tv Bloomberg Markets Asia Bloomberg August 19, 2018 9:00pm-12:00am EDT
>> the markets coming on board for the first trading day of the week. start. muted down by about 4/10. looking likeres more of the same. been very busy for investors. they're looking for a little bit of common. looking at how they are dealing with uncertainties in china. in position for the new tit-for-tat tariffs, that will
tariffsting additional of chineselion worth products. willng has already said it boosted and they have infrastructure projects to help sustain the economy. forre continuing to watch what is going on with the u.n.. that willhave these get close to 70's. we haven't heard much from authorities at the moment. let's take a look at how the market are going. upking at how we are setting for this trading week.
you have the futures just nudging slightly, that is looking study. that was demonstrated by setting a stronger than expected, seven days in a row. you can see the chart. as commerce banks point out, it looks like they are finally sharing common interests in according to a new york times china, they will pressure in this week's talk. losses, thatys of is within half a percent below the 2016 below and back then, markets panicking over the chinese economy.
notquestion is whether or the talks going is are different than will the salt best 2016. let's look at how investors should be positioned himself. we always talk to you when you are raising cash. >> interesting. and theree uncertain optimism and that has been washed out. our hope was you get this diversion's growth and it pushes you up. that has not been the case and that is our situation going back now. february.e in visit looking as volatile?
-- visit looking volatile -- is it looking volatile? backtrack, youhe have isolated buyers, but at the same time, you have some adding few. the possibility is very high right now. also, very different. having short positions and using currency. >> where do we go from here? >we have been midterms coming u. is it mere politics? >> i think the midterms will be greece come. tradition for a
dissipated, that is what i want to get at. tariffs are just more than the trump administration. china is becoming too quick -- to powerful, to quickly. i think for that reason, the notn tensions, you would war, there will be winners and losers. .hat should be our focus could talk about buying ,ectors which do really well cybersecurity companies.
there are a lot of winners and losers. there is more of for china to build alliances with europe, so after all, the job politics are shifting and we start to get different alliances. thee are talking about teflon nature of u.s. markets. destruction of emerging markets here in asia. u.s. stocks brushing off the volatility. of risk aversion likely to continue and do you see any cracks? >> when you look at u.s. equities, they are cruising all the way up.
you look at the underneath -- surface, the underneath, the dealership is defensive.t more we are look -- we are seeing more on the downside and less upside. the market is not near. also, you look at financial conditions. so far, they have been able to ignore what is happening. when financial markets collapse, it will be the lag that will impact conditions. we are not far from that. >> we were just talking about
the dollar and where we go from here. that donald chances trump makes good on what he has alluded to so far? >> it is very unlikely, but it is possible and for that reason, there is a lot of credit positioning. a prime sector because there is a risk that the ormp administration intervening is pretty high. i think it is a safe haven. bottom? a race to the where they are doing really suffering?
>> it is. those, in one of , at theen you look at same time you have trade war's picking up and at the same time you have a point that chinese haverities are trying to access leverage. it just happens at the wrong time. authorities are theng to ease on liquidity, transition is not working now. there is a lot of effort. it is all happening at the same
a forward basis, single-digit evaluation. short-term timing measure. managing opportunity as we had the september, october. there are a lot of opportunities out there and it doesn't take a much longer time frame to work through. >> they have been the beneficiary of some of the outflows. it is too expensive now, isn't it? >> i agree. . very narrow market isgot to a point where it well-placed because you have a new environment in china
spending on fiscal policy. banks, the reason they are behind is he have banks that are resolved. where do we go from here? bankss not much room for to grow. levels, it is not a bad time. think it might i towardsest areas moving defensive areas. we have allocated telecommunications health care. we have allocated to global sables.
really play at amazon versus walmart again. there are a lot of opportunities. getting our trading week started. let's get to first word news. >> report from washington saying the administration has rejected turkey's attempt for a major turkish bank. they have been told that all other issues are off the table until andrew rosen is free. turkey's credit rating has been cut further. a recessiony expect in 2019.
there trying to cancel the slump canceling -- >> an investment in his country could help reduce a deficit and he borrowed chinese muncie -- money he could not repay. >> wendy lazing government borrows money to build infrastructure that he cannot afford, that is not going to give any return, that is not good. are not against chinese companies, but we are against inrowing money from outside
having products that are very costly. >> venezuela is taking drastic measures on its economy. about $280,000om to $6 million. inflation is already at one million the year. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. >> still ahead, let's take a look at why bearish bets are piling up against chinese property.
domestic chinese assets this could mark the biggest overseas that they have tried to do. bit thing is, which of the hotels are likely to be included in what about the flagship? not wanted to percent which hotels are included, but they could include the iconic property, the walled off the story of that is associated with ping-pong and its downfall. thater manhattan property overlooks central park and another part of this package. profile and luxury focus that they are shopping around apparently. >> what kind of central buyers
are we looking at? foliois a very happy for valued at $5.5 billion. whether they will get the same amount would be interesting. obviously with the chinese government in control, they have a little bit more leeway in .erms of selling off the other concurrent that has got debt coherent china. in terms of who might buy it, , some bigation private equity outfit, a really big hotel chain depending on competition. >> thank you. just remember, bloomberg users
>> this is bloomberg markets: asia. a quick check of the latest business flash headlines. founder richard ellman will not become executive director. they are being told he has decided for personal reasons not to accept the role. shareholders must go back to restructuring. ellman supports the plan. a chinese news and video have has filed for an ipo, saying it's all a sevenfold rise in revenue. they could change.
companies.hinese canada amongst those out with their figures. here is sophie. >> we're looking at a positive start for main and market. far,st the event or so there is joe hickman, one of the companies on the u.s. list for a potential ban on national security concerns. china continuing the game that we saw on friday. coming in stronger than we expected. we are seeing it nudged slightly below are -- lower.
