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tv   Bloomberg Daybreak Asia  Bloomberg  August 13, 2019 7:00pm-9:00pm EDT

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paul: good morning. i am paul allen in sydney. we are under one hour away from the australian market open. shery: i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." this a la top stories wednesday, hong kong braces for more unrest after violent clashes and further disruption at the airport. the u.s. says china should respect the city's autonomy.
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president trump will delay china.nal tariffs on markets rally on the news of apple surging 4%. the cbs-viacom romance leads to a waiting. the megamerger -- shery: breaking news out of south korea. we have the unemployment rate for the month of july coming in at 4%. that was as analysts expected. the third month in a row that stayed at 4%. south korea added 299,000 jobs in july, higher than the 281,000 they added in june. the south korean economy and job market being highly supported by government job creation. we are expecting the extra budget set to pass parliament at the start of august to also give more support for the job market. exportseantime,
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continue to plunge in south korea, now headed to the ninth month of export declines in august.we have seen the weakness in w theon throughout these -- the south korean won. in hongrn to sophie kong for a check on where markets are headed this morning. sophie: we have plenty more data to come through from asia including a check on china's monthly activities for july which could dampen some of the anticipated relief rally as industrial output and retail sales slowed on the mainland. kiwi stocks adding just about .5% and our into cash -- an hour into cash trade. nikkei futures pointing higher as the yen holds its biggest drop in over a year. we will get a sense on how much impact that has had on chinese
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consumer spending when tencent reports today. we will illustrate how protests in the city may affect the city. pop. paul: thank you for -- paul. paul: thank you. whitaker group. -- ritika gupta. signaling inflation maybe firming as the fed debates whether to lower interest rates again. the core consumer price index rose .3% from june and 2.2% from a year earlier. medianains exceeded the estimate of the economists we surveyed. -- offering a reason for the r.b.i. to remain dovish. pointer prices rose three -- 3.15%. goal.elow the 4% the r.b.i. lowered rates four times this year and they said
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future moves will be data dependent. is calling for an urgent meeting of the un security council to discuss india's decision to revoke autonomy for disputed jammu and kashmir. it threatens to trigger conflict between armed neighbors. pakistan says india will provoke a standoff to divert attention from growing problems at home. facebook is being accused of paying teams of outside contractors to transcribe -- from uses of its services. the work has upset the contractors who have not been told where the audio was obtained. facebookot know why needs transcriptions. it has been transcribing users audio but says it will no longer do so. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. shery.
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shery: thank you. hong kong is bracing for more unrest after violent clashes. the u.s. is urging china to respect the city's autonomy amid claims that beijing is mobilizing forces on the border. stephen engle is at the hong kong airport. tom mackenzie is in beijing. start with you. we have seen travelers really get affected in hong kong. when will operations return back to normal? stephen: it seems like it is back to normal right now because i was just up in the departure hall and i was looking at the board for departing flights between now and 1:30. all the flights are listed and i counted nine cancellations. that is not bad for an airport that handles 1100 flights per day. i am looking at the arrival board and i do not see any
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delays. when i arrived at the airport, i did the numerous planes landing. a problem.t anybody who checked in before 4:30 yesterday afternoon, if they could get through the gates which were blocked by protesters, north and south, if they could get to the gate and were checked in before 4:30, they could have left. everything after that was pretty much canceled, but arriving flights still continued into the evening even though this arrival hall and the departure hall was packed with heating amounts of amounts of-- heaving protesters, blocking the way, disrupting passengers. it is the longest lines i have ever seen for passengers. for the most part, after a chaotic evening that involved what some say would be mob tactics that included confrontations with mainland chinese sympathizers that
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involved them that tying their hands and not allowing -- zip- tying their hands, one police whener pulled a sidearm his baton was taken away by protesters. some riot police did arrive. there was some pepper spray. batons were used. it was a peaceful dispersion of these protesters after midnight last night. that is where we stand right now. shery: we have heard from president trump tweeting that china is mobilizing its troops to the hong kong border. what do we know about beijing's response? stephen: -- tom: we have seen a sharpening, hardening, of the rhetoric out of beijing. we heard from officials at the affairs office saying they are seeing signs of terrorism in hong kong. they described some of the protesters as being evil and
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criminal. they said external foreign forces are aiding and abetting protesters. they said, officials out of beijing, that they have the power to quell "all sorts of unrest." alongside the rhetoric, we are seeing a step up in terms of the propaganda. the propaganda machine has started to ramp it up. giving a frankly one-sided view of what is unfolding in hong kong. that is taking place online. but also in the state media as well. we have an editorial from the state run or state owned tabloid here are describing a color revolution which aims to ruin hong kong's future. that is from an editorial from the global times. reports that there are paramilitary chinese forces amassing on the border in shenzhen. whetherthe question of this is an intimidation tactic
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by beijing or whether they are laying the groundwork for some kind of intervention in hong kong. paul: we just heard tom describing beijing's reaction to this, the appearance of troops apparently on the border, the use of the word terrorism, the rhetoric really getting turned up. how are protesters responding to all of this? stephen: of course, i must clarify as well that after the hong kong and macau affairs office official spokesman used that terminology, terrorism, of course, it sparked a lot of speculation that that was going to be used as justification for the chinese to bring in their ireliminary to -- the paramilitary police from across the border. a lot of local or mainland media have been showing an assembly of more forces there. i must clarify that the hong kong police, after that unrest on sunday on the streets, where tear gas was fired repeatedly
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and we had into the subway stations and there was a lot of injuries, including that one girl who was shot in the eye with some sort of police projectile reportedly, the police said you're not classifying this as terrorism yet. with -- we are not classifying this as terrorism yet. they used the terminology meeting. keep in mind under the basic law in hong kong and the one country, two systems, it is a requirement if the pla is going to come in, if chinese soldiers will come in, it has to be at the request of the hong kong government. so far, there has been no request that we know of. presence of the pla in hong kong, but if china were to intervene directly in hong kong's affairs, that would represent a fairly significant escalation, would it not? invited or otherwise. tom: that is the big fear, that
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the paramilitary police will be ordered into hong kong or the pla will be ordered to step up their support and support the hong kong police. that would raise concerns internationally. therein lies -- therein lies a major risk. that is the view that you would effectively be allowing or calling a death knell, the end of hong kong as an international financial hub. you would see ex-pats from the city and financial institutions moved to other jurisdictions like singapore. that would be the concern of that approach. the other concern is it would lead to a hardening of the pro-independence movements in taiwan, which asian wants to reincorporate into the people's republic of is something that may be considered as well by officials in beijing. the flipside is that president xi's under pressure to take a hard line on the protesters in hong kong, particularly as we
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,ead up to october the first the anniversary of the founding of the people's republic. president xi is under pressure on both sides. no easy solutions for him. october 1 is a crucial date in all of this eventually. engle and tom mackenzie, thanks very much for joining us. the trump administration is delaying new tariffs on some chinese imports until mid-december. that includes laptops and cell phones. other items are still going to be hit with new deities. macgregor is -- new duties. macgregor is joining us. is this array of light on the trade front -- a ray of light on the trade front? >> it sent the stock market jumping in the u.s., a delaying in some of the terrorists that will be imposed. it does include things like clothing and footwear, some of
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the things that really a lot of retailers warned could raise the price of their goods. some of those will be hit on september 1 but a large back of -- batch of items will be hit december 15 instead. that was great for some of those best buy and walmart stocks. that is a temporary one day stock market bump. what we are hearing from businesses is there is still this environment of uncertainty. today's announcement, even though there might be a reprieve, it is an indication that the trump administration is changing it policy from day-to-day and companies do not know how to plan for it anymore. shery: president trump saying he want to spare the christmas shopping season. essentially acknowledge presidents trump's claims -- president trump's claims that it will not affect u.s. consumers is untrue.
