that suffered from that rout in the property market. haidi: country garden hasn't shown more signs of progress when it comes to managing that debt load? annabelle: if you were to bring back the graphic, you can see that there is a note in question at the top of it, and this is one that has interest payments due today, just over at 2 million yuan -- 62 million yuan.

bondholders have received the interest ahead of schedule. that is a positive for country garden, and you can really combine that with the signs of state-supported we have seen for the property sector more generally. it does appear that is really what sparked the moves we are seeing over the past few weeks in properties box generally -- property stocks generally. they do not alleviate the longer-term challenge is to any extent, because even though the company has managed to present its debt obligations into the dryer and it has a lot less due by the end of the year, it needs to sort through country garden nearly $190 billion of total liability. there is a major payment test looming in january, because that is when the country will have a $1 billion u.s. note maturing.

mid-september, january, it does not have very much time to move i get the financing ready for that note as well. haidi: annabelle and singapore with the latest. watching china and some of these other geopolitical stories we are keeping an eye on, north korean state media saying kim jong-un and russian president vladimir putin have reached a agreement on reaching tactical cooperation. they met at a space center in russia of las vegas far east. they are fell twice this year to deploy a satellite. analysts think kim may be looking for tech help. kishida has kept his core economic team unchanged. kishida is looking through unveiled new stimulus measures soon as price gains continue to

outpace wage increases and added five women to his cabinet lineup with the most prominent being the former justice minister appointed as foreign minister. apple is being drawn further into u.s.-china tensions. the chinese foreign ministry is raising concerns about security problems with the iphone while the white house says beijing's government bans are delegation. let's dig into this with stephen engle who us in hong kong. we know about this apple iphone ban directed at a plethora of state agencies and bodies. what is the true nature of these potential bans coming from beijing? >> it is interesting, because this is the first time beijing has really commented on a number of different media reports, including the coming from bloomberg news saying that some of the ministries in china have been instructed, their senior

officials not to be using iphones, and that perhaps the restrictions could be expanding to other agencies across the government, because that there are indications coming from beijing that perhaps there are security threats. yesterday it was basically the first time we had at the ministry of foreign affairs spokeswoman comment directly about it, and actually her comments did not necessarily add more clarity, perhaps more confusion. that is why apple shares did pare gains in the session overnight. apple, its biggest production base is in china and gets 1/5 of its revenue from the mainland market, so this kind of talk and speculation will impact apple shares and its prospects going forward. back to what i talked about, the ministry of foreign affairs spokeswoman in beijing saying on the one hand, china has not issued laws and regulations to ban the purchase of apple or for branded phones, so that is a

clear denial that has not happened yet, but at the same time she also commented that beijing attaches great importance to security and that all companies operating in china need to abide by its laws and regulations. so it is sort of a soft denial. so this story will continue to have legs until we get to the actual root of it, but john kirby, the spokesperson for the white house national security council, essentially alleging that this is potentially a retaliation against the united states, this action against apple. we are watching this with concern are john kirby's words, calling china to be more transparent about what they are seeing and what they are doing. this could potentially be retaliation for those export controls and curbs washington has imposed on advanced semiconductors, ai, and quantum computing, and it comes at a time when apple is launching its just iphone 15 as well as along

with -- huawei unavailing it's recent chip into it smartphones. shery: the european union also launching an investigation into chinese subsidies for electric vehicles. how will this factor into geopolitical tensions? >> this potentially if this goes forward could be one of the biggest anti-tariff moves of all of the different tariff moves we have seen from the west on china, simply because of the size of the industry and the size of the market potentially going forward in europe, but it is a double-edged sword for european carmakers that could protect them if there could be tariffs on imports of chinese made dvds -- ev's anti-europe. keep in mind, like volkswagen, its biggest market is china. bmw makes its ix3 ev's in china

and export them back to europe, and that german car maker gets 33% of its operating profit from china, so if there is retaliation by the eu, that could obviously impact the german carmaker's quite sizable he. ursula von der leyen says says the price is kept artificially low by state subsidies. this is disturbing or distorting our market. essentially they have launched an investigation, the european union launched investigations to ward off potential flood of cheap imports, and by average, the average chinese import into europe is 20% cheaper than the european counterpart. shery: stephen engle joining us from hong kong. coming up next, hong kong's first virtual insurer competes

-- completes a new funding run. get the details with the cofounder and co-ceo michael chan. this is bloomberg. ♪ j.p. morgan wealth management knows it's easy

