tv Bloomberg Markets Asia Bloomberg September 2, 2019 10:00pm-12:00am EDT
rishaad: just getting to this news conference taking place in hong kong, carrie lam, the chief executive, apologizing to travelers about the problems that they are having at the airport at the moment. she is also going on to say that different parties need to set aside their differences and she is hoping they will do. she is aware of this leaked closed-door meeting where she talked about her inability to really do anything, that it was now in the hands essentially of the sovereign entity. in other words, china here as well. this is what we have at the moment. she is hoping also to continue dialogue, to solve problems. she is taking questions. a bid to try to sway public opinion or even shift the blame to beijing. can you just clarify whether it
is something you are trying to achieve? carrie: first of all, in very clear and strong terms, i have to refute the second point. still verym disappointed that my remarks in a totally private, exclusive session, which is a lunch, actually, which clearly is subject to checks on house roles -- rules, had been recorded and then passed to the media. i think this is quite unacceptable, ok? so, to further suggest that myself or the government have any role to play in this thing is absolutely unfounded. so, that oinp -- point has to be made extremely clear. on the first point about
resignation, i said on several occasions previously and also reaffirmed by my colleagues and the chief executive's office, in response to media inquiries, that throughout this period, from the very beginning until now, i have never, i have never tendered her resignation to the central people's government. i have not even contemplated to discuss a resignation with the central people's government. the choice of not resigning is my own choice. understand,ant to because in a private session, i just attempted to explain that, as an individual, given the very difficult circumstances, might be it was an easy choice to leave. but i told myself repeatedly in
the last three months that i an dmy -- and my team should stay on to help hong kong and to help hong kong in a very difficult situation and serve the people of hong kong. that remains my position. i know it is not going to be an easy path. and that's why i said that i have not given myself the choice to take an easier path, and that is to leave. i would rather stay on and walk this path together with my team and with the people of hong kong. [speaking foreign language] rishaad: while she is speaking
cantonese, we will check in on the market action. the thing -- the hang seng up by about 0.2%. a risk-on move, but only a little. adding to some gains we saw yesterday, a good session for that one. others didn't have the same sort of optimism which guided them to the upside. let's quickly look at some of the other markets. the s&p asx 200, just about flat as we await the reserve bank retail sales. sterling, though, lurching towards that 1.20, not just a resistance level, but a psychological one, probably more of a psychological one. the aussie 10 year yields have been backing up. this down just about to basis points -- two basis points. bitcoin falling in tandem where the cny goes against the dollar. this means the correlation twoeen the two is -- the
sinking together by the most since 2015. up 7% on bitcoin over the course of the last two days. 9777 dollars this time yesterday, just down a fraction on the open today. iron ore futures lurch up at the moment. we're talking about a horrid august for iron ore, but it has been coming back strongly. that's currently what we have. ok, let's get over to sydney to paul allen. he has the first word news. paul: thanks, rish. cathay pacific has grounded cabin crew from two flights after emergency oxygen bottles on the planes were found to be depleted or emptied. staff have been barred from flying while an investigation takes place, that will include the hong kong police and the chinese aviation regulator.
routine preflight infections on the planes found 13 oxygen canisters to be completely or partially discharged. theation has flatlined to weakest on record and south korea with no change in august -- record in south korea with no change in august. last week, the be ok said negative inflation was possible for two months to three months -- the bok said negative inflation was possible for two months to three months. predictions of another rate cut in october. sterling fell as the u.k. prime minister repeated his vow to leave the european union at the end of october and threatened a snap election if mp's rebelled against his plan. lawmakers return later tuesday after their summer break, and the opposition labor bank -- labour party will present legislation to force johnson to delay brexit if a deal has not been reached. hasuncertainty manufacturing slumping to its lowest level since 2012.
hurricane dorian has slowed after killing at least five people in the bahamas, but it is still seen as highly dangerous as it moves towards the eastern seaboard of the u.s. the storm will cause at least $25 billion of losses for insurers, which would make it the most expensive natural disaster for at least two years. ubs raises the total to $40 billion depending on how hard dorian hits the coast of florida. global news, 24 hours a day, on-air and 2ti -- 2tict -- @tictoc on twitter. i'm paul allen. this is bloomberg. david: let's talk about the lack of progress with these trade talks. both sides are said to be struggling to agree on a schedule for planned trade talks this month in washington. the impasse comes as the white house rejected this request from beijing to delay president trump's latest tariffs. our china correspondent is with us out of beijing. i'm guessing we know the answer
to this question. where do things stand right now? tom: of course, still a great deal of uncertainty. we had the tariffs imposed, also the retaliatory measures and steps from beijing over the weekend. what we were looking at is whether or not the sides could nail down the date for the next round of negotiations, and it seems they are struggling to do that, precisely because the u.s. say the chinese want parameters -- say to the chinese we want parameters. the chinese say, well, we could have sat down for talks if you had held back on those tariffs over the weekend, which of course the u.s. did not do. we are at something of an impasse. president trump has said the talks, he thinks, will go ahead at some point in september in washington. what we are hearing from sources in beijing is that the chinese side don't want to be seen to be strong-armed by the u.s. and they are cautious that if they commit to a date, president trump could just send a tweet
that unravels all of it. there's a lot of anxiety around the uncertainty. in terms of state media, china is leveraging that to try to prepare people there for a long, drawn out trade war. we had the state council suggesting over the weekend that they will put in additional measures to support the economy. the view from china is that this is going to be a long, drawn out fight. they are preparing for that, but equally they are still willing to talk, but they want to get to a point where they have been given some concessions, particularly around the tariffs. trump has threatened additional tariffs on october 1, symbolic for china, when they celebrate the founding of the people's republic of china, and additional tariffs december 15 and retaliatory measures from china, at which point all of china's exports to the u.s. would be hit by tariffs. that's what we are looking at if don't get these nickthey -- if they don't get these negotiations back on track in washington. rishaad: let's get over to singapore.
ubs wealth management executive director for commodities and fx when gordon. -- wayne gordon. wayne: good morning, rish and david. rishaad: what's going on in the commodities complex with this backdrop -- i'm going to start with iron ore. it had an awful august. there's the spat between beijing and washington. wayne: it would be difficult to say that the trade issues have not had some impact on broader growth estimates. as an example, ubs has cut its china gdp numbers again yesterday from 6.1% for this year to 6% for this year and then we now expect around a 5.5% growth for next year. clearly, growth -- the trade war is having an impact on growth.