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sarah: it was hard for the administration to move forward with these. there were public hearings earlier this summer and companies locked in their shipments for the rest of the year. if you hit us with these tariffs, it is an on for seen cost we will have to completely digest ourselves rather than the price togh readjust supply chains. the trump administration realized it would be pretty months ofhe last four the year when there is back-to-school shopping, black friday, cyber monday, and the christmas holiday coming up. that was a pretty hasty move to make. the bottom line is the two sides are no closer to a deal. the announcement today is a bit of a distraction from the fact that more tariffs are being imposed and the trump administration and china have not resolved any differences at the crux of this disagreement. shery: ip rights, we are talking about stealing trade secrets, intellectual property. sarah mcgregor, thank you so much for that. still ahead, a mega-media
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merger. cbs and viacom announcing a kia after you -- tie-up after years of infighting. paul: u.s. inflation data shows an unexpectedly hot reading. this is bloomberg. ♪
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paul: this is "daybreak asia." i am paul allen in sydney. shery: i am shery ahn in new york. president trump's move to hit the paths button on new tariffs -- pause button on new tariffs -- su keenan joins us now with more. effectively, we saw those sectors that would benefit directly from these tariffs getting delayed just rally. throug -- su: intraday, it was
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the biggest surge in two months for the s&p. let's go to the snapshot. treasuries tumbled. we also saw oil surge and gold fall. wasou take a look at what the big strength of the s&p 500, it was consumer discretionary. take a look at the big movers. targety moved big as the . hasbro, the toymaker, gap, and others, big movers. of thel notice some other standout stocks included cbs and viacom having that big $11.7 billion all-cash transaction. out with earnings. take a look also at tech which rallied strong. apple setting the pace for the hardware stocks and many of its suppliers and chip stocks getting a big boost from this pause button on the tariffs, if you will.
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paul: shifting to commodities, soybeans leading the recovery in futures. oil jumping the most by this year. what are the highlights there? su: we are getting preview data that is a bit bearish. let's go right to the soybeans, because that has really been knocked hard and it led the rebound in futures. if you take a look at oil, the surge was significant. the biggest rally in brent really since the beginning of the year. if you take a look at gold, which has been flying high on all young uncertainty, it took a big drop down from its six-year high, so very interesting turn of events. it was almost an immediate market reaction. it seems investors are waiting to see what happens next. back to you. paul: we will see what happens next. joining us now to discuss that some more is the head of fixed income. thank you for joining us today.
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we saw in equities market rally, but the bond market is still telling us something somewhat different. you'll curve in version be approaching soon. what is it telling us -- yield version will be approaching sintered what is it telling us? >> we see a recession. the questionund, is whether or not the current deceleration we are seeing will translate into consumption and services, so if we look at the data, right now, u.s. is teetering. it has been decelerating and it these could whether push the u.s. into contraction territory. paul: what does this mean for the fed? encouragingpretty inflation numbers. jobs growth is very strong as
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well. if the fed is data dependent, looking at domestic data, it does not seem to be much of an argument to cut further. what do you see happening next? >> in terms of the push and pull, you are identifying a little uptick in inflation but overall, the backdrop is one where i think economics really trump inflation. if you look at the treasury market, typically, it really moves more to global factors because the treasury market is such a liquid market that all risk offnts use the environment. i think the fed will be looking at both global factors as well as local factors and with that backdrop, it is almost like the fed is being backed into rate cut. i think looking at that is important. looking at short-term money market is really important because that has been inverted for a long time. the money markets do not bode
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well in terms of what it is longer thehow much u.s. has in this current expansion. interestings really to see the hong kong news, the trade news, it completely overshadowed the strong inflation numbers. economy andt on the manufacturing numbers, the chart on the bloomberg showing manufacturing, the growth has slowed. the global manufacturing pmi already in contraction territory when it comes to that purple line. correlationstorical of pmi's with treasury yields, where are we headed in those 10 year yield? teresa: many market participants are looking at 10 year yields and saying we have come a long ways down, but the reality is that it is actually quite consistent with where we are seeing with respect to global pmi's. as such, we think there might be more room for treasuries to fall as opposed to rise, especially
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given the current risk-off environment and the unpredictability of where the trade war is headed. shery: we continue to talk about the government bond yields, the government bonds being in negative yielding territory. but we do not talk about that much when it comes to the investment grade debt. the gtv chart on the bloomberg iswing us 25% of debt negative. what are the implications of this? teresa: it is really fascinating. we have really seen investment grade corporate falling. we know the global government bond yield story especially in japan and europe. what a staggering is the fact that about 45% of global investment grade bonds are yielding negative outside the united states, that means there's going to be a race to the bottom. it means a lot of financial institutions are going to be looking for where are they going to find yields to meet their
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liabilities in the future. overall, it bodes well structurally for emerging-market assets because this is the one place you can still get yields. you have to take a long-term perspective. we look very late cycle in the united states and we are in contraction territory with most of the world. the only way that makes sense for a lot of these in two shins is to take a long-term view. that means over three years, emerging markets will have a structural tailwind to it because of global low yields. shery: thank you so much for joining us. teresa kong, head of fixed income. plenty more to come on "daybreak asia." this is bloomberg. ♪
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shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul lau and in sydney. a quick check now of the latest business flash headlines. the cbs-viacom romance has
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finally led to a marriage. the deal unites the most-watched u.s. tv network, the parent of paramount pictures, and nickelodeon. the viacom boss as ceo. laptopshe maker of hp says it will shift production of u.s. bound computers out of china as the trade war keeps pressure on the tech industry. in the tech -- in the intact will move to -- inventech will move to taiwan. them thedent told escalating trade is very painful. this yeara's plunge made the stock the most profitable short bet on wall street. gains in 2019. last year, elon musk took tussle so media to attack what he called value destroyers and
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warned them to prepare for the short burn of the century. coming up next, president trump is to delay additional tariffs on some chinese products. we will ask what this means for the ongoing trade war. this is bloomberg. ♪
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ritika: this is "daybreak asia." president trump bowed to pressure from corporate america, delaying additional tariffs on certain products imported from china. the duties will not be imposed until mid-december with the president acknowledging higher prices would hurt consumers in the run-up to the holiday season. the announcement comes at the two sides spoke by phone for the first time since the recent escalation intentions. hong kong is breaking for more unrest after riot police clashed with protesters at the airport. departing flights check in was suspended.
