Skip to main content

tv   Bloomberg Daybreak Asia  Bloomberg  October 30, 2016 7:00pm-9:01pm EDT

7:00 pm
♪ z'sdoing a deal, buying an in five different asian countries. the old site and after the fbi director reignites the clinton e-mail inquiry. ascrude behavior, oil falls opec fails to secure agreements on an output cut.
7:01 pm
>> this is "daybreak asia." it is just past 7:00 p.m. yvonne industrial production rose 0.3% on month against an estimate of -0.2, eight feet on a month on month figures. feet on a month on month figures. things,omy weighing on also political scandal in south korea. let's see how things in the asia-pacific are starting things off. after another political u.s. weighing the on markets, a political bombshell as the fbi reopens its probe into hillary clinton's e-mail.
7:02 pm
australia, we saw the dollar dip and wall street weighing from the politics, aussie stocks flat. come expecting factory output retail sales and housing starts today. hint todayd take a because it is risk off. 104 .60 to one dollar-yen this morning. india is closed, philippines leaveand mongolia also on today. different 55 hours makes. the fbi reopening hillary clinton's e-mails. i did not think this election could get any more dramatic. what a lot of
7:03 pm
people say is an october surprise. 500,looking at the s&p down about .3% after we got better than expected gp gdp numbers. we have a lot of stuff happening in terms of four major central banks, financial earnings, facebook, alibaba, starbucks. week,kick off a new obstacles facing the at&t time warner deal. apple toachs pushing make a competing bid for time warner. su keenan is right here with the latest. news,start with the deal time warner-at&t deal likely to continue to be in the spotlight. time warner stock has been under pressure with regulatory scrutiny.
7:04 pm
it could be another round with this weekend report that goldman sachs is pushing apple to make a rival bid for time warner. the newrt comes from york post, quoting an unidentified source with direct knowledge as saying they are at&t has agreed to acquire time warner a week ago for $85.5 billion, touching off speculation and the intense regulatory scrutiny ahead for the deal, adding another layer. starts, let's do a quick recap. ramy: the big headline was that stronger than forecast gdp. 2.9%, economy grew at more than forecast, data supporting a rate hike.
7:05 pm
economic reports in the week ahead will likely show that october hiring likely accelerated. we have the countdown to election day. the race has tightened that the fbi has opened a new investigation into hillary , and anythingil that threatens a clinton victory could see the market rock. yvonne: we also have stocks in the spotlight. >> baker hughes and ge likely to move once monday trading opens. the wall street journal reporting the two could reach a deal this week. baker hughes climbing almost 9% on friday. ge said to be the acquirer here. those in the industry say any kind of partnership between baker hughes and ge would boost the oilfield cloud of both.
7:06 pm
another stock in the spotlight, face book reporting. likely beats the street according to one analyst. on november 2, alibaba will be reporting. over the weekend, news from a news paper in germany is that alibaba is an talks with german retailers. chinese customers set to be increasingly looking for made in germany products. thank you with the wrapup on the u.s. markets and look out for this week. now let's get to first word news with paul allen. talks,fter 18 hours of opec is no closer to a deal with major oil producers to restrict supply. in the talks on saturday, saying internal divisions had prevented a broader deal.
7:07 pm
discussions will continue in late november, days before opec is supposed to finalize the deal. canada has signed a free trade pact with the eu after a belgian province withdrew its objections. the deal has been years in the 98% of tariffs, worth around $550 million a year to you are in manufacturers. the deal knees to be ratified by individual eu members. the u.k. business secretary has confirmed nissan will keep manufacturing in the u.k.. the promise was to keep tariff free access to the eu. they will offer support for training and innovation. nissan announced a new investment one month after warning it could move its european manufacturing elsewhere. the third powerful earthquake and two months has struck italy, toppling buildings, but causing
7:08 pm
no serious casualties. the quake on sunday morning was a 6.6, the most powerful recorded in italy since 1980. many fragile buildings have been evacuated after tremors. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ramy: thank you. with a week ago, the race for the white house is tightening as a renewed fbi investigation into hillary clinton's e-mails ways on her support. democrat in the u.s. congress is now saying that the fbi director may have broken the law by revising this inquiry. >> this is very unusual. it is not just to make the allegations, but to make it in this manner in a letter that
7:09 pm
goes public, and what it is doing is inviting other whocrats and legal experts agree to pile on and take the attention away from hillary clinton and put it squarely on jim komi. comey.e there is a second matter, which frome revelations wikileaks, hacking, intelligence officials believe the russian government has ties to this, and many relationships between donald trump and pro-russian government players has frustrated democrats. they are now trying to raise the ought to talke
7:10 pm
about that as well. i want to read the end of this letter in case you have any questions. harry reid saying please keep in mind that i was a supporter of yours in the past when republicans try to block his nomination, i led the fight to get you confirmed because i believed you to be a principle of public servant, and i now see i was wrong. even the washington post saying that we are not even sure if we will get more before the election, so what impact will this have? watching is as you can imagine, democrats and ying to see are tr how early voting could be affected. an abc-washington post poll that suggests hillary
7:11 pm
clinton's national lead went from 12 points to one point. there are other battleground polls that show there is a tightening, one that may be based on people digesting the trump allegations and moving on and this, but that tightening may not be enough to swing the results and some key battleground states, florida, but north carolina, and nevada. not able to change the dynamic, this may not matter in the end. yvonne: may not matter, but interesting to see the market and the cap between hillary clinton donald trump narrow ring. thank you so much for joining us live. anz's ready to buy businesses and five asian countries. couple ofust broke a
7:12 pm
minutes ago. what is going on right now? haslinda: the headlines are still coming through. the retail and wealth division and five asian countries. would havet anz preferred a complete selloff of its operations. , expansion across asia was critical to the future. but no longer. it is looking to undo that. dbs is the fifth largest private bank by assets under management, so this move this morning will only add to that. it rose three notches from last year's ranking, the momentum helped by the acquisition back in 2014. it is a difficult operating environment. heightenedeen security, so are a lot of due
7:13 pm
