Formal impeachment proceedings with House Speaker nancy pelosi saying he has violated his oath of office. President struck a hard line at the United Nations with comments about china and iran. Investors are weighing another change of tone. Boris johnson refuses to quit as u. K. s top judges attack his suspension of parliament. They say his advice to the queen was unlawful. Stock market,he take a look at this board where you can see the major market averages down across the board. It was donald trump speaking at the u. N. And bashing china. News came out that pelosi was ready to say, ok, we are going ahead with impeachment proceedings. You can see the s p 500 losing a full point. What hit the nasdaq so hard was the fact that donald trump was beating up on big tech companies. Interesting that we are seeing a little bit of an upturn for the stock futures. The s p 500. This hit bonds. Another thing that hit bonds, a big move down in yields, you can see quite a rally of seven basis points at the close. Consumer confidence in the United States dropping 10 points in the latest month. People asked what worries you so much . One of the things they said was trade. That goes right into what donald trump was talking about today. Lets see how this shapes up. Sophie, what are you looking at . Sophie markets suffering from a lack of conviction. We can see the politics feed into market sentiment. Futures across the board mostly lower. We could see sydney stopped under pressure with futures dropping the most since august 26. Key restocks on the back foot while bonds are rising in new zealand and australia. Trade. Ment risks for switching the board to check in on what is on the calendar this wednesday, it is a pretty busy one for asia. From japan, waiting on Producer Prices and boj minutes, which comes after governor kuroda expounded the value of negative rates. Inflation numbers from malaysia. Trade came out earlier from new zealand. We saw the trade deficit widened more than forecast just ahead of the rbnz decision, which is staying on hold along with thailand today, paul. Paul yes. Next week in australia, we have ofery Live Reserve Bank australia decision. Phil lowe was speaking last night. For more on that and the rest of the days first word news, lets get to ritika gupta. Ritika rba chief or philip lowe says he sees a gentle pickup in the australian economy, repeating that policymakers are ready to plant rates if needed to support that recovery. He stopped short of the imminent move some have factored in for next week. The aussie dollar on his comments while bets on a cut from the current cash rate of 1 fell. After having been through a soft patch, a gentle turning point seems to have been reached. While we are not expecting a return to strong Economic Growth in the near term, we are expecting growth to pick up a little bit. Against this backdrop, the main source of domestic uncertainty continues to be the strength of household spending. Sophie yvonne is checking out conditions for any potential talks for the United States, but there appears little likelihood of a meeting at the u. N. This week. The president said the u. S. Must end illegal sanctions and return to tops on the talks on the nuclear deal. President trump hinted at negotiations but struck a tough line at the u. N. Pres. Trump no responsible government should subsidize irans bloodlust. Irans menacing behavior continues, sanctions will not be lifted. They will be tightened. Ritika you cape Prime Minister Boris Johnson is vowing to deliver brexit next month, remaining defiant in the face of the countrys top judges, saying his suspension of parliament is unlawful. The Supreme Court says the advice johnson gave the queen to shut the legislature down was politiciansrevents from doing their democratic duty. Johnson says he disagrees and will deliver brexit next month regardless. Lets make it absolutely clear. We respect the judiciary in our country. We respect the courts. Whatagree profoundly with they had to say. I think it was entirely right to go ahead with a plan for a speech. Ritika global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. All right. Thanks. Story. Et to our Top Democrats momentum for the impeachment of President Trump has hit a tipping point. Trump the actions of the presidency revealed the betrayal betrayalth of office, of national security, and betrayal of the integrity of our elections are therefore, today, i am renouncing announcing we are moving forward with official impeachment inquiry. Paul Congress Editor Anna Anderson joins us now from washington. In the past hour, we heard from Kevin Mccarthy adopting a rather combative tone. What has been happening in the past few hours . Anna the question mccarthy was asking and we are asking as well as what is different with this announcement . There were six house committees already investigating the president , his business associates, his personal finances, his tax returns, the mueller report, and so, now, pelosi says they will continue their work, but it will be under the umbrella of formal impeachment proceedings. The point for Kevin Mccarthy is just cannot declare proceedings without any kind of house action. He said what pelosi said today is not any different than what is already happening so what we will be looking for when the Congress Returns from a two week break that is scheduled to Begin Next Week is whether or not they on thetually have a vote house floor on these articles of impeachment. Kathleen what is the endgame for the democrats in congress . If the senate is still dominated by republicans and they have to vote on this, it seems that you would i dont know, what would you need to have them cross the line and vote to actually impeach President Trump . Anna we heard from democrats so far. There was a good statement from a moderate democrat that represents a swing district in michigan. She said it just got to the point where i swore an oath to the constitution and the president has violated the constitution. So in order to live up to meiosis, we have to take this move. She recognized there will be political blowback. There will be people in her district that have been or urging her to get on board with impeachment and people in her district pleading with her not to take it to this divisive place to the country. She finally got to a point, as did many of her colleagues today, yesterday and saying the president has done enough. These allegations are so serious regarding our national security, the integrity of our elections, that to respect the constitution, the constitutional responsibility of congress to execute oversight of the executive branch, we have to begin impeachment proceedings. Kathleen thank you so much. Anna edgerton joining us from washington. Busy day for you. She is our Congress Editor. Joining us now is jeffrey wright. What do you make of this . It is interesting, speaking to a i havesman who said to obey the oath of office. Too . At what it is for you, the thing that has really changed over the weekend and the beginning of this week is that democrats, house democrats, now see a light. Pelosis strategy of waiting until the election in 2020 and hoping to defeat trump then is not providing sufficient oversight that he has chosen to againstthe same norm foreign interference in elections that he violated in 2016, so i think that is what really broke the dam of pelosis mission. Kathleen two things. What can the house whistleblowers say that will make it very clear that he that . Ly did it sounds like you are assuming he has done that. It is not a question in your mind. And then, what what could what he said, he said released the tape. Pardon me. What does it mean to say to support that . Assume whatever is in the whistleblower report is quite damming because i struggle to see why the white house would keep it secret from congress otherwise. Lawirect violation of the that states they have to turn designatedal that is as significant by the inspector general. It is theoretically possible that whatever is in the areas not so bad for in their is not so in there is not so bad for trump. The transcript will be a different matter. The content will matter for house democrats. Paul what is the motivation here . Even as the house votes favor of impeachment, it is always going to run around in the senate. Is the intention to weaken the president heading into Election Year . Jeffrey there are a few intentions but first is to air the specifics of this case and probably many others. I would expect that if the house moves impeachment articles, they will include things from the mueller report, potential violations of the emoluments clause related to Trumps Hotels and golf courses, so one intention is to air those things. Another would probably be to put the onus on the political pressure on Senate Republicans to say that they condone this behavior. At least that they do not support removing trump from office for it. And thereby, sort of put them in a little