watch,g in on stocks to putting infrastructure players on the radar. after it grows with least two decades infrastructure spending slowed. it is a mixed bag. at thed china sliding start of the session. we are seeing some movers early. on higher sales and on consumer connections. also gainingina ground. this and a plan to sell the coal units and the price targets on the stock. senior high care
slide over 11%. this, after issuing a warning. now is john louis, one of the largest managements. than $7 billion. thank you. thes start things off with obvious question. we see what is happening with chinese equities. very cheap axis, cheap for a reason. you looking at this? >> we are not salivating at this point. in our view, there are good equities haveina performed very poorly this year. a lot of issues and everything. i think the sentiment also is
quite weak and not to mention, the trade war to do with the u.s.. we are still waiting on the sideline for the time being. are they basically pricing into these markets? say. is hard to what we have seen for instance, someweek, we are seeing rotation and selling some so it seemsctors, investors are going towards the end, but happily not there yet. about over tech alibaba, horrible week? .
sellingnk china hardware is difficult. it is highly competitive. i think people are upgrading these days, so hardware manufacturers are probably facing some headwind. here. have the nps you are in for the long-haul? risk,ing on the level of it is that she goes with you guys? for us, we have 14 different funds on our platform.
equity. high risk or it is up to the members to decide what is best, but our general advice is when it comes to investing, time is your best friend. , short-term -- on >> -- short term. >> you have a lot more retirement coming as well. we are giving advice for the more senior people. thank you. that is what we have at the moment.
about first word news? we can find out what is going on here. >> under pressure to keep a job. suggestions are growing and he could face a challenge. he is also facing a revolt on key energy policies. -- the also called at home and to help boost foreign reserves. he is been named as the finance minister. people have0,000 been displaced and at least 350 flooding ine worst
a century. say they haveials been there considerably. the two koreas are holding a rare week for families that are 1950.ession since this week, it comes after a hold on the north nuclear test. >> this is bloomberg. , we are you for that going to discuss what is driving. this is bloomberg are -- this is
>> we are back. -- bloombergng markets. >> chinese stocks are reaching record highs and expecting sales to plunge as china's economy slows. tony us now with more on the story. what is going on? > we could see this one coming a little more than a year ago. i was talking to the chairman and said if the government going to relax some of these? answer within ask for this and said you are pretty
well-informed. foreign carmakers can come in and take control. there is a lot of competitive pressure. be thehear is going to first of the major automakers to take out the joint partnership. let me just run through the main stocks. they are being backed by warren buffett. they have soared to the -- soared to the highest according to the market. we could bring up the stock can see. it is down about 36%. the next one there, billion.
stock is down more than 50% near the highest in six years. the short position any, up to a one-year high. long-term for many of the regional carmakers in the country? >> there are many of them. >> they were really else up a cousin of the structure. wayside,s going by the then subsidies are being produced. the survival of the fittest. they have automakers, many of them are big employers.
they hire a lot of people, so some of proponents say the government will come in and help bail them out, but the naysayers say all of them cannot survive. it is an industry that has too many players apart from keeping jobs. >> keeping jobs is the key emphasis as the economy is going into a slowdown and keep in mind , they are under double pressure because if they tried to buy them out, this is a company cars also imports the most from the united states to china. >> i did not realize it was the biggest from the united states. >> from the united states to china.
being mature next year in the higher and higher. we did see it is unimpressive. , it could be an impact on the earnings. sales,ng a look at home what are we looking for in the first half? the growth is something like 10% or 12%. percent or something like that. it is pretty weak. expecting a little bit
high-margin because it is improving this year. momentum is higher so that is why the margin is better. do you think what the rises, is it probably going to play into the soft target? think it is really high for them. in terms of soft target, that .eans it is a couple of them we will see how they did. the of them, we will keep
[indiscernible] >> thank you. taking a look at some of the , looking at more details. your taking a look at in for stocks. >> we are seeing a mixed bag there. and nearly 4%na on the mainland while we are seeing other players move higher . also to highlight some other movers. this retailer is one that operates in hong kong and areas like property investment.
the stock was ready to buy and this after its first half of his exceptional cost management. this stock to end on in japan. as 10%. falling as much this, after it completed its tender offer with the purchase radio -- ratio at $.38. bridge collapse is on the terminal. how denmark is struggling to keep up with this booming tourism industry.
it fall shy of the average of $7 billion. the first hollywood film in almost a quarter-century with the largely asian cast top the box office this weekend. running $26sians million helped by good reviews and social media. the mag may 20 -- you envision beijing having a look at this. what is the main focus of this state, given all the cool burning? >> it has been something of an outreach.
he landed on the southwestern city on friday evening and then he spent the day there is an companies including alibaba in geely. stage andook to the really, his mission was to say that malaysia remains open before interest despite his continual reviews. that investigation is ongoing. but taking a look at what the prime minister had to say when he was addressing the concerns
on sunday. it borrows money into infrastructure that he cannot afford. of course, that is not good information. are against borrowing money and having projects which are not necessarily very costly. >> not backing down from what he would describe as sustainable investment. they said he would welcome investment there and he welcomes money to china when it comes to in point malaysians. this is a $92 billion trading.
by the way, the prime minister expected to meet today. say in terms of deals on this visit? deals is the notable andgreement between geely proton. agreed to transfer some of the technology to help them carveout market share in their expand protonill the print. the prime minister tapping of his visits tomorrow here in beijing. >> thank you. people dig into the
that is going on at the moment. let's have a look at japan at the moment. most markets just gained some of the ground they were losing. ally of i a third. asian stocks gaining ground and gaining over 1% after the losses we saw on friday. assets and at extending gains stronger than expected for an eighth straight session. highlight what is going on despite the disappointing data that we got. we do have the dollar softening.
commodities looking rarely mix, down by about a third of a percent while steel and copper are gaining ground. it is set for a fresh all-time high unless they look at the aussie now trading. the aussie falling on tuesday which will also see the release. >> thank you. let's not forget, we have seen the correlation between the aussie and the yuan as well. ofare seeing a bit
steadiness when it comes to the u.n.. is there any in terms of the revival? the day in a row may have been set on the strongest side of expectations. there is a clear signal that they don't really want to see anymore weakness in the near-term and with the talks coming up later in the month, they are trying to take away the distraction so united states is not tempted to talk about the currency and can talk about the trade talks back on an even keel. so far, it seems to be working reasonably well. cost ofeeing the shorting a lot and that has helped to bring some stability in the markets.
