tv Bloomberg Daybreak Asia Bloomberg October 5, 2017 7:00pm-9:00pm EDT
♪ yvonne: 7:00 a.m. in hong kong come alive from bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." u.s. stocks with an eighth straight win, the s&p 500 cap's its streak since july 2013. they await payroll numbers as hawkish comments strengthen the case for higher rate. betty: from bloomberg's global headquarters in new york, it is after 7:00 p.m. this thursday evening. catalan leaders said to be stepping back from immediate independence. spanish banks show a willingness to pull out.
delivering goods on amazon's plans to drop fedex and ups and do the shipping itself. ♪ betty: there is not much that amazon cannot do these days. we are watching headlines from christine lagarde. she is at a conference in boston the head of the imf meeting next week. theis making comments on tax reform plans here in the u.s., saying deficit widening tax changes are not "advisable." that is an understatement. globalization is a baggage word left for those kind. also come a surplus nations must take advantage and invest, return that money and invest.
also noting the imf is accommodative of the boj and ecb. interesting, very timely coming from lagarde. especially come of a past the budget resolution. one step closer to some kind of tax reform from congress. that big test will be when the senate continues to stick with the proposal we do see. they are not as keen when it comes to budget deficit. similar to what we're hearing from lagarde. it is surprising come other republicans that are supposed to be deficit hawks have not come out as strongly as one might expect. in the meantime, here in the markets they are sanguine about any showdown on taxes. let's look at how the markets ended up today, giving asia a left on this friday session. the s&p higher by 0.5%. the dow jones up 113 points.
1%. wedaq up by almost have a jobs report tomorrow, it gives you a sense the markets are disregarding the jobs report. normally they would be unchanged ahead of it. i don't think anyone will be looking at those numbers. yvonne: our analysts are calling it more a weather report. we saw momentum coming through on the wall street session, which was intriguing. asian stocks were poised for the best year since 2009. how new zealand is faring on this happy friday, up 0.1% for the nzx 50. the kiwi at .7112. 200.y, up 0.4% on the asx
.7792 for the aussie after that let down in retail sales. we are talking about the open in japan, futures unchanged. looks like we are seeing a bumper in tokyo. dollar-yen, 112.82. you mentioned a showdown, we got that with prime minister shinzo abe. plenty more to come. markets in china remain closed for golden week harvest moon festival celebration. wrapping up golden week we talked to the resort international, talk to them about how this week has been for them. betty: looking forward to that interview. let's get to first word news with courtney collins. has dropped trump to the strongest hint yet he may act on the iran nuclear deal. he said they are not living up
to the spirit of the accord into will be discussing his response with military chiefs later. administration sources tell us he may leave the deal in place, but ask congress to tighten oversight laws. the e.u. and russia say they believe tehran is upholding the agreement. they have not lived up to the spirit of their agreement, and we will be discussing that tonight. >>'s separatist leaders in catalonia said to be pulling back on the declaration of independence as politicians in madrid and business leaders in barcelona ramp up their opposition. they are worried it would cripple the regional economy. and several banks have indicated they are ready to move their headquarters out of catalonia, if necessary. >> the independence of catalonia is not going to take place, it is out of the question. first, it is illegal. relevant for a
community, a society. law isorcement of the going to be important in spain. may is said to be safe for the time being as senior conservatives say her opponents do not yet have enough support. she is calling -- she has been called the step aside after campaign removed her majority. the conference was disrupted by a prankster and letters falling off the slogan behind her. washington is renegotiating a trade deal that the trump administration blames for widening the u.s. deficit. we see no details yet on how the accord might be changed. the president has threatened to drop ifseoul does not agree to agree.eoul does not
regulators in asia and europe are said to be investing in charters over the transfer of $1.4 billion from the channel islands to singapore before new transparency laws came into force. the bank notified authorities after questions about the timing of the transaction, and whether the source of client funds had been properly vetted. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. ♪ we are counting down to the hurricane-afflicted september jobs report in the u.s. doesn't really matter? let's get to ramy inocencio with three terminal charts you need to know. ramy: whether it matters or not, we have to take a look. some are saying we will see a good move when this does disrupt. 918. off, g #btv
we are looking at the high and low survey for september jobs. 45,000 for contraction is the low. the median estimate is 80,000. that is on the order of half from august. i want you to take a look at one thing. this spread on the bottom right, 198,000, it is the biggest spread from the high to the low. ever since 2015, almost three years ago. there is a lot of uncertainty from analysts about how much impact those two hurricanes had on the jobs market. we will see that in 12 hours time. let's look at g #btv 6682. these of the top line numbers we're expecting when the job numbers do come out. let's look at the white line first, the unemployment rate. number,the expected unchanged from august.
