tv Bloomberg Daybreak Asia Bloomberg December 3, 2019 6:00pm-8:00pm EST
haidi: very good morning. we are under one hour away from the market open in japan and south korea. shery: good evening from new york, i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. you are watching daybreak asia. ♪ haidi: our top stories this wednesday -- asian stock futures live as president from cast doubts on the trade deal. he says he is happy to wait until after the election. it is change alphabet. larry page and sergey brin step back with sunder pichai taking
the reins. shery: we are counting down to gdp, trade and retail data from australia. it may offer a mixed picture of the economy. ahead of all those numbers, let's take a look at how australian markets are kicking up trading. what are you seeing? sophie: investors taking their cue from the pullback we saw on wall street. ozzie shares up a share of 1% after losing more than 2% on tuesday which was the worst session for the asx 200. we have seen some upside but little change for the s&p. aussie bonds tracking the overnight rally that we saw in treasuries. the aussie 10 year yield falling as much as 11 basis points ahead of australia's third-quarter gdp report. checking in on the offshore yuan. breaking through a support level for the currency, propping the 100 day moving average to fall to the lowest level in more than a month. volatility is going up. pulling up this chart, i want to
show you this picture as we are seeing the offshore yuan two-week vol continuing to surge. that is the blue light on this chart, whiting -- widening the gap. it is ahead of the december 15 headline. jeffries warning traders to put their helmets back on. haidi: it is going to be a volatile december, it seems. sophie kamaruddin in hong kong. let's get to the first word news now. ritika: the european central bank is facing increasing pushback against the negative interest rates policies. the euro zone finance minister particularly from northern european countries have been challenging the bank's subzero stance during confidential discussions. sources say they are increasingly worried about the detrimental impacts from savings and pension. the latest job losses at unicredit pushes the global total for all lenders this year past 75,000.
unicredit announced 8000 cuts tuesday as part of a major overhaul. more than 80% of the global cull took place in europe where interest rates at a slow economy has forced banks to slash costs. the asia-pacific has seen the least impact with over 500 job cuts. rent in prime shopping districts in hong kong will fall sharply next year, according to a property agency. it is protecting reductions of 15% in key areas. retail sales plunge amid ongoing protests. charge the highest rent in the world in the third-quarter, beating new york spit avenue and in london. iran has admitted security forces have shot and killed protesters during recent unrest across the country. describing the victims as rioters, reporting on widespread clashes over a rise in gas prices.
tehran is facing growing international criticism for the crackdown on demonstrations that began on november 15. amnesty international says at least 200 people have died. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. our top story -- president trump has cast a new doubt on the trade deal with china happening anytime soon. speaking in london ahead of the nato summit, the president signaled he would be prepared to waive another year before reaching in accord. president trump: in some ways, i like the idea of waiting until after the election for the china deal, but they want to make a deal now. we will see whether or not the deal will be right. it's got to be right. shery: stocks around the world plunged on the news with u.s. equities extending the third day of losses. let's go to our strategist,
mark. we have seen a huge run-up to equity markets and expectation of this phase i deal. what happens if we don't get it? very ugly.uld be people are hoping it is not a repeat of december 2018 when the financial world seems to be coming to an end. it was crashing very badly for most of the month. of course, we will be looking for more factors than that. the problem is the base case is a lot of the investors would have been assuming that somehow, either the trade talks were close enough that the united states would defer those tariffs on december 15 or there would be some kind of negotiation that would allow that without anything happening. the reason words of donald trump changed that quite a lot. at people will be looking really being a very serious event. financial markets are not fully priced in if china is hit with a
new bunch of tariffs. we have seen over the past 18 months or so how much damage that can do to financial markets. that is why people are getting very jittery. they now have to reassess how they feel about equity markets and bond markets for that matter. going into the end of the year, they are still just as comfortable holding onto risk as they were a couple of weeks ago. you can see the initial soundings now that people are getting nervous. they post some deeper profits as well. equities over the past few months, and has been a pretty good rally. the year and approaching. new risk event on the horizon that they didn't think they would have to worry about. now they want to get defensive and you can see the reaction and treasury yields coming up as well. it is a very big thing and people will be worried right up to the last minute as to what is going to happen with additional tariffs with china. haidi: treasuries and you saw like swiss havens
come yen and gold overnight. what else would you be watching as signs and sentiments deteriorate further? mark: the chinese currency is really a very important place to look. the last four hours or so, we have seen the dollar rise against the offshore yuan even though the dollar is broadly lower against swiss bank and the yen. this is not something that can go on for too much longer. throughout this whole period between the u.s. and china, we have seen whenever the dollar-yuan rises by a reasonable amount, it drags the dollar with it. you can see the most recent case wasn't august when it went to about 7.00 and pushed to the dollar stronger against major currencies. if the situation were not that so the yuan gets weaker over the next few weeks, maybe even go to 7.20. it most likely would take the dollar with it.
the move we have seen in the past 24 hours or so is not sustainable against the dollar-yuan. with treasuries as well, you can see the rise and treasury yields is quickly being reversed. it has dropped substantially yesterday. they are taking the rest of the world down with it. you can expect they continue to play a big role as a major haven. you can expect treasuries to be very much in place over the next couple of weeks. if it goes on long enough, if things get really bad between the u.s. and china, people will be looking at gold again because that is the ultimate haven. it is early days but the fact gold has gone back below 1500, means it is not skewed towards the bullish side it would have seen three or four months ago. gold is something that can come back into play. some assets that have been on the sidelines for the past several weeks can come back into the picture if december turns into the kind of situation we saw last year. haidi: mark cranfield there. plenty more market coverage
throughout the day as risk comes roaring back into the session. we have an exquisite interview with wealth management cohead boris calardy joining us. joining us now is claire reid. claire is a former assistant to u.s. trade representative for china. nice to have you on a day like today. is this just gamesmanship? is this a kind of comings and goings you would expect in trade negotiations or is it really quite unique how things have been proceeding? claire: when we are talking about president trump, i don't think we are talking about the status quo. it makes it extremely difficult for anyone to know where the negotiations are going. it is just pretty impossible. that having been said, there has noting thatmmentary
the december 15 tariffs could pose a risk for trump, both with regard to market as you head into 2020 which is the big election year obviously for the u.s., as well as further consumers of the united states which have driven the robust economic growth that we have had in the u.s. and, those in the trump base could get hit hard. so, there has been consideration to the fact that trump really may need to find a way around imposing those tariffs on december 15. then hear him talking about the idea he wants to wait, that does look a little bit like he is playing some games on the chessboard of negotiations, particularly if they are getting close to coming up with the deal and he is trying to be sure that the deal is less deal that
advantageous that it could be. haidi: is the danger that the optics of coming down hard on china as a strategy, as a campaign going into 2020 is just too powerful for president trump to be able to let go of so easily by december 15? for example, is that more appealing to him than the possibility that his base realizes that the tariffs are actually going to hit them as consumers, as farmers, as regular members of american society than it does create damage for the chinese economy? claire: i think to some extent, the politically appealing part of this situation would be for him to come up with a phase one deal that that allows him to say we are not done and this is just a down payment.
