Into the second session of the legislative council, which means at the end of that period, the bill, for all intents and purposes, will not be revived. But she never said it was dead. Shes been under pressure to actually withdraw the bill completely, to take it out of the process altogether, and shes refused to do that. I mayhes saying is, if put my interpretation on it, shes saying for all intents and purposes, the bill is dead. I will not revive it. Shes using that wording to say the bill is dead. That is why we are saying, is the bill dead . Well, yes it is, for all intents and purposes, but not withdrawn. I would find it very unlikely that any of the protesters find this to be a satisfactory way of dealing with it. They still want to see it withdrawn and she refuses to do that. I suspect it is a matter of face. , thee even last week protesters rejected meetings with her. David tweed, thank you for that update. David tweed joining us in hong kong. I mentioned how things are looking mixed here. We are counting down to jay powells testimony in d. C. Are we going to get a clear signal on what easing path is going to look like for the fed . Not really a clear story to tell you, but it seems things have stabilized a bit. From the liquidity we saw in china, plenty of ipos in the pipeline, also when it comes to japan and korea, theres reports that the two sides are going to be talking. At least that is eliminating some of the risk that things could be ratcheting up. Watching out of china snapped out of that slump. Take a look at another chart when it comes to u. S. 10 year yields. We are watching that u. S. 10 year. We are still back above that 2 for the 10 year yield at the moment, but we have a cautious stance ahead of jay powells speech. Dollaryen is interesting. We are seeing Dollar Strength coming back after that solid jobs report. Closer to 109, which is not what a lot of traders were forecasting. And we are watching the ringgit as well. Largely expected to keep things on hold, but there is a stronger case now given what weve seen on the trade numbers and export that the bank is ready to cut sometime in 2019. Talking about the hong kong dollar, seeing some weakness but still hovering around 7. 80. We have seen the stocks pare some of the earlier declines. A look at the first word news now. Australias banking regulator has softened requirements on the nations largest banks after they argued there wasnt enough capacity to raise the necessary funds. The banks need to lift their total capital by three Percentage Points by january 2024. That is less than the initial requirement of four to five Percentage Points. The u. S. State department has approved a possible arms sales to taiwan worth more than 2 billion. The deal isnt confirmed yet. With prime prime tractors including bae and oshkosh. The Prime Minister said he was severely concerned about the move. Signs of recovery in taiwan. Exports rose last month in their first increase since october. Overseas shipments declined 0. 5 . The median estimate was for a decline of 4. 8 and only one of the 12 economists we surveyed forecast a rise. And car sales in china showing signs of recovery as dealers offer discounts to clear inventory. 5 inries rose almost june from a year earlier, reaching 1. 8 million cars. That is the first increase in sales since may of last year. Demand for cars has been hit by the trade war and emissions rules. Deutsche bank tumbled in frankfurt and new york as the latest turnaround plan fell flat with the market. Shares in germany closed down more than 5 . Say the ceos profit goals are too ambitious, pointing to concerns that the bank is focused on a competitive market and lowmargin financing. Global news, 24 hours a day, onair and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im selina wang. This is bloomberg. Back to you. Rishaad lets get a little bit more on what carrie lam has been talking. Shes talking english now, reiterating that this extradition bill is dead. She hasnt withdrawn it. Just quickly seeing if she confirms that in english. If anyone in hong kong has any different views, especially those about Hong Kong Government policies, please continue to uphold the value of expressing it in a peaceful and orderly manner. June, i tendered my most sincere apology for the disturbances and confrontations caused by our work in amending the ordinance. Since then, ive met a lot of people and listened to their views. I just want to give a brief account of our views now. First of all, because of all these grievances and there is anns, exercise to amend the ordinance. I have almost immediately put a stop to the amendment exercise, but there are still lingering doubts about the governments sincerity or worries whether the government will restart the process in the legislative council. Here, there is no such plan. The bill is dead. As regards the other demands, myself and the secretaries have responded on different occasions. Brief, we have not given a label to what took place on the 12th of march. Whatever label given by whoever rishaad we get the latest from carrie lam reiterating in english that the extradition bill, that controversial bit of legislation, is dead. She also did say it is dead but it hasnt been withdrawn, but that is the state of play at the moment. Going to keep tabs on whatever else she has to say as we look at what is going on in the world of Monetary Policy. The global march to lower Interest Rates is set to continue despite doubts about whether the fed will cut Interest Rates, and in turn, will that influence the bank of malaysia when policymakers meet there . Kathleen hays, lets start out with the bond bulls, still convinced that they are ready to cut. What is the rationale . When it be down to 2001, we saw even better nonfarm payroll growth . Kathleen that is a great historical context. So far, many of the signals in , sou. S. Economy are mixed bond bulls are saying, maybe i was wrong. 