Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

Foreign purchases. We have the first public impeachment hearing testimony revealing the president s lawyer was digging up dirt in his shadow diplomacy in ukraine. Howi lets take a look at we are setting up when it comes to the start of trading here in sydney. Investors dealt a pretty mixed hand overnight. Stocks closing pretty close to fresh record highs. Still, uncertainty over the lingering trade negotiations continuing to chip away at sentiment. We are hearing potentially the agricultural purchases that had been a solid part of the phase i deal could be in doubt. China reportedly saying if these tariffs are not resolved, they could back away from purchasing more u. S. Soy and pork. Taking a look at the picture, just about 1 10 of 1 . Watching the labor market numbers, typically quite volatile, could be a move in the aussie dollar. New zealand, upside about 1 10 of 1 after the reserve bank of new zealand held on rates for their last meeting of the year somewhat unexpectedly, causing a surge in th\. Kiwi dollar. Some growth for japan a little later on when it comes to the u. S. Session. Looking pretty flat for the future session. A delayed openat for south korea and stocks on account of the National College exams. Lets get you the first word news with jessica summers in new york. Reporter thank you. The first public hearings in the formal impeachment inquiry into President Trump have heard from the acting ambassador to ukraine at a senior official in the state departments european and eurasian bureau. They were asked if they thought Rudy Giuliani shadow diplomacy in ukraine was intended to dig up dirt for political means and both said yes. They both denied being opponents of the president. Continuedis set for disruption thursday morning after another night of protest clashes with police. The government has ordered all Public Schools to shut for the day, the first time it has done so since the unrest began. Wednesday evening, riot police moved into clear the streets across the city. Global media has reported top officials were gathered at carrie lams residence. International Energy Agency says its forecast for Peak Oil Price is still open to change based on future government policies. The iea says it expects Global Oil Demand to plateau around 2030. The executiver told bloomberg much will depend on how the worlds leading government chooses to manage their individual Country Energy needs. If the governments take much stronger clean, efficient technologies, we may well see that the peak can happen earlier, but at the same time, if the governments going the other direction, we might see the peak later. Reporter airlines and other operations of the boeing 737 max are being warned to check any parts from a florida repair station implicated in last years crash off indonesia. The faa alert says extra space failed to keep documentation and did not follow its own rules on evaluating parts. They worked on the sensor that failed on the lion air jet that crashed, killing 189 people. Extra cooperated with the faa investigation but said it disagreed with its findings. Teslas new plant in shanghai has one permission to start mass production. It clears one of the last remaining hurdles to begin selling locally made cars in china. The first player fully owned by a foreign carmaker is a crucial crucial test of elon musks bid to sustain profitability. The firsty showed off model three s to be showed off in shanghai later this month. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im jessica summers. This is bloomberg. We are getting m and a news crossing the bloomberg. Internetf softbanks business, former yahoo japan, is holding final talks to merge with a messaging service, line. A 44 stake holds in the holdings. Line is controlled by a south Korean Corporation to the Parent Companies have been involved in this discussion according to the nikkei and they are talking about a potential tie up or merger. Softbank could acquire shares as part of that. We know that line struggled after its ipo in 2016. They are up about 21 rating in tokyo. Trading in tokyo. Trades. Ets turn to because President Trump has hit an optimistic tone on talks with china saying negotiations are close and moving along rapidly. That contradicts earlier reports that talks had hit a snag over agricultural products. Lets go to our editor, Sarah Mcgregor. We thought the farm purchases were the easy part of this deal. Whats going on . Reporter yes. It seems if you are confused by the farm purchases, it is a club we have all joined at this point. It really is a political football for china to use these purchases. Farmers are a big support base from trump. Theyve been some of the biggest victims in terms of the export market cut off from them. Thatnk it is no surprise if there is some disagreement purchases, it might be china figuring out how to take advantage of this, how to use this to make sure it gets the rollbacks that it wants. All that being said, we heard from trump today and he said the talks are progressing well and rapidly. I think we will all get that determination when we finally have an agreement and the two sides sit down and sign. Until then, there still a lot of uncertainty on whether this can actually be wrapped up. Chile and of course, with no longer the venue for them to meet, do we know any more details on when or how the deal can be signed or any timeline . Reporter according to donald trump, it will be signed in the u. S. There are two parties in this, and china will also want to have a say in weird the deal is signed. Even with the time difference, you would imagine its important for both sides to agree on neutral territory, perhaps a time zone that will hit the media and public at a good time, not when everyone is sleeping. Still this important aspect. We are still under the assumption the deal will be signed in a few weeks, but the longer it takes, it seems like we lose some momentum and it throws a big question mark over whether it can be signed quickly, this year, or at all. Haidi our senior trade editor Sarah Mcgregor with the ongoing trade talks. Still ahead, japan releases a slate of gdp figures. Growth is likely to have slowed. We will have reaction from bank of america see zoo may devalue. Shery the the current stance of Monetary Policy being called appropriate. Ifwill discuss the options Global Growth slows. This is bloomberg. Is bloomberg. The u. S. Economy can operate at a much level lower level of unemployment than many have thought. Its not surprising we would be learning that now, because we are at levels of unemployment we havent seen in 50 years. Monetary policy is in a good place, but we will be watching carefully incoming data and if development emerged that because of material reassessment of the outlook, we will react accordingly. Our economy is in a strong position. We have growth. We have a strong Consumer Sector. We have inflation below target. Very low and negative rates we see around the world would not be appropriate for our economy. The key to keeping this going and to it continuing our that we keep job creation at a solid level, that households retain confidence, that wages keep moving up. That seems to be the engine thats driving the u. S. Economy forward at this time. Shery fed chair jay powell signaling further rate cuts are unlikely for now. Lets discuss this with kpmg chief economist constance hunter. For him, it would be a good day. Did you hear anything new . That was a good day for him. No, i think it was interesting to hear the fed really articulate and jay powell articulate that it is sort of accomplished. We saw that in the last jobs report with the revision that the impact of the three rate cuts have started to feed through the economy and the reason they have fed through quickly is that it was such a significant shift from three rate hikes this year to a pause to three cuts. We have seen a change in mortgage rates, rates are lower. It sped through to the economy. I think there were three important things that he added and underscored. One, the terminal rate may be lower, so there is some research that could suggest it could be as low as 1 . I think the fed is opening to exporting that. Inflation remains below their target. And this is a global phenomenon. Globalook globally at Central Banks, most have not met their target more than 50 of the time. They are all less than 50 of the time. The major exceptions are australia and the bank of england because they have had currencies that have been able to weaken to get with inflation. Its not because of strong demand. I would say the third thing is how datadependent they are and how much further they think the Unemployment Rate can stay at these levels. Inflationboth points, expectations have been rising, on this chart showing the fiveyear rate rising. We have core inflation rising as well. 1. 