we think trade is contributing to a downgrade of about 40 basis points growth -- for growth over the next 12 months, so that's truly impacting steel as well. iron ore -- they have shown they can recover supplies. supplies have started to drift back into the market in quarter three after that terrible dam disaster at the start of the year. broadly, we've gone from a very tight market globally to still a tight market, but effectively the market seeing that supply is on the way. so, we expect the iron ore prices to hit about $80 by the end of this year. we think we are still around -- on track for that. at least in the short-term, things are still a little bit tight in the iron ore markets, and that's why we are seeing a bit of supportive prices in the low $80's. david: while we are here, the other commodity that you guys have been flagging, and i will
read the headline, "gold is destined for $1600." really, wayne? wayne: really, david, really. the gold forecast for us is very much based on u.s. rates, where we see interest rates going globally, which is down. we also think that real interest rates in the u.s., which gold follows very closely, will dip into negative territory or is already in negative territory. that's going to push further up the pressure on the gold price. we also have to look around the globe and you can see that about todollars -- $15 trillion $16 trillion are already in negative territory. gold is steadily moving higher, particularly in these periods where you have uncertainty around the trade issues and some other issues, such as the u.s. and iran, as well as some issues
between japan and korea. generally speaking, we have higher geopolitical risk, including brexit, and that's fueling people to add gold into their portfolios. the one key thing that has not yet impacted gold, of course, is a weaker u.s. dollar. the dollar has been on the stronger basis over the last couple of months, but we now see it below the $1.10 mark on the euro-dollar. we think the u.s. dollar will weaken over a 12 month to 18-month period, so, as a consequence, that will also lift gold on a 12-month basis. rishaad: gold come with all these bonds in negative terrain -- gold, with all these bonds in negative terrain, actually has a yield. given that fact. also, at the same time, we see this big lift up for bitcoin as well.
is that now a proxy like gold is, for instance? rish, ih, to be honest, don't follow bitcoin a lot. definitely on the gold side, i agree with you from the sense that, if you are sitting in a portfolio with equities, gold volatility is below that of equities. on a risk-adjusted basis, adding gold into your portfolio creates this benefit of a hedge. --sequently, giving people given people are concerned, particularly regarding the trade war and the next stage, whereby it begins to hurt consumers a little bit more in the u.s., they are worried about the lofty heights of the u.s. equity market and equity markets on a global basis -- at ubs, we shifted to a broad underweight in equities for the first time in a long time. we see gold as a very effective hedge against these issues. so, while i don't have any
particular views on bitcoin, certainly gold we see is a very beneficial part of any investor part portfolio -- investor's portfolio at this stage. david: a lot of people talk about dorian, the hurricane on the eastern seaboard of the u.s. any impact there on stocks and bonds? wayne: soft commodities have been very beaten down by the trade war. in particular, we've seen corporate -- corn prices and soybean prices under pressure. commodity impacts will be in cotton, for example. however, the cotton market generally has also been in the doldrums, largely because of the trade issues between china and the u.s., as well as fairly robust crops on a global basis. so, yes, it could have a small impact on something like cotton, as well as some of the grains, such as corn, as an example. but generally speaking it would have to be an impact on energy, i think, david.
david: wayne, hang tight. we are moving to fx next. coming up, three months of protests are taking their toll on the hong kong tourism sector. we will assess the damage. rishaad: and sticking with the same theme, later this hour, we will hear exclusively from australia's minister for trade, tourism, and investments. you are watching bloomberg. ♪
that to happen is that we get the end of the trade war. do you agree with that? that'slook, i think partially at least in the short term, that would provide relief to potentially the fed cutting rates even more. i think you would need to change a lot of the settings of the cogs that most people now assume are going to play out over the next six months. the fed cutting rates more, which traditionally would see the dollar weaken. nonetheless, the dollar at the moment -- yields in the u.s. are still higher than those on a global basis. also, just the potential for the u.s. dollar to form a safe haven as people purchase more u.s. treasuries as a result of greater geopolitical uncertainty. i guess from that perspective, we take a long term view that the dollar would weaken largely on the biggest -- basis of higher deficits in the u.s. and
also beginning to see fundamentals work their way through the dollar in that respect. not only that, but of course if the trade war is called off, what you would find is that you would see risk markets rally. asian currencies in particular such as the rupiah have very high yields relative to many other currencies on a global basis. we saw stability and growth on the global basis and we didn't see -- if we saw stability and growth on the global basis, you would find people would start to look at picking up yield in those currencies. that would also help emerging markets more generally if the trade war was to be alleviated. yes, i do agree with him on that basis. but i think there's a lot of cogs moving around that would also change, if indeed we got a truce on trade, a real truce on trade.
rishaad: wayne, i want to shift slightly and get to brexit, get to sterling, and all the political machinations going on there. leave with-- britain a deal or no deal at the end of october? that's one aspect of it. most commentators are suggesting that the path of least resistance is to the downside but how far down? are we baked in with the euro below 1.10, seeing a realization that losing the second largest economy will hurt them, too? wayne: look, i tend to agree garding thereh, re being a broader selloff of euro against dollar and pound against dollar as these hard brexit risks have again come back into the frontline. i guess the bottom line is we will most likely find out how this movie really plays out over the next couple of days.
there have been rumors that boris johnson will call an election by the end of the week. but these still are just rumors. we've also seen, interestingly enough, one of the leaders of scott morrison's political campaign in australia earlier this year, has now joined the boris johnson camp. certainly he is preparing himself for the worst or potentially having to go to an election. all we can say with reference to the pound is that, on a longer-term basis, the pound is cheap at these levels, but we could see the pound dropped to 1.15. -- drop to around sensease is still that prevails and we see some deal or some soft brexit option. nonetheless, the risks of hard brexit have increased to some degree and i guess we will all
know by the end of the week whether the legislation is passed or whether boris johnson calls an election. rishaad: what about the euro side of it? you didn't answer that. side, in the euro still think it's difficult to see the euro consistently staying around this 1.08 to 1.10 mark. i think it can fall down towards the 1.08 mark as the risk-off element boosts the dollar a little bit here, as we see perhaps treasuries going a little bit stronger in the very short term. however, the fed is going to start cutting rates and that is going to erode the yield of the u.s. relative to everybody else. rishaad: wayne, great to see you, as ever. let's tell you what we have coming up. we have protests wiping out 30%
rishaad: you are back with "bloomberg markets." the founder of lululemon has made more than $30 million from his investments in three months. jumped.tswear maker has it's above 70% now for the year. there were questions about accounting and governance. this group may renew its renewable energy listing. yhares surged after plans to bu
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>> it is 10:29 a.m. in hong kong. i'm paul allen with the first word headlines. space is getting relatively crowded as fleets around the earth -- at least around the earth. they have had to move an observation platform for the first time ever to avoid a potential collision with a spacex satellite. spacex launched 60 broadband providing satellites in may. the potential for collisions is becoming so high that it will be impossible to manually manage space traffic. it is preparing an ai system to do it instead. iran is warning it is preparing to step away from the nuclear
deal if europe doesn't come up with new terms by the end of this week. iran has set a friday deadline for germany, france, and the u.k. to offer a feasible way for it to sidestep u.s. sanctions and continued selling oil on the global market -- and continue selling oil on the global market. reports from japan say the government is planning a new police unit on the islands dispute over china -- island's dispute over china -- the i slands disputed by china. ties between china and japan deteriorated to their worst point in decades after the abe government bought part of the disputed chain from a private owner in 2012. the central bank of argentina was talking to the imf about revising its monetary policy for this month, a day after the government reimposed some currency controls in an effort to contain the rising financial crisis. the bank said policymakers failed to meet their monetary-based goals for july and august, but added to that