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-- mainland police working undercover. both were released. president trump says china is moving forces to the border and hong kong authorities say protesters have crossed the line as a civilized society. allegations of sexual harassment against domingo have prompted the san francisco opera to cancel an upcoming performance. the associated press as several women accuse him of trying to pressure them into sexual relations. -- shipping concerns in the gulf. the news agency says documents have been exchanged between tehran and london and the problem may be dealt with in the near future. a resolution could also mean the release of the u.k. flagged tanker that iran seized in a
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state of hormones. -- strait of hormuz. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks very much, ritika . we are half an hour away from the open in tokyo, sydney, and seoul. sophie kamaruddin. sophie: we are going to be watching reaction to south korea. it is not considering curves on dram chips apply to japan as part of a move to downgrade its trading partner, which some observers say is mostly symbolic given the trade deficit with japan was $24 billion in 2018. machine tools, chemicals, and stainless steel, those are among the type of products south korea may subject to export controls. today, we are going to get
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results. shery. shery: thank you so much for that. let's get back to trade with the trump administration delaying new tariffs on some chinese imports until at least mid-december. joining us now is the professor of economics at syracuse university and the peterson institute nonresident senior fellow. always great having you with us. president trump has repeatedly tariffs that these against chinese products would not hurt american consumers. it is a tariff delays sensually admittingssentially they will hurt american consumers? >> i think you put your finger right on it. it is a declaration that these tariffs would hurt american consumers. it is certainly what reputable economists have been saying for months. it is clear what we know from looking at the effects of the existing tariffs on export and
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import volumes, on prices, that it is the american consumer and business that are paying these tariffs. today's announcement basically acknowledges that. the question is how much will american consumers actually feel it? when it comes to farmers, we know they are getting hit, but the president is giving them billions of dollars in subsidies. how much will these tariffs hurt american consumers. will they be able to feel it on the ground as we head towards the 2020 election? >> as you recall, at the very beginning of this conflict, the president's team tried to pick products that basically were input into products and therefore, consumers would not buy them directly. they tried to back load the pain. so far, to some extent, that strategy has worked. the opposition from everyday household has been pretty muted
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to the tariffs. however, there's two big "but 's." the president blinked before imposing these tariffs because clothing, shoes, baby seats for ,our car, iphones, all of these the consumer would definitely see higher prices. receiving these payments. market facilitation payments. nevertheless, farming has declined and we are seeing increases in bankruptcies, particularly along the midwest, and increases in the number of farmers who are behind in their debt payments. we are seeing a lot of pain and agricultural sectors in the u.s. economy. they are very vulnerable to a downturn if one is to come while this trade conflict is still going.
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not clear that these payments are really buying them off in some sense. war has put them in the crosshairs. they are in some sense the victim of these policies. to what degree can you view this as a circuit breaker? talksuld assume that the scheduled for september would now proceed. is this going to be enough time for some incremental progress on the trade front now? mary: it is really hard to say. it depends on what each side wants out of this. it gives a very small window, as we have said all along. the issues that underlined the conflict, were the original reason for the conflict, the american intellectual property, greater market access for companies, the role of state owned into prices, these are very complex issues, one in which the two countries do not
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see eye-to-eye in any sense, not only on the problem but on the remedy, so it is hard to see how a few more weeks will get us to an agreement. earlieru are measuring -- mentioning that consumers were starting to feel pain. we know farmers are starting to feel pain. what about u.s. citizens through their 401(k)s? citizens are much more exposed to the equity market. is this always about who could take the most pain on the market site as well? mary: the markets have reacted not dramatically so. we have to remember that, you know, exports are still a relatively small share of the u.s. economy, but we did see today the rally as a result of this announcement. concerned.ets are they are watching. and i do think that they seem to be very short term in their movements because today's announcement is really a delay.