7 , they are in the range, cp. Thats probably core withincase, inflation is a few Percentage Points of the target. I think whats interesting is they are holding onto this idea of it being symmetrical, which would imply they are willing to allow several quarters of it being above 2 . It just seems we are so far from that. I wonder when they are going to stop or drop the symmetrical language. The fact that they keep it makes me think that they anticipate that we might actually get a bump up in inflation at some point. I think thats an interesting feature of the situation. Constance, does an alleviation of trade tensions remaining for agreement change the fed trajectory . Thats an excellent question. If you look at indicators of why the economy was slowing, certainly the inverted yield curve was one of the key reasons. You think of the yield curve as taking the temperature of the economy. It tells you that it is sick if the yield curve is inverted, but not why it is sick. We looked at negative housing investment, for example. That turned around in the thirdquarter. I dont think thats trade related. Trade, that will be positive for the economy and expenditure, but i dont think we will go back to a place of 3 tariffs. We still have higher tariffs that will be punitive in trade between the u. S. And china. Does staying on hold during an Election Year fiscally look like on that side . Of how much money is spent refinancing the debt, that depends on the market interpretation of rate. Whether the yield occurred curve stays as steep it has been. The fedthe odds actually stays unchanged over the next year are actually somewhat slim. I would say its a pretty binary outcome. Id say it is possible we get that higher inflation, the symmetry that the fed is looking for, but i would be surprised if they stand pat in the face of that. Furthermore, if we get a softening of the economy, we still have a global slowdown going on. We will get german gdp tomorrow. We will see if they have a second consecutive quarter of negative growth. I think theres a lot in the mix. I think its too early to be making the call they are going year. D for the election shery constance huntershery , thank you so much for your time today, kpmg chief economist. Jay powell isnt the only fed official to reinforce a red rate cut pause message. Highlights from our exclusive with San Francisco president mary day via. President trump cared more about investigating joe biden than the fate of ukraine, according to testimony from a key witness in the first public hearing in the impeachment inquiry. Joe sobczyk has the story. Witness was acting ukraine investigator ambassador william taylor. Lets take a listen. Following the call with President Trump, the member of my staff asked song lend what President Trump thought about ukraine. He responded that President Trump cares more about the investigations of biden, which giuliani was pressing for. Shery so what were the Key Takeaways today . Reporter that was certainly one of them, a pivotal piece of testimony for both sides. Testimony puts trump much more directly involved in the Pressure Campaign that democrats say the administration was exercising on toaine, trying to get them investigate joe biden and joe bidens sons dealing with the ukrainian gas company, as well as a sofar unsubstantiated conspiracy that the ukrainians were somehow involved in the 2016 election interference. Key piece of testimony, but the republicans did pounce on it by virtue of the fact that it was a secondhand account. The ambassador relaying what an aide told him. Sondland,d by gordon the u. S. Ambassador to the eu, and has been a central player in various accounts of the ukraine affair with regards to the administration and attempts to get ukraine investigations underway. There was something certainly for the democrats, but republicans also did have a counter that sorted sort of pointed a fact that the white house is not allowing any testimony from people with direct knowledge of a lot of these events. Deputy assistant secretary of state questions. George kent also answered questions. After you answered with a the Vice President involvement did not decrease . In theect, he was ukraine for the United States. And his sons involvement did not cease . There was a possibility of a perception of a conflict of interest. Haidi can you give us more context . Did we hear the president respond . Reporter yes. This is a point the republicans turn to again and again, hunter barns role on the board of isma was a key point that trump was said to be concerned about. However, he did puncture a few of the arguments by saying that there was no evidence that there was corruption going on at that despite that joe biden, the appearance of a conflict of interest, as Vice President had done nothing to interfere with any investigations and in fact was pursuing a policy supported by both the u. S. And its allies in europe. Trump today responded to this, saying he had not been watching it, but he did also join in the that this arguments is all second and third hand information passed along. Recall anydid not such conversation with ambassador sondland, that the that he wastailed investigating or interested in investigating the bidens. We have a few more insights, at least a little bit more about a picture drawn in public for the , but thee investigation remains underway and will continue next week for more open hearings. Shery shery joe sobczyk, Congress Editor joining us from washington, d. C. Thank you for the latest twists and turns. Coming up, hong kong racing toward another day of disruption after more violence overnight. The latest developments, coming up. This is bloomberg. Haidi this is bloomberg daybreak asia. Im haidi stroudwatts in sydney. Shery im shery ahn and new york. Lets get a check of the latest business flash headlines. Alibaba has started taking investor orders for the hong kong share sale, which could raise more than 11 billion u. S. And become the citys largest Equity Offering since 2010. It is offering 500 million new aims for next week to start trading in Hong Kong November 26. Shares have risen by a third this year in new york. Haidi the ongoing protests have caused Cathay Pacific to issue a second warning in less than a month. It is continuing to struggle with a slumping number due to the violence. They say secondhalf Financial Results will be significantly lower than the first, using language even more pessimistic than last months warnings that the rest of the year would be incredibly challenging. Shery the unrest has hit canada goose as well. Shares fell the most since august after they said the protests are hurting business and would mean a fallen revenue this quarter. Newser shares had risen on that sales in asia were robust with global revenue rising 28 to 220 million u. S. Hong kong is set for disruption again thursday morning after another night of clashes between protesters and police. The government has ordered all Public Schools to be shut for the day and political leaders are set to have discussed Emergency Powers last night. Our chief north asia correspondent stephen is joining us. We are seeing the situation has escalated this week with violence and unrest and getting more violent and chaos. What is the latest . Reporter this could be another disruptive morning commute for those who have to get the work to work this morning. We can talk about the more mundane aspects, the logistics nightmare, and the more maudlin aspects. There was a another death overnight. We cannot at this point attribute it to the protests just yet, but i lack clad