. it has become much more expensive and trading slightly stronger than the offshore, so it is a good signal that traders are taking this message seriously. the sterling here, arguing the possibility of a products it or hard brexit. more declines likely to be on the way. what are people saying? >> my colleague was running about this this morning. the british government is taking the possibility of no deal and they already have to put some provisions in place. still about the lowest level it's all two years
ago, though we may see and that more on the downside. given the chance of the no deal is a bit more serious. they have been trying to push the deadline back. there deadline was october. they are trying to push it to november. the chances of getting a deal this year is not easy. not just stern. let's look at the euro. it is not exactly been falling crazy. >> this is part of the dollar strength. u.s. short-term you are very high. ae dollar is almost becoming safe haven so it is good from that point of view. the dispute from china has
helped. that was good for the dollar as well. the u.s. economy is doing extremely well. there's no question the fed will be raising rates. those factors have been making the dollar stronger overall. on the flipside, europe has had some issues. , it is not really that clear. it is no wonder we have seen a little bit of weakness. >> thank you. our mliv registered you can follow more and all today's trading on the market. that is on the bloomberg terminal of course. >> we can get to some of the first word news headlines. reports from washington say
the administration has rejected release antempt to american pastor. the wall street journal says the told all other issues are off the table until he is freed. the said triggered -- this has triggered a financial crisis. beeny's credit rating has cut further by the s&p and moody's. stop tanks from borrowing, forcing them to use the rate which is 150 basis points higher. china has launched a new check on peer-to-peer lending site as
authorities attempt to clean up the sector. they are trying to lessen risks. checks includes the views and inspections which must be completed by the end of the year. the new time government is whereng ahead with plans a bid -- bridge collapse last week. the company must constant hate andompensate the victims rebuild the bridge. a magnitude 6.9 quake hit sunday and was followed by a series of aftershocks.
company says the u.s. economy will be hit more. notar, has own business is been heavily affected. know impact.h is whatimportant for us happens. we have not seen any threats at this point. it is really hard to judge what .he eventual impact will be of course, there will be substitution effects from one country. course, parts of the tariff andease will be passed on
>> to an extent, the trade issues are coming at a bad time. fact we are, the seeing capital goods in the development of. we have had a particularly eriodg p there is a sense that it is starting to wane. already, a little bit reading into the production in asia so any sense that they would add to will be a reason to question the current decisions as well. >> where we go from here? what can they bring into the table?
i guess it is talks about dogs really -- talks about talks. >> i think the announcement about talks is welcome. china does not have a lot of levers to pull here. in terms of what china has left, you see a depreciation. more in theve much current situation. that, limits their ability to really, you're left talking helping support momentum at home.
you're talking about a monetary and fiscal policy. regulatory conditions are still pretty tight. be a view that stabilizes, so we think there is a bit more upside. in -- is there a risk that deleveraging gets cause -- caught by the wayside? >> i do think there is a genuine concern as they have always done. contract inocial
threat of higher inflation to come and some of the tariff escalation we have been talking about. for other policymakers, talking about trade all you can do is talk. it is going to lead to a ratcheting up and individual level. us in a longeaves run. things aboutf the the news of the weekend is it some engagement, fitfully in global in agreement -- particularly in global agreements.
let's show you how the yield curve is flattening. while that is going on, we have a tightening taking place in a couple more rate hikes in the u.s. what gives looking at those two things? >> this is why a lot of people were scratching their head when you have a u.s. economy looking like tight unemployment. it is are hard to see why the fed would be stopping. probably trickling through, so they are looking externally, you have to play what is in front of them.
>> a series of queries being sent to a lot of the online lending platforms across china asking certain things for example, are you raising funds or distributing other products? the idea is the p2p lenders self-review and other regulators will be involved in checking the answers. >> this is the latest clampdown across the financial sector. is it too little too late? >> it depends. the chinese government is very clear about cracking down on shadow banking, trying to take leverage out of the system in countries all , they have been
promising what we would consider extraordinary gains in returns. there is a question on whether wey can meet those the >> and seen a record number one is not seeing many. are we likely to see more before things improved? one becausericky they classify them as failures. you look at the headline numbers of last month was a record about 223. the purposethis is of the policy, to shrink the market. we obtained the story making
>> 10:29 in hong kong. i'm paul allen with the first word headlines. australian prime minister turnbull is under pressure to keep his job after his government slumped in a new opinion poll. suggestions are growing he could face a challenge from the home affairs minister. he trails the labor opposition 45% to 55% in the poll released today. he is also facing a party revolt over a key energy policy. singapore prime minister says his government will ensure the cost of housing, health care, and education remains affordable, making his annual national day speech saying many people feel their incomes aren't enough to cope with higher living costs.
a rangennounced of new schemes which would require largeswe expenditures. tit for tat tariffs with trade tensions escalating rapidly. washington will target an additional $16 billion worth of goods, and beijing is already saying it will hit back. the feeling is growing in china that the tariffs have less to do with the trade deficit and more to do with president trump's desire to force down china's rise. venezuela is taking drastic measures to rescue its flailing economy after the currency fell a staggering 95%. the initial relief is about $280,000, in the government will try to offset the shock by raising the minimum wage three point 5000%. inflation has already seen 1,000,000% this year.
global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ♪ >> just getting some news out of china, these are the growth numbers coming out. it is slightly better than anticipated. there was a move down from the previous quarter, 4.6% growth. let's go to our southeast asia economics reporter. thiss the significance of stronger-than-expected move? >> it is certainly pretty exciting. were with then we head of the economics department for the bank of thailand, he said there would be a lot more
pressure to push for an interest rate hike although that is a big debate among policymakers. they are seeing the nine ninetion -- seeing be inflation. a lot of people are arguing to stay put while the hawks are saying this is a great time to often aterest rates really low 1.5%. i think it should add more pressure and we will see an interest rate hike in september. looking a bit more defensive or attractive within em space. >> i think so, especially like last week, where we saw turkey and risks of contagion. is looking especially good among em's and in the region. others are dealing with a lot of currency weakness issues while thailand has seen a benefit.
they are seeing strong exports in the electronics sector, where there are a lot of tariffs going into china and coming out of thailand. fundamentals,ng and they have an argument going on the central bank, it is not about crisis issues, it's about whether to take advantage of these good times and raise interest rates well you can. show what this thailandws, it shows and the robust tourism and exports, you could argue with could have led to some growth. question,ask you this this seems to be the one winner. in the trade war. we expect to see more industries enjoying similar benefits.