only the quality target is binding for the imf aid program. global news, 24 hours a day, on air and @tictoc on twitter. i'm paul allen. this is bloomberg. david: thank you so much. about 30 minutes ago, we had a couple headlines out of carrie lam, having a press conference. she said she has not once tendered her resignation to the central government. her remarks come after this audio recording has surfaced from last week, telling business leaders that, if she had a choice, she would just call it quits. rishaad: she said it was personal, her personal view. north asia correspondent stephen engle has been listening in on this news conference. short news conference. centered around this reuters report and this audio that has surfaced where she is heard saying, if i have a
choice, the first thing to do is to quit, having made a deep apology. she went on to say that few options are available, as issues have now been elevated to a sort of sovereignty and security level. she also told those business leaders in the closed door meeting last week that she had caused unforgivable havoc. she was not so forthright today in the press conference when she was asked directly about these comments. she was actually quite angered that these comments were leaked and what she thought were private, closed door conversations. she says, i have never tendered my resignation with beijing. i have not even contemplated to discuss my resignation. the choice of not resigning is my own choice. again, that has always been a question as well, with the resignation as well as the potential to withdraw the extradition bill. she now is saying it is her choice if she wants to resign. i believe we have the
soundbite. carrie: i know it is not going to be an easy path. and that's why i said that i have not given myself the choice to take an easier path, and that is to leave. i would rather stay on and walk this path together with my team and with the people of hong kong. stephen: you just mentioned it was a short press conference. the last question to her was, why won't china allow you to resign. then she said, i have never tendered as the resignation to the central government. she turned and walked away. rishaad: she did say she had no choice. stephen: did she? oh, basically, the backdrop of this, there are just few options right now for her, other than she is saying they are looking at all legal framework to stop
the violence and that is the number one priority. they have not ruled out, including yesterday, the press conference with the chief secretary, the security secretary, and others basically saying they are not ruling out this colonial-era emergency regulations ordinance from 1922 that was last invoked in 1967 to quell unrest in the 1960's. it will give sweeping powers to the police for arrest, for searching property, for censoring publications, and even shutting down the internet, even though the internet wasn't around in 1967 or 1922, for that matter. rishaad: stick with us. this is having a huge impact, especially with the airport being closed, on tourism into hong kong. we are joined by alice chan, executive director of the travel industry council of hong kong, representing the inbound and outbound travel agents in hong kong. welcome to the program. how bad are things? >> they are really bad. the travel industry is
suffering, both inbound and outbound business suffering. mainlanding about the inbound tour groups. 300 groupshave 200, visiting hong kong per day in august for some years. but for this august, we only have an average of 80 groups per day. and for the last 10 days of august, we only had about 40 groups visiting. for two groups from -- tour groups from other overseas markets, we have seen at least a 15% drop in tourism numbers. david: we know it's bad. we know july was bad. do you have early numbers on august? how does august look? >> august was bad. according to the hong kong tourism board, the first half of august, we had a 30% drop in arrivals year on year.
stephen: how does this compare to other crises? i've lived in hong kong for the better part of almost 30 years now. i've lived through the asian financial crisis, through sars, through the umbrella movement. how bad is this comparatively? how quickly can and will hong kong bounce back, as those past crises have been resolved? we saw café occupancy or flight load factors really low during sars. hotel occupancy was in single digits. we are seeing a similar situation now. >> i think for inbound travel, it is as bad or even worse than sars or all the economic crisis that we have had before. even the umbrella movement. time, itt least this is much longer and we are not seeing an end to it. even for outbound travel, sars was worse because hong kong
people were not traveling during sars. but for now, people are also scared away by the incidents at the airport. stephen: the travel industry council of hong kong executive director, when all this dies down, if it dies down, what needs to be done on a promotional level? singapore has its sale. we had harbourvest in the sars time. what needs to be done to restore confidence? >> we are already working with the hong kong tourism board and the government on a major relaunch. we are waiting for the day, for the protests to end before we can launch these programs. theaad: of course, one of biggest tourism groups comes from mainland china. they must be -- what are you seeing in those numbers in particular? >> just seeing -- in august alone, we saw 64% drop year on year in the tour group numbers.
we don't see them coming, maybe not in the next few months up to christmas or even chinese new year. rishaad: have you got any more numbers on this? do you have any way of actually trying to entice them back into the territory? >> i think a peaceful hong kong is what would make them come back again. david: but that's not within your control, obviously. >> no. david: are they still shopping, though? talk to us about trends, assuming we didn't have these protests. you mentioned 400 a day, 200 to 300 usually, down to 80 right now. do people still shop in hong kong? do they consider hong kong as the shopping center? >> not so much. it's because of the depreciation of the renminbi. impact onely has some the shopping. stephen: there needs to be a
great hong kong sale. i have been walking through pacific place, which is the next normal, which does cater towards mainland chinese, as well as city gate, out towards the airport. nobody wants to go near the airport right now, except to get in or out, but there's been some difficulty with travel. what is the specific strategy to get retail sales, which have been dropping by double digits in july -- there have been seven consecutive months of decline in retail sales. you have some things you are talking about. you are just waiting for things to calm down. give me your top two things you need to do. rents are high. you can't drop prices too much. >> we are hoping that the developers will cut -- or at least reduce the rent for a while. and then concessions, discounts will be a major part of the relaunch program. rishaad: luxury sales are plummeting. this is the shot we just brought up here. alice, are you seeing any
evidence of people leaving? buying one-way tickets, that sort of thing? stephen: that's outbound tourism. rishaad: outbound expediency. david: immigration. >> i don't have those statistics, but ticketing sales are dropping in august. like 7%, 8%. david: you hear it anecdotally in the city that hotel rates are coming down. can you give us a number? are average hotel rates down 30%, 40%? .> at least 30%, 40% some are dropping even worse. they are asking for daily rental of less than $100 per night. david: that's like an expensive hamburger. rishaad: what about business travel? that's the other thing. are you seeing any fall off in people coming into do business? are they having second thoughts? we have compliance departments
saying you can't go, it's too dangerous, things like that. >> we do see some drop in business travel, too. the drop of 7% to 8% in ticketing business has accounted for part of that. david: -- stephen: to the airlines that are based here, can they survive this? look what's happening to cathay. we won't get into all of this. but they are under severe pressure. hong kong airlines, under severe pressure, asking employees perhaps to take unpaid leave. flights are being canceled. how dire is it for the two main airplane -- airlines that call hong kong home? alice: we see them offering discounted tickets to trade and the -- the passenger numbers are really dropping. david: alice, we thank you for your time, of course, for coming
on. we look forward to having you back under better circumstances. rishaad: when things are going well, we will have you on. stephen: we will all go shopping. alice: i'm looking forward to that. david: thank you so much. executive director tip of hong executive director for hongravel industry of kong. the chair of that party -- hengside joshua wong -- was detained at the airport. we will get you more details on this once we do have them. stephen: there was a report that joshua wong showed up in taiwan. rishaad: we need to explore that. stephen: that's coming from our bureau in taipei, saying that there are local tv reports that he is in taiwan.