a black clad man was found in a pool of blood after a fall, presumably. A another case was a 70yearold man hit in the head with a brick and in the hospital. A 15yearold reportedly had brain surgery after a fractured skull, being hit in the head with a tear gas canister. Action ishis happening on university campuses. It is happening actually all across hong kong. In the northern parts of the New Territories where the Hong Kong University Chinese University of hong kong is, and it has been on lockdown the last couple of days with some of the more fierce standoffs and battles between police and students, who have gone back and barricaded campus. Es on the we are also hearing Hong Kong University president has put out a note urging students not to provoke police to come onto their campus. We are hearing other action at baptist university. Citywide university crisis, if you will, between protesters, many of them students, and the riot police. All schools, primary, kindergarten, secondary, have been canceled today. This is the first time hong kong has ordered this in the five plus months of unrest. Chinese university of hong kong has canceled the rest of the semester. The next term will not begin until january. There is this fallout. As far as the logistics, the more mundane aspects, the subway operator is saying it is partially suspended. The east rail line up to the chinese border, suspended. Many more are closed today. Also, the Airport Authority of hong kong says it is aware of possible plans to disrupt traffic to and from the airport today. Shery shery stephen engle, thank you for that, our chief north asia correspondent with the latest on hong kong. Coming up, the south per cisco fed San Francisco fed president calling for rates to stay on hold. Our exclusive interview with mary daly, next. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Reporter this is bloomberg daybreak asia. Im jessica summers with first word headlines. Teslas new plant and shanghai has permission to start mass production. It clears one of the last remaining hurdles to begin selling locally made cars in china. The mainlands first plant fully owned by a carmaker thats foreign is a crucial test of elon musks bid to prove tesla can sustain profitability. The company showed off the first model three asked to be assembled in shanghai earlier this month. Retail inflation in india quickens for a Third Straight month in october, breaching the rbis median target of 4 . Also potentially slowing the pace of easing. Consumer prices rose 4. 6 from a year earlier, 3 10 higher than the median estimate in a bloomberg survey. Food and beverage in that inflation is being fueled by a more than 26 surge in vegetable prices. Fed chairman jay powell is pushing back a President Trumps call for lower Interest Rates, saying it doesnt suit the u. S. Economy at the moment. He told lawmakers that rates are probably on hold after three straight reductions, but he did signal hes ready to ask if the outlook for Global Growth falters. His comments echoes his message last month when he noted continuing threats to the economy. Our economy is in a strong position. We have growth, a strong Consumer Sector, inflation a bit below target, so the very low and even negative rates we see around the world would not be appropriate for our economy. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im jessica summers. This is bloomberg. We are staying on the fed. Jay powell isnt the only official reinforcing the rate cut pause message. San francisco fed president mary daly also said the fed has done enough for now in an exclusive interview with our policy editor kathleen hays. Did mary daly add anything new for you when it comes to the fed policy picture . Reporter she absolutely did. Of course, she started it by carefully and repeatedly laying out all the reasons why the fed, after three rate cuts, has done enough for now. Yes, there are Downside Risks, the feds eyes are open, she is a data dependent fed official act the rest. Economy is in a good place. For now, rates are where they should be. Lets listen. Hashe policy accommodation put policy stance in a very good place to make the baseline come out where we needed to, which is slightly above trend growth and continued move in inflation to target and further progress on full employment. I think of that as the economy in a good place. Of course, we continue to be datadependent and look at the risks to see if the baseline changes even with this accommodation. Pause andso is this a the fed rate cut path, or is said policy cutting rates now, we would stop and see what happens, or is the fed at a policy crossroads . What needs to happen next . Can i give you a third option . My third option is where i am today, which is i see the level of the policy rate right now as appropriate for the economy we have, which is good Consumer Spending, good domestic momentum, but facing these headwinds which have hurt business manufacturing. We are in a moderate accommodative stance, and that is appropriate. I feel we can stay in that stance for a period of time it takes to get inflation back to 2 on a sustainable basis. Reporter so what im hearing from you is you have paused, you have a policy that looks appropriate, you are watching the data, and what you are trying to figure out now is you say you probably dont have to do anything, but you are just as willing to say inflation is rising and we will shift policy, the headwinds have shifted again and we have to look in the other direction. One of the things we have to do is look forward. Even though i characterize the economy as in a good place, we also look at the risks that could emerge. On one side, you do have a potential for the accommodation we have given for the economy and trade uncertainty, and the stimulus other countries have been in place works and we have upside potential, but i think on the other side, there is Downside Risk that could continue to emerge. We could get the furthering of trade uncertainty. We still have the brexit issue to settle. I am a little bit open to the idea that the risks are on the downside. Now, i see the policy stance we have got is the right one for the risk we have ahead of us so far. Reporter one of the things i pushed mary daly on is the fed officials have said absent a material worsening in the outlook, they are in a time of pause. When i pushed her, she said ok, the things she is looking at our trade uncertainty or trade negotiations seem to kick out further. Of course, we had a headline about agriculture being a sticking point. This starts to cripple how businesss work or investment works, and the slowdown in manufacturing starts creeping over to Consumer Confidence and that could change the way i look at things here that could make me reassess the data. Its important that the fed has counted on a strong consumer to keep the economy going. Its important that if you see it seeping from manufacturing to Consumer Confidence, that is an issue. This, jaytouched on powell said inflation is close to targets, you could raise rates in the future. Basically mary daly said she wants to see proof inflation is rising. She wants to see it in rising wages and price inflation. For now, she says inflation has room to run because there are already people saying if we are not cutting rates, we will look at raising them. If you listen to what jay powell said about unemployment, its not raising the way it used to. If you look at what mary daly said, it it is like fed officials who are not at all inclined to raise risks in any way. They are hoping the risks do not materialize to force them to cut again. Shery thank you for that, were global and policy economics editor from San Francisco. Taking a look at how markets are trading. A bit of a mixed picture with the asx 200 under a little bit of pressure. Financials and materials leading australia. The aussie dollar and the stock markets could take a little more direction from that labor report coming out in about an hours time. Dollarseeing kiwi gaining 4 10 of 1 , rebounding from yesterday after we saw the rbnz unexpectedly keeping Interest Rates unchanged. Nikkei futures flat at the moment. Not doing much. We have a few minutes, japans thirdquarter gdp numbers, and u. S. Futures