diligence mustn't happen to come to this conclusion. ramy: we just got dbs third-quarter earnings. let's go into some detail on that. dvs income came up 8% higher totalingar, earnings $1.07 billion. estimates were for $1.04 billion. the ratioing loans, is 1.3%, just under 1% year on year. weighed other banks down by the oil and gas industry. more and more cyclical companies in the sector are finding it hard to repay debt because demand for their services are falling, given fewer exploration activities. we have seen others say they may be in default. r is reorganizing its debt,
7:14 pm
so a painful time for these companies. smaller rivals like a cbc and others reported higher nonperforming assets, higher provisions for bad loans. bank profits have been under a lot of pressure. singapore's economy is weighing on credit growth, total loans dropped 2% and august from a year ago. that slump in the interbank offered rate is at a one-year low, so all these factors are weighing on banks in singapore. ramy: thank you very much. the latest out of dbs. sees onlyf economist one thing stopping a fed hike. this is bloomberg. ♪
7:15 pm
7:16 pm
7:17 pm
yvonne: i got it. ramy: you are watching "daybreak asia". i am ramy inocencio. earnings will take a hit from the fierce competition, driving down international airfares. underlying profit before tax will fall. qantas is down from the same time last year. a few minutes ago, we watch those shares down about 5.5%. ramy: four central banks are deciding on rates this week. what can we expect? we will get to that. before we get into that, i want to talk about this october bombshell when it comes to the fbi and e-mails with hillary
7:18 pm
clinton. it caused a huge record scratch on markets, falling, currencies, treasuries. if anythingthink could be the ripple impact in asia? look, asia will definitely respond. so far, the largest responses through the fed channels, fed expectations, so the dollar has been weaker. has also rattled equity markets because of the political risk coming through. investors have been worried about political risk, and that has ramped up post-brexit. or so to go a week before the election, and it seems like clinton and trump are are closed.nact -- about the fed,d so let's hop into the bloomberg
7:19 pm
in terms of where we are in terms of the december rate hike. december is the month we are looking at, 69.2% chance. we have the november meeting this week, 17.1% for that. you have trump wins, said that the only thing that looks possible to stop a fed hike is a trump victory. if trump wins, outline your scenario for the future of rate hikes. trump wins, what happens matters a lot. wins, does not mean fed rate hikes are on or off the table. markets, consumers, businesses, how they respond is important. up and assetes markets move a lot, that would ring the probability of a fed move down a lot and may well bring it before -- below 50%. soothing,ord to use
7:20 pm
consolatory terminology post-victory about his policy platform, that may ameliorate some impact, but it would depend on exactly how things transpire. ramy: another huge theme we have been seeing is this big bond market route. i want to head back into our bloomberg and show our viewers the global aggregate treasuries index. to october, and we can see the slide down to 3% in terms of bonds worldwide having lost that amount in october. people are saying they are moving money into cash. what extent do you agree with building a cash position? look, i think the cash position makes sense from a market valuation perspective.
7:21 pm
bonds are fully valued on any measure. it seems like they have been taken to extreme valuation levels relative to the fundamentals over recent years because of central bank involvement in markets, which persists, particular europe, the u.k., and to a lesser extent japan. from that perspective, that shift makes sense. the global economy is clearly getting better, not everywhere and at the same's the, but unemployment is falling across advanced economies. india is a great global growth story, conjuring half of what china does to global gdp. will continue to gather momentum, so i understand the cash allocation. i would rather be more judicious about my geographic allocation than cash at a 0% yield. we have been talking
7:22 pm
about this gdp number out of the u.s. on friday. the headline figures show a big beat at 2.9% after that terrible when youf, but continue to see domestic demand underperforming, where do we look? >> i don't know it is that domestic u.s. story. there is enough going on in the u.s. labor market and the economy to suggest the u.s. economy will continue to normal allies and head closer to full employment. what have fed rate hikes meant for the global economy. they have been trouble for the if we economy, so can get more global momentum, faith, and strengthen the economy, the fed could go more than once next year. have seen central banks starting to tweak policy
7:23 pm
and terms of growth, can you call this a new regime and an inflection point? >> i think inflection point implies you can identify it at a particular point in time. we are at a part of the curve that is showing inflection. there have been clearly discussions around tapering, but by this time next year, it will almost certainly be a reality. the boj has shifted away from targeting levels to targeting the curve. the doe has delivered easing that seems completely unnecessary, and china at best is neutral and policy. -- neutral in policy. there. we will leave it thank you. up next, south korea's president apologizes and then calls for her to resign for a political influence candle. the details ahead. this is bloomberg. ♪
7:24 pm
7:25 pm
7:26 pm
yvonne: south korea has been gripped by political scandal, seeing the president's key staffer resign and put her leadership under pressure. of talks been a lot urging action to stop the bleeding from the scandal. how did it erupt in the first place? keep in mindll, that the rumors or whisper rumors about the influence by this close friend of the president has been out there for decades. ago, it basically corrupted when an opposition lawmaker accused this woman of coaxing and prodding business lobby groups to donate millions of dollars to a foundation she was running.
7:27 pm
ofa result of that, a number revelations have come out, reportinglocal news that they discovered a tablet owned by this woman which showed in thee had influence speeches that president park road. she might have even had access to classified documents and -- accusations continued from there suggesting this woman had undue influence over the president's office. some we are seeing pictures of some pretty big protest there right now. walk us through the uproar. >> over the weekend, tens of thousands of people protested in major cities. the public uproar is significant. that is mainly because there is a confluence of factors, including pressures on the economy suggesting undue power influence.
7:28 pm
they are adding to this amazing public uproar. ramy: we will have to leave it there. thank you for keeping us updated. up next, four central bank said [ emily kaldwin ] when you said stole the throne, witch, you took away my strongest ally -- my father. but you didn't know me. ♪ you never thought i'd fight back. you don't know me. but you will. ♪ so it begins [ male announcer ] rated "m" for "mature."
7:29 pm
7:30 pm
>> it is 7:30 a.m. here in hong kong. -- t: down markets have closed across the board. in large part because of the october surprise of the fbi reopening its probe into hillary clinton's private e-mail server. yvonne: you're watching "daybreak asia."