so that he avoids criticism from both the right wing, the republicans, and the left, the democrats that the deal he got was not good enough because he can say we are still working on it. if he could create a trade truce at the same time that he avoids criticism about whether this deal is his greatest deal ever, that may be a way forward for him. that would allow him to look tougher on china during the 2020 campaign and not take pot shots from his clinical rivals. shery: we are expecting the u.s. house of representatives to have another vote on a human rights bill concerning china. this coming on top of that hong kong human rights and democracy act. this one would be targeted against chinese officials that --late human rights against how likely is we could get a
trade deal when the political mood in washington seems to be so anti-china and congress is resolute and getting all of these human rights legislations passed? you actuallynk have seen president trump tried to walk a path where he segregates the trade issues from the human rights issues to the extent that he can. legislation,d the the first set of hong kong legislation, he said he did it out of respect for president xi which was a difficult statement to understand for those of us here in the u.s., but i do think in the ideanvested of trying to come up with a deal on the trade side and would like to be able to avoid severe fallout. on the other hand, it is very clear that congress and the u.s.
is very concerned about the hong kong situation as well as -- they will be pressing hard. i think he is likely to take it a step at a time in terms of looking to see where this next piece of legislation goes in terms of how quickly it actually moves. i don't think he is going to get out in front of that one in anyway because i think he probably likes to keep that trade deal on track. shery: thank you. the latest, her insights on the trade negotiations. still ahead, the house judiciary committee's first public hearing in the impeachment hearing later on wednesday. we will preview that later. haidi: next, changes at the top of alphabet. why larry page and sergey brin are stepping back from their day-to-day roles. this is bloomberg. ♪
haidi: this is daybreak: asia. i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. larry page and sergey brin are set to be stepping back on their day-to-day roles with sunder pichai becoming the boss of both google and alphabet mark bergen has the story in san francisco. what would this mean in terms of the operations at alphabet? would anything change? mark: the fundamental changes right now, that are a bunch of outlet companies outside of google like waymo, self driving cars, verily, health tech. they report up to the alphabet board and a management board that was where sergey brin and larry page set. now centerpunch i will be sitting on the board along with their own management operations. the company sent out a statement saying they are confident in the
ceos and management team to go forward autonomously. this gives sunder pichai even more power than previously which was quite a bit. that: a lot of criticism larry page was not as engaging with lawmakers and policymakers given the topic of how powerful and influential google has been. with that be a reason why they were making changes at the top and what are some of the biggest challenges going ahead? mark: it is not like even when he was ceo of the company he was still willing to -- they sent eric schmidt who was the chairman. neither larry page or sunder pichai showed up to a senate hearing last year. these are engineers. they were famous as visionary technologists and not known for their diplomacy or their love of policy engagement. in our reporting, we have shown page has stepped quite back from google's daily operations and
not clear how involved he was day-to-day with the rest of alphabet. we heard he was overseeing projects like self-driving car's and drones. there's a lot of evidence that was a nominal role in here and sergey brin have been taking further and further steps back. haidi: appreciate your time, mark bergen, for us. quick check of some of the movers in the early part of the session. oo media rising more its earningsr upgrade approved for september and the fourth quarter. mccoury has raised its price target by 7%. shery: coming up next, we will get a health check for australia's economy as we get set for the latest growth figures. this is bloomberg. ♪
shery: this is daybreak: asia. fourth-quarter gdp numbers from australia due out in one about one hour. a pretty mixed picture for growth. >> we are expecting an uptick but it is a modest one. about 1.7% for the quarter which is a big improvement from the second quarter where we had 1.4%. a long way off the growth the rba would like to see. the good news is trade that has been driving things forward for australia. the last reading we had in september was a strong beat, $7.1 billion. the october numbers tomorrow is excited to be pretty good as well. $6.5 billion. the fourthade in quarter. we have had construction rising. the rv is pretty grateful for
the weak aussie dollar that has been stuck in the 69 sent range for four months now. that will be supporting the services side of things and manufacturing as well. on the drag side, it is the usual suspects. weak consumption, weak wages growth. also on friday, we will have retail numbers that is excited to show an uptick as well. consumption not all it could be in australia. shery: let's get to the rba because they helped study this week saying they need to assess the long and variable lag of easing. what does that mean for 2020? that was the last rba meeting of the week. there will not be one in january either as australia takes its long summer break. they do have a few months now to watch how things shake out. tuesday,meeting is
february 4. we have seen every time the rba releases a statement, it tends to revise the growth rates and the latest one is the 2.6% in the second quarter of 2020. if you bear in mind, a reit of 1.7%, that does seem kind of optimistic. .hat does raise questions phil lowe spoke a couple of weeks ago about the threshold needed to get to qe. we are pretty low now. the cash trade getting to one quarter of 1% before we got there. in terms of getting there, the picture is rather mixed as well. hsbc says we were probably going to have a rate of 20% but then if you look at the analysis from bill evans, a top rba forecaster, he thinks we will get there quicker. we will be at half a percent february at a quarter of a percent in june.