25 is still on the table. Lets listen to henry from kkr and see what he said about this whole question of what is going to happen on july 31. I think the market got to darvish on the fed. Sh on the fed. 50 basis points was too optimistic. The fed sees low inflation and slowing growth. The prudent thing is to do 25 basis points. Kathleen spotlight shining brighter than ever on jay powell as he gets ready for his testimony to congress, to speak about Monetary Policy and maybe give us some more foreshadowing of what he sees happening at that july 31 meeting. Lets see what Td Securities says about treasuries. You should buy them because the structural reasons for fed cuts are still in place. What is she looking at . Theres global risk, brexit, iran tensions, even south korea and japan opposing each other. Citigroup says with a deescalation of some tensions in the trade war, that july cut is not a done deal. Bloomberg economics says the fed is going to wait until september. Jay powell, will you please send us some clues . Theres going to be a big debate on july 30 and 31. Yvonne so many questions about if they are going to do it, by how much. How is this going to impact the meeting later on today . Kathleen they have a lot of, some would say unequivocal forces. They are not seeing cutting just yet. Lets look at the Bloomberg Library to see what their inflation rate is doing. You can see that turquoise line. It was as low as 0. 2 year on rate far below 1 , one hike last year, then a cut. What happens for them . They have a lot of to cut rates. Exports have contracted. 70 of their gdp is exports. The impact on the chinese economy could hurt their gdp. Oil prices have been softer. They are a big oil exporter. It hurts the exporters. It hurts the government budget revenues. Surveyed. Erg 21 of 24 said they are going to hold steady. Some economists say may be bank negara wants to wait and see what we all want to see. Does the fed cut on july 31 . Is it 25 basis points . Is it stronger . Do they signal they are going to do more . Guess they will be watching on wednesday as well when jay powell talks to congress. Yvonne kathleen hays, thank you. Joining us now is david stubbs. He joins us here in hong kong. Good to have you. What are you expecting to hear from jay powell . Is he going to lay out a strong case for easing . Usual you willas get a little bit of this, little bit of that. Youve got some important data to come out before the meeting. Seen a concerted effort to walk back the Market Pricing expectations for a cut. I wouldnt expect one to begin at this testimony. I think you would have seen it before this landmark piece of congressional testimony. I suggest that the signaling for a cut will continue. David, this is david here in hong kong. Because you brought it up, in backthey decide to walk those expectations, help me understand, how clear does that signal have to be, short of basically saying it is not going to happen . S. i think david there would be a series of speeches around this issue. They would emphasize the actual growth metrics are very strong. They would start to caution potentiallyrisk of asset valuations getting out of hand if they ease Monetary Policy further. Surprised if such a coordinated method started with this testimony. I think you will see a very balanced set of comments from the chairman emphasizing the need for tightening in a very strong domestic economy. Underwriting the feds commitment to extend the cycle as long as possible, to defend low unemployment, and indeed some comments among structural reevaluation. We could always debate the cyclical position of any economy any time there is a central bank meeting. Around the world, Central Banks are coming to the conclusion that performance has been too low and they need to do something about it to address the structural loss of credibility. You see that in many Central Banks. The fed is very concerned about it. That kind of rhetoric will keep the fed thinking about how to halt Inflation Expectations to the upside. Rishaad david, surely at the moment we have a situation where the inflation targeting is taking a backseat. Theyve tried everything. Look at the bank of japan. It has been futile. Surely it is all about getting the economy on an even keel. Weve got an earnings season. They are going to be looking at capex. Gotink you guys have something going on here. S p global estimates, just reading this, 3 this year from 11 last year. That is a horrible number. That is something they need to deal with. Lower Interest Rates may not be the cure, but at least it sends the right message. David