we're also looking at the key forecast changes from the rba.t some insight into the direction the forecasts are heading in the statement tuesday. the company now saying rates will only head down to around 5% over the next couple of years. previously, they had been saying they seek it hitting below 5%. that is a downgrade for the labor market. that is also flowing through to their inflation forecasts. they now do not expect inflation until 2021, target so that is lighter than they had been expecting previously. definitely a downgrade on the forecast looks likely in today's news. lowe i remember when phil got the job, he said he was not an inflation not are -- nutter. it is obviously becoming a problem for him. but what we're seeing is that low rates and a strong job market does not equal inflation anymore. >> it is a difficult situation for the rba. they do have a mandate to keep inflation between 2% and 3%. it is becoming clear that lower interest rates do not really have the power to push inflation of anymore. it was appropriate is more of a r

the rba is expected to hold.s are down .2%, after the rba followed june and july cuts. now we expect them to hold. nikkei futures are down .6% after the japanese yen strengthened to the strongest level in 16 months. the korean won, a different story, dropped to the lowest level in two years. we have escalating trade tensions at home and abroad, kospi futures down .6%. we are expecting 31st report earnings in korea -- 30 firms report earnings in korea this week. paul: let's recap on the stories we are following. disruption continuing across hong kong. you can see the fortress hill station. groupis a protester -- a causing delays of trains. extra travel time will be needed on east real and west real lines. -- real -- you can follow this on tliv . this is bloomberg. ♪ ♪ good morning, i am paul allen in sydney, over an hour away from the australian markets opening. good evening from bloomberg's global headquarters in new york. welcome to "daybreak: asia." ♪ paul: our top stories this monday, hong kong races for a

traders have increased bets the rba will follow suit.ing in a 70% chance of a 25 basis points cut from the rba in september. as these trade worries are , experts at central banks are beginning to do some competitive rate cuts. there are those saying perhaps that is a little bit overdone. the nextt least for month we will be seeing the aussie stay around these mid-67 level, even though pressure on the australian currency has increased. .ophie: thank you check out our gtb library for some of the charts we've been talking about on the bloomberg terminal. for more on oil, our bloomberg energy reporter joins us from denver. tell us what we learned from saudi officials a few hours ago. rebound asee crude little bit in after-hours trading after saudi arabia said it was in talks with other major producers to figure out how to halt the slide. they said all options are on the table. i think the question is -- what are those options? some members will be meeting in abu dhabi in september and i think it will be in or misleading fortune for the marke

that could be a catalyst for why the rba may feel compelled to move. where are seeing these downgrades and they aussie earnings environment. the earnings season this time around has not been too bad. we track the number of companies expectations. the number we have seen it come faces been over 30 expert -- 30%. overall the earnings upgrades have been in the resources sectors. commodity prices have been strong nostril out. relying on commodities like iron ore, those are not taking a turn though. iron ore and coal prices are weakening a lot. and quite drastically. the outlook for the resources dr. is not a strong. other areas of -- the resources sector is not a strong. constructionntial activity we have seen developers follow over in australia. that is in line with our view that construction activity particularly in residential continue to weaken in six to 12 months, because we have had a boom in the housing market that is continuing to unwind. homeis not to say that prices have not found about improved with income price growth will be good over the next

shery: aside from the rba, all banks in central asia cutting rates.hat is the risk of policymakers of talking themselves into a recession? katrina: that is a very good point and a concern for us at the moment. we are at a point where it could be that we do talk ourselves into recession. the trade war has smothered animal spirit throughout asia. ratesl banks were cutting and they were concerned about the impact the trade war is having on not just the export and manufacturing data but the economic outlook going forward. you do start to talk yourself into darker times. has risen recession in the trade war has gone back to escalation stage. paul: consecutive quarters with negative growth. we seem to be some distance off that. take a look at malaysia. 1.5% expected there, what are you looking at? katrina: malaysia is a bit of a bright spot. think it will hover around a steady 4.5%. tot is a star contrast places like singapore. we are expecting to see continued and significant week this in the economy in the june quarter. in australia we got jobs numbers th

david: we are more clear in the cutting cycle, at least with the rba. morgan us now onset is stanley's asia economist. as an economist, what is a midcycle cut? what does that mean? >> from a growth extension perspective, the u.s. economy has seen its cycle. from our perspective, that seems too optimistic an assessment. even for morgan stanley, we believe by all accounts the u.s. economy is in a slowdown phase. what it means going forward is the fed will still cut, but this will not be the lengthy cutting cycle that the governor was mentioning overnight. yvonne: is there a communication problem? dependent, the data we have manufacturing in the u.s. and jobs coming out friday. if the date is is not pick up, you expect the fed to cut more? deyi: we expect the fed to cut by 25 basis points in the october meeting. this will give the fed's time to look at more -- fed time to look at more data points, how households are behaving, and you also get risk events like the u.s.-china trade negotiations and brexit. rishaad: it seems he is not as deliberate as he woul