thanks to the week numbers around inflation and jobs and growth, he sees qe coming later billionee that to be $2 worth of bond purchases from the rba. these growth numbers do not pick up fairly sharply, we could be getting to qe sometime in 2020. haidi: we spoke to one analyst and he says there is space for qe in australia but the efficacy is questionable with more investment from the government. paul: it is the missing piece of the puzzle. phil low has been needing the government and the way central bank is due to offer some more support but the calculations of the government is somewhat different. everyone boxed themselves into a corner on fiscal support. all this talk of getting the budget back into black, all the emphasis put on that if we don't see much surplus in may and budget is released, that is going to affect the political
promise. as much as phil low would like to see some political support, probably not coming. shery: thank you. let's get a quick check of the latest business flash headlines. apple was a high-profile victim of renewed doubts of any imminent trade deal. president trump's comments causing shares the fall the most since august as investors weighed the long-term effects on apple's supply chain. a third consecutive day of decline, although it has gained can sincerely -- consistency. haidi: amazon's cloud unit is taking up intel's dominance in the service market. as the program. the second-generation chip is called graviton 2. it is designed to handle general-purpose computing tasks. intel accounts for more than 90% of the service chip market. shery: salesforce slumped in late trade after giving a profit
forecast that fell short of excitations and signaling it has lifted cost. share inwill be $.55 a the current quarter, long sort of analyst estimates of $.62. salesforce global expansion has fueled revenue growth. $4.5 billion. to coming up, softening his stance, president trump takes a more amicable view of nato as he meets other world leaders. we will have the latest. this is bloomberg. ♪ [ electrical buzzing ]
ritika: this is daybreak: asia. opec and its independent allies are sending mixed signals about reduction cuts as they surpassed -- repair to meet in vienna. opec has reiterated its view that they should go in africa by 400,000 barrels a day. endedrly meeting o without any discussion of new restrictions. the european central bank increasing pushback against a negative interest rate policy. the euro zone finance minister from northern european countries have been challenging the banks
subzero starts during confidential discussions on the region's economy. sources say they are increasingly worried about the detrimental impact on savings and pension. china is heading for another record year of onshore bond developfaults, testing the abilo keep markets stable as the economy slows. at least 15 default since the start of last month has pushed of this year's total above $17 billion, a fraction below 2018 full-year total. that is fueling concerns about contagion as investors wonder which firms aging will support. manila airport has reopened after a typhoon battered most of the island, killing at least three people and displacing half a million more. about 500 flights canceled during the shutdown while government offices and schools were closed. the weather forecast heavy rain wednesday morning.
the typhoon heads into the south china sea. 24 hours a day on air and on quicktake five bloomberg and powered by more than 2700 journalists and analysts. this is bloomberg. haidi: thank you. let's take a look at how markets are moving so far in the early part of the session. withe: caution taking hold confidence being rattled over question marks over a trade deal. nikkei futures very much in the red. ozzie shares extending the tumble we saw since tuesday which was the worst session. aussie bonds on the other hand recovering from the drop we saw on tuesday with the 10 year yield falling as much as 11 basis points. this as we wait on the third-quarter gdp report from australia. goldman revising its estimate toher to 1.8% year on year reflect stronger data on the external and public sector. check in on the yen this morning. the yen hold and steady after a
two day upward bias very much intact. the offshore yuan is eyeing 7.07 after the 100 a moving average picking up on trade worries. the s&p edging higher come up 1/10 of 1% after the benchmark has a three-day drop. perhaps some steadiness coming. shery: the nato summit formerly kicks off later wednesday with president trump appearing to adopt a more amicable stance after something of a fractured lead up. as the alliance marks 70 years, leaders are meeting to discuss the future. joe joseph from washington. really a lot of divergence when it comes to views about nato. how bad was it? joe: it was a bit of a turnabout for president trump who had been very critical of nato in the past, questioned whether it was really still a viable organization. defend in essentially to
nato from criticisms by french president macron. applaud thatst many of the countries were picking up their spending on defense which has been something he has been hammering them over for some time. that has been going on since before he took office but a number of officials give the president credit for pushing along this rise in defense spending and to take on more of the burden of nato. he has really changed his tone on that. there is something of a turnabout with meeting with macron. they had seemingly been having a good relationship but they have been feuding over the past few days not only about nato but also about french taxing
american companies, internet companies with trump threatening to put tariffs on french goods. ride at nato tonight. haidi: in the meantime, impeachment. house democrats releasing the impeachment report. what have we learned from that? joe: it was a compilation of much of the documents and testimony that have gone on before. interestingly, it did not recommend specific articles of impeachment or even recommend directly that the president should be impeached by the house. chairman adam schiff of the intelligence committee says that is up to the house to decide. but the report did layout a very specific case and said very directly that the president had broken laws and obstructed justice and his attempts to get ukraine to announce an
investigation into his political rival joe biden. thisall stems back from july 25 telephone call between president trump and president zelensky of ukraine. it also details some events that preceded this as part of this effort to put pressure on ukraine through various officials and also through trump's personal attorney rudy giuliani to get ukraine to conduct these investigations. at the same time, at issue is some aid to ukraine was held up as well as a white house visit for president zelensky, which the ukrainians had been seeking as real stand for the legitimacy and show support for the u.s. as they are continuing to battle russian back forces. shery: at any moment now, we are expecting the u.s. house of representatives to vote on a
bill again concerning human rights in china. this coming on two bills about hong kong that became law. what is the third one about? joe: this would require the u.s. to put sanctions on chinese officials who were found to be responsible for oppression of religious minorities in china, specifically the concern in isgress is that china continuing to crackdown on human rights to a large degree. it shows there is some real anger in congress and its desire to do something. this is likely to pass by an overwhelming margin in the house. it will have to be fixed a bit as we go to the senate. perhaps past its own version of this. members of both parties and both chambers say they are eager to get this done and there is no real disagreement that they want
haidi: this is daybreak asia. shery: i am shery ahn in new york. amidst of the trade war and market uncertainty, dealmaking is on a roll. global m&a volume is approaching the $3 trillion mark, closing in on last year's total and no minting -- maintaining the momentum of 2018. joining us with the asia dealmaking outlook is senior management director and cofounder of bda partners in new york. great to have you with us.
we have seen dealmaking be too tempting given the easy money on low rates. most central banks right now seem like they will hold for a while. will that make a difference heading into next year? >> i think cheap money is definitely the key determinant at the moment. we are at what would be normally very late stage of an m&a cycle. we have been getting in on six years of boom conditions. people in my industry are hoping it carries on. shery: it is interesting we are seeing a lot of that m&a and dealmaking happening in asia. where are we seeing most of the action? euan: we've seen a slowdown in china but japan is filling the gap. i think japanese companies are becoming increasingly aggressive ever since decatur last year spent $62 billion to buy shire. japanese companies are really stretching their efforts and really reaching to do bigger deals than they have done many years.
