Year yield. Really talking about when you look at the 10 year yield, you look at the charts, it is starting to make an uninversion of the yield curve. When that starts to happen, call your mom or head for the exits. Again, 4. 2 a and new home prices, nothing much to say there. The big story we are continuing and some ofbrexit the key crosses here on sterling. The headline is we are weaker on cable, but if you take a trend from 124, it is something we are trading right now. Lets stay on for brexit now, Boris Johnson will make a fresh attempt to deliver on his pledge to deliver out of the European Union. Supporters say he has enough votes to get a deal out of parliament. The u. K. Prime minister has formally, but reluctantly asked the eu to delay brexit until january 31. Here, justheadlines bring us up to speed. Saturday, he faced a defeat and parliament when he was supposed to be able to bring forward his boat, a meaningful vote to get parliament to this side whether or not they were on board and instead, legislators decided to move on with an amendment from a former tory basically had an insurance policy and asking for this extension, so he was not able to bring his boat to a meaningful vote, so thats what monday is up for says this up for monday. Things are going to get a little dramatic as we see the agreement come to the floor, that is where things get interesting and this is how it will be implemented and how brexit will actually come into law and that is when you could see a lot of amendments take place. The other thing we are waiting for is the official eu announcement. We heard that if the u. K. Does not vote on a brexit deal this week, they are ready to give them that extension for three months. There is a chance that when monday starts, they dont actually get to vote on it again. Can you clarify that . That is true. Since he brought it to the for saturday, this figure the house needs to allow it to hit the for monday and that is why this timeline is fluid and something we need to consider. It is not set in stone and quickly if you are looking at the supporters of it, we crunched the numbers and it was it looked like he was able to secure 62. E needs 61 we have seen this story play out before. Theresa may has gone in thinking she would get the vote and she did not. We saw the reaction on sterling and it was pretty muted. Is there more upside . I think what this means is it is basically the status quo. We are starting the week exactly how we ended it. We dont know where parliament longterm, i think the fact that Boris Johnson begrudgingly had to do it, he asked the eu for extension and i think traders have more faith. They have faith that they will extend this, so that brings down the worry without having this no deal crash on october 31. Most fx traders are saying we 136 ande pound go to they are saying you should by now. Buy now. Ould by now annemarie, thank you so much. Running us now joining us now , pleasure to have you on the program. Of positioning, i guess my question is this move up in cable and the pound, do you think that was Short Covering . Estimation, to our oneont know [indiscernible] of the hedge funds following the , it is in keeping of the pound dollar position. They areund 1. 25, so forced to cover brother further. And it is a target around 1. 30. You look at cross assets, get is the impact if we some sort of negotiated brexit . Some type of divorce deal between the u. K. And eu, how will that be reflected across Asset Classes . At current hedge , the turmoil is limited fundse most hedge [indiscernible] to avoid a situation. I think it is a little different by looking at the hedge fund and waiting to see the approach and how the negotiation will go for now. Brexit is just one of the risks out there. I will read part of your notes here. Around november 5. What is happening november 5 . Is based on the manned on the hedge fund in the global stock market. The first is Hedge Fund Exposure on the global market, so we it is very low, even in september. S however, their exposure suggests [indiscernible] any Downside Risks for the global stock market. Agreement phase one agreement not happening until no november. Do we need to see a risk rally . Agreement is ae positive factor in global hedge we admit the situation will be gloomy ahead of november we can avoid but with thescalation hedge fund meeting to reduce in to pushal stock market up the global stock market ahead of the end of the year. You, you are saying with us. Lets get it over to paul allen. Governor saysan the countrys economy has improved significantly and for the first time in about 15 years is no longer inflation. The Central Bank Still plans to continue as they are showing tangible effects. Produced in 2013 includes all of the elements. Rates and real Interest Rates fell far below and powerful easing effects have been exerted. Ministers havece pledged to use all their tools whatpport the demand of they called a highly uncertain what they called a highly uncertain outlook. This was issued by the imf Steering Panel during which they made a fifth straight cut, for directing the weakest expansion since 2009. Chinas top trade negotiators said they are making progress. Both sides are trying to make a national deal. Financial car conference that potential progress had been made. [no audio] staying balanced since the weakened. End u. S. To name the china currency manipulators. Global news 24 hours a day, powered by more than 2700 journalists and analysts and at tictoc on twitter, in more than 120 countries. Im paul allen, this is bloomberg. Still ahead, brighter is can japantter, but display keep up with the surge in a lead oled . Protestsantigovernment flare up around the world. We will bring you the latest from hong kong. This is bloomberg. Demonstrators in Hong Kong Set fire to shops and parts of real stations sunday in a 20th straight weekend of protests and organizers estimated at least 350,000 people took part in an earlier rally. It escalated quite quickly. Ground where a lot of things took place over the weekend. What is happening now . Now is the clean up. That is what happened monday morning. He street sweepers came out this weekend seems to be a bit more violent and damage, a lot more vandalism and arson. Whether you support the movement or not, this is vandalism and this is arson. This is the store here in hong kong will stop it was the target and there was a fire set. All here, you see the remnants bombs and the iron against chinese companies, particularly the banks. The bank of china atm burnt to a mark 360 also best which has ownership and the protesters feel that some of the troublemakers that came after the protesters in various , protestersthe past attack to that store and we also have a medicine company. Xiaomi is probably the most highprofile. Right now, everyone is cleared someone the last hour, people have been Company Coming taking photos. Off to the side with their cell phones taking lots of pictures, this as carrie to is leaving the city today go to japan, so there is still a little bit of anger that she is going away again at a time when the streets are literally on fire. You mentioned she will be in japan next week. How likely or what could the government do in response . The government is sticking to its guns as they protesters are as well. We heard last week in carrie lams address which was interrupted and then she had the video address in the next day she tried to articulate