the rba left unchanged after cutting it in june and july.goes to show you we are seeing some easing but investors are still looking for havens amidst it escalation of the trade were between 10 and beijing. manus: let us see where the next the takes us in that agenda. good to see you guys. let us get the bloomberg first word news with annabel to list in hong kong. >> thank you. fed chiefs are making a statement. op-ed,ll street journal janet yellen, ben bernanke, alan greenspan, and paul volcker commented on president trump's recent attacks on the fed. ablesay the chair must be to act independently and free from fear of removal or demotion. president trump has delivered his most forceful condemnation of racism and white supremacy following the mass shootings over the weekend that killed more than 30 people. newident did not call for restrictions on gun ownership instead blaming the attacks on mental illness. that thet recognize internet has provided a dangerous avenue to radicalize, disturbed minds and perform demented -- demented ki acts. ac

the rba signaled this one pretty strongly.rprise if they don't cut their cash rate today. we also like to act preemptively and there are very aware of the position in the global economy, then need to maintain a rate.itive we can see further cuts in the not-too-distant future given how things are playing out. paul: a common complaint of central banks, and i am guessing new zealand, is no exception, there is a lack of government help. nothing happening on the fiscal side. is that true in new zealand as well? sarah: i think the government is perhaps arguing some fiscal stimulus. it is focused on infrastructure which is very good in the long run. it helps production capacity as well as stimulate domestic demand. could the government do more, definitely. you've got very, very low interest rates at the moment. they are looking at running deficits and financing those has never been cheaper. dust forst majority the vast majority of developed economies as well. so they could do more and it would help domestic demand. that is something

the rba will ease again if it is warranted. higher anden it tick we have been watching that move in aussie yields after we saw gains in u.s. yields. the korean won is a little stronger -- weaker. it is now tracking higher. course, we have bonds in currencies fairly stable in china after we had the new ltr coming through today. manus? manus: yes, some say it was a little bit more of a whimper than a whopper. we will see you very shortly. to china, they have made borrowing costs a tiny bit cheaper for companies after the pboc induced a new market benchmark rate for the first time. the change is part of beijing's push to connect its rate system to conditions in the market. joining us now to unpack the reform is david, great work on this so far this morning. what does this really mean? mentioned, they are trying to get more in line with where market conditions are very the pboc injects liquidity and the average rates don't seem to be responding, so they are trying to unclog the mechanism. the rate today is 4.25%. a bit of a whimper

longer, ihigher for think, than the rba really expected.has been to do with supply shocks due to the tragedies and so on in brazil. iron ore, which is a very important component for strega, that is now coming down a lot. coal is a bit stickier. with those commodities, because they are priced in u.s. dollars, a weaker aussie immediately enhances cash flows not only for us trillion companies but for the us government, so that has played a key role in helping those parts of the australian economy. thatorry for lowe has been the consumer here has been very weak and as long as the consumer stays weak, australia needs to have that week australian dollar otherer to enhance those parts of the economy that are most sensitive to the australian dollar. thank you so much for that. coming up next, markets are in wait-and-see mode ahead of jay powell's speech later friday. this is bloomberg. ♪ shery: i'm shery ahn in new york. paul: i'm paul allen in sydney. you are watching "daybreak australia." let's get a quick check of what to watch in the markets th

the rba wanted a bit of weakness to kick in and support the economy. that is starting to happen. on for little longer now. shery: a trio of rate decisions today, not only the rba yesterday but new zealand, thailand and india. new zealand, stocks are strongly start -- strong. what are we expecting? malcolm: we are expect to get cut according to 18 of the 21 economists we have surveyed. new zealand was the first among the developed nations to cut this cycle. it looked like it was going to do so again. it is the same story across the developed world playing out in new zealand. robust labor market numbers you referenced are not kicking into the broader economy. not seeing any wage gains. inflation is mid or below targets. some of the other sentiment gauges like consumer sentiment is underweight. because everyone else seems to be cutting in that direction, there is no reason not to. a cut is broadly expected today in new zealand. paul: another common theme for central banks, they all seem to complain that they are getting no help from governments. rbi as well. is that a theme for them

the rba seems to be trying to job on the aussie ever lower. maybe the rba is going to move a couple more times at least on rates, so where is the floor for the aussie? value, about fair 6550. he clearly has room to go if that is the guideline. prices, butommodity i do note that spec positioning is already quite short the aussie in terms of leveraged funds and real money accounts. there's a lot of bad news already priced into the aussie, side would sayr it has really been in the price for about 18 months now almost. thes quite remarkable that rba would talk lower wind trade weighted is around 10-year lows, so we're talking about gsc type levels, so it has already benefited the australian export sector quite a bit. surplusa record trade in australia. from that point of view, i think it is probably short-term not a great deal of downside. still, we do think there will be support over the next few weeks from resort company dividends. that should lend some support as well and as i say, lots of bad news priced in. while we do have a base case of 66