7:31 pm
a deal includes stakes in banks in china and malaysia, and shares have been holding anticipating the announcement from dbs any moment now. qantas shares are down the most in almost a month. they warn they will take a hit from fierce competition driving down international affairs. underlying profits before tax millionl between 800 and 850 million australian dollars. fbi director reveals a of inquiry into hillary theton's e-mails, and democratic nominee may be losing some support. a survey found around a third of voters say the news makes them less likely to support clinton.
7:32 pm
state isr secretary of still holding a lead, down from 12 points ahead last week. this is bloomberg. asian marketsthe are shaping up this morning after that political bombshell on friday. which we were waking up to more solid footing, but it is what it is. let's take a look at the fix -- vix. when gdb camey, out -- gdp came out. a political to risk. take a look at what is happening across the few markets that are open right now. you have australia and new zealand.
7:33 pm
india and the philippines are shut today. you can see a fair amount of risk aversion in the markets. futures are down on the s&p, we are roughly at session lows. you have yield on its way down. when you have stocks on the way down, bonds are up, yields are up, futures on the way down. how we are likely to open in japan, there we go. 319, that is about a fifth of 1%. a third to oneut fourth of 1%. liquidity is going to be quite thin, especially to look at the u.s., so just keep in mind when you see some of these, chances are you're going to get a little bit more upsized news.
7:34 pm
let's head on over to currencies, because i'm looking at the dollar from friday. we lost steam. when you watch and currencies? >> the opposite side of that move, the dollar is a little bit weaker. 450re now closer to one of dollar-yen.ur bring that up as we have a bunch of pmi's out of china. very quickly, have a look at the mexican peso, we're back above 19 for obvious reasons. that is friday, your big jump in the dollar. it was down but not against the peso, and outsize move there.
7:35 pm
a proxy for donald trump's chances. let's head on over to commodities, oil saw a big drop of the weekend. >> we are pushing lower at the moment. that is where we are at the moment, we are closing of 48. there are some differences between opec and outside opec, it doesn't look like we are going to get in agreement anytime soon. we have the lowest level for oil since september 30. ramy: a lot on the board today. it's a big week for central banks with four of them meeting. make ae expected to policy change the markets are hoping for signals and what they might do in the final weeks of this year. kathleen, let's start with the fed. >> they have a two day meeting, starts tuesday in its wednesday,
7:36 pm
and it is set against the backdrop of the third quarter gdp figure that rose more than expected, up 2.9% from the second quarter. our intelligence he looked at it and they said, the details don't add up to the strength of the headline. probably sufficient for the fed to move in december. swimmingriven by experts and rebuilding inventories, those are not particularly sustainable. i want to look at a terrific chart that our team put together to put something in perspective. this is final sales to domestic purchasers, a very important spending number. it slowed in the third quarter and is down to 1.4% from 2.4% in the second quarter. even so, jump into the bloomberg is 4052, itchart shows the whole story. the white line is the november hike, but the odds of a hike at
7:37 pm
the end of the year are still staying high. they are at 69%. what do the markets want to see now? in the fed policy statement at the end of that meeting on wednesday, they are hoping for a signal of that hike. on friday we have a jobs report, it has to be strong for the fed to be convinced about that move. ramy: let's head over to the bank of japan. the boj needs to maintain stimulus because it is having its worst monthly lawson's jim. will governor kuroda pullback on bond buying? >> he is not doing much of anything right now. we have another big couple of numbers coming up. breaking news on retail sales and production. let's jump back into the bloomberg to look it inflation. 39-10.
7:38 pm
take out the fresh food number to get the core, also down to 0.5%, it is well below 2%, which is the boj's target. they have said they are even willing to overshoot, good luck. you have a lot to overshoot. last week he told parliament no need to change. hintmists are hoping for a that the boj might pull this back a bit. there are a lot of rumors about mark carney and whether he might save his job. ourhis is exciting news for asian trading morning. let's take a look at australia. encouraging signs underneath the numbers when you look at labor and etc.. of 27are still six
7:39 pm
economists in our latest survey that are looking for a cut. the latest gdp number was so strong they cannot do anything. if you are a faithful viewer, we were talking a lot about the reports last week. let us jump back into the bloomberg and another chart. -- 46.01. -- at the white line, that is the cut. people are not looking for a cut. at 90%, the blue line going up shows people are changing their view as they see the bank of island has been affected and trying to ward off a big brexit break. we have been recording that mark carney, the head of the bank of england, who would been criticized by many people in the u.k. government about how bad
7:40 pm
brexit might hit the economy, he has said he will stay in serve out his eight-year term. earlier, the u.k. business secretary threw his support around carney. we will see how the markets react, he has a lot of fans out there. i presume many people will like this. yvonne: wait to put that room addressed. thank you. we have more lines coming out of dbs after it announced it will buy a wealth management company. we are seeing a price on that, $110nd $10 million -- million. they are now targeting this deal , a full deal completion by early 2018. to talk a little bit more about the deal, return of equity earnings one year after the completion, didn't say when it came to the asset under
7:41 pm
management that this could add about $23 billion in wealth to the books after the transaction. also talking about the discussion here, the focus on injured -- international banking and asia, and they are using the sale to increase their capital ratio by 15-20 basis points. for anz.a net loss we're still waiting for their shares to trade, they have been halting pending the announcement. nontime, opec members are closer to agreeing to a deal. the group needs to finalize how to implement the cuts by its meeting on november 30. we have more on this now. i think the agreement was they're going to keep talking.
7:42 pm
>> essentially. there was some progress made in the methodology for making cuts, but they will continue talking. no agreement on country quotas or supply commitments, and i understand supply commitments were not even really brought up at this meeting. opec basically agreed to output of a range between $32.5 million $33.5 million per day. to push still enough oil prices to a 15 month high. they have dropped now because they are weakening a little bit from this inability to agree. -- iraq and iran are both wanting to be exempt.