rishaad: back with "bloomberg markets." prime minister boris johnson threatening a snap election if he loses a vote in parliament next week. his critics are trying to force him to delay brexit, but he says that's not going to happen. johnson: i want everybody to know there are no circumstances in which i will brussels tos -- delay. we are leaving on october 31, i nof -- no ifs or buts.
david: our guest is here to talk us through -- let's start with how this is going to go down. have abasically, we situation where boris johnson is trying to kind of push the people who oppose him. david: that's a kind word, push. >> boris johnson gets the queen to approve his idea to suspend parliament starting next week effectively for a month so that there would just be two weeks left for discussion, for debate on any proposal regarding brexit before that october 31 deadline, which of course he said we are going no matter what. his opponents have decided that this week while they are still in parliament, to try to use parliamentary procedures to require him, in the event of a no deal brexit, to get it
delayed, to have legislation that does that. in the meantime, he is saying, if you try to do that, if you succeed in that maneuver, i will call for a snap election on october 14. rishaad: it is getting more polarized. essentially what he said to his opponents, talking about members within his own party, you either with me or against me. this is also at the moment perhaps the beginning of a schism, a split in the conservative party, perhaps. this warning may further embolden them. jodi: they are senior members of the conservative party that are saying they don't want to be forced into this leaving no matter what on october 31. they want to push for a deal. the prime minister has set himself, i think this will help me get a deal by doing this. the parliamentary maneuvers, suspending parliament, although that, but they are not so sure -- all of that, but they are not so sure. they don't want to be pushed into a potentially economically catastrophic no deal brexit.
they are trying to get something else, but now he is saying we will have that election instead. everything is up in the air. it will be very interesting to see the next two days, who succeeds. rishaad: it really is going down to the wire at the moment. sterling has lurched lower. what is it pricing in that we need to know? jodi, thank you very much. in a moment the australian minister for trade, tourism, and investment discussing the global fallout from the trade war during an exclusive interview. we will hear from simon birmingham next. you are watching bloomberg. ♪
we are counting down to the start of the trading day in india just under an hour away. our reporter is in mumbai. what are we looking at from markets after the shock slump in growth? we are not expecting any good news. every data point which talks about how we are growing has been negative. if you take a look at not just the gdp trend, but even the manufacturing pmi data, it has come in at 51.4. for 25 straight quarters, we have seen expansion above that mark.
it is an contraction mode when it is below 50. it's been coming off at a rapid pace. last month we were at 51.4. the other part being that even though we've seen a lot of measures being passed by the finance minister, the community is still not very confident. growth in gdp will not encourage them to come back anytime soon or come back with the large sum they went out with. for's going to be difficult the indices. the morning will be a negative note. rishaad: ok. what about the finance business of announcing a megamerger of some of these state-owned banks? is that move being viewed positively? is there any implication for stocks here? >> there are two sides to the coin. while some of them are saying that the merger will happen at a faster pace, there is
consolidation in the industry, which is a good thing. 21 thanks, instead -- instead of 21 banks, there will be 12. size does not mean efficiency. we saw that in the last megamerger that happened between three banks. we are still to see meaningful results from that merger. while this is viewed as positive in terms of bringing down the number of banks, whether or not this -- the bandwidth of the management now shifts focus into making sure that the synergies are aligned instead of actually focusing on the actual growth of these banks. that is something we will have to wait and watch. it's going to be a long process, probably six months to eight months. in today's session, it's not going to be viewed too positively. expect these banks to open negative. you don't have to wait
six months to eight months for the rba decision, coming up shortly, about 90 minutes, even less than that. just to be clear, no change is expected, with the exception of one economist. everyone else is saying they are not going to move. keep in mind that you want to remember that before the year ends, the market -- it's a 90% probability that the cash rate will be below 1% by the time the year ends. i think we have three more meetings into your end -- year end. the aussie dollar is back ajead of the art -- backat -- is back at 2.009 ahead of the rba. trade, allerms of the back rate cuts we had in june and july might be reasons to get in and start buying the aussie dollar at this point in time. that's one of the top trades in the asia-pacific. have a look at the chart, the
aussie dollar. that's what they think at this point in time. we have to talk about property. we had two straight months now of month on month increase. that's your top panel right here. 1% from the previous month and the month before that was a fraction. as you can see, these are average mortgage rates across median cities in australia, median rates. when you see it, every time mortgage rates go low it's intuitive. you do get a spike in prices as well. the question is whether or not banks will pass on those rate cuts to consumers. rishaad: absolutely. that's what the royal commission was about as well. that -- let's have a look at this trade war, with no end in sight, australia has been amongst those suffering collateral damage. simon birmingham caught up with us here at bloomberg earlier today. we did talk to him about what is going on. we will have that interview for you in a little while.