, 4.6% growth coming through,, do we get more industries which might get more benefit. >> we have heard bits and pieces, on the electronic side this is another one that stands is,ain from the trade war and it is hard to talk about winners when they keep talking about the risk of the trade war but by sector there are certain areas that will take some orders as they are battling these tariffs. we look at autos and electronics throughout the region and other , even if some of the companies don't want to admit it or say it too loudly. >> that's the thing.
>> it is going to go back to politics -- how is that playing into the forecast index dictations? >> that is definitely the x we have several months before the early 2019 and the talk of having elections for real this time, sometimes that is delayed under the government. we just don't know yet what will happen, there's a risk on the horizon, but for now the optimists are looking at the they areals in saying certainly showing a lot of good signs that other economies in the region aren't. for now, going back to the interest rate argument, maybe it's a good time to take advantage. we will see. >> michelle,. thank you our southeast. asia -- shell, thank you so much. our southeast asia correspondent.
inare looking at a move reaction with that september meeting. second-quarter gdp at 4.6% on the year. are fx us now, strategist. let's start off with the big picture macro question. are things really that bad? you have a mixed bag of numbers coming out of china, but elsewhere, we are seeing pretty resilient growth, a record stretch when it comes to japan, southeast asia holding up. are they doing all right? think there's a difference between how things are evolving in other emerging market economies versus asian economies. in southeast asia, you were ,eeing reasonably strong growth thailand's q2 growth outperformed expectations and that suggests that even though
trade tensions will continue to linger or escalate going forward, the underlying trend of fiscalfor expansionary policy has been really helpful in terms of sustaining growth momentum. we are hopeful that this could overh investor concerns asia in particular, given the fact that we have been doing quite well on both the trade much morewe have reduce volatility compared to other emerging market. forecast,look at the the central bank's hand in raising rates off a record low, does that mean the strength we are really seeing is set to continue? >> we believe that thailand will probably be basing went to raise interest rates given this strong
first half. the bank of thailand has forecasted 4.4% growth for 2018 given a slew of numbers they received for q1 and q2. aere will definitely be revision higher in terms of numbers. it suggests that the output is and there areng, some discussions of a potential rate hike by the end of the year. with these signs of inflation coming through we think that it is likely to be supported. we think trade tensions may not be fully negative. and thailand also offers a compelling alternative as a manufacturing destination for china could potentially benefit from some diversification of production away from china into
thailand. the country's current account surplus is strong, external burden is low. if emerging market volatility going forward, a case can be made for the dollar trading below entry-level going forward. at it as a whole, whatever growth concerns, tariffs and trade wars, who do you think is most vulnerable? think the trade war dynamic -- it is mostly coming through the financial markets channel. what that means is the countries with a high current account deficit are relatively more foreign holdings, so out flow
has picked up. in this case, indonesia is somewhat vulnerable to sentiment , especially if it is driven by financial market. but on the other hand if you look at indonesia's q2 growth number, it remained at about 5.3% and suggests that underlying domestic demand might not be hindered even though they have raised rate hikes in q2. they will continue tightening monetary policy conditions, leaning against rupiah depreciation. even though there will be some increase in volatility across economies, especially indonesia and india, we think that central-bank preemptive policy stance will help incur sentiment.
they remained fairly stable going forward, even though volatility is expected to be a bit more elevated given what we are seeing in turkey. in the case of countries that thinkss at risk, we thailand has a strong manufacturing base, a pretty good alternative for investors and manufacturers to move out or diversify production away from china. similarly, vietnam also offers a good labor cost base to a potentially strong skew set for manufacturers who increase investment and potentially lower tariffs. will place between countries and more exports dependent versus financial
flows. >> quickly, you mentioned turkey. we haven't talked about turkey. what about the contagion in this part of the world? where are we with that? turkey is athat case of the country where the fundamentals are poor. we don't see similarities to down in asia. current accounts in this part of the region, it is not as high as turkey. we see some contagion but we don't see too much. they are not strong as the same trade contagions. >> thank you so much. yuan isp, why the
♪ markets:s "bloomberg asia." let's have a look at what's going on, japan set up shop or its hour-long lunch break. we do have some strength of their and here to tell us where it is is sophie. >> not much in the way of gloom, asia stocks mostly higher with trade developments to digest. we want to highlight new zealand, headed for a fresh close, commodity currencies feeling the pain. let's take a look at hong kong, housing building of friday's games.
china, power climbing on the back of their earnings reports. it is set to snap a five day decline in the yuan is gaining ground jumping the most in over two weeks beating expectations. over into indonesia stocks are gaining ground after unveiling record spending plans as it seeks to shield the economy. we arecommodities space mostly higher after the most volatile week for the complex. and you rebound helping have steel and copper gaining ground in shanghai. i want to show you how wti and brent are faring. , and we under pressure do have both oil contracts holding on to recent marginal gains but oil has lost about 11% from late june on terrorist
related was and concerns around rising supplies. >> thank you so much. sophie kamaruddin looking at the markets and oil traders. pretty wild swings in the currency due to trades with the contracts being less of a slamdunk. we have been looking at this story in detail -- we had all the fanfare when it launched in march. >> writes, it has been about we haveths and definitely seen the trading volume and interest rising, but if we think about it, it looks like shanghai still has a way to go because speculators do take a oute part, and we found
from our analysis that investors take position in shanghai for 1.5 hours. , thenternational # speculators are holding it for more than 40 hours which is a big difference. if you look at the liquidity, ,rading is focused on one check and is traders want to do orbital trade it will be running with difficulty because it has limited options. looking at the obstacles, what is the biggest for global traders and investors in terms of having to trade in yuan denomination? mentioned, the biggest obstacle for early traders is the fluctuation in the yuan
because they have to buy the oil barrels in dollar denominated -- in u.s. dollars. do with how the , andis performing globally we have seen since early may that the u.s. and china trade frictions have really made the yuan volatile. also they have to be exposed to hedging which also has a lot to do with how the currency is performing. there's also the oil storage becausech is an issue the process is extremely expensive compared to other storages. to get intowants chinese storage, it is going to be eroding their profits.