haidi: you mentioned china. we are still seeing the impact of the deleverage or is a broader economic slowdown that is creating this sharp slow down it comes to outbound? euan: i think it is a perfect storm with different problems in china. i think clearly the trade war has damaged sentiment. the chinese authorities had already put certain restrictions on outbound activity. made it hard for chinese companies to make opportunistic moves. but really combine that with a trade war with the concerns in hong kong and broader concerns about the future role of china, i think we really have a very difficult environment for aggressive chinese companies. haidi: it is interesting when you look at the previous graphic we have had. historically, it is not such a low, it is more than the previous couple of years. we had such extraordinary levels
of outbound investment. euan: the chinese authorities were greatly encouraging investment by what they saw as potential global champions. that has really ground to a halt and i think it is going to be a while before we see chinese companies really doing the same way. shery: is the initiative changing the future direction of outbound investment? euan: i think that is a good point. we are seeing more infrastructure deals. we are seeing less and the way of deals into the u.s. for all the reasons we mentioned. i think really heavy engineering and infrastructure is the focus right now. shery: what does it mean for competition among these buyout firms? euan: the private equity industry is keeping deal flow going very well. returns to lps in china have not historically been that good. majore seen every global buyout company raising funds
both for japan and china recently. billionarket with a $15 raise for a new asia fund. year. $11 billion last we are seeing real enthusiasm from those big buyout funds both to do deals in china but also in japan today. is really driving the activity you are seeing in japan? a big part of it is demographics when it comes to looking for growth opportunities elsewhere because they don't exist in the domestic market? euan: that is right. the first thing is demographics. like many developed countries, japan has a low birth rate. excuse me -- and has not welcomed immigrants historically. japanese companies need to move outwards. they have lots of access to capital and i think it has encouraged outbound investment
and encouraged japanese companies to be more aggressive than they were previously. at the same time, we are seeing japanese companies as well. the concept of m&a has become more acceptable and we see companies like hitachi, panasonic and sony restructuring and selling assets which historically they would not have done. shery: how much of the dealmaking is happening with just cash reserves as opposed to cheap borrowing? euan: it is accommodation of the two. $900ink there are up to billion sitting on the balance sheets of japanese companies today, but they are being funded by private equity as well. happy to coinvest alongside those big corporate. private equity money and they are cash reserves on corporate balance sheets. euan rellie joining us there. thank you for your time. let's get stories from the bloombergs group. the u.s. stepping up efforts
against huawei and zte. washington has created a new agency with a $60 billion budget to help businesses purchase telik come communication equipment from other firms. let's get to san francisco with our tech editor alistair barr. tell us about -- we know what the motivation is but how will this be set up and will it be effective? alistair: it is called the dfc. it is other similar u.s. agencies. one of the key things is it has this $60 billion investment cap. before, it was less than $30 billion. the way it will be set up is looking outward from the u.s. to developing nations which cover about half the globe. this entity will be able to provide loans or loan guarantees or political risk insurance. even now, it is taking minority equity stakes in companies.
the broader goal is to basically help u.s. companies abroad and help support u.s. businesses over there. there is a very large tech focus to this. the agency is not waiting around. they actually have yet to be officially cleared by congress that that will happen soon. it is in this debate over 5g and huawei. shery: there was a reason why these developing nations preferred cheaper chinese tech. do we have any point how attractive this initiative would be for these nations? alistair: it is not even developing nations. some telecom companies in the gear as huawei and zte well, especially in europe. this is the to current u.s. administration has been warning a lot of different
countries and allies in particular not to buy huawei and zte gear. the concern there and the allegation is the gear might be used in some ways first buying by the chinese government. other companies deny that, but the idea so far has been to warn and make those warnings and hope that people stop buying. that really has not worked. this is a really new step where they will say huawei gear might be cheaper than the alternative, but here is some financing or other financial support to make it very price competitive. haidi: are those companies you mentioned, nokia, ericcson, their stocks have jumped. are they taught beneficiaries of some thing like this? alistair: very much so because there aren't really any other major competitors in telecom
.ear, especially 5g another big one, but nokia bought them a few years ago. really, it is huawei and zte. samsung is another player, but it is really the other ones that are really close allies of the u.s. nokia, which is based in finland, and ericcson based in sweden. they have been struggling, especially nokia, both to keep up with 5g telecom technology, but also on the pricing front. shery: alistair barr, thank you. our tech editor in san francisco. earlier, state department deputy assistant rob strayer told us where he sees the agency putting its money in a bid to find a viable alternative to huawei. mr. strayer: when people talk about competition in this space, the largely they are focused on the radio access network vendors. there are three alternatives which are erickson, nokia and
samsung. beyond that, the components that go into a lot of this gear are american or at least western european. those include companies like andcomm, juniper, intel, numerous other companies that are in the u.s. gain of company stand to from selecting a trusted radio access network vendor for a future technology. taylor: in europe, i think germany and france had been hesitant to block or ban a specific of any like huawei or cte. how do you work with them to get them on board and see the risks that you see and potentially actually ban a specific of any? amb. strayer: we are not trying to get them to ban any specific company. we have been working for more than a year to educate them about the risks of 5g networks. the most important feature to understand is software can be updated instantaneously and that can update a backdoor or compromise that of -- disrupt
the system. not just applying secure practices but also applying measures of what our trusted vendors in their network. how to identify what are the right. fundamental is the vendor must be headquartered in a country that has the rule of law and an independent judiciary. taylor: go ahead. amb. strayer: the other factors to look at other transparency of ownership, as well as its funding mechanisms for the country. in the case of a company like huawei, what is the role of the chinese company and who owns the company? it is claimed to be owned 99% private ownership but in fact, that ownership is probably controlled by the chinese communist party. allegationsar these of security threats coming from huawei but other vulnerabilities, we have not seen much in terms of evidence. how much evidence have you seen on those backdoors and cyber
threats so far? amb. strayer: we know the united kingdom looked at huawei's technology. every year, they find there to be serious and systemic software engineering defects and cybersecurity challenges. they are finding hundreds of defects. what we have here is a bug door. that is so many vulnerabilities in what huawei is producing that it is impossible to really determine if there was intent to put one of those there for a future vulnerability that will be compromised. haidi: that was the state department deputy assistant secretary robert strayer speaking earlier. some breaking news. the house intelligence panel has approved the trump impeachment report released by the house intelligence committee earlier in the day. this is the impeachment inquiry into president donald trump. it occurs the day before the house judiciary committee is scheduled to hold its first hearing on constitutional issues related to the impeachment process. among some of the things were
revealed within the document which was really a compilation of other documents, the report saying it was faced the revelation of trump's actions publicly and repeatedly urging foreign governments, including ukraine and china to investigate his political opponents. that impeachment report has now been approved by the house intelligence panel prior to debate beginning in the house judiciary committee tomorrow. don't miss bloomberg interview with the democratic presidential candidate, elizabeth warren. she speaks to us in new york on wednesday. that is at 6 p.m. eastern, thursday at 7 a.m. watching out of hong kong. this is bloomberg. ♪
