Alleged phone call an apparent trade detente that was apparent flipflops leave beijing unsure of u. S. Policy. Is the first of chinas big touted by the u. S. Administration, we saw the yuan banks to report earnings. Six in terms of the senate how the trade war is affecting devaluation was the largest performance. Shery lets get you started since the beginning of august, when we saw the risk of event with a quick check up on how markets closed. Where the yuan bridged the seven level. Theintent is there from it was a wild ride, with u. S. Chinese site. Dogs paring back gains. The s p 500 finished down. 3 . If we see these levees continue to be raised on september 1 and it is a very financials leading the declines with the 10 year yield falling politically important date for below 1. 5 . He dow gave up 120 points the chinese. It is the 70th anniversary of the peoples republic of china. That is not something the chinese are willing to let slide it was a bit of a mixed picture with volatility gaining ground as we continue to see the vix without a serious olive branch i think from the u. S. , which looks about the 20 level. We have more positive sentiment unlikely at this stage. In that sense, we will continue when it came to trade out of the to see slow and steady g7, but at the same time, with depreciation of the yuan, as chinese officials not really confirming some of the comments coming from President Trump, the long as the pboc are comfortable they can manage Capital Investors did not know what to outflows. Make of the trade negotiations that are expected to kick off the. 4, 7. 5 level looks within again in september. In the meantime, mixed economic reach we see the increased level data. U. S. Consumer confidence did of going into effect in september and october. Fall, but it declined less than shery how much exposure do you recommend in asian equities . Expected, and not to mention, we had the fed Manufacturing Index i think, in asian near lows we have not seen in equities, at the moment, we are recent days. Recommending that clients are underweight emerging markets picture forixed relative to developed investors to digest all the different factors playing into the market today. At the moment, u. S. Futures markets. From a longterm standpoint, gaining. 25 . Investors are underweight equities at the moment. Lets see how we are setting up exposure toreased in asia. Selina. Selina as investors try to us of like utilities, consumer digest the latest twists and we like and reits, turns of the trade war, asia set for a mixed open. Nikkei futures up. 1 . Minimum volatility as well. And underweight exposure to it may hold onto the gains from small caps too. That is really to protect yesterday. New zealand trading little against the trade escalation changed. A little bit more green on the board than we did see yesterday. That we see in the forefront and continued recalibration in growth expectations downwards. Seeing no clear at the moment, analysts consent is estimates look far too sunshine china whether they are optimistic against the current going to come to the negotiating table. That is causing some investors economic backdrop. Paul strategist or australia, to pare back their positive sentiment. Eleanor creagh, thank you so much for joining us. You can get around up of the japans removal of south korea from its list of stories you need to know to get your day going in todays edition of daybreak. Trusted export partners. That takes effect today. Bloomberg subscribers can go to because japan has that and is a dayb on their terminals and its also available on mobile in the bloomberg anywhere app. Supplier of ketek components, you can customize your settings so you only get the news on techap component Key Industries and assets you care about. This is bloomberg. Components i want to take a quick check of the yuan. That is on its record monthly plunge as the trade war continues to intensify. Right now, trading around the 7. 1639. Itdit agricole is expecting to reach up to 7. 3 per dollar. They see the outlook continuing to deteriorate. We have seen the pboc said that reference rate higher than expected so we will have to watch to see if that continues to see just how much of this weakness the pboc is willing to stomach. Taking a quick look at some australian stocks, we saw Virgin Australia report a fiscal year loss. Little change. Up 1. 25 out the last close. Looking minerals. The forecast copper production for the full year maintaining its previous forecast. Paul, shery. Paul thanks very much. Lets check in on the first word news with ritika gupta. Ritika senior officials in iran have all but ruled out talks of the u. S. After President Trump seemed to indicate a willingness to meet. Iranian leaders said the u. S. Would have to lift sanctions if there were to be any chance of negotiations. Rouhani added tehran would be interested in solving problems recently but he is not prepared to give a photo op to trump. En blaming the coalition in Democratic Party for an early election. Even if a deal is reached chance of restarting brexit negotiations after Boris Johnsons talks last week in berlin and paris. Sources say germany and france have relaxed the Withdrawal Agreement. Get a quick check of the latest business flash headlines. Indoor cycling start up peleton has filed for an the trials against the former malaysian Prime Minister have ipo. The company want with an initial reached the end of the offering of 500 million, which prosecution phase and may conclude as and as november. It says it is likely to change. They sell highend exercise he faces 42 charges linked to his alleged role in the troubled bikes that are linked to a state fund. He pleaded not guilty to all the touchscreen. Accusations. s willingness to they sell classes in exchange for monthly subscriptions. Paul agreeing to sell its travel a scandal that involves billions of missing dollars and has shaken the countrys entire Operation First 5. 6 politics. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 billion. Journalists and analysts in more the deal includes the stake, it than 120 countries. I am ritika gupta. Largest producing oil field in this is bloomberg. U. S. History. Shery. Shery thank you. Oil output has slumped from its heyday in the 1980s as the former head of the new york reserve driedup. Fed sparked a wave of criticism reserves driedup. This is bloomberg. After he implied jay powell should not help President Trump by cutting rates to shield the u. S. Economy from the trade war. Kathleen hays is here with that piece. Bill dudley wrote it for bloomberg view. Kathleen, the fed does have a dilemma. They could keep cutting rates but the president could continue to threaten the economy with a trade war . Ritika and that is it. Some kathleen and that is it. There is already that debate raging. Build but we of course, president of the new york said ran the9 to 2018, he new york feds open market test. He was chief economist at Goldman Sachs for many years. So this came as a bit of a surprise when he wrote this Opinion Column for Bloomberg News that came out swinging on behalf of the fed and against trump. What he said was, in fact, the fed could go further than this. It is tough to deal with trade as an official banker. Any will not bailout administration that keeps making bad choices on trade policy, making it abundantly clear that trump will own the consequences of his actions. Bill dudley sees some benefits from this. Lets take a look. It would discourage further escalation of the trade war because it would make it more expensive for trump to do. It would reassert the feds independence because it would distance itself from donald trump trade policies. It would conserve muchneeded ammunition. The fed funds rate is low already. That is the idea here. This is a part. If we move on, why did this upset people so much . This part, he said the u. S. Election and the outcome is in the feds purview. Froms reelection arguably presents a threat to the u. S. Fedsobal economy, to the independence, and its ability to achieve its objectives. Achieve the best longterm economic outcome. Fed officials should consider how their decisions will affect ritika this is daybreak