the blue line is a participation rate, 62.9%. we did see this rising since 2015, we are seeing it may be plateau out. natural disasters do have a negative a fed on the participation rate. we may see it fall a bit. wage growth, around 2.5% year on year. we are expecting that to remain unchanged. from the past month -- unchanged from the past month. those of the two we're looking at. looking to the future and impact on artificial intelligence, this is often really terrific report from the chief u.s. economist for bloomberg intelligence. he was looking at the bloomberg transcript wire that looks at earning calls an investor meetings, and whether there was any mention of ai, artificial intelligence. was a lot.and there
nearly 300% in terms of a jump in mention. 53% is in technology. aspects,at the other the other pieces of the pie. 11% for financials, 9% for consumer discretionary, 8% for industrials. these werea lot of in china. a lot of companies thinking they have to get in on this action. those are your three bloomberg terminal charts. just about 11 hours time until those drop. betty: ramy inocencio with the charts to watch. i want to bring in a jpmorgan chief economist. he is one of the most accurate forecasters for the u.s. economy, according to bloomberg's ranking. michael, i hate to make it look like we are discounting these numbers, but in a way we are. what are you watching for for
tomorrow's report? michael: everyone will put in asterisk next to it. they are all over the map in terms of what the impact could be. you mentioned earlier the range is between -- we are in the middle at about 100,000. we sell 175,000 over the past few months and year. say a guess, to but it is our best to guess based on storm impacts. will have toet, we part through some of the details in terms of industry composition and so forth. i think everyone realizes that. behael: do think it will neutral in terms of the impact on how people look at the next said decision? is december people are watching. by the time we get to december we will have october and november payrolls.
also, we will know how unemployment looks. i do not think this number will be that impactful for the fed decision. more interesting will be what we see next week in terms of the cpi report for september and we two reportsother before the december meeting. i will be more interesting. there is not a whole lot of debate about growth, doing alright at least for the near term. what is more interesting is the inflation story. probably even if we have a net to the upside or downside, probably will not change. we see ao you think if big beat or miss from that itdline number of 80,000 should be more than just noise and be a+++
of these hurricanes could have a damaging or less damaging effect on the economy? michael: each number you have to read a little bit of nuance. we will have to see some of the details in terms of the industry composition, as i mentioned earlier. we do have a downshift also in august number. i would not say that raises alarm flags, but at the same time, everyone is realizing storm affects historically -- sometimes they can be 200,000, maybe even 225,000. i suspect people and policymakers will give this number until we get more details. the state data in a few weeks time and also the october numbers. betty: i want to turn to the hot topic now, who was going to lead the next chair of the fed? i want to pull up a chart, 3203.
we are talking about gambling later in our show. might want to put back here on who will be the next fed chair. you have kevin warsh, jerome powell. they seem to be front-runners. i would not say anyone is sticking out. and gary cohn are the connect as the least likely to be next fed chair. does that seem consistent with what you are seeing or believe? what about john taylor, who seems like a wildcard? michael: i do not have any inside information. i do not know what the white house is thinking. where the pic, it would represent continuity. deputy for a loyal both young and bernanke over the years. would be a change as far as how policy is conducted.
shot in termsnger of where we go from here. betty: stay with us, we will talk more about this. michael feroli from jpmorgan. do not miss our conversation with lawrence ho. yvonne: looking ahead the u.s. jobs, we will have the first reaction from white house national economic director gary cohn at 9:30 eastern. this is bloomberg. ♪
about rate hike ahead. here.en hays is we just heard michael feroli say he thinks kevin warsh might be the one. kathleen: usually we are obsessing over jobs and wages and the december rate hike. it is still there, a big deal for the markets. but right now, the real obsession is this question of who is the next fed chair. let's talk with three fed speakers and what they said today on the more plodding, persistent situation. said inflation declined temporarily, it will rise. he is on board for more hikes. harker has- pat penciled in a december rate hike.
news confirmed that neel kashkari is not in the running, ultra dovish. john taylor, he is under consideration. the former president of the powellolis said thanks will be the pic. they said also yellen would be the best choice to keep markets calm. another said the one candidate who would rock the markets is probably taylor, because he is maybe more hawkish. alan ruskin at deutsche bank said kevin warsh would boost the dollar because he is perceived as hawkish. how hawkish would he be? we do not know. betty: wouldn't taylor be hawkish, he has the taylor rule. kathleen: the taylor rule is a
guidepost, a map. john looks at a lot of things and said, this is where, based on my role, it should be. it is not a dogmatic, this is what the rates must do. they do not understand what john taylor does with that rule. betty: mike, you can chime in. michael: it is interesting that in the past year john taylor has talked about being less dogmatic. fedou look at some of the reform bills, they have been pretty dogmatic about sticking to the taylor rule or having to share a lengthy explanation or apology why they deviated from the taylor rule. it is interesting to see there is more flexibility in john taylor's remarks lately. theou were the fed chair, market would perceive that as probably the most hawkish choice. yvonne: certainly is the case.
is this really a game changer? of course the chair matters, but will be standing over freethinking individual in a whole fomc committee. doesn't matter? michael: we will shortly have three other governorships that will be dominate -- that will be nominated by the president. yellen is not nominated, presumably she will leave in february. you will have three other governors. the identity of those will matter. one thing we have learned from history, the chair has to make sure they have the board with them in terms of policy choices. if you have a board more hawkish or fetish, the identity of the chair also matters. to speculate who might be the next chair.
is a committee here that matters and it is not just a rubberstamp committee. i think we have to keep that in mind. betty: if you look at the bond market, we have seen yields back up in anticipation of this rate hike in december. do you feel like the markets are too sanguine about this announcement? there is too much complacency that whoever disappointed, it will be about the same here? michael: it is easy to say there is a lot of uncertainty about the fed next year and the direction of policy. will hard to say how they respond to that. be morechair could hawkish, dovish, simply the fact it is uncertain, we can say that, but how you price that in his hard to say.