also flat after stoxx finished just below alltime highs. Coming up next, two of japans biggest banks reported profit falling in the Second Quarter. Can the firm to reach their full year target . We will discuss. This is bloomberg. Haidi shery this is bloomberg daybreak asia. Im shery ahn in new york. Haidi im haidi stroudwatts in sydney. Of japans biggest banks reporting lower quarterly profits. Joining us from tokyo is morningstar senior Equity Analyst Michael Makdad. What are you learning this earnings season . Ande got the Mitsubishi Ufj sumitomo mitsui. We will have mizuho and japan postbank today. I think that what we have seen is what we expected, a very similar trend to the last quarter. In terms of the bottom line, it wasnt a backorder just in terms of how much profit bad quarter in terms of how much profit was made. Both banks have earned more than 60 of the fullyear guidance two quarters in. In terms of the bottom line, you wouldnt say it was a backorder, but bad quarter, but similar to last quarter, it was driven by gains on sales of bonds after u. S. Interest rates declined. When you look at the details, it is grim. It is not terrible, but not much different and not many exciting parts. All of the segments except Global Markets were down and it was a much different for fms g. The Retail Business in japan is struggling the most in low Interest Rates. Although cost cuts are coming true, revenue estimates are falling faster. And the International Business, you have growth at the top line, but then costs are also rising. Except for the bond gains, there is really no growth. Haidi is asset quality becoming more of a concern . It is. We heard that on the earnings calls yesterday. It is at the level of being more of a concern rather than materializing. Msg orght for example, the other banks are seeing or the otherg banks are seeing higher, but it is more general provisions and preparing now for expected deterioration going forward. I think one of the things that could affect Bank Earnings related to credit costs, and we heard this from mufg, is not only could Credit Conditions deteriorate, but oversees the accounting standards have changed, and if people are looking at global comparison privations in japan are not that high. Just to catch up, there could be extra credit could be going up. Shery mizuho has a relatively smaller exposure to the overseas markets. What is their Growth Potential here . , at the end of last fiscal year, took some pretty big writedowns. Basically goodwill. Basically it invested in a number of systems. They also wrote down foreign bonds. Basically after that, it leaves them with a lower base of expenses. I was expecting mizuho to be pretty much in line and similar to mufg and smsg to be a fitting from the sales. Seems so overall, it there isnt a lot of great news for the japanese banks. This chart on the bloomberg seems to show we are seeing of course these banks struggling over the past decade, especially compared to u. S. And european peers. Could there be some room for opportunities here . Positiveis something in the change, and it is related to the overall push and japan for improved corporate governance. What we are seeing for the banks is even though earnings are not increasing, shareholder returns, dividends, and buybacks are steadily increasing. Moreover, as we have had buybacks from these banks, increasingly we have seen that when they buy back shares, they promptly cancel them. Smsg did that last quarter. Sumitomo, sue me to mitsui did the same. If we look at shareholder returns and improved corporate governance, there is a positive story. Haidi what about Global Opportunities or global headwinds . Of the banks extended quite a bit in between about 2010 and 2015 overseas. Exampletally, mufg for has now just consolidated dan newman in indonesia. The expansion into Southeast Asia continues. Whether that actually will increase earnings for the japanese banks is a question. One of the things we have seen is although net interest margins in places like indonesia are much higher than japan, it is a global trend for bank margins to be narrowing. You have potential headwinds and a credit cycle. The proportion of International Business has increased and is still increasing, from a profit point of view, the driver would be expense profits in japan. Haidi thank you so much for joining us, morningstars Michael Makdad with us. Lets get a check of business flash headlines. Bhp saying the next ceo would be mike henry. He will succeed Andrew Mackenzie when he retires at the end of the month. Canadian born henry previously led bhp is Marketing Division operations, having joined the company into thousand three. His elevation clears the way for a new executive to meet the challenge of a slowing both situation and demand in china, the source of most of bhps revenue. Shery top apple assembler reporting profit above expectations, indicating solid demands for the new iphone 11. Net income was one billion u. S. Dollars from the Third Quarter compared with forecast of 900 million. Apple has forecasted holiday revenue above the projection. They are planning to launch 5g devices in the next year. Tencent is going to have to wait longer for a longawaited comeback after third net income missed the lowest analyst estimates. Profit plummeted 13 in the september period as chinas slowdown hit advertising and profit charges with the tencent investment portfolio. Costs jumped 21 as tencent splurge on pricey content to feed its netflix selfservice selfservice. More on tencent in the next hour of bloomberg daybreak asia. Shery japans real growth likely slowing. Those numbers are coming up next. This is bloomberg. Shery we have breaking news out of japan. We are getting thirdquarter gdp numbers. Anwth of 0. 2 percent on annualized seasonally adjusted basis quarter on quarter. Year on year, growth of 0. 3 . Quarter on quarter, we are seeing 0. 2 growth, really missing estimates of growth of 0. 9 . Ais, of course, also deceleration from the previous secondquarter growth of more than 1 . We are seeing secondquarter growth deceleration when it comes to the quarter on quarter numbers from the annualized seasonally adjusted basis. When it comes to nominal court on quarter numbers, annualized 3 growth. Just seasonally adjusted, zero point 1 , again missing estimates. We have seen the negative effect on the japanese economy from net exports probably being a drag. The economy set to pull back even further in the Fourth Quarter, according to bloomberg economics, as we had that tax hike taking a toll on spending. Lets get Immediate Reaction to the data. Joining us from tokyos bank of America Merrill lynch, head of japan economics, izumi devalier. Thank you so much for joining us. Its a big mess on the annualized quarter on quarter basis,. 2 . Why didnt we get support from the front loading spending ahead of the sales tax hike . Actually, i havent had the opportunity to look at the breakdown of those numbers, so it will be interesting what consumption came in. I think what can be said is there was actually a lot of frontloading that happened in september. We saw some very strong pickup in retail sales and Department Store sales in september. I think there was frontloading, but it was true if you look at the July September quarter as a whole, frontloading was a lot more subdued than 2014. That is one bit of it. First half growth in japan was actually pretty strong. In particular, consumption and investment were strong. It is not entirely surprising theres a bit of moderation. Shery what does it mean for the Fourth Quarter though, given we had a sales tax hike . If you look at the thirdquarter number and the absence of extremely strong frontloading, you would think the payback in the Fourth Quarter would be milder. We do think fourthquarter gdp ifbers will be quite weak we had a sizable contraction. Looking at the post tax hike consumption dynamics, we only have october numbers so far, but thats showing a steep drop in retail sales figures. Another issue is weve had a series of disruptive natural disasters hit the country in october. That has lingering effects. I think that Fourth Quarter growth will be weak. Haidi its interesting that because of the postrecovery