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completed its first funding run raising just under $35 million u.s. led by hong kong with anticipation from another company. the co-ceo joins us exclusively from hong kong. great to have you with us. tell us what are the plans for how you plan to do fully -- deploy this funding. >> thank you for ending -- havi ng me. we are really going for acquisition. the highest customer satisfaction rate, customers consider us as having the highest product value. how do we put our product into more hands of customers? that is the focus for our products. haidi: virtual insurer's from hong kong are not making up profit. there is huge competition from traditional insurers who are catching on. when you see a potential profit being turned? >> that is a good question. we project 2 to 3 years, but it

is a question of how much we continue to invest in innovation. the goal is not to be a small successful nation insurer. we are trying to put good and successful and affordable insurance in the hands of more people in hong kong. shery: do those investments include innovations such as ai? we have heard from prudential who are saying they are investing in artificial intelligence already. >> is innovation in core systems. ai is just one piece of the automation toolkit. how do you have more people be more impactful? we are dedicated and passionate people. how do we amplify the impact and give them more leverage? that is a focus for us. one thing we are seeing is hong kong is a very sophisticated city, people are very discerning

consumers. financial literacy is still not good. the insurance cap is about $1 billion u.s. we are seeing huge gaps in what people are actually doing, so ai will help us produce content to cover the insurance literacy and raise awareness. shery: how does hong kong compared to other financial hubs when it comes to the digitalization of insurance products? >> we are somewhat far ahead. it started out about four years ago. online insurance was less than 2.9%. that include telesales and direct online, which was 2%. we have corner that market channel three times, so about 8% of policies sold online and direct. auto market is higher. if you look at india, u.k., even u.s. there is still a ways to go in terms of how digital we are and

how consumers are consuming their information and purchasing the products, accessing different information, but across southeast asia i think hong kong is one of the leaders already. shery: has the trend been accelerated by the pandemic? what sort of consumer behavior are you seeing since covid? >> we have not seen a slowdown. we started about four years ago, and pretty much covid head is immediately, so for us we have not seen a non-covid normal period. we have not seen a slow down, so we have seen ourselves continue to grow. website traffic, conversion rates have stayed high pass covid, so it is validating that it is not just a covid phenomenon. that digital change, the behavior change of looking for insurance online and being comfortable for buying insurance online, whether it is life

insurance, health insurance and being comfortable with the insurance company will be there. that is a permanent change we are seeing. haidi: what about the broader economic slowdown you are seeing? hong kong has not staged a full recovery and things on the mainland are not great either. how is that impacting broader sales? >> we are not focused on a cross-border sales. the opportunity to do a health insurance and make health care more affordable and more accessible is a huge opportunity for the next decade across asia. we are doing protection products. that is really the opportunity we see. shery: will higher interest rates, the tightening cycle we continue to see around the world affect your business? >> is actually good. if you take a step back, a lot of consumers go to insurance companies for the safe investment, to simply get 3%, 4%

from an insurance investment, buying an insurance policy and getting that savings. people have more options in terms of where you can get the safe, steady return, and that will drive more of a demand for that traditional way of investing. you need to bundle your investment products without protection insurance. it is more cost affordable, much more transparent, and that is our preposition. we are unbundling more traditional complicated projects, a lot of financial engineering involved. our products are more simple and much more and transparent -- much more transparent, so we see it as beneficial to the business model. we are focused on traditional risk, which in many ways is great. it is very stable and is a good investment proposition. shery: it was really good having you with us, cofounder and

co-ceo. we have more to come on "bloomberg daybreak: asia." this is bloomberg. ♪

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shery: we have breaking news that of japan, we are getting court machine orders for the month of july, a contraction of 1.1% month on month, a larger contraction than what economists had expected. it is also falling into that red after having risen to .3% the previous month. the numbers have been pretty volatile coming into contraction territory often as you can see on that chart. and it comes to the gear on your numbers, a much bigger contraction than what was expected, double-digit, 13% for the month of july.

also a bigger contraction of more than double the pace from the previous month. of course, we had seen company costs coming down from highs at the start of the year and continue to see producer price growth slowed down, but it seems the appetite to invest might not be there. court machine orders contracting more than expected. haidi: just four months before taiwan's president of -- presidential election a relatively unknown candidate is giving the major parties a scare. he is pleasing second in most polls and just a few points behind the ruling dpp. stephen engle talk to him about his approach to cross strait relations -- trade realtions. >> the national defense budget needs to go up because peace comes at a cost. what we do not like the dpp is

they are opposing china every day. i agree with the move to rate the national defense budget to three percent of gdp but disagree on the reckless spending. for the defense of an island nation like taiwan, the priority should be cybersecurity, air force, navy, and army so the budget should be distributed accordingly. >> i am sure you are aware of the pentagon report that 2027 seems to be a target date that many military officials in the united states see as the possibility of a chinese invasion of taiwan. is that something you give credence to? and how would you mitigate against the possibility? >> china's intentions toward taiwan have not changed in the past 70 years. the only thing that has changed is china has become stronger. whatever preparations the chinese communist party is doing, taiwan has to prepare accordingly. we have to communicate with our