it is appropriate you say they pricing, a loty of rhetoric this week, last makingweeks, obviously december the incumbent choice to see week data -- weak data. i not sure how they should respond about policymaking for next year. kathleen: when you look out to 2018, there will be a new fed chair, then the question of how inflation is a, big question for every central bank around the world. what you see is key here? what does the next fed chair have to do? rethink their that inflation target? get off this thing that inflation has to rise, or will that be the guidepost? michael: the fed has a 2% inflation target. it'll be hard for one individual to change that because the
committee has voted on that. i think all that means is that if inflation continues to disappoint, we will get less than three hikes next year. i don't think there will be deviation from the broad strategy average -- averaging 2% inflation for the next several years. as i said, wait until inflation shows some rise, and they can have their plans between two and four hikes next year. i do not see major change coming, we talked about the institutional inertial of the federal reserve and the fomc. a lot of individuals will be there next year have been there for years and signed onto an inflation target. thank you so much, we will leave it there, michael
♪ yvonne: a quick check of the latest business headlines, $11 for movieg to ambitions. shares surged. they agree they can attract subscribers while charging more. they say netflix remains a relatively cheap with hulu -- hulu and other competitors charging more. there are hearings november 1 and of called on on leading social media to appear. facebook plans to report third-quarter earnings. mark zuckerberg and sheryl sandberg will handle that presentation.
yvonne: happy friday, it is 7:30 a.m. in hong kong. a little cloudy out there, felt some rain this morning. should not be anything to ruin our mood is this friday. betty: because it is a friday, right? it is 7:30 p.m. thursday in new york, where markets closed higher ahead of the friday's jobs report. i am betty liu in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." directorf managing christine lagarde said the fund remains fully supportive of policy at the ecb and bank of japan. speaking ahead of the imf autumn
meeting she said current conditions in the e.u. in japan mean policymakers are on the right track. she also thinks it is difficult to comment on the bank of england because of the uncertainty surrounding brexit. >> i think the case of the bank of england, i do not want to be too specific about the circumstances there because it is too in flux because of the brexit situation. we support continued accommodative monetary policy. >> the u.s. treasury has found stephen mnuchin's use of government aircraft at a cost of $800,000 in line with the rules. but there calling for more vigor about expenses in the future. mnuchin has asked for nine official planes since the coming secretary in february. althoughe approved, the one to use for his honeymoon was withdrawn. president trump's comments on puerto rico's debt, saying he
expects the $74 billion to be addressed through bankruptcy proceedings. he suggested the debt be simply wiped out. puerto rico began a bankruptcy-like process in may. they restructure their obligations. saudi arabia says cooperation with russia has brought new life into opec, taking a more optimistic about the oil market than it has been for years. king salman's first visit to moscow show their joint determination to take action for the oil price. as the king met president putin, brent crude rose for the first time in eight days. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. ♪ we are counting down to the open japan. south korea still closed for a holiday.
trading in australia has been going on for half an hour now. we see rebounds up 1/3 of 1%. .bout 0.6% gain on the asx 200 sophie kamaruddin looking at these aussie shares. it is an understatement when it comes to the asx, especially oil rebounding. >> the sydney bar -- the sydney market has been range bound. they could see the first weekly gain and three. taking a look at the imf breakdown, and those the prize to see miners in the top spot. anticipated slowing growth in china. energy isnsumption of seen to improve next year. i want to show you this stock, copper and gold mining
resources, a two day jump. this morning, copper has reached a value, helping drive gains so far this friday. offsetting the weakness we are seeing in gold. keep in mind copper has been trading, chinese traders are on holiday. it jumped to the highest level since july. this is falling for a third day. it is the worst the kleiner on the asx 200 this year. the pressure is very much taking a toll. yvonne: we are seeing futures pointing higher, but the run in these stocks we see in the nikkei are overheated. sophie: whether or not you should get into profit taking, they have increased their holdings of a japanese stocks. and jack -- japan is ranked among a positive prospect.
they expect a rebound in the dollar. yvonne: it is interesting because we have that snap election coming up. michael: another anticipates -- sophie: another anticipates japanese stocks will continue that run. it comes down to what the dollar might do, we have a trading at july levels. the question is, can it continue? i want to pull up this chart, g #btv 5176. we are going into the fourth quarter, which might give dollar olds hope -- bulls hope. there could be more of a history on the market side. tighter monetary policy in december. the friday u.s. jobs report could be a test for the greenback.