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it is not a resolution in any sense. i think the roller coaster ride will continue through christmas is not beyond. shery: we saw surprisingly strong cpi numbers here in the u.s. what is the likelihood of the tariffs could push up inflation to a point where this would tie the hands of the fed? mary: namely, it would be a one-time increase. a one-off. the fed is concerned about persistent increases in prices. there was one study done by the federal reserve bank. it would out about .5% on to the cpi. increase. i do not think the fed is concerned about that aspect. views, theysome would like the inflation rate to be a little higher. what is more concerning is the tremendous amounts of .ncertainty that this lens
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business investment has been softening. the manufacturing sector is not adding jobs right now. with keeping the economy moving, it is the consumer. what happens when consumers decide that things are getting risky and they stop opening up their wallets? that is a much bigger concern for the fed. ofl: mary lovely, professor economics at syracuse university and peterson institute, nonresident senior fellow. thank you for joining us. still to come, haven currencies fell as president trump delays those additional tariffs. the yen posts it's biggest daily -- its biggest daily drop since march of last year. this is bloomberg. ♪
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paul: this is "daybreak asia." i am paul allen in sydney. shery: i am shery ahn in new york. let's head to sophie in hong kong for a check of the markets. sophie: we are going to be
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checking how far this overnight relief rally can go after the u.s. delayed tariffs on chinese products. theince march 2018, while greenback found support from your score inflation coming in higher than forecast. the yen did pare some losses. around 106.65at against the dollar. it has been needs to over the month of august. check in on the offshore yuan, holding its overnight rally, which was the best in almost a year when it strengthened past seven a dollar. a quick check on treasuries futures, flipping the board. seeing them that changed after a chart the session. seesdip buying at the long end of the curve. dip buying at the long
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end of the curve. paul: let's look at what this reprieve means for foreign-exchange markets. we have l -- nick with us in sydney. let's talk about the yen. it was not a dramatic move. that is the biggest move since march 2018. is that dependent on the next tweet? >> i think it does depend on that next week. 105 does seem to have a bit of a floor now. we have had a decent rally in dollar-yen. it does depend on how the market takes this move over the next few sessions. if it is just a blip higher and investor sentiment does stay to the downside, it probably will perspective,rrency you would expect them to buy yen for medium-term moves in the future. a realo take this as positive move, and it is more
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the fact that talks are reopening between the u.s. and china, maybe even more so than the tariffs delay. i think we could see an extended rally in dollar-yen and we could see yen retreat across across currencies as well. paul: prior to this development, there was discussion going on. maybe the tension fund might get involved in self. the boj might start jawboning. there was speculation. has that retreated? nick: i don't think there is any smoke without fire but i think it is further off than we thought. level,id break that 105 maybe we would see some sort of smoothing action from one of the entities in tokyo. i do nothort-term, think we will see too much of that, but we are feeling very volatile. if we do see exacerbated moves, i would expect to see central banks come in. maybe not just in tokyo, maybe
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not some of the bigger players, but maybe some of the other currencies. for the moment, we have been relatively stable. i use relatively in a longer sense. if we see some sharp moves, we could see some action. shery: if we see the flight to safety, is it safe to assume that as he continued to see as at&t and more idiosyncratic headlines like argentina elections, like hong kong protests, that money will flow out of emerging-market currencies? nick: yes. i think you are right. i think if we take out the move last night with regard to the tariffs and the talks, there's still a lot of i suppose fear in the market and especially emerging markets. argentina, obviously a fantastic example, and not in a good way over the weekend, but i that is the issue that we do face in the emerging markets space that
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there could be investors taking the opportunity of any rallies to get out of some of those emerging-market currencies and that could lead to a stronger flight to safety. shery: where does sterling stand and all of this dynamic? we saw some significant pressure on the british pound, very close to that psychological level at the moment. obviously, 1.2 is a key level. it would not surprise me if we see that break lower. there does not seem to be any consistency as usual. until we get some clarity on what is going on and until this bickering between the politicians comes to some sort of agreement and that does not look likely at all, we will continue to see pressure on sterling. if a plan can get put in place, if we get some solid ideas from the new government, maybe there is room for a relief rally. you would think, with regards to
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what we were just talking about with the end currencies, if the u.k. get its act together, there would be a large flow of money back into the sterling trade. while we have is uncertainty, there is more downside to sterling. dol: in terms of the yuan, you expect that that is going to stabilize now? nick: i would hope so. it comes back to this. so many geopolitical factors hitting the market. the yuan did rally nicely. and that is a nice short term. whether we get that extended move comes down to some of the other things. we are looking at hong kong closely at the moment and it is a major flashpoint. if there was to be an escalation in hong kong and what is going on there, if we did see movements, we keep talking about armed police or troops over the border. i think there is downside for the yuan on that side, but there is a lot of moving parts to the market. i think we are in a slightly
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happier place today than we were a few days ago that there are still those risks out there. paul: i want to get your thoughts on that currency manipulator label. that seemed quite ironic because that china seemed to stop manipulating its currency that it attracted the label. would it ever handle? nick: i think it would do. we have that issue with the yuan that we have market forces exerting pressure on it. bankve certain central forces as well. we are keeping a close eye on that on a daily basis. we think it would be weaker at the moment. given the data coming out of china and the global growth concerns, i think at the moment, it hit china seen her and harder than it would hit the u.s.. the yuan should be a little bit higher. once again, it is a short-term guests at the moment because there's so many moving parts. at the moment, we take what we can get and that appreciation will be well received by the
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market but we will look for that next catalyst. shery: are currencies affected more by interest-rate differentials or growth differentials? that would make a big difference on deciding where the u.s. dollar is going given that they are cutting rates, but it seems everybody else around the world is easing as well. nick: i think so. firstsly, we always look and foremost at the interest-rate differential. at the moment, growth and the global growth concerns are such a major factor for the market. foreign-exchange always sort of leads and gets into trades a lot quicker than some of the other products. i think that growth will continue to dictate short and medium-term considerations. we have got that slew of central banks queuing up to cut rates at the moment. it is sort of a race to the bottom. because of that, we are not seeing those decent interest rate driven trends in currencies.