counterparts on the basis of self defense capabilities. we should start with things that are not controversial such as culture or sports. neither will oppose. and we start to increase economic exchanges, which no one will object to. we must leave political negotiations to the very end. >> xi jinping likes one country, two systems for hong kong. that would never work for taiwan? >> firstly, taiwan has its own troops and elected government, so taiwan is definitely not hong kong. the fundamentals are different. if china brings one country-two systems to the dpp, the dpp will answer no. the hong kong weight does not have a market in taiwan. may be we should think about other possibilities. we have to think of a way to have dialogue with china and not just always tell them "no" because after no there is no other step. haidi: the taiwanese

presidential candidate speaking exclusively to bloomberg. take a look at how we are shaping up just a few minutes away from the start of cash trading in sydney, also the open of trading in tokyo and seoul. looking at positive, still looking like a mixed start of the day. sidney futures flat coming back from earlier declines. new zealand off by .25 of 1%. potential upside as we get into the start of trading in tokyo with nikkei futures showing upside just shy of 1%. quite a bit of speculation when it comes to the bond market as well, jitters about weak demand situation for longer maturity bonds looking like they are overhanging on that market as we get into the sale of twenty-year securities. lots of speculation as to what the boj's thinking is a. shery: especially after comments

earlier in the week by governor a way to -- ueda. we are watching softbank as arm priced its ipo at the top end of its range raising $4.9 billion in its larger assisting of the year. keep an eye on asian airlines stocks after several carriers flagged a disappointing outlook for the third quarter as we got higher fuel costs and winning domestic travel demand -- waning domestic travel demand. haidi: sec capital shares there strategy. we are live at a summit speaking to the asian infrastructure investment bank. ♪

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shery: this is "bloomberg daybreak: asia." we are counting down to asian major market opens as investors digested disappointing see prior numbers both core and headline inflation accelerating. oil at this year's highs. haidi: really deciphering the implications of that mixed cpi report for asia and the implications going forward for the fed. let's get you over to annabelle. annabelle: the question of relief for investors is what sort of market reaction we will see to arm pricing it's target ipo, it could be something to inject investor enthusiasm into markets after the inflation imprint, a lot of investors yawning after that one. japan, korea coming online trading forecast treasuries. a little bit of movement the

prior session in the 10 year yield, but watching the start of trading for equities in japan. softbank there moving higher at the start of trade. it is going to be retaining a 90% stake in arm, strong demand for chairs in terms of the pricing, so raising 4.87 begin dollars, that will make it the biggest ipo over the course of this year and listing tomorrow on the nasdaq. in terms of the start of trading for stocks, nikkei225 moving .7 of 1% to the upside, but also watching what is happening in the bond space given that we have a 20 year option coming up later today. essentially the japanese government looking to sell $80 billion of the end bonds -- yen bonds are maturing in 2023. a little bit of nerves a bit of that because we did see weak demand, and focus point in japan as been the boj governor comments around a possible exit or normalization of rates.

let's take a look at what is happening in korea at the start of trade, it is the u.s. inflation print broadly in focus, even though as i said wall street did largely look past it. core reading advancing 3% from july, a lot of concerns around energy cost of building into this report. something keeping the chance of another fed hike in play over the course of this year, but a lot of investors had been appreciating that rest of the market. because back, -- because back -- kosdaq, tech stocks rising, but that was more about officials meeting of the u.s. to discuss ad policies. a state of play for korea, still watching the korean won, around the 1300 level. in australia, echo data likewise in focus, but it is the job sprint do in the next hour, quite volatile data, but we could see a pickup in the hiring outlook.

brent crude building into commodity prices, generally easing concerns around and uptick in price pressures, but above the $90 per barrel mark, and we had the iea adding to concerns about a tight oil market outlook over the course of the end of 2023. haidi: that u.s. august inflation report may be reinforcing that the fed could deposit rate hikes up at numbers also suggest the rate tightening cycle is not over yet. joining us next is the founder of sgmc. it was the worst kind of data print and that there was something for everybody. it lends no more certainty to expectations. >> we are not innate period where we can have certainty. the message is clear from the data we have seen. sure, we have come down from the

inflation peaks we have seen a number of months, but it is not going to be easy to get back to the 2% inflation the fed once -- wants. is it a bit of a one-off this month because oil is at a peak and maybe inflation can come back down over the coming months? we think maybe it will come down a little bit, but it will not be a massive fall. it means the fed will not be in any rush to cut rates, potentially could hike them one more time this year. basically, it is a data which keeps equity investors on jitters, because it is not clear which way things will go, and that is why we do not think it will be likely you will have a further leg up in terms of equity valuation anytime soon. haidi: it is interesting to me

that when it comes to depend, do you not believe it is different when it comes to the confluence of corporate reforms we have been seeing drive so much of this rally? obviously most strategists we speak to our constructive on japan. >> we have heard the sentiment different times. it turned out it was so different after all. basically, the reason we are not so constructive is the following. it has run up a lot, so you were looking at valuations that are not cheap. this experiment they are doing from a monetary perspective, and edging the 10 year rates, that will have to go. eventually that will have to go especially in a world where interest rates are increasing in the rest of the global environment. that poses a risk, and when that happens you will be seeing a knee-jerk reaction, because when it happens, it will happen fast.