could be more pointing to a squeeze on dollar short. betty: thank you, sophie kamaruddin. let's turn from asia to u.s. where the focus is turned to the friday jobs report. straight gains in the s&p, partly due to the french round of bullish economic numbers. an expectation of news on the job front. joining us on set is su keenan. su: better than expected factory orders was a shock. at the close you see the bulls are running and they are running a long time. it is the biggest winning streak for the s&p 500 since 2013. the data has been good. a lot of support for a fed rate hike. u.s. dollar, see how it is reacting to hawkish comments from the fed. it is rising to a two-month high, treasuries dipping. it is going to be the case for the higher rates. you look at the one chart, you
can see it has come off the bottom. let's talk about bonds, particularly puerto rican bonds. the president talking about how, given the tragedy in puerto rico and hurricane relief, the debt would have to be wiped clean. let's go to g #btv 3010. these are puerto rican bonds. you can see they have slid dramatically as investors figure out how they will get paid back. see if you can see where on this chart this happens. they say we are probably going to have to wipe the debt clean, a lot of people bailing out, a difficult situation. seeminglyt is it endorsing a type of debt relief that is unprecedented. you look at market movers, netflix up in a big way as they raise a popular u.s. plan by $10. pay plan killing it. this, and many said
they would ideally use it as their preferred plan. fedex, trying to take on and ups directly with a new delivery service. an analyst said they may even take on facebook. they are really raising the amazon paranoia, if you will, that is out there in corporate america. betty: so many times you heard about amazon talked about in corporate boardrooms. let's talk about the numbers that set us up for friday and yum brand. su: it was up as much as 5%. a came up a let -- a little bit. a mixed report. but certainly on revenue, third-quarter revenue beat the highest estimate they established an initial dividend share. a coo willdent and
follow a female executive. has been rising the company. brands runs taco bell, kfc, pizza hut. they plan on opening 500 restaurants in the next year or two. that will be in the spotlight. in terms of economic data, they came in stronger-than-expected. and we have the weekly jobless claims, which have declined. there is a stage is a stage set for the jobs data friday. the hurricanes expected to have impact. theno one is clear how, weekly jobless claims we did not see a lot from that yet. could be a way to go before that plays out. mentioned, amazon one click -- one step closer to weaning itself off of delivery
services like fedex and ups. thirdill pick up from party merchants themselves and delivered to customer's homes. broke this story. great scoop for amazon. already providing these services when i came to a warehousing and packaging. how significant do you think this shift is? another baby step in their logistics expansion, but it is a very important one. you are correct. they currently do all kinds of things for merchants. merchants send their products amazon warehouses, amazon stores them for them, gathers them when the orders sending, packs them and send them to the customer's doorsteps. the significant thing, they are taking the logistics service beyond their own warehouse network into those of its merchant partners. it is moving itself beyond the amazon echo system -- ecosystem
into the broader ecosystem of goods and inventory in the u.s.. betty: why now? spencer: they are constantly iterating, we are heading into season, anthe peak experiment to see if it relieves pressure on the warehouse network. they're warehouses can become logjam during the holiday shopping season. good safed a flow through them and to the customers. reliefbe a good pressure valve. about justwe talking supplementing that in order to celebrate their capabilities? spencer: initially supplementing.
expanding capacity because e-commerce continues to grow by double digits every year in the u.s. it is initially supplementing. investors cannot help but wonder, what is the end game? amazon ceo jeff bezos is a man who thinks in terms of decades. as their volume keeps growing and growing, would it become economically feasible for them to do this more and more on their own? they did mention they will continue to use fedex and ups as their delivery partners. stocksdid see those two drop on those news, they cannot be happy about this. what are they thinking on wall street about these partnerships? spencer: they are always spinning it ahead. will it be in immediately -- immediate threat? absolutely not. it will be a small trial. in wall street when you see
these kinds of reactions to a subtle shift by amazon, they are always spinning it way into the future. what is the endgame? that is what the market reaction is about, long-term as opposed to short-term affect. spencer,hank you, joining us live from seattle. highest power prices in the world. the failures of aussie energy policies. this is bloomberg. ♪
institute. he has advised asian pacific governments on energy. speed on what has led up to this energy crisis. how does a country like australia, resource rich with uranium, coal, gas, phase power outages as a crisis right now? skyhigh electricity prices. it is a real miss, as we -- outlined in, as we the story today. companies here in australia have been baffled about the best way to invest their funds. what has happened is, the market
in the meantime has started to move toward clean energy, away from coal. seen as the big hope for australia, a lot of it has been exported to asia. it is created a perfect storm and led to the highest gas prices in the world. i want to show a chart 5105.iewers, g #btv you have to walk before you can run. well-established energy sources like coal, you see in yellow. you see the rise in wind and solar installed capacity. in between that we do not see any viable alternatives in the near term. is the prime minister the man to plug this gap? backtimately this comes
the policy failures and we enter that, a decade of bad regulatory outcomes where the cost around it -- a country that is the significant.ts are because of then, outlined, we have not seen technology replacing them. we saw fantastic potential for the future. but it needs balance because they are intermittent. the only way out of this is to get clear policy both from a federal and state government. because in australia, state governments are very important policy. conviction?ere much and in the meantime, where do prices go? do they continue to tighten? >> at the moment, prices have been tightening. the gas industry has built up to
rebling ofbut -- a t volume. .t has taken a while concerns about fracking. we start to see a bit more volume coming into the gas market. pressure onward heating and electricity prices. we have some ways to go yet. we will not see australia have significant changes for a little while. maybe we have seen the worst of it. it means politicians are under real pressure. as we have been talking about, it is a slow motion train wreck that is happened over the last 10 years or more. long toing to take that try to course correct?
that is very much in the balance, as we speak. i am interested in getting tony's thoughts on this. taking anment interventionist approach, they are looking at restricting lng reports -- exports. they are directly engaging with companies like agl. who knows what is around the corner. that is the big fear that we hear from companies. there is a lack of policy totainty, it is difficult know how long this will play out. i wanted to check with you, did of whethery inkling
this interventionist approach from the government may continue ? >> i think not. i do not think governments can stand by and watch very high prices have an impact, not just on households, but businesses. you cannot see that sort of destruction of jobs and community continue. the government has to intervene. industry does not like it when government intervenes in the market. i would help that these interventions we have talked about in the short-term -- now we have to settle things down. as we implement the consequences of major reviews that were instigated by them federal and state governments under the energy council, plus we see the itsrnment start to frame climate change policy. it has been a difficult debate. lyrically, very challenging. it won't be easy, but by the end
of this year, the government in some ways has no choice except to come forward with comprehensive set of policies. about 90% of what we need is probably in place. betty: is there nothing that can be impactful to be done on the private side? does it have to be all reliant on government policy and intervention? >> it does not. if you look at the network ox -- case, it is a case of the companies working with regulators to produce a better outcome in terms of the network. which in some cases in australia, where demand is not been growing, because our economy has become less energy-intensive, responding to that kind of change. we are starting to see real investment in the combination of technologies.
