107. 71. Eurodollar almost fell the year to date lows. Very strong fix out of the pboc. Look at your cross assets. We are looking at gold giving back because of the risk asset types. Also giving back, the boj, not buying as much. Fourth cut in the last six weeks. That is a look across your markets. Lets get to our top stories. Yvonne President Trump followed his china comment saying, trade does could happen sooner than you think. Addressing the General Assembly on tuesday, the president insisted he would not have a bad deal. 24 hours later he implied things were moving ahead and that too two sides could reach an accord. President trump china is way behind us and they will never catch us if we have smart leadership. We have picked up trillions of dollars and may have lost trillions of dollars. And they want to make a deal very badly, it could happen. It could happen. It could happen sooner than you think. David these trade war developments have also seen significant discussion at the globals Global BusinessForum Taking Place in new york. Good forwars are not anyone. They are not good for the u. S. , china, or the emerging markets. Globalization has been great and trade has lifted hundreds of millions of people out of poverty. The other side of that around the protectionism of people having lost jobs. We look at china in a different way. There are trade related issues that have to get dealt with. I look at china as a glass halffull. The Chinese Government has many more levers to rely upon, as most governments do. They are very focused on ensuring the effects of the trade tension are not felt to the full extreme. Two countries have started, as a result of false starts and a variety of other tactical stuff, are starting to decouple. Which is very dangerous. Means kind of reciprocal. Trade has never been reciprocal, but closer to reciprocal. I hope we get there. I do not expect it to happen before the election. What after that i hope to have a fair trade deal. Yvonne joining us is our next guest in hong kong. Principalmanager at investors. Yields are higher, stocks rebounding. Is the whole impeachment inquiry not matter anymore . It is going to manifest itself in different terms. It is political. It is linked to Interest Rate policies, fiscal policies. We have to be prepared for how we position portfolios. Entering the Fourth Quarter. Late year, late cycle, we dont know when the recession will come in the u. S. What is the biggest anticipated adjustment you might make in your portfolio for the Fourth Quarter . If it picks up in the Fourth Quarter than it becomes reality them we would allocate more towards risk assets. We have been running portfolio in the bias over the past several months, given uncertainty. Past the session in the global economy, then valuations have collected, earnings are favored, expectations are low. In the fear of significant rate cuts and policy adjustments. You could get a bounce up in risk assets. Bring it back to to the Political Drama in the u. S. It seems like markets are very sensitive to the trade headline and whats going on there. Does the whole impeachment inquiry force President Trump to deescalate the trade tensions, and possibly score a win with china, or does it delay things further . I think President Trump is conscious of the economic situation. Whenever markets are up too much, there is pessimism, but the economy because of trade issues the president takes a step back and tries to get closer to a deal. At least something that does not worsen the sentiment. There is no doubt that growth has slowed down. Including the u. S. Growth as well. David i was about to ask you that. The slowdown story. Recent data suggest that continuing are getting worth. If that includes improves and you get into risk assets. Going into the next couple of months, should we change our mindsets . Things might improve, but should that be the base case . What is plan b . You have to be smart about where you allocate risk. You can also jane doe think about building hedges in the portfolio. Treasuries are expensive, but in the multiasset construct, having 20 year treasuries or gold can provide that hedge in case the base case does not play out. You could be smarter and allocating money towards exposure within the equity world. For example, we like financials because we have the highest payout. We also like technology. We are doing an approach there. To adjust this volatility and potential for a bounce back taking too much of downside of the base case is to build hedges that do not cost a lot. Yvonne hold on a second while we get more. Binay stays with us. More on President Trump. Lets bring in bloomberg Senior Editor. Derek, talk us through the latest developments. Placingt trump is himself in more political jeopardy by ordering the release of this confidential memo with his call to the ukrainian president. What does this memo show . Ek i was struck by something in this. I think there had been some thought right before it came out, republican thought they had some ace cards. The dot the democrats overplayed their hands. The white house seemed confident that this was going to be a culpatory. Y es the