yen appreciating, things should get back to normal, but white run that risk getting exposure to something that has run up a lot, which poses this a big macro threat. we believe there are better opportunities elsewhere. we have rallied and gotten on the back of the rally, but as of now we think the risk reward is just not there. shery: when it comes to valuations, i do not think anyone can dispute china is considered cheap. is that a market you would invest in? >> china is cheap and has recently gotten cheaper as well. unfortunately for china, cheap valuations both from an absolute and relative perspective is not enough to have a rally which can be sustained, so what the market needs in order for a rally to be sustained in china is visibility with respect to policy, with respect to more fiscal and monetary health and more visibility with respect to how

the debt situation within china it be developing. most importantly is visibility with respect to what the government is going to be doing in terms of business paula terry -- business policy, monetary and fiscal policy. unless we add clarity to that we will not see a sustained rally. shery: we are also headed toward another ecb rate decision. what are your expectations are run monetary theory -- monetary policy there and its implications for the markets? >> we expect ecb to hike once again. we have seen inflation data coming out stronger-than-expected. the problem here is europe is struggling with growth, which is lower than on the u.s. side. we are growing increasingly cautious on european equity valuations because we are close to the highest, there are stocks close to the 20 year high. if you put that together with the fact that the ecb will

resume hiking, consumption will start to come down, growth will come down and we are seeing geopolitical tensions both within countries and among european countries themselves. that is why we are starting to be a lot more cautious on european equities. we have lightened up a lot on our exposure, because we believe the u.s. over performance will be taking foot going forward. shery: is that also the reason we are seeing this extension of euro weakness while the u.s. dollar is staying at this year's highest? what are the implications for broader emerging markets? >> that is definitely one of the reasons, and if you look at expectations on the 3, 4, 5 year horizon, the european area is not as positive as the u.s., and u.s. data continues coming strongly even in the face of higher interest rates. the strength of the dollar we

have seen and goes together with the fed messages and interest rate reduction, also in terms of macroeconomic expectations, and that is likely to put pressure on emerging markets going forward, because it is at elevated levels against emerging-market currencies, and that will put pressure eventually especially with respect to the debt, which is dollar-denominated. we expect that to be hitting emerging-market currencies and valuations over the next few months because we do not think the dollar depreciation will come anytime soon given the environment we are living in. haidi: we are getting more certainty when it comes to the pricing of the arm ipo, watching to see how that trades when it makes its debut, but does it move the needle for you in terms of how excited you are about ai or chip stocks or broader tech going forward? >> ai we believe is a secular theme. you need to be exposed to this

theme, it will be staying with us for the next five or 10 years and people have not realized how much ai will be changing our lives. both large caps and smaller caps within that industry. with respect to arm, we are excited. it is not cheap, so they are making you pay for it, but it will be something interesting to see because it will be linking well with the existing echo system of semiconductors, which are already in the public space. we are not going to be jumping in and chasing it too much, because valuations of the ipo are not exactly cheap. shery: we are seeing softbank right now losing about 1%. let's see what else is moving across asia. annabelle: it is another group of stocks in focus not just about the arm ipo but airlines is what we are keeping a watch on, because the story over the course of this year has been so much about that rebound and

travel demand that has remained robust in the asian region in particular, but today in the session we had weaker outlooks coming through from u.s. airlines. american in focus, also discount carriers like spirit fighting concerns around the outlook and what is driving that is higher fuel costs, labor costs, and flagging interest in domestic travel or tourism in the u.s. that is hurting their bottom line. reaction in asia not feeding through. the other stock is what ahead and taking a look at what is trading was stuff bank -- softbank. now trading in negative territory, but it is all about the big raise of 4.78 billion dollars, the biggest ipo over the course of this year. shery: for more on the arm ipo we are joined by the asian tech executive editor in tokyo. how did the pricing turnout for

arm and softbank and what are the implications we will actually see positive trading not just in the next few days but in the next few quarters, which seems to be more important here? >> softbank have bounced around with their targets for arm over the past few years. you will recall a plan on selling the business to nvidia. that ended up not working out for a variety of reasons. softbank has had down the path of the ipo. originally they were targeting a of $60 billion to 70 begin dollars -- $70 billion. the company is going public at evaluation of $55 billion, still a respectable amount and far above the valuation that softbank paid when it bought the