7:43 pm
with the world biggest producers unable to agree amongst themselves, not opec nations are not exactly given an example to follow in terms of cutting themselves. some have already said they're not really willing to cut. they're going to continue talking, right up to the time when they have to have the ministerial meeting in november. ramy: the lower crude prices biggestn -- china's companies are no exception to most all that recently. >> they have seen a drop in spending and output. it is essentially going hand-in-hand. domestic crude output is down about x percent in the first nine months or so of this year halfne company spent about of their target in that same period. producers are not doing so well in china.
7:44 pm
ramy: thank you very much. up next, after all central bankers have done to prop up bond prices, it did not take much to city global debt market reeling. the worst bond rout in three years, next. this is bloomberg. ♪
7:45 pm
7:46 pm
♪ ramy: welcome back. yvonne: "daybreak asiayou're watching-- you are ." ybreak asia let's join our guest here in the studio. let's talk about the politics we got erupting on friday in the u.s.. the markets are a bit nervous, what you make of this?
7:47 pm
could this put a meaningful halt to this bond rout? >> you saw the stock market clinton started to a send in the polls, starting to rally. more volatility in the markets. yvonne: what about the bond market, there seem to be two arguments that the central banks are tweaking. a lot of naysayers that say that the demographic trends we see show that yields remain low for long as you have this asian population that are counting on fixed income. mesh short-term we are dealing with inflation, everyone is talking about 3% come february. i think what we're talking about here is a bit of a reset.
7:48 pm
the yield pushing up, we'll probably go close to 2% in the two year yield and we will see people get interested again. at the end of the day, you're facing 0% interest rates everywhere. will be attracted to the u.s. bond market in particular if we get a bit of a selloff. yvonne: do you buy into it? when you buy stocks and bonds which both seem expensive right now? >> it is tough to see long-duration right now, but people are still very worried about their income levels, you have a lot of insurance firms trying to keep particular targets, they have not been your expectations. when you see yields rise, you have to start stepping back into the market. ramy: we are seeing a global route down 3% or so in terms of what we saw earlier. apparently some folks to not get the note. i want to show you this graph, a seven-year note offering in the u.s. last week.
7:49 pm
it seems to be in outlier. i want to know you make of this. >> we have had a lot of supply coming through, especially in the corporate credit market, record levels there that are weighing on everybody. base yields are reset here because there were a lot inflation numbers. we see come to on the real yield, driving yields up, less of the normal yield. ramy: let's talk about cash position because it seems a lot of people are pushing into cash. week, and investor was telling us she has something like 10% in cash. what you recommend? >> and bonds, people are thinking about liquidity, so they have been running in cash anyway. most on funds tend to be closer to 5% if you're running credit portfolios today. that he liquidity for the mutual fund side of the equation.
7:50 pm
-- the fronthe part of deal covered in the back part of the yield curve, you see that there is a flattening of the yield curve and then moving into the front part of the curve. if not cash, what other kinds of assets should be or could be a strategy? >> in bonds today, we have had credit spreads come in dramatically. do you really want to play long duration credit spread bonds? probably not. you start to move into the front part of the yield curve again, you do that for the role and carry. that is less risk in your portfolio while not giving up on the income, which is particularly important if you're , and to be sitting in cash this is an extended. of time, we are getting less rate hikes potentially in 2017, it will be costly.
7:51 pm
thanks for your time. breaking news out of japan, industrial production was unchanged the month of september, that was an estimated increase of 0.9%. 0.9% afterput rose an estimated rise of 1.9%. we're seeing gains of the year on year figures being less than what was expected. pretty bad inflation trends last week out of japan, down half of 1%. coming up next, how the world's biggest cattle trade is at risk from indonesia's growing appetite for a cheaper alternative. this is bloomberg. ♪
7:52 pm
7:53 pm
♪ watching "daybreak asia." australia supplies
7:54 pm
indonesia with more than half a million live cattle each year. as now that may be at risk frozen buffalo meat from india starts entering the market. for more, let's go to our reporter. are all worried sterling cattle ranchers? reporter: they're getting pretty worried. the last few months, india has been allowed to export buffalo meat to indonesia for the first time. australian cattle ranchers supply indonesia with more than half a million live cattle each year. that is the biggest seaboard cattle trade in the world. it amounted to have the billion australian dollars last year. estoril he accounted for about 80% of indonesia's -- australia
7:55 pm
accounted for about 80% of indonesia's red meat. the cattleerson or association said the threat is very real. yvonne: what about in terms of quality? cattle thinkralian they are selling a superior product? better, buts, it is buffalo is obviously cheaper. we are hearing that it is selling it in the -- indonesian markets for about 40% cheaper than australian beef at the moment. there is a burgeoning middle class and indonesia, but many people are still below the poverty line. indian buffalo meat is very
7:56 pm
and noodlecurries soups. ramy: what does this mean in terms of the indonesia-australia relationship? reporter: cattle sales are really at the heart of the indonesian-australian trade alliance, and that relationship is still recovering from about five years ago. there was a lot of turmoil when australia abruptly canceled its exports into indonesia due to allegations of cruelty in indonesian abattoirs. there's been a lot of tensions between the two nations and at the moment, there is a trade pact in the balance as well when -- and when the indonesian president visits australia next month they are hoping to make headway on that. ramy: thanks very much.
7:57 pm
in theaters this weekend, "inferno" failed to take the top spot in his debut, indicating the dan brown series may have flamed out. it was expected to generate at least $20 million in sales and took in about $15 million. "tyler perry's boo, a halloween" did well. yvonne: lots to catch up on the movie front. ramy: lots of interesting movies out there. don't change the station because asia's first major market opens are minutes away. seeing that oil sinking, and mixture for stocks this morning but certainly that fbi probe reopening
7:58 pm
investigation into hillary clinton's e-mail is going to weigh throughout the week. industrial production numbers in japan, as well.