combined. Particularly republicans in blue states like cory gardner in colorado and potentially in maine as well. Paul is there a Political Risk here that it all backfires . Of course, bill clinton got impeached, and well, he just trembled on. Inwas business as usual, and some respects, his popularity improved. Jeffrey it is certainly a risk. The risk has held that democrats back up to this point. But what has really changed is the the violation of alleged violation of the constitutional norm against foreign interference in elections really has compelled democrats, they think, to act on this, even if it is to hurt them in 2020. Of thisthe conception violation is so grave that they really feel like they need to do something, and if it ends up having negative political consequences, that is something they will deal with next year. Youleen down the line, do think, besides what it might mean for President Trump, that he may get reelected regardless do you think it may show up in the coming elections for the house and the senate . Jeffrey yes, certainly. On both sides. There is the dynamic i just mentioned in which centrist democrats and perhaps republican leaning districts have to endorsed or did not endorse, in some cases, an impeachment process that is probably going to be very divisive spirit on the other hand, you have a Democratic Base that has been extremely motivated by this issue. You have seen almost every democratic president ial candidate declaring their support for impeachment this week, so i think that this works in both directions. It helps motivate the Democratic Base but it also sharpens the divide and probably rallies Republican Voters to trump as well. Paul all right. Eurasia Group Senior Analyst jeffrey wright. Thanks very much for joining us on that story. Still to come, with President Trump set to meet japanese Prime Minister shinzo abe on wednesday, we will ask japans former ambassador to the u. S. About the chances of a trade deal. Next,en and up thompsons eyes Central Banks have inoculated markets against most types of risks. That is just ahead. This is bloomberg. Kathleen this is daybreak asia. I am Kathleen Hays in new york. Sydney. Am paul allen in the decline in u. S. Consumer confidence this month as the latest data sets adding to the gloomy global outlook. In the past few days, we have had downbeat numbers from japan and germany. Incoming ecb president Christine Lagarde says an outright contraction is unlikely despite one significant risk. Lagarde it is not in the baseline to have a recession. That said, it is mediocre growth. Of,s at risk because essentially, one major threat, which is, you know, the trade war that we see. Us now is global head of economic and Investment Research at Wealth Management , marie owens thompson. We were just hearing from the incoming ecb president , Christine Lagarde. Would you agree with her assessment that all hinges on a positive outcome between the u. S. And china . Under any, i think, circumstances, protectionism is probably the one potential major threat to any economic cycle. Reduceionism tends to the volumes of trade that we have been the Global Economy, and that we have started to see outright declines in trade volumes at the moment in the order of 1. 5 percent. Perhaps year on year. We think we can compare this with 2008 when global trade volumes fell Something Like 10 , and of course, the great depression, when trade volumes collapsed by some 60 . So that gives us a bit of a numerical gauge as to the threat that we are facing at the moment. Paul yeah, well, we have been hailing for quite some time the u. S. Consumer as the era of the u. S. Economy, helping things to stay at a reasonably positive shape. As we just saw, there is evidence that perhaps the consumer is starting to suffer. But in a way, does that provide some motivation for the u. S. To get a deal done on trade . It depends on whether we think that the trade policies purported at the moment are actually truly economically motivated. You know, if the u. S. Administration really wanted to balance their trade balance, the appropriate policy would have been to raise taxes so u. S. Consumers import less and instead, taxes were cut. So there is some, you know, i think it can be debated what the ultimate goal is around these policies. Kathleen i would buy that if it were not for the fact that china has an enormously large trade surplus with the United States. If you look at the percent of trade to gdp for china, is not as high as a lot of other countries. When it comes to the u. S. , it is so lopsided. How can you really say that there is no economic motivation in what the u. S. Is trying to do or what donald trump is trying to do . If he is not trying to balance this out, is he trying to punish china . I dont understand your point. Marie yes, i think it is very much actually, you know, a question about balance of power in the world economy. That is more the driving force here than the actual idea that balancing a bilateral trade account is going to have any significant effect on the user economy. I think most economists would agree with the global overall trade situation that can be important for an economy, but targeting a bilateral trade relationship in order to try to inress the fundamental balance is usually doomed to failure. Sorry, but the underlying issue in the u. S. Is of course that they consume more than they produce, so it is a savings deficit, if you wish. The only way to really address that issue is to try to make the u. S. Consumer save more. Kathleen many people argued that the beginning of all this, trying to target their currency to make it week so exports will be cheap to the u. S. , which has nothing to do particularly with what consumers are saving or not saving. I want to ask you about this. A year ago, when the trade war was heating up and the u. S. Had this wto complaint against china, a lot of it was about intellectual property. This was not unilateral. Japan and europe jumped right in on that complaint, almost the same day the u. S. Launched it. Do you see any credence then in the attempt for the u. S. To lead this push toward china, to say, hey, theres rules you have to play by . Marie yes, for sure. I think that is perhaps what many of us would like to see more of is a strengthening of the wtos position, and instead, we have a stalemate there, where by the end of the year, there might not be any resolution mechanism still operating because of Unfilled Positions of the judges at the wto, so for sure, you know, i think what most of us would like to see is a rulebased global trade, and you know, that remains in the hands of the Global Economy, and that these bilateral strongarming strongarming is not going to be very successful in terms of boosting anybodys economy. Kathleen when you look at what is going on now, where you see the push on both sides, one of the big issues the u. S. Wants is an enforceable trade agreement. China has said theres things we cannot give up. Cannot give up made in china 2025. We cannot give up subsidizing our small and medium businesses. How do you bring those two together . Do you think there is a place where they need . They meet . Agree yes, i definitely that anyone abusing International Trade rules should be brought to the wto, and that, you know, whatever appropriate measures need to be taken so that International Trade rules are accepted, so i am not trying to exonerate anybodys guilt in this context. To your point earlier about the currencies, i think, sometimes in the markets, we overestimate the effect that the currency actually has on International Trade, and we have to remember depreciatesry that its currency perhaps ostensibly in order to gain a competitive advantage, while backcountry will obviously pay more for its imports, which is not necessarily in its own selfinterest, so i think true competitiveness lies outside of the currency market. Thatn terms of, you know, it is located more in terms of having an educated workforce and credible institutions, and open both Capital Accounts and trade accounts. So this is where, clearly, we would like to see the chinese to make more progress towards opening its Capital Accounts fully. Paul ok, well, we do have a high level meeting in a couple of weeks. Quickly, what are your expectations . What is the best that can be hoped for . Incremental, easily achievable development . Know, the u. S. President is obviously in a difficult situation with a split congress, right . There are not that many degrees of freedom left for a president facing a split congress and the two degrees of freedom that they have is Foreign Policy and trade policy. With delegated authority from congress, so i cannot see this issue actually going away for as long as this administration is still in the white house and the Congress Remains split, obviously. Ive i think it is going to and wayne until the end of wane to wax and until this. We should refrain from expecting the absolute worst when we do not