business, that was $32 billion. it was well above that range. they are raising $5 billion in the end by selling just under 10% of shares. we will see how investors react more broadly the offering. haidi: how does this stack up against other ipos at this point? >> the initial target of $10 billion would have put it among the biggest tech ipos of all time. in the end by raising just under $5 billion it will be the largest offering of the year certainly unless we get surprises, but it will not be one of the largest of all time. as mentioned earlier, arm has been shifting its focus. it is a chip designer that has been successful working with chipmakers to get a design for smartphones in particular, the advantage of the arm design is that they use very little power,

which is great for mobile devices. now they want to be expanded beyond that into other areas, including ai, data centers, computing intensive applications that hold promise for the future. so the company and ceo are trying to build on that base of smartphones and move into other growth areas. shery: what does this mean for softbank? it will be getting billions of dollars from this ipo. >> the ceo needed a win here. he invested in startups, more than $140 billion was poured into startups. it goes far beyond that into the returns of the portfolio, they have been subpar. he needed a win. arm will offer a respectable return. we will see how it trades tomorrow, but it will make some

money for him, and he is beginning to accumulate cash to set off on some adventures. he has a long list of potential deals and acquisitions he wants to do. the cash on the balance sheet gives them the flexibility to go out there and look for new opportunities, either acquisitions or investments. haidi: our asia tech executive editor peter elstrom with the latest on the arm ipo. we meet the third party candidate shaking up taiwan's presidential race with an unconventional campaign that includes a rap video. kim jong-un and vladimir putin agreed to more strategic cooperation. we take a look at exactly what that could mean. this is bloomberg. ♪

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haidi: country garden is facing a new that deadline, holders of the bond maturing in october it must vote by 10:00 p.m. thursday in beijing on whether to grant an extension on repayment.

bloomberg's latest credit tracker is showing stress building in chinese dollar bonds. kevin kingsbury joins us in hong kong. talk us through the potential outcomes and pathways here. >> country garden earlier this week got approval from bondholders to get $1.4 billion worth of yuan bonds extended, so we have this one bond remaining dead ends at 10:00 p.m. tonight. since we had the votes earlier this week and those approvals, it is just one more way the company will be able to kick the can down the road as far as debt payments: and give themselves a breathing room as they tried to figure out how to boost sales for the company. shery: what has been going on in the broader offshore credit market? >> we have the chinese credit tracker showing stress rose to level four from level 3 in august. that came in as the high-yield bond market fell 5% amid country

garden's initial woes with the country's debt payments and a bond interest in particular that was taken care of earlier this month, so that is where we are going now as far as getting the stress back in place with country garden. haidi: we have seen this recent junk-bond rebound. is this sustainable if you take a look at how previous bouts have not managed to see that longevity? >> we just have to see -- some of these past rallies we have seen in high-yield have petered out. this record really ran from october through january when the first bout of chinese property support measures were rolled out, so we saw that fate as 2023 progressed. we have been up three weeks in a row, the longest streak since

june. with all of the pressure still in the property market, it is very concerning in particular as to whether or not this rally can persist. there are a lot of negatives investors will need to overcome. shery: what is happening in the onshore market? >> there we had stressful for a second month in a row to a level three from level four. on short bond yields calling alongside the falls we have seen in government debt that has narrowed spreads to some of the lowest levels this year, but spreads have widened again. government bonds have been a rallying, yields have been a, so spreads have started to bind again. it is something we need to be watching. shery: kevin kingsbury there. you can get around up of all of these stories we have been talking about in today's edition of daybreak.

bloomberg subscribers go to dayb, also available on mobile in the bloomberg anywhere app. customize your settings so you get news on the assets that you care about. this is bloomberg. ♪

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shery: north korean state media says kim jong-un and russian president vladimir putin have reached an agreement to strengthen strategic and tactical cooperation. they met on wednesday for the first time in four years. our correspondent joins us from seoul. north korea is calling this an epoch making discussion. what came out of it? >> they are, and it took us a

little bit to trace where kim jong-un was going, because he was on his luxury armored train for hours, close to a day to reach russia. the first destination that he chose was in the anwar region. he went to the space center. putin wanted to show him around his satellite launch site as well as give him a tour around the rockets exhibition that he has over there. the two did also have a one on one, and they discussed various topics, but we did not have the chance to have a full presser on both of them, but putin did also treat kim to a nice gourmet lunch. putin said kim was interested in the russian space rocket and

putin was willing to help build the satellite kim has been trying to put into orbit. haidi: what do they want from each other? >> kim jong-un is now headed to vladivostok. he will be stopping by a civilian and military equipment factories, and what they want from each other is kim wants some of that economic help from russia that they can offer, and that would be the arms deal he is trying to reach with russia. any sort of arms deal would benefit is economy, and for putin himself, he definitely needs assistance from north korea on his war in ukraine, as he is running out of artillery and munitions from the prolonged war, and north korea has one of the largest stockpiles of these