asia. The political outcome in 2020. At a time when trump has been i am ritika gupta with the first attacking the fed and people keep saying you cannot word headlines. Returned trump has politicize the decision, displays into the sense that ,udley, a former fed official from the g7 and wasted no time in resuming his attacks on the head. He took to twitter to accuse jay is saying something that sounds like politicizing the fed. Powell and his colleagues of bill dudleyen, ending by and watching american manufacturers struggle with exports. He added that the rest of the certainly knows how to start a conversation, doesnt he . That was the most emailed story world has long been taking advantage of the u. S. On bloomberg and it kicked off a former senior fed official, bill huge wave of comments. Dudley, says the central bank what is the response . Siew lets start with the official response kathleen should reject the president demand for rate cuts and not bow to pressure to fix the damage caused by his trade war. Must start with the official response. Reserves policy dudley was new york fed president until last year. End up the fed could encouraging trump to escalate the trade war further. Engineer haser decisions are driven by the mandate to maintain price stability, maximum employment, and Political Considerations play no role. Been released on a 2 million spoke to manyteam bail after pleading not guilty people. At Minneapolis Fed Bank president said bill dudley is to charges of stealing driverless Vehicle Technology completely wrong. From alphabets waymo unit. The fed legitimacy as technocrats relies on their the indictment adds a new sticking to that mandate, criminal charges of the saga of trade secret theft against uber. Sticking to the job, not getting political. Says, this does surrendered to the authorities and faces up to not work. Ofn the fed did not approve 10 years in prison if convicted. The fbi will not tolerate the it for years ago, they raised theft of trade secrets. Rates to punish george bush. Renaissance macro says the fed i want to be clear on what we cannot be seen picking sides. Consider trade secrets. These are the crown jewels of companies. Roberto, former fed economist, says he agrees the fed should ritika the brazilian president says he will only accept g7 aid not push and the impact of the trade war but he thinks this to fight the worst ever fires in the amazon if you first wins an political angle is extreme and probably wrong. Apology from emmanuel macron. The two have been feuding since paul. Bloomberg economics and he accused both in our about policy editor kathleen hays, thanks for joining us. Lying about his commitment to do not miss our exclusive fight climate change. Bolsonaros chief of staff interview with San Francisco fed president , mary daly, tomorrow, says he is in no position to 11 00 a. M. Hong kong time. China is preparing for the worst lecture brazil. Global news, 24 hours a day, on air and tictoc on twitter, on trade as President Trumps powered by more than 2700 journalists and analysts in more than 120 countries. Apparent policy flipflops the permit the stress between the i am ritika gupta. This is bloomberg. Two sides. Tom mackenzie joins us now from lets get you across an beijing. Tom, a day of conflicting signals. What is chinas view . Tom yes, certainly. Alert on the bloomberg terminal. More earnings from after we have been speaking to officials in beijing, and what million dollars. They have said is that in terms of how they view the comments the market has been expecting a from President Trump over the weekend and at the g7, it just loss of almost 40 million Australian Dollars. This is a service in australia argument in beijing that some viewers might know this better as labor. That this is a president they cannot trust. He is not reliable. This is the digital version of on friday, he said xi jinping was an enemy of america, and 24 it. Profit of 42. 9 million, where a hours later, he said we are closer to a trade deal with loss had been expected. China than we have ever been. President trump says the chinese a bit of a market darling. Shery. Open wait to see how they picked up the phone and said we want to get back to talks and we have had pretty much silence from china on that. In australia, as the markets they pointedly refused to caps off, selina, what are you confirm that that was the case. We had a news editor saying watching . Market opend of the there was no such call. It feeds into the hardline. In japan, i am watching several stops, including our reseller this is not a president or administration you can trust and that we need the chinese to manufacturing arisawa continue to prepare for a long, manufacturing. Wewnout trade fight, that must not give any concessions 1. 35 billion yen. It is maintaining its sales and for the sake of national pride, operating profit targets. Watching for new pond building, nippon building. So what you are looking at now, according to these officials we will be speaking to, is china it was upgraded to neutral from will sign up to a deal which agrees to buy more agricultural underweight at j. P. Morgan. I am watching panasonic last close. 3 . Purchases. It was cut to neutral from buy as an enforcement mechanism, not at citi. Going to happen. China will insist on all tariffs they have cut their outlook on being removed. The Japanese Electronics sector. It is unlikely we will get a deal in the near term. China is preparing for a no deal. It is preparing additional weak manufacturing, capital expenditures, as well as a trend stimulus and a blacklist of u. S. Companies should it come to that. It should be noted they are they are seeing in the 5g they are downgrading the outlook on prepared to negotiate and we the Japanese Consumer Electronics space overall. Have not yet had a cancellation of the planned talks in switching boards, sticking with washington in september. Shery no deal as of yet, so japan, a quick check of the yen. Does that mean the yuan has no it has of course been other direction but down . Tom you look at august, it strengthening as we have seen the trade talks continue to deteriorate, trading at around level. 71 looks that way, doesnt it . It has been on a relentless over the course of the year, it downward trajectory. Is strengthening about 3. 7 potentially, we are looking like the first month on record for thatst the dollar, but the week. The biggest drop on record for the yuan. Dovetail in comparison to the rally of other even assets like gold. U. S. So far versus the it has rallied 20 . Dollar. There has been a bit outflow of funds from japan as it is also lower against the Institutional Investors seek basket of its peers as well in higher returns elsewhere. That is dampening the rally of terms of the renminbi index. It is close to the 91 level so this traditional haven asset. We have seen this asset swing it has been under pressure. The pretty wildly as the trade if you want a couple of calls, Credit Agricole say the yuan is talks continue and the rhetoric changes from positive to going to fall to 7. 3. Negative. Bank of America Merrill lynch we have seen that fluctuate quite a bit. Says it could fall to 7. 5 by the paul. Shery. Chinas bank of end of 2019 as officials try to offset these additional tariffs. Communications posted net income just under 6 billion for the first half. That is the call from bank of America Merrill lynch. Growing nearly 5 from one year we have had five Straight Days earlier. That is the first of a string of now where the pboc has fixed the Bank Earnings this week currency stronger than expected, including the socalled big with suggests maybe they are four. Rosalind chin is hong kong with getting a bit concerned about the numbers. What are you seeing so far . This depreciation of the rosalind we are seeing growth currency and what it means for potential capital outflows. Paul china correspondent tom in the business. Overall profitability growth is hampered by costs in terms of mackenzie in beijing. Thanks for joining us. Tilde come, we are talking more trade with stevenson yang. Provisions as well and rising costs. Revenue is growing robustly. She argues that tipping the income net interest balance of the trade war may require what President Trump coming in at 9. 