see that deal coming. Paul global head of economic and Investment Research, marie owens thomsen, thanks so much for joining us. We do have plenty more to come on daybreak asia. This is bloomberg. Kathleen some very interesting news coming out on the whistleblower. Of course, the whistleblower had a complaint that President Trump was having a quid pro quo in discussions with the u. K. President about investigating joe biden. Joe bidens son, hunter, his involvement in certain Ukraine Companies are now, we have the White House Press secretary, stephanie grisham, saying there is no chance of legislative progress around this release of the whistleblower complaint, which as far as we know, is coming out soon. She blames democrats. And for all of the problem here, as she issues this statement on impeachment proceedings. I also want to quickly throw in the dow jones, apparently, whistleblower complaint is expected to be turned over to Congress Later this week, paul. Paul thanks very much, kathleen. We will bring you more developments on that story throughout the day, but up next, we are going to be discussing brexit, where all that heads, next. Sidney policy lab director, is going to be joining us. Dont miss bloombergs exclusive interview with Goldman Sachs on,live onter bloomberg. This is bloomberg. Mberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Advise her majesty to unlawful. I welcome the judgment this morning that had the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions without reasonable justification. I strongly disagree with what the justices have found. And demonstrates a contempt for democracy and an abuse of power by him. I do not think that it is ahead. But we will go parliament will come back. Anyoday is not a win for individual. It is a win for parliamentary sovereignty. Some key figures in the brexit class is giving their reaction to the u. K. Supreme court ruling. Boris johnson says he will not step down. He is vowing to deliver brexit next month. He is set to fly home early. I am speaking at the uns General Assembly in new york. Lets explore what all of this means for the u. K. And europe with our next guest. The chief speechwriter for the opposition labor party. He is director of the sidney policy lab at the university of sydney. Thank you so much for joining us. Lets start with one of those key players. Boris johnson. What are the implications for him . He has given unlawful advice to the queen. Can he survive . Mark boris is a survivor. He has shown he had no signs of wanting to let go of power. Historicomentous and rebuke. It never happened before. The Supreme Court saying he gave the queen unconstitutional advice, tried to stop parliament from doing its job. It is not for him to Call Parliament backbite to Say Parliament was never suspended so he will be back. We will see what happens to boris then. Paul interesting theater when it does resume. As we step aside on whether he can survive, what about his people . Can he get the u. K. Out of the e. U. As he promised, or is it slipping through his fingers as well . Marc it is definitely slipping through his fingers. The rule is that parliament has passed the law that says he has got to ask for an extension if he has not got a deal by the 17th or 18th of october. There is no sign he will get a deal by then, so the law ought to apply. He ought to write that letter to the e. U. Saying, sorry, we want to stay in a little bit longer. He is saying he will not abide by that law although his language is softening on that, but the Supreme Court made it difficult for him to ignore parliament. Parliament tells him he has to extend, he will have to extend. Kathleen some of the political calculus for us, along the way toward the power grab although boris is saying it is a power grab by the courts away from him. He lost some conservative support. Labor is pushing back. Where are we now . Where is the u. K. Parliament now that boris desperately needs some support from . Marc i mean the u. K. Parliament is horrendously split. That is the truth of the matter. We are not moving forward because there is no majority for anything and there has not been a majority for anything for a very long time now. Just to look at the conservative party, in the Supreme Court case the former conservative Prime Minister, john major, a very moderate, conservative politician, actually wrote to the court denouncing Boris Johnson, a sitting conservative Prime Minister. The conservative party is just in a tiny little factions at the moment and that is very difficult to see them coming back together, at least on this side of the general election. One of the reasons british politics is in such a mess is precisely because the parliament is so deeply divided amongst itself. Backstop,the irish you know, theresa may maybe could have had a deal had anybody been willing to decide what you do with the republic of ireland and Northern Ireland and how you keep them together and not just split them up. Is there any idea from Boris Johnson that he stated publicly about what could be done . Marc none whatsoever really. Lateis fascinating is that 19th century, beginning of the 20th century, now near the beginning of the 21st century, the average question is what causes constitutional chaos in the united kingdom. I mean, it is incredibly difficult to solve this question. Boris is suggesting perhaps there could be a border, but no border, so there is officially a border, but there would not be any infrastructure on the border, and he would do inspections, customs inspections, et cetera, deep in Northern Irish territory rather than at the border, and perhaps that would stop there being any fighting at the border. That is the argument. Everyone is saying it is just not going to work. You need an alternative, and at the moment, the british are saying Boris Johnsons team is saying you do have some alternatives but we cannot tell you what they are. They have not told the e. U. Negotiating team, the british press, the british parliament, so it looks as if there is not an alternative, which is at all possible at this stage. Paul you mentioned the conservatives are deeply divided, but there are divisions on all sides really. Perhaps the reason we have not seen that in the labour party is they have the luxury of not being in power. It isn election possible we oc one in the coming months we will see one in the coming months, we could end up in a worse place. Marc this weekend, the labour party tried to get rid of its own deputy leader because he is strongly antibrexit. The labor leader, jeremy corbyn, wants to be neutral on the brexit question. Theres some people still on the labor side who are close brexit. Absolutely. The pro brexit. Absolutely. There is no consensus at some people want a second referendum now. Some in a years time. It is all over the place. Britains big problem is even if there were an election and even if it came up with a decisive result, the Winning Party would fill be divided amongst itself and that is a really bad place for the country to be. Paul lets talk about the e. U. For a moment as well. Do you get the sense that the e. U. Is trying to make this as excruciating as possible for any other Member States that might be getting any other ideas, and italy, i am looking at you. Marc there was an article at this week. He argued the e. U. s strategy all along has been to make this as painful as possible to put off any country from ever thinking about leaving the European Union. I mean, they have succeeded. They really have caused complete political meltdown in the u. K. They have not because economic meltdown yet and that is really interesting. I am sure your viewers will be aware that the u. K. Economy is doing ok, given the political turmoil. And so, the e. U. Have not succeeded in completely bringing britain to heal yet, heel yet, but politically, they have. That will put off other countries from exiting in their own way. Paul university of sydneys marc stears, thank you so much for joining us today. The ever evolving story of brexit. Lets check in on the first word news now with ritika gupta. Ritika President Trump has taken a new hardline stance against china in his speech to the u. N. He ruled out accepting a bad deal and accused beijing of yuan anding the stealing intellectual property. His pessimistic line comes less than two weeks before trade talks are due to resume in washington. The u. S. Earlier welcomed positive comments from china about purchases of farm produce. Pres. Trump the American People are absolutely committed to restoring balance to our relationship with china. Hopefully, we can reach an agreement that will be beneficial for both countries. Clear, ihave made very will not accept a bad deal for the American People. Ritika brazil is dismissing what it calls media lies about five years in the amazon, saying the rain forest is not burning down. President bolsonaro told the United Nations that fires occur naturally in dry whether although he agreed some dry weather naturally in dry weather. It increased 84 in the first seven months of the year. The amazon is not being devastated nor is it being consumed by fire. Misleadingly ritika says. Germanys misleadingly says. Ritika prosecutors charge volkswagens Top Executives with market manipulation and the Diesel Scandal and diameter was dianein a separate fined in aiemler was separate investigation. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. Kathleen. Kathleen we are half an hour away from the open in tokyo, sydney, and seoul. Back to Sophie Kamaruddin. What are you watching . Sophie checking on the risk barometer, the yen back above 1. 07 after briefly breaking that level for the first time in two weeks overnight, while gold is Holding Steady after a fourday drain, trading near a twoweek fourday gain, trading at a twoweek high. We have the report registering sagging u. S. Consumer confidence. That is hitting risk sentiment as well. In bonds, bands continue with the aussie 10 year yield below 1 . Sliding benchmark yield three basis points this morning. Lets switch up the board check in on the kiwi dollar which is looking little changed. Ignoring that whiter than forecast trade deficit we saw wider than forecast trade deficit. It is expected to hold the rate at 1 after 75 basis points of cards that we saw so far this year. The kiwi dollar is set to remain on a weaker footing in the coming weeks. Should the rbnz confirming more cuts, taking a wider view on that. It is off nearly 5 over the past year. Guys. Kathleen 20 more, next. This is bloomberg. Plenty more, next. This is bloomberg. Paul we are counting down to asias first major market opens this morning. We have got japanese futures we see the yen trading at 107. 15. Futures lower at the moment. This is daybreak asia. I am paul allen in sydney. Kathleen i am Kathleen Hays in new york. President trump is to meet shinzo abe to continue the process of what he calls her terrific new trade deal. Joining us from tokyo his former japanese ambassador to the United States, ichiro fujisaki. Mr. Ambassador, what do you make good morning. Kathleen good evening in new york. In terms of the trade deal that has been put together, everyone would love to have a trade deal signed. Many people are concerned that this trade deal is not balanced. Especially when it comes to the fact that auto tariffs are not mentioned and the japanese are worried donald trump could reach out with auto tariffs after this is signed. Do you have that concern . Thessador fujisaki i think japanese people are not concerned if the United States inld introduce measures ordance with the 232 trade pact. Of your if that happens, i think japan will lose all trust towards the United States, even after we conceded on agriculture. Agriculture, i think, we will make an agreement with the United States. We have sent that we will go down to the level of tpp with the u. S. In the last september, and that is what we are doing. What we need is some balance. The lowering of tariffs, if we can wait a little, the more important thing is the commitment that the u. S. Will not introduce unilateral measures against japan on tariffs or quotas. Kathleen how do you read the dynamics of the negotiations . Certainly on a trade level, the carried negotiators the trade negotiators. This is an attempt to build a friendship, and still, try to deal with this antagonism, this backandforth over trade. Do you see a Strong Enough connection now that this will help bring this trade deal to fruition on terms that the japanese see as, you know, positive for them . Ambassador fujisaki i think japan still sees that tpp was the best solution. In order to meet with the emerging mr. Obamas strategy was that the u. S. , japan, and other countries should be the rule makers, not china, and i think that is still our belief. However, as there was a very Strong Initiative coming from the United States, mr. Abes government agreed to go along with this bilateral deal. And if we have taken that step, we needed to do that as quickly as possible. We agreed last september. It took one year, and i think people are relieved, thinking we did not go down the slippery slope like the chinese are doing. At least, we are making some war isnd that miss trade not erupting between the United States and japan. Our relations are far more important. We have north korea, we have other issues. So i think we need to tie the u. S. Japan relations very firmly. Ambassador, i want to follow up on kathleens point. In terms of the way shinzo abe cultivated his relationship with President Trump, i believe he invited the president to meet the new emperor. Have you seen anything like that before in your experience, and has it paid off for japan . Ambassador fujisaki i think the japanese people, in general, our understanding that, and i think some of them may ridicule that kowtowingn is to u. S. Pressure. Relations. Uch close it is not a very easy leader in the United States, mr. Trump. I think people would understand i think e has been he took a really he took effort to create that kind of relation. I think that itself is important for us. In order to continue that relation, i think the trade deal i think would help. Relations are far bigger than trade. We need to keep good relations with any american leader. Lot one have focused a auto tariffs when discussing the trade deal. It is worth considering agriculture as well, particularly the desire of u. S. Rice growers to have greater access to the japanese market. I find that curious. Is there even a market in japan for u. S. Rice. Do consumers need it . [laughter] i dontor fujisaki any drasticwill be sort of measures, but i think for beef, pork, and eventually corners where we will import more from the u. S. , what is important is the u. S. Had been behind other countries like u. S. Did, because the not join tpp, but now that the u. S. Is on equal footing with other tpp members, because we are having this bilateral deal, and i think that gives a lot of comfort to the u. S. And that is exactly what mr. Trump was thinking. Kathleen another quick question, sir. You mentioned north korea and some of the very Common Concerns that japan and the u. S. Have. How do you see that moving ahead . Itassador fujisaki i think is a good thing that north korea has not done any Nuclear Testing for two years now. And i think that is i think we have to think mr. Trump thank mr. Trump for that. North korea would not launch any middle range missiles. It may reach japan. And they have launched that in the past. I hope that the u. S. Would not say that we do not care. It is not reaching us. Losehen, on japanese will trust towards the United States if the u. S. Ever said that. Kathleen thank you so much for joining us. We will leave it there. Ichiro fujisaki, former japanese ambassador to the United States. Directly to breaking news on the bank of japan, minutes of the last meeting in september. Boj members, most of them saying it would take some time until the 2 target. They will be a little bit patient with the persistent shortfall, also saying it is appropriate to continue easing persistently. That is boj speak for we do not have any intention to pull away stimulus. The big question now is adding more stimulus. Governor kuroda last night talking about negative rates and how opening it is to them. Thats get to Sophie Kamaruddin in hong kong. What are you watching and markets . In markets . Sophie we are seeing little reaction to the release of the boj Meeting Minutes in july, which are considered a nonevent given that the boj has already signaled a readiness for further easing. We are seeing million hold around 107. 