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i think that is the issue the currency markets are facing at the moment. we continue to keep talking about these global growth concerns and trade wars. shery: the central bank in argentina, will it have to get involved? how our argentinian assets looking -- are argentinian as a cooking? -- looking? nick: it is a drastic situation in argentina. we have the real vote to come up. if we see this extreme volatility and we saw their stock index dropped by 50% on monday. if we see that sort of volatility, i think the central bank would have to get involved. we have to look at the world bank and the imf helping out as well. there is a whole school of things that could go on -- slew of things that could go on, especially with excessive volatility. i think the central bank will have to get involved there. paul: nick twidale, thank you
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very much for joining us today. breaking news on the bloomberg terminal. machine orders for the month of june. it is a huge beat. that is an understatement. 13.9% increase. the expectation was for a contraction of 1%. a massive turnaround on the month of lay which is a 7.8% contraction. on the year, that gives us a 12.5% expansion. a massive beat on the expectation of a 1.1% contraction. you might want to have a look at their methodology. that is a gigantic heat. not a lot of change to the yen. 106. this is bloomberg. ♪
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shery: this is "daybreak asia." i am shery ahn in new york. paul: i am paul allen in sydney. in a long-awaited deal, cbs agreed to merge with file on --
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viacom. the deal unites the most-watched u.s. broadcast network with the parent of paramount pictures. let's go to chris palmeri. they first proposed this combination in 2016. what tickets along? -- took it so long? chris: management. jerry redstone had a couple of strong ceo's at these companies who both of them had their own agendas and visions for the company. work themwhile to both out. and sort of what was the price of this and who was better off? there are still some people who don't think cbs should be tied in with the slower growing cable tv channels. mario seems to be legally challenging the merger. what is this about? chris: is viacom voting shares were trading at a premium to the other shares, and they have taken a hit of 10% since the
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deal came out. paul: so what does this mean for netflix and the competition in video streaming? chris: we are seeing the emergence of another giant media company. we saw at&t buy time warner. everyone is getting bigger to complete with netflix -- compete with netflix. there will be a lot more streaming platforms. they will offer alternatives all over the world. palmeri, thank you so much, joining us from los angeles in the latest of the viacom merger. markets open in tokyo, sydney, theseoul, at the top of hour. let's turn to sophie for a check of what is moving. here's the futures board. nikkei futures hinting at gains of 1% to 2%. some ground after its biggest loss in over a year. they assess the latest move from the u.s. on chinese tariffs in the face of flip-flopping in the
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past. it has been a busy day for your data. we saw japan's core machinery orders coming in at a massive beat. we will see how that feeds into sentiment today. china, july's monthly activity is due. we will see if it comes in weaker than expected. we thought trade from india. in australia, which price data. we had korean jobs figures along with japan's core machine orders . tencent very much in the spotlight. this as we learned how the trade tensions may have impacted the company along with hong kong exchange. the stock exchange operator will show us how much of an effect perhaps these protests in the city have had on the earnings outlook. shery: a busy day for the earnings report. a quick check of the latest business flash headlines. moody's is wanting exxon mobile -- warning exxon mobil that is
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credit rating may be lowered. highest rating to the $7 billion offering of senior notes, but stable outlook is under pressure because exxon is outstandin outspending cash . protests ingoing hong kong have prompted china's biggest bank to slash its view of cathay pacific. the wideningrom unrest damages the airlines brand. the bank has a stock price target of six hong kong dollars it's totalu says number of daily active users has topped 200 million this month. that figure includes unique mobile devices that have accessed the app at least once a day at the start of july. baidu said it total has reached 188 million.
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the company reports earnings next week. cost cuts and lower investment may turn profit even as sales growth falls. paul: coming up on the next hour of "daybreak asia," u.s. stocks surge after donald trump takes a step back in his trade war with beijing. ♪
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paul: asia's major markets are .bout to open for trade the u.s. goes on china to respect hong kong's autonomy. the city is bracing for more unrest.
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shery: what are we seeing coming from the tariff delay? sophie: we're seeing breaches come through, adding .9%. when it comes to risk aversion, we see the yen gained some ground after his biggest drop in over a year. south korea says it will not curbs on japan. we have the korean yuan advancing.
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we're also watching iron or minors in sydney after gold has been boosted to $115 a ton. paul: let's take a look at first word news now. has bowed totrump pressure from corporate america, delaying additional tariffs on certain products imported from china. markedly imposed . the announcement comes as the two sites spoke iphone for the first time since the recent escalation attention.
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ballgames exceeded the median -- both gains exceeded median estimates. , offering a in july reason for the r.b.i. to remain dovish. the r.b.i. has lowered rates four times this year, and the governor has said future moves will be data dependent. pakistan is calling for an to discussing india's decision to revoke .utonomy
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pakistan also says india will provoke a standoff to diverge attention from growing problems at home. day onnews 24 hours a air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. shery: thank you. the u.s. is urging china to respect hong kong's's economy amid concerns beijing is mobilizing on the border. >> the hong kong thing is a very tough situation. it's very tough. we will see what happens. i hope it works out for everybody, including china, by the way. i hope it works out for everybody. shery: our chief north asia correspondent joins us. the u.s. are trying hard to stay out of hong kong in what beijing claims is a domestic issue.
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are we seeing signs this might be changing? >> it is interesting again the donald trump has commented on hong kong, not only in a soundbite you heard just now, but as well in a tweet. we can bring up that tweet from donald trump where he is saying basically that intelligence sources -- well, his intelligence agencies indicate the chinese are amassing more troops on the border across from hong kong in guangdong province. he says everyone should be calm. it is interesting that donald trump is saying the things. we do not know if he is talking about new evidence in the last 24 hours or if this is what we have already seen. on mainland video streams.
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this has long been used as a bit of a sort of damocles hanging over hong kong as a bit of a threat, but it makes it all the more threatening when two days ago you have the hong kong and macau affairs office spokesperson basically use the terrorism,minology and many people say that could be a justification if they wanted to for beijing to order .ts own security forces under normal circumstances, it would have to be the hong kong government that requests china to send in the pla. if it is deemed a national security issue, china could basically do what it wants with its soldiers. after what appeared to be another night of chaos, things seem relatively calm now. >> yes, proverbially it is night
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and day between last night and today. theme step aside and let cameraman, richard, zoom in and see the scale of the test right now it's -- right now. it is fairly minimal. they blocked both north and south departure gates, and that caused lots of chaos. the airport authority saying anyone who checked in before 4:30 p.m. yesterday and who could make it through the throngs of protesters, some described it as a mob tactic.
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it was similar yesterday and we know it turned pear-shaped later on in the afternoon and evening. shery: cathay pacific, one of those companies very badly hit, not only because the cancellation of flights, but this routeshowing has erased 1/3 of the company's value. what is the outlook for the company? >> it does not look good at this time. they have faced a number of headwinds in the past, if it's .rongly hedging on fuel prices
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week warned late last basically warning any staff on flights to china or three chinese airspace that had sympathizers or participants in these protests -- in these illegal protest, as china describes them -- would not be able to be on that flight manifest. that has serious ramifications for them. it is not a surprise that the chairman of sort of pacific, which owns 45% of cathay pacific, was in beijing and maybe is still there as well. has deep talking, this ramifications to cathay pacific. issued aerday, itpc note putting a strong sell rating on cathay pacific, citing irreversible damage as well as
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the deep exposure to the u.s.-china trade war. paul: thanks very much for joining us now to hong kong airport. we are looking forward to a basket of eco-data from china later on, and that's likely to show fallout from the trade war. our asia economics reporter joins us. this data dump obviously predates significantly news we've had in the past 24 hours. with you have? >> it also significantly predates the threat of tariffs in september. data, we will have five indicators today. economicsloomberg seeing a theme of less bad data, but still not looking good. investor production data probably flowing a bit. pmi's looking a little bit less
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retail sales also soft. it will be hard to keep up that pace. lastly, fixed asset investment is looking decent probably in july. that's where you really start to see government spending, where to push we will see kind of a bevy of data, seeing how the data react to trade war pressures but also a lot of other pressures going on in the chinese economy right now. president trump trying to protect the u.s. economy by delaying 10% tariffs on chinese goods. how are these economies shaping up in the trade war?