>> our bloomberg asia oil in trading reporter. let's have a look at the business flash headlines. elon musk says he went take a different approach. an open letter accusing him of outdated and inefficient use of human energy, something he rejects. tesla shares rose 9% after it interview in which he described these months as the most difficult and painful of his career. >> jack dorsey says while the use is lamentable, any attempt to block content based on political or social views are still concerned about the power of social media. he says the platforms can't keep changing, because it provokes questions about being judgmental. president trump tweeted that social media discriminates against conservative views. asian cast, warner
asians"ys "crazy rich raked in $26 million helped by advertising, good reviews, and social media buzz. >> for breaking news wherever you are we have launched, tictoc, the first global news network designed for social media, offering live video coverage and hourly updated news reports verified by bloomberg. this is bloomberg. ♪
♪ >> it is time for the battle of the charts, hitting the best against each other. let's go to adam haigh and, processes reporter. you can access these charts on the bloomberg by running the functions on the bottom of your screen. who is going to be first? let's go in alphabetical order. eric. >> the chart we have for you showing onechart is u.s. treasuries and japanese two-year bond rate
differential. the other is showing the yen. but we are seeing here is a second period of divergence. we saw the first between the yen and rate differential back in february and march when we were having concerns about fed rate policy. now we are seeing the end evength, suggesting that with a rising interest rate differential with u.s. treasuries and japanese bonds, the status of the yen as us a few than his the preceding that. people are still buying yen. all right, very nicely done. one of the trading themes we watch as we look at volatility globally. >> i think this is the only charge you need to watch this week, the one that shows us the
u.s. bond market. is all about short-term speculative positions in the treasuries market, which is showing a record short position which has been building, and when markets get to such extremities on either and you are often primed for some kind of reversal to the mean, and indeed a lot of pain. byt was the argument made jeffrey gundlach over the last few days. there's plenty going on this week that could flip the dial either way full we have jay powell himself talking later in the week, so any kind of stepping away from this rate hiking cycle by the fed or any turbulence in the geopolitical ceiling would see risk appetite die away and people wanting to buy treasuries can see a painful short squeeze. >> i like the extremists of that
♪ >> it is almost 11:00 p.m. in singapore. >> we are entering last hour of the morning session here in hong kong. it is monday. you are watching "bloomberg markets: asia." ♪ >> asian markets searching for direction. it is starting to look a little bit better for some start up hong kong, and has been swinging since. andariffs remain a concern,
merkel warns against further escalation. america will be the big loser in any trade war. >> emerging markets are feeling the heat, but thailand beating forecasts. now a rate hike seems to be in the cards. >> a message from malaysia. they welcome chinese investment, but the deals must benefit both sides. we are live in beijing. ♪ >> searching for direction, but we are seeing a lot of key markets higher. the end of last week was one of the worst we've seen for asian markets incident march but there's more positivity today. the dollar is set to claw back a little, the yen fairly steady with at 110, and you are seeing the yuan steady as well amid all the signs that china could be popping up its currency, and of course the bond market is the
one to watch with jackson hole coming true, and key earnings from big companies, including bhp billiton. i guess what comes the market is the fact that turkey will be off-line all week. >> the lack of that lines from turkey does help but suffice it news ande lack of bad good news is not going to be enough to push the higher. we talked about thailand a little bit, that's opening up, and i don't have to tell you which way the data was pointing. we are getting no more's table chinese currency but it has strengthened again. the bloomberg dollar index, and we talked about hong kong following. a better start to the week today, and this takes us to the broader view.
let's have a look at technicals quickly. msci asia, let's have a look at the other charts. onshow you this chart back friday, we were sitting right on , andf two support levels on the gtd library you can do men and we are seeing a nice bounce. , the 200 day moving average. >> that is a pretty chart. let's get the first word news with debra mao in hong kong. the report from washington says the administration has toected turkey's attempt release an american pastor with relief for a major turkish bank. the wall street journal says ingres has been told all other issues are off the table until andrew brunson is freed.
it has triggered a financial crisis in turkey pushing the lira to record lows. turkey's credit rating has been put further and the s&p says it expects the recession in 2019 with inflation to hit 22% by year-end. barred banks from borrowing, forcing them to use the overnight rate which is higher. it is trying to counter the lira slump without really hiking. venezuela is taking drastic measures to rescue its flailing economy, devaluing its currency by 95%
the official rate will lead from 280 to 6 million and the government will try to offset by raising the minimum wage three and a half thousand percent. more than 800,000 people have been displaced in 350 killed in southern india's worst flooding in the century. storms that began early have triggered landslides and destroyed homes, roads, and bridges. but officials say the weather conditions have improved can terribly and there are nearly 10,000 people that are still stranded. the australian prime minister is under pressure to keep his job after his government slumped in an opinion poll. suggestions are growing that he could face a challenge. his coalition trails the labor opposition in the poll released today. he's also fading -- facing a party revolt. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i'm debra mao. this is bloomberg.