7:59 pm
8:00 pm
♪ yvonne: dbs do you buy anz's divisions and asia. ramy: losses ahead with global equities facing the first monthly drop since june. yvonne: the polls tighten as a top democrat says the law may have been broken. nosedive as shares
8:01 pm
competition drives down fares and profits. yvonne: this is the second hour of "daybreak asia". i am yvonne man. i am ramy inocencio. we kick off a second hour of "daybreak asia" with a quick check of where we ended friday. .3%, markets higher when we had a surprise number four u.s. gdp, but that went into the red. yvonne: what a development just nine days before this election. shares down,ng anz the headlines about dbs buying five operations in asia. a loss here, so
8:02 pm
investors not liking that news, down .8%. let's get more at the market board. 20 740 is your starting after it announced it was divesting and selling its retail and well management is next. 27 .40, down .8%, not a big move there. we are broadly sing risk aversion. austria looking like this, mix, financial space, but the big story is the greenest of the green, 1%. if you take this out of the equation, a decline across the index. gold prices, a lot of risk aversion friday driving up the
8:03 pm
gold price. can we get the gold price up, please? mining stocks, to bring down, 14 out of 16. new crest getting an a grade. have a look at those falling as well. getting an upgrade. have a look at those falling as well. numbersouth korea, gdp on friday, and the e-mails and , stocks,fbi said bonds, gold, futures on the way down, japan down .4%. a lot of it comes down to money coming back into the japanese to 104.50.oser
8:04 pm
there is a lot of risk aversion, perhaps also retracing some steps, coming off a big week for currency markets, the dollar, in fact, so don't be surprised if we see a little taken off the table. currencies,ning have a look at dollar-yen. 104.57, the currency in focus. the mexican peso, two day chart, back above 19 the currency following this poll suggesting closer than expected race. good morning, mexican peso. 19 is your current level. weakness there. guys. yvonne: thank you. let's stick with dbs, ready to buy anz's retail and wealth businesses are 110 million
8:05 pm
singapore dollars above book value. trying to easenz concerns for investors, saying asia is still part of its core strategy. what is the latest? haslinda: you said it, dbs agreed to pay 110 million singapore dollars above book. it includes a 40% stake in , andesia, 20% of malaysia 20% of shanghai world commercial. ural commercial. earnings, one year after completion, down progressively from the second quarter of next year. that most oftold the people in the affected units will join dbs. for dbs, it is an expansion
8:06 pm
mode. a recent report says it is now the fifth largest bank. the momentum helped by its acquisition and 2014. is selling off operations that have dragged down its return on equity. its overseas operations, especially asia, have consumed a third of the banks capital, but has accounted for only a fifth of profits. you can understand where anz is coming from. anz says it will take a loss in the sale. earnings,did report third-quarter net income past estimates here. can call it no change. net income at $717 million. provisions for bad loans and other losses offset gains from
8:07 pm
non-interest income. has been weighed down by the oil and gas sector. more and more singapore companies linked to the industry are struggling to repay debt because the man for their forices -- because demand their services have fallen. those saying they are in default. swiber has been forced to reorganize debt under judicial management, so it has been painful for these companies to the smaller rivals like ocbc have reported higher nonperforming assets, hire provisions for bad loans. ocbc of 5%. singapore banks under a lot of pressure because of a slowing economy plus that slump in interbank rates at a one-year low, sell tough times for singapore banks.
8:08 pm
-- so tough times for singapore banks. ramy: let's get to first word news. south korean lawmakers meet on monday to discuss cabinet. neutral cam investigators claim the president allowed a close friend to metal in state affairs. apology has not stopped protests and members of parks potty amanda action -- party demand action. petrochina the latest oil giant to struggle with the worst energy crisis in a generation. profit slumped as low crude prices and natural gas earnings eroded earnings. net income fell to $177 million. higher earnings from refining and chemicals were overwhelmed by losses on production.
8:09 pm
after 18 hours of talks, opec is no closer to a deal with other oil majors to restrict supply. talks onmembers in the saturday, saying internal divisions over the role of iran and iraq have prevented a broader deal. incussions will continue november, days before opec is supposed to finalize the deal. the third powerful earthquake in two months struck central italy, toppling buildings. no serious casualties. and magnitude 6.6 was the most powerful recorded in italy since 1980. many buildings have been evacuated after tremors and the august quake that killed almost 300 people. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. ramy: thanks very much. with just over a week left to
8:10 pm
go, the race for the white house fbiightening as a renewed investigation waste on hillary clinton support. ighs on hillary clinton support. agoe know that several days , this was a race many believed was over, the onus was on donald trump to come back and he battleground skates. race has tightened significantly because of this. what is not clear is whether that tightening in key battleground states is enough to make a difference. particularly because there has been so much front loading terms of online registration, vote by mail, early voting, many millions of voters have already voted, so a tightening of the , potential impact on down
8:11 pm
ballot races for sure. how much difference it makes in the outcome of battleground states has yet to be determined. the top democrat in the u.s. congress is saying fbi may have broken the law by reviving this inquiry. this is pretty unusual, about senator harry reid alleging this? >> this is not something you would typically see. democrat in the senate taking on the fbi director, not just politically, but saying he may have violated government says officials such as the fbi director cannot purposely take steps that would influence the outcome of an election. is a real personal critique, and it is aimed at deflecting attention away from hillary clinton and putting the onus on the fbi director and attempting to pressure the fbi director to
8:12 pm
now talk about a completely separate investigation or potential investigation related to allegations about the wikileaks potential involvement of the russian government and so forth and whether there is any connection to donald trump's campaign or supporters. this is a multi-pronged effort to discredit the fbi directors approach to wipe clean any concerns about hillary clinton and redirect attention to donald trump. yvonne: we heard from harry reid, how about president obama? is we don'tanswer know yet. it is maybe one of the most interesting questions. president obama has been hillary clinton's best surrogate when it comes to who can expound on the message on the stump better than hillary clinton can, but will he do it in this case? he has not done it so far. the comingnd most of week campaigning in key states
8:13 pm
in conducting high-profile interviews. whether he feels it is appropriate or proper or politically constructed to weigh in on this is going to be front and enter as everybody watches. , asne: everybody watches well as the clinton campaign, all blindsided by this latest development. thank you. still ahead, china's love affair, why push bikes are making a comeback. ramy: our next guest still sees thevalue in asia after first marley positive reporting season in years. that is next. this is bloomberg. ♪
8:14 pm
8:15 pm
ramy: you are watching "daybreak asia". i am ramy inocencio. yvonne: i am yvonne man. qantas shares recover after the
8:16 pm
airline warned they will take a hit from competition driving down airfares. first-half underlying profit before tax will fall between 800 million strain dollars to 850 australian dollars. security shares gaining after the company reported 25% increase in second-quarter profit. it posted net income of $289 million last quarter thanks to higher trading income. they also announced a share .uyback as it cuts its dividend >> the yen is on the weakening trend. a fed rateection and hike will weaken the currency, but that will push up the stock market. we expect markets to recover along with profit in coming quarters. yvonne: we will be watching shares of chinese banks later,
8:17 pm
icbc and china construction bank reported loan loss coverage ratios below a regulatory minimum of 150%. so far, the banks have not seen significant penalties for missing the target. face as say they could hit and profit once regulators start pressuring them. let's check back in on the markets. you just came back from the u.s. recent developments with the fbi saying hillary clinton's e-mails are being looked at. markets were rocked by this on friday. >> it is an interesting question now talking about the u.s. election. postelection, i'm sure we will be talking about the u.s. rate hike. with impact,ues but it is about understanding the ramifications, what will
8:18 pm
happen after that. haveof these opportunities not been a good opportunity to deploy capital. people areng at way position, which is quite defensively. down,: you see stocks headed for a monthly loss when it comes to global equities. fed funds futures now less than 70%, a key line in the sand on whether they will hike or not. is this just a preview of what will happen if donald trump becomes president? >> i think this is an interesting question. out of brexit, people were not expecting it. the uk market is up significantly from before the result. if we think about what will happen, even depending on your political stance, something for markets will be negative, it will be less expected than what brexit was.