her and protesters have been [indiscernible] it is just escalation and escalation. That is what we have seen. Outside you, joining us in hong kong. Kong talk more about hong as the Hedge Fund Industry saw its biggest quarterly outflow and a ship that make deep an investor sentiment. We talk about the outflow we have seen here in hong kong. Crisis a political leading up to this posing a meaningful threat to the market . Escalation isther a negative factor for Hedge Fund Activity in hong kong markets. We are not sure how and when the situation is coming down, but by looking at hong kong markets, we in new position on the , especially hun sen index picture. We see the downside is currently. Imited however, the hong kong markets which we cannot exactly forecast. Atthe other hand by looking the hong kong equity market, it is interesting lets take a look at the latest business flash headlines. Softbank assembling a finance rescue plan for we work. The 47fraction of billion valuation as recently as january and sources say the talks are fluid and the talks could change. We work has been considering rivals from softbank and jpmorgan. The government is considering billion tost 1. 8 purchase the tollroad operator. The same malaysia is delivering a plan that involves self financing so the government will have to pay cash for the purchase. Have a look at the movers across the region today. Xiaomi, essentially not allowing shares and you can see what the stocks are doing, not for gains across those as well. Looking at treasury, we are don 11 . The ceo announcing his retirement. Out of australia, purdue much the biggest percentage. Gm, global macro movers. Lets get up there. Theres nothing much in the equity sort today. I would point out that it is trading below and earlier, perhaps the south korean currency, Third Straight day. Hich might be a risk sterling is weaker, half of 1 . This is bloomberg. 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. Is 10 29 a. M. In hong kong and shanghai, i am paul allen with the first word headlines. Hundreds of thousands of antigovernment protesters gathered in lebanons capital in the biggest demonstration there in 15 years. The demonstrations began after new tax proposals. It sparked anger amongst groups that said the ruling class is doing little to help the economy. Justin trudeaus liberal Economy Party has a narrow lead according to a poll. Respondents are for the liberals, versus 34 conservatives. 30 ofxpected versus conservatives. President Trump May Replace his acting chief of staff mick mulvaney, according to people close to the move. We have been told the president s team is a sibling a roster of candidates, including Matthew Whitaker and chris christie. Mulvaney says he has not offered his resignation and told reporters he thought he was doing a pretty good job. A senior Goldman Sachs investment baker faced course court after allegations of Insider Trading. He is accused of leaking nonpublic information for almost three years in exchange for cash. Goldman says the bank was not aware of the allegations until fridays arrest, this is the third Insider Trading allegation lodged against a goldman banker and three years food global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen. This is bloomberg. Chinas growth rising just have a percentage point in september. The long housing downturn may push buyers to the sound sidelines. Us, our guest from morningstar investment and he covers property. Nice to see you. Your key takeaway . Are seeing a continued price deceleration, as pretty much expected purity expected. September is usually strong and this year was no exception but developers had to offer quite a bit of sales incentive and price discounts in order to entice the buyer. Its not surprising to see lower average selling prices across many cities, and that is what the data shows. Going forward, we expect the trend to continue because developers will focus on aggressive sales, cash collection, by defending the margin. They largely expect the financing for the the financing for the sector will remain tight. I think it was in july when we heard from policymakers saying we are not going to use the market to boost the economy. Or cushioney avoid, the slowdown and avoid a crash . Phillip i think the property sector is doing relatively well in terms of the investment in double digits. Its not really in a dire situation. That would be the reason, any type of monetary easing being put into place, the government will likely direct access of liquidity into the real economy and not allowing the liquidity to flow into the sector. They are scrutinizing the use of red cards in home purchases of credit cards and home purchases. Was a decrease in september for the one year term, the fiveyear term mortgage lending remained constant. Haves an effort not to the liquidity in the sector because the government doesnt see the sector in danger at this point. David longerterm trends, china physicald the peak of construction and is in decline. To the bigger implications what are the bigger implications . Phillip every year we want to see a higher number of gsa sold and higher price. That has been going on the past decade or more. We think the peak of the physical construction that has passed, either last year or the year before that. Going forward, most of the gains for the listed developers will confirm consolidation but that does not change the fact that the sector is in structural decline. The policyhave address from carrie lam in hong kong last week and it seems like the Property Developers, or least stock, reacted positively. How much room is there in the rally . Two reasons, the protests are impacting retail sales as well as tourism. Its also affecting sentiment in residential and Office Sectors as well. It is important to recognize that the protest is a reflection of underlying discontent over lack of Affordable Housing and lack of Economic Opportunity for certain segment of the population. At this is in no means residential crisis for hong kong, it is clear to everyone lieshong kongs future with china. Thats why the policy has largely focused on housing and land supply. On the Public Housing side, the proposal is to have large scale land consumption to build Public Housing, and we think that will affect the affordability in the long run. On the private housing side, there was a surprising listing of the ltd restriction for mortgage insurance, and that will push the stock up. That measure is somewhat surprising because it will bring more liquidity into a sector thats already at a height youd i think it will provide a high. I think it will provide shortterm boost. David are there any signs that a Property Market correction is taking place because of the unrest, sentiment, what have you . Phillip i think the biggest risk, hong kong is a very investor driven market, not so much about supply and demand but rather the liquidity inflow and outflow. The market has been at a cyclical high for some time because of the inflow from the developed world as well as mainland china. We believe that process is unwinding itself. That is the greater risk for the Property Market, to go into a decline. Yvonne what is the strategy . Do you have to differentiate between Property Developers and landlords . Phillip we are looking at how hold. Velopers take aproperty holder has done good job managing a property sector. It also holds a portfolio of assets in china, not subject to