s. absolutely. The weakness in inflation is one aspect to the central bank conversation. Central banks in japan are much further down the road. The fed doesnt want to be in that situation. But also, just another level of the argument for doing something more is the weakness of global cyclical indicators around manufacturing, trade, investment, capex, and your intentions linked to those trade tensions. Absolutely it is something Central Banks are trying to address. Weve seen several cut Interest Rates already. You see the European Central bank debating what, if any, stimulus to bring to the table. Right that this may not be the issue they are trying to deal with here. There are structural problems in certain parts of the european economy. Have other systemic issues as well. Central banks for a long time have been the only game in town. They emphasized the need for structural reform. But we dont see a lot of those issues. Some of the things we discussed are getting worse when it comes to the trade tensions. Aat is why you are seeing firm easing cycle around the world. Rishaad david, stick with us. Going to have more from him. Davidl be back also with in hong kong later this hour. Bloomberg subscribers can watch all of this on live go. Right now weve got the uber chief finance officer speaking with bloombergs own shelley. Rishaad asia stocks drifting in the session after the u. S. Counterpart slipped. Treasuries are little changed. Still with us, david stubbs. Is it time now to be putting your money under the bed or under the mattress . David s. no, absolutely not. Unfortunately we see a lot of clients holding a vast amount of cash, unwilling to invest that. We certainly think there are still some opportunities, even in a slowgrowing world, to find sectors with some growth. We see that in technology and health care and parts of the Chinese Consumer story. Becausesee that just Asset Classes are close to valuation averages, there are alternatives to generate yield. And even if you have a pessimistic view about where we are heading in the cycle, cash may not be the best way to protect against that. We would advocate reinforcing portfolios which are long equities with a collection of other instruments that are going to help out if the world does take a turn for the worse. We like a little bit of gold, but not too much. And then a series of derivative strategies to provide some participation in some of these key themes and names you want to hold for the long term. Certainly a difficult investing environment. One to use all the tools in the toolbox. Maybe alternatives to help generate some yield from the downturn as well as traditional investments. Holding a lot of cash is probably not going to get it done. Yvonne global pmis are disappointing. Is it still too optimistic in your eyes . David s. i dont think it is too optimistic for the next couple of quarters. Ket explanations are fair expectations are fairly muted. Theres still expectations of a pickup in 2020. That is the big question mark for us. Are we going to get some kind of rebound in china and europe . Will we have to multiply for trade going into a positive cycle or a negative one . That is where the question mark is for us. Compared to the growth we had in the u. S. Last year, we see a combination of the stimulus coming out of the u. S. Economy, we see the effects of the Monetary Policy tightening from last year starting to affect the economy there. We want to focus clients on key names and themes, rather than broad equity exposure. Yvonne when it comes to treasuries, we continue to see this rally, but talking about ation of european bonds as well, do you think european bonds could be rated higher here given that we have this new ecb president who seems to be more dovish . David s. she is seen as being dovish. We saw some parts of the complex react to that. Barriers, apart from , a lot ofical selloff the Quantitative Strategies are now very long in that way, so we must be mindful of those fragilitys in the market. To get a sustained rise, you need to see a number of things. Probably a turnaround in global sentiment. You need to see more robust inflation dynamics at home. Real wages rising. Confidence pretty high as well. Before we get that, we are probably going to get more easing from the central bank. Into negative rates this year. To get a sustained move up, you need quite a bit. I certainly think as part of a Global Portfolio we would love to european credit, maybe some bank credit as well. Structure capital could potentially be a way to enhance yield . How many of your private clients come to you and go, i want to get out of this brexit mess do i go to emerging markets . How many have been asking that weston question to protect their assets . David s. brexit is a neverending conversation. Rishaad unfortunately. David s. yes, you cant get away from it even if you want to. Weve seen many of our clients take significant steps to protect the value of their portfolio. One thing we do for all of our clients is provide that diversification. Almost everyone is holding too much exposure to their domestic economy. Weve had a range of derivative hedges on sterling. If that is where the bulk of your wealth is held, we protect that. But ultimately, we dont know whether