Should be a very robust system to investigate and look at periodnts over this long of confrontation and violence. The other is an arraignment to intoe a factfinding study courses in the fact of this incident, so i hope that this is a very responsible response to the aspirations for better understanding of what has taken place in hong kong and it is not just to provide a sequence of facts, it will also provide the government with recommendations avoid to move forward and the occurrence of similar incidents are at it the second i havent missed which will give addressbetter to differences in society is we peopleart dialogue with from all walks of life, the this is something that we want to do in serious and humble manner. I am committed to listen to what people have to tell us and we want the chance to help community of service possible. There we go. Just going to leave things there. Just seeing a little bit of a move. Lets take a look at what is when came at the air at the top, it was down just a fraction. A quick look at some of these yields ands of course is a big story, what is going on. The rally really the most sparring as people deciding not ,s many Interest Rate cuts still at the moment negative and 10 reels at 1. 6 . Taking a look at the china tender and how this dovetails into the whole rate story. It is the middle horizontal bar that we see. As we were mentioning, it is happening here, so for 25 is yourfirst benchmark and five day 30 midback. Essentially, they want to bring taken inis going to be this becomes stable we do have the first omission from the banks today, and this is what we to moree lets get on this. Make of where they goesit, how much it towards it etc. A has spent quite a few years trying to improve the admission and it started in 2015, particularly towards the end of 2015 and that is where we had the beginning and what we have noticed is china has been easing Monetary Policy and tightening, but the actual presence in to prevent enterprise just hasnt been as effective as you would the, so to try and defend them through this mechanism through this would allow in pricing for Consumer Credit and were not really expect much change today anything monumental. It is relatively straightforward. It provides regular terry regulatory birth the markets and they can have a rate at. We would actually be anticipating throughout the us of this year that those prime lending rates might take down a 10, 20bit, not a lot, provides theto it mechanism for a more efficient rate cut conversely when the time is right, to raise rates as well. By . Oes this mean you buy . They are unclogging it in order to deliver something the economy. We are happy to be recentration, but also through the 30 year and one of is you areings bringing more participants to market, so when we first started to see this last year with our pinpointing the domestic investors and in the recent weeks and months, we have seen the 30 year become more liquid. You are seeing a bias for long Interest Rates. [inaudible] the development of the demand market, or come the majority is the best think domestic investors. Insurance become a bigger role, so it is a natural progression and we expect to see that it dovetails into making things simpler for people brought as well. The age ofactor in data ease of hedging your currency risk adjuster cnh come derivatives. Ise is have accessep to Government Bond futures and that will be quite a path to tool to beowerful able to adjust up and down using the race derivatives. Throughwith us fidelity. Lets take a look at first word news. Boss start with Jpmorgan Jamie dimon, among a group of prominent ceos that interest should always come first. That test the purpose is reserved all employees and society at large. Include jeff bezos. Bloomberg economic has been crunching the numbers on the growing 30ince the and that would compared to a scenario where is no trade war. I would be dealt the impact of the tariffs themselves. The number of people migrating from hong kong to talk that to taiwan surging as protests continue. It is up by almost a third of this year compared to last with hong kongers making up to 10 of all the residents in taiwan. The president had an vocal in her support and there are more demonstrations to come through a mass protest over the weekend. Protestersage is if dont use violence, police will not use force to the test on will not use force. Solution. S never they have found hundreds of accounts allegedly used by china to undermine the protests in china. Twitter has taken on more than 900 accounts and they tried to manipulate opinion in hong kong. They also found the summer and what option with an pages and regrouped. Three groups. Global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. Going to be joined by mckay on risk andecord opportunity. Youre talking politics and andness next with cookie the will be joining us to discuss the progress the impact it is having on the overall economy. This is bloomberg. Some lines from hong kong. Reportsam speaking with and talking more about what we saw over the weekend which was a peaceful protest that came to one when people and seems like we saw the government in terms of meeting in the middlprotesteg she wants to a platform for dialogue immediately and has no ands to revive the bill should be increasing the number of dates. Protesters if these are saying it is enough to satisfy the demands they have laid out in what is 12 weeks of protests. Now joining us is the approaching lawmaker to the National Peoples congress. He also found the group which operates 7000 outlook in the region. Does this in olive branch from this anam today . Is olive branch carrie lam today . . I think the Central Government is increasingly concerned about the