the same type of risk them and also the valuation is attractive. Thats a stock we recommend. Landlords, they have suffered quite a bit, but you have to look at the quantity of the assets. From the quantity of the asset and valuation perspective, we also like the same company. David on that note, we are approaching earnings season, what are the key themes . Unrest will of the unrest show up for the landlords . Phillip for the landlords, of course we are seeing rental income. Of discountsot being offered, but what we are seeing is the discounts landlords are offering is for the time when the mall is closed. They are not offering it across the board, its not someone saying my sales are bad because of the protests. They are saying new close for two days and we will give you a discount related to those two days. I think thats a reasonable offer and limited in scope. Rental leases are assigned for three years. I think the impact will not be as big as people think. Yvonne even with the mortgage lending restrictions or the limits that were changed, you said it was a bit of a surprise and thats why we are seeing stocks rally. How much did that spur homebuyer demand . Its not the mortgage rules that are hurting buyers, it is the property prices. Isllip the mortgage change not the change from the bank, its from what loans are eligible from mortgage insurance. From the banks perspective, the risk is unchanged. What this does is essentially act as a secondary mortgage on top of the banks mortgage at a lower rate. But that program surprisingly has not been very popular even before this change, only 30 of people eligible for the program choose to participate because you have to pay an insurance fee that think that improves the Interest Rate. I think the impact will be small, but definitely there is a headline impact, thats why the stock price has reacted favorably the first day afterward. David i just want to pick up, final question, two things you mentioned. When you look at what the government is trying to do, supply and demand, but you also mentioned hong kong property is investor driven. What would it take to correct . What would it take to gradually guide home prices in hong kong more reasonable levels . Phillip i think that is the main thrust of the policy address, the construction of the Public Housing program. Right now, it covers about 40 50 of hong kongs population, so they want to enlarge that program. To decouple the Public Housing from private housing, that will fundamentally address the affordability issue. Yvonne and hopefully relieve the bank of mom and dad. Thank you. Up, we are heading to indonesia, a 7 trillion plan for the country. That is next. This is bloomberg. As promised, we are headed to indonesia, while where the president is expected to unveil a revamped cabinet later today, and that is targeting a 7 trillion economy in 30 years. Yvonne 2045. Lets get to our Southeast Asia report out of jakarta. What can we expect from this second term . Good morning. Inaugurated yesterday and things could not be more different. Five years ago when he was inaugurated the first time, there was euphoria. Yesterday, none of that. No pomp and ceremony apart from what we saw in the parliament, a mid type of security. Officers lining the main thoroughfare in jakarta. This comes after a few weeks ago, sweeping protests in indonesia over the controversial legislative agenda, and an attack 10 days ago on the nations security manager nations security manager. What can we expect . As you pointed out, he is targeting a 7 trillion economy by 2045, but to get there, he needs to unleash a wave of reforms. He pointed to that yesterday in his speech, saying he wants to red tape, but cut also address labor market reform that has been holding back indonesia and primarily he is targeting investment. He wants to have a go at foreign investment. I guess we expect to see him coalition,alvanize a a cabinet team that can deliver on those reforms. David i just had a look at where the world Bank Actually is placing the size of the indonesian economy right now, about one trillion u. S. Dollars in terms of price. Seven times in the next 30 years, a tall order. Cabinetabout the restructuring, what has been announced, what are we expecting . What are the important selling points when it comes to this topic . Karlis all eyes are on the finance team, of course. One thing we do know, the one person that is sure to the job as the current finance minister. Were not sure if she will stay as finance minister or be elevated to coordinating minister for the economy, but we interview, the president guarantees she is in his cabinet. That is important for the market. That is what they are waiting to hear. Other interesting points, to get his reform through, he is trying to build a Broad Coalition. See even the person who lost to him join the cabinet, or members of the Opposition Party joined the cabinet. That is really interesting. Obviously the president is trying to eliminate any opposition to his reform plans, someeally i mean, people have raised questions over that, it might be good for his reform plans, but it raises questions over checks and balances. Democracy is well served when you have a strong opposition. Yvonne right, and thats on the government side in indonesia as well. Among most economies that have been hit by the global slowdown, have a bank in indonesia, are they likely to cut again . Karlis yeah, actually the governorvernor will told us on the sidelines of the imf meeting that the door is open for another Interest Rate cut, the fourth in a row, they started cutting in july. Looking at a Bloomberg Survey that is still open, but i checked it out a few moments expect of 24 economists a rate cut that will take the rate to 5 . Indonesias economy, like most around the world, is slowing, growing at the slowest pace in two years. The imf revised down its forecast indonesia last week, saying it would grow at about 5 this year and pick up again next year. People,s good for most for indonesia it is not so good. Watch this space. We are expecting the cabinet to be announced within hours. The president said yesterday he would do that. All eyes are on what economic change he will introduce to get the reforms through and supercharge the economy. David i just did a quick calculation. The economy will need to grow about 7. 4 on average between almost 2045, that is like china. But that is a different topic altogether. Thank you so much. You were saying . Arlis thank you i was about to say, two years he wanted to be in the top four economies in the world, but they paired it back to top five by 2045. Yvonne they are managing expectations but still aiming high. Lets do a quick check of the is the headlines. Expanded thers role of Flight Control software boeing told regulators multiple times that it expanded the role of fright Flight Control software. Weeks revelation, a senior boeing pilot had described the system to a colleague as egregious. David qantas says it wants to begin its marathon sydney to new york flights as soon as 2020, this after completing its first test on the weekend. A billing dreamliner touchdown in sydney after completing the more than 16,000 kilometers journey, about 19. 