efforts, i would have thought that would feed through to the recent data sets including this one and we havent really seen that. Just a breakdown of private consumption quarter on quarter was lower than expected, for trance of 1 , business spending just shy of 1 . Are stillsuggest we not really seeing a strong revival of animal spirits essentially in the economy . On the consumption side, i do think there were statistical quirks as well. Like i said, secondquarter consumption was strong. I think actually a little bit of the frontloading got captured. You are right. One thing you didnt mention is exports. The good news is export growth has actually been stabilizing. We are starting to see an improvement in manufacturing indicators. Looks like we are looking for a gradual recovery in that area. Overall, the Global Demand environment is very weak. We have uncertainties around the policy outlook and the u. S. And around trade wars. It is hard in this environment to get that kind of strong, forwardlooking investment from japanese corporates and consumers. Boost atw much of a easing in trade tensions be . I think it would be very helpful because it was certainly removed a significant Downside Risk. What we worry about is even if the u. S. And china strike a mini deal and we dont have further increases in the threats and tariffs, there will still be a lot of lingering policy uncertainty, not just associated with longterm u. S. China relationships, but also the u. S. Elections coming up at the end of next year. I dont think the fog around policy uncertainty will be completely lifted. If the export cycle recovers, we are looking at up gradual pickup in growth into the summer olympics here, but i dont think we can expect the double potential types of numbers we saw in 2016 to 2017. Shery talking about the summer olympics, are you worried about the olympic cliff, especially with the boom in construction . Is one narrative we are trying to push back against. Its referring to the fact that a lot of olympic host cities suffer this sharp growth slowdown following the game. We find that is actually not the case. That kind of olympic cliff situation is almost always caused by a volatile swing in construction investment. Strongns case, we had a runup in construction investment pretty much since Prime Minister abe came to power in 2012. It has been moderated by the fact that we have supplyside constraints on the construction sector. We dont think there will be a big fall off construction after the olympics. Plenty, that will be especially since the natural disasters or the construction site is fine. I think we can avoid that kind of catastrophic scenario. Have this level of sustained slowdown, does it make you think the bank of japan will need to change or add to what it does already doing . Know, i dont really think so. Of slowdowndegrees has been manageable. The labor markets have not deteriorated significantly. It has been kind of flat for the last two years or so. Bottom line is we will need a much bigger shock. Even the Financial Markets or in the Global Growth environment to prompt the boj to deliver additional easing, which would most likely be rate cuts. We were not surprised all the bank held at its october meeting and the bottom line is unless the yen strengthens materially or we get further Downside Risk from materializing, we think the boj is on hold for the foreseeable future. Haidi for the full schaeuble future. Great to have you. Izumi devalier, from bank of. Merica this is blumberg. 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. Haidi a very good morning. Japan has just opened for trade. Shery good evening from new york. Welcome to daybreak asia. The trade war is still on. We do not see such a massive jump in Consumer Spending across the quarter. Inknow there was a big one september. That potentially means less of a pullback in the Fourth Quarter. Saying, thewas Fourth Quarter numbers are not likely to be fantastic. Abe andPrime Minister his administration compiling a fiscal stimulus package. The numbers are not so bad that it would argue for a bigger package invented ready envisioned. Perhaps ¥5 trillion. That means less pressure on the bond market. Shery not meaningful enough of a slowdown or deterioration to move the needle when it comes to bank of japan . The bar isan in the minds of booked of most doj watchers. Very high to apply more stimulus and cut the Interest Rate, which is already in negative territory. With businesses continuing to expand their Capital Spending despite the slowdown, i think the bank of japan will say, hitss we see a significant to Business Confidence from the trade war, unless we see the yen strengthening towards 100 and endangering export profit and sending the prophet down, then we are happy to just keep warning we will be prepared to ease if necessary but hold fire. Haidi appreciate you coming on for us. Lets get you the first word news with jessica summers. Jessica hong kong is set for continued disruption thursday morning after another night of protest clashes with police. The government has ordered all Public Schools to shut for the day. On wednesday evening, riot police moved in across the city. Top officials were gathered at carrie lams residence. The first public hearings in the formal impeachment inquiry into President Trump have heard from the acting ambassador to ukraine and a senior official in the ukraine and eurasian bureau. They were asked if they thought Rudy Giulianis shadow diplomacy in ukraine was intended to dig up dirt. They both said yes. They denied being opponents of the president. The devastating bushfires raging across asia and australia have claimed another life. The body of a man was found outside the town of kimsey, 280 miles of sydney. The state has borne the brunt of the fires. Emergency services are warning that queensland will see worsening fire conditions. Airlines and other operators of the boeing 737 max 8 are check any part of a florida repair station implicated in the lion air crash in indonesia. Keep aerospace failed to proper documentation and did not follow its own rules. On the jet,led killing 189 people. Faa but saidth the it disagreed with its findings. 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 jessica summers. This is bloomberg. Fed chairman jay powell has testified before congress, confirming his policy course remains unchanged and pushing back at President Trumps call for lower rates. List mark joins us from singapore. The u. S. Market has barely reacted. What are asian investors watching . They are watching how the repricing of the Interest Rate curve is taking place. One of the noticeable things we have seen since the fed decision in october is the futures market is pricing out the chances of further rate cuts. They seem to be believing Jerome Powell and his colleagues. The message is there is going to be a pause in december. The markets are really taking back to heart. If you look at the forward curve in the futures market, it still suggests the possibility of one more rate cut toward the end of next year. That is a big change from what we were seeing a few weeks ago, where as much as four rate cuts were pricing in the market. Powell is trying to get the message that 75 basis points is enough. She would like. To see he would like to see that feed into the markets. As far as asia is concerned, they will be looking to their own markets. The indications are, we saw new zealand hold rates. It could be that asia is getting where itits own period takes more time to digest the data. There are cases where the economy is a bit soft. We just had the gdp data. We expect more stimulus in japan. In general, the fed is trying to give a picture that the bottom is being reached. The economy can start to turn slowly in an upward direction and need less Monetary Policy and stimulus for the time being. It is a steady as she goes message from powell. The dynamicrms of we are seeing in trading, we ended higher despite what seemed to be a negative trait headline. There is still a fair degree of optimism we will see this deal done. Traders in the states are getting tired of these unnamed source reports. They are trying to pour cold water on the trade deal. They know who the key players are. Donald