8 billion. Does not want, higher Interest Rates. That is later in the show. It has been a surge in charges shery markets are still digesting the recent twists in the trade war. Operating extensions tells us howtegist climbing 17 in the first half. Net interest margins did whiting she is positioning amid the uncertainty. From a year ago but it did this is bloomberg. Narrow three basis points in the Second Quarter, and that of course is the main concern. These margins continue to be squeezed into the second half. Take a look at this terminal chart. It does show the Second Quarter on its own. It shows Income Growth is there. Equity has been falling since 2012 partly because banks have had to raise capital. That improves very slightly in the quarter. Shery how do those results compare with what is expected for chinas consumption later today . Rosalind probably, it will be a very similar picture for China Consumption bank and the big four banks which will be reporting this week. This shows you the measures of profitability for these banks, which has been falling. We have return of equity, the turquoise line, Net Interest Margin hasd the of been affected by the prime rate, which kicked in recently on a declining trend and those are likely to stay pressured as impact on the trade war and revenue risks make themselves felt. How could we forget the trade war impacting the economy . And chinas Second Quarter. Economic growth was the weakest in almost three decades. The guidance really is going to be key here as we are looking at the results coming in this week. Margins under pressure. Ofo in this environment lower rates. Partly to support the economy but also for the changes in the way the central bank is sitting lending rates, including these on the ours ldrs. Anis likely below 2 for extended period. Assets could slip below 1 . We have the rest of the banks, which will be reporting this week. We have the biggest lender by assets coming up tomorrow, and then on friday, we have the bank of china. Back to you. Paul thanks very much for that. I want to get you across another alert on the bloomberg terminal. After they again. If you thought the numbers seemed too good to be true, they were. ,hery the u. S. Market that was not a fullyear profit of the 2. 9 million. It was a fullyear loss of 42. 9 volatility was the theme of the day. Million. Hewlettpackard enterprise was the star of the show. That is the correct. That is worse than what the su keenan joins us with more on market was expecting. This. The vix, above 20 now. No dividend from after they. Very much of growth story. It was really a wild ride for stocks. After pay saying active customers were up 130 but still there was this continuing the recording a loss for the year of saw as investors wrap their head around what one strategist 42. 9 million, so this called really had spinning clarifying that for you. Changes between headspinning shery in the u. S. , a feud over the ongoing opioid is simmering changes between friday and now. The strategist says, in his firms view, it will need to get as part of the broader trade war. President trump has accused beijing of not doing enough to worse before it gets better and we are in the midst of that. The dollar held steady serve exports of the highly addictive painkiller and to know, fentanyl, a claim the against peers. Narcotics regulator is denying. The financials were one of the the is of the cost deputy head weaker sectors in the s p. Lets go to the bloomberg. The agencys deputy had said one of the big stories was Philip Morris has confirmed it is now in merger talks in an all they are politicizing the issue. Some u. S. Politicians, out of stock deal with its former other half. Ago with whatars their own political necessities, disregard the fact. Became the group. They find fault, make small they are talking about getting things day, enter black and the the band that together for the biggest deals at ts bid for white and turn black and time ordering time warner. White. Clean water is muddied. WerePhilip Morris and lgf paul the u. S. Treasury has recently sanctioned three Chinese National and two lower on the deal. Check out costco, which had its big debut opening its First Companies operating in china. Will you be taking action against these individuals . Store in china in shanghai. It was mobbed. Will you be taking action against companies that operate that produce according to the of people were so u. S. Fentanyl products . At the time that these for strong, they had to close the making these substances, the store early. Many people defending on overly Chinese Government had not announced wider controls, so at discounted goods. Morgan stanley says costas move into asia is a big growth move that time, what is evil were for the company. Move into asia is a doing did not violate chinas law, but some in the u. S. Big love move for the company. Political circle take issue with paul hewlettpackard rose. This and want to implement it has made some comment on the sanctions, which is not good at all. Trade tensions. What are they saying . It only hurts the good cooperation we have had over law enforcement. There would be some who would su executives were on the conference call. The ceos noting that trade argue that with the power that up as much asbeen you have at your hands, a budget 4 on a raised forecasts. For domestic security of about the trade tensions are continuing to create uncertainty 200 billion, if someone in the politburo turned around and said and an environment of uneven demand. They noted that has affected the company. Six this now, close this down, you could do it . Revenue fell across all Business Units in the quarter. We do admit that a small number of unlawful evil are some say it is a sign of weak demand. It is the forecast that is making fentanyl substances under grabbing attention after hours. A number of people are making it is much stronger than fentanyl substances. Expected because of her margins. Hewlettpackard enterprises is the maker of server computers. Ceoeo shifting its we have zero tolerance for them. We will exhaust every means to find them, arrest them, and punish them. Shifting into cloudbased services and that continues there was China National to be a positive move for the narcotics control deputy company. Paul su keenan, thanks very director. Much for that. Joining us now is the market still to come, we will be taking to the research cofounder and strategist, eleanor creagh. Thank you for joining us. Eleanor thank you for having evenson yang. She argues stevensonyang. Me. Both right off the bat, she argues for higher Interest Rates. This is bloomberg. Ugly sure knows how to start a conversation but he got criticized for saying pretty much what everyone is thinking. It does not make sense for the red hold back on limited ammunition and that politics salt a political problem. Solve a political problem. Easeor they are having to more than is necessary just taking a really aggressive road with china when it comes to resetting that trading relationship. Comes tohat when it the u. S. President , not much is going to sway his mind. We have seen at least trade tensions have continued to escalate and we are expecting that will continue to be the case. That trade relationship is a sideshow for the real problem, which is the battle for test dominance and hegemony of the 21st century, so that is not to be an ongoing rattled that will battle that will rage on. In that sense, i understand that least common, dudleys comments. Included asthe fed the lender of last resort in the need to backstop confidence and markets as well as we continue to see trump take his aggressive path on trade. Paul all the craziness and volatility, we keep seeing this flight to quality. Investors are running for cover and we see the yield on the 10 year. We drop now since 2015, so how much lower do you see the 10 year yield going . Eleanor i think at the moment really, the structural trend downwards in yields is in play. Tactically, we are looking a little bit stretched him about right now, a zero target on the u. S. 10 your yield we have seen 10 year yield. We do