5 hours. During the flight, passengers and crew were giving a series of medical checks and questionnaires to analyze how they were feeling. After falling nearly 50 over the last year, one of apples suppliers has struggled with the shift in new panels. The ceo told us what to expect. Coming,ve new products which we plan to put into the market. Prove tohink, we can the outside that our Oled Technology is ready for mass production and to serve our customers. Fingerprinte unique sensing technologies, which we also plan to put into the market soon. So these kinds of Growth Drivers i think will help us once we get the money, to come out strongly to go into the black as soon as possible. One of the biggest concerns for japan display is the shift of the mobile phone industry from lcd panels to oled. What is your strategy . We are seeing changes regarding the market trend, and due to the point that the price competitiveness and also all of the customers, now many of the customers shifting from just recurringartphones to business is a key factor in the be usedntinuing to because of price competitiveness. Changesthose kinds of will help us Going Forward, but having said that, we will keep on building our technology on the oled side as well and try to be flexible Going Forward. When it comes to the mobile phone business, capex is the name of the game. How do you plan to keep up with the companies that are spending billions of dollars on their own fabrication equipment . Lcd, ihe past, even in did not manage our Balance Sheet as well as expected in these big capex oriented industries. Even entering the oled market Going Forward, i think we should be more smart in rationalizing those things and tying up the Business Partners or Financial Partners so that we cannot use our Balance Sheet, but enter into the market wisely. Ofnne that was the ceo japan display. David coming up, the monday edition not that there should be a difference between the days but battle of the charts is coming up. This is bloomberg. Yvonne time for our special moment of the day, battle of the charts. Andrea is going to be going against stephen today. You access this on your. Erg, dtv go gtv andrea my chart is about everything is what everybody is watching today, the pound. It is changing at a key resistance level despite the confusion about exit, its a very fastmoving story. Having said that, the chart shows the Pound Holding above 1. 2883 against the u. S. Dollar for a third debuted the reason that is significant a third day. The reason that a significant is traders are hopeful the u. K. Will not crash out of the eu in a chaotic manner. The decline today has snapped a four day winning streak the consensus among strategists is that this drop will be shortlived. Sayingysts are still deep pound speculators are least bearish on the currency since july, according to data on friday. The broadview is it has found some support, any positive resolution, we could see it go back through that 1. 3 level. Yvonne all right. Stephen, what do you have . Ive got a chart that probably very few people are talking about today, but it is very important to the Energy Landscape of the United States and the trump administration. What you see is this yellow line, the amount of folks employed by the coal industry. You see it drop significantly through 2016. The reason is there were less was less coal production, folks were being laid off amid the shale revolution, and made gas cheaper than coal so utilities used to gas and power plants. Now from 2016, it has risen, but the production has not jumped as much and that could lead to more layoffs in the future. David stephen, im giving it to you because on sterling, how do you trade this thing really . We need to wait. Sorry, andrea. Yvonne i thought you were going to go for andrea. David it is too early. Yvonne check out those charts, we have planning more coming up. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. It is almost 11 00 in singapore, 8 30 a. M. In mumbai viewed moon by. In mumbai. Yvonne Boris Johnson on brexit . Supporters say he has enough on monday. And we will be live from jakarta as indonesia awaits the president s new cabinet. Yvonne and a hedge fund accidents after a 20th week of violent clashes in hong kong. This is Bloomberg Markets asia. Haslinda it is a big week this week. ,sian stocks mostly higher although sentiment remains fragile ahead of the few earnings expected from this week, amazon, mcdonalds, and a chinese company. Gains ine in asia pac, adding to the 9 upside. Drivingindustrials games this morning as well. The nikkei to 25 higher by 3 10 of 1 . Markets pricing in improvement in terms of Economic Growth as the friction between the u. S. And china seems to be easing. The two sides are talking about a possible phase one deal. The slump in china may be over. 4. 2 oan rate unchanged at despite calls for a cut. By two tents leads of 1 higher. When thedday, president is expected to reveal his cabinet in indonesia. We will have the same finance minister. There has been some talk she may take over as the Overall Economic minister. Lets look where we are in terms of currencies. Focus, 12908. Sterling is looking fragile. Johnson is making a fresh push for brexit. The pound could be heading for weakness. 1. 35. Und could rise to wonone currently korean at 174. Some say the yen is unlikely to trade above 1. 8. The pound in particular in focus. Lets get the first word headlines from paul allen. Top tradeas negotiators say talks with the u. S. Are making progress in both sides are working toward a partial deal. The vice premier told the Technology Conference of stancil progress has been made substantial progress has been made. Negotiators are trying to prepare a deal for president xi to sign next month. With Crossborder Capital flows staying balanced as the currency weekend in august. In a statement to the imf, he said the you want depreciation has been driven by Market Forces and shift in market dynamics. The u. S. Named china a currency manipulator. Lam ng leader carrie after the 20th weekend of protest turned violent. Protesters attacked real mainlandand some chinese owned banks on sunday. This followed a peaceful march that police had declared illegal. Saysank of japan governor for the first time in about 15 years, the country is no longer in deflation. He says that in advanced economies, the monetary easing has become limited, but the Central Bank Still plans to continue its easing policies, as they are showing tangible effects. Constructing easing constructive easing includes all three elements. [indiscernible] levelst rate fell to a fall below far below the natural rate. [indiscernible] paul global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen. This is bloomberg. Yvonne thank you. Want to bring you a scoop coming to the terminal, ubs is said to be cutting about 40 jobs in the asiapacific is part of a global push to trim costs. This according to a person familiar with the matter. What we are learning is the reductions are roughly split markets ands banking teams, Vice President or below. Our sources also telling us they are seeing smaller cuts in the region than what had been planned in europe, because ubs overall is seeing the asiapacific is a big area of growth. Line,t is coming over the ubs cutting 40 jobs in asia. Boris johnson will make a fresh attempt to deliver on his pledge to take britain out of the European Union by october 31. U. K. Prime ministers backers gethe has enough votes to the deal through parliament as soon as monday. On saturday, the commons approved an amendment seeking a further brexit delay, forcing johnson to make a formal request to the eu for extra time, but