problem is a came out and you looked at the transcript and there it was. President trump was asking for the ukrainian president to look into one of his political rivals, joe biden, by name. Literally by name. Its right there. Are saying, hold on a second, there is no quid pro quo about do this or i will hold up military aid. Your getting this dissonance on capitol hill were now a majority of the members of the u. S. House of representatives say that they support starting this in impeachment inquiry. By far, sopublicans it might not be the best thing in the world, but it does not rise to the level of actual impeachment. Right, it was not explicitly said. We were speaking with jodi schneider, our Senior International editor, this time last hour. The context is, ukraine needs aide. You put those two things together and i imagine it would be something the democrats would latch onto. There is that, but at a baseline level, in the u. S. You are not allowed to go to a foreign power and ask for help digging up dirt on your political rival. You cannot do that. Thats a baseline thing. I think this has more to run because this is going to be a jumping off point. This is not the end. This is very much the end of the beginning. We are moving forward here. The democrats are going to push forward on this impeachment probe. Its very clear that a fractured Democratic Caucus up until last week you were sitting here seeing real divisions among democrats and they said, all of the things they were not thrilled about President Trump for doing, we are not sure about impeachment. This week they united immediately. They are now in full lockstep this. Even their swing members. This has been a momentous move on the left side of the aisle. There is a lot more to run on here. There are some questions about Rudy Giuliani has been up to. Tvy giuliani said in a interview that he had calls from the state department asking him to do certain things. There is a lot that people will get into. Buckle up, this will take a while. Yvonne brill quickly, Elizabeth Warren is still leading the polls. Does this memo hurt joe biden . Early to say. Oo earthden has come down to and Elizabeth Warden warren has moved up to catch him. It is more sort of like democrats on the left side of that party coalescing behind Elizabeth Warren. Rise. Nly she has had a biden was a solo standalone front runner, warren is a cold front runner. Co it depends on if things come out on this. Right now, no, it has not hurt him at all. It would be really interesting to digtrump orbit tried up dirt on joe biden and wound up with Elizabeth Warren instead, and still in a political pickle they find themselves in. Derek wallbank, our Senior Editor live out of singapore. Binay is still with us. Matter until they dont. You have middle east, brexit, the story in the u. S. , impeachment, u. S. China. Is there anything that might have an impact on markets . Binay it would be trade. The impeachment part, you have to find really impact in the market if you get to a state where impeachment would be passed by the senate. You have to learn to ignore the noise. Been a decent environment for the last two or three years since President Trump came. Markets have learned how to discount what information discount information from noise. This is why we have been dont going investors to orbit risk, it could selloff your it maintain a balance and keep hedging in the portfolio process. Thise one quote i read morning said you just cant trade this stuff. Stays with us. Su keenan is with us out of new york. Su we start with hong kong and its ongoing protests. They expect to wipe out the usual delusion, first weeks of october marks one of the busiest tourism. Chinese tour groups are set to plunge 86 compared to last year. Thats according to the travel industry council. Less than one third of hotel rooms are booked for this busy period. The European Union is weighing aggressive response to potential u. S. Tariffs over airbus subsidies. It threatens transatlantic relations. Wtos will authorize u. S. Duties on nearly a billion dollars of eu goods. It will hit next month, wine and planes, cars, fashion items. Moving on to the bank of thailand, it has left its benchmark Interest Rate unchanged. This was expected, but it may consider steps to rein in the baht is the economy weakens. Bank now expects will be lower this year than previously forecast. Growth is being undermined by the strength of the thai baht, which has gained more than 5 against the dollar this year. Divisions are widening at the ecb with german policymakers resigning from the executive early. Ore than two years it is the biggest show of dissent in the mario draghi era. Neither she or the bank have offered any reason for her to partner. Been a board member since january of 2014 and served as the vice chair of the single supervisory mechanism. Day,l news, 20 for hours a powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Program,ming up on the the best from the bloomberg Global Business forum. We will hear from a motivated modi who says india is waiting for you. America andbank of blackstone are navigating when it comes to instability. This is