let's have a look at the business flash headlines. we have saudi arabia again checking -- shaking up its energy industry, this time removing the chairman of aramco ahead of its most anticipated -- much anticipated ipo. he had already had parts of his ministerial job taken away, leaving him to focus solely on the oil market. he will be replaced as aramco chairman by the current head of saudi's sovereign wealth fund. motor averting a strike after reaching alleged -- wage deal -- a wage deal. a performance bonus of an extra month and a half of pay. avoiding a strike is crucial for hyundai as it struggles to meet demand. facebook considering a test to stop publicly showing the number of likes a person receives an effort to lower the competitive
nature of social media. this was revealed by security research and later confirmed by facebook. only the poster will be able to see the light count. facebook has been trying the same policy on instagram in seven countries this year. money -- thesing fund will focus on india and china among its core holdings. we are told it has raised $150 billion so far. it's a challenging time for emerging markets, with some hedge funds predicting a wave of distressed debt is on the way. hong kong moving markets to the upside. ♪
>> it is almost 11:00 in singapore, 8:30 a.m. in mumbai. >> i am rishaad. this is a look at our top stories. nu concerns about the escalating trade war. the united states and the china can't agree to parameters for negotiation the. >> standing firm. kerry long said she has never resigned and has never had beijing's permission to step down. >> and boris johnson turning up the heat. he says brexit will happen next month and threatens a snap election if parliament tries to
scuffle his plans. this is bloomberg markets. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org ♪ > it looks like asian stocks with gains and losses. they are waiting for clarity. both sides unable to set a date for the september meeting as suggested by president trump. let's take a look at where we are right now. the asia-pac index, that benchmark is down .2%. it was a gain about an hour ago. hero data suggesting the economy. g.p.a. coming in at 2%, weaker than expected. record.he lowest on that puts pressure on the
b.o.k. to ease rates going forward. the central bank saying g.d.p. will rise in the second quarter. nd we are taking a look at the rba, which will release its decision later today, currently up boo i .1%. let's flip the page and see where we are in terms of those currencies. we have the yen continuing to make gains. the kiwi dollar, hedge funds up the short bets. the aussie versus the dollar among the worst performers in asia. rishaad: we are heading to the indian open. about 43 minutes before we get that. last trading day we had there was on a friday. we got this terrible read there. g.d.p. weaker than expected, coming in at 5% lower than all the forecasts. banks revising their growth
projections. ver the last two trading days, fnty lost about 2/3 of 1%. they are down over threes days, but up to date we could see a little bit of positivity. it has hardly been a strong radar start. 98 peso for a dollar. let's have a look at whether it bond rally has resumed there. in india at 10-year yields, we are about 6.55% on that 10-year. that really is reflective perhaps of a little bit after move.- bit of a bond yields are decreasing. let's join paul allen. >> thanks. u.k. prime minister reaped his vow to leave the european unat
the end of october and threatened a snap alex if m.p.'s rebell against his plan. they return after the summer break, and the labor opposition will present legislation to force boris johnson to delay brexit if a deal hasn't been breached. the uncertainty is reaching the economy since manufacturinging to its lowest levels since 2012. >> i want everybody to know there are no circumstances in which i will ask brussels to delay. we are leaving on the 31st of october, no ifs or buts. we will not accept any attempt to go back on our promises or scrub that referendum. >> inflation has flat lined, the weakest on record in south korea with no change in august compared to last year despite expectations after small rows. the b.o.k. said negative inflation was possible for two or three months, but long-term
did he playstation is unlikely. second quarter g.d.p. coming in at 2%. they bolster predictions of another rate cut in october. >> f.a. pacific has grounded two crews after emergency oxygen pottles were found depleted or empty. an investigation is taking place that will include the hong kong plailings. preflight inspections found 13 canisters to be partially or completely discharged. opec production increased last month for the first time. nigeria and saudi arabia led the rise, which toll the 200,000 barrels a day, taking overall production for a fraction below 30 million. opec plus has had trouble to shore up prices amid the ongoing trade war. global news, 24 hours a day on hair and at particular tick to
be on twitter. >> paul, thank you. now the u.s. and china are set o be struggle to go agree on a date for planned trade talks. the white house rejected a request from beijing to delay president trump's latest tariffs. we are in beijing. tom, it looks like turbulence is a possibility if that meeting does not come through. where zo things stand now? >> absolutely. even the talk, the reporting by bloomberg that maybe they didn't have a date for this meeting sent the u.s. futures lower. if they get confirmation that the talks are not happening, can you suspect more of a sell-off. but yet we have not had that confirmation. china has said we want to continue these talks in washington, but to get to that point, we want a delay on the tariffs.
but china did not get that demand. the u.s. wanted china to agree for what they were going to be talking about in the next round of talks so they could actually achieve something of substance. we do know that china is reluctant to be seen to be bending to demands from the u.s., particularly as we head ep to this sensitive anniversary on october 1. we still don't know, and they still haven't secured a date for those negotiations in washington, ebay if trump says he expects them to happen. again, further down in terms of the calendar, you are looking at october 1, not just an anniversary, but that is when trump said he may impose additional tariffs, from 25% to 30% on chinese goods. then december 15 when you get all of china's imports tariffed, hitting consumer products and smart phones. china said it would retaliate, including on u.s. autos.
that is what we are looking at. if we don't get october 1, then december 15. the stakes are very high. >> tom, what is the chinese government doing to make sure that their economy can actually weather this trade war storm? >> well, there are a couple of things. first of all, in terms of the messaging domestically to the domestic audience here, the state media is girding people and trying to get people to understand that this is not going to be resolved quickly. there is that side of it. then on the economic front of course we had the state counsel coming out over the weekend saying the risks were manageable for the economy at the moment, but also that they would provide some adequate liquidity, and we saw some up side in the market largely as a result of that commitment. in terms of additional meshes, you have had the new lone prime race. you have had tax cuts. you have had the package of consumption measures as well to support to support the consumer
sector here. those are measures we expect to be unfolded over the next few months. we have a meeting of the central committee, so about 200 members of the senior leadership, who will be meeting at in point in the next few weeks. we may then get further indications as what additional measures they may be putting into place, to help things that continue to slow. >> tom our man on president front in beijing. now our hong kong chief executive said she has not once tendered her resignation to the chinese central governor, after an audio recording surfaced last week that if she had a choice, she would quit. that lam news conference happened about an hour ago. it was short by usual standards. >> yes, by usual standards, because she has a lot of questions to answer or not
answer. but this one was fairly quick. you have to kind of really look at her words. she chose her words quite carefully, especially after we heard that recording from a closed door business leader's unch chon last week. luncheon. somebody recorded it. .t was in english, and lam she talked about how she has created this unforgiveable who have ok on hong kong. she was peppered with those questions today at her press conference, and she basically said this. let's roll it. > i know it is not going to be an easy path. that is why i said that i have not given myself the choice to take an easier path, and that
is to leave. i would rather stay on and walk this path together with my team and with the people of hong kong. >> ok, so in that recording which was released by reuters news agency, she basically said if i have a choice, the first thing is i would quit. well, today shemmed i have never tendered my resignation with beijing. she didn't say i have never thought about quitting. but she said i have not even contemplated sending my resignation. it is tied to what she did with the central government. hers? decision was >> she said the choice of not resigning is my own choice. that is one thing that has been hounding her. not only on resignation, but
whether she is authorized on withdrawing it. on the issue resignation, she said that choice is hers. >> steve, what china is saying, because we know there has been a report in the news agency is that china said perhaps the end is close. >> yes. that is a news agency commentary. we are going to get a news conference from the affairs officers in beijing. they have only had two press conferences before since the 1997 hand-over, and both of them were a few weeks ago in relation to the escalating violence here in hong kong. they are having another one. the last time they talked about threatening the protestors, if you play with fire, you are going to patricia by fire. i paraphrase of course. but those are the strong messages the last time they had a press conference. we also got lines out of china late yesterday saying the hong kong protests have evolved into extreme violence. but again, and i expect to get the same kind of re-affirmation
today from the amares office spokespersons that they are rearming their system for lamb as well as the hong kong police to try and maintain law and order as well as controlling the unrest, that hong kong continues to have the ability to do that. >> chief north asia correspondent, stephen. thank you for that. still to come, our interview with grant robertson. he joins us live from auckland. this is bloomberg. ♪
business confidence is at an 11-year low. inflation expectations are dropping the least since 2016. let's get to auckland and speak to grant robertson. minister, thank you very much for joining u.s. how bad are things getting there? >> well, we know there are still some solid data in the new zealand economy. we also just recently had our latest labor force statistics, and we have the lowest unemployment we have had in 11 years. sound wages and increasing job growth. there are challenges for the new zealand economy. we are a small open export based economy, so we are going to be affected by the declining state of global growth and those trade tensions thaw mentioned. but the fundamentals of our economy remain strong. we have low public debt. budget surpluses that are forecast and food job growth.