timing. The national is coming up. China will be summoning his 70th and will be the songs that china has ever been, so obviously, the top leadership would want to focus on the achievements of china. The last thing they want to see is bloodshed in hong kong. Even a few hundred thousand is on are can the streets ,o cast a very bad impression is for theng government advantage. What i heard is there would be a deadline and it should be the first week in september. To see whether they have enough confidence that no central. Overnment needs to take place [inaudible] if the streets are still filled with protesters . They invoked article 14 which is for the troops to come in to help. The former secretary of justice by shareg, basic law has said repeatedly that sending violate. Did not [no audio] these are the two ways that the Central Government can and the, but nobody wants to run the china. New you have peaceful raids in beijing, etc. You have great inflation where it is gone. Now, we have a golden window right now, it let the protests frontg kong, you have a organizing very peacefully first two months mobilizing hundreds of thousands coming up. Then, you have a group of young supporting a Smaller Group of islands protesters who create trouble. Really theometer is. Eaceful rally it was a very sizable turnout, but there was no violence pressure, so why do i say the. Ext 10 days is a golden window interventionvoid in september, this is the time for carrie lam to think about addressing some of the demands. Which of the five do you think is the most feasible . I have talked to protesters on the streets. They would not talk to me. The ones that follow them and from what i can understand for , they are really concerned about just to come a which you be no one is not number two. Stubborn they be so since complaining against police. It is simply because the credibility is different because the setup for the current organize hours to some people, subpoena documents and any was later as not be taken charges to come against them so most people think that is the popular way to deal with, but on the other hand not to overlap with the addition of the police council, i have suggested that they set up an inquiry with different terms of references. They are not looking at individual cases fairly at the structure. On the tech side, who is behind in. Is thing that is crippled whether they are in a deeper extension. So far, we have heard that some leave there is another dimension behind the whole thing and for a are saying, so judge to conclude that there is important toery continue as an International City investors being these. To them, it is important. Ton you look at them not butlap the specific cases, but rather to avoid and empower empire between those into the. Whether indeed they have missed for haveon the island. O time to react to the new law on the kind of things that a judge can look at. Just to recap, what youre than is there is a 10 day window until which based on your sources basically might implode to mark the 10 day window is the civil human rights front which according to them, 1. 7 million peaceful demonstrators two days ago come to a what organize next month august 31. That is the tenday. What is so special about this past weekend is this is the first time that they have organized the peaceful rally with fast turnout but not result in violence or teargas or anything. Opportunityrfect for government to bring think about addressing and not be accused of backing down to violence. Our peaceful protests of civil our peaceful protesting suitable . Acceptable . Day comes the second birthday. Wood teargas, and absolutely out of the question. Aat is also not acceptable is peaceful rally up to 200,000 people. What signal is china sending the rest of the world . With look at what the protesters are demanding percent. Thisnd how did administration lose the hearts and ones of the people in what do you do to actually address that . I think the type of cheap that that chief executive politician. Ds is a carrie lam is a lifetime civil servant. Politicians know the art of compromise. The successful pop would be able to judge something can be contained and when you really have to answer to compromise to achieve demands. I think in this particular case she is behind the eight ball every step bit if she had come june out of the five them and even today, when followers of the protest, they are not talking [inaudible] demand andr three all that. They are coming down to just two, a complete with all committee. Happense things the not needd the not happen not happen. It is interesting what is going wrong and what beijing made about it ahead of the national day. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. David we are continuing the conversation. In terms of the economy, Morgan Stanley was out this morning and they are basically taken a cleaver and cut their forecast on growth for the economy. Fullyear. 3 . In contrast we look at the bloomberg chart because the government came out with the final reading on friday which just show up on traction. Which essentially means we are one quarter away from entering a technical recession here in hong kong. An economic typhoon of level 3. Yvonne level three danger. Level 8 is when the city shuts down. We are joined by michael tan, the Hong Kong Legislative Council member. You have the pulse of the Retail Sector. Im wondering what kind of impact have you seen already since the Movement Began . Michael why dont i share with you what i suffered. Since july, i have 40 stores in hong kong. So, im in the clothing business. And since late june until now, the last few months, overall our business has dropped 40 . 