bloomberg. David welcome back. King minister modi is the of speech at the global forum in new york. He had one message for the Global Business community. We saw the Corporate Tax cuts come here. 2025 5 for the trillion target. By the average of about 9 between now and then. Right now i think we are growing up 5 6 . Yvonne the Portfolio Manager at principal global investors. This portfolio is fizzling out. What is your take on india . Are you still cautious at these high levels, or can we sustain these rallies . Binay the best thing about india is the structural story. The demographic story. The diversity that the market brings for it. Allocations. The sentiment was getting weekend by the fact that growth was not picking up. It has been rebounding in india and for the last two to three years as not happen. Just only thought we would get one, we had the prices. We had the real estate sector bigtime. The Corporate Tax cut is supposed to get the corporate suspend more. They have announced the lower 15 were new businesses how to manufacture. It links to Prime Minister modis appeal for Foreign Companies to invest in india. Adjusted forlue the semantic 8 kick. If you look at the corporate 7 a adjusted for the kick. T kick 7 8 hopefully get a kick start in the earning cycle. Despite being expensive, Indian Markets could expand. Yvonne lets listen in on what he had to say in new york. P. M. Modi we need to be able to adapt to global benchmarks so that we will be able to increase the confidence doing thers so we are necessary reforms and our laws and taking new initiatives as well. Safety and security of investors. Muscatmight get the returns they want. There are two things in india that distinguish us from the rest of the world. One is democracy and the second is our judicial system. Which is also in english. Any investor, if there is a dispute of any kind, these two forors create confidence the investors. There is a democratic system, a judicial system, and the use of the english language. There are no problems with interpretation and the uniform interpretation. Language plays a very important role. This situation is favorable and india. Secondly, we are also trying to make our Infrastructure Ready for the next generation infrastructure. We want to create new airports and increase the speed of railroad. We want better roads. Hometo give every family a we want to give every family a home. Infrastructure is a priority sharpshooter for us. David that was the indian Prime Minister at the bloomberg Global Business forum in new york. Binay is still with us. We had some of these measures put in place by the government. What is noise, what do we need to be careful of, and what is the hope . Binay the hope is starting this sector of the corporate sector. It is essential for the economy to kickstart after two or three quarters. There could be a come back with Interest Rates cuts, we expected to cut more. They have said they will keep the budget deficit unchanged. They will probably use the bounty from rba transfers. But what happens on orders . To balance a push up the budget, or do they have to borrow more from the market . Thats after the announcement of the tax cut. India cannot afford significantly higher bond yields. Yvonne you mentioned about the reaction of the bond market. Doesnt that complicate the rbi . The whole transmission gets distorted now. Can they ease more . Binay i think rbi will cut at least once more. Then it will see the impact of the tax cut. In terms of transmission, they are taking steps to ensure the gets better. R ating banks lend loans better levels. That transmission hopefully get solved with that and the state own banks. In this entire announcement, fiscal deficit remains the key. Yvonne thank you for joining us. We are glad to have you. Joining us in hong kong. America can keep on trucking as President Trump drops tariffs on japanese autos. We will be live in tokyo next. This is bloomberg. Yvonne lets get to the latest business flash headlines. The worlds biggest exporter posted a second straight loss, a record of 380 million u. S. Dollars. The shortfall is three times bigger than one year ago. They said they will distribute less of future profits as dividends after making no payment this year. Shares are down more than 20 in the past six months as investments in china and south america have soured. David swedish phone maker billionxpects to pay 1. Thats over allegedly brief of business ethics. They are involved in the breach with six countries, including china. They said it would affect thirdquarter results by 1. 2 billion. The investigations concern compliance with the u. S. Foreign corrupt practices act. Will likelyork postpone its ipo next year following the resignation of the ceo. They would sideline what was expected to be the second biggest ipo in the u. S. This threatened 6 billion of credit financing that was contingent on a successful offering. We work is in talks with banks for a new 3 billion loan. David a couple of things coming up on your trading session in asia. A decision in the philippines. Exports coming out of hong kong. Markets looking like this, equities higher, dollar weaker. Hi when it comes to bond yields. We are headed into the tokyo lunch break. Yvonne they have the trade deal that was the first stage of the deal. It seems like they would spare when it comes to auto tariffs. More about that will he go live to tokyo. 