see u. S. Growth take a turn for the worse. Factly have to look at the that we have seen this recent paul this is daybreak asia. Escalation in trade tensions that will continue to weigh on global growth. I am paul allen in sydney. We have disinflationary pressures that are ever increasing. Shery i am shery ahn in new chinese cpi going negative. York. We have the evaluation to china is preparing for the worst. After a weekend of confusing contend with. Signals, President Trumps it is hard to see that inflation credibility is becoming a key is going to rise from this obstacle for any deal according moment in time. Theres not really much reason to lean against the current to chinese officials familiar with the talks. Joining us now is anna dynamics in the bond market, particularly as we the global Central Banks coming to the stevensonyang anne front in this race to the bottom stevensonyang. Haverms of Interest Rates we there seems to be a big trust deficit between the two countries. How do you break the impasse . Anne i dont think you do. There has been a big problem from the u. S. Side all along with not understanding what is actually possible to do in china and also not having the process to record and memorialize what is going on in meetings so that i think would happens is the u. S. Roach down its understanding. China says that isnt at all what we said. We are just stuck. We are continuing to see the rhetoric for President Trump hardening against businesses as well. Ordering them over twitter to stop investments in china. U. S. Ke to of the chamber of commerce. 1. 4 billion customers are in china. U. S. Companies are not going to ignore the market. They will diversify their bets and look at other markets because of the trade war and the trade friction between the two countries but they are not going to leave china. It is too important a market. Shery when can we expect the domestic forces within the u. S. To push back against the president , including businesses . And those constituents that are taking the biggest hit . Anne that is a good question. That it is not as if he has a clear policy that is hurting peoples interests and that we are a guest. What is hurting peoples interest is the vacillation. If he would say i am cutting up all relations with china, we are putting on 30 tariffs, that would be better than what we have now. The problem is that if you are a business, you just cannot plan. Are you going to have to pay 20 import tax to the u. S. Or 30 . There are a lot of yes businesses that are based in china that export to the u. S. , so that makes it very tough. To your point, we have plotted trade policy uncertainty on the bloomberg terminal. We have a chart here. You may not be able to see it. It shows the u. S. Trade policy uncertainty spiking to a quartercentury high. In this environment that you describe as a vacillation, what are your expectations for these talks that are almost upon us in september . Are they even going to happen . Are expectations pretty much on the floor . Not think there is anything that can happen. A couple of months ago, china could have bought a bunch of roy deans and made a deal and it would have gone through, but at this point, expectations have been raised to hide. They are raised for a deal which then,ally impossible, and you also have the hong kong problem. Isare up on october 1, which the 70th anniversary of communist rule. The mainland government is definitely not going to be gentle with hong kong around that anniversary, and it will be very awkward for the United States to make a deal with china around that. I think, basically, what will happen is the u. S. Will delay implementation of the next set of tariffs, but that is it. Paul maybe we can come to hong kong in a moment. I wanted to get your thoughts on the context of this trade deal as we head into the 2020 election. If President Trumps last campaign showed us anything, he is extremely good when it comes to the tactics of scapegoating and he has a perfect one in the form of china and the fed. Is it even in his interest to secure a deal before the election . Anne that is one reason that he vacillates, because he does not want to be viewed as being soft on china. I do think that there is a good chance that it could kick china into a crisis, and that will in turn generate a crisis in the United States and possibly kick off a recession. Shery you have an interesting point on one of your Opinion Pieces that perhaps the reason that we saw this chinese boom is because of the cheap money coming from the u. S. President trump wants to see lower rates in the u. S. , but higher rates might work better. Anne i think that is true. The chinese economy begins and ends with liquidity, so the absolutelynomy requires a constantly rising stream of credit. By that credit is generated incoming u. S. Dollars, so during the quantitative easing period, when the u. S. Was kind of into the world economy, a whole lot of them made their way into china. That fueled the investment boom. The investment boom in china created underpriced goods for export and a lot of subsidies in industries and all that sort of thing. If you wanted to address the issue for real, you would raise rates. That clearly is not what trump is going to do. Paul Capital Research cofounder and research director, anne stevensonyang. Now, dont forget our interactive tv function tv. , you can watch us live, catch up on past interviews, and dive into any of the securities or bloomberg functions we talk about. You can also become part of the conversation by sending us instant messages during our shows. This is for bloomberg subscribers only. You can check it out at tv. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. At the trade were between the u. S. And china escalates, technology continues to be one of the most impacted sectors. Despite tim cooks relationship with President Trump, that includes apple. Steve wozniak spoke exclusively earlier to bloomberg technology. Isif it manufactured more efficiently in oregon, i would buy it in oregon. Why do we establish orders for countries . Politicians want their own domain to be important. I am more into sharing. Cooperated ways to and reach agreements that way. It will have an advantage in the balance of trade. You mentioned competition. That word has come up two or three times in your answer and that leads me to wonder if competition is significantly more fierce this time around and if that is driving the trade. Are you worried about competition from samsung or huawei encroaching on some of the big market sharers. I have thought about that. You know, i do not say there is to logical rule that comes one answer for all. I happen to be more against competition. We are taught from the time we go to school, my school, right or wrong. My team, right or wrong. My country, right or wrong. I am more into thinking about what is right and what is wrong. Also being liked by everyone. To hurt you, i am going to somehow throw my balance of force against you in a way. That does not make friends. We should try to be friends with all the countries of the world that are important and china is one of them. How china could influence apple, everyone knows a lot of the tech products, especially things like smart phones and computers, the manufacturing shifted to china and the shenzhen region. A lot of it is moving out of places like the annan, but so what . That will let us make products for a lower cost. Everyone who buys an iphone will pay less. Say,not see why we have to oh my god, the balance of trade is going in that direction. Common, especially for companies that are at chinas level on the Development Curve towards being a real major force in the world economies. Look where they have come from. Shery Steve Wozniak speaking exclusively to bloombergs taylor riggs. Lets get a quick check of the latest business headlines. Australias biggest Investment Bank, Macquarie Group is planning to raise money in a share sale to fund new investments. The spending will mostly be in renewable energy, technology, and infrastructure sectors and macquarrie updated its earnings that infamous reading firsthalf profit will be about 10 higher than a year earlier while year earnings will be lately lower. Paul hewlettpackard enterprises is offering a profit forecast that tops wall street estimates, indicating progress. Shares jumped in late trade earnings said a justin will be . 