17 against the dollar. Jgb futures matching higher. Taking a look at futures for the nikkei in chicago in singapore, a slight rise. Overnight, we saw a drop which could mean weakness for tokyo stocks this morning. Taking a closer look at what happened to jgbs on tuesday, i want to highlight what has been going on over all because we jgb yields move for under pressure. We do have the moving towards the 25 basis point level, reflecting the impact of the bojs offer rations. We operations. We had governor kuroda indicating the negative policy, there is still room for that. Paul. Paul thanks very much, sophie. For more analysis, lets head to tokyo and our asia crossasset editor, klizan. Chris anstey. What do you make of those minutes . Chris the big news about the isk of japan in recent weeks how explicit governor kuroda and the boj have been about their concern about excessively low longterm bond yields. Not so much about the readiness to cut the shortterm Interest Rate deeper into negative territory, but about the damage to japanese Consumer Confidence and japanese returns on saving that excessively low yields that the long end of the yield curve pose. So governor kuroda, just yesterday, was out saying that it would be strange for yields to keep falling despite a 10 year yield target of around 0 , and he explicitly said that the bank of japan will conduct operations if needed to ensure that yields do not fall too low. So no reason why they are telegraphing, as kathleen said, that they are ready to cut Interest Rates if needed is really to provide cover for any operations to try to support the longterm yield. That is their number one concern right now. Kathleen thank you so much for watching the boj so, so closely as our asia class editor crossasset editor in tokyo. More ahead on daybreak asia. This is bloomberg. Paul lets get a check of how things are shaping up for asian trading. We have had new zealand up and running for a little while. The nzx looking at this after a couple of hours. Trade weaker by. 2 5 . We had the reset. Sidney futures have recovered slightly, but it looks like we are going to open lower by. 9 . Also also in the negative territory. We have had quite a bit of means after the market close, particularly in terms of potential impeachment against President Trump, which could prove to be a catalyst today, kathleen. Kathleen the u. S. Session was all about politics and geopolitics, and now, it looks like it is reverberating around the world at least in the markets. Coming up on the next hour of daybreak asia, Nobel Laureate Michael Spence joins us for his outlook on the Global Economy, trade, and brexit. He says uncertainty is what you have to watch there. And later, do not miss an exclusive interview with Goldman Sachs president and coo, john waldron, live from beijing. The market open is coming up soon. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Paul good morning. I am paul allen in sydney. Kathleen good evening from new york. I am Kathleen Hays. Sophie im Sophie Kamaruddin in hong kong. Welcome to daybreak asia. This our top stories wednesday President Trump is facing formal impeachment proceedings with House Speaker nancy pelosi saying he has violated his oath of office. Boris johnson to quit as the save thep judges advice to the queen was unlawful. Kathleen the boj governor talks about the power of negative rates. How governor kuroda grew speculation of policy action next month. Lets get straight to the Market Action with Sophie Kamaruddin. Sophie in japan, stocks under pressure. The nikkei 225 could snap a two day gain. Ditto for the topix. We are seeing the yen above 1. 07 after reaching that level briefly overnight. Watching for the u. S. Japan trade deal after both sides failed to agree on autos. Pretty much considered a nonevent given the ease from the boj. Opening higher with a 10 year yield nuding closer nudging closer to 25 basis points. Now lets check in on the mood in korea. Yuand lower and the korean this morning, we are seeing it hold steady above 11. 95 against the dollar. Keeping an eye on korean bonds as well. The 10 year yield holding 1. 45 . Korean bonds among the worst performer yeartodate as how much the yuan has weakened over the course of 2019. It could benefit from currency hedging which brings the outlook for inflows for south korean bonds, the offer was well bid. Checking in on the asx 200, off by 2 10 of 1 . We do have the aussie dollar trading below 68. Aussie bonds did open higher after the commentary from the rba governor with easing still in the cards for next week. Set to standpat. Putting more pressure on the kiwi dollar which is off by 1 10 of a percent after a twoday gain. We got some week data from new zealand. A wider trade deficit for august than expected. Paul thanks. Lets check in on the first word news now. Ritika thanks. Iran is sitting out conditions for any potential talks with the United States. There appears little likelihood of a meeting at the u. N. This week. President rouhani said the u. S. Must and what he calls legal sanctions and returns to calls on Nuclear Deals abandoned by washington last year. President trump has hinted the eventual negotiations, but also struck a tough line at the u. N. No responsible government should subsidize irans bloodlust. Irans menacing behavior continues, sanctions will not be lifted. They will be tightened. Kathleen brazil is dismissing what it calls media lies about fires in the amazon, saying the rain forest is not burning down. The president told the United Nations the fires occur naturally in dry weather, although he agreed some have been set intentionally. Last month, the Brazilian Space Agency said the number of fires in the amazon increased 84 in the first seven months of the year. Amazon is not being devastated, nor is being consumed by fire as the media misleadingly says. Ritika germanys struggling Auto Industry suffered a new double blow as prosecutors charged volkswagens Top Executive with market manipulation and the Diesel Scandal. Second was fined in a investigation into emissions. The ceo, former ceo and the chairman were too slow to inform investors about the emissions scandal. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. Im ritika gupta. This is bloomberg. Kathleen thank you very much. Most members of the bank of japan say it is appropriate to continue easing persistently, something they have been saying for years. That is one of the headlines in the minutes of the latest bank of japan meeting released moments ago. The theme of global easing as the economy slows. Lets discuss all of this with Nobel Laureate Michael Spence, economist and professor at Nyu Stern School of business in hong kong for ubs nobel prospectus series. Welcome to the show. Michael nice to be with you. Kathleen when you look at japans economy and the bank of japan, many people say they failed because inflation is falling away again. However, japan has extremely low unemployment rate. Japans gdp rate is growing usually around potential. The big dilemma is how do you lose inflation . Is and that the dilemma for the world . Is there anything the bank of japan can do about this . Michael it is far from clear. One of the lessons we have seemed to learn is that Central Banks are a lot more effective in lowering inflation than they are generating it. And, japan seems to be an example of that. I agree with you. I think it is a much broader set of issues with respect to Monetary Policy. Kathleen negative rates, governor kuroda spoke about 24 hours ago or yesterday afternoon in tokyo, talking about how there is the effect clearly, he can see that but he does not seem too eager to actually cut the key rate at the shortened and maybe not even too eager to widen the yield curve control so that the 10 year jgv can trade below 0. 2 , even lower. What do you think about negative rates for the bank of japan and other Central Banks . Are they an effective tool . Michael they dont seem to me to be. Im quite worried about a prolonged period of very low Interest Rates because i think they affect over that over time is behavioral. People come to think it is a permanent condition. Then, we run up that level debt level in the corporate sector, that is fine as long as it is a condition. But i dont think anybody is sure. If it is not a permanent condition, we got ourselves vulnerably ourselves globally in a vulnerable position. Paul is it another Behavioral Risk with the low rates when you go down to the consumer level . Because average people see rates and negative territory and instinctively know something is not right with that and tighten the purse strings. Is that a phenomenon you would be concerned about . Michael there is a certain amount of research that has to do with the question what do people do when they are saving for retirement and the rates of return on their investment, including on bonds and Bank Deposits and so on are low . I dont think the research is definitive yet, but there is at least a possibility that when you lower the Interest Rate, people will raise their saving rate in order to achieve some kind of objective with respect to retirement assets. That actually would reduce demand and adversely impact Economic Growth. Paul you did mention a moment is this inflation problem getting broader than Monetary Policy and it has been a complaint of Central Banks throughout the developed world. That governments need to step up and do more. What can governments do to make it happen . Michael some governments are severely constrained by virtue of prior accumulations of debt. If you take the european case, there is physical capacity in the European Union and even in the euro zone so that they can stimulate the economy with fiscal measures. Kathleen so, if you look around fiscalld and you look at measures, will even that make a difference . What about technology . What about the fact people can go online and apply for jobs and buy things and compare prices . That to me is perhaps the mistake a lot of policymakers are making. To think there is really anything that can be done about inflation, and by the way, what is so wrong with inflation that does not rise . I think a lot of consumers, certainly in japan, like it. Michael they certainly do. From a Macro Economic or monetary perspective, the problem