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. Yvonne it is su it is 10 29 in hong kong. Continuing the tradition of a european in that role. The former world bank chief executive starts october 1. She succeeds christine lagarde, who is often the ecb. Gieva is the first to come from an emerging market. She says morning signs and flashing of Global Growth continues to disappoint. A strike at General Motors has billion. Ove half 1 thats how much profit gm has missed out on a nine production out. Halted by the uaw walk meanwhile, ihs markets has numbers that pretty much confirmed this. They estimate the strike is costing 8000 vehicles per day, with each one averaging about 8,000 in earnings, pushing total losses to about 544 million so far. The jet maker boeing, now the company will sharpen its focus on safety when the 737 max 8 jet returns, forming a new Oversight Panel and recommending changes to the design practices. They also reached the first settlements with ryanair with thefamilies families of ryanair passengers who died. The terms are not clear, but reuters is saying each family will receive at least a million dollars. Finally, in israel, Benjamin Netanyahu has been tasked with forming a new government, despite no clear sign he could end the political stalemate. The decision by the israeli president to give netanyahu first crack at building a coalition comes just a week for on corruptionring allegations that have overshadowed his last three years in office. This months election left him and i quit former left him neckandneck with a former military chief. This is bloomberg. And japan have. Agreed to a limited trade agreement after washington withdrew the threat of limited tariffs on auto shipments. President trump and shinzo abe shined the first stage of a pact after meeting at the you in general a simile. The president said he expects a conference of deal at the u. N. General assembly. The president says he expects a comprehensive deal. Between the deal two countries is quite significant, as it not only contributes to our countries, but also to the global economy. David joining us to talk about this from tokyo is a Research Institute of Japan International affairs. Was this preliminary deal ever in doubt to begin with . All, thank you for having me. This morning, we are hearing that the two countries reached a trade deal, and Prime Minister abe stressed the deal was a winwin for both countries. I agree with him in some way. They can reach a deal that the two make the tariff level lower to the level of the tpp level. Wanted. A thing japan for that, the United States, now that the u. S. Has a difficult situation with china for the and americantion farmers need more markets to is one of the potential markets for them. President trump will have the president ial election next year, and he needs the vote from those farming states in the midwest. I agree that the result this morning was good news for them. On the other hand, for the they reachedriffs, thatreement, but additional tariff issue will be prolonged. I think the risk still remains for japan that President Trump, who used this issue as a bargaining chip. So what does japan need to offer in the near future in order to avoid tariffs on autos . Naoko that will be very difficult for the japanese government and Prime Minister abe. But the administration has been tough and is tough. Tough and difficult too. I do not see many things japan can offer right now, and the additional tariff would be very difficult for the japanese government to accept, so i think the negotiation will be very prolonged. David i want to bring in the issue of security, because the u. S. And japan see the world in 99 ofe way on maybe things, with the exception of how they approach north korea. You bring up a very good point, that that is a key thing to take note of, and they dont agree on north korea. First, what is the difference in view . Second, do you think the japanese are willing to concede to the u. S. As a bargaining chip for avoiding auto tariffs . Think first, i think the japanese government wanted the total denuclearization in the korean peninsula. Of course, the japanese government is still thinking through that goal. But now that the japanese government has seen that President Trump is making direct negotiations with korea, and now at the u. N. General assembly the Prime Minister addressed that he support trumps approach. Maybe the japanese governments tactic toward north korea has been changed slightly. It could be that the japanese government has changed because of the trade negotiation with the United States. Naoko, final question. Does the trade of element affect trade development affect japans relationship with south korea . Does a trade deal with the u. S. Now impact, in any way, japans trade relationship with south korea . Korea, well, i dont think so very much. Now that you see there are difficulties between