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>> it's always hard. the data move along at a different pace. we looking at july data for china today. we have seen other data out of the u.s. that have not look quite as good as they did previously earlier in the year, so we see services, manufacturing, kind of softening quite a bit. they never want to cite death of its financial markets, political pressure, the global economy -- they never want to cite those as the primary reason for what they do. that is something to see him a u.s. site as well as the china side. we have already seen some of the weakness on the china side even before the data we will see today. we've been talking all morning about the good news overnight
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that the trade war will not steal christmas on the u.s. side, so that does provide at least some near-term upside. for thehank you so much latest on the trade. let's check in on what's moving on the market. ashie: sydney rising as much 6.5% after canada's brookfield property agreed to buy an australian village operator. computer share climbing on its earnings, forecast margin income earnings.
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shery: thank you. investors are hoping tencent will get back on track. when it reports earnings later, we will get to that. , deutsche bank's cio joins us to discuss the potential for trade tensions. this is bloomberg. ♪
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paul: this is "daybreak asia." our next guest says stocks and currencies remain volatile and investors should take profits and recalibrate.
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joining us now is deutsche bank had ofmanagement cio and emerging markets. there seems to be some fear of missing out going around. we are seeing asian stocks again rallying, following u.s. stocks higher. o we still have room to rise? >> not really. at least in the short term from our perspective. i think what you refer to is in the tradeblip tensions. it is some sort of -- i would even call it like a poker game, who is calling out the bluff, who is moving backwards, so we don't really think this would be quite what markets are hoping for. a short break. we have been calling to take
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profits and recalibrate for some time. we are in a quite comfortable position i have to admit, for the past few weeks. the market seems to recover at least in the short term. we are not ready yet to be deployed the cash we took out from equity markets -- not yet ready to redeploy the cash we took out from equity markets. shery: you see trade tensions and we see more economic data today expected to show a slowdown in the chinese market, with the pboc come to the rescue and perhaps give a boost to the market? think it is not that yet, so we're not expecting any immediate moves. we have seen already from the government am fiscal stimulus over the past 12 months. if you look at the last 12
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months, there was the first big tech reform in china, followed by a tax cut last few months. been some stimulus measures over the past few months already. if things get worse, we would expect also the pboc here to come in, but of course, we have seen already from the pboc some movement in terms of rrr cuts for providing banks more liquidity to support, especially midsize companies. hence, these are measures we can expect from both sides over the next few months if things get worse. to that point, i want to bring up this chart on the bloomberg terminal. cuttinggoldman sachs its target by 10%. where do you see stocks in china
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next sixover the months he apple >> we were quite positive for chinese equities going into this year. we did call out china back in october which was, i have to admit, a little bit premature, but it has paid so far in the course of this year, but then cominge trade tension back in early may, we did close this course and are still on the sideline now to reenter the market. i would not go so far to cut -- to cut chinese equity markets by 10%, but given the year to date kind of market movement and nice performance in thinke equities, we still investors can look to take profits here, but we don't think it will lose all its year to date kind of gains.
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hence, we would just expect a minor pullback in the range of maybe 5% to maximum 10% for the .hort-term that is may be an area where we would be more positive on chinese equities again. paul: you said that has been your position for some time to take cash and recalibrate. what is the plan right now? are you just holding cash? if you're looking for opportunities, where are you looking? >> why we are saying recalibrate the profitot to put into cash. we do hold some cash position, but the majority offer to proceed into fixed income, which is now the biggest asset allocation within our portfolio. emerging markets are a hot currency.
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the environment still supports fixed income and we are also seeing spreads quite tight right now. because of corporate still looking quite robust, we still think this is an area where investors can still put some money into. shery: thank you so much for that. we have an alert on this developing story in hong kong. we are now hearing the hong kong airport has obtained an interim injunction to bar protesters. this would mean that they can restrain persons from unlawfully obstructing the hong kong it ist has said today rescheduling flights and operations are back to normal, but we are now hearing the hong kong airport has obtained interim injunction to bar protesters and restrain people from unlawfully obstructing.
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this, of course, coming as we continue to see a six-day sit in at the hong kong international airport and a 10th week of her across hongests kong. plenty more coming up on "daybreak asia." this is bloomberg. ♪
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paul: this is "daybreak asia." a bloomberg scoop -- facebook paid hundreds of external contractors to's grand scribe -- axonal contractors to transcribe users' private audio messages -- external contractors. >> hundreds of contractors were paid by facebook to transcribe audio messages people send each on facebook chat. this is a breach of what people understand to be their privacy as they arets,
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person-to-person conversations. the company says it has stopped afterractice competitors have come underscore need for similar practices. amazon, google, and apple have all used outside contractors to try to improve the artificial intelligence on the voice commands people give to their assistants. this is different because it is chats interpersonally between users on facebook messenger. facebook just got over a $5 billion fine from the ftc on privacy concerns, and this is just the latest in a series of controversies over how a company handles data. paul: let's get a quick check of the latest business flash headlines. off-again on-again cbs/viacom romance has finally led to a marriage. the deal unites the most-watched u.s. tv network.