40. Rishaad wow. An averaged 40 is of some stores dropping 60 and some 20,30. It depends on whether those stores are completely shut down for the day. We do most of our business on saturday and sunday. That is when they do all these rallies, right . Now they are getting to arcades . Nd malls, right and their ugly scenes happening. So people just close down early. The amll operators the mall operators are worrying. Everything, right . So, basically in terms of, you what youhat im in the call the impulse business because fashion is not something you need to buy every day. I am probably the hardest hit. My understanding is even f d was also had very badly, ok . Maybe the only trade that is thriving is the supermarket because people at home. Maybe supermarkets are doing better. But, anyway, basically that is the scenehere. Now the f d and the retail actor employs 600,000 out of 3 million workforce. That is a sizable number, that is 20 . Ok . So, how long are we less when the business drops 40 . Landlords are not reducing the rent. So where is the money coming from, right . There will be a reduction in workforce. Rishaad they were close down. Michael unemployment is going to grow up. If this thing doesnt stop, ok . Of course, is it really because of the demonstrations that the people are not buying fashion or clothing . I think it has also been a feelgood factor. There are many consumption, but a lot of consumption is based on whether you feel good. I can truly say that in hong kong today nobody feels good. Rishaad why . Why, why did this happen . Michael its dragged on for too long. Everybody is seeing. Young people, our next generation completely defying the law. Putting the one core valuation hong kong has always been proud of which is a place of rule of l aw, all right . Reducing it down to, you know, a value that none of the younger people seem to even respect. That is very, very dangerous. Anyway, this is what is happening. So, the Retail Sector is hit like that. Ive talked to a lot of Business People about whether there are any other concerns. Is you know what happened every one of the employers in hong kong cannot guarantee or know whether they have stopped, the protests. Yvonne im just wondering, yes or no, should carrie lam step down . Michael that is for Central Government to decide. And honestly, the answer to that e session. End on th you are talking about a far r eaching decision that cannot be made lightly. Whether we have recession secession, whether it is smooth than anything else. But, anyway, time is running out. There is still a chance for carrie lam to do something, i believe. David this is from one of our viewers. Ill just read it. You mentioned earlier that it is acceptable to have a peaceful congregation as long as the spirit of basic law is upheld. If the crowd should not be as big as several hundred thousand. One or two thousand might be acceptable. Isnt having a concurrent celebration in hong kong up on the chinese mainland the best example of one country two systems . Uge rally toor a h happen on national day that is peaceful means a majority or a huge number of hong kong citizens is discontent about the way this issue has been handled. So, what does it mean to the Central Government . It means that under one country, two systems, all right, the two systems is not working too well, all right . Of course, it is the right written in basic law that we are entitled to lawful, peaceful protests. But the signal to the whole world is two months now this thing has been going on. Theres still that many what thissatisfied with e government has done over what has happened in hong kong. That surely is not something that the Central Government lightly. E to heart but more importantly is we dont know if a massive turnout happens on national day whether that evening there will be protests, all right . Iolent you notice the v protesters is banking on the support of the huge number of peaceful demonstrators. If you reduce the number of people going into the peaceful rallies, because somehow the government has met some of their demands, ok, its going to make a difference, big difference to whether the hostile and violent protesters will still continue to charge. So, they are now working with each other. Although there means, their methodology, their belief is different, that they are actually after the same thing. The government has to do something. You just cannot ignore it completely. So, the question is very simple. I do not agree that the five demands should be met, all of them. But does it mean that none of the demands can be met . Partially . Right . To some degree . There has to be some show of sincerity. Youre talking about hundreds of thousands of people saying that they want to be respected, because they have no vote, right, in selecting the chief executive. All right . So, it comes back down to the fact that 22 years after our changeover to chinese chiefignty, we still, the executive is really still only answerable to 2000 people. All right . And the other 7 million are not stakeholders. There is the problem. Yvonne im wondering as a Business Owner because we have been covering the fallout of cafe specific. If we continue to see employees, people who want to voice their concerns in the streets, how does one Business Owner or ceo told the line between vowing down bowing down to pressure from beijing and talking to their staff about that . Michael personally, i am a National Peoples congress deputy. It is the right of every citizen in hong kong to go and into a peaceful protest. So, as far as im concerned, if my staff takes a day off, all leave,and we grant that whatever that person does is on his or her own, all right . So, but a lot of my friends have come to ask me, you are in the National Peoples congress. Dont you worry . If your staff ends