>> deborah, thank you. if you have been watching us you will know that the malaysian prime minister is in beijing and they have signed a deal for cooperation. we are also getting a bilateral currency swap agreement and those defenses -- we are also getting something on oil , if yougy development are into this, they are also making a deal on during in. we will get you more details and there will be a press conference. we will 15 minutes bring you live pictures when it starts between the prime minister of malaysia and the chinese premier.
speaking of trade, the bigger relationship is between the u.s. and china. ist we know is that the u.s. imposing a further $16 billion of terrorists. beijing has promised to respond in kind. they will be meeting in washington this week to hopefully move the needle. to help us understand what to expect. the tangible deliveries. our senior international editor is here with us. should i hope for any sort of break? >> these are the first talks we've had with china and the u.s. in several months so it really is talking about talking, getting started, discussing the parameters of where they might be able to go and getting things going, to lower the temperature.
get to a higher level of talks. it is interesting that the chinese delegation is going to the u.s., that is something that the president clearly wanted. but it is not at the cabinet level, it is some vice commerce minister leading the delegation to the u.s. and the u.s. delegation is led by an undersecretary of the treasury. these are not the commerce secretaries and treasury secretaries and vice premier we saw at earlier talks. >> bloomberg heard from the ceo saying that the u.s. could be hit hardest. do you think the trump administration could be swayed by companies by groups pushing back against the terrorists? >> so far the trump ,dministration has not in suede
even by members of the president's own party. it is more political for president trump, this is a way for him to stand by his america first promises. to take a harder line on china. he was criticized early in his presidency for not doing that. however if there is economic fallout that is the kind of thing that could affect the imposition of further terrorists. we will see another 16 billion in tariffs on chinese products take effect. china is saying it is retaliating in kind. at this point it may behoove both sides to say let's posit and see where we can go. i think that is more likely to affect president trump. say, the new round of
terrorists kicking in, and the chinese delegation heading to d.c. will there be any progress made, or is it a sense of each side trying to make their point? >> i think this is more talking about talking. ,oth sides will be at the table that hasn't happened for several months when they came to an agreement and then the president called off. be a good seem to first step of seeing where they before they come to any kind of larger agreement. >> our senior international editor joining us from hong kong. days when on the uncertainty was enough to tap the brakes on tightening. we will discuss what bond traders are expecting from the jackson hole symposium. thend later on in the show,
♪ welcome back, you are watching "bloomberg markets." a giant of the fixed income markets, have a look at this. from --er, we heard saying that the buildup of these speculative short positions is setting the traders up for more pain. to tell us more what he means and what the numbers look like, our global markets editor joins us, he has been tracking the story all morning. obviously we have to watch the market closely anyway, but
especially at these levels, i'm guessing. >> i think the point here is that when you get to such extreme levels of the market there's a good chance you will get a swing in the other direction if you get data coming through that takes you one way or the other. what we have now is a set up in the u.s. treasuries market and you can see it in your gtd library. it shows you how extreme these short, speculative positions are. we have been building these records for some time, we got up level in some people bought it off. the latest data shows us that we have hit a fresh record, and what this is doing, anything treasuries,d to the whether it is the fed dialing back from rate expectations or
some kind of trade situation between the u.s. and china, if you see a flood of money into treasuries some of them could get squeezed pretty hard and in a very pronounced way. that is what they were articulating in their brief tweets late friday. it's a reflection of the data and the extremity in the market. >> a lot of catalyst for the bond market because we have the jackson hole symposium. that we gotbefore the minutes from the meeting which took place at the start of the month. wednesday and then we moved to the jackson hole later on in the week. it will be the first time he gets the chance to speak about any of the market turmoil that has been impacting global markets, most notably what's
been happening in the space and what is happening in turkey. whether or not he says anything on those topics we don't know but what we do know is that the bond market at this point is very much reflecting a september hike but they are still a little unsure about the december hike. thating he says to confirm or any language he uses which says he's not learned about global economic factors, we could easily see some fairly givennced in the market that it is a speculative short position. >> our global markets investor, thanks so much. our next guest expects the yield curve to steepen so let's bring in ryan. adam was alluding to what we could see this week with the bond market but i want to show you another chart in our library
showing that there could be further flattening with the yield curve continuing to narrow. that's opposite to what you were thinking. >> yes, that chart is interesting, but the economics behind the steepening trade is also interesting. you're getting paid to wait for it to steepen and you are already seeing that. when we talk about a flat yield curve, we are looking at maturity in the yield curve is actually pretty steep. the flatness is from i've years on it, and if you put it makes the case for its elf. then you have a flat yield curve which will give you the same sensitivity. but if you look at the short interest, it probably expect some short. marketshe main focus in
is simmering tensions between the u.s. and china bubbling underneath everything you see. but could be perhaps putting too much on this as a trump issue, that it could stay? data,you look at the exports plus imports as a percentage of gdp, it peaked in 2008 and 2009. ago, and 10 years since then we have been fighting a cold trade war, not an countriesr, in that are reassuring or manufacturing capabilities and bringing them back on shore. president obama went on long way to help the efforts reassuring of the entire supply chain and what we have now is
trump, who takes the temperature of the market and public very well pointing to a problem in coming up with a solution that >> pleasure to have you. i wanted to bring one of your points that you made to juliet. the fed funds rate, it is steeper, that anything beyond that is flatter. isn't that the problem? end, whathe short that tells us about the u.s. economy, how can we say it is steepening if we are to getting people coming out of the long and? >> i think if you understand why the curtis of what from 10 years out, then that gets rid of the uncertain and gives you the basis on which to put a steepener. of look at the ownership treasuries, it's between 31% to 40% of the market up to 10
years. the fed is almost 56% of the market and it is creating an undersupply. as the senate normalizes. but as it rolls off, that undersupply is going to be floating around. thatat you are saying is flattening them a few years ago, it's not exactly an accurate indicator, or the recession signaling mechanism of the yield curve is wonky because the fed has presence across all of. said it owns almost 60%. the thing about qe is that you don't know what it's going to do to the market or the economy. out andthey are pulling
it seems to have had some unexpected results. >> very quickly, one of your contrarian views is about china. >> there is certainly value in china. we need to explain why the weakness, it started two months ago. the run-up to the trade war started a long time ago but the firing of the bullets began maybe two months ago. the pboc has been run way to tie. >> thank you so much for coming in to our studio today. our executive director and the a.l.. remember, bloomberg users can interact. featured sohart is you can catch up on key. this is bloomberg. ♪
we want to take you to beijing where as you can see there are pictures of the malaysian prime minister. just some top lines that china is ready to boost imports of especially palm oil. one of the things that has come malaysia will strengthen its relationship to china leading up to this. there was a little bit of concern whether or not the relationship between the relationship might be tricky given that his stance leading up to the campaign -- that's not the case. let's bring in tom mackenzie, watching these events out of beijing -- what has been the main focus of our?