munitions, and these are interoperable munitions from the soviet air system, so it would be the only country russia could turn to for additional munitions, but what kim jong-un wants could also be a technology transfer from russia on these spy satellite technology as we said, and some of that technology involving his nuclear powered submarine. shery: vladimir putin will also be headed north korea? what is next? >> that is true, north korean state media just confirmed kim jong-un has invited putin to visit pyongyang, and putin has accepted that offer. that would be pretty much a landmark summit. the defense minister of russia was there in pyongyang just a

few weeks ago. we can see that the relationship between russia and north korea is burgeoning, just like the white house has said. haidi: let's take a look at how futures in europe are opening at the moment as we get the reaction from the u.s. cpi report, not a terrible print but not too great either in terms of providing certainty into what the fed will do next. pretty flat future when it comes to european futures as well as german dax futures, trading to the downside. the d(announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy.

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shery: with elevated inflation pressuring them most vulnerable around the world, the asia infrastructure development bank says well structured development projects can remain resilient to price pressures. let's discuss with the cfo, andrew cross, who joined us from the milken institute asia summit in singapore. andrew, thank you for joining us. how big of a talent is it to have prices rising especially when material costs are high for these infrastructure projects? andrew: i think it's a very good point, and good morning to you, by the way. so, inflation pressures do impact the cost of infrastructure, but one of the bigger impacts on infrastructure is climate change. the things that we have to do now with infrastructure projects dealing with more extreme events, more extreme events that come through more regularly than they did in the past, that is a much bigger impact on the cost

of infrastructure. and remember that we are doing infrastructure because infrastructure has a massive impact on people's lives and makes a really positive contribution to asia. shery: so what are the factors you look into when it comes to identifying new projects? and do you have more in the pipeline? andrew: i think it is worth recognizing that the bank, since it started just over seven years ago, has done 230 projects in 34 countries. we operate in our shareholders. we work here in singapore to do private-sector mobilization. we are in many other countries around asia looking at green financing, technology enabled financing, interconnectivity, other things your viewers would imagine what infrastructure is from the heart, but also, the learnings of the covid-19 pandemic has meant that aiib has also been focused on social and

health infrastructure. remember, this is a 25-30-year acid, when making this investment, it will have a long-lasting impact on people's lives -- this is a 25 to 30-year asset. shery: i am wondering what the domestic economic slowdown, on top of higher cost of capital globally, has it been difficult to be able to identify the right projects to invest in? has the slowdown made an impact on aiib's operations role? it is fair to assume that the headwinds all economies are facing have an impact. infrastructure is a significant and big ticket item. if you look at our portfolio, though, it is pretty well diversified given we have only been in existence for 70 years. we have investments in china. we equally have investments in india, turkey, bangladesh,

indonesia and so on. so it is worth recognizing that in some respects, infrastructure is a very local asset. you are thinking about what is going on in the economy, the debt sustainability issues. also, connectivity. how does augmentation, geopolitics affect that. but the banks already put something like 36 billion dollars to work and commitment and we are still seeing significant pipeline. the last point, asia has a $5 trillion infrastructure gap. we have got $100 billion of rare taxpayer money. clearly, even in a downturn, there is significant infrastructure that still needs to be built. haidi: you mentioned geopolitics, that is the cross current that impacts just about everything, but particularly an organization like yours. does that complicate matters day-to-day?

andrew: i think it is worth recognizing that aiib is a multilateral development bank, we have 106 shareholders. 106 members which are essentially countries. so our day today is dealing with shareholders that have different perspectives, that will have collateral conversations. so in a sense, geopolitics is a standard for multilateral development ranks. it reinforces the importance, especially with the tensions we have today of multilateralism, given countries institutions where they can come to work together for a common good. and it's worth remembering that the common good that it aiib is trying to do is impactful infrastructure that will improve prosperity in the asian region. shery: and yet, we have seen the canadian government launching that probe with allegations of communist-party influence at the aiib. how is that progressing?

andrew: so, i mean, the canadians have announced that they were organizing an internal review. the bank has also finished its own internal review. it's worth recognizing that we have got 500 staff from 66 different nationalities. so of course we have got really talented individuals with different perspectives, but all coming together to achieve the same goal. canada is one of our 106 shareholders, it has contributed text their friends. so the bank is a constantly-learning institution. seven years, $36 billion in commitments, growth in members, we are always acutely sensitive to the thoughts and learnings over shareholders providers. shery: do you expect a change in membership or even seeing some leaving? perhaps the canadian government, depending on how this probe

unfolds? andrew: yeah i think that question is quite astute. we started with 57 founding members. we are now at 106. and the bank will be announcing new applications and new members in the coming months. we have seen a growth in membership and we have seen a growth in impact. one proof of that is last week, we received $5 billion of orders for a $2 billion bond. they were hundred 10 investors globally around the world are seeing the benefit of what the bank is trying to achieve by making sustainable and green infrastructure investment in the region. haidi: andrew, great to have you with us, andrew cross, chief financial officer at the asian infrastructure investment bank. let's look at crypto, at current prices have been under pressure after a bearish technical signal appeared, the so-called death