including things like batteries and pump hydro, which will balance wind and solar. the investment from those companies will be critically important. that is why government -- a stable -- us framework for them to move through. yvonne: and fingers crossed, elon musk will deliver. i you confident australia will have a clean energy target by the year end? i do not think it will be called that. a policy that will be intended to drive down our commissions, -- emmissions. it will also have to be one that is not a subsidy for renewable energy it is an important issue in australia we need to be developing.
that will include wind and solar, which are getting cheaper all the time. gas -- means improving: improving coal and gas. we will see a clear policy that will deliver outcome. it will not be easy. but if it is not done, things will get bad. this will be a significant political issue for this government. energy and climate change could easily destroy a prime minister. yvonne: great to hear your perspective, tony would, energy program director. more ahead on "daybreak asia." this is bloomberg. ♪
i am yvonne man in hong kong. betty: and i am betty liu in new york. surging almost 1000% after selling a magnesium deposit. that is not a typo. the price is $750 million. asset inays the british columbia has about 3000 years of magnesium supplied. yvonne: warren buffett, berkshire hathaway has named the new ceo for their dairy queen business. shows buffett's preference for internal talent. dairy queen licenses its services to many locations worldwide. plenty more coming up, the market open in japan.
♪ yvonne: we are live from bloomberg's asian headquarters. friday,stories this heading for their best week since july. growing optimism about the global economy. numbers expressed hawkish numbers. betty: from here in new york, i am betty liu. catalan leaders are said to step back from media independence. indicating a willingness to pull out. china's growing military
influence with its first overseas-based being followed by others. ♪ yvonne: what a day on wall street. we will take it here in asia. most markets are in holiday mode, especially in hong kong. you can see asian stocks outperforming the likes of the u.s. and europe. this is in dollar terms. it is also a signal of caution as well. are we being a little more complacent in this euphoria? there is a lot of political risk, especially in china with the party congress and the snap election in japan. betty: it seems like you have
gotten our euphoric disease from the u.s. stocks are flying high and evaluations getting richer and richer. that does not seem to be stopping the u.s. stock market at all. the continue their record run today. let's get to the first word news with paul allen, who has more with what is happening around the world. director saysging the fund remains fully supportive. speaking ahead of the imf meetings, she says current conditions mean policymakers are on the right track. she also thinks it is difficult to comment on the bank of england because of the uncertainty surrounding brexit. >> i do not want to be so specific because it is in flux.
as far as the bank of japan is concerned, we support commodity monetary policy. paul: president trump has stopped his strongest, yet saying he is going to act on the iran nuclear deal. he said he will be discussing his response with military chiefs later. administration sources say he may leave the deal in place but might ask to tighten laws. president trump: they have not lived up to the spirit of their agreement and we will be discussing that tonight. the pentagon is asking private company is what they know about using computers to review hours of video images to speed up the depiction of potential threats. they will host a seminar on artificial intelligence to learn more about algorithms. grumman andnorthrop
general dynamics. -- the trump administration blames the trade deal. to president has threatened drop it if they do not agree to the americas demands. relations with china have been souring. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. betty: we are getting breaking hope, thethe party of party opposite shinzo abe. the party of hope, this is their manifesto that they have released. it will free the sales tax increase according to the manifesto. they will seek to save nuclear consider2030 and
taxing reserves over ¥300 trillion. i think that is quite interesting, considering to freeze the tax increase. yvonne: that will be the wildcard. it has been interesting to talk it sounds like it is very similar to the policy views we see coming out. the sales tax seems like they are solidifying this as the key her andce between shinzo abe. they will seek to raise renewables to 30%. all those lines coming through from japan. let's get to the market open with sophie. sophie: you cannot keep a good rally down.
week, butn a quiet not too shabby for asian stocks. the best weekly gain since mid-july. the best year since 2009. the dollar which was that july height could be in for a cheerful fourth-quarter come which has delivered gains for the past six years. we have new york crude back up, although a little weaker this morning. its first weekly drop since the -- of september. out.so got cash earnings the average cash earnings raising for the first time in two months coming in at .9% on a yearly basis. you updated us on the party of hope manifesto revealed this morning. take a look at this. foreign investors are back to
buying japanese stock. this was after nine straight weeks of selling. they are upping their exposure to japanese stocks on prospect of a dollar rebound. stocks --ike japanese we do have technical signaling overbought territory when it comes to japanese stock. a look at that reaction in japan. we are counting down to the reaction of the jobs report. television and radio will have the first reaction from the economic council member gary cohn. he will join our coverage at 9:30 eastern. what iske a look at going on in singapore and talk with kathleen hays. i want to start in new york.
the job support, we have been talking about it. what parts of it might be useful for us to forecast what the fed might do? kathleen: that is the one. the fed has a conundrum right now, inflation. what would help boost inflation? if wages started writing -- rising. it will be the fifth month in a row that we are second 2.5%. something that will not be affected by hurricanes. everyone will add back from 80,000. about -- they know the labor market is strong. their concern is not enough inflation. yvonne: how do you think
policymakers will treat this report? , are they going to react differently? seen, theyains to be are operating in a way that a lot of us do not understand these days. as far as policymakers, i have kathleen.ith not expecting to see much change. in a way, this gives the fed a pass. we will not get a clean report before the december meeting. they can say they still have confidence it will ring true eventually and we will see some boost in inflation and wages. not much changes to wages or employment. yvonne: that rate hike is almost certain when it comes to december. we still have some questions about that last fed meeting.