he goe it clear he would rather that way there was no extension. I will not negotiate a delay with the eu. And neither does the law compel me to do so. I will tell our friends and colleagues in the eu exactly what i have told everyone in the last 88 days i have served as Prime Minister, that further delays would be bad for this country, bad for our European Union, and bad for democracy. This weekends brexit develop its have left investors with yet more uncertainty. Sterling fell, holding a four day winning streak, but it could be shortlived due to a lower chance that the u. K. Will not crash out of the eu without a deal. To asianhe impact bonds, the impact will be minimal. Lets bring in our guest. There might like not be a resolution in sight, but the situation looks encouraging. Is that a Fair Assessment . I think it is a Fair Assessment. The probability of a no deal brexit is very low. You can see that if you look at the probability being offered by bookmakers. We think that is pretty much off the table. Longerterm, the deal is the best deal the u. K. Is going to get from the eu, and pretty acceptable to a lot of members of parliament. If you look at the demographics of the voting on saturday, you can see that boris could have a singledigit majority in order to continue the process for brexit. Saturday, itpite seems like the pound is resilient. What has been priced and when you look at where the pound is right now . Colin at the moment, because twove seen arise from 120 129, it is showing you that thato 129, it is showing investors see that a deal is more likely than no deal. And in theet a deal shortterm it is seen as a good thing for both sides, you can see the pound continuing to trade higher. If you get all of these amendments that will happen this week about attaching a referendum or a general election to the deal, then you could see some volatility and retracement of the pound. Yvonne what are the knock on effects you see for markets when it comes to brexit . We see a stronger pound, is that sustainable, can that break down the Dollar Strength we have seen and maybe lead to more inflows in e. M. . How are you seeing it . Colin i think one of the things it will do is reduce the overall risk premium in the world. You saw that after the no escalation of the trade war with the u. S. And china. The escalation of global risks that everyone has been worried about the last six months, i think it will allow people to be more positive. If you look at investor positions at the moment. The pain trade will be if risk assets, equities, high yields, start to trade higher, because people are position, investors are position very cautiously at the moment. You can see the pain trade is to the upside. Yvonne you dont think it will bring down the dollar . Or are there other driving factors keeping the strength in the greenback . Colin i think there are other factors. We think the dollar will remain strong. You could see it weakening, smaller currencies as we have seen, outside of the g10. Against the g10, we see it being pretty strong. If you look at the difference in Monetary Policy between the u. S. , the level of rates between the u. S. And other g10 economies, it is in favor of the u. S. If you look at the growth rates between the u. S. And the rest of the world, again, in favor of the u. S. From that perspective, the brexit votes dont really have an effect on those drivers. Tight. A colin, hang you are sticking around. Still ahead, hong kong unleashrs release destruction again. Next, Global Finance ministers and central bankers alleged to use all their tools to support demand. This is bloomberg. Risks of Monetary Policy being too tight and driving us into a recession exceed the risks of Monetary Policy being too easy. I personally would be more cautious bringing rates down, because you are using up one of the tools you have. What you do see is that ankers and others alike share worry of it being at its end. We have a key role to play but if you want to improve gdp growth and potential gdp growth, we need water economic policy. A sound World Economy will need to depend on much more than Monetary Policy. Onnne big names weighing in the limits of Monetary Policy. Lets bring back in column graham colin graham. Most Central Banks have the flexibility to lower rates further. It comes down to the fed this month as well. It seems like markets have priced in that they will cut again for a third time. My question is, what will happen after three rate cuts . Will they signal a pause or will it be lower bound from here . Colin i think if you look after the last fed meeting, there was this exultation that they will pause food the market started to increase pause. Market to watch what pricing happens. Fed speakers have been very quiet. I would suggest that they are going to follow what the Market Expectations are and cut rates. We are thinking about maybe a cut in the First Quarter next year would be the first would be the next one, but you have to think about the leads and lags on this, it generally takes nine months for Monetary Policy to have an effect on the economy. We are just getting to the point where you are getting abiding of the stimulus into the economy and the Economic Growth should start to pick up youd pick up. Monetary conditions in the u. S. And china are positive but the activity level has not really picked up yet. If it follows a normal cycle, you would expect activity over the next two or three months to improve. The u. S. Economy is pretty strong. The consumer remains strong, the job market remains well supported, so from that perspective, i think thats one of the dilemmas facing the fed at the moment. Yvonne the two biggest threats you could say to treasuries are the bond market or the bond market is brexit and the trade war. It seems like on both fronts we have reached the light at the end of the tunnel, it seems. Does that give enough clarity or reason for the bond bulls to worry . Weve made that argument so many times over the years. As Interest Rates continue to be anchored by fed policy and your seeing Interest Rate cuts around the world, we have the make of indonesia this week, the russian central bank, turkish central bank, all looking to cut rates this week. Sweden as well. They might not cut rates but they will sound very dovish in their statement. From that perspective, you have to say, theres no inflation problem in the Global Economy for the foreseeable future. If Interest Rates are this low, you can expect these types of returns from bonds Going Forward. It also gives investors a bit of insurance against any downturn or extended downturn in the Global Economy. So if you extrapolate the growth rates we have seen in the last 18 months, they have been downwards and slowing, you continue to plot that course, you need some protection in your portfolio from that perspective. However, thats the way everyone is positioned. As i said earlier, i think over the next quarter, the risk is that you get some sort of improvement on many fronts and that will lead to increased appetite for risk assets. Haslinda talk about how the u. S. Economy you talk about how the u. S. Economy is strong but the trends are to the downside. Some say sub six is coming. Then you look at indonesia and india when you see markets trading on fundamentals . What would it take . Fundamentals,k but we are very aware of Monetary Policy, that it is the tool that all investors are focused on. We are looking