last month but it seems nissan missed out. spurredl year inventory carmakers and dealers to offer record discounts which was not enough to prevent slumping almost 16%. shery: united airlines is set to be close to ordering its first airbus deal which would be a new setback for boeing as it struggles with the grounded 737 max. we are told united wants 50 of the long-distance a-321 lxr jet s, with the delivery to begin 2024. the deal would be worth just over $7 billion before customary discounts. haidi: alibaba is to sell more shares in hong kong and offering an additional 7500 shares at the price of 176 hong kong dollars. exercising the 15% option. that means it should raise about one's point -- $1.7 billion. the extra shares are set to be begin trading on friday. shery: markets open at the top
of the hour. let's turn to sophie for what to watch. sophie: futures are well in the red. aussie stocks off by more than 1%. complacency is being rattled as of late. jumping to the terminal, treasuries very much and focus after tuesday's rally which was the biggest since august, driving the 10 year yield through a one-month low after sinking as much as 13 basis points while the curve flattened. softgen to a record low. not looking as reasonable perhaps. in the near-term, securities expects yields should take it lower to 1.6% if i report on the u.s. services sector misses estimates. benchmark treasuries up 25 basis points from november's three month high. haidi: sophie kamaruddin there. coming up in the next hour, head of asia strategy eugenia
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>> i'm am haidi stroud-watts in sydney. bloomberg'sing from global headquarters in new york. i am shery ahn. selina: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." haidi: our top stories this wednesday, asia stocks set to slide as president trump casts new -- on a trade deal. all change at alphabet. larry page and sergey broome step aside with the ceo taking
the rains. shery: alibaba enjoyed a lucrative listing in hong kong but some are cautioning against unrealistic expectations. we have the background. we are set for a risk-off be across markets in asia. let's turn to sophie as japan and south rear come online. investors in asia battening down the hatches. we are seeing some pickup in s&p e minis. they are rattled by the uncertainty over trade. flipping out the board to check in on bonds. we are seeing a rally in australian sovereigns with the 10 year yield falling as much as 11 basis points. the u.s. ten-year holding steady at the start of cash trade, trading above 1.72%. a 0% are hovering around level. let's check in on the mood in australia ahead of the third quarter gdp report due at the
bottom of the hour. the asx 200 extending the temple. the aussie dollar is holding steady in the 68 zone. the kospi opening lower, off .7%, while the yen is holding onto a two-day gain amid this risk-off tone. i want to highlight what is going on with the offshore u.n. -- the offshore yuan, breaking through the 100 day moving average. the support level eyeing the 707 handle. climb seeing implied vol the two week level, rising even further. sophie kamaruddin in hong kong. first word news now with ritika gupta. ritika: the latest job losses at unicredit pushes the global total for all mentors this year passed 75,000. unicredit announced 8000 cuts tuesday as part of a major overhaul. more than 80% of the global cull
has taken place in europe, where a slowing economy has forced banks to slash costs. the asia-pacific has seen the least impact. rents in prime shopping districts in hong kong will fall sharply next year according to a property agency. it is predicting reductions of 15%. sales plunge amid ongoing protests. street-level outlets in causeway bay charge the highest runs in the world and the third quarter, beating new york's fifth avenue in london.street iran admitted security forces have shot and killed protesters during recent unrest across the country. describing the victims as rioters, state media reported on widespread clashes over a rise in gas prices. thee is criticism to crackdown on demonstrators. amnesty international says at
least 200 people have died. manila airport has reopened batteredyphoon most of the island, displacing .5 million people. flights were canceled during the shutdown whilst government offices and schools were closed. the weather bureau forecasts strong winds and heavy rain wednesday morning as the typhoon heads into the south china sea. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 on quick take on bloomberg powered by more than 2700 , journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. shery: -- haidi: thank you. the u.s. house beginning its vote on another human rights bill in relation to china. this time in support of the week in the province. sanctions onte chinese officials that have been in breach of human rights
putting through these human rights abuses in relation to the muslim people in western china. that vote is happening over the next few minutes or so. it has tensions between the u.s. and china as these trade talks come to something of an impasse. hehad president trump saying is waiting to play the long game and waiting until after the 2020 election to get a deal. china has already said it is retaliating in response to the previous human rights bill, which was in support of the hong kong protesters that president trump has signed. this would certainly seem to act further to those tensions. let's bring out joe sobczyk for some context. it is clear lawmakers feel there is currently momentum behind these china related issues. there is so much anti-china sentiment in relation to these bipartisan issues like human rights. it is likely this bill will go through even with the amendments required to go back to the senate?
joe: you can see by the screen it is passing overwhelmingly with support from democrats and republicans. there are minor differences with the senate bill, but members of both parties in both the senate and the house said they are willing to work through those the entirey and get package passed and sent to president trump in the next several weeks certainly before they leave town for the holidays here in the u.s.. angers reflective of the that has been bubbling up regarding china beyond just the , the issue of human rights abuses and china has taken center stage. it is something the trump administration has particularly emphasized and appears to be going along with it reluctantly. the sentiment in congress is
pretty clear they want to send a message to china on a number of the allegedding human rights abuses against the muslim minority in china. >> given that bipartisan nature how muchhird bill, pressure is there on president trump to sign this into law and what could be the impact on the ongoing trade negotiations? joe: there will be a lot of pressure for president trump to sign that into law. the hong kong measures, the white house is largely silent. trump did not say whether he was for it or against it but then decided to go ahead and sign it before it became one on its own. if he were to choose to veto it, this would certainly get overwritten by the house and the senate based on vote tallies that the measure is getting, so that will certainly probably go into effect.
now, china has already indicated that it will take some further retaliatory actions, possibly involving penalizing u.s. companies or penalizing other u.s. officials. intops allowing some to go the country. there may be additional steps. one thing it has not done so far talksinged on the trade at least publicly from china. president donald trump today of course was backpedaling a little bit from his earlier statements about wanting to get a deal done . now, he is saying he is willing to put it off until after the election next november. although negotiations are continuing on the so-called phase one part of the deal, which is a preliminary deal, so it is unclear whether he was referring to that or some sort of larger accord with china. >> joe sobczyk in washington.
thank you. of course, we continue to see the u.s. house of representatives voted on that legislation concerning human rights. joining us now from singapore is the head of asia strategy. great to have you with us. thesetinue to see tensions buried between china and the u.s. trade negotiations or human rights bills being passed in congress and president trump could again be forced to sign them into law. given the market run-up we have seen and the expectation of this trade deal coming up, what happens if we do not get that? >> clearly, the market is in a bit of a surprise overnight. yesterday, i was just telling our clients i don't really expect the phase i deal to be finalized before the end of the year and the best case scenario would be q1. but overnight, they have upped
the ante and he is saying he is willing to let it go until after the u.s. elections, which is a year from now. fortunately, even if the talks continue for another year, the risk sentiment would not be very supportive to the emerging asian economies. we have already seen that even with the prospect of a phase one deal being signed, dollars cnh was slowly creeping up. other concurrency's were also rising. that is not really supportive of the emerging asian currencies. >> what about the other factors that can play into the asian economies? a lot of people have been expecting the bottoming out of the semiconductor cycle. we don't necessarily seem to be headed there. the markets are very dependent on the tech cycle like taiwan, south korea, japan? >> right now, the market is
a recovery in the semiconductor index. the semiconductor index has been rising even though the semiconductor global sales remain in contraction. ,f you look only at the volume if volumes were to remain right now for the next few months, then on a cyclical basis, because of favorable base effects, there should be some recovery in the ample numbers. having said that, if it is a cyclical recovery, it could be quite shallow and there would be a follow-up as far as a pullback in market pricing in the semiconductor equities as well as the currencies in the region. is that enough?