we did have the rba monetary policy today indicating that governor lowe is ready to ease rates lower.hinese stocks coming under pressure today, along with those in hong kong. some weakness on the csi 300. that is in regards to a divergence to the data we got out of china today. let's take a look at cpi, which 0.28%. up 0.2 8% -- pork cpi is the redline, up far higher than core cpi. we had a big miss coming through in tpi, showing a divergence between consumer inflation and inflation on the factory floor. all these adding to concerns as to how the pboc can address boosting stimulus when you have inflation rising on the consumer front, but the climbing -- declining on the factory floor. matt: juliette saly in singapore. for investors, august has been all about the trade war and china's currency. it has been anything but a quiet start to the month. after the yuan sailed past seven and china was labeled a currency manipulator, markets have been focused on what is next in the trade dispute. in a bloomberg scoop, we learned the white house is holding off on a decision on licenses for u.s. c

the rba governor has a warning for the world central bankers, you can see the day on your own.e more on the key takeaways from jackson hole. this is bloomberg. ♪ ♪ triggeringde war is other aspirants around the world -- other actions around the world, other countries reevaluating trade relationships . this could get out of control. >> trade uncertainty with us in what i saw was a system that has become more cautious. >> business leaders express a fair amount of concern about knowing where export markets are going and what their opportunities are going to be. >> we have to keep monitoring the way forms will -- firms will react and if it will spill over into hiring plans and spending plans and into the consumer sector. said he figures -- some fed he figures we spoke to at jackson hole. the rba governor philip lowe drew rave reviews with one simple message, monetary policy makers can only do so much to isre up the economy would under pressure from political uncertainty. kathleen hays has just returned from where he spoke. kathleen: some striking. there was a two-day symposium frid

a lot depends on rba.that will put pressure on the australian dollar, but the fed will probably cut twice. so for the next three or four months, i see them as being below 70 not a lot lower or higher. if you get a make or break moment on trade tensions on september 1, it could be a trigger for a big move. if tariffs go up, ozzie will move lower. aussie could go back toward 70. paul: the kiwi is sliding, as well. but the aussie tv crosses -- kiwi intrigues me because it is historically high. what you make of that? aussierbn cut 50 and kiwi is a little higher, around 104. part of this has to do with the effectiveness of rate cuts as they approach the zero bond. there cut was a surprise but the currency impact at a time where the rba might cut as , the impact is limited. that is the problem for the kiwi were right now. the aussie kiwi has not moved that much. thanks very much for joining us. plenty more to come on daybreak asia. this is bloomberg. ♪ shery: this is daybreak asia. paul: i am paul allen in sydne

shery: we have a couple things the rba will be paying attention fed's september meeting.are we expecting? jobs data this week, it is a bit of a crapshoot, that whole report. it provides volatility, but generally is short-term volatility. it takes a few months. putting in context what i was saying earlier about two cuts needed to get the economy growing next year, the question is, what are the triggers? the fed in september is a big one because if they cut, that would put pressure on the aussie and that is the last thing they want. they want the australian dollar stable or appreciating. the start of september, we will have second-quarter gdp data, which will give us a better sense of where the economy has been. and we will have a current account, which is likely to show the first surplus in 40 years. in the short-term term, there is not a lot. paul: as you were describing, the testimony, the statement, the market expectations, those are pointing to a cash rate of 0.5% down the road. that has to be a dark place for the aussie dollar. michael: it depends on how high the fed

the rba will kick things off on tuesday.nd others as well in the next few days. been have already preemptive cuts across the emerging markets world. we are hearing that it may force further easing among the banks in the region. let's get you over to cincinnati, ohio. president trump addressing the trade tariffs. let's listen. >> now we are stopping the theft of american jobs, we are stopping the theft of so many other things happening, including intellectual property. they steal our intellectual property. i think they want to try to make a deal with us, but i am not sure. the word is, i feel they want to -- they arehey get praying. they would like to see a new president in a year-and-a-half so they can continue to rip off the united states like they have been doing for the last 25 years. they would love to see a guy like sleepy joe biden, who has no clue what he is doing -- what the hell he is doing. sir,say to sleepy joe, sign right there. ok. i will sign. we have been losing hundreds of billions of dollars a year in china.