this is going to be resolved or how it is going to be resolved. When i talk to clients outside the u. K. , yes, we could go through a bumpy time in the next year or two, but if you look at tradeweighted sterling, u. K. Real estate, the dividend yield on some of the key stocks, u. K. Pound credit relative to its peers, u. K. Assets are cheap. Five years from now, most of those valuations will be higher. Yvonne david stubbs, thank you. Just coming through here, the minister speaking about these japan curves later on this afternoon. We will update you with more. Wanna take your xfi to the next level . Now you can with xfi advantage. Giving you enhanced performance and protection. When devices are connected to your homes wifi, theyre protected. Helping keep outsiders from getting inside. And if someone tries, well let you know. So you can stream, surf and game all you want, with confidence you can get coverage where you need it most. Thats xfi advantage. Make your xfi even better. Upgrade today. Call, click or visit a store. First word headlines. Carrie lam says her controversial extradition bill is dead. Her announcement follows weeks of mass protests. She did not clarify if the bill has been completely withdrawn but some work on pushing it through has stopped. There are lingering doubts about the governments sincere and see sincerity. There is nohere such plan. The bill is dead. Iran says it has already enriched our radio beyond levels agreed in the nuclear deal and may push levels as high as 20 . Atomic inspection industry confirms the enrichment and says it will scale back a less european powers find ways to offset european sanctions. An independent think tank says there is a significant risk the u. S. Will reach its a death dealing in september. Beings bring bob brought forward due to u. K. Tax numbers. Hit the 22hen it trillion limits on a borrowing. Hasces new Prime Minister been sworn in but his appeal to bailout creditors has failed. Finance ministers say athens has received billions in loans and commitments are commitments. Miso talk us schmidt so talk tsoatis is reached out on twitter. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Back to you. Rishaad thanks. Bankg a look at deutsche depositors are tumbling. They had a fall of 5. 9 in the primary market. Radical planings is falling flat. But some investors are celebrating the move. What christian is taking the back the bank back to is its history of being one of the worlds best commercial banks. Stable, but ast, an investor, it is an exciting place to be. Rishaad our asia finance editor is tracking all of this. Psalm, theo the first cut is the deepest. What is the first cut here . Good morning, rish. The cuts have been the deepest on the banking side, specifically the equity trading business which has been wiped out. That has resulted in 18,000 job cuts worldwide, so a pretty devastating 24 hours or so for Deutsche Bank staff. Yesterday, the broadcaster sounded optimistic but investors did not express that with shares following following. Falling. Investors are worried about the outlook for profitability. The building to implement cuts and execute them officially. Bear in mind, this will cost 7. 4 billion euros, about half the market cap of Deutsche Bank. Some are saying it to cost even more and that leaves the bank with very little wiggle room on capital, given that the capital ratio has declined. Trying to do is to get away from the high risk andness of trading equities focusing on more stable businesses like retail banking, transaction banking. The problem is that those businesses are quite low margin and there is a lot of competition. How can thestion is Bank Transition from this high risk model into a low risk one while maintaining revenue. We were just showing pictures of employees leaving and some sad images out there. We are talking about thousands of people that are out of work. Where could before employees land . It will be very tough, yvonne. , hundreds of thousands of jobs have left the Financial Sector and it is not getting any easier. Again, butare hiring hedge funds are retrenching. Signs for few bright the staff is areas such as Wealth Management in asia. Deutsche bank is hiring an Wealth Management. Bearing in mind they are minting millionaires faster than anyone else. So these could be areas where we have employees who lent. Also, the fin tech sector is growing as well. Another issue for Deutsche Bank employees who were laid off is that they tend to be quite highly paid. They will probably have to accept some lower pay wherever they are likely to find a job. Rishaad thank you, russell. Our asia finance after. Lets get back to live pictures out of the rise conference in hong kong. We have been there all morning Tech Companies are discussing challenges and opportunities in this space. Lets go to david who is joined by our next guest. Dave . We just heard from the uber cto. Heard that some paid as much as 125,000 u. S. Dollars just to be here. A sense of howu important some people view what is going on at the rise summit. Kim, the ceo john of stenberg. Nice to see you. What do you guys do exactly . Hn we empower user to user messaging. So on a dating app, marketplace, talking to a seller, we pair all of that infrastructure. Avid a tangible