with low Interest Rates is that at some point, you get a kind of deflation problem. Because even though we dont know exactly where it is, there is some lower bound in Monetary Policy, it loses its power to economic downturns counter economic downturns. Im now on your side on this. I dont think we should get uptight because we entered a period of relatively low inflation. What i think has happened is that the thinkers, the relationships that Monetary Policy people and Central Banks have relied on, like the phillips curve, the relationship between unemployment and inflation, they all seem to have disappeared. It is almost certainly true that means there have been structural changes in our economies that have changed the historical patterns of the relationship between these things. I think a very good guess, even though it cannot be definitive, is that the Digital Technologies are an important that part of the structural changes. After all, we have entered a period in which most people agree that the Digital Technology have become rapidly becoming an important part of the platform on which entire economies are built. Kathleen is europe heading for a recession . Two quarters one quarter negative gdp. They had that terrible purchasing managers plunge. Europes biggest economy. Is that where the eu is heading no matter what the ecb does . We know fiscally it is very difficult for them to come difficult for them to come together, all those nations and get anything big done. Michael yeah, i think it is a distinct possibility. Germany is a relatively speaking, among developed countries, it is a relatively highly trade exposed. It has been adversely affected by the trade war between china and the United States. They are heavily dependent on the auto sector and so on. If germany experiences a significant downturn and there is a little bit of evidence recently and are heading in that direction, other european economies which it basically trades a lot with germany are going to be pulled down with them. I think it is not a certainty but a distinct possibility. Slowingy, europe is down significantly now. Paul all right, Nobel Laureate Michael Spence is staying with us. We will return for more discussion in a moment, but for now, lets check on what is moving with the markets with sophie in hong kong. Sophie jgb, the five year yield july 2016. Low that looking firmer ahead of a bond option that is expected to drop these in demand. I want to check in on some movers. In tokyo, the game maker jumping to the highest level since january 2018 as the mobile game dragon quest retains its ranking. Nintendo is under pressure. Citi says the new switch sales are looking weak. Crypto related monex group slipping after bitcoin fell as much as 17 on tuesday. In sydney, afterpay rising after reports of Money Laundering were headed over to regulators. Paul thanks. Still to come, we will ask what is next for brexit as the defiant Boris Johnson refuses to quit despite being slapped down in court. Kathleen dont miss bloombergs exclusive interview with Goldman Sachs president and ceo john waldron live from beijing. This is bloomberg. The decision to advise her majesty to delay parliament was unlawful. I welcome the judgment this morning. It had the effect of frustrating or preventing the ability of parliament to carry out its constitutional function without reasonable justification. I strongly disagree with what the justices found. It demonstrates a contempt for democracy and an abuse of power by him. I dont think that its right , but we will go ahead and come back. Today is not a win for any individual or cause. It is a win for parliamentary sovereignty. Paul some key figures in the Brexit Process giving the reaction to the u. K. Supreme court ruling that Prime Minister Boris Johnsons suspension of parliament was unlawful. Those voices included gina miller, the business who led the challenge in the court. Parliament now set to reconvene on wednesday. While force johnson says he is not going to step down, he is vowing to deliver brexit next month. He will fly home early from new york where he is due to speak at the United Nations General Assembly. Nobel economist Michael Spence of nyu is still with us. Just want to get your thoughts on brexit now. Three years in the process has been dragging on. Really, i would like to get your thoughts, if you could consider a parallel universe where the u. K. Crashed out with no deal three years ago, how would it look now . Michael well, i think it would look like the british economy would suffer to some extent. Theresthink substitutes for their trading relationships with the eu. But more importantly, i think again, british citizens get to decide this so they may want to be independent of government structures in the eu. But, britains influence globally would certainly be in the process of diminishing because they have a significant role to play in europe if they smalln and they are and relatively isolated if they stay out. From most points of view, including the economic point of view, brexit either three years ago for now viewed retrospectively would probably be viewed as an a mistake, except among people who do not really care about the Economic Cost of it in terms of jobs, dynamism, linkages with the rest of the Global Economy and just want to control their own destiny. Guests earlierr was pointing out that although politically britain is in a very dark place at the moment, economically things have held up rather well. What is your assessment of the u. K. Economy at the moment . Michael i think that is a fair assessment. Powerhousel, it is a in terms of finance, being a Financial Center. It is really quite good in terms of innovation and technology. They have powerful growth engines that dont necessarily disappear overnight. So, i think there is some vulnerability on the kind of Financial Center side if it becomes more difficult to deal with the rest of the world, especially europe. Economy over the last 30 years has developed significant strengths that are in some sense not completely adversely affected by brexit. For the prospect of brexit. Kathleen the organization for economic and cooperation and Development Just downgraded its Global Forecast again. 0. 3 reduction just about every quarter for the last year or so. Down to 2. 9 . Do you see any scope for recession . Not necessarily because of the economic impact, but because when things are fragile, when things slow down a bit, there is often some kind of shock. Oil shock. 20082009 financial shock. It pushes the Global Economy, recession. Do you see this as a potential shock . Michael i think you are right that what would push the Global Economy into recession would have to be a pretty big shock. It is a distinct possibility because there are elements of weakness and fragility in the Global Economy. I guess i wouldnt say it is the most likely outcome but it is a distinct possibility and more likely than it was a year ago. Kathleen thank you so much, dr. Michael spence, Nobel Laureate, professor of economics at nyu joining us from hong kong. Coming up, President Trump slams the democrats impeachment inquiry as a total witchhunt scam. More on the escalating competition between the house and the president next. This is bloomberg. The actions of the Trump Presidency revealed that is honorable fact of the president betrayal of his oath of office, betrayal of our national security, and betrayal of the integrity of our elections. Therefore today, im announcing the house of representatives will move forward with an official impeachment inquiry. Speaker pelosi happens to be the speaker of this house, but she does not speak for america when it comes to this issue. She cannot aside unilaterally what happens here. Kathleen congressional leaders from both sides of the aisle dealing with dramatic news. House democrats will open an inquiry that President Trump pressured ukraine to investigate joe biden. Lets bring in Jody Schneider from hong kong. What does this mean in terms of an investigation . Does it mean it will lead to actual charges against the president . Jodi it is an escalation of the investigation of the president and the democratic led house but it does not necessarily mean there will be charges brought. At this point what is happening is there will be six committees that will be doing their own investigations and then reporting back to Speaker Pelosi in terms of this inquiry. Some of these committees have already begun such investigations and it is unclear what more they will actually be doing. The House Judiciary Committee has been looking into some things. Clearly, the fact the House Speaker is saying that she wants the formal investigation, formal inquiry under this big umbrella means that they are really turning up the heat on investigating the president and whether he has done things that basically violated his oath of office. Jodi schneider, in hong kong. Thank you for joining us on that evolving story on the impeachment inquiry