>> it seems like this has been a tosion from a prime minister reach out to chinese investors and business communities. despite that criticism and despite our reservations about the belt and road initiative and that infrastructure in malaysia, malaysia remains open for business. we heard yesterday when he took to the stage with jack ma, the best-known chinese entrepreneur and took questions about the business environments, this has been part of the mission, originally on friday evening, whered the headquarters they signed the deal around the elation carmaker. now they are meeting with the prime minister and is expected to meet with xi jingping this evening. but that has been the main message.we do have reservations about these major product , particularly the review that's
going on a $20 billion rail line that has been supported by china in malaysia. there are sectors in malaysia where we welcome chinese investment. as long as it is sustainable and as long as it includes elation productivity, that has been the message. >> you ran through a couple of those deals, tell us a little bit more about these details in the significant plans that have been made today. fruit famously pungent getting a topline on these memorandums of understanding that was one of them, so was the currency swaps and deals around palm oil and robert stop one notable deal was around proton. stake in thens a 49%
country's namebrand, and there's a push to get them to adopt their technology, to expand the market share and push into china with a joint venture. we will look for additional details around that deal and it will be interesting to see if the prime minister takes any questions around the report of the incarceration of hundreds of thousands of muslims. that has been put to the prime minister. but certainly traders the top of the agenda. the malaysian prime minister is trying to build on that visit. he departs beijing on tuesday. >> thank you. , china's second-biggest we will have a,
♪ 11: >> 29 in hong kong. i'm debra mao. the u.s. and china are preparing for new terrorists as trade tensions are escalating rapidly. washington will target an additional $16 billion of chinese goods on thursday and beijing has already said it will hit back. the feeling is growing in china that the terrorists have less to do with the trade deficit and more with president trump's desire to for china's rise as a global power. new storms have hit the chinese island for lombok. the quake hit sunday evening and was followed by his. reason aftershocks.
one person died during the biggest in nearly 100 houses were severely damaged. it killed 460 people. is new italian government moving ahead with plans to revoke the concession of the company that runs a stretch of highway in genoa where a bridge collapsed. the deputy prime minister says the company must compensate victims in rebuild roads. they have already offered more than half $1 billion in terms of compensation to the area. a former cricket star has been sworn in as the prime minister of pakistan, promising to stamp out corruption. he also called on workers to invest at home and sent back remittances. enron has named a new finance minister, he has are he said pakistan may need to find $12 billion to plug the hole in the budget.
primengaporean minister says they will ensure the cows of housing, health care, and education remain affordable. he said many people feel their incomes aren't enough to cope with higher living costs and announced a range of new schemes , some of which will not happen for many years and will require what he calls large expenditures. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i'm debra mao. this is bloomberg. >> thank you. you are watching "bloomberg markets: asia." i'm david ingles in hong kong. >> and i'm juliette saly in singapore. let's get to sophie kamaruddin with a check on the markets. stocks lookingn mostly higher, but on the mainland we have seen fluctuations that could be set
to snap a five-day decline. we do have chinese railway companies on the retreat after they posted worse than forecast earnings. the offshore yuan is gaining ground as the pboc set the reference rate stronger yet again. it has been charging back against the greenback. 1.6%esian stocks gaining and rallying as they unveil a budget. the kuala lumpur gauge rose. they seem to be on the charm offense this, led higher by energy, this after gdp growth came in faster than expected in the second quarter. day of trading near the session highs and this could prompt policymakers to hike the rate after it has been at
ultralow rate. prevent them from tightening anytime soon. they are pointing out that the central bank ought not to rush to make any moves amid this in rout. yeah. it certainly does put that into context. .ots of reasons thate had the gdp numbers she also mentioned. it's not too early for the bank of thailand. with the more on this tie economist at standard chartered. pleasure to have you. nice to see you. we are coming off a growth read 4.8% for first quarter, 4.6% now. the first quarter numbers, a lot
of that was inventory buildup. have you had a look at these numbers, and/or growth drivers more spread out as tumor -- spread out? claimed itshas economic recovery over the past four years, things they lost up to 2014 with political decisions. political continuity over the past four years has benefited the country, infrastructure investments are under construction, private investment has been sluggish but has started to show a recovery with very strong economic growth in the first quarter. 4.6% second quarter. >> is that good enough for the beauty to raise interest rates or to discuss raising the?
>> thailand has had low interest ands for many years provides a strong economic growth. it is reasonable to believe that the policy for interest rate hikes might be in the near future. there will be a few more meetings of the monetary, in particular in september, november, and december. we maintain our non-consensus call in thinking that is part of the policy rate hike for thailand might be taking place at the september meeting. >> there's a lot of positives to the economy that you are mentioning but there are also some headwinds. tourism is a big driver of the economy but since the incident earlier in the year and private investment is not that strong either. what are the major headwinds you are's?
>> while we are optimistic from this year into next year, we do see some headwinds in the thai economy. conceptiones weak with private investor confidence able to sustain the recent improvement in private investment. there are also concerns about the global trade dispute and whether the thai government can reverse the recent slowdown in chinese tourist arrivals after the accident in july remains to be seen. >> and speaking about the impact of the trade dispute, that is giving a boon to some economies around the globe, because it could mean things things are not manufactured in china. are you seeing an uptick in electronics makers? i think the link to the currency was not affected by the
recent global uncertainty including the u.s. federal reserve tightening. the recent concern over some emerging market countries stop this year we believe it will perform well with strong export numbers, clearly a political clarity, and also the rising expectations on policy rate hikes. we believe those factors should be supporting this year. -- ifhelp me understand the situation in thailand is doing so well, why is the governor of the central bank saying that economy doesn't need as much support but they can't determine when the right time would be for them to pull back on record low interest rates? why do we have that seemingly contrasting message?