so we have the fundamentals to deal with a slow in growth economy. >> minister, i think in the may budget, the treasury forecast goes for about 3% for the fiscal year. do you think that is looking agents bit optimistic now? >> well, obviously the treasury will go through its half yearly forecast here shortly. but quite clearly what we are seeing around the world is a slowing of global growth. the countries that new zealand trades with are all experiences the outcome of the china-u.s. trade tensions and what is happening with brexit. we will wait and see where that ends up. but obviously within our economy we have got some good funds. our services sector continues to do well. the manufacturing sector has slowed a little. we will wait and see where the forecasts end up. but wherever they are, i am still confident new zealand will continue to out perform a
number of our trading partners as we have done the last few years. >> minister, you talked about some of those good signs, but when you take a look at business confidence, it is at the lowest in 11 years. are you doing enough? and wu resort to fiscal stimulus if needed well, in our budget in may we did lift or operating spending annun, to illion per $3.billion. we were already trying to get ourselves ahead of the curve. the fiscal stimulus that will come from that investment will be seen shortly, and our central bank has made clear that they are going to help with growth increases in the second half of next year particularly. we have already pulled that lever to some extent, and we continue to monitor what is
happening in the rest of the world, and obviously we will responsibility accordingly. but at the moment i am confident that the underlying strong fundamentals of our economy combined with the investments we are making in areas like infrastructure, social spending, and health and education will continue to help bolster the economy. > the market was surprised with the a basis point cut. do you think that was the right move, especially when you consider the kind of message you are sending to the business community? >> the reserve bank made the decision. i think most commentators had price inside a 25-point cut. they went for a 50-point cut. i think oval that had some impact on the markets. but overall that was not unexpect the. obviously new zealand is now with 1% o.c.i. has a little bit of room to move. we we accept the point that
monday torii policy and fiscal policy need to work together. it was government spending that would be part of helping the economy grow more solidly into 2020. therapy monday torii policy shift was not unexpected, albeit a 50-point cut in one go perhaps surprise add few commentators. >> absolutely, minister. you may need to have fiscal stimulus, if you will, to keep the economy going perhaps after 2020 as you are saying. ut you do have quite stringent targets to debt, et cetera. your debt target programs as some people have said it a straitjacket which would prevent you from doing the spending that you probably need. what is your approach? >> we did set ourselves some targets around debt to get net debt to 20% of g.d.p.
i know that all sound very low to some of the people watching this. but as an small open economy that is susceptible to global economic shocks and unfortunately to some natural shocks as well, it ensures that new zealand needs to keep a careful hand on it. we believe we can make good investments within the constraints we have set ourselves here. we have said from the beginning that if there is a significant global shock, we would be prepared to reset the rules. we have still be able to make significant investments, around $40 billion of expenditure over the next five years on capital and core infrastructure. so we are making the investments that need to be made, but we will always keep a close eye on the global economy and if need,, we will respond accordingly. >> minister, apart from the
all-blacks not winning the rugby world cup, what worries you most about the economy? >> well, clearly that is not going to hurt it, so that doesn't worry me in any shape or form, and others will back me in that regard. we can't divert on to rugby for an extended period if you wanted because i am also the minister of sport as well as the minister of finance. but it is an impact on our sport sector on what is happening in the rest of the world. if we see tchinning demand in china or australia, which are our two biggest trade partners and they rely on one another, that is a concern. we need to diversify the markets we export to and range of products that we export. we haven't been particularly
good in the past at adding value to products from new zealand. we have exported row commodities and that has done us well, but we need to up our the in adding val to agricultural sectors. i think an economy we have to continually lift our game to be able to stay ahead of the curve. >> minister, just for the record, i do root for the all-blacks. now these unconventional times, we have negative rates. wu are comfortable if they were to adopt that kind of policy, would you be comfortable with q.e. even? >> could you repeat that? >> i was just saying that these are unconventional times. be comfortable if the r. b.
n. goes for negative rates or even q.e.? >> look, i don't see that happening in the short term in new zealand. as i said before, there is still a little bit more room to move in terms of monday torii policy in new zealand. my -- monetary policy in new zealand. tell respond to the monetary policy and the fiscal policy. we do live in very interesting and different times. for new zealand that would be very much uncharted chair tore in terms of negative interest rates. but clearly our bank is an independent institution and it has a job to do to keep inflation at around the mid point of our range at 2% and also keep an eye on maximum sustainable employment, which is its other objective. we are probably about that in that particular case. we will continue to keep an eye on that, but that would be very much uncharted territory for that stage, and i don't see us getting there. >> new zealand, particularly
vulnerable to the u.s. -- china trade war. what do you make of the lack of progress so far between the two sides? >> it is very concerning for new zealand. perhaps not as a direct impact on new zealand, but the countries that we trade with, obviously china than a the u.s. them, but also those who are in the supply chain, and we are starting to see that impact through southeast asia, and that has a flow-on effect back to new zealand in terms of our export industries. we are very concerned about that. beyond just the u.s. -- china trade war itself. new zealand relies on a rules based trading system. we need good quality trade agreements and rules that are stuck to. it is of great concern to us to see problems at the w.t.o. and bilateral issues between china and the u.s. we certainly want those
resolved and get a fair and open trading market. but we have seen some good results for new zealand exports. we have seen a lift of exports as a percentage of g.d.p. at times. and that has been hugely beneficial for a number of export sectors and seeing growth in places like japan and canada, who are signatories to that. that tell you that good quality trade agreements are important for new zealand, and we need the rules based system to work for us. >> your associate finance minister has asked for an pinion on past financial reports? can you tell us a bit more about this and why? >> well, frontier recently wrow down a number of the debts that they have or the assets that they have. they have had some difficult issues with investment in countries like venezuela and issues with their investment in
china. they have made some strategic decisions about the write-downs. that has caused some concern particularly for the former shareholders here in new zealand. overall frontier has a good base of products and continues to be a very important part of the economic make up of new zealand. but it is our largest company eye on need to keep an their progress. we are satisfied with it at the moment, but we do need to make sure they continue to operate ell in a global environment. >> in 10 seconds, if new zealand is not going to win the rugby world cup, who is? >> i am even countenancing the idea that anybody else would win it we look forward to healthy can competition with our northern hemisphere rivals. rishaad: good job. grant robertson joining us from auckland.