47 a share. Analysts have been expecting . 43. The deal has been trying to prepare them for a future increasingly defined by cloudbased software. Says iterican airlines is stepping up them in efforts for travelers who suffered from byargeted work slowdown mechanics and back handlers who are pushing for better contracts. 1200called more than cancellations and lengthy delays, delivering a blow to the Summer Travel season. The carrier has sued the Workers Union for them to help recover some of the costs. Opened its first outlook in china, sparking wild enthusiasm and lengthy queues. It was forced to suspend sales. Also is entering cosco is entering a market where many global others have given up. 4 had a disk corre shery they hold onto their position at the most profitable Investment Bank in japan. A demand helped upset weakness in trading. Securities rose 8 to 201 million. A rise in trading losses at Goldman Sachs japan pushed it back into third place behind bnp Paribas Securities japan. Citigroup raise the minimum wage for rankandfile staff to 15 an hour after encouragement from the House Financial Services committee. Unlike other major banks to announce similar moves in glossy press releases, citi disclosed its commitment to maxine waters. It came into effect on june 1. Walters asked to boost the minimum to 20. Market open in tokyo, sydney, and seoul at the top of the hour. Selina. It looksmp selina like futures are pointing to a mixed open at the start of asia trade. It is rhetoric from trump on how the trade war will unfold. There is no quick resolution to this. More muted than yesterdays close, up about 1 . Throughout theat year, up 2 since the start of the year. Seoul, coffee, and sydney futures kospi, and sydney futures in the red. We see vacillations on trade in the geopolitical outlook. Switching boards, i want to do over the look at treasury futures. We have seen u. S. Treasurys continue to rally. We have seen the rush to haven assets continue. The yen has been strengthening as well but not as much as gold, which has seen a 20 rally. We are looking at treasury futures, up about. 5 . Paul thanks. Still to come in the next hour of daybreak asia, bloombergs most accurate forecast is on the aussie. Sean will join us to discuss on the major effects. We have the market open coming up next. Stay with us. This is bloomberg. , paul good morning. Im tall allen in sydney. Asias major markets are about to open. Selina welcome to daybreak paul our top stories this wednesday former new k fed was still doesnt new former new york fed boss bill dudley is under fire. Bow, is the first of chinas big banks to report earnings. Investors want to see how the trade war is affecting performance. Seilina trade headlines forcing big action on the markets. Investors are clearly struggling to understand how they should be pricing in big changes in rhetoric on the latest around trade. Looks like stocks in asia are set for a mixed muted open. In japan, the nikkei is little changed. Some analysts think this ongoing trade dispute between south korea and japan will have a big impact on japan, given that it has a trade surplus with south korea. And macyig supplier challenges ahead. Taking a look at south korea, which we are still digesting some of those very poor Consumer Sentiment numbers from korea. It did gain. 5 after three Straight Days of losses. It has been a poor performer since we started the year. Taking a look at australia and new zealand, looks like the asx 200 is little changed. We are seeing a little for the shares. Lastly, i want to get a quick check at this interesting bloomberg terminal chart, which shows u. S. Trade policy uncertainty is spiking to a quartercentury high. As you can see from the chart here, going back all the way to 1995, that really is no surprise, given how much we have been discussing the vacillation in trade rhetoric from trump and the fact that investors are struggling to price in this very unpredictable path. On firsts check in word news with ritika gupta. Venoco thanks, paul. Iransin iran leader said the u. S. Would have to lift sanctions if there were to be any chance of negotiation. Rouhani added that iran would be interested in solving problems reasonably but is not prepared simple provide a photo op with trump. Movement blaming each other for the threat of an early election in italy. The harsh rhetoric indicates that even if they meet, the coalition would be hobbled by infighting. Government sees a chance of restarting brexit negotiations after Boris Johnsons talks in berlin and paris. It also appears germany and france have appeared to relax their town on the Withdrawal Agreement and the need for socalled backstop on the irish border. Meanwhile, leaders of the u. K. Opposition party held a closeddoor meeting to discuss how to block any chance of a no deal brexit. Trials againstny the former malaysian prime end ofr has reached the the prosecution phase and may conclude as soon as november. He faces charges linked to his alleged role in embezzling state funds. He has pleaded not guilty to our to all accusations. The verdict will test the nations willingness to tackle scandal. The loss of hundreds of millions affected thes country. Hasbrazilian president assistanceill accept in fighting fires in the amazon only if he receives an apology from the french president. Day onnews 24 hours a air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Paul thanks. Asian stocks set for a mixed session wednesday, but it has been a rough month for most gauges. Garfield reynolds is asian markets life editor. As long as this vacillation on trade goes on, i guess we can expect to see asian markets growing kind of sideways. Garfield sideways with a tendency toward the downside. Theres always the potential for a little bit of rebalancing of positions. It has been a great month for bonds and a dreadful month for stocks, so we could see that flip back a little bit in the next couple of days, but whatever the talk is on trade, the sides are walking towards more tariffs. September 1, were supposed to get tariffs on 140 billion of 10 or 15 . S at thats a little bit unclear. And were supposed to get china tariffs on oil and on soybeans and a couple of other things at 5 coming in. As long as those tariffs are set even ifin, any talks, china does actually confirm that it has picked up the phone and called the u. S. About the negotiations that are due next month, is not really something that investors should pay much attention to. Shery moving away from these ongoing trade negotiations, we have seen the msci reweightings the closect after yesterday. Will this have an impact on markets . Garfield i definitely think it did have an impact on markets during the week. That helped explain some of the resilience shown by the china market and some of the weakness we have seen in the philippines in particular. Also earlier in the week in south korea because there was there were some Big Tech Companies that were seeing the allocations shifted down so china ashares could shift up. We might see again and little bit of a rebalancing. The philippines in the jugular has shown earnings resilience, and even though it suffered along with everybody else from , therade war angst philippines actually is not as exposed to trade as some of the other nations. Trade makes up a smaller amount of its economy than korea, for example. You could see a bounce back there. There are some philippines stock completelyre not disheartened by what has gone on. Then again, that anxiety, that fear factor is there. Like i said, a little bit of position adjustment going on, but its going to be hard to see too many investors taking bold positions leading into a weekend where we are only a tweet away from a fresh meltdown. We have to continue watching trade tensions somewhere else because japans removal of korea from a list of trusted export partners takes effect today, right . Will that have an impact on the Market Sentiment . Were also headed toward a Rate