cross indicating more downward pressure. but were also hearing at the same time, some optimistic projections coming from asia's biggest crypto conference this year. >> i do think one of the key things may be around this etf decision, i think that opens up a type of dollars that are likely to come in -- opens up a pipeline of dollars. i think $48,000. >> i can't comment on whether prices will go up. for us, we continue to see it be a reflection of the innovation in the industry. for us, there is a term of innovation that is happening right now, internal use cases around gaming, entertainment, especially in asia. we think that as more and more use cases come around, but can will also reflect that. >> i don't think anyone can predict the price of bitcoin 12 months from now. i do think that it looks, the sector as a whole looks favorable on a 12 month going

forward basis because of improved macroeconomic and regulatory factors, but i don't think anyone can predict the price of bitcoin? >> i am generally quite optimistic, but i believe, especially with my perspective on bitcoin etfs, it should be in the $45,000 range 12 months from now. i would be disappointed if it is not. obviously, it is a volatile market, but that's where i think it will be. annabelle: those were some of our guests speaking at the token2049 crypto conference, asia's biggest crypto conference of the year still underway for a second day today. we have some big interviews coming up, one of them with the founder of a coin. we will have more on. and speaking with the circle ceo, jeremy out there. he is behind one of the biggest stablecoins in circulation, a hot topic at the conference given the amount of revelatory progress. still a lot to be worked out particularly in the u.s. and

also in the hong kong. changing, let's look at where we are seeing markets just over half an hour into the session for korea, japan and australia. we are seeing so far some pretty muted moves but broadly to the upside. it does appear that investors are taking some of the latest u.s. inflation print in their stride. we saw an uptick in the underlying core cpi reading, still putting that fed hike in the end of 2023. it is perhaps a yawn that you can see so far in the session. shery: still ahead, as itaewon's presidential race heats up, we speak to the relatively unknown candidate who could be the election's biggest wild card. that exclusive interview next. this is bloomberg. ♪ s. to find your personal style.

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shery: with just four months to go before taiwan's presidential election, a relatively unknown candidate is giving the major parties a scare. he is placing second in the most recent polls ahead of the establishment kmt party and just a few points behind vice president lai ching-te of the ruling party , dpp.

bloomberg's chief north asia correspondent stephen engle has a closer look at the man who could be the biggest wild card. ♪ stephen: his former hip hop -- his hip-hop video shows just how his quirky candidacy is making up the race for the presidency. ♪ at 64 years of age, this former from a surgeon turned third-party politician is taking on what has been an entrenched political door pulley of the incumbent dpp and the oppositin kmt with a straightforward approach that polls suggest resonates with younger voters. >> we are different from traditional politicians. they are too fake and young people don't like that. stephen: bloomberg news spent the better part of two days with him on the campaign trail as no other outside, it had ever given the political establishment such

a formidable challenge. why do you want to be president of taiwan? >> [sighs] ko: frankly, we shouldn't be thinking about who will be the best president of taiwan, rather, who was the most suitable. the dpp will continue to maintain tension with china, the risk of war will remain and taiwan's economy will continue to deteriorate because china will do everything possible to block a one. and that kmt is too obedient to china so they can't gain the trust of the taiwanese people. there needs to be someone in the middle. stephen:ko's platform on mainland china is based on deterrence and dialogue. yes, he is in favor of a bigger defense budget but it must be accompanied by better communication with beijing. ko: ko: we shouldn't fantasize that we can completely change

the current situation and one day. but even more, we shouldn't fantasize that if we don't do anything, the situation will change on its own. a real important principle is we have to think of a way to have dialogue with china and not just always tell them no, because after no, there is no other step. ♪ stephen: ko also disagrees that major chipmakers like tsmc have no other step but to decouple from china and depart for other markets. it is costly and inefficient, he says, to move she making to america elsewhere. defusing tension with china, he says, is the better approach. ko: if tensions between taiwan and mainland china continue to rise, we don't need more. the tense situation is enough to result in a decline in foreign investment. a lot of rich people in taiwan have already started to move money away. for investment doesn't dare to come in, and the outflow of capital is already causing damage to taijuan. that is where we must try to do

as much as we can to lower the risk of war. [applause] ♪ stephen: while ko sees himself as a straight talking pragmatist, he has been dark with questions about his personality, mainly some, dare we say, and charitable comments he has made towards women, as well as acknowledged social awkwardness that he has self-diagnosed as a mild case of the behavioral disorder as progress syndrome. a man who says he doesn't feel comfortable in social settings, the candidate ko, has to do a lot of handshaking on the campaign trail. good luck, sir. do you enjoy meeting with people and talking to them? ko: no. not too much. all my patients are incubated, they can't speak. almost all of my patients, they are incubated. stephen: intubated. so you don't need to talk to