we are not even sure who the fed chair will be next year. kathleen: absolutely. us. morgan chase reminded that other seats are open aside from the fed chair. the composition would change somewhat. chair,th a hawkish fed janet yellen is a well-known dove. she has become more hawkish. she says it would be imprudent to wait until inflation gets to 2%. gotten ant chair have little more aggressive in her stance. is, we do not really think that will change. it will be the economy that determines how they look.
i think a lot of people at the fed now will say we are on board for rate hikes. betty: it is a big? question mark. how do you think the job supports are going to look over the next few months? where is the labor market headed? >> we are still a very tight labor market. we see job vacancies at record highs. a lot of undermine -- underlying demand. we do need to see the gains slow down a little bit. we have been expecting that this year would be slower on the pace of job gains. it has not slowed down from last year or the year before. we are looking pretty strong. we should expect to see hiring slow in a healthy way. good to see the
unemployment stable at least, if not down. that wages will perk up a little bit. that might take a few months. that seems to be where we are headed. betty: thanks so much. thank you guys. do not miss our extensive coverage of the job numbers when they are released friday morning. the fund manager will be joining daybreak americas for the reaction. that will be at 8:30 p.m. hong kong time. yvonne: our exclusive interview ceo.the we will ask him in about 20 minutes time. this is bloomberg. ♪
yvonne: this is "daybreak: asia." betty: we just had these headlines come out on japan. the hope party coming out with its manifesto. here, including the speed to phase out nuclear power by 2030. stickler isn the the party of hope will freeze the sales tax increase that is a part of shinzo abe's plans going forward. that is in terms of fiscal stimulus for japan. workan see that the yen is -- reacting more than before to this news. .et's take a look at the market
what do you make of the is headlines coming out of the hope party and the sales tax increase? >> it is interesting. i think it is a way that the hope party differentiates itself from the incumbent political leadership. recognizes the former is seeing in japan the political landscape and introduces uncertainty there. betty: they did open up slightly lower after these headlines came out. i am curious if you think the market is pricing in enough the outcome of these japan elections. i know so far there is a lot on
shinzo abe winning this election. the market is prepared for some volatility. in japan forrise sure, given that the policy has held the 10 year yields very tightly around 0% to 10%. there is a form of complacency there. mark --think that the it would take a lot to shift that view. i want to focus on spain. you mentioned complacency. have seen,nt that we the market reaction of catalonia is in the spain german ten-year. up and seen that spike stabilize now on news that there
might be division among the and business leaders. is asia underestimating the risk of this? >> i think there is still some pragmatism. that is what we saw unfold last night in terms of spain, that there was a bit more balance in the discussion that it was constitutional, that the catalans could not succeed. it would be a lose lose situation. it would be detrimental to the banks and ultimately to the stability of spain. it would not be great for the population more generally. isgmatism in the markets still complacent.
past,e have seen over the generally speaking, it has been a reasonable balance met both -- between the different interest groups. what would a successful succession mean for markets outside europe? the spillover effects. that is why the spanish government would be quite wouldt and why brussels be very resistant to getting involved in this type of secession talk. constructive or otherwise, because the spillover effects italy and parts with the populist sentiment in many countries. they really do not want any
of a european break up being a remote possibility. betty: really quickly turning it back to here in the u.s. and the treasury markets. it has been interesting with all this talk about the fed turning more hawkish and the interest rate hike in december. i surprised yields have not backed up more of the 2% that they were hovering at? >> i guess i am. given the cyclical upswing and the reason that janet yellen is harping her stance towards the past she is on and her -- path she is on and her successor, a reflects that the u.s. economy is doing quite well along with the global economy.
i would think that cyclical yields have pushed up a little higher. there are some straws in the wind, the hurricane and what it might do. generally speaking, most people looking through that. the head of asia-pacific fixed income and managing director of asset management. stories.et many more bloomberg subscribers can go to tv . it is available on mobile. you can customize your settings so you only get the news on industries and assets you care about. this is bloomberg. ♪
china's first overseas military base in the tiny african country is likely to be followed by several more. daniel has been looking through this report. it is rare to hear comments like this from your us intelligence officials -- u.s. intelligence officials. they give the world view on china's activities abroad. it is unusual. the base thing is a concern. there are questions about china doing a lot of investing in ports around asia, pakistan is one. qatar could be another potential base. they did not name any other countries they are particularly concerned about. yvonne: technology transfers was interesting as well. see china'scally
big state-run company is inviting american companies and and taking their company -- technology and kicking them out. they view this as an economic threat. this is something steve bannon talked about while he was over here. this is a view shared by the intelligence community as well. doingear that china is everything it can economically and strategically, militarily, to you road u.s. influence -- erode u.s. influence overseas. betty: what are some of the flashpoints going into november? pull,have seen this push good cop bad cop relationship that president trump has with china. he is lauding cooperation want 301same time bringing about
investigation. they are under pressure when trump comes out to the region to have some deliverables. bigh korea obviously the component. trump seems to be focusing on that. he wants progress on that front. he was to keep that situation from getting out of control. we are really seeing -- some sense is better than it could be. ande is a lot of tension potential trouble ahead. betty: thank you. a quick check of the latest business flash headlines that we are watching. general motors is in the fast lane this week under growing speculation that it will when .t's that -- win its bet
helping the stock closed at a new record every day this week. years, shares have been stuck in neutral. regulators in asia and europe are said to be investigating standard chartered is over the transfer of $1.4 billion to singapore before new transparency laws came into effect. staff raised questions about the timing of the transaction and the source of the clients funds being properly vetted. betty: netflix raising the price of their most popular plan from $10 to $11. shares surge to a as investors agree the company can attract subscribers while also charging more. cheapx remains relatively . cannot wait to see what shows
yvonne: 8:30 in sunny singapore. it is friday. i am betty liu in new york. let's get to first word news with paul allen in the knee. -- sydney. paul: the party of hope has launched their manifesto. they would put the sales tax lives on hold at its current 8%. prime minister shinzo abe once itlift it -- wants to lift to 10%.