trump and are the guys who really matter. It does appear the talks are ongoing. They are moving towards the phase one deal. Until something is heard from the big players, that all of the talks are off or everything has fallen apart, the traders are shrugging their shoulders. There are more focused on where the end game is. In the short term, it causes volatility. You get some erratic trading. Overall, people have dealt with the trade issues. We have had the tariffs for well over a year. Companies have got used did dealing with a. They have found ways around it. The Global Economy is moving at a slower pace. Are scared the Global Economy will come to a standstill. Companies are still making money. That is reflected in the way the s p is creeping higher. It would take a lot to derail the rally we are seeing in america. Unless donald trump says everything is off, and i am increasing tariffs across the board. There is no reason to suggest the Global Economy is going into recession. Haidi Mark Cranfield their. Mark cranfield there. Rundown anda market ongoing commentary and analysis. You can find out what is affecting their own investments at any point. Disney stories to a new record after its new streaming service and drew in 10 million users. Shery of next, will be joined get hisn richards to outlook. This is bloomberg. Shery the ecommerce giant following the most since september. This would be a fall of more than 5 since after we had some news that the former yahoo and japan Internet Business could be in final togs to merge with the messaging service, line. Although softbank has come out saying there has been no decision on see holdings and the line merger. Followinging rakuten the most since september. Haidi a big data dump from china is out. Reporting fresh numbers from october as well as retail sales and asset investments. New insight into the impact of the trade war. Our next guest says despite being resilient, it is hard to see how china can avoid a slowdown. Are expecting broadbased pressure across the pullback in industrial output and some stabilization. What are we seeing in terms of the outlook . We have not really seen a substantial pickup despite the targeted easing. Julian we think the early indicators point towards a slight pickup in the data that is going to be released this morning for october. We have had an improvement in the pricing of metals, which usually indicate price of production strengthened. Is beingse economy driven by Property Construction with property growth expanding at a faster pace than sales. That does not look sustainable. We are starting to see signs from the land market that that construction is slowing. Even though the trade tensions are easing, i think the reality is that the tariffs have not been as significant as a drag on the chinese economy has many feared. The flipside is that if we do see a reversal, it is not going to provide a significant boost. A key driver of growth is going to be remaining the domestic factors. At the moment, the construction cycle seems to be turning down. Monetary stimulus does not seem to be driving a rebound in credit growth. How difficult is the policy balance, given the spark in the allimportant price . Think it will be wise for policymakers to look through the surge in pork prices. The indicators point towards easing inflation. Just as most other Central Banks would not hike rates in response to oil prices, i do not think the central bank in china should respond to higher pork prices. If anything, the broader indicator suggests they need to conduct more policy easing. Shery we have seen the one year mediumterm Lending Facility cut. Does that mean we could see the low primary being tweaked . It is likelynk that next week, we will see a similar production to the mlf rates. The loan prime rate is anchored to the mlf rate. I think the mlf reduction was intended as a signal to the bond market. That the pboc was not happy with the selloff. That it is not want monetary conditions to tighten. The bond market is getting ahead of itself a bit, expecting growth to bottom up. There is been no more monetary easing. We think the pboc will have to do more. Shery how concerning is the sharp fall we saw in october, particularly when it comes to the new you want loans the new yuan loans . Ian it is one reason for that is the reglet tory starts on areas like shadow banking and allowing more defaults in the bond market has allowed nonbank financing much more sensitive to Interest Rates. I cannot think there is a willingness to rollback those regulations. To support credit growth, you need more sizable reductions in Interest Rates. If anything, i think that strengthens the case for additional easing to prevent credit growth from slipping too easily. If credit Growth Continues to slow, that creates additional Downside Risk. Shery how strong is the Chinese Consumer . When we see results from alibaba, we do not seem they do not seem to be doing that badly. Julian there are pockets of strength, but overall, the Consumer Sector looks pretty weak. Had cars sales figures from october. They are still very weak june it was sent weak. It was some of the trade tensions. Now that trade tensions are easing, the surge in Consumer Price inflation is an additional drag. Toil the labor market starts recover, consumers are going to remain cautious. Consumption growth will remain relatively weak. Shery julian evans pritchard. Oining us with a preview thank you for those views. Another alert coming from hong kong. The subway operator saying part of the west rail line is now suspended in addition to a number of other disruptions and closes, citing vandalism to parts of the subway in hong kong. We are also expecting a third day of unrest and disruption in the city. This is bloomberg. Shery we have breaking news. Take a look at the stocks. Rising more than 17 . This is on news they could be merging with line. Line at the moment, under traded. It is near the upper limits. The holdings is a softbank Internet Business. They are in final togs to merge with line final togs to merge with line. They are in ecommerce giant. Messaging app a used in Southeast Asia. Aare taking a bake hit big hit. Now, over here in the u. S. , disneys shares soared to a record high after 10 million fans signed up for its new Video Streaming Service in two days. There were also complaints about glitches. Su keenan has more on this. It seemed huge for disney. Are,he headlines now disney dazzles, whereas disney plus becomes disney minus. What is fascinating is that ce is at a record pa blistering pace. Analysts say they could reach their goal in two years. Looking at a 20 year chart, the stock was pushed to an alltime record. Many of the rabid fans of disney had the chance to preorder months in advance. Y had that was obscured by all of the glitches. Disney has been able to deal with all of the glitches. What we saw earlier in the session was that the shares were down. Disney touted its 10 million figure. Locale the rivals reacted. 17 ,y shot up as much as closing above 17 . Netflix and amazon down. Amazon prime did not have this many viewers early on. Interesting, what disney gains is not only a lot of credit for the ceo, bob iger, who staked his legacy on video sharing, but it allows them to bundle together profits for espn and hulu. Haidi in terms of the reaction in netflix shares tumbling, how big a threat is disney plus . Su if you take a look at some of the numbers out there, one analyst is estimating the strong initial interest in disney could lead disney hitting its target 10 90 million in two years. It could also mean netflix would lose as many as 10 of its y couldrs, that the be lured away by disney. The result of thats much strongerthanexpected debut. Haidi thank you so much for that. A quick check of the latest business headlines. There are calls for googles acquisition of fitbit to be black. Consumer campaigners are calling on antitrust enforcers to prevent the deal on concerns it consolidate the surge. The takeover would give google access to data from 28 million users. Shery starbucks rival lucky coffee released better than expected revenue. 220 millionas through september. 