this as the rba cuts 2 times in june and july 2 1%. says we can end up as zero lower bound. this is bloomberg. ♪ jessica: this is "daybreak: asia." i'm jessica summers with the first word headlines. boris johnson is calling on european leaders to "show some common sense and rewrite the brexit divorce deal." with 84 days until the u.k. is scheduled to leave the eu, johnson says there's plenty of time for the agreement to be changed. he's repeatedly said he will take the country out of the block with or without a deal at the end of october. stimulateis ready to its economy in the face of weakening global demand and the u.s.-china trade war. it warrants the threats posed by uncertainty are likely to be long-lasting. the prime minister used his message to reassure the audience that singapore experienced slowdowns before, and the government will launch stimulus as necessary. the indian prime minister is promising a new era, saying he is ridding the state of what he calls dynastic politics and entrenched corruption. he addressed the nation a

we heard today from the rba about a gentleg surgeon the economy. there was nothing gentle about the aussie dollar and the new zealand dollar. what did he mean by gentle? >> i think the governor really stood out. he said he gentle turned in the economy. he also said they are ready to ease further if needed. the other central banks, we are starting to get laundry lists. new zealand, india, thailand, the philippines, orleans this week. this week. he issued a more positive note. himself.entiated among central banks, he is probably the most influential central banker. , the note is always looking for trading patterns, something to think about is these rate cuts don't last forever. have an effect on economic growth. now.e in this frenzy the message from the rba, we can be on the lookout now for other central bankers to echo this turn,f looking for a looking for positive results of rate cuts. matt: thanks for joining us. rest ofcheck out the on team by typing mliv your bloomberg terminal. let's get the bloomberg first word news. >> the u.s. is holdin

you have seen the rba allude to it and the rbnz allude to it.aking them act more preemptively in those cases. for the fed, jerome powell said the u.s. economy in and of itself seems to be ok, but what lingers on the edges is the threat from further trade tariff acts collations and -- escalations and what that would do to business conditions in the u.s. shery: the signals from the pboc seem to be different. could this mean we are not going to see broad benchmark rate cuts in the what does that mean for the market levels? >> absolutely. i think the interest rate reform from the pboc is something that they have been signaling for quite some time. they have been mentioning the need that chinese interest rates, policy in general should be more market orientated as opposed to date hated by the government and the pboc -- dictated by the government and the pboc. the reform is about creating a more transparent and visible focus point in the market. , all borrowers alike drop a chinese economy. at the outset i don't think the intention is to lower rates d

but wewe have 10 seconds have comments from the number two at rba concerning the trade war.ow concerned are you? rob: i think it does present concerns to austria. china is a significant trading partner. we will not be immune to a economic ramification from the trade war. it is something we are monitoring closely. nejra: rob scott, the ceo from wesfarmers in perth. coming up, more on trade. this is bloomberg. ♪ ♪ from the 5am wakers, to the 6am sleepers. everyone uses their phone differently and in different places. that's why xfinity mobile created a wireless network that auto connects you to millions of secure wifi hot spots. and the best lte everywhere else. xfinity mobile is a different kind of wireless network designed to save you money. save up to $400 a year on your wireless bill. plus get $250 back when you buy an eligible phone. click, call or visit a store today. nejra: this is bloomberg daybreak europe. i am nejra cehic in london. manus: i am manus cranny in dubai. donald trump could be open to changing his position dramatically on iran. he made his most expansive

tuesday, a decision by the rba. wednesday, we see pmi numbers from china.s., the beige book drops. this is the same day that we hear from the fed. thursday, we get the u.s. adp jobless claims. this all leads up to the payroll report for the month of august. back with us are james athey, greg staples, priya misra. to wrap things up, we have done almost the whole program without talking about trade and china. i just wonder whether we are focused too much on the tone and not the substance? the optics change every week. the tone shifts. for the last 18 months, tariffs have gone on have stayed on, and , more have gone on on top of that. priya: that is putting all of this uncertainty on the business sector around supply chain. last friday, the tone went very negative, very dark. the fact that we didn't have a further darkening of that tone mattered for the broader macro market. if you look at the structural issues between the u.s. and china, we have had the same issues for the last two years -- ip, cyber. i'm not seeing any progress there. politically, neither si

in australia expecting rba to be speaking in sydney. fore watching out australia's business confidence report. earnings we have foxconn industrial. >> all right. thank you very much. first dayk in on the of news. >> thanks. has hired aology u.s. law firm to lobby on its administration pressures allies to put the blacklist.the huawei is increasingly being the trade war and is currently banned from buying technology. tagsean union may impose on taiwan and indonesia. industry group said eu. imports a billionworth about u.s. dollars last year. european commission has eight tariffs. decide on the the trade back between japan and is widening. the ministry said they will split the category in two and be the only country in the second group. comes after tokyo said export. safe enough for >> from now on, those country uphold principles and management of export controls will be included in this new group. be the first country group.ncluded in this >> argentinian assets in the after president macri shock defeat in primary election. the peso plunge