japan and countries, but both japan and south korea, say that those issues are a problem between the two countries, and the two countries do not think the u. S. Should intermediate about the problem. David thank you so much for coming on the program, naoko funatsu. Just to get you guys up to speed, some comments through a speech that is not published on , leading to ate pop in the kiwi dollar. Is likely to be prepared. We will get you more details just in case we do get them. Yvonne kind of dampening down the expectations in qe, it seems like. Coming up, we will hear from the eu commissioner and his views on brexit. David u. K. Prime minister Boris Johnson returned to a noisy house of commons, refusing to quit or apologize for his unlawful suspension of parliament. Said Supreme Court justices who criticized him were simply wrong. The eu is due to leave on october 31, and johnson says it will happen with or without an agreement to soft and the impact. It is time for parliament to take responsibility for its positions. We decided to call that referendum. Again toed time and accept it. The people of this country had had enough. The Parliament Must either stand aside and let this government get brexit done, or bring a vote of confidence and face the day of reckoning with a vote. David we spent to the eu commissioner of economic and financial affairs. He says they are ready for a hard brexit. A brexitovici spoke at form. And customs iseu prepared to this eventuality. We should try, all of us, to avoid it. But what happens in the u. K. , we cannot command that because every day is a new dream. But it shows there are institutions in this country, which is the oldest parliamentary democracy in the world. There is a law asking for an extension over the 31st of october. There was a suspension of parliament. The Supreme Court said it was a legitimate. Mr. Johnson needs to listen to that. You cannot have a kind of fight between the institutions. I think still a new extension as possible, but in the end, what we need is a political solution. We see the system is blocked, that the government cannot impose its views. Think there will need to be a return to the polls and to the people, either through elections or through a referendum. Which is a possibility, but take the other alternative. You are prepared, october 30 first, to impose the restrictions you need to impose october 3 one, to impose the restrictions you need to impose . 31, to impose the restrictions you need to impose . Pierre the other Member States are prepared. It is also a country with a channel just in front of the u. K. I went to the entry of the tunnel and france in france. They hired the right people, trained them. They equipped their systems in order to have those controls. I dont know what it is the case on the others of the channel, and that is why whatever happens, we need to be repaired. Yvonne that was pierre moscovici. David coming up, navigating global instability has become and is still a top priority. From the Global Business forum in new york. The henry Group Chairman says the trade war has opened up enormous opportunities, and indias one country stands to gain in a big way. Bloombergspoke at the Global Business forum. What you have been seeing over the last two and half years wanting them, as the leader of the developed world, to come pretty far. On the chinese side, they are trying to figure out how far and how fast they want to get. The two countries got quite close in may, at which point the chinese just withdrew. Variety of to a things, then they looked at the whole and said, lets not do that. Now it is starting again. Meanwhile, what has happened in this two and a half years is the countries have started, as a result of false starts and a variety of other tactical stuff, are starting to decouple, which is very dangerous. I want to dig a little bit into that. Increasingly, we are expecting this world where it is china and its allies and the United States and its allies. It is an interesting place, figuratively and literally, between china and the United States. How do you see it . I see it as a situation of enormous opportunity. You mean with that, you do . Of course. Im just being truthful here. For a long time, he was not kosher for anyone in american policy positions to admit that there was a kind of conflict with china, and that india, in fact, could be one of the in this game as a buffer against china. If you went to the council on foreign relations, nobody would admit that. I think President Trump has made it more in the open. Going to houston and listening to our Prime Minister, he made it. Clear whatde it very kind of an he has. We need to play our cards right and see that we are viewed now as a very appropriate ally for the u. S. , as a buffer both in defense, frankly if you look at the number of defense exercises between the u. S. And india, they are increasing. Defense in india is already burgeoning. We used to to buy more from the russians. All of the tenor within india is right. This is a democratic country. A country that values ideas and has scaling growth. India has nothing but a unique opportunity, and we have to just