at what the catalyst could be to unlock the valuations and trade on fundamentals. We think that is an upturn in growth, or at least a bottoming out in growth. To be honest, you are seeing that in exporting from korea, they are down year on year. Slow as the 2016 slowdown, but nowhere near previous recessions. If you see those bottom out, if you see bottoming out in the commodities market, then you can see that sentiment will be interchanged and everybody, investors will look for pockets of value around the world. Value stocks are one of those that are a pocket of value. Haslinda i want to look at your conviction calls, you are short euroyen, what is the basis for that . Colin that is our hedge. It is costing us nothing because of the Interest Rate differentials at the moment, you can hold ian against euro. It is a hedge against mobile slowdown or an accident within the financial markets. We see the yen as a safe haven asset. Yvonne just digging into the rest of those, you are looking at some carrie come along ruble, longduration, highyield. No mention of equities. Do you think stocks have reached a top already . Colin we are seeing a divergence between the u. S. Equity market close to alltime highs and yet you are seeing asian markets and european markets trading at near recession levels in terms of multiples. Below 10 in korea, just over 10 in china. There is this dichotomy between the markets where the u. S. Is priced for an ok outcome in the economy, where there are other parts of the world that are priced for a worse outcome. Those of the types of areas we think you want to be looking at. However, we need a catalyst to unlock the valuation speed from our perspective, valuations. From our perspective we need better growth or export numbers. Thehave the trade tensions, g20 at the end of november. We are in these periods. The other element is what is going on in the early season. Within the u. S. , weve seen financials, reports, and theyve done quite well, but its based on fixed income trading and better debts because of servicing due to lower Interest Rates. So we really have to see what is the growth driver there. We also have european earnings starting this week in earnest. Yvonne what about when it comes to asia, when it comes to earnings . We see at least some markets, like the cost be kospi, starting to rebound. Are you marking the bottom . More if you have a positive outlook, you have to see it bottoming out. We have a position in korean equity, we have decided there are some pockets of value, but we have to size them correctly. Canorea underperforms, we add more. From that perspective, there pockets of value and we are putting them in our portfolio, but it hasnt added up to an overall long equity position in our portfolio. Haslinda thank you so much for your insights today, colin graham. If you are a blumberg subscriber, you can catch up with all of our interviews by using our interim interactive function, tv go. You can also send instant messages to our team and guests. Check it out, tv. This is bloomberg. Lets do a quick check of the business flash headlines. Boeing said itll u. S. Regulators audible times it had expanded the role of software that was linked to crashes. The plane maker says that faa personnel observed the system operating in flight tests before the max was certified, and follows last weeks revelation that a senior boeing pilot had described the system to a colleague as egregious. Qantas wants to begin its marathon sydney to new york flights as soon as 2022, after completing its first test on sunday. A boeing dreamliner touchdown in sydney after completing the more than 16,000 kilometers journey in 19. 5 hours in the process. During the flight, passengers and crew were given a series of medical checks and questionnaires to analyze their experience. This is part of our project, the first pretest flight that will come up with recommendations about how we managepilot fatigue, passenger jet lag, and after 19 hours on the flight, i think weve gotten this right. Yvonne speaking of getting things right, time for the spot of the hour. I know its only monday, but youre looking at an australian one company . Haslinda this is so up your alley. As stoxx slumping as much 11. 5 percent today viewed this is a Company Behind some the wecks slumping as much as 11. 5 today. This is a Company Behind some popular wine brands. Been been the coo has the named to treasury wine. It is up despite losses this morning. Have 10 buy, three calling for a cell. Two holes. Holds. Yvonne a good one. Lets do a check on markets before Chinese Markets get to a break. We are looking a little bit mixed today, the csi 300 seeing shares about one third of 1 . Asia looking quiet. We were expecting this loan prime rate come out and most economists were expecting the cut, a baby cut of five basis points or so, but they did not do so. A little bit of his appointment to bond traders as well, but we are seeing a limited price action when it comes to equities. Were going to look closer at hong kong as well after another violent weekend, the 20th weekend of violence. Plenty more to come. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Haslinda youre looking at live shots. Almost 11 30 a. M. In singapore. The sti pretty much on trend, up by 9 10 of 1 . Bringing gains for the year at just about 2 . We are looking at ocbc, it wants to expand its cream lending projects. Green lending projects. In green lending loans in Southeast Asia. It has made a pledge to stop lending to coal projects, and will stop lending to palm oil companies. Again, the sti up 19s of 1 . Lets get to paul allen with the first word headlines. Ministersians prime canadian Prime Minister just introduce liberal party has a lead over the conservative party ahead of the election. 30 for the liberals versus for the conservatives. It is supposed to be one of the most close elections in the ys history. Beente of emergency has declared in a country. Protests and vandalism continued through the weekend after attacks on 70 subway stasis stations and bus stations. Dozens were injured and stores were looted in chiles capital. Hunters of thousands of antigovernment protesters gathered in lebanons capital in the biggest demonstration there in 15 years. The protest began four days ago after the announcement of new tax proposals. It sparked anger amongst groups who criticize the ruling class for amassing private wealth and doing little to help the crumbling economy. Preparingtrump may be to replace his acting chief of staff, mick mulvaney, according to people close to the move. We have been told the president s team is a sibling a roster of candidates, including former acting attorney general Matthew Whitaker and former new jersey governor chris christie. Mulvaney says he has not offered his resignation and told reporters he thought you thought he was doing a pretty good job. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen. This is bloomberg. Yvonne thank you. Lets look at markets here on this monday morning. Today asy mixed here we kick off the trading week. The nikkei 225 back from lunch break, up one third of 1 . The macro picture was pretty ugly when it came to trading early this morning from japan, kospi. E los double digit falls for exports. The hang seng up one third of 1 . Kind of taking the weekend in stride given the violence that broke out. The asx 200 pretty much flat in sydney this morning. Not a lot to talk about, were waiting for some clarity when it comes to brexit and whether we see the vote go through on a deal in the house of commons. Lets get to indonesia, a little more focus on that. The president is expected to river vale a revamped cabinet expected toonday reveal a revamped cabinet later this monday and wants 87 trillion by 2045. Lets get to our politics reporter in jakarta. How will the second term be different from the first term . Just before we get to that, i want to give you some breaking news. We are seeing pictures of the palace and people starting to arrive. Jet founder,the go there had been speculation he might be in the cabinet. Andarrival was moments ago boosting the chances that he will join the cabinet, we dont know in what form. Line to be then Vice President , he has also been arrived he has also arrived. Expectations are building. We will hear in a matter of hours the full cabinet lineup expected. Getting to your question, what we are expecting from the president , right now he is trying to form a Broad Coalition it seems, drafting potentially opposition figures as he seeks to get through much needed reform and fire up Southeast Asias biggest economy and trying to nail down the growth that is needed to get to the 7 trillion mark. It is a big dream, 7 trillion by 2045. The economy is worth about 1 trillion now. Hes aiming to be in the top five economies in the world by 2045, but a lot has to happen. In a speech today, he said labor reform is on the agenda, which reinforces what he told us in an interview weeks ago. He also wants to cut more red galvanize hisy cabinet with a revamped Economics Team aimed at economic reform at the heart of his second term. Theinda you highlighted founder of kojak. Reportedly is a priority for him. Karlis the president and his first term appointed to the Digital Economy is crucial to his plans and the indonesian economy Going Forward. They are expecting it to be worth billions of dollars in to indonesia in the years ahead. A population of close to 270 million people, one of the biggest Internet Users per capita countries in the world. Huge users of social media. Ception reliant consumption reliant on smartphones. Drafting and someone like this would be seen as a crucial step toward making sure the Digital Economy does become a foundation for the broader economy Going Forward. We got a big indonesian policy decision this week. What is expected . Are they likely to reverse the tightening from last year . Karlis thats right. The tightening last year in the wake of the emergingmarket route, they raised Interest Rates by 125 basis points. They have gone three times in the space of three months. Looking at a blumberg survey, 75 of respondents are expecting a fourth cut in a row looking at a Bloomberg Survey, 75 of respondents are expecting a fourth cut in a row. Thegovernor told us on sidelines of the imf meeting a few days ago that the door is open for Interest Rate cuts. Directed toward growth at the moment, indonesias economy downgraded by the imf to growth of about 5 this year. Picking up next year to 5. 1 . The governmentk, are focused on bolstering the economy amid the global slowdown and the fallout from the trade war we have been seeing. Haslinda great stuff. Politicsmy and reporter. Lets stay with indonesia, its bonds have blown away competitors as its sovereign debt has returned 13 this year, outpacing the 6. 1 gain of emergingmarket Government Bonds as a whole. Lets get more on this from our guest. Good to have you with a spewed we talk about indonesian bonds, great return, more to come . I believe so. Meantime, we are seeing cautiousness. I think the best thing about the indonesian Government Bond howet this year has been the volatility characteristics have changed and that has surprised even us. We were quite bullish coming into the year for indonesian bonds. If you look at the fx market and bond market, very quick to buy bonds when it slacks off. The volatility correction has changed somewhat. Toward the end of this year, it has done well, it has people taking profit and protecting profit before the next year. We are little cautious at the moment that with that said, if that follow solely volatility will hold with the new cabinet coming in, we will probably see good numbers next year. Haslinda how closely are you watching the cabinet . As a bond investment destination, this is probably the key to the entire puzzle. Whether the finance ministers stays where she is or becomes economic advisor, but she gets more power on top of that role because at the moment, the financers are getting more power in terms of actual operations and policies. If she does, it will keep the indonesian Government Bonds in an attractive space. Yvonne youve been focusing more on the negative yielding debt we see in the world, its really spurring people to more asia dollar bonds. What does this mean when it comes to the dollar prospects . Some are saying the pound of strengthening could bring down the dollar, others are saying there are factors that could easily keep the dollar up. What is your take on what brings down the dollar now . Lin jing i think specifically to asian currencies, which is what i watch a fair bit, you are starting to see differences here. Slightly more positive numbers coming out of the asian bucket. When i say that, is very specific. In terms of asian currencies, could like inr, idr, you still see i wont say gains, but they are hard hi carrie currencies. Carry currencies. I guess youre export driven economies, this is where china and u. S. , the trader comes into play. We believe that trump has basically opened the avenue of saying he has a deal when it suits him. Some asianring forth currency appreciation at specific times, and we are expecting that come expecting the probability of that to get higher as elections get closer. But by and large, given that we are still in this space where the u. S. And china going through geopolitical standoff, this is where the dollar asian market becomes attractive. The dollar is safe haven currency and you get the bulk of asian dollar debt getting a very high credit rating, companies and countries in there, the gcc included, which allows for a combination of a higher carrie as opposed to higher carry. Diversification is what were going for. Yvonne we were talking earlier about the uninversion of the yield curve. How significant is that and is the flattest point behind us . Lin jing i think to an extent it is probably behind us given that things are rebounding slightly. Outside the u. S. , i think the u. S. Is just starting to see it turned downward. To that extent, you get a little bit more positive sentiment whenever trump announces a deal of sorts. Not very substantial but it is some optimism behind all of the bearishness we have seen in the market over the last six to nine months. Haslinda what is impacting the broader em sentiment . Will what is happening in turkey have a spillover in em in this part of the world . Lin jing it used to be. [laughter] five years ago, something happened in russia are turkey, the first thing i would do is sell indonesian bonds paid these days, less soap youd unless it is something these days less so. In less it is Something Like oil prices. If there is no direct link, it has been fairly muted. I credit that to a lot of the Central Banks in this region. By and large, we havent seen much appreciation in the currencies even though there are some factors, but whenever