8:19 pm
if we look at what candidates have mentioned, the desire for tax amnesty, stimulus, which could be quite positive, so those people think trump would be a negative outcome. around seen his comments things like corporate tax reductions, which would be positive for stock markets. yvonne: how should you position yourself? biotech? infrastructure stocks? >> in asia? from my perspective, it is different. when we look at the u.s. market you have aents, market that is reasonably expensive. when you come back to asia, you have the stock market that is reasonably cheap, so these risk events are something that ironically will make people more focused on parts of the world
8:20 pm
where could be positive for emerging markets. an ans. being in expansionary mode would be positive. yvonne: earnings season has been quite interesting, some surprises to the upside, momentum still building. people saying we could be at the end of the recession when it comes to earnings. i would sing fundamentals building up now? >> i think you are getting early evidence of that. preempt, ands markets have been strong, a lot of people asking if they have missed an opportunity. that is what most people are grappling with. we are seeing expectations set so low that we are seeing more positive momentum, and we have seen that with the recent reporting. more around margins, cash flow, less about top line.
8:21 pm
it is just the expectations of where people are at, but costs are starting to come down, so a favorable outlook. past severale months, we have seen low volatility, the fear index. at 16.2, theare last time we were sustained with june or so, but the you see this breakout potentially happening? we have been talking about that bovine lens to some kind of breakout. what might that be? think that probably has to happen, and my gut feel is interest rates start to pick up. the ability to leverage up into low return assets is a little bit more difficult. we know people are quite conservatively position. we know people are waiting for these events to occur. , it's likelyective
8:22 pm
to see an increase in stock to's version good for active investors. it can create opportunity as much as a negative if you are on the wrong side of it. x concerns are four to think about with a stronger dollar, up 4% since its august low, usually await her asia. weight for asia. talk thataring some we will not get much higher? meanstrong u.s. dollar that it is bad for merging of markets, and it is a negative correlation over the longer run, but this comes back to valuations. the valuation difference between u.s. and asia is quite significant at this point. i think that will be more important in terms of what that means for ford returns. the u.s. dollar has been strong
8:23 pm
and people often focus on that. if we look at say the indonesian brazil, weces like have seen emerging-market currencies strong. if you have a look at the rates in those markets, they are very high relative, so as the question around currency weakness, now, i think there could be some interesting areas to invest in. ramy: thank you very much. up next, a political scandal and south korea plans some of the president's key advisors, but will she survive? this is bloomberg. ♪
8:24 pm
8:25 pm
korea gripped by political scandal which has seen the president and key staff resign and put her leadership under pressure. our bureau chief joins us now. how did the scandal you wrote in the first place? lawmaker accused a
8:26 pm
close friend of the president of coaxing business lobby groups to to know nate to a foundation -- to donate to a foundation she oversaw. since then, it has snowballed and revelations that she may have looked at presidential them, may haved had significant undue influence on the president. calls: there have been for her resignation, even in peach meant. go through the details on the public uproar. -- even impeachment. go through the details. she apologized for having shared and consulting with a close friend. there are revelations since then that the woman may have had more to do with the presidential , the presidential speeches she gave, and as a result, there has been a huge public uproar. over the weekend, tens of ,housands of people protested
8:27 pm
calling for her resignation, but right now it does not seem like that will happen. stick it out, and even the lawmakers don't think they will seek an impeachment. she may stay in office until her endm in's and about 6 -- i and about 16 months. yvonne: to what extent could the scandal hurt the economy? >> the markets have been muted. it really hasn't budged. includeprevailing views one that unless she resigns, it will not worry all the markets. the scandalew is if continues, she stays in office and there is basically paralysis and the government that could have a long-term effect on the economy. right, the latest on
8:28 pm
the political scandal rocking south korea. up next, qantas shares pull out of a nosedive as investors digested profit warning. details coming up from sydney. this is bloomberg. ♪
8:29 pm
8:30 pm
is 8:30 a.m. in singapore, half an hour away from the open of trading. afterl watch dbs shares it said it was buying anz's wealth and retail units and five asian nations. i am yvonne man. i am ramy inocencio. qantas shares have recovered after the airline warned earnings would take a hit. it says first half underlying
8:31 pm
profit before tax would fall to between 800 million australian dollars and 850 australian dollars. singapore's dbs has agreed to buy anz's wealth and retail divisions. it will pay $80 million above book value. singapore,perate in hong kong, china, taiwan, and indonesia. third-quarter profit little changed at $768 million. opec tries to restrict supplies, but non-opec members ended talks on saturday, saying internal divisions over the role of iran and iraq have prevented a broader agreement. discussions will continue in november, days before opec is supposed to finalize the deal. polls taken after the fbi
8:32 pm
director revealed the of inquiry into hiller, and into e-mails says -- hillary clinton's e-mails show she may be losing support. the poll gave the former secretary of state a 46% to 45% lead. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. let's take a look at how asian markets are shaping up after we suffered a risk off after the recent fbi developments. let's go to david for more. david: which is why we are were watching the currencies. the last 10 minutes has seen the dollar come back strong, but it is moving markets early. as we head into the
8:33 pm