this sector's recovery, is that enough to provide support across the region, as it comes to currencies and equities broadly? >> not necessarily, because what we have right now is it is only taiwan that's really showing an uptick in the electronics exports. and when i looked at the composition of the improvement in the export outlook in taiwan, it was really because its exports to the u.s. have outperformed even as exports to the rest of the world remain in contractionary zones. that just tells me that taiwan is getting market share from the other heavyweights in the region, including singapore, south korea, china, and japan. but unless there is a real improvement for all of these economies, we cannot really say tides are rising for the industry. all right.
our guest joining us. all right. we have lots more to come here on "daybreak asia." breaking or casa bloomberg. the u.s. house of representatives has voted to sanction chinese officials over human rights. this is the bill in support of the muslim minority in china's province. we were expecting an overwhelming majority to vote in favor of this bill given that sanctioning chinese officials over human rights, be it in the has beenegion one of the few bipartisan issues that has seen widespread report in what has otherwise been -- toresentatives voting sanction chinese officials over human rights abuses. this bill had some amendments. even though it had been previously passed in the senate, it will have to go back to the
senate before it can go to president trump. the signing creating another spanner in the works when it comes to ongoing trade negotiations. china has already retaliated in response to the hong kong democracy bill and it has already threatened its chinese state media that it will retaliate for this bill as well. lots more coverage coming from beijing, next. this is bloomberg. ♪
>> we will take you to those pictures of the u.s. house of representatives that has just voted to pass that legislation on human rights bill concerning china. this measure would impose sanctions on officials responsible for oppressing muslims. this has to go back to the senate for another vote before going to president trump before becoming law.
the human rights democracy act not to mention another bill that bans the export of devices to hong kong's police. really, the focus on what happens in terms of u.s.-china relations. let's turn to sophie to check on the market reaction so far. modest we are seeing moves in reaction to the latest minds. 108 .55. the offshore u.n. now topping 707 after breaking through 100 day moving average. a key support level given the trade uncertainty. .mplie they are now erasing gains in the session. little change to the downside. haidi: we are expecting that to add to the further risk aversion we are seeing in this region. fors bring an our editor
context. this bill would largely -- was largely expected to pass. given we solving retaliatory reaction to the hong kong bill being fairly measured and considered, how are we expecting beijing to react to this second human rights bill? >> some of the suggestions we have gotten from state media, the global times, has been that may be china would not allow the sponsors of this bill to tom. they would institute some sort of visa restriction on those lawmakers. another thing that has been hinted is that perhaps china might speed up the production of its list of foreign companies which could include sanctions against folks like fedex who have been talked about a lot in that sense. >> the measures we have seen so
on theing from china retaliation from those hong kong bills have been mostly on sanctioning those human rights organizations and halting u.s. naval visitors to hong kong. they have not necessarily made a link to the china trade talks. is that what we are expecting in terms of u.s.-china relations in the future? what wei think that's should expect as of now. beijing is walking a very fine line of needing to retaliate, needing to show folks out on the it is standing up for china's rights, not allowing washington to do whatever it wants. at the same time, china does not want to shoot itself in the foot in terms of economics. growth is slowed. we have credit stresses we have seen this week. there are lots of problems with the system here that policymakers need to solve, and you know, exacerbating things by
>> you are watching "daybreak asia." let's look at the major changes at alphabet. both set to be stepping down from their day-to-day roles. the google ceo now taking the home. google andthe ceo of alphabet. su has this story. what does it mean for the company? su: there is a lot of headline excitement but no structural change. they are stanford graduate students that founded google and are stepping back from their roles.
a veteran is taking over the helm. co-founder, reminded everyone in a letter today that google was not founded as a conventional company. sergey brin reminded everyone 2015, google reorganized the alphabet holding company can put them in charge of the ceo of google. it gives him a greater role. he will now be ceo of both google and alphabet. to quote directly from statements coming from the cofounders, they say we are deeply committed to google and alphabet for the long term and will remain actively involved as board members. they now go to the board as major shareholders and the company. they also wrote, in addition, we plan to continue talking regularly, especially on topics we are passionate about. if you look at the after-hours chart, the shares moved as much as 1% higher, not a major
change. we will probably see a bigger reaction when the market open. the stock is up 24% year-to-date and have been trending higher this week. >> is there any speculation about the timing of the change? larry page historically has been getting heavily criticized for not being more engaging i guess with policymakers, lawmakers, on the topic of google's increasing power and influence and the scrutiny it has come under. su: it is truly the end of an era. analysts, some are saying they are surprised it did not come sooner. scrutiny has been a big issue. again, the founders or cofounders are saying there will not be a big change. but there are questions that the change does raise, and that is, according to those close to the matter, will the new ceo of the combined company -- he has been a veteran there. now that he has the undisputed authority, is he up for the hot seat?
he has been running all the functional, important parts of the company. alphabet ceo still held a bit of authority. now, it is all him, and there are others that say, you know, these cofounders were really engineers. while they had their pet thiscts, that -- projects, was a natural evolution. some saying it could not come soon enough as the company is in good hands. haidi: su keenan with the latest on a reshuffle at the top of alphabet. we are going to head to alibaba. in hongillion listing kong -- some are cautioning against unrealistic expectations. joining us now is lulu chen. well alibaba getting added to the hang seng index? >> while alibaba might covet being part of the 50 member index, what we know is it will
only be added as of december 9. the reason they are not part of the benchmark hsi and china enterprise index as of now is because those on the comprised of primary listings and also companies without weighted voting rights and alibaba falls in both of those categories. to have a expected meeting and discussion early next year. they will hand out a paper around may of next year. those discussions carry forward next year. it means alibaba probably will not be added to this very prestigious index until late next year, even if they change the regulations. >> do we have any idea of alibaba will be included? lulu: another great question. that does mean billions of dollars that might flow into the company as well. connect does not include companies with weighted voting rights, it also does not
exclude secondary listings. it's largely dependent on the csrc, china's stock market watch down, and there's a lot of discussion that is behind doors that is not really clear in terms of what the actual metrics they use, so that's also a discussion that is pending. what about alibaba's primary listing to hong kong? could that change? lulu: that's a possibility for the hong kong stock exchange. the trading volume within the year exceeds more than 55%. then they will have to automatically convert to hong kong as a primary listing destination. fair tradingat the volume for alibaba, it is still very low. shery: lulu chen, thank you. our asia tech reported joining us from hong kong. coming up next, australia's growth likely to have remained modest in the quarter due to weak consumption demands. we will break those numbers, next. this is bloomberg.