the u.s. treasury has found stephen mnuchin's use of government aircraft at the cost of $800,000 is in line with the rules. others calling for more rigor in the future. eight were approved while the request for a plane for his honeymoon was withdrawn. the white house has tried to clarify president trump comments on puerto rico's debt. rattled the market when he suggested the debt be wiped out. puerto rico began a bankruptcy process in may. praisedillionaire has this year's introduction of a consumption tax, predicting it will boost gdp growth. expectsrman said he
that to become apparent in the september quarter and to continue through the second half. the introduction triggered , which is rundown distorted production data. >> this has been the biggest single -- it will add a lot of value to the growth rate. we should wait a little. people are being unnecessarily pessimistic. paul: saudi arabia says cooperation with russia has breathed new life into opec. the king's first visit to moscow highlights the warming of relations between the two nations and their joint determination to take action to bolster the oil price. as the king met president -- president putin --
hot weather boosted air conditioning use in the midwest and the east. hello reserves and winter could see gas prices soaring. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. yvonne: time to see how the asian markets are shaping up so far this morning. things goe see sideways. you're not really seeing that. sideways is not the case when you take a look at currencies like the kiwi and the aussie dollar. the kiwi is planning to a four-month low. canada data showed its trade
deficit balloon. it seems to be cushioned by base metals. check this out. breakingthe aussie through the 100 day moving average for the first time since june. after the hopes party revealed its manifesto this morning. yurinomics as well as abenomics. stocks onscretionary the up as well. perhaps after wages rebounded in august. that was a weak trend. stocksseeing retail among the biggest drags for the
nikkei 225. check this out. you can see the nikkei 225 further away from its session high. thank you. let's talk about golden week. chinese tourists visiting. down 5%. a little bit of a disappointing for -- disappointment from what we saw a year ago. it was monday or tuesday where we actually saw some decent gains. it fall. day we saw not a good sign. we have an exclusive interview .ith lawrence he joins us in the hong kong studio. it is not that super of a golden
week as we were expecting. week is always great. macau has really matured over the years. you're seeing your around visitation extremely strong. unlike previous years, where golden week was up 50% or so, we get that throughout regular weekends as well. if anything, think the business is much healthier. there is less pressure on immigration, less pressure on the entry points. all in all, the year has been great. it is up 19% year to date. golden week will turn out to be fantastic. yvonne: we are talking to the analysts. they are saying things look a little bit weak. it will not see as much robust revenue. will you have to lower your forecast as well? >> no.
it on a year-long basis. the whole year has been phenomenal. october, do not forget come ,fter two tough years in macau it started recovering around august of last year. in terms ofr october, but the key thing is ultimately quality is what counts. having quality products, you will get a return. yvonne: what is the breakdown when it comes to quality? >> our longtime thesis, the way that we build our integrated resorts is the growing middle class in china. they are climbing the consumer latter and becoming more -- ladder and becoming more affluent. yvonne: can you quantify what
you are seeing? >> so far this year, there has been a lot of pent-up demand. with our star winning restaurants, we have captured an outsized portion of their business. going forward, it will really be and onmassive -- masses those numbers. betty: you took me through excited aboutd the expansion. i am curious about the ipo for studios to the. -- studio city. , think we are still in a quiet area. i cannot say much about it. needless to say, we are extremely excited about studio city. it was built for the masses.
the city of dreams is our flagship property. it was built for the upper tier, premium mass classes. studio city is for the general mass. we are really excited about that , especially with infrastructure improving in macau with the lotus bridge. we can utilize more now. studio city is a 32nd walk from that lotus bridge. walk from that lotus bridge. betty: some further tightening policies coming out of china. do you think we will get more? macau is a dynamic market. it is the best market to be in. we are very excited about some of our potential expansions. at the end of the day, macau will always be the number one market.
dealing with national policies in china is a fact of life. it overgotten used to the years. most of these policies are not directed in macau. they are focused more on capital flow globally. macau is naturally a part of china. it benefits from being a part of china. we deal with it and we are very supportive to the macau government and the national government. betty: stay with us because we want to talk about other potential markets. i am talking about japan here. we will stay with lawrence ho. the next election may become a branding battle with the two parties on many policies. we will be live in tokyo next to talk about politics and the gaming market. this is bloomberg. ♪
betty: this is "daybreak: asia." leaders of japan's main political party will debate on sunday for the first time since the snap election was called. investors will be watching for clues on how shinzo abe's policies differ from his opponent. the possibility of taxing companies retaining earnings. brian, how convincing is this list? >> it is quite an interesting list. shehe question of branding, already makes some progress on that. she dubbed her platform yurinomi cs.