up joining a demonstration and he got arrested, and suppose he was not charged, was released, all right, but obviously it would be aade public that he is employee. Do you feel pressure that you have to do something or fire him . Iends isnse to my that i will abide by the hong kong law. If he is not charged and he is released, there is no problem. Friend says you are a National Congress deputy, are you sure you will not get any phone calls . My answer is, i do not think so. I am not in a strategic business. Im selling clothing or die not doing airlines or oil or gas or whatever. My friend says, why can you be so sure . I dont know. A lot of these people worry. They cannot control what their staff to in all these rallies. And if it gets out they are part of the company if they get into trouble, would be under pressure to take action which would then antagonize the rest of the workforce . The employers feel that if this thing continues they will be caught in between. Hong kong has always been known as a place where politics and business are separated, right . We all know that. But recent events have led some to believe that, hey, they somehow are getting more, you know, mixed. That is not a good sign. For hong kong economy in the long run. David one question. Do you think sending the pla in is a good idea, yes or no . Michael of course not. Both article 14 and article 18. David do you think beijing knows that . Michael i think so but equally they cannot tolerate any kind of unrest in hong kong. It could be resulting in bloodshed on their 70th birthday. Rishaad michael, final question here. Ultimately, how much damage is being done to the reputation of hong kong in particular, and by chinas restraint at the moment no damage done but damage would be done if the pla was sent in, how much damage has hong kong suffered . Michael i think so far it is still not too late, ok . If something can be done by the anger to control and the discontent of the people, i think this business can resume to normal within half a year or so, ok . A lot can go on as usual life can go on as usual. But if violence continues and it escalate, there could be more and more cases of people getting arrested relating to businesses that had dealings in the mainland and there will be rumors about, you know, getting phone calls on how you should do with your employees. Yvonne michael, thanks so much for taking the time. Hong kongen, councilmember joining us in hong kong. Plenty more ahead. This is bloomberg. Rishaad you are back with bloomberg markets. President trump is pounding the table for more rate cuts. Another top official says the u. S. Economy is doing fine and another is not needed. Trump was asking for 100 basis points as a cut. Eric says he wants to see evidence of a slow down to justify an Interest Rate move down. He was one of two dissenters when it came to julys cut. It was tied to the fact that Economic Conditions are still pretty good, so 3. 7 unemployment is very low. Inflation is a little bit low. If you look at the Core Measures of 1. 6 but if you take out the outliers using mean its closer to 2 , exactly 2 . My view was that we have to be careful not to ease too much when we dont have significant problems. So, the focus is not to do something that affects the Exchange Rate or something that necessarily takes care of the world economy. Were supposed to focus on unemployed and inflation in the United States. So, i think we are in a pretty good spot right now. There are calls to ease at times when you do not need to ease. Costs. Re several one with the ways that Monetary Policy works is you cause people to buy houses and cars earlier than they otherwise would. Substitution. You choose to make an investment now because Interest Rates you think are going to be temporarily low. You make us managers you might not otherwise make. The second is that when we lower Interest Rates we make the cost of that lower. That means that households and firms are more likely to be leveraged. Get leveraged right before we have more significant problems, they are in much worse shape. We have to think about the Financial Stability characteristics and by that its thinking how much do we want households and firms to be leveraged going into whenever we actually do have a significant downturn. How concerned are you about a significant downturn . The signs from the global economy, the signs from the bond market in particular, even signs from wall street banks that have cut their gdp forecasts and recession indicators suggest Recession Risk is rising. Is it rising in your eyes . Many of those indicators are tied to Financial Markets. Lets start with what most economists things is the likely outcome. One way to gauge that is the bluechip forecast. We just came off real gdp at 2. 1 . The bluechip forecast for august had growth of third and Fourth Quarter both at exactly 2 . Roughly the same as the second quarter. Thats not a recession, it is continued growth at a moderate pace. They also have the Unemployment Rate at exactly where we are right now, a tenth less. So, forecasters are not seeing a lot of weakness in the data. Reallythink has people focused on whether we are going to have a recession is the combination of volatility in stock market, we had a very big movement a week ago, when we lost 800 points on the dow but in subsequent days we have moved back up. If you look at the long bond, it is around 1. 