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>> you are looking at live picks out of the lion city. it is almost 11:30 a.m. in singapore. we are in the middle of the trading day. it has changed directions, just a tad in the money. singapore needs to remain open to skilled foreign workers . that is what the government is saying, especially the echnology sector to ensure the economy stays a global pressure. let's get a look at headlines with paul allen in sydney. >> thanks, hong kong chief executive carrie lamb said she
has never exd bane permission to resign. it follows a report that she had told business leaders she would quit if she had the choice to do so. lam says she has decided to stay on as she believes in leading hong kong out of this difficult time with her team. >> i know it is not going to be an easy path. that is why i said that i have not given myself the choice to take an easier path, and that is to leave. i would rather stay on and walk this path together with my team and with the people of hong kong. >> inflation has flat lined, the weakest on record in south korea with no change in august compared to last year despite expectations of a a small rise. last week the b.o.k. said negative inflation was possible for 2-3 months, but long term deflation is unlikely. second quarter g.d.p. also missed forecasts, coming in at
2%. the results bolstered predictions of another rate cut in october. iran is warning it is prepared to step away from the 2015 nuclear deal if europe doesn't come up with new terms by the end of this week. iran has set a friday deadline for germany, france and the u.k. to offer a feasible way for it to sidestep u.s. sanctions and continue selling oil on the open mark. they are heading to moscow for talks on the issues in the coming days. the central bank of argentina is talking to the i.m.f. about revising monetary point guard a day after they had resumed currency controls. the badge said policy makers failed to meet their goals for july and august, but added that the quarterly target is binding for the i.m.f.a. program. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in
more than 127 countries. this is paul allen. >> let's go markets. this is a look at hang seng giving up the earlier gains. that is certainly the case, but certainly off the highs of the days. concerns that have been really haunting us for this year, really at the moment, still haunting us as well. we have trade war concerns, and these stocks are turning mixed. kospi, down .25%. all of these as chinese and american officials are trying to get together and schedule a planned meeting later this month for dialogue. shares are ticking higher, but marginally in australia and japan. you see u.s. futures preparing a drop. let's have a look at the prospects for the trading day over in india. about 13 minutes ago there.
the ru pee is weaker. that is likely -- actually the ru pee has strengthened. the dollar is down. this market starting off its first trading day of the week. they are reacting to that slump in g.d.p., coming in at 5% weaker than all the economists had been didn't patrioted. >> let's get more on the markets with mark. let's take a look at the dollar, strongest in about two years, and we are seeing strength again today. that due to the fall-out on the u.s.-china trade war. >> and the euro is helping lead the direction today. it is such a major currency that when the euro is falling, the flip side is a strong dollar. one of the things beginning to be priced in there is europe is also going to suffer. if there is a hard brexit or an bankrupt end to the
relationship between europe and the u.k. europe has as much to lose here as the u.k. and realization is beginning to come in, plugs the i.c.b. is going to ease policy again. they made it clear that they can and the data warrants it. the polls yesterday were awful. we are heading in that path. lower rates for europe. more pain from the brexit situation, which is going to be heighten today as the u.k. parliament comes back in. all in all, that is feeding nto a whole range of currin -- currencies. you are seeing prod based dollar strength. the kiwi being hit hard. the u.s. yield is slightly higher. it is like a steamroller and just going across the whole f.x. space. >> mark, pbac coming out and setting its reference, stronger than had been expected at least. what is going on? is this a sign that its patience is running out, or is it a message they are trying to
send that the yuan is not a one-way bet. >> yes, partly that for sure. they have been searching their fixings, slightly weaker. but the amount has been getting smaller and smaller. today's fixing of the dollar race was one pip higher. yesterday was 230 pips higher. it is flat lining. the message is becoming stronger that where the rate is trading in the foreign exchange market, it is about 1.76, which is a little too high for their liking. they got within 35 pipps of 720 . that is a message they want to send to people that they don't really want to see 7.20 broken gist yet. likely if the trade talks with the united states keep on being so far apart as they have been, it may well be that we get into
higher levels in the months ahead. but the months ahead, the run-up between the dollar and reinforced. they will probably seeing that this week. the fixings are almost identical from day to day until fournette exchange mark starts to come back to a level where the pboc is more comfortable. >> good stuff. we didn't get a sterling, which is having a tough time. let's get to marlins founder. thank you for jacoby also. we have that horrible g.d.p. number playing out, and the yield curve steepening slightly. we have a bond rally back in place. we have yields at the moment on the way down. what is the yield on the 10-year? i think it is 6.5% currently. stronger, ightly but that is probably a
reflection of the dollars weakness. what do you make of that number that we got on friday? it is the first time the markets are reacting to it. what do you think their verdict will be? >> i think the market will pay more attention to the weak b.m.i. yesterday. plus dead our core industrial sector for august. august looks like pretty much a watch-out for the entire indian economy. so i think markets have shifted attention to an even weaker trend for the quarter to september. because of that, i think you will see cautious trading over the course of the next month or month and a half. will the r.b.i. give more aggressive guidance for rate cuts? my guess is they will cut by 50 bips in the next six months and 00 bips in the next 12 months. >> we have a chart here showing
how it is really the moment lunge -- lurching lower. why is this happening? >> the main turn of the downturn has been because of the blow up of the banks. since then nbsc has struggled getting financing in the bond mark, which means they can't finance real estate, autos or s.m.e. it affects these three sectors, autos, real estate and sme's. all three are struggling to get money and hence the down turn. >> you talk about how you are expecting further rate cuts, but so far, the r.b.i. cuts have not worked at all. futures are down to levels back to before those cuts. what do you make of it? what will be needed to revive sentiment? > i think what has happened is
they cut 110 bips in the last 10 or 11 months, but the banks have only cup 30 bips. the banks have capped that the government is borrowing so heavily that it is making mardy for banks to lend. they need to sit down and figure out if the government can stop borrowing in the market. the r.b.i. i think will cut the rate further, but we and the gostisbehere of india need to coordinate the government's borrowing programs so they don't crowd out the markets. we need transfusion from the banks and a change. otherwise this blow up is not going to be addressed satisfyly. >> add to that is a tax flip-flop. why should foreign investors start buying into india again?