>> breaking news crossing the bloomberg. third gdp for australia coming in now. the economy expanding .4% quarter on quarter, just misting expectations -- missing expectations. the seasonally adjusted number for the third quarter year on year, growing by 1.7%, which is bang on expectations. we are getting a few more revisions. the second-quarter gdp was revised to .6% quarter on quarter, slightly better than half a percent it had been. previously household spending
rising just .1%. just as a side note, we are getting the hong kong pmi number. not falling close to the lowest on record. let's get some reaction to gdp numbers out of australia. great to have you. we keep talking about the almost 30 years of uninterrupted growth in australia. there is a lot going on underneath the hood but we are waiting for some of the breakdown numbers. we would have expected household spending, consumer sentiment, investment spending, all to look pretty weak. >> we did get a lot of information coming into this so no surprise that we are seeing economic growth still below trend. some of the things we would expect in detail, household consumption, very, very weak. we did see signs of that with retail spending being the the other signs
of weakness which we are expecting to see is residential construction is still looking like it is being a drag on growth. business investment is also a source of weakness. it's looking like that uncertainty in the global because he and weakness in the domestic economy is going to feed through to businesses, so overall, a pretty weak picture in terms of private demand. haidi: in terms of that lower bound, we had three cuts from the rba. we are expecting two more in the first part of next year, and then ever-growing course of people calling for qe. spoke to him about the efficacy of qe in an economy like australia. >> the efficacy will be much more modest. the way to think about qe is provides the fiscal space and
listening. in other markets around the world, if that is not forthcoming, it is difficult for that policy. significantly stronger growth. haidi: it's becoming a common refrain across the world. we have done the heavy lifting. we are passing it onto the fiscal side. is it possible we don't see the fiscal listing in australia? janu: if we do continue to see gdp, the pressure increases for the government. i have to admit, it's not like the government isn't doing anything. we are seeing national accounts today. there was a sizable contribution to growth from government spending. that it's is more just that the government could do more. governmente the
fiscal position is, where they have been aiming for a surplus. that does suggest there is room for the government to step in and do more. thatre right in saying there has been a lot of honest on banks to be providing that support. there is definitely more that the government can do as well. end of the day, willie rba be forced to bring worth qe? janu: there is a lot of uncertainty about the outlook. we think the expectations for economic growth, inflation, and employment are too optimistic. it does seem that there is a high bar for the kiwi to occur. the rba does seem reluctant to do that. foras a few other steps -- the qe to occur.
the rba does seem reluctant to do that. the effect of lower bound in so first ofs .25%, all, we are expecting rates to fall to that point. forecast, we are expecting ratesa to lower by mid next year. is good chance that qe will follow. shery: the rba wanted to assess the long and variable lags of easing delivered so far. when are we going to start seeing that? janu: that is a good question. the rba is right that it does take time for monetary policy to actually do its job. statement that they do think monetary policy does
have some of fact, and the fact that we have seen house prices lift, there is that scope for rising household -- house prices to flow on for stronger consumer spending. that is one mechanism in which monetary policy works. it takes time for that to occur. the rba does seem as though it wants to wait and see for that through. are we still see that there those headwinds despite the stimulus particularly around the consumer sector. wage growth is slow, household that is still quite high. -- debt is still quite high. there is not a lot of room for household spending to increase much at all. sterling investment, we are expecting that drive to continue. we have seen house prices rise. that drag is expected to continue through much of next
year. the other key uncertainty is business investment. the latest surveys on that are suggesting the outlook is not as rosy as it was. where we of signs of see a lot stronger growth. the big factor will be the government. whether they do step up fiscal could provide support for the economy. haidi: the aussie dollar, that has got to be pretty comfortable as to where levels are at the moment. janu:janu: the rba has been clear it wants a lower australian dollar rather than a higher one. we are expecting -- we see there is further downside to the australian dollar. the risks are great at that. we see that further. a number of factors from that,
firstly, we are in a very uncertain environment. global trade tension. what is going on with the trade deal? that is going to be one of the key drivers for financial market sentiment which is in turn a very strong driver for the australian dollar. on top of that, eric expectation -- our expectation that they will lower interest rates for another two times. qe will put downward pressure on the australian dollar and also the key downside risks for the domestic economy. theof these would suggest aussie a little bit lower than it is. 66 the lower forecast was to cents. there is likely to be volatility mattd that, highlighting to the downside. that to thetth -- downside. >> thank you. sophie. sophie: reaction to that report
from australia. we have seen the aussie move to the downside, trading at -- those after we saw weeks ending and high savings weigh on growth down under. aussie shares falling as much as 1.6%, the worst today drop since august 6 while aussie bonds are rallying. the 10 year yield falling as much as 11 basis points, tracking the moves in treasuries which are fairly the after yields tumbled the most since august. amid the trade uncertainty, another layer of risk is being added. we have the minis slipping -- e minis slipping. they are picking up slightly. the offshore yuan has weakened through 707. the kospi sliding with the korean won, which we can october 10 low. that's check in on japan. stocks are sliding for a second session with chemical makers weighing the most on the topix. just holding steady after 10 hao-ching 108.53, holding a
two-day gain, falling as much as two basis points. we saw some slight deterioration as shinzo abe's cabinet prepares a fiscal spending package. let's show you the dollar with the latest market pmi reading from singapore. little reaction as we are seeing that he or my reading, in higher for november. back into expansionary territory, which could be a sign of bottoming out for the manufacturing actor. for hong kong, the pain continues. it collapses further. the pmi for november coming in close to the lowest on record after october's dismal data suggesting a prolonged recession here in hong kong. shery: let's get the first word news with ritika gupta. ritika: the u.s. house of representatives has
overwhelmingly approved legislation that would impose sanctions on chinese officials over human rights abuses against muslim minorities. the build aims to support the ethnic uyghurs in shenzhen province. it risks retaliation from beijing as a world's two largest economies seek to close a trade deal. president trump cast doubt on a trade deal with china happening anytime soon. speaking in london ahead of the nato summit, the president signaled he would be prepared to wait another year before reaching an accord, saying, "i have no deadline." global later confirmed the u.s. will levy new tariffs on chinese goods next week if nothing changes. ies. trump: in some ways, like the idea of waiting until after the election for the chinese deal. but they want to make a deal now, and we will see whether or not the deal will be right. it has got to be right. ritika: opec and its independent allies are sending mixed signals
about production curves as they prepare to meet in vienna. the group should deepen output ,urbs by 400,000 barrels a day saying it believes saudi arabia supports the idea. however, an earlier meeting as a wound up advises -- without any discussion of new ones. countries should share. nobody should take the burden. ritika: global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. haidi. haidi: thank you. u.k.xt, a little from the general election. we will be assessing the campaign. it gets brexit done. this is bloomberg. ♪
>> jeremy corbyn is standing by his claims the national health service could be or would be threatened from any trade deal with the u.s. even as president trump said it would be passing negotiations. corbyn spoke with the u.k. election just over a week away. joining us from singapore's douglas, a professor of political science. wait to have you. regardingeveryone brexit's feeling this. do you think we will get some certainty in just over a week's time? brexit will get done one way or another. i really cannot say at the present time. what we can say i think right now is a two horse race between conservatives and labor. democrats have not really made a very strong impact in the
election campaign. it seems to be declining. the race is tightening. it is not as big now as it was for two days or a couple of weeks ago. polls cannot tell what will happen next week. if the election were tomorrow, they would probably -- there would probably be a conservative majority. in the last week of the campaign, some voters can change their minds. right now, i would be hesitant to make a prediction. i think probably there's going to be either a small conservative majority or a hung parliament. there could be a conservative majority. the deal with boris johnson -- which boris johnson negotiated will be passed before the end of january. if there is a hung parliament, i would expect to see sometime within the next year's second referendum on whether or not britain should withdraw from the e.u. at all. forgive me for being a
little cautious when it comes to opinions. do you think these ones are more accurate given we have seen them it youly inaccurate be are talking about the u.k., u.s., and australia? douglas: we cannot be certain about opinion polls. they give a snapshot of public opinion at any given time. they all contain a margin of error. i would be hesitant about making a firm prediction as to how the election will turn out next week. of the problem of opinion polls right now in the u.k. public opinion is extraordinarily volatile. there is a long-term shift away from social class towards values. the brexit debate accelerated this trend and there's also going to be quite a lot of tactical voting in the elections next week.