the aussie started plunging and we saw the aussie dollar start plunging around 3% after the last rbaune. this time, we are expecting a little bit of a pause from the because the economy has gotten much better, but because we have had some sense of stability when it comes to prices. stabilizationg so, perhaps, a bit more time for them to see how the june and july rate cuts will affect them already. caroline: you've got to be busy because it is not just australia but it is new zealand, thailand, india. a lot of them looking at what the federal reserve did last weekend wondering whether they cut, too. shery: i am really trying to keep all of these interest rates in my head right now. reserveause the federal loosen their policy, that gives them a chance to react. m cutting tog the 1.25%. this would be the fourth consecutive rate cut. from indiaon coming very strongly with prime minister modi and the new governor of the r.b.i.. thailand as well could be cutting 25 basis points from 1.5%. the general sentiment is the federal reserve is cutting companies asian central banks have leeway to c

wel: yes, and to your point, are just getting some headlines rba saying he is not sure he would relyrve about recession. zach, thank you for joining us. president trump has been tweeting his thoughts about president xi jinping, about what he is calling "the china problem," saying he can quickly and humanely deliver a solution and also suggesting a personal meeting. the economic impact of the disruption, our chief correspondent, stephen engle, is in the tourism part of hong kong, and, steve, the economic concerns now seem to be getting somewhat real for hong kong. eve: yes, absolutely, and maybe those six days of protests at the airport did raise the international profile that the protesters wanted, and we are getting more comments out of washington, d.c., as evidence of that. that more recent tweets, and there has been more from president trump on the hong kong situation. i want you to bring up that tweet again that you just alluded to, paul, because i think there are two key parts of that tweet. the first and probably the most critical part of that tweet is he believes that presiden

the rba rate decision. governor rossello signal -- signalr phil lowe caution.ld he be inclined to make a bigger cut? the u.k. parliament returns at a time when there is so much that and forth about brexit. looking at the regional economies across the country. u.s. job days. a lot of people are watching this closely to see whether the fed will end up cutting mat rate in two weeks. -- that rate in two weeks. paul: china's big oil wrapped up a first half. it punish refining. we will have the details in a moment. this is bloomberg. ♪ at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. kathleen: that is "daybreak asia ." i am kathleen hays in new york. in sydney.p

what i want to know is the ceo in your business -- two rate cuts from the rba, does it matter?ink you need to look at the economy beyond rate cuts. the results we reported today across a number of retail businesses and our industrial portfolio in many ways shows the australian economy isn't into bad shape, if you can deliver that level of growth. there are clearly some levels of growth, a bit of a slow down and economic growth and consumer spending, partly impacted by concerns around house prices. we are seeing the stabilization, and as we showed in the results, things aren't too bad. ♪ sparkling today as its quarterly profit shattered estimates. but despite the good news in terms of the profitability, tourist spending threatens to crumple the outlook for the year. >> tourism has been a problem for several quarters now. this goes back to before last year's holiday season. foreign tourists coming from abroad a lot less, not spending as much of these big destination stores that tiffany has, like their flagship in new york city. chinese tourists in particular have been something t

good news for the rba, they can stop talking about wishing for the currency to be lower.it is be careful what you wish for. one of your guests was saying, we know the rba would like a weaker currency but the circumstances under which it is being achieved are far from desirable with the latest escalation of the trade spat and the global economic outlook, let alone what it means for china in the short-term. in recent going to be weeks and months, it has been trading as the preferred emerging-market proxy. tried to say how far the dollar-china exchange rate is allowed to rise will be pivotal to how low we go. the chinese want to moderate the pace of decline and safe to say we see a move up to 725. 7.25. the aussie would represent reasonable value and that could be the levels we expect to see the economy and push of a -- in australia and try to hedge at attractive levels. we have yet to put a new tail on the donkey but levels around 65 don't look unreasonable. paul: the fate of the aussie enacted to the yuan. i want to did your thoughts on new zealand. we have the rbnz meetin

onay, we're keeping an eye the rba meeting minutes. trade data from taiwan and today rate the pboc's loan prime . a key milestone indeed, paul. paul: definitely watching out for that, sophie. let's get to first word news. >> president trump has resumed his assault on the fed, calling for a full percentage rate current and complaining the strong dollar is hurting other economies. key rates should come down at least 100 basis points along with additional easing. the fed cut rates last month for the first time in a decade and some policymakers are not been for the need for more. -- convinced for the need for more. low but ites are think it is reflective of global conditions and global conditions are week. i am not saying there are not circumstances under which i would be willing to ease. i want to see evidence that we are going into something that is more of a slowdown. if i am growing at to present, i am not as worried about that. >> boris johnson is planning a nationwide pr campaign to prepare voters for a no-deal brexit. previous brief