>> the tax flip-flop, unfortunate as it is, is par for the course in our country. i have been living here for 11 years. seldom have i seen a year where there isn't some sort of tax uncertainty. why should foreign investors buy in india? this is the only economy where you get a clutch of companies with return in excess of 30%, low debt equity. those sorts of propositions are rare to find. to illustrate this, if you take our two most well run private sector banks, each has performed very strongly through the downturn, similarly with companies like t.c.s. well run companies in india, they are continuing to grind out good numbers. you are better off buying those
number rather than waiting for a full-fledged boom to come back to the indian stock market. >> where is that going to come from? what is going to be the catalyst for that? >> i think there are three things to look out for. commodity prices are coming up aggressively. in the last three months, steel prices are down 15% to 20%. the auto sector can get relief by cutting car prices as commodity prices come up. secondly, the dollar, the weakening of the dollar, it has going from 68 to 71. i reckon we will end up 76 to the dollar 12 months out. i.t. service companies will benefit from the weaker dollar. others there is a lower cost of money. if you join them together, it is good. lower commodity prices, cheaper currency and lower interest rates, i think those come through in the next 12 months, we should be seeing the economy climb out of a hole six months
out. >> you say lower oil prices and the lower rupee. the oil price has to go down quite a lot. if you have a low rupee, oil is going to cost more for the average indian, is it not? >> yes, focusing on cheaper oil prices and lower steel petraeus. those three can lift the auto sector out of the hole. auto sector is around 10% to 15% of our g.d.p. the lower cost of money should help the construction sector. that is for the banks to play that out. and finally the cheaper dollar. depress inese currency yates against the dollar, that sector gets a flip. i am not really banking on oil prices correcting too much. you are right, it is a double edged sword on oil prices. but the rest of the story,
currency, commodity and r.b.i., if that falls into line, i think we should see a recovery six to seven months out. and the other thing to look forward to is basis facts. our economy started slowing in december of last year. once we ener october, november and december, we should have better g.d.p. growth. before that, we have to be careful, that the august-september print will look weaker than president print you guys were discussing a few minutes ago. >> the government surprise to market for those bank mergers, what do you make of it? two, will it distract the government from its focus and growth? >> i think where we applaud the government is acknowledging the downturn. nine or 10 days ago, it was one of the most press conferences i have seen. she was condrey i had in saying we have an economic downturn on our hands. where the government would do better is spoke using more on
supply side measures. what they do is good, but it is not going to address the downturn in our countries. i don't think the bank mergers will have that much of an effect on the economy, but as the government's commitment to turn things around, it is good to see that those authorities are awake and alive to the extent of the downturn. >> the founter and c.i.o. thank you. still to come, boris and brexit. he says a split will happen and threatens a snap election if his plans are thwarted. this is bloomberg. ♪
bloomberg's reporter is standing by. it looks like traders have a lot to did i jest, including that surprise g.d.p. growth slump in the june quarter. >> that is absolutely right. there is more negative stuff coming in for indian marks. the first being the g.d.p. number for the june quarter at 5%, which is a six-year low. the election selections for the month of august were below the government estimates. the auto sales have slumped for he sixth to seventh month. market is back below 11,000. they have cut 300 points. and the bank nfty down 50 points. for the broader market, the nfty 500 is down about maybe 1% in trade. not to forget the indian currency, which snapped a seven
week losing streak last week by aining .3%, is back to about 72 to the dollar. the rupee has weakened about 1% in trade. the currency mark will be focus after the cut they got for the june qur. >> it came out of the blue, but the government planned to merge several state banks. tell us about that and what the likely market reaction is going to be? >> well, the reaction is pretty much negative, owing to the relatively stronger banks in which these weaker banks will get. bank index nfty opened lower. it was anouped that the consolidation will take place and almost 10 banks will become four banks now. they will be merged. the job national back will take
over commerce and united bank. the stock has reacted pretty much negatively. hat is down about 35.5%. the other two mergers were yoon-bang, which takes over andra, alongside indian bank that will be merged with another bank. if you look at the overall performance of these banks in this calendar, they have seen cuts of over 20%. this megaconsolidation news has been received negatively with the street by this morning. with that, back to you guys. >> thank you very much. now, let's get to brexit and british prime minister boris johnson threatening a snap election if he loses a vote in parliament next week. his critics and the labor opposition are trying to force him to delay brexit, but he says that is not going to happen. >> i want everybody to know there are no circumstances in which i will ask brussels to
delay. we are leaving on the 31st of october, no ifs or buts. rishaad: our international editor is with us. how might boris johnson's threat go down in the commons this week? >> well, it is very interesting. a number of millsap sisters, including some people in his own party, some senior members of the conservative party, say they want to kind of undo this suspension of parliament that basically is supposed to take affect starting next week for a month, or starting september 14 for a month. they are plan had been to use parliamentary procedures to undo that. then the latest move is that they want to require to -- to pass legislation requiring
boris johnson to delay the brexit if they don't -- if there is a no deal. at the same time, now he is saying well, no. i am going to try to undo that. this is another parliamentary maneuver on his part. i am going to try to -- i will threaten you with that snap election if you pass that legislation. so at this point, it is a big stand-off. there is going to be a lot of back and forth here. at the same time, there is is the whole question of what will if that terms of brexit deadline gets closer and closer. he said he is not going to ask for it to be extended. but there is a real question there. he is obviously playing a bit of a game with the e.u., and the question is will they come in at the last minute and say ok, you've got more time? >> jodi, what now for his opponents? what might they do? might this warning further embolden them? >> yes, it very much could. obviously this is another way
that he is trying to go around parliament, and he does -- there is somewhat of a coalition here. it is not just the opposition labor party. it is senior members and some senior members and other members of the conservative party. there is a lot of opposition to what he wants to do here with the suspension, and obviously that threat of that snap election is not going to sit well. they also may feel somewhat emboldened by the facts that there were several thousand people protesting this past week, basically saying stop the coupe were some of the signs, that they don't want to see the parliament not be able to debate, especially with that brexit deadline looming. >> a lot at stake there. thank you international editor, jodi schneider. plenty more to come. this is bloomberg. ♪
>> with no end in sight for the trade war, it has been among those suffering slaten damage. simon birmingham spoke to bloomberg this morning. >> well, it is a concern that three seems to be an impasse that has worsened in the course of escalation of tariffs and measures applied 20 one another. and we don't see a clear off ramp in terms of how either party is going to get to the point to have successful discussions to resolve it. opposition has been clear all along, and that -- our position has been clear all long. we do under the points in relation to forced technology transfer, protection of intellectual technology, and australia shares theriot concerns, as do many or countries of the world. but we do not believe that the unilateral mix of tariffs is
the way to resolve those issues. we are concerned about the global impact. >> so critical to the fate of australia's economy, being the largest trading partner by some distance. are there any risks here as china slows, particularly in terms of key commodities such as iron other and coal? has the weakness of the aussie dollar been enough to offer set that? >> we continue to look into opportunities to expand australia farmers and businesses. whether it is in new trade deals we have struck in indonesia or trade deals we are still negotiating with the european union. in those cases it is about creating more opportunities for australian businesses to choose to send their goods and products and giving them a chance to diversify their risks. >> this is kathleen hayes in new york. it wasn't so long ago that trade negotiations, like free
trade agreements were kind of in the background, and once in a while would be news. but now things have changed, at least in the u.s. does this new environment make it harder for you when you sit down with india, when you sit down with the e.u. and try to reach an agreement, or is it just background noise? >> i think we continue to get on successfully with the job of negotiating new trade opportunities. now australia has been a leader in recent years, especially since our government came to office in 2013 in demonstrating the abilities to get on and get deals done. rishaad: the interview of the interview with simon birmingham. we have the reserve back of australia announcing its rate decision in just over a half hour at the bottom of the hour here. the bank expected to keep policy unchanged. this is after back-to-back rate cuts that we saw in june and july. the reserve back has left the door open for further easing
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>> our top stories this morning. >> when will trade talks resume? the u.s. and china are struggling to agree on schedule as they continue to row over the tariffs. chairman [inaudible] production rose since the latest round of cutbacks. >> we get the latest rate decision from the bank of australia in half an hour. standingers are seen