election, so some of these moves will be outsized. dollar-yen closer to 105 at the moment. the aussie dollar falling by a fifth of 1%. dollar strength coming through in the last few minutes or so, resulting in equity markets down, but off the bottom. the nikkei 225 closing in on that zero level. australia of, and both markets off the bottom of the day. a few movers we are following in australia, goldman sachs cutting and crown resorts getting an upgrade from ubs. earnings out of japan, these three stocks taking the biggest hits, cutting their operating profit outlook between 10% to essentially some downgrades
8:34 pm
when it comes to these companies looking at their full-year forecast. yvonne: thank you. shares of qantas have come back from steve early losses after the airline warned first half earnings may fall by as much as 13%. paul allenore from in sydney. we all remember in august when qantas announced a record profit. what is weighing down the airline? it is a volatile business. aviation shares have always required a good strong stomach to invest. airlines that big beneficiary of cheap feel prices, and qantas' fuel bill has calmed down -- has come down. we are seeing increasing competition across the board for qantas, international revenues
8:35 pm
down 6.9%. revenue down 2.9%, and that has weighed on profit. first-half profit expected to between 800-850 australian dollars, down from 921 million a year ago, and a similar story for revenues, 3.9 8 billion expected, down from 4.1 billion on the year. just seeing year to date change, down 27%. is the qantas ceo having to say about all of this? paul: he is putting a positive spin on it. he has said the impact of all of this is tempered by competitive advantages. domestically, qantas continues to do well. you mentioned that share price, there has been a wild ride this morning. off 9% at one point
8:36 pm
when this trading update was released. 2.2%, so maybe we are seeing some short covering going on here. ramy: a lot of turbulence as you said. onwe kick off the new week wall street,'s signs of growing -- on wall street, there are signs of growing push back for the at&t-time warner deal. goldman sachs is said to push apple on a rival bid. >> the deal will likely continue to be in the spotlight on monday. shares have been under pressure for time warner with increased scrutiny on the deal. now reports of the weekend could add to the volatility. the new york post reporting goldman sachs pushing apple to make a rival bid. the wall street journal having a competing story, saying that apple apparently took a look at time warner and nothing came of
8:37 pm
it. agreed to at&t acquire time warner for $84.5 billion, touching off deals inon about other the media world, also putting a spotlight on the regulatory scrutiny for this deal. yvonne: we have some other stocks we are watching this week, but what are you looking at? hughes and ge, the wall street journal reporting they two could reach a deal this week for some kind of partnership. use, it was ups as much as 9% on friday. ge said to be the acquirer, and many say the combination would boost the oilfield cloud of both companies. in terms of earnings, there are some marquee names out this week, facebook reporting earnings on november 2. according to one analyst, facebook is likely to beat the street.
8:38 pm
alibaba also reporting the same news over the weekend is very interesting, a german newspaper reporting alibaba in talks with some large german retailers over potentially opening online shops for chinese clients. customers are increasingly looking for product made in germany. yvonne: thank you. some breaking news out of seoul, korea, hanjin surging. after thek at shares financing program to include bulk ships and tankers. shares surging more than 25% this morning out of seoul, korea. south korea said to double the ships financing program to $2.4 billion. that is the latest news out of hanjin. hyundai heavy when
8:39 pm
spin off his non-shipping business. industrial production in japan unchanged in september, falling short of expectations. it is the latest snapshot of japan's economy and central bankers discuss monetary policy. weight should we put on these factory output numbers? what is the biggest take away for you? industrial production and retail sales came in flat, weaker than what the market had expected. coming on the back of consumer price data which shows a drop last week. weakening household spending data, all still pointing to a relatively weak economy. what is interesting also is that with corporate earnings this week, we are expecting companies about 15% drop in
8:40 pm
operating income in the quarter that just ended, so even on the corporate front, things do not look good at all. ramy: what implications might this have on japanese policy? we are looking ahead to the boj tomorrow as well. the expectations are that the boj will stand pat, hold interest rates where they are. the reports have not changed that is on the lack of information so far. still think monetary policy alone cannot change the situation in japan, and this has to come with more effort from the government in terms of fiscal spending and structural reforms. ramy: thanks very much. signals, investors
8:41 pm
watching for any policy clues when global central banks from the fed to the boj meet this week. we will look at whether they are expecting any shifts and strategy, next. this is bloomberg. ♪
8:42 pm
8:43 pm
ramy: welcome back. you are watching "daybreak asia" . i am ramy inocencio. it is a big week for central banks with four of them meeting, none expected to make a policy change. markets are hoping for signals about what they might do. our central-bank washer has been watching all four of these banks. what is the focus for the fed meeting? ndsstarts tuesday, e wednesday. the gdp reports, the third quarter number that came out on friday, rose more than expected, 2.9%, almost double what we saw
8:44 pm
in the second quarter, 1.4%. bloomberg intelligence says look at the details, not as strong as the headline, but enough to seal the deal for the december interest rate increase. final sales to domestic purchasers, one of the thing ,hat drove that gain overall surging soybean exports, companies rebuilding inventories. out exports and inventories, now you get a view of the spending overall. from 2.4o 1.4% percent, not a strong signal for the fed. the rate hike odds remain strong. linean see that white stayed pretty flat around 17%, but look at that turquoise line. it has been steadily climbing. it is at 69% going into u.s. trading.