dollar strength, or the rba does because they want to see the australian dollar weaker because it willaustralian economy. see thees not want to yen get down towards a hundred so it wants a stronger dollar. it is definitely a drag on the u.s.. i do not think that what is with the yield curve in version is going to make it go away. i don't even think that if the fed cuts rates more aggressively, as some, including some in the white house have been calling for, that that would necessarily cause dollar weakness. situation isde war turning everybody in on itself. that is helping to feed dollar strength. everybody else's rates are so you said the u.s. 30 year low fell below 2%. yes, it fell below 2%. that is a stunning level, but that is still much more than you could get on a 30 year bond if negative. even the 30 year treasury yield at 1% is not necessarily going to give you a weaker dollar. u.k.'s bonds in negative territory. our mliv asia editor garfield reynolds in sydney. the tenure is around 4.4%. let's bring back in, or bring in bank of singapore's cio. thank you for joining us out of

the rba undertook back to back rate cuts in june and july to a record low 1% as it stopped to revive a decelerating expansion and drive down unemployment. >> inflation will be below the target for some time to come, and the unemployment rate will remain above the level we estimate consistent with full employment. all that remains the case, the possibility of lowering interest rates will be on the table. su: the japanese economy grew more than expected in the second quarter, softening concerns about the rate of the slowdown. gdp expanded at an annualized 1.8% on the prior period compared with estimated growth of .5%. consumer spending and in not enoughrose but to help the economy revise a 2.8% expansion in the first quarter. there are increasing warnings of a downturn in the world's leading economies as the escalating trade war. the probability of recession in the u.s. in the next 12 months has risen to 35%, up from 20% at the end of last year. that is the highest. among the 20 nations and only matched by japan. goldman sachs is telling investors not to hold their breath for a trade d

this point that suggested the rba could get cut, ande with the this was probably spoken out in the last. wellnk what didn't go down with markets was the fact that when asked why not 50 basis points, why 35, he said 50 basis points would be slightly excessive. probablyomething that mid markets wonder if there is room left to take further rate hikes. the pricing in the yield and bond markets have priced in another cut coming at the end of october. that probably spooked the markets. that dragged the index. a crucialclosed at market. we will see if we hold onto that . that will be important. david: we were talking about this earlier, the changes in msci waiting, the global -- weighting, the global standard index. that will be good for the stock. what do you think? devina: that be good for the stock, but it has seen a run-up in the last two or three days. this will not replace the bank of india in the global standard index. the stocks are running up almost 5% a day. you may not see incremental moves on the stock, because it has already been factored in. there is slightly more that could be l

the rba having its worst session in 18 months.losses expected today, but just not quite so bad. i'm paul allen in sydney. shery: i'm shery ahn in new york where it's 6:30 p.m. let's go to first word news with jessica summers. jessica: china has lost its status as america's top foreign predator as japan became the leading holder at treasuries. tokyo increased its stash of u.s. bonds, bills, and knows point $22 million to one $1 trillion, the highest level in 2.5 years and a fraction ahead of beijing's holdings in june. the last time japan was america's largest foreign predator was may 2017. the world's largest shipping line has added to its gloomy forecasts. they released earnings along trade.warning about shares jumped as prophets did meet expectation but then fell as maersk went on to say the trade war could remove of 2.5% of global demand this year and next. jet of-weekl to a low after dovish comments from an ecb policymaker. a two-week low. that's after a governing councilmember reportedly said significant easing is needed next

many expect to see further easing from the rba certainly some time this year.g up next, we will take a look at potential opportunities in the credit markets. this is bloomberg. ♪ : let's take a look at some of the many issues weighing on markets right now. named wall oftly worry. we see a number of bricks in their from brexit to the trade war, the inverted yield curve. we need to add another for argentina as well and all the been happening there. plaintiff for markets to digest. this is on a day when global markets are also worrying about falling yields and a slowing global economy. we now turn to our next guest, someone who i guarantee will offer a different perspective on the current mania and more reportedly, a long-term investment strategy. at the and cio management just wrapped up a is here auckland and now. when you checkout that wall of inry, you say we are late the cycle. might be something of an understatement. which assets do you think are most poised for a correction? >> when you look at the wall of worry, there are a few other things to think about,

paul: we do have an rba that .ontinues to look to cut fiscal stimulus is missing in action.you see the coming half? >> i think the next 12 months to two to three years is very, very exciting. we might have just made an all-time high at the end of july after nearly 12 years. it really does all go well for this trillion market. now, there is a lot of doom and gloom that has been around the markets for at least 12 months or even longer. the china trade war talks of recessionary environment, etc., and that just spells opportunity for me. australia has been lagging behind a little bit and now is the time to play catch-up. youou study world markets, know that both australia and the u.s. are pretty aligned. they will get out of sync and the u.s. was sprint off away from australia. now is the time for us trillion to shine where is america will not be as bullish. kathleen: 2023 is a very optimistic outlook. like it, a industry sector, are there particular companies you are positive on? care.ike energy, health i think there's huge opportunity, especially china's growth has slowed, but