Decision, right . Garfield i think the be ok Rate Decision is probably more important because japan, korea, that has sort of been priced in here there might have been hope it could be wound back. Arguably, japan has focused on mending trade fences with the u. S. Abe and trump reached an agreement over the weekend. I think the bank of korea is more in focus. You were mentioning the quite dreadful breakdown in Consumer Sentiment that we saw. The climb we saw in the advanced trade figures for korea, the bank of korea is going to be a very interesting meeting on friday. If you look at the way threeyear bond yields are well under the current cash rate, you chance think there is a they go. Can find garfields commentary on the market life blog on the bloomberg. You can get a market rundown in one click. There is also commentary and analysis from bloombergs expert editor. Yorkormer head of the new fed sparked a wave of criticism after he implied jay powell should not help President Trump by cutting rates to shield the u. S. Economy from the trade war. Our Global Economics and policy editor is here with the peace bill dudley wrote for bloomberg view. Powell has tried hard to depoliticize the fed, and this kind of would take it in the other direction. Kathleen it certainly would seem that way. Former fed officials are almost as cautious in the remarks as they were when they were current at officials. Bill dudley, of course, played this game for many years. When he makes a Statement Like this, he clearly must have put a lot of thought into it and felt strongly about what he was saying. Lets look at some of the key remarks from the oped he wrote for bloomberg view, published today. He talks about the fed its hard to make Monetary Policy amid a trade war but he says the fed could go farther than that. He says he keeps making bad policy debt bad decisions on trade policy, making it clear trump will own the decisions of his actions. Says it would discover discourage further explore the he says it would discourage further escalations of the trade war and distance the fed from policy and serve muchneeded ammunition. Why cut rates now because of the trade war when you might need it later when there is really a recession . That is his argument. What really got people going saying bill dudley has moved even further on this talking about what this might mean for the next election, how trump is affecting the economy, here is what he said that people also took great note of. Arguablyeelection presents a threat to u. S. And global economy, to the feds independence and ability to achieve its employment inflation objective. If the policy is to achieve the best longterm outcome, fed officials should consider how their actions will affect political outcome in 2020. That last sentence seems to think bill should help rate in fed and keepin trump from getting reelected. Paul the of a kick of a wave of commons, and a lot of them negative. The oped kicked up a wave of commons. The oped kicked up a wave of comments. Kathleen one of bill dudleys former colleagues, also a says hescolumnist completely wrong in this one because the feds legitimacy is electedant on officials. He agreed that the fed should question trumpo trade policies but never the less said the political angle is wrong, perhaps a little extreme, so we leave it at that. Bill dudley is a private citizen now, this is something he wanted to say, and, boy, did the world hear it. To go one theme should for a while. Dont miss our exclusive interview with San Francisco fed. Resident mary daly tomorrow still ahead, investors will get a look at chinas biggest banks next week amid slowing growth at home, a trade war, and Interest Rate overhaul. Kellerp next, shawn lows us and tells us how the treasury rate can go. This is bloomberg. Paul the Australian Dollar foot, but the back the rba Deputy Governor says the currency has repeatedly held the more healthy economy absorb shocks. The banks senior currency strategist joins us. I guess some things never change. The rba seems to be trying to job on the aussie ever lower. You do expect maybe the rba is going to move a couple more times at least on rates, so where is the floor for the aussie . Value, about fair 6550. He clearly has room to go if that is the guideline. Prices, butommodity i do note that spec positioning is already quite short the aussie in terms of leveraged funds and real money accounts. Theres a lot of bad news already priced into the aussie, side would sayr it has really been in the price for about 18 months now almost. Thes quite remarkable that rba would talk lower wind trade weighted is around 10year lows, so were talking about gsc type levels, so it has already benefited the australian export sector quite a bit. Surplusa record trade in australia. From that point of view, i think it is probably shortterm not a great deal of downside. Still, we do think there will be support over the next few weeks from resort company dividends. That should lend some support as well and as i say, lots of bad news priced in. While we do have a base case of 66 by early next year, we have obviously come a long way. In the interim, we see fit a little higher on profitability. Australias fate is very closely tied to that of its biggest trading partner, china. We see the yuan headed for its biggest monthly plunge in 25 years as the trade war continues to bite ever harder, so same question, i guess. Wheres the floor from here . It has already blown past estimates for the yearend. Very has certainly been a active month given it all kicked off on august 1 with the renewed viaat of tariffs president ial tweet. Infact, the biggest moves dollarchina this year have been specifically in reaction to escalation on the trade war side by the u. S. It has come a fair way. I do think it is notable the daily fixed income yield tends to be toward a further yuan. It is not being weaponize in that regard, and that does suggest capital outflows are still a concern for the peoples bank of china and when they have 3 trillion of reserves to back expect the yuan will weaken drastically. Yearend for the time being, we have only got it at 720. We think it has come a long way and tradewe did services are. Lready at multiyear lows shery where does that leave the u. S. Dollar . The crosses. Shortterm we think it performs well against the euro. We expect the ecb to be very dovish on september 12, so that will keep the euro under pressure, but against the yen, not nearly so compelling. We are actually on the aggressive side of the market in terms of our baseline view. Pricing,points, market difficult fort is dollarian and other crosses, lotgiven we probably have a more turmoil, turbulence in the equity markets, theres no realistic prospect of a resolution on this rate front. Shery are you at this point potentially factoring in a fiscal boost coming from germany given that we are now seeing them on the brink of a recession . Export numbers slumping the most in more than six years already. That would be nice, wouldnt it . There is plenty of room for germany. Iny have the fiscal power the reserve. Their position is very strong. T will be great to see i dont know how committed the government is. Merkel has not shown herself to be very interested in much fiscal stimulus aside from been bundesbankaside from chipping in and saying dont do it. If it happened, it would not happen soon, so i think slow growth in germany at best is what we can expect into next year. For joining us. You can get a roundup of the stories you need to know to get your day going in todays dition of daybreak. Bloomberg subscribers can go to go on the bloomberg terminal. Customize your feet so you only get the industries and assets you care about. This is bloomberg. Koreas removal from japans socalled white list of preferred trading partners formally comes into effect today. If this trade spat drags on, who wins and who loses . Now, it seems japan is in a better position. Japan provides materials that go production of semiconductors and displays in south korea. Also, when it comes to components like rubber, plastic, sd machine parts, south koreans reliance on japan is pretty high. Be good forwill not Korea Incorporated in