>> our recent conversation with investors, they are reluctant to raise expectation on policy rate hikes to provide lower inflation outlook. benefits.see clear even after having strong wasamentals, thailand helped by the recent global uncertainties. central banks on the tightening path would help reduce risk of capital outflows, and we saw that in the catch up to be gradual and not aggressive. >> final question. help me understand. the unemployment rate in thailand is at 1%. i'm not saying the data is wrong but why is it so low?
>> i think there have been structural changes in thailand, unemployment has been rising recently because of how people are changing their behavior and doing more freelance work and also because of the robots in manufacturing sector will stop i think the unemployment rate for thailand has been rising recent. much, joining us from bangkok. president macron has made it quite clear he doesn't want to see rate hikes. but the nation may be headed towards tighter conditions after policymakers stopped banks from borrowing at the benchmark repo rate. let's bring in enda curran in hong kong. forcing banks to borrow from high has the same effect as a rate hike. >> exactly right.
the current benchmark cash rates, what they are doing is there is an overnight rate, which is of a higher charge antedating the cost of money, there's a feeling that if he goes step further they could force an emergency, so you could effectively have a kind of act or rate hike, which is all part of a push by policymakers to try to get some support on the lira, which has taken such a hammering. and of course there's no sign of circuit breakers insight. of like policymakers doing what they can with what they are given. that there a possibility it gets taken away and we move up higher? >> the thinking is if the
currency collapses we need some support, and if there's complete opposition to raising interest rates as the president has outlined then they may have to look at other options and this is why analysts are looking at a backdoor option for central banks to get rates higher. maybe a circuit breaker could be ,oming in terms of the market the broader em tone seems to have been lifted. >> i was going to margin that the markets were closed and we could see more volatility coming through in the currency. ultimately, what is going to stop the slide? >> let's not forget the external factors. this week jay powell is speaking at the fed and he will make big commentary on policy. if we get a hawkish tone out of him that will put more downward pressure.
we have gotten around domestic arelenges but also they looking at the global story which is rising u.s. interest rate. weekend, it will be critical. >> never a dull week. enda curran, thanks so much for joining us. after up, india steps up the worst flooding in the century with losses at $2.8 billion. we will have a live update, coming up. this is bloomberg. ♪
open of the markets in mumbai. the headline, one of the headlines, india's sovereign credit risk might be on the way up because of the currency weakness. we should be opening about 38,000 on that market. sophie is here with a closer look at markets in mumbai. >> let's take a look. games, theriday's nifty edging higher. the rupee is back below that 70 handle, rising the most is june with a 10 year yield back toward 7.8%. the rupee has been on but as you pointed out, the impact of that limited duelooking
to the relatively strong external finances. when it comes to stocks to watch, health care is in the the malaysian ihh group trying to buy a 26% stake to take over the company. the radars losing over 3% from the start of the session after the resignation of its cfo. they haven't cut to equal weight from overweight and jet airways has been on our radar for some time in the company is now saying it is evaluating attempts to as it make its costs more efficient. >> certainly has been one stock in focus, thanks. india is setting up relief of its states reels from the worst flooding
the century. more than 300 people died and as many as 845,000 have been displaced. our reporter joins us from mumbai with the latest. there are so many people displaced and discourse about water contamination. tell us the latest. this is the worst flood in 100 years of history and one of the worst floods in india's history. [indiscernible]
people are now getting back to their homes, and this relief -- we are looking at pretty dramatic picture is, the flood has taken place over the last 15 days. can we now say yes or can we determine how much damage has taken place to mark -- lace? india,southern state of tourism is one of the main attractions. the current estimate is around and the structure has on in the roads have been to we buildhey need other critical infrastructure.
>> more rain is forecast as well so they are racing against time in things could get worse. that rates news is are getting lower in the forecast says there will be less rain. but there are three districts with the commercial capital, and there are districts that are still risky and we will have to wait for the ravens which will reseed, otherwise it is the same. sayhe hope is needless to that the rain does subside full. for clients, tv is the
shareholders will have control to creditors in/stakes. shares of fortescue, but badly executed pancake. the average forecasts from analysts was more than one billion. the iron or minor with the final dividend. woolworths with the full net income of 1.2 7 billion fell short of even the lowest estimate. sales float in the first seven weeks as consumers adjust to a ban on single use shopping bags. they expect momentum to improve through the second.
>> let's have a look at on bank insurance. the company is denying reports it is wanting to offload a string of luxury hotels. the wall street journal is saying on van offer a portfolio of high-end property. says it is pure market speculation. speculation, it has been increasing and is now at a two-year high. expecting, --rket short-sellers are obviously watching. it is a fairly leveraged company -- the x activation
>> it is good to see sales growth. we see them coming down a little so it is still very high. and also we see some risks. the funding costs, it is a percent everywhere. we also see calls for funding going higher and higher. -- home salesed have grown pretty weak compared to rival sectors. what are we expecting in the first half? i think for the first seven
i believer-over-year, that the situations are going to tighten over the longer term, so margins weterms of overallbe expanding, so the quarter is still pretty positive. 6% -- is thatup going to help a lot of companies reach their sales targets? >> we still have five months to think the momentum will not be as strong as before.
they had a really high target this year so they will have 40% and compared to last year they have raised the target. i think they won't have the high possibility to raise targets further. think people are looking for a positive catalyst and they might be. >> our intelligence real estate analyst joining us in hong kong. it is a very big week for markets and if we have a look at havewe are expecting, we other earnings including china telecom and cftc pharmaceuticals. a little bit of upside coming through in the stoxx. and hopefully things will come in higher. the european commissioner for the economy will be joining our colleagues in europe in a few
announcer: the following is a paid presentation for theraworx relief with dr. drew pinsky. ♪ dr. drew: if you are one of the millions of americans who suffer from muscle cramps in your legs or feet, relief is finally in sight. hi, i am dr. drew pinsky. and today i am here to share some news that got me excited when i first heard about it. it is called theraworx relief. this life-changing product is clinically proven to quickly relieve the discomfort of muscle cramps and also prevent muscle cramps before they start.