play those cards right. I think it would be a winwin for both the u. S. And india. I agree. Having been with a bunch of ceos and the Prime Minister this morning, talking about their business expanding in india, it has been a natural recipient. Some of the bureaucracies and things that were difficult to operate can be improved, and Everybody Knows it. I think the broader context is global trade. If thego back and say china and u. S. Situation takes longer, the question is, what can we resolve in the interim . As much as india is a beneficiary, mexico and canada in trade with the u. S. Is a beneficiary in a sense that they are a way to operate. The scale and mexico is actually lower than parts of china. They could use the jobs. There is already integrated manufacturing and supply chains. Canada is a different situation. To keep the u. S. Moving forward, there are three or four things to knock out. Everybody hopes for china and the u. S. , but there are a couple of things to knock out first, and one of them is usmca. If they can push that through, that would be good and it would give more time to work on china. Yvonne that was at the bloomberg Global Business forum. David big hitters, lots of them. We are coming down to the open of the session in india. What a week it has been. 53 minutes until the open. Fiveday glow from last thursday to where we are. Friday was a good session, of course. This kind of tracks how my mood is at the start of the week. When you get toward friday, you think monday is coming up. We will be taken through but part five of this chart might look like. David, you already spoke about the massive move we saw last friday, which was followed through on monday. Since then, we have seen an ever so slight decline coming in on the benchmark indices. A lot of traders are betting on the markets remaining where they are. Least yesterday, we did see , a decline leaking of around 1. 3 for the benchmarks. There is a lot of weakness in the banking index. Deals of straight foreign portfolio investors selling into indian equities, that remains a puzzle for now. As far as domestic institutions are concerned, yesterday they also sold into the markets. At this point, our question is whether or not that solid up move was a little overdone. That will be determined through the course of the next few days. For now, we are looking at a little more weakness as far as Indian Markets are concerned. David yvonne agam, thank you. Just a check at the headlines, coleman Goldman Sachs is offering estate. Goldman has approached other Financial Institutions to take on its lending commitment and decrease its risk. The credit line was set up to help softbank pounce more quickly on potential transactions. David Credit Suisse is scrambling to contain the fallout into the investigation of a spying scandal. Figures which senior the bank authorized and managed to work with private detectives to track one of their former senior staff who had been moved to ups. Ebays ceo is stepping down amidst pressure from activist investors to break the company apart. Calls for change since the start of the year, including demands that itself assets and buyback shares. Scott cycle has been appointed as interim boss. They are looking at it and external candidates to take over. David it was a tough first day of trading in hong kong for biotech. Down a further 1. 6 . The Company Closed marginally lower yesterday. The chinese drug developer has raised just over 4 million sharing selling shares at the very bottom of the ipo price range. Byd is considering an ipo for a unit that makes a Power Management device. Ae listing would involve business that uses special transistors that are only made by a handful of companies around the world. They are the only company to make the component independently, analysts say the market for them will likely double in the next five years. David u. S. Futures doing this. You have asia, china, southeast asia, a decently good session, but volumes, as we approach the long chinese holiday, just a lot of risk out there. Things were better by about a quarter of 1 , give or take, across the week. Yvonne we have been watching one stock in particular, Cosco Shipping and their units. Cosco shipping energy was suspended in hong kong as well as in shanghai, after we heard from the u. S. Imposing sanctions on certain Chinese Companies over iranian oil, which Cosco Shipping was involved in, that umbrella here. We are seeing Cosco Shipping shares. Certainly want to focus on for your stocks to watch. We have thailand opening in the top of the next hour or so. We have the bank of Thailand Holding rates. The bond is actually flat right now, falling after signals from the central bank, which also downgraded growth at 2. 8 , and that would be the lowest pace of growth going back to 2014. Thats when they had political instability in the country. But they held off yesterday. 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. This is bloomberg technology. Ceo and alphabet and googles chief Financial Officer joined the bloomberg Global Business forum in new york wednesday. And crowd strike found itself in the middle of the trumpukraine