them? ko: i don't need to talk to them. stephen: did it desensitize you? ko: almost. to work in the icu, you can't be emotional. we believe in order for taiwan to be a civilized country, our people must be rational. our people must be rational, we cannot be too emotional. ♪ stephen: for now, the accidental candidate, as ko likes to call himself, has resonated with centrists within an otherwise all right electric. simply put, he is different and direct. the trick now is to avoid missteps inside his campaign or across the strait ahead of the election on january 13. ♪ [applause] haidi: steve, we are just as we were watching that, getting news

of his vice presidential running mate for the presidential election. he announced that at a briefing in taipei. out of the field, how likely is it that this third-party candidate could actually be victorious? stephen: well, he is polling second, ko wen-je is polling second in the recent fall that kmart last month. he is several points ahead of the kmt's candidate, hou yu-ih. that is significant in itself. there are exactly four months to go until the january 13 election . i have been covering a lot of taiwan elections and anything can happen, but when you have a four-horse race and four dare i say alpha males, will they be willing to partner with another one toppled the front runner right now, and that is lai ching-te, the vice president of the incumbent dpp?

i have talked terry gou and i have not talked to ko. both of them agreed that dropping the dpp is paramount. that doesn't necessarily mean that they agree with the kmt which once more engagement with mainland china. they just simply see that the dpp's attitude towards independence and towards china and not engaging them, is the wrong way forward and it is escalating chances of war. everyone i talked to on the streets just about asked me, will ko partner with any of the other candidates aside from, of course, lai ching-te, the dpp front runner? and ko would not answer that question, norwood terry gou. of your sleep, by today's announcement, terry gou has picked his vice presidential running mate, it seemed like he is not leaning towards an alliance either.

four months to go. it is a 4-headed race. and yes, ko could win. he is seven points behind the front runner, william lai, in those opinion polls. shery: ko has also made very, very disrespectful comments about women. what exactly were day, and why isn't this more of a problem? stephen: this could be a liability. at the same time, those people i have talked to in taiwan say they like his denseness, his straightforward attitude, and it is a breath of fresh air in some ways, against the two established parties. but he is on record in his biography, as well as in recent comments, of having what some have said by more misogynistic comments towards women. i will redo one of them. he said "the more females in an industry, the less successful that industry would become."

potentially damaging comments to his candidacy, with half the electric being women -- half the electorate being women, and with the #metoo movement's across the world. we will have to see how damaging this could be. i did ask him point-blank, "are you a misogynist?" he, of course, denied that and said they are putting into place standard operating procedures in the campaign to try to make sure they don't have these similar types of gaffe going forward. sshery: our chief north asia correspondent stephen engle there. alright, we will have more the markets, coming up we are more, into the trading session in korea, japan and australia, the aipac msci treating up 0.4%.

shery: the singapore grand prix is returning this weekend, and the lion city is gearing up for three days of fast and furious festivities. the mclaren driver wrote down his strategy before heading into the race. >> being calm and composed is always a strength. of course, you always have to be aggressive. but i think doing everything with a calm attitude is always a

positive. it is something i have had through my whole career and something i have tried to work on through my career as well. i don't really feel like a rookie in some ways, especially now in the second half of the year, i feel like i have got more and more experience. at the beginning of the year, and definitely felt like a rookie especially not racing last year at all. i still feel like i am gaining experience, but i think i have learned a lot from the start of the year. >> it's a process, right? >> exactly. >> how confident are you that mclaren will give you a card that is capable of fighting for championship's, given all of these changes with regulations? >> i think we're making good progress. the start of the year was a struggle for us. we have managed to turn it around massively in the middle of the year. if we can -- we have shown how quickly you can change things for the better, and hopefully we can make some more steps like

that. we obviously know that we need a bit more to try to challenge red bull. but in our good days, we are the next team waiting to challenge them. >> quite a year you have had you kind of burst onto the social media scene with a viral tweet in august. he have garnered a huge following since then. what do you see your way of shaping the future of the sport given your influence now? >> it's always important for us as drivers to express ourselves in some ways. of course we have a lot of partners and commitments. and sometimes that can be a bit daunting. but i think it is very important to get your personality out there and show that we are people, not just folks in our formula one car. both of us and this sport help ensure that more. i think is very important for us to explain ourselves. haidi: mclaren driver oscar pr

history speaking -- oscar piastri, speaking in singapore. certainly is up zero point 7%. also seeing broad upside on the kospi as well as a bit of apside -- sorry, the nikkei was 0.7 percent higher. modest gains, a quarter of a percent of higher here in sydney. we had a rather confusing cpi print from the u.s. suggesting that the fed may not done yet with this tightening cycle. looking ahead, we are watching country garden as well as the rest of the property sector getting into the start of trading in china. this is bloomberg. ♪

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