example. So say you are on tender and you message someone, that is what you guys do. John basically. David what is the number one question you are getting . John exactly the question you asked. What exactly do we do, how are we helping companies to powered message and messaging and how much it costs. David how much does it cost . John it depends on the volume of users. It could range from a couple thousand a year to millions. David since you brought up scale, is there a certain scale that a Company Needs to reach before it makes sense to engage . John there are a couple of ways to look at it. Startup building a topnotch messaging service, it is good to start. But the real value comes in at scale of 100,000 users. That is when users expect a really good experience and also reliability. That is where our sweet spot is. So in terms of you being a more of them messaging, can you describe that the ban messaging than messaging, can you describe that . If you are rolling out a new product, you download our kids. You our kit. You plug and play and get chat messaging running in hours. , ourghout the process social Engineering Team will engage to really give excellent service. When you are rolling out, you will fill confident the revamp will go well. So that is how we work. And we engage in commercial, legal, all of those things. David i know you cant talk about specific revenues. But compared to last year, you are on track for what type of growth . John we have been tripling for the last couple of years which is why we have been able to raise a significant round in may. Investors are excited about our growth rate and expect us to go down that. David and what is the split . John that is where our company is very unique. If you look at our revenue distribution, a third comes from the u. S. , a third from Southeast Asia and a third from the rest of the world. David is there a preference . John we like to be where our customers are. And the South East Asia market is interesting. Weve seen Companies Come out of nowhere and become massive. For manyeen partners years for many years. China is more of a discussion about the business of them a value proposition. Business than a value operation. David are you profitable . John we can be if we choose to come about because of our aggressive growth, we are nonprofitable. You mentioned you disclose the series, there is no pressure from investors to turn a profit anytime soon . John our investors are very longterm thinking. They want us to beat the market and be the number one standard. They are really rallying behind this growth rather than try to turn out a quick profit. David are you number one . John we are number one in this space in terms of revenue, users, and growth rate. David we were talking during the break that it is a new product category. In terms of the pushback you get when you purchase, picture this, what is the most common pushback you get . John it comes down to the timing of the business. If they are in the right timing to revamp their business, those other perfect times. Are the perfect times. It is more about it being the right timing to really invest. Thing, because they might have an Engineering Team who wants to give it a go. But we have experienced countless times that those who go and do it come back six months later and say we want to work with the client. So we see that happen more and more. David final question. How long do you see that money lasting at the current rate . John we have been growing very efficiently. Roughly, three years, give or take. But increasing investment will shorten it. But for the foreseeable future, we are very financially stable. David appreciate your time, all the best. Sandberg sof endbird. Rishaad good stuff, david, thank you. Up, as the budget blues continues to spook indian equities, we have a look at how things are shaping up for the session today. This is bloomberg. Rishaad thats have a check of the latest business flash headlines. This korean a game developer is surging after announcing a buyback to more than 2 million shares to help save stock prices. Netmarble has tumbled after its latest game fails to get anywhere near market expectations. A Chinese Grocery delivery startup is seeking new funds and looking to hedge valuations of 3 billion. Planning to raise up to half a its high profile backers including tencent and goldman sachs. Fiveyearold company and says it promised to reach profitable cash flow last year. Intended to is moving some of its switch production to vietnam nintendo is moving some of its switch production to vietnam, saying its target of sales may not be affected. An tendo currently makes all switch consoles in china. Yvonne taking a look at markets right now. We have seen a little bit of moves after carrie lam talked about how the extradition bill is basically dead. , some losses,ring and now were seeing the slide on the hang seng. Main shares in Mainland China are also lowered by. 2 . Mutedur large caps are after a ugly day and ugly day an ugly day. We are watching japan and korea, a trade spent. Spat. Won has rebounded a bit at 11. 