we have dollar weakness, appreciation hasnt been that strong. The minute reserve numbers are pushed through, you see why, the Central Banks are so quick to collect ammunition. When you have any sort of depreciation which looks at goes into the devaluation space, the Central Banks step in. Haslinda speaking of, india is one of the Central Banks we are looking at. How aggressive can they be Going Forward . In terms of rates. Lin jing i think they can still be i wouldnt say aggressive, but they can cut a few more times. One of the things that was made clear in the last policy meeting is they are looking to get conservative over at. Over it. The problem right now is the transition mechanisms from policy rates into the real economy and they are struggling with that. Instead of cutting rates, they are trying to fix that. Rate, buthe growth only the policy rate by 25 basis points. Opposed to 35 from last time. So they are getting quite conservative. For us, we think they can cut a which will times, affect the indian bond curve. Haslinda plenty of room. Thank you. Still to come, more chaos in hong kong, a live update from the scene of the latest violence. This is bloomberg. You are watching Bloomberg Markets asia. In hongdemonstrators kong set fire to rail stations on sunday in the 20th straight leastd of protests and at 320,000 people took part. Lets get to our chief north asia correspondent, stephen engle. We were just learning the carrie lam made a visit close to where you were or are right now. What is the latest . She was right here just a few minutes ago, she walked past. She was visiting this islamic mosque this morning, she came in at 11 14, so within the last halfhour. She met with religious leaders and we are hearing that she apologized to the Islamic Community because yesterday, as the police did their dispersal operations where the protesters were here on this road, they used the water cannon truck with blue dye and some of it was sprayed into the mosque compound. So carrie lam and the Police Commissioner, both of them just walked by cama walked by, and apparently they apologize. We just had a media scrum with some of the religious leaders at the bottom of the mosque. All we could hear was that they were appreciative of the carrie lam and the Police Commissioner coming to apologize. Obviously this is a tense moment as well because we had some people who voiced or shouted, i should say, their displeasure in carrie lam as she walked by. She did not stop and talk to the media gathered here. Lam, you are you were in tokyo. What do people think about her trip overseas . She wants to give the impression she is still a solid leader. She has other duties, including coming here. She has not made many visits in the public other than to have meetings with select groups of the public. This was a rare chance for people on the street to see her and shout their displeasure. Carrie lam will be heading to tokyo, where tomorrow there will be the enthronement ceremony of the emperor. She will be carrying out her representative duties there as a rep resented of of hong kong. Had people much like she the trip to beijing for the National Day Celebration in beijing she will get some criticism for leaving hong kong in the hands of her secretary when it is the 20th second 20th consecutive weekend of protests. Yvonne these images from the weekend have been disturbing. At what point do the more radical protesters risk angering the protesters more in the middle . We had some protests that were peaceful, though unauthorized, this weekend. At one point to those groups get angry at what is going on . Stephen this is constantly, for ae last fourplus month, perception battle. And the wateras cannons, but a perception image battle and winning the middle ground. The people who might in heart and mind support the protesters but not the violence. Who will win over those hearts and minds . Thats the question. The hardline element of the protesters feel that is their only course of action because of what they say is a government not giving in on the remaining demands. But they risk losing some of the middle ground. Stephen engle in hong kong, thank you so much for that. Ceol to come, j. P. Morgan at his name to the list of debtors about facebooks cryptocurrency. Jamie dimon is next. This is bloomberg. Lets do a quick flak check of the business flash headlines. The malaysian government is considering paying 1. 8 billion to buy the countries toll road operator, according to local media. A newspaper says malaysia is mulling a plan that involves self financing so the government wont have to pay cash for the purchase. The report also says the purchase might be made on the governments behalf. Appliance maker has started taking investor orders for a hong kong ipo. Is expected to raise as much as 460 million in the offering, at a price range with a market cap of more than 2. 7 billion. Inre has been a resurgence ipos on the Hong Kong Exchange despite protests. Softbank is said to be a sibling a rescue financing plan for therk that might value money below 8 billion, that is a fraction of the valuation they demanded as recently as january. The terms could change. Wework has been considering rival financing plans from softbank and jp morgan after scrapping its ipo. Yvonne jp morgans Ceo Jamie Dimon says his company is spending 11 billion on technology this year, and his Morgan Stanley counterpart said they are spinning about 4 billion. Ch on asgusted fin te panel in d. C. Forts but at the forefront helping customers. You would not have mutual funds if you didnt have mainframe computers. The benefit is the customer, the cost of doing business is coming down, you get automatic services, realtime data, apis. You can buy things on your phone, get information on money around the world. That is competition. The part that is different is it is faster now. Real,real, digital is cloud israel, and it is faster. Iscloud is real, and it faster. You noted the risks, are these new critical for structures that need a Regulatory Regime in place . Im not sure im going to advertise recommending new Regulatory Regimes. Listen, it is in everybodys interests. We will put more stuff in the cloud. We are managing more data, investing in big data, investing robotics andrning machines, everything you need to be. I dont know that it is Regulatory Framework so much as common standards. I think that is starting to come. We are not a technology company, but technology infuses everything we do. One Technology Innovation getting headlines is libra. Do you have an opinion . It was a neat idea, it will never happen. I have nothing else to say about it. [laughter] we already have stable coin. Morganshat was jp lets get a check of the markets. Were talking about currencies and bonds and equities. The won continuing to strengthen, when it comes to the currency today. The dollar dynamic in play. We solve the dollar brought down by the pound. We are watching the chinese 10 year yield. Back to the highs we saw for yield dating back to july viewed july. A lot of it is pork price driven and inflation concerns. This is bloomberg. Announcer the following is a paid presentation brought to you by rare collectibles tv. Announcer the California Gold rush is considered to be one of the most impactful events to affect americas young economy during its first 100 years. And it has certainly had a longlasting impression in numismatic history, as well. The people of calirn