it is pretty catchy. the tax on retained earnings, that is an interesting step. she says she is thinking about it. the numbers they have thrown out is ¥300 trillion. the aggregate value is actually about ¥275 trillion. we are not even at that number. it looks like that is a way to effort tornings in an spur more investment in capital facilities and wage increases. the taxation is where her party is differentiating itself from shinzo abe and his party. what would be the economic impact of freezing a sales tax increase? >> one of the big problems in japan's economy has been consumption. ,e have been ok on exports
especially with the yen being fairly weak. consumption has trailed. that is partly because wages have not gone up i any convincing rate, especially base wages were full-time workers. i freezing the sales tax, people feel a little bit wealthier, perhaps they spend more money on products and goods, and having fun in japan. to theuld be a boon economy. that would assume that she actually wins in the election. betty: still very much in doubt. let's look at another side of japan, the potential opening up of a $25 billion gaming market in japan. still with us is macau's billionaire chairman. i know you have had your eye on -- melco'sany years
billionaire chairman. i know you have had your eye on --an for many years area many years. what are you willing to do? >> we will spend whatever it takes and do whatever it takes. betty: $10 billion or more? company,global gaming anyone of us and spend $10 billion. that statement is irrelevant. it is really going to be what you can showcase and what you can deliver to the city. whetherco has proven, it is in macau or the philippines is that we have always been the best corporate citizen. he worked very well with the government. we understand what the government wants to do. if you look at macau, the
government wanted diversification. no one has done more in terms of building award-winning attractions and entertainment facilities. lawrence, if you ask she , they sheldon hamilton would all say that as well. howdy you present yourself as having the edge? based on it is really the track record that we have had in asia. there is a difference between las vegas and asia. within asia, the things that we have built, we are extremely proud of them. in macau, i did to say that nobody has built more non-gaming attractions in the truest sense of attractions, entertainment
focusing on bringing more visitors, rather than just hotel rooms and meeting space. nobody has done more of that than us. yvonne: we were just going to talk to our colleague in tokyo. shinzo abe has a couple of his own. how does this snap election delay some of the progress? >> ultimately, such an exciting market, we have been working on japan for over 10 years. he will continue to work on it. it gives us more time to understand and talk to potential local partners. bothood thing is between prime minister abe's party and sure similar, they views on several issues. the key for us, it is worth the
wait. have imposedators some strict rules to prevent the gambling addiction rate from going too high. they are thinking about banning cash machines on the casino floor. you cannot use credit cards to buy chips. do you think this could destroy the industry before it starts? willdo not think it destroy the industry because ultimately, singapore has very rigorous -- yvonne: $100 entry fees. >> yes, it was unprecedented. ultimately, we can make it work. yvonne: would it make it less exciting for you? >> not at all. we are very understanding and respectful of the different cultures and different places that we operate in. japan, like many countries, see
that they have a gaming addiction. would be good for that because it would rain in some of the two go -- pachinko. along all, we will play and will be very respectful to how it works there. betty: i know you have been bid ding for japan for about 10 years or so and have talked to local partners there about the entrance into the market. how close are you finding -- how close are you to finding a partner? >> japan is going to be a complicated reading process -- bidding process. consortators have to with cities first. pick their operating
partner, and then it goes to the national level. tier at least a two bidding process. different prefectures and different cities are still putting their hands up. operators like us arks scrambling -- are scrabbling around trying to pick what city is the best match for us. there is still a lot of work in progress. once there is more clarity from the election and the regular diet that will start next year, once the implementation markets , a lot ofssed companies will be more aggressive. betty: really quickly. do you think that japan can exceed macau? >> no. i think mattel will always be the best -- macau will always be
the best gaming market in the world. the rate from china is extremely low. macau is the only place in china where gaming is allowed. it will always be the biggest. japan has a great shot at being the second largest gaming market in the world. betty: thank you so much for joining us. thank you so much. one feature on bloomberg we would like to bring to your attention is our interactive tv function. you can find it at tv . you can watch us live and see previous interviews. you can become part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
betty: this is "daybreak: asia." the college sports conference is about have a lot more airtime in china. alibaba has acquired the rights to broadcast games in china through 2024. stephen engle has the story for a area did is the first time u.s. collegiate sports network is available in china. is there a demand for this? >> there could be.
keep in mind this is stanford, washington. greatsly, this is a branding exercise academically and athletically or the pac-12. what i find interesting is the even2 network, they do not have a deal in the united states on directv. they go to china first with alibaba to get that distribution deal. it will be interesting what kind of demand will be for college basketball. betty: will other college networks in the u.s. likely follow pac-12's lead? >> if there is money in it, and they will. chinese families are sending their children off to school in
the united states. you look at the other networks. a lot of the big college networks or conferences have their own networks. you have big ten network which onpartly owned by fox directv. they are just in the u.s. and canada. the other networks are partly owned by espn, which is partially owned by disney. woulduld think that they start exploring a similar streaming theme. yvonne: coming up, more from tokyo. hope partyke's manifesto. a bold monetary policy. maybe we are continuing on this easing path. seeking an exit strategy. we will talk a lot about this extra strategy. betty: not with inflation at
these record lows. it is interesting. bold monetary policy begs more details coming up from the hope party. reactioneen some muted that people expect shinzo abe will come out victorious. that is it from "daybreak: asia." our market coverage continues with rish. this is bloomberg. ♪ who knew that phones would start doing everything?
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