general. japan obviously the far larger economy, but is there any area where south korea might have the upper hand . Tourism is one area. Last year, about 7 million south koreans traveled to japan while 2 Million People from japan came to south korea. This is already putting some pressure financially on some of the regional problems in japan are kind ofreans hoping this will put enough pressure on the Prime Minister so he can retract the tightened rules on exports. Thanks for joining us. Australias biggest Investment Bank, mcquarrie group, is planning to raise one billion aussie dollars in share sales to. Und new investment mcquarrie also updated earnings profit will be about 10 higher than a year earlier. Bridge in australia is cutting 750 jobs and launching a wide ranging operational review after seven straight annual loss. The job cuts affect almost 8 of the total workforce and shrink corporate and head office staff. Virgin will also review destinations, eliminate some domestic and International Flights and reassess contracts with the players. enterprise is offering a forecast that tops wall street estimates indicating progress in its drive to cut costs and reshape its business. Shares jumped after hp said adjusted earnings will be 47 since per share. Analysts had been expecting just . 43. The ceo has been trying to prepare hp for a future increasingly defined by carbased software. Plenty more to come on daybreak asia. Stay with us. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is 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 buy an eligible phone. Click, call or visit a store today. President trump return from the g7 and wasted no time returning to his attacks on the fed. Added that the rest of the world has long been taking advantage of the u. S. Bill dudley was new york fed president until last year and said the fed could end up encouraging trump to escalate the trade war further. Postedngs former leader a link on his Facebook Page to our website promising a crowd. Unded reward hasformer uber engineer taken leave on 2 million bail after pleading not guilty to waymo. G technology from tovoluntarily surrendered authorities and faces up to 10 years in prison if convicted. Dismissed calls from us that it should release an ontralian biker arrested suspicion of espionage. He was formally charged on tuesday after spending the past seven months in detention in china. His lawyer said the basis of the charge remains unclear. He has held australian citizenship since 2000 two. Chinas Foreign Ministry says the case is being investigated according to the law and a straley a should not interfere. Global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. m ritika gupta this is bloomberg. Paul thanks very much. Lets get a quick check of the markets. Markets look pretty muted. Its relatively quiet today. Were still waiting on the next trade headlines. There has been a lot of confusing and whip sawing. Hetoric new zealand is leading gains, up about. 4 . The new zealand index is up about twitter percent this year. Taking a look at the cost following the new zealand index, up about. 2 . It looks like it is on its second consecutive day of gains after three Straight Days of losses. Its down about 6 since the start of the year. We have the asx 200 and nikkei little changed here. We are of course in addition to the u. S. China trade, today is the day japans removal of south korea from its trusted list of partners is due. South korea is reliant on japan for a wide range of materials that are very important, that underpin factory operations across a variety of sectors in south korea. It will have an impact on both of those economies. Switching boards here, want to take a quick check on stocks that im watching. He first one is Hyundai Motor south korea tentatively agreed on wages and working terms for 2019 without a strike according to a statement from the companies. You can see shares are up about 2. 8 . Bellamy, whicht is down about 6. 7 , the company said it is still waiting for chinese Regulatory Approval and has deferred a mediumterm sales forecast. Jumping about 3 . The company will be supplying screens for apple to watch is to be released as early as this august. Bloomberg has not confirmed that report. Also checking on after pay ch, jumping about 726 , 7. 6 . President trump has accused beijing of not doing of highlycurb exports addictive painkiller fentanyl, a claim chinas narcotics regulator is denying. The agencys deputy head says u. S. Politicians are politicizing the issue. Some u. S. Politicians out of their own political necessity , find faults,fact make small things big and turn black into white, so what is supposed to be a simple problem becomes obligated and clean what isddied supposed to be a simple problem becomes complicated. Will you be taking action against these individuals . Will you be taking action against the companies that according to the u. S. Produce fentanyl products . The time that these people were making these substances, the Chinese Government had not announced wider controls. At that time, what these people were doing did not violate chinese law, but some in the u. S. Political circle take issue with this and want to implement sanctions, which is not constructive at all. It only hurts the good cooperation we have had over law enforcement. Be some who would argue that with the power you have at your hands, a budget for domestic security of about 200 billion if someone in the bureau turned around and said solve this problem, fix it now, close this down, you could do it . Admit that a small number of unlawful people are making fentanyl substances underground in china and shipping them to the u. S. For huge profits and at the request of criminals in the u. S. We have zero tolerance for them. We will exhaust every means to find them, arrest them, and punish them. The china was National Narcotics control deputy director. Coming up next, bangkok communications is the first of chinas big banks to report this week. We break down the results and discuss what we can expect from its rivals. This is bloomberg. Paul chinas bank of Communications BangkokCommunications Posted net income growing nearly 5 from a year earlier. Thats the first of a string of Bank Earnings this week including the socalled big for big 4. Generally, there is growth in bocom, buts for growth is somewhat cap. As we take a look at the numbers, you see growth in lending and fees doing well, but there has been a surge in bad debt charges. We also saw operating debt expenses climbing. Net margin widened from a year ago but didnt or three basis points and the concern is this will continue into the second half. You see there is Income Growth, but the return of equity is improving slightly. It has been dropping since 2012, largely because banks have had to increase bad loan provisions and growth capital, but it has increased slightly in the Second Quarter. Would those results compare with what is expected for China Consortium bank which reports later today . Generally we will see similar outlooks and results for most chinese banks. They are seeing similar pressures. Basically a decreasing trend and we are seeing, for example, are a befalling, also Net Interest Margins, and that also will be affected by the loan primary which kicked in recently. There are also revenue risks making themselves felt again. We saw in the Second Quarter the with the weakest growth in three decades, and that, of course, will have an effect on the loan risk. Overall, if you look at the consensus rating for the consumption bank, it is scoring 4. 