10 million above the average estimate. The net loss widened to 75 million. Investors have questioned it strategy of burning crash to lure coffee lovers away from starbucks. Fintech platform one connect financial has filed for a u. S. Ipo. Nine months after it had reported it was looking to enlist in hong kong. It will be on the nasdaq with a placeholder offering of 100 million. It is backed by softbanks vision fund. 150d a net loss of almost million in the first nine month of the year. Coming up, cutting down to the jump data out of australia. We will be breaking down those numbers as they crossed the bloomberg. This is bloomberg. Haidi we are getting the latest numbers out of australia when it comes to the ever volatile series of jobs numbers. Ofhave not seen a great deal change when it comes to these numbers. It comes it remains fairly steady. Employment coming in at a contraction of 19,000 jobs in october. The estimates were for a gain of 15,000. A contraction of 19,000 jobs in export in october when we were expecting a gain of 15,000 to be added. To the economy. Participation rate dropping slightly in october. The estimate was for 66. 1 percent. The jobless rate at 5. 3 picking up from where it had been hovering. Fulltime employment falling. Parttime employment falling by 8700 jobs. Employment, the headline number, a contraction of 19,000 positions in the australian dollar. The jobs number has unexpectedly decreased. Given we have seen Unemployment Holding firm, we have seen arising participation rates, boosting labor market could start getting more problematic for the rba in the coming months. The reaction for the aussie dollar as we saw the contraction in the employment situation. 19,000 jobs lost from the economy in october. Lets get you the first word news from jessica summers. Jessica the global slump continued to her japanese exports. Consumer spending before last months sales tax hike prevented an even sharper deceleration. Gdp grew at an annualized two chance of 1 in september from the previous quarter. Economists had forecasted an expansion of 9 10. Retail inflation in india quickened for a Third Straight month in october, breaching the target of 4 and slowing the pace of easing. Consumer pricing rose 4. 6 from a year earlier, three tents higher than the median as print the median estimate. 26 g field by a more than surge in vegetable prices. Teslas new plant in shanghai has permission to start mass production. It cleared one of the last remaining hurdles to begin making locally made cars in china. To proverucial test tesla can sustain profitability. Firstmpany showed off the model three is to be assembled. It is humans one, robots zero. After years of trial and error, boeing is dumping the robots that build the fuselage trade it engineers. N skilled boeing says the shift to humans began in the Second Quarter and should be complete by the end of the year. 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 jessica summers. This is bloomberg. Hong kong is set for disruption again on thursday morning after a night of clashes by protesters. The government has ordered all Public Schools to shut for the day. Political leaders have discussed Emergency Powers. Followinge has been the developments. Steve for the first time in the five months of unrest, all schools in hong kong will be closed. Hong Kong University and others have canceled this semester. Any University Students will not be going to class until january. Much of the unrest has been centered on the university campuses. There are eight governmentsubsidized universities in hong kong. Many have seen a rise of unrest thehe campus including Chinese University of hong kong. The emergency meeting held last night reportedly with carrie lam at her top official and her top officials, supposedly centered on what relations she could invoke to quell the rise, which has spread for a fourth consecutive day. Usually, it has been contained to the weekend. There was a general strike called on monday. That has continued for the fourth consecutive day. Here in central, there were protests and vandalism. There were arrests by the right police. There are more injuries being reported, including another death, which we cannot necessarily tie to the protest. Was found in an pool of blood after a presumed file. We do not know if he was a protester. To0yearold man also said be in critical condition. He was hit in the head by a throne break. A 15yearold is in the hospital having undergone brain surgery after suffering a cracked skull from a tear gas canister fired by police hit him in the head. Shery we are seeing strong rhetoric coming from u. S. Lawmakers. Senator marco rubio tweeting they made sniffing and progress kong on the past hong human rights act. How significant would this be . Steve this would be very significant at a time when the white house is trying to strike a phase one deal with the chinese. This could exacerbate the problem and attention and spark retaliation from beijing. Already, mitch mcconnell, the majority leader on capitol hill saying he denounced beijings insatiable thirst for control of hong kong. The u. S. Would subject trade privileges that it bestows on hong kong to an annual review as well as possible sanctions against chinese officials or hong kong officials deemed by congress for being responsible for undermining hong kongs level of autonomy. Be acould absolutely destabilizing factor, even though the United States congress saying they want to show a level of support for the protest movement. Shery thank you so much. Also, destabilizing for the markets. We have seen this unrest putting pressure on the han sang index. It has barely held onto the gains for the year. The s p 500 is near record highs. Before the protest started, you see the correlation with the s p 500 was high. Perhaps you will have a good day on the han sang index. You can see the two have diverged. The correlation is falling. Haidi of course, corporate heads are concerned about the situation. We had a never profit warning from Cathay Pacific. They are the hardest hit. Airlines in general are getting concerned about the situation. Jonesr, qantas ceo alan spoke about the impact of the protest in hong kong on his business. Weeded the quarterly update a few weeks ago. Quarterly update a few weeks ago. We sell a 15 drop in volumes. We are using a smaller aircraft with the same frequency. Taking it month by month and deciding what we do with capacity as we see how the situation do you think permanent damage is being done . It is hard to say. Who knows how long this is going to take to resolve. Maybe one of the beneficiaries will be zynga for will be singapore. We have a bigger presence in singapore. We have a bigger operation from australia to singapore. If that is the beneficiary, image traffic moves from one city to another. About i want to ask you the potential for the max aircraft to become part of your fleet. Toxic . Brand too i am a big believer that boeing and company will fix this. We have seen problems with other aircraft in the past. We 75, 737, aircraft with 21 717 and 70 100s over the next few days gates the few decades have to be replaced. If boeing commits the 717 in the max, that will be a viable alternative. We thing boeing will fix this. Will be a good competition dear. Shery plenty more to come on daybreak asia including details on weworks quarterly loss. This is bloomberg. Haidi this is daybreak asia. Work continues to burn cash, more than doubling its loss last quarter. Big in anticipation of an ipo that was ultimately pulled. Are these numbers surprising at all given what we already know . It is interesting to look at these numbers in context of what wework expected to happen in 2019. As early as this summer, they were anticipating an ipo in september. They had ramped up spending in an attempt to have growth for the first couple of quarters as a public company. This is something that came from the top. This is Adam Neumanns plan to have wework come out strong as a public company. That plan did not come to fruition. Expenseswe see growing even at a time they talk about wanting to get profitable. That is what is driving the huge bump in loss as compared to the year before and even the quarter before. Debbie did we get much indication about the way forward echo forward . They still have these two new postceos that have replaced adam neumann. They also have a new executive chairman of the company who was installed by softbank. Aree reported earlier, they continuing a search for a new ceo including names such as john leger from tmobile. This is something they are going to be looking to for in the next three months. Nextoking to fill in the three months. To execute a turnaround in which the company goes from burning went . 