up to 1/5 of all british voters are going to vote for a political party, which is not really their first choice and probably these are voters who will support liberal democrats in seats where labor has no chance of winning. alternatively, this could be labor voters voting for candidates in seats where they think this is the best way of preventing conservatives winning. this on the assumption that remain candidates and voters, those who want britain to stay , will vote for the party, most likely to be the conservatives and their constituency. >> we have seen the weekend terrorist attacks in london. how important will security issues be and do voters pay attention to these? douglas: i don't think this is likely to have a very big impact on the election outcome. the big issues really are brexit firstly and then secondly, the future of the national health service. i do not get the impression at the present time that the
attacks in london at the end of last week will play a significant role in the election outcome. >> quickly, we also have another variable at the moment. the nato meetings happening this week. prime minister johnson does have the opportunity to look prime ministerial, but what are the chances this could backfire? douglas: again, i don't think this issue will play an important role in shaping the election outcome. foreign policy, apart from foremostre not really in the minds of british voters. thinky work, certainly, i this would favor boris johnson, because the labour party, especially jeremy corbyn, a longtime opponent of nato, is not seen as the kind of state leader when it comes to the future of nato and british defense, but i do not really think many votes are going to be swayed by the nato summit or
defense issues generally in this election. shery:shery: thank you very much. we will be watching this election very closely. professor of political science, douglas webber. coming up next, china is in a race to keep its pigs from dying and it is turning to the lab. china's biomedical breeding experiment, next. this is bloomberg. ♪ ♪
the trade deal with china, whether it comes or does not, does not solve the worlds problems. >> good news was incrementally positive. we are more negative again. >> it will stay in flux as we enter next year. >> the president views tariffs as a legitimate tool. >> the president wants a deal. he wants the deal also to come in time to be marketed to the election. >> trump really needs to get this done well ahead of the election. >> the tools that leaders are talking about for some time to come and investors have to get used to that. >> the biggest risk into an attorney. inthis may end up being -- 2020. >> this may end up being the trigger. >> it was baked into market valuations. >> we were skeptical about the trade deal as well. how really fragile the markets really are to this particular theme.
guests weighing in on the trade concerns, putting markets very much on notice. vols spikingied further, widening the gap. they are buckling up to put on helmets for more turbulence. of theait on the rest pmi data later this morning, we have a quick look at the damage report. we have the hong kong pmi posting the lowest on record at 38.5. this as the business outlook deteriorates further. that picture will continue deteriorating. haidi. giving swift reaction now from beijing. this after the u.s. house of representatives voted overwhelmingly, 407-1 against to includeshe bill that
sanctions for chinese officials over the oppression and mistreatment of the uyghur muslim ethnic group in shenzhen province. this is from the minister of foreign affairs. urging the u.s. to stop wrongdoing regarding the bill. opposing the u.s. bill on human rights and warning the united states not to interfere in chinese matters or in china's internal affairs. china also vowing to further respond to the u.s.'s human rights bill according to the ministry of foreign affairs. painting atse further retaliation to come. there has been retaliation for the u.s. support of the hong kong democracy bills that were signed by president trump. is now morehina irate and urging the u.s. to stop interfering and further reaction response for retaliation is to come. really retaliation, not
related to trade in itself but really on sanctions and some human rights organizations, not to mention halting u.s. naval visits to hong kong, so it will be really interesting to keep an eye on what beijing will do given that they have in the past , through their mouthpiece talking about retaliation in terms of publicizing their new entities. it could affect some tech firms. let's turn to another side of this china trade war, which is related to pork. china breeding genetically engineered super pigs with the ability to resist deadly diseases and freezing winters race.his biotech arms we do have the u.s.-china trade war. christine joins us now with this story. it's not just a trade war but also the devastating african swine fever. so how important is this? u.s., as hugehe
meat producing -- exporting nations, they are confronting the question of how to ensure future food supplies in the backdrop of a trade war, climate change, and other challenges. scientists in china and the u.s. are answering that call for editing technology to produce livestock that are more robust, so in terms of pigs, experiments have produced pigs that have bigger muscles, that can survive winters because they have less fat, which helps them regulate heat better, and also the ability to resist killer viruses, so that includes african swine fever. one of the interesting pigsiments has produced that could potentially resist african swine fever. that is from europe. there first, who
actually produces the super pig, will have a tremendous economic advantage. to leave itll have there. really interesting story about this kind of biotech race as well between the u.s. and china. so many kind of competitions on various fronts. digital news editor. we are getting one more line in response from china. the ministry of foreign affairs vowing further response to the u.s. house passing the human rights bill. giving no details. but saying that it is warning the west not to interfere on chinese internal matters that it opposes that bill on human rights to stop wrongdoing. we will be getting more on that as it becomes available. this is bloomberg. ♪