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stevia shareholders will have 61% of the new company, the remainder going to viacom investors. sherry redstone will be the chairwoman. the maker of hp laptops says it will shift production out of china within months as the trade war heats pressure on the industry. they will move their entire american ground operation to home base in taiwan as suppliers reassess their dependence on china. told investors that the escalating trade war is very painful. paul: bears have seen to and three-quarter mark to market gains in 2019 so far. musk social media to attack what he called value destroyers and warned them to prepare for the
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short burn of the century. it remains on pace for its worst annual decline on record. next, more from our exclusive the philippine vice president, including her thoughts on the ongoing trade war. this is bloomberg. ♪ from the couldn't be prouders
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withis is "daybreak asia" first word headlines. hong kong airport has won an interim injunction barring protesters from unlawful obstruction after another night of chaos with violent clashes and departing flights suspended. -- demonstrators accused these two men accused of being working undercover. hong kong authorities say protesters have crossed the line of a civilized society. u.s. aviation regulators are banning some macbook pro laptops from planes after apple said ame have batteries that pose
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fire risk. the faa says it is aware of the has alertedd airlines. the european union aviation safety agency issued a warning modelshe recalled earlier this month. iran says it expects oil tankers seized by u.k. forces to be released soon, something that could help ease shipping concerns in the gulf. exchangedhave been between 10 iran and london and the problem may be dealt with in the near future. a resolution could also mean the release of a u.k. flagged tanker that iran seized in the strait of hormuz. allegations of sexual harassment against veteran tenor placid a mango caprock to the san francisco opera to cancel an upcoming performance -- veteran tenor placido domingo.
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several women accuse him of pressuring them to sexual relationships and harming them professionally when they refused. the philadelphia orchestra has rescinded an invitation to the singer. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. let's get a check of the markets with sophie. sophie: we are tracking the relief rally we saw on wall street. the korean won jumping this morning. it snaps its decline but does remain asia's worst-performing currency this year. check out the chinese yuan. a quick check now on some stock movers pulling up the board. i want to highlight south korean and japanese tech and apple suppliers rising on the u.s. delaying tariffs.
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lg innotech earlier jumping as it percent. let's check in with our chinese correspondent. some tariffs will still be affected september first, but perhaps the ones that could hurt the u.s. the most not. give us details of what is on this list? essentially, those $300 billion of additional tariffs trump had threatened are being divided into two list's. the first will go into effect on september 1. that will include items like agricultural products, antiques, clothes, some kitchenware. that is equivalent to about $110 billion of goods according to bloomberg analysts. bigger ticket items like smart phones, notably apple iphones as well as laptops, some children's
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toys, will be delayed until later in the year. on the bright right here, talks are back on. we know they have had phone calls. they have another when scheduled in a few weeks, but on the other hand, we don't know if those september talks are really going to happen. exuberance in the market seems to miss the point that this is just a temporary pause. we have no sign any real progress has been made. besides do not seem any closer to a deal besides this temporary delay, perhaps just delaying the inevitable. this temporary delay change the picture in terms of an economic impact? tariffs are just one piece of the pie. still 110 billion dollars of tariffs will be in place, but almost a bigger drag is all of the uncertainty around this. when you talk to business, bloomberg spoke to columbia sportswear's executive. they say this is too little too late and the chaotic policymaking makes it hard for
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them to plan for their businesses. in terms of the long-term prospects of this, in terms of reaching a lasting deal, bloomberg economics is still projecting a re-escalation is likely after this rather than a de-escalation. some analysts view this move as less than an olive branch toward china and more recognition of what is at stake domestically at home. with this announcement, he seems to finally be recognizing the economic costs and the pressure on the domestic consumer by having these tariffs. on the china side, one viewpoint is why would they choose to make difficult decisions with trump now when they may be able to wait this out and have trump fold as they starts to be a drag on the markets? the consensus view is the relationship, the trade war will still be in purgatory mode at least until the rest of his administration, if not for longer. paul: selina wang in beijing, thanks for joining us.
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southeast asian nations have found themselves caught in the escalating tensions between the u.s. and china. presidentpine vice says her country does not need to take sides even as the current administration builds friendlier ties with china. she spoke to bloomberg in an exclusive interview. let's listen. >> the relationship has changed over the years, especially the last three, with a new administration, foreign policy as far as dealing with the united states has really changed. perception to be a that could be more friendly with china or with asian neighbors would mean we decrease our friendship or our relation to the united states, and i don't believe in that. i don't believe the philippines should choose between the u.s. and china. in the sense that friendships
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with both countries would be beneficial to the philippines. why the new administration has chosen to be more friendly with china. what i don't understand his -- is why there is no clear line because we canup maintain economic relations with them, but there should be a very as far as protecting our territory is concerned and preserving our sovereignty. >> some critics say this has been a lack of pushback when it comes to china in the south china sea. why do you think that is the case. ase others went as far saying that perhaps the
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philippines is selling itself to china. do you agree with the comment? >> yes because of the way that our administration now is to ouring to threats territories and threats to our sovereignty. for many years now, china has been occupying many of the territories where we have staked our claim, and, in fact, many years ago, we filed a case before the united nations tribunal, and we won overwhelmingly, and we felt like it was a big win for us in the sense that we were hoping that the win, that we would be able to use that to rally nations behind us because there is the sense that we are too small and powerless dealing with china, theeven after we got
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tribunal award, our government has not responded in the way that we were expecting. in the recent past, there has been a shift in those statements. the president recently said that monthe goes to china this , he will take up the tribunal decision with the president of china, and i think it is a big china, and i think it is a big development in the sense that people have been prodding him to do that already in his previous meetings with the chinese official, and he has been saying there would be time for that. the question now is i think everyone is waiting with bated breath, what will happen in that meeting. >> do you hope for u.s.