8:45 pm
you can see the odds have not moved there. now people are going to save what will the monetary statement signal. people want those kinds of words in a statement, and we will be watching friday's job report. ramy: so much happening this week. the fed pushing to raise rates, possibly december. yenboj policies pushing the to the worst since june. >> our tokyo bureau chief saying industrial production, retail sales -- retail sales are down seven straight months in japan. inflation was the big number last week. chart,ook at a bloomberg 30 910 if you want to follow
8:46 pm
along on your bloomberg. the white line year over year down 0.5%. is nowhere near that 2% target yet. governor kuroda said he would like to overshoot and race inflation expectations. last week, he told parliament that he sees no need to change the short-term and long-term levers of policy. ken's ofd like to see hints about controlling the yield curve. according to the financial times , a lot of supporters on the boe will be happy about that.
8:47 pm
let's start with the reserve bank of australia, no change expected, well below their inflation target. there are signs that inflation may stabilize. gdp,r the boe, a strong stronger than forecast. the white line is the expectation for a rate cut. they flattened out. traders are now betting on a hike after the middle of next year because the economy as holding up well in the u.k. we will see if the updated projections from the boe on thursday support a better view than they had right after brexit. thanks. now for a look at some other major events in asia this week. tuesday, china manufacturing pmi data for october, official figures and the private cage are
8:48 pm
expected to come in at 50.3 and 50.19 respectively. growththe just that remains slow but steady in the first month of the fourth quarter. high as alibaba prepares to report on wednesday. consumption has slowed in china, but analysts are expecting as an will boost the bottom line. some are concerned about the crackdown that make it growth in the medium-term. alibaba's singles they promotion is that the end of next week, a big day for them. ,ednesday brings important news expected to announce plans to coproduce paul volcker's in china. last week, volvo reported robust sales, especially for the suv and hatchback. slice of to take a china's rapidly growing interest in hybrids, which could rise to 20% by 2025. finally, we will keep a close
8:49 pm
ta on friday when it releases full-year results. takata said to be considering bankruptcy protection in the u.s., although no decision has been made. ramy: a quick check of the business flash headlines. the u.k. business secretary has confirmed nissan secured post-brexit assurances to keep manufacturing there. promised nissan the government would negotiate to keep terror-free access and the eu and offered support for training and innovation. they announced a new investment in the u.k. after warning it could move its european manufacturing elsewhere. shanghai electric will pay $1.8 billion for a controlling stake in a pakistan electric company.
8:50 pm
it gives the chinese utility access to 2.5 million clients in karachi alone. is purchasingric the state from a group that has held that since 2009. singapore and social media company looks to take over relatively -- relativity media with an option to become a majority shareholder in the next two years. l.a. business journal reports the sale could be worth between $150 million and $250 .illion up next, china's big tech firms take their fight to the streets , but they cans agree that two wheels are better than four. that story is coming up. this is bloomberg. ♪
8:51 pm
8:52 pm
ramy: you are watching "daybreak asia" i am ramy inocencio. yvonne: i am yvonne man. what you are watching? difference a week makes. hillary clinton's lead evaporating after the e-mail controversy raises its head again. with the boj and the fed meeting
8:53 pm
this week, what more can central banks do in the face of retreating global demand and trade story? we will also look at the outlook when it comes to metals and materials. minerals joins us to talk about the outlook. of crisis, mistrust, missteps, australia back on track when it comes to exporting beef to indonesia, but now a new threat in the form of india. yvonne: thanks so much. -- ak at other headlines look at other stories making headlines. two former goldman sachs employees forming a hedge fund by analyzing big data.
8:54 pm
a source tells us they are looking to start trading in january with $100 million to $200 million in capital. ramy: credit squeeze looking to rein in costs. ways tos are on about work together, which potentially include sharing databases and services -- servers. ubs has also said it is in talks on cost-sharing with other lenders. investorsazon spooked after showed it is willing to sacrifice profit margins. retailer's biggest reported third-quarter earnings which miss estimates, but said it will continue to win market share by offering quick delivery on a growing assortment of goods. jeff bezos told charlie rose that the company has one key
8:55 pm
focus in driving success. china's love affair with the automobile has made those traditional images of the street filled with bicycles a thing of the past, but the bicycle is making a comeback and it is being supported by some of the country's biggest tech names. ♪ after chinais back started ditching them. today, it is all about bike sharing, powered by startups. they custom build the machines, combining cutting-edge tech with sleek design. >> how to make people feel like i am not writing a bike. i am driving a ferrari, right? >> design is easy to use. you look at your mobile app, find a bike, and then simply scan the qr code and it unlocks.
8:56 pm
the smart thing about these bikes is there is gps built-in, which means they can beat track, and you can pick them up and drop them off pretty much anywhere. back to the tune of $100 million, and it has rolled out operations in four cities this year. the company is not profitable yet, but banking on rapid expansion and the data to drive revenue growth. isthe target for each city towards the end of the year to have at least 100,000 bicycles per city. mobike faces stiff competition. it's arrival was recently died and $500 million. the team is confident tech will keep them ahead of the pack, and they are eyeing opportunities overseas. >> we are looking to expand to the u.s., new york, san
8:57 pm
francisco. mobike are betting on a new generation of commuters coming along for the ride. ramy: the tech world restores the old world. sony's thriller "inferno" failed to take the top spot in its north american box office debut. only knew weekends release and expected to generate at least $20 million, taking just $15 million. filme: tyler perry's retained top spot. withy more to calm "bloomberg markets: asia". starting. ♪ [ corvo ] delilah won't go with a fight.
8:58 pm
8:59 pm
she outfoxed me, and i never saw it coming. but i was corvo before i was the royal protector. ♪ i don't know what grand scheme you've got under way, delilah. but i'm coming... to put you in your grave. ♪ so it begins [ male announcer ] rated m for mature.
9:00 pm
♪ 9:00 a.m. in hong kong, midday in sydney. i am haidi lun here in hong kong. this is "bloomberg markets: asia." ♪ haidi: most asian stocks falling, energy producers take a hit as opec fails to reach a deal. wealth andanz's retail divisions, taking a $200 million loss.


info Stream Only

Uploaded by TV Archive on