6 . One of the reasons for that is the global weakness. Global cure for weaknesses for countries around the world to expand either with fiscal or Monetary Policy in their own countries rather than just the United States doing the easing. Yvonne david that was the boston fed president with Kathleen Hays in boston. Here is the case for a cut. According to donald trump the u. S. Pretty much the only economy of the developed economies among its major peers that has some semblance of a positive rate. The bloomberg dollar index at a 2019 high. Lets bring in our portfolio manager. It seems they are going to cut rates likely. You cant position for a higher a cut and how do you reflect your view on what is happening . The market is pricing in cuts already. To the end of this year, you have 60 and 70 and not far into the new year you have 100 basis points of cuts that President Trump is calling for. The reality is that the market has adjustable lot in with the 10year treasury at 160, you have done a lot of the heavy lifting already. Long duration assets has been yeartodate. There is no harm in taking some profit and shifting to the shorter end of the curve. 4 yields with a little bit of credit risk. That is not a bad place to be, thinking six or 12 months ahead and you reduce the gyrations you might see from News Headlines and tweets. Yvonne so, last week the conversion of the yield curve, do think it was an overreaction . The good thing about the inversion is it sends a warning sign. It does not mean there is an imminent problem but the flattening of the curve, you ant have any incentive to lend money longer than a couple of years. That is inherently the challenge of an inverted yield curve that could have self fulfilling prophecies. And the impact on Consumer Sentiment or Business Sentiment is clearly that. Hence, the calls for Monetary Policy easing. Across theng it board and renewed hopes the fiscal stimulus not just from the u. S. But from europe and china as well where we have seen significant fiscal stimulus. Thats still going to play through. David we were talking about a late last week. Bond markets look ahead. We saw this coming, the slackening inversion. When do bond markets are pricing the recovery for the slowdown we are pricing in now . It is a little way off yet, before we get too concerned about the curve. We can enjoy the credit spread premium. There is Financial Market repression. We are being encouraged to take risk globally. With 16 plus and growing 1 trillion of negative debt, that demands for anything with a positive yield and anything with a little bit of credit spread premium, is desirable. Youll continue to see that. I would not be too worried about thinking of a steepening, but make sure that we are focused on good quality credit and coming down the shorter end of the curve you can lock in profits and be ready to adjust. Rishaad the u. S. Treasury looking along the date 50 years. Germany has 50 years. U. K. Are looking at 50 or 100 years. How does that change the game . Yvonne there is demand for it. They have attempted this and previous time in the demand has not been there. There could be an element here of what a great opportunity to discuss even the prospects of it . And, if you are government, the idea of bond rishaad down the road to the of borrowing for 50 or 100 years as tantalizing. More lot of investors in active or even passive investments, parts of our world, that is going to be less inclined, it is quite a niche demand from longer dated, active liability matching but yes, i think the interest will be low. Yvonne 230 seconds. Your appetite for asia dollar bonds . If you invested in these junk bonds he wouldve lost money. We are still very comfortable with asian dollar debt. Triple bs offer a nice generous spread. High yields, single b, are attractive spreads. Rishaad thanks for being with us on the program. Just to tell you what we have coming up. Andrew mckenzie joining us live for an exclusive interview to discuss the results. That is on the way. Dont miss it. David welcome back. A quick check of your big stock movers today. Cut to. Underweight at Morgan Stanley ubs downgrading. Bhp group was out with earnings. We will talk to the ceo later on. Flip the boards. A few names coming out with earnings in hong kong. Everyone from hot bots to property and hardware. I would say smartphones but the company is probably going to say no. 2 up. Just a few names. 10, 12 big names coming out with earnings in hong kong. Yvonne yeah. Were talking about this but forget about fundamentals and earnings going on. We really are talking about of a risk on, but not a whole of conviction in the markets today. ,h hang seng is downe. 01 despite the fact that we heard from the white house that hu awei got a bit of the past for 90 days with sanctions. You cannot say it is a sign of progress on the trade front, either. Rishaad huawei got that reprieve, 90 days. Chip makers, of course. Yvonne up 5 today in hong kong. Rishaad i will tell you what is coming up. Going to be joined by bhp ceo andrew mackenzie. A record dividend payout. Also, hes already in the singapore studio. Mark mobius talking about risk and opportunity as the trade war rolls on. This is bloomberg. Custom shirts help people feel like theyre part of a team. My name is timothy chi and im the ceo of weddingwire. Were very proud customers of custom ink. We keep coming back to custom ink because of the quality of the product, the customer service, and the ease of use. That moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away and our shirts from custom ink help bring us together. [announcer] custom ink has hundreds of products to help you look and feel like a team. Upload your logo or start your design today at customink. Com emily im emily chang in San Francisco and this is bloomberg technology. Twitter and facebook say they have proof of fake accounts backed by the Chinese Government aimed to undermine chinese protests. Plus, deadline extended. Commerce secretary wilbur ross says they will ease huawei sanctions for another 90 days. Is there an echo in here