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intervention? >> i hope not. that, theo understand u.s. presence in the south china is a source of comfort now in the sense that we know that much resourcess and power is china in pushing for our rights on the south china sea. fact that the u.s. is there, the fact that many other countries are there is a source of it would be best if we are in a position to defend our rights. that was the philippine vice president speaking to bloomberg. coming up, investors are hoping
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inwhen earnings come out hong kong later. we will have a preview. this is bloomberg. ♪
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paul: this is "daybreak asia." it is a big week for chinese tech earnings. let's turn to sophie fore-check of the lineup. sophie: chinese e-commerce operated reporting a surprise profit and quarterly revenue that top earnest -- earnings estimates. plus, the company added 10.8 million new customers after a stagnant back half in 2018, and expects third-quarter sales to come in line or slightly ahead of analyst or forecasts amid fierce competition from alibaba. alibaba, along with tencent, had
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market cap since the trade war escalated in may. both tencent and alibaba's .usinesses are both domestic alibaba expected to post revenue growth of 38% after coming off a record june online promotional campaign. tencent has been on a shopping spree, and not just in the gaming space. barely a week went by in the second quarter when it was not making a deal and the titles involved everyone from super mario to lady gaga. struck in april, tencent a deal with nintendo to revive stalling switch sales and unleash the mini console on the mighty china market. in may, it was one of a few big chinese names that pulled the right strings with the hong kong monetary authority to win a virtual banking license. was home in shenzhen, it .qually bullish
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it kept out the fountain pen to .ign and him ou in june, it teamed up with singapore investment giant to invest $35 million in a startup from the u.k. last month, it went mobile with india and invested $100 million in a local streaming company. it also partnered with bmw to develop self driving cars in china, and it said go, go, go to pokemon. -- two are developed developing computer games. it's currently tapping access to the best catalogs of lady gaga and taylor swift, negotiating terms for a 10% stake in the world's biggest record label. if all that is not enough, sources also tell us it is planning to come back to the loan market with a bang, seeking to raise about $5 billion from
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banks. with so many fingers in so many pies, if the loan is approved, there will be plenty of ways for tencent to spend the money. from joining us now .hanghai, sandy shen we just heard a breakdown of just how many pies tencent has its fingers in these days, but you get to a point where it is the law of diminishing returns. i want to bring up this chart on the bloomberg. about 300 times bigger now than it was an 2004. revenues and margins getting squeezed. is this really a good way forward. >> i think for its major business like gaming, it is getting saturated. there are fewer titles tencent is now having that can reap big
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revenues for this company, so that's why they are buying up a lot of gaming companies as well as investing in those music and video content business, so it can bring new content and new business.a maturing i think that's probably one of the few ways tencent is able to grow its business, while it's businesses are still growing. when we do get results a little later on, what are you expecting to see from tencent? that theling is general numbers should be in even the i think macroeconomic pressure from
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trade wars, tencent probably will feel a little bit, like -- how to say precious in the coming months, but on the other hand, i think tencent's main focus, the majority of the revenue is coming from the domestic market. to some extent, it is being less exposed to the trade tensions. while it is investing in a lot of the overseas business and getting content from big record labels, they are mostly just serving chinese local markets. on those fronts, i think tencent is placing its bets for the future of growth when the market is stabilizing. that seems to be the case for alibaba as well. how does online spending and e-commerce do when you see tough times because of macroeconomic ressures?
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>> i think so far, the domestic market seems to be still very strong. if you look at the consumer confidence index, it is on an upward trend so far, and people still keep buying both in retail stores as well as additional channels, and looking into the second half, china is going to face further slowdown in gdp growth, but even in slower to spend moretend time at home or online, so they are shifting their spending online which can actually benefit alibaba as an e-commerce player. shery: is that what will have driven the performance when we week? t later this how much will cloud account for it? >> a think the cloud business is still very strong.
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it has seen very strong growth given that alibaba is the dominant player in the china strikingnd it's also more for its cloud. it had salesforce is the excuse of provider for the software in china. acquiringe alibaba some multinational companies who in the past would not have used alibaba's service. that will give them some growth prospects. thank you so much for that. if you missed any part of that conversation, tv is your function. you can touch up on past interviews, also watch us live and died into any of the securities or bloomberg functions we talk about and become part of the conversation
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by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out. this is bloomberg.
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asia." his is "daybreak paul: let's get back to hong kong airport now. our chief north asia correspondent is there.
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we are hearing the airports won an injunction barring protesters from obstruction. what more do you know? >> they sought this court order late last night and we got confirmation in the last half hour or so from the airport authority that they did win this injunction. they are waiting for field copies to come here to the airport before they are required by law to post it for the public here and the protesters to see it. basically, let me read from the statement. they say the airport authority of hong kong has obtained this personson to restrain from unlawfully and willfully obstructing or interfering with the proper use of hong kong international airport. persons are also restrained from attending or participating in any demonstration or protest or public order event in the airport other than the area designated by the airport authority, which is the area just behind me here.
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lines are already -- i will step aside for a second. the lines have already been demarcated on the floor of the arrival hall and yellow. where we still have a few dozen protesters, remnants from yesterday's more than several thousand protests, are still hanging out here. basically, this temporary injunction indicates if they decide to move upstairs to the departure hall like they did yesterday, where they are not authorized to go, yesterday, they of course blocked passengers from getting to their aircraft. airport security has the right to restrain them from doing that. our producer has spoken just a few minutes ago to some of those protesters asking them if they know about the injunction, what they plan to do. they say right now, they are just planning to sit tight. they are aware of the injunction but will not discuss it or do anything until they see that court order, that interim
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injunction posted as required by law. right now, it is sitting tight. shery: thank you so much for that. us fromengle joining the hong kong international airport. let's get a check of the latest headlines -- moody's is warning exxon mobil its credit rating may be lowered as spending balloons and debt piles up. the agency assigned its highest rating of aaa to exxon's proposed $7 billion offering of senior notes. exxon is outspending cash flow, and its refining and chemical businesses are underperforming. paul: chinese search engine ofdu says it's total number daily active users has topped 200 million this month, including unique mobile devices. start of july, baidu said its daily active user total had reached 188 million. the company reports earnings next week. cost cuts and lower investments
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may turn a profit even as sales growth falls. shery: the relief rally continues across asia. let's get a preview of what to watch in markets this morning. biggest bank cut cathay pacific to a cell -- sell after dropped to a level last seen in 2001. forecast than likely where shares to fall to a 10-year low this week. airport soaring by the 10% daily limit. citic security says international airlines make reassess hong kong's role as an international hub, which could help shenzhen establish itself in the long run. china's civil aviation authority said it was boosting capacity
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area.e guangdong, macau call: thanks. before we hand over to bloomberg markets asia, let's take a look at how things stand right now. a lot of green on the screen today. we have the nikkei higher by .8% . the asx higher by .3% here in australia. resourcesme of the stocks performing particularly well. gold miners seem shery: to be suffering today. that is it from "daybreak asia." the chinese open is next. this is bloomberg. ♪
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>> it is not a clock i am in beijing, shanghai, and singapore. welcome to "bloomberg markets: china open." david: we are counting down to the open of trade in hong kong and on the chinese mainland. let's get your top stories. hong kong airport wins an injunction against protesters after another night of chaos and more canceled flights. tom: president trump bows to corporate america and will delay extra tariffs on china. concern is growing about the economic impact in the u.s.. david: we are looking ahead to second-quarter earnings from tencent. the period


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