that aussie market at the close down by 2.44% curiously, the australian dollar went up despite the rba flagged further easing that was the picture in asia yes, we were weaker but well and truly off the lows of the day. >> matt taylor, thank you very much let's get the pulse of europe. joumanna bercetche, i know you come in as early as we do over there, i assume there were a lot of nerves after the united states, but like asia things have stabilized a bit. >> that's it yes. so we came in this morning, a lot of nervousness and cautiousness after the price action in asian equities as things stabilized there, we started to see more green on the screenment behind menand behin almost all of these indices have improved we are trading firmer today, but again not having fully recovered from yesterday's losses. i want to point out the ftse 100, it's the only index, the uk index, trading in the red. down 0.10% it's down 5% for the month yesterday was the worst performing index it is not just about risk-off environment here the politics, that's something to watch the deal or no-deal brexit, that's

the asx 200 posted the biggest jump since june, following the rba minutes indicating there could be furtherasing. fed officials saying we do have monetary policy looking effective. we are seeing downside pressure for kiwi stocks. nearly 1.5% at the start of cash trade. we will get an eco health check across the region from korea. a pulse check on exports amid the ongoing trade dispute with japan which looks to strengthen economic ties with china. on tap, thai trade figures which comes after the government approved a $10 billion stimulus package. the government has cut its growth in exports forecast due to that strengthening, which made it one of the best-performing currencies this year. paul: let's check in on the first word news now. ritika: italy faces a new political crisis. the prime minister resigning and saying the populace coalition is dead. blaming the anti-immigration andue for his decision withdrew support from the government. salvini hopes strong poll ratings will see him when a step election and go without the need of a coalition partner. the european union has rebuffed boris jo

we will be getting the rba meeting minutes for the august session, when it held steady on rates.econd quarter trade data from taiwan. july expected to show inflation slowed for the month. this after we saw the jobless rate pick up in the city. a three year high amid protests. today marks the first fixing for the pboc of its new loan prime rate. paul? paul: let's check in on the first word news. >> president trump has resumed his assault on the fed, calling for a full percentage point rate cut and complaining that the strong dollar is hurting other economies. he tweeted that the key rate should go down by at least 100 basis points, along with some additional easing. the fed cut rates last month for the first time in a decade. some policymakers are not convinced of the need for more. gete still expect we will reasonable growth over the second half of the year. bond rates are low but i think it is reflective of the global conditions. global conditions are weak. i don't think there is a circumstance of which we will be willing to ease, we want to have evidence that we are going into

here are the names dragging down the index in today's session cisco, microsoft, nike 'rba ia nuwee ckne sily. that's what happens in golf and in life. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. >>> hurricane dorian expected to hit the florida coast over the long labor day weekend kaitlin mcgrath has the latest back at hq caitlin? >> dorian remains a strong category 2 hurricane, but it is expected to strength, expected to become a category 3 later this afternoon and in the evening. right now, those sustained winds still at 110 miles per hour, moving to the north and west at 10 miles per hour. now, that's slower than it was earlier this morning and that indicates to us that it is taking a more westerly turn as we head throughout th

boeing, jpmorgan and goldman are 'rba ia meenre wee ckn mont announcer: fidelity is redefining valuezero account fees for brokerage accounts. and zero minimums to open an account. at fidelity those zeros really add up. ♪ maybe i'll win ♪ saved by zero they use stamps.com all the services of the post office only cheaper get a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again. >>> european markets are going to close in a few minutes here seema mody has a breakdown of today's action overseas. >> hi, carl. a negative session for the european markets with the exception of spain which was higher fractionally on the day what's also getting a lot of attention is the british pound spiking to a three-week higher after german chancellor angela merkel said a solution to the border with ireland is possible before the looming october 31st brexit deadline. boris johnson is set to meet merkel later tonight, so we'll see what kind of influence she could have on the larger brexit topic. a mixed picture for manufacturing. france's industrial sector