87. A gust was on yesterday saying thinks all this hullabaloo is overblown right now. Shery thank you for more insight on chinese banks. Great to have you with us. Just give us an overview of what you are expecting this earnings season. In the Second Quarter this year, we will see a little bit profitcline in operating simply because in the last year, the Second Quarter was likely be peak of a lot of bank Net Interest Margin and after that, they started to see Net Interest Margin contraction. We would have a high base when we calculate year on year growth. Overall because of nonperforming loan ratios allegedly stable, most of the banks will cut a little bit for the Second Quarter this year. Net Profit Growth could be a little bit faster. Shery microeconomic concerns actually having an effect on share prices. Chinese banks are actually underperforming their global peers. How do you find valuation . I would say a lot of china banks, especially for the big are aturrent valuations historical lows. I would say this year is quite similar to what happened 2012 32015. We expect Interest Rate ratios to increase next year, but overall, the valuations already priced in the potential downside. Chinachina bank are banks a good value right now, or are they cheap for a reason . Measures of profitability are declining, so how is the outlook , particularly in this environment of a trade war . I would say that it depends on the investment horizon. If we look at a threeyear investment horizon, i would say the average has declined a little bit, around 5 to 10 because due to the potential r. O. E. Decline, but for the short term because the market has already priced in most of the negative news, and also if we look at, like, pboc, they are already trying to loosen on Interest Rate policy, which makes sense to believe pv maye shortterm recover a bit, which is similar to 2012 through 2014. Paul one to thing we have seen in the past few weeks or so is this new lpr, benchmark rates. How do you see that affecting the interest margins Going Forward . Bank of communications expecting a bit of a squeeze their happening in the second half. Yes, actually, we expect Net Interest Margin contraction in the second half. Reform itself is just changing on a quotation base and does not necessarily lead to a change in china banks lung yield, but what we think is more important is window guidance and policy change from the regulators. We noticed regulators have called bank heads in several cities, asking them to reduce real Interest Rates for real economies and ask them to keep mortgage rate. Banksll affect china low yield. I would say loan yield will probably decline in the second deposit rates may still , whiche to increase results in Net Interest Margin decline. We have seen the lpr linked to mediumterm facility. If they tried to make new loans available for smaller businesses , the mls will eventually be cut . Yes. Actually, we expect the pboc to cut later in the fourth quarter. Torently, banks are trying issue loans using rpr, and there are requirements that ask them to provide more than 50 , 80 of new loans september to december, and after that, we expect 5 to 10 of total existing loans will. E priced that way finally it will lower the loan yield to real economy. how well do you feel china s banks are for any potential shocks . Are they well capitalized probably not this year because internet, especially for soa bank, they want to raise capital below when people, so currently, they are trading at 0. 7, 0. 6, which means they probably wont raise capital this year. Paul thanks for joining us. Dont forget our interactive tv function, tv. You can watch us live, catch up on past interviews, and use any of the tv or bloomberg functions we talk about p are you can also send us instant messages during our shows. This is for bloomberg subscribers only. Check it out on tv. This is bloomberg. Singapores Housing Market is not turning out to be the winner many thought it would be amid the unrest in hong kong. Instead, investors are looking to cheaper markets elsewhere in asia. Lets get started with singapore and why it is not as popular as some people would have expected. Yes, when you first think about it, you would think singapore would be the best option for people wanting to leave hong kong because both cities are the Asian Financial hubs in the region and singapore has a very good education system, a stable government, but the thing is, one of the reasons why hong kong people want to leave the city is because of the expense of market here in hong kong as well as the high living cost. Is not ass market expensive as hong kongs, but it is also one of the highest in the region. , for those who are buying in singapore who are thelocal, there is a 20 to foreign buyers, so for those who can actually afford singapore professionals looking in finance or law or entrepreneurs from hong kong. singapore is pricey then. Where are the bargains . Increasingly popular options for hong kong buyers, malaysia for its tropical climate as well as the cheaper prices, of course. Transaction volume from hong kong buyers in Malaysia Properties have gone up by 50 over the past couple of months. Apart from that, taiwan is also getting popular because taiwan is Chinese Society and people share the same language. Course, prices are more affordable to hong kong buyers as well. Paul thanks very much for joining us. Lets get a quick check now of the latest business flash headlines. Indoor cycling start off startup telecom indoor on filedstart up pelet for an initial offering of 500 million, which it says is likely to change. Cybersecurity Company Mcafee said to have hired underwriters to pursue an ipo this year that it hopes will bring valuations of at least 8 billion. We are told mcafee is working with Morgan Stanley and bank of america and their share sales could happen in the coming weeks. However, sources say a final decision has not been made, and the plans for an ipo could change. Opened its first outlet in china, sparking wild. Nthusiasm cosco is entering a market where many global rivals have given up. It sold and 80 stake in its china unit. Muted gains across markets in asia. Lets get a preview of what to watch later this morning. When markets open, i will be watching for a slew of Chinahong KongStock Companies that just came out with earnings. There have been concerns about pressure on margins. Many analysts see continued interest margin pressure for the rest of the year. Theres concerns this will be limiting profit gains. Net income for the first half of the year was reported 12. 9 billion. Also throwing foe some international in. They also reported earnings and for the rest of the 2019, the company said while it is cautious on the volatile global markets, it is also looking for the stable growth of its communications. Also, want to take a really quick look. Newly itsing at about biggest monthly it is trading at about its biggest monthly plunge for the year. This is its biggest loss since 1994. However, there are reports from analysts that it could get much worse. Paul thanks. Bloomberg on markets asia, bloomberg is live at thailand focus in bangkok. Haslinda amin is there to give us a look. , thenda policymakers investment community, industry chiefs are here to discuss how to move the country forward. This is a country of 17 Million People, the second largest economy in southeast asia, but this conference comes at a time of slowing growth. Gdp at the slowest pace in five years last quarter, and that is partly because of the u. S. China trade war. It is an exposed economy. The strongest currency year to date this year, up 6 . Dollar stronger against the yuan, impacting not just exports by tourism as well. That has been putting pressure on the bank of thailand to cut rates unexpectedly this month. Pressure is now on to cut rates this month. We will be speaking to the t to se minister of find out what is needed to attract more investment into the country that is also expected to slow like the rest of the region. Shery looking forward to it. Thank you so much. That is it from daybreak asia. Our market coverage continues as we look ahead to the start of trading hong kong, shanghai, and shenzhen. The china open is next. This is bloomberg. 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 buy a new samsung note. Click, call or visit a store today. To bloomberg markets. Yvonne we are counting down to the open of trade on hong kong and mainland markets. David john is preparing for the worst as washington flipflops about leaving beijing increasingly unsure of u. S. Policy. Yvonne welcome is the first of banks to report earnings. Investors want to see how the trade war is affecting lending and performance. Tom and we hear from chinas drug regulator as opioids become a crucial part of the trade ta