into President Trump. We have the Chinese Foreign minister now speaking live in new york. Lets listen into what he saying. A challenge for the United States is the proactive and constructive china on the world stage. For ther or an United States. One year on, these questions are still being debated in the United States. Twoh seems to be leading to different views. In my conversation during dinner, american friends also shared with me this reality. This may not be a bad thing for relationship as important and complex as chinau. S. Relations. Debates will help people get closer to facts and truths. Day,ieve at the end of the american friends will reach sensible consensus and find the right answer to those questions. Present here today are longtime friends of china. Before i expound on the government position, i want to take this opportunity on this occasion of the 40th anniversary of chinau. S. Diplomat relations, on behalf of the Chinese Government to all those devoted and contributed to this important relationship, i want to address the deepest appreciation to all your efforts. This year marks the 70th anniversary of the founding of the plc and the diplomatic relations. At the age of 40, there should be no confusion. This is a historic moment that means a lot to both countries. We need to stand hi, look far and take this bilateral relationship forward with vision and conviction. Over the past four decades, this relationship has weathered many twists and turns. Yet, it has steadily moved forward with progress beyond even the boldest meditation imagination. It has brought tremendous benefits to both nations and contributed greatly to peace, stability and prosperity across the world. On the other hand however, chinau. S. Relations today have once again kathleen we have been listening to wang yi, the Chinese Foreign minister speaking in new york. We will continue if you want to continue watching, go to live go on the bloomberg terminal. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Profits. Over four decades of china u. S. Rade 252 times a u. S. Cbc report found that u. S. En 2009 and 2018 exports to china alone have supported more than 1. 1 million jobs in the u. S. Companies reported profits from doing business with china. Trade with china had saved a hundred 50 for every u. S. Family on an annual average. Globalization is the trend of the times, should not and cannot be held back. Flow of resources enabled by globalization has yetted in normas wealth, it would also lead to Uneven Development within countries and trade imbalances between countries. That is the Chinese Foreign ministry speaking in new york, saying 97 of u. S. Corporations say they are profiting from relations with china. He says trade has enriched u. S. Households by 850 per year. Of course, a beautiful skyline behind him. Athink i see bob rubin at table there. Lets go to the first word news. Incoming president of the European Central bank says he is confident the Global Economy will dodge recession, although there are still substantial threats from the trade war. Christine takes the reins at a precarious time for the Single Market and the wider world. Her time, growth estimates were lowered to the weakest pace since the financial crisis. It is not any baselines you have a recession. Said, it is mediocre growth. , because ofk essentially one major threat, the trade war that we see. U. K. Prime minister is bowing to deliver brexit, remaining defiant in the face of the countrys top judges saying his suspension of our limit is unlawful. The Supreme Court said the advice johnson gave the queen to shut the legislature down was wrong and prevents politicians from doing their democratic duty. Johnson says he disagrees and will deliver brexit nest next month. We respect the judiciary in our country. We respect the court. I think it was entirely right to go ahead with a plan for the queens speech. Germanys struggling Auto Industry suffered a blow as prosecutors charged Top Executives with market manipulation and daimler was separate finding. Executives were too slow to inform investors about the scandal. Global news 24 hours a day on the air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks very much. Lets get a check on the markets in hong kong. Asian stocks on the back foot with stocks off 7 10 of 1 as trade and Political Risk, given the impeachment of trump. With the trade most, we are seeing the south korean won meeting the drop in currencies. Off to tenths of 1 . Kiwi dollar looking softer. I want to highlight moves across the bond. Kiwi yields below 1. 1 . A one in five chance for a rate cut today. Dovish Forward Guidance from the central bank on the kiwi dollar. Aussie bonds looking good with australia selling 10 year debts wednesday. We are waiting on a 40 year auction from japan. I had of that, seeing the five year yield off sliding to a 2016 low. U. S. Features nudging higher. Paul thanks. Lets get to melbourne and bring our next guest for his views on the reserve bank of australia. Had a research for pepper stone group. The reserve Bank Rate Decision next week is very much a live one. Expectations seem to have pulled back after the speech last night. The market is still above 60 . Meeting,is at this they will do with the next meeting. The door would need to be open for that to happen, otherwise we get a reaction in the aussie dollar. Reason we are looking for a rate cut. If you look at what we saw from the governor, he wants to keep rate setting in tandem with other Central Banks. I dont want to get disjointed. It is moving in a universal pattern. Rates are coming down. The external situation is precarious enough that they can look at lower rates. Did everything they can to make sure volatility stays low. They said australias economy is at a turning point. So gentlening point as to be imperceptible . Can you see it . I think there are things looking a bit more like a raise. Housing is going the right way. Spike thatseen the kept them from getting too excited. It is an irony that the housing was supposed to be the reason we would see a significant cut. Housing could be one of the main reasons people are feeling good and we will see a turn in Consumer Confidence. The area where specific looking at, one is currency and making sure the dollar continues its decline. Like everywhere else, everywhere is focused on the external picture in europe, in trade, in the u. S. Economy. Brexit is still a grey cloud we do not understand. Everywhere is external. Theygets more precarious, will continue to cut the rate to 50 basis points. Perhaps lower. The conversation of unconventional policy will become more. Perhaps a longe way from that. It didnt seem like they were eager to go down that path. You talk about the outside things for many countries. One thing wrong with australia is the trade war, but impeachment proceedings, one more thing for u. S. Markets to deal with. How much does this reverberate around the world . The impeachment story is obviously an incredible story. It is full of drama and intrigue, but at the end of the day, the market has spoken and that is, since nancy pelosi made the formal inquest, we have seen s p futures slightly higher. Treasury features are largely unchanged. The idea is that people are looking at the matthey and saying there is a 5050 chance, but what does it actually mean . Are we likely to see this implicate joe biden and then we will set ourselves up for Elizabeth Warren versus donald trump. The promises of fiscal spending and blowing out the budget deficit, if that could support the u. S. Dollar, but the fact is, the market is telling you right here, with the s p closing , it is not going to make it through the senate. They need public 20 republicans to vote against the president. That is a very low probability. We are starting to look forward. Once impeachment is in the price , and there is still a way to play out, we are starting to talk to clients more about the 2020 race. How will the u. S. Dollar trade . Spending whenscal the budget deficit is precarious. That is an interesting one. A headwind to joe biden, and therefore, do we see increase probability of a worn versus trump showdown . Paul while we are talking, we have the Chinese Foreign minister talking. He has just made the remark that china has not ripped off the u. S. Those were hers those were his exact words. I am wondering how closely the you are watching these ongoing trade disputes. What are your expectations on the Incremental Development . What needs to happen to help her gets to help markets . We are saying the worse this gets, the closer we will get and whether the market would play a more dominant theme in driving the two parties to form a deal. The s p is still a whisker away from an alltime high. The dollar has been rocksolid. There has been a bit in the markets, but has not been aggressive. At the moment, there is no clear situation. They are making the right noises, but i believe this growing consensus story that