'rba iju about two minutes. pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. >>> hi, everybody. i'm kelly evans. coming up on "the exchange." bonds have gotten way out of whack. is it a temporary cyclical aberration or global bond market structurally and maybe permanently broken discuss all of that. >>> plus, a tariff hangover for whiskey. we'll talk to a distiller whose business has come to a complete halt and. >>> terrell davis says cbd could have extended his career he's launched his own cbd line and will join us to talk about that >> good stuff, kell. see you in just a bit. >>> let's answer some of your questions. annie in portland has a question on j&j brenda, you own the stock. what's the advice? >> i think you continue to hold it here. this is a good company with great fundamentals if you can look past the headlines into baby powder and opioids, the underlying business is still growing nicely. likely to have above industry growth trends. the stock is still

the same day, we have a right decision from the rba, expected to hold firm.eral aipac central banks that include the reserve bank of india, thailand, and the philippines. big earnings throughout the week. commerzbank reports wednesday. thursday.ws the u.k.'s new prime minister boost spending. we will discuss. ♪ manus: it is "bloomberg daybreak: europe." atra: we are taking a look live pictures from hong kong. fromwe are seeing is live outside the police station, the pro-democracy protesters have been holding rallies in parts of the city with the aim of paralyzing the city and the economy. lines have been suspended. carrie lam warning of a dangerous situation. let's get the bloomberg business flash from annabelle jewelers in hong kong. >> hsbc chief executive john flint is stepping down after less than 18 months in the job. they are appointing head of global commercial banking quinn as interim chief. the lender announced a quarterly pretax profit of $6.2 billion and says it will buy back up to $1 billion worth of shares. buffett's distaste for overpaying is wi

'rba rht after this. this is my headquarters. this is where i trade and manage my portfolio. added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. >>> online now, read the latest article on why an indicator may be waving a yellow flag to the markets. i can't believe it. that sophie opened up a wormhole through time? (speaking japanese) where am i? (woman speaking french) are you crazy/nuts? cyclist: pip! pip! (woman speaking french) i'm here, look at me. it's completely your fault. (man speaking french) ok? it's me. it's my fault? no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. (pterodactyl screech) believe it. geico could save you 15% or more on car insurance. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's

on the same day, we will get a .ate decision from the rba anna: that's the first of several asia central-bankhroughout the week. we were just talking to tim graf about that. then there are some big earnings throughout the week. commerzbank reports wednesday follows thursday. we are some way through the earnings season. the head of microstrategy for emea still with us. 3.4% earnings surprise overall. stocks had 311 reporting, but we still have a bit of a sense where we are. banks doing ok, and differences doing -- defenses doing better than the rest. >> banks would reassure me maybe, except i feel that's probably more down to cost cutting and banks are still going to operate in a tough environment with let yield curves, narrow net interest margin, but you will need to look at performance. the euro stocks bank index continues to underperform the broader index. and you wonder why that is the case and you think about cost cutting and look at what else has performed, as you say, it is defenses. it is not really enough to get me to excited about european tocks, at least relative safer and less trad

manus: and some would say -- i think it was the rba governor yesterday, really did question the fx channela race to the bottom by central banks, does that send an even more desperate warning flag about the health of the global economy? norman: we clearly are in a slowing environment for the global economy. we have been of the view that what you really need to see is much more fiscal activity in the major economies in the world. the chinese have been doing that in their economy. we think it falls to the europeans with the new leadership coming in in september october to pick up the mantle. historically, that has been a challenge for europe to do in any meaningful way. manus: in order to find -- nejra: in order to find safety in a portfolio, would you be looking to gold or the safety of u.s. treasuries, which we will discuss more in a moment? norman: we think both have played an important role over the last week or so and we have seen treasury yields fall very sharply. those trades, we would be a little bit cautious. we think there is a little bit more upside. there are scenarios where you s

rba has been more willing to go before them.hey will go in october rather than november. that gives some relief for the government. very low. they are not talking about even staying neutral. if they are going to move, the bias is to cut, which it has to be. everyone else is looking to cut. shery: we are seeing yields at the moment on treasuries gaining ground. we saw it in the regular session in the u.s. we continue seeing more caution on future fed rate cuts. it seems there is a broader theme going on i jackson hole, at least early in the session. is a bond rally in the moment at risk? for now, it looks like potential pause, or there could be a correction. bonds have become very aggressive about what they are pricing, as far as paying for the global economy goes. overnight, we got the first contraction in the u.s. market measure for the pmi. we also had more concerning, the services flash pmi for the u.s.. it was still in expansion territory. it dropped by a lot. those are concerning signs about the momentum of the u.s. economy

the strong report will allow the rba to hold the benchmark at 1% for the rest of the year. that is the expectation. we have trade retail data and economists expecting inflation is slowing slightly. and we had the japan super confidence index -- consumer confidence index. paul: let's check in with first word news. >> argentina is banking on the imf to save -- stave off default. than $5package of more billion, adding to a record bailout last year. than $10ve had more billion in the last month as policymakers try to shore up the peso after stunning political defeat. brexit drama has turned another page with prime minister boris johnson securing the queen's admission to limit parliament ahead of debate. forill shut down comments months, severely restricting .pponents of the no deal brexit he said a hard brexit would be manageable but there would be a hit to the economy. is undemocratic at a time of national crisis. a parliament must be able to account to represent constituents. it is undemocratic to shut parliament down and stop it from doing its job. the italian prime minister