79. The dollaryen, also some risk on the moves riskon moves. These were some of the stocks pressured by the chip material export curbs. They are rebounding. Having a bad day here. We are getting close to 20 losses after that profit warning. We see more banks downgraded the stock as well. We saw a bit of a rebound here with this Sports Company after some came through saying they were conservative. They came out saying the allegations are incorrect but we resume the slide once again. Anta sports it down. Sports down. Son nerves from investors who got spooked by this additional tax surcharge. How are things looking today . You could see a slight followthrough coming about but the nifty is likely to gain support for a landslide move at the end of the trading session picked up. Set for early, you had the likes of metals losing a lot of momentum in trading yesterday. With regardslarity to how the taxation works in india, but that may not help soothe the nerves too much. , there wasboard rising across the Different Levels of strikes. This is an indication of further selling pressure on the nifty index. Kicking off with the tcs numbers in india, what are analysts looking for in particular . Muted a muted growth on revenues. However, the weighting is inspected, because of higher cost and employee costs which have been weighing down on margins. Regards to other margins, 24. 3 is what is expected but the Bigger Picture is how i. T. Stocks have been reacting to the increased tax and buybacks. So for companies that have been these tools to give investors back excess cash, this will become a bit of a sore spot. But i doubt anybody will look at tcs numbers. Today is the semi finals in the cricket world cup so all eyes are on that. Yvonne yeah, a lot of people watching that it. , we look at the battle of the charts. May looks marvelous, whatever that means. [laughter] we look ahead to this battle. Plenty more to come, this is bloomberg. Yvonne time for battle of the charts. Weve got our senior economic correspondent who is battling an asian metals and minings reporter in singapore. Will pick their best charts against each other. Rishaad you can access those charts on bloomberg by running that function. Lets start off. This graphic shows why donald trump is upping the ante on india when it comes to widening the scope of his tariff wars. Wars. The trade deficit is at a threeyear high, despite india dropping oil imports from iran and buying more from the united states. Andrly, it is not working been strong is likely to put pressure on india to open up its Financial Markets and do more trade. The u. S. Trade representative will be in india this week. The other thing he wants is he particularly wants duties on Harley Davidson the bikes to apparently, a phone call from trump to modi. Did it. This is all in the background of increasing trade tensions as they explained last month. Expose aided to tariffs on American Products in. Esponse to trumps move tariff man cometh. Yvonne what do you got . The u. S. Has been singing and rain rain go away for the longest time and now it seems they are finally getting their wish. Whether it is set to be drier and warmer, it should help corn grow normally after relentless rain has caused record planting delays. Those have caused corn futures to search an amazing 21 but that is starting to ease off. Eating corn liked and not sure if that will score points for you guys about but given that court is a commodity that is unchecked for trade tensions, this is a market to look forward look out for. Yvonne i do like corn. It is a tough one. With the indiao u. S. China trade tensions. Aboutinteresting, we talk the u. S. And china, the u. S. And south korea, but not india too much. Sorry. I like your chart as well. How do you feel about all this . Rishaad we talk about corn all the time, dont we . [laughter] have lovely, i would have probably liked crystals. A paperthin margin for me. Thank you so much, guys. Im not going to make some sort of corn reference. You can interact with the charts shown to catch up with key analysis and use them for future reference. A lot coming up. Yvonne yeah. Tomorrow is one you dont want to miss, our exclusive interview leader of theeng, Worlds Largest supplier of consumer goods, joining us to discuss how the trade war is impacting the Global Supply chain. Dont want to miss that one. Also coming up here from the rise conference, we will be joined by the chief commercial officer of one championship. A mixed martial arts motion outfit. We could look at them as the rival in this part of the world. I am hearing quite soon that they will be joining the ufc in the octagon, looking to enter the u. S. Markets. We will look at the strategy and how they plan to take on the u. S. Market, which is a completely different animal. Here at the rise conference. Is getting full and were starting to get a lot of the speakers and talks up and running, so pretty noisy. It is the second day, if you were wondering, and it goes all the way until friday. I mentioned this earlier on the program, some people paid 25,000 u. S. Dollars just to get all access here. Lots more coming up here. Stay with us. Emily im emily chang and this is bloomberg technology. Up, growing a trade tensions between japan and south korea are threatening top and the Global Supply chain. We discuss which companies are being hit the hardest. Plus, apple great downgraded. The most since its since back in 1997