they want to see a democrat when and they dont want to see a deal ahead of the 2020 election. We have these nice stories, will get closer than see them move further apart. I am dictated by the sensitivity of the markets. The market is sensitive to pressure. However much you loath to be in that situation. Kathleen lets move to peoples bank of china. Fed just cut rates. Upna, everyone was so geared for easing. We will do something with a mediumterm financing. They did cut the rate. They moved the lpr a little, but then we get the speech where he says, he signals they are not in a hurry. What does that mean for traders, what does it mean for looking at chinese stocks or not . We have been on the hunt for a slight cut and now we have seen that play through. We saw the Monetary Policy that will stay prudent and they will not be looking to tweak it. I think the cut to the rrr was massaging around the edges. Ist making sure the economy looking like it has held up well given a we have seen in industrial production. The thing we have been looking at closely is what the pboc have been doing on a daily basis. Time thatn time after we got a strongerthanexpected fix. That plays into the idea that when we get comments on the currency, they are doing what they can. Kathleen pepper stone group head of research joining us from melbourne. Hours before the house lunch its impeachment inquiry, the president gave his America First pitch to the u. N. , taking a hard line on china and iran. No responsible government should subsidize irans bloodlust. As irans menacing behavior continues, sanctions will not be lifted. They will be tightened. Kathleen our White House Reporter has been traveling with the president. He joins us on the phone. Does it look like President Trump will meet with iran . They are in the same city. The same meeting. The odds seemed to be a little higher in part on the efforts of emmanuel macron. The french president has been spending the last 24 hours trying to engineer a meeting between the president s. Monthsition is that before the president s back on u. S. Soil, trump is not going to go there anytime soon so the window is now. Boris johnson has been playing a role in that dance these countries are doing. Has been playing hard to get, saying he is not ready to meet with iran. With a little time left, we will see if it happens. Moving. Ems to be things the americans are being all the quiet about where this will all go. We have got chinas foreign minister at the moment making comments on trade. President trump had a few words on that himself. Has been juggling a few things. We expect him to meet with shinzo abe of japan. There could be an announcement of the interim trade deal. It is very small scale as deals go. He talked about the possibility of getting a similar stopgap agreement with india. Thesetrying to have off oneoff agreements heading into 2020. China is the big one. President trump had a lot of comments about china yesterday. Less so today. Their position has been if they can get a deal they believe is good for them they will sign it. Benot, President Trump would more comfortable keeping the tariffs in place. Everybody will be looking forward to those talks in washington. Josh White House Reporter whitford. Thanks for joining us. Earnings Beat Estimates, sending shares to a record. We take a look at those numbers next. This is uber. Kathleen the star of late trading in the u. S. , shares at an alltime high after beating estimates. Nike reported doubledigit sales growth in china. Guess that trade war is not as bad as we thought. This is a big relief to traders and alleviates concern that the trade war could have lingering effects on the bottom line. Bad july quarter miss at earnings in the rearview mirror. Nike has doubled china growth, which we will get to, and they saw stocks soar to an alltime high after hours. 92. 40. Up that itst result shows is pretty insulated, at least as far as we can see, from the effects of the trade dispute. Sales 7. 2 and 10. 2 billion. It Beat Estimates versus the fiscal First Quarter earnings and handily be the estimate of . 70. There were nominally no real effects from the trade war, but other controversies that might be dealt with. They had a decision to pull a limited efficient shoe that featured a controversial version of the american flag. There is also concern about backlash from allegations a controversial attorney that the company is facilitating bribery and corruption within college basketball. Those are heavy allegations, and yet, this was an important quarter for the company and it is reflected by the share price at an alltime high. Talk about growth in china. What is nike saying about that . This is the largest growth area. We talked about doubledigit growth. That handily beats estimates of 17 in china. Also about one quarter of their goods are made in china, so it underscores the concern investors had about, well this u. S. China trade conflict hurt nike . It has not. There has been a lot of positivity toward nike. Earnings was another issue. It did not seriously hurt it, but it did take a dent, three percentage points, and that is a result of the stronger dollar and when you have international companies, that is a concern. This is a positive quarter for the company and it remains insulated from the trade dispute. Paul thanks very much for that. Plunged after a where stan expected quarterly loss, crating thousands of job cuts, and concerns of a bubble on the mainland market may be bursting. Joining us is our Global Business editor. Aboute they driving fears the entire electric car industry . China has been a crucial market for electric carmakers. Investors andut, analysts have been calling as a bubble for some time, and now they are starting to see evidence that it could start to pop. This company is often referred to as chinas tesla or a test the one a be. It has a position in that market, yet it is strengthening with recalls and other problems. Now it has had a wider than expected loss. Had thejune, you company the ceo seeing the share price was not a big deal. It has been a big deal for key investors. Look at a fund like bailey gifford. They have lost in this last in thef share decline value of the share of about 432 million. That is a big hit, and that company happens to be the biggest investor in tesla. Rising investor skepticism across the board. Subsidies play a very big role in the electric car market and now that china is winding those down, it is having a big impact and people are asking what is going to happen to other markets when subsidies begin to pull back. July eke car sales across the industry fell as they did in august. That was the first time for those declines. This is having a Global Impact for sure. Thateen does this show that is one of the vulnerabilities of the electric car market, that you need affluent car mark car buyers eager to buy. When things slow down, consumers get cautious, you have problems and that is when it looks like you have a bubble. Maybe it would not be a bubble if demand was strong. Exactly. It was not just a wider loss than expected. They said deliveries fell by 11 and this is a company that should have had backed up demand. They had a huge recall in june. One quarter of the cars they sold recalled. A could have been expected that they could have seen stronger sales, but it turns out, without subsidies, maybe the demand is just not there. Kathleen thank you so much. Global Business Editor joining us from tokyo. Still more ahead on daybreak asia. This is a. This is blue. This is bloomberg. Paul chinas foreign minister speaking out and event on the United Nations General Assembly hosted by the National Committee on u. S. China relations and u. S. China business council. He has been saying china has not been ripping off the United States on trade and decoupling the Worlds Largest economies is neither sensible nor realistic. Saying that conflict and confrontation can lead nowhere and neither country can mold the other to its own image. U. S. Tohina expects the remove its restrictions on chinese trade. Continuing to give the speech there. On the bloomberg terminal. Kathleen thanks so much. Hour, up in the next Bloomberg Markets china open has exclusive interview with Goldman Sachs president and ceo coo. That will be live from beijing and continuing the Market Action. The news of impeachment proceedings. That has roiled u. S. Markets. The asiapacific lower at this point. We will catch up on all that on markets open. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. 10 00 a. M. In beijing. Markets bloomberg open. We are counting down to the open of trade. Lets get your top stories. The gloves are off. Facing formalp impeachment inquiry. Democrats say he violated his oath of office. Yvonne Boris Johnson refuses to quit and the u. K. Top judges attack suspension of parliament. Was unlawful. As china celebrates 30 years of the prc, we assess its
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