2 billion in quarter to becoming profitable, which is what they said is the new goal work. Ew northstar for we harder tois getting believe in tencents come back. Worse than their most pat summitt their most pessimistic forecast. What is the bottom line in these results . Out, they wereed bad. 13 down is bad for the company. One of the analysts called it dismal. This reflects the difficulties of being in the content business in china. Adsent sell its media dropped 28 . They also have this category they call other gains, which is typically the profits they take from startups the invest in. Periodbeen a difficult for the company. They long contended with alibaba as the most valuable company in china. It has fallen behind alibaba. One of the bite one of the bright spots is the smartphone adaption of their game, call of duty, which has taken off quite a bit. There is a sliver of hope they may see a rebound. Shery tell us about the progress in the content business. Again, it has been pretty difficult for them for a number of reasons. China is an unusual market. It is the biggest Gaming Market in the world, but it also has challenges because of the government involvement. There was a freeze on games last year that hit their games business. Tencent, the biggest Games Company in the country. Also, beijing came out with a cap on the amount of playing time that anger kids can use on their games. That has hit tencent also. They have been moving into other kinds of online content including nba games. The tweet from the Houston Rockets general manager created and normas controversy within china in particular when the general manager voiced support for the hong kong protests. That has caused a lot of blowback. The state on media have stopped broadcasting nba games. Tencent has continued to show the games. It is not clear if they will be able to continue going forward. 1. 5 billion to get rights to these games. Basketball is very popular in china. It is not clear with the path forward. That is a reflection of these challenges with the content business with tencent right now. Shery joining us now from the deputys director. Given all of the challenges peter mentioned, we are seeing on this gdp chart on the bloomberg that analysts are the least bullish on tencent in at least three years. Are there some bright spots you could bank on . If you look at tencent and the product portfolio, the segment they are operating in, gaming is the biggest, accounting for 30 of the revenue. These are the two segments that are struggling. Gaming is a tough business. You need to have blood stir titles. Tencent has a couple of blockbuster entitles. Globally isening that gaming is a lot more under the regulatory scanner. Some of these games taking about how addictive these games are, especially to the student community. The ad business also what we are seeing is that many of the agencies and their conditional corporates are looking at what is the biggest thing for bug. They looked at mobile. Platformsof these new coming in we are seeing a shift in the model of where agencies are spending. It is going to be the short video content. That is where i think tencent does not have much of a portfolio. I think the social media as well as fintech has done well for them. That is the brightest spot. That is one area where they want to be aggressive. Shery what about the nba controversy . How much has that hit them . It has hit them. Gaming is a content driven business. You need one or two blockbuster titles. Thatme that cant tencent is giving, they need a blockbuster title. Controversy,e maybe one more quarter for things to cool down. That will be one flagship title. Sure they will be hoping they can revive the npa title more aggressively than the nba title more aggressively the next quarter. Haidi the basic question of whether it is a victim of its own success. In terms of the growth tencent has had as a company, it has grown to 300 times the size it was. Revenueseeing falling and margins. Where did they find the next area of growth . Is internationalization of their business somewhere they can look to . They will be aggressively looking at internationalization. Itna is a big market, but is but it is at that stage where they have to look at International Markets. That is also going to be challenging because some of they ares looking at tencent cloud, all of these drivers. Looking at it as an International Market in emerging countries across the globe, we will have its own set of challenges, which will be very difficult very different. They will have to be aggressive around these emerging markets. You are right in the sense that they are a victim of their own success should they do not have to be of their and success. They do not have to be. Whether the some of the parts is able then overall. The ecommerce platform has siphoned off a payment platform. There is a huge valuation for the claimant for the payment platform. If standalone is a more valuation gain for them to save enough that separately. They have already done it with music chain with music. They will have to actively start looking for those aspects also. Haidi does easing of the trade tensions make a material difference to the outlook . I would say less to tencent than alibaba. Diversified. Thatnot see them restricted from their trade platform. As much as alibaba. A significant portion, from ecommerce. Any change in status has a direct impact to their bottom line. The regulatory aspect is something for gaming and advertisement, which is a lot more challenging for them in terms of International Markets. Haidi thank you so much for the latest on tencent. We have more analysis on the company ahead. Alex one joins markets china open today. Take a look at live pictures out of bolivia. Youre are taking a look at the interim bolivian president. She is being sworn in. A new cabin is being sworn in at the president ial palace. The president of the country for over a dozen years has stepped down this weekend and has fled to mexico. He has called the new government unconstitutional, saying her government is unconstitutional and has urged his backers to disrupt the new government. We are seeing the new cabinet being sworn in. More to come in daybreak asia. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Haidi im haidi stride nods in sydney. The ongoing hong kong protests have forced cafe Cathay Pacific to issue a second morning. It is continuing to struggle with the slumping number of travelers. Have resultsnd will be lower than the first, using language that is more pessimistic than last month. Shery the unrest in hong kong has also hit canada group. Shares fell the most since august. They share the protests are hurting business. Redemptionres had global revenue rising within 28 to 228 million u. S. Dollars. Haidi japans leading messaging platform is in talks with the former yahoo japan about forming their operations. Line is controlled by neighbor corp. Climbed 21 this year in tokyo. Ze holdings are gaining z holdings gaining 40 in that time. We are seeing line, unchanged at the moment. Seeing an upside of 15 as we get this news softbank is considering a plan to consolidate the yahoo japan Internet Business. Shery take a look at the markets trading at the moment. We are seeing nikkei under a little bit of pressure. Afx 200 is reversing losses and gaining two tens of 1 . Futures unchanged. National College Examinations day. It is this is bloomberg. Beijingt 00 a. M. In and singapore. Welcome to Bloomberg Markets china open. Hear other top stories. Growth will have slipped below the governments 6 target. The fed she pushes back at President Trump saying rates are not appropriate for the economy right now. And hong kong braces for more unrest with the new profit warning, saying protests are increasingly hurting business