California utility pg e said to be close to finalizing terms for a 13. 5 billion dollar payout to victims of wildfires sparked by defective equipment. Youre told it would pay half in cash and the rest in stock in the reorganized company, although no final agreements have been reached. Pg e shares rallied strongly on the news but are still down more than 50 this year. The owners of the new york mets are in talks to sell up to 80 of the major league franchise. Were told a deal would be valued at 2. 6 billion and set a path for billionaire steve cohen to take complete control after five years. Hes already an investor in the mets and has a net worth of more than 9 billion. Shery markets open in tokyo and seoul at the top of the hour. Sophie stocks are set to rebound after closing at a low. U. S. Futures little changed. Checking in on the end, Holding Steady while weakening to a twoweek low yesterday, snapping a fourday advance. They opened lower but could gain a 30year option come and. When it comes to stocks to watch, we are keep an eye on nintendo after a solid week of thanksgiving sales, also keeping an ale and i on fujitsu. Analysts expect the company will have an easy time selling its unit. This is bloomberg. Unit. Ritika im haidi stroudwatts in sydney. Asian major market sub just opened for trade. Good evening from new york, im shery ahn. Sophie im Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Haidi our top story is this china arethe u. S. And said to be moving closer to a trade deal despite tensions over hong kong. The next halfhour brings the latest trade and retail sales straily. A exports are going up recently. Elizabeth warren tells bloomberg she supports capitalism but the system needs a shaking up. , capitalist. I believe in capitalism. But markets without rules are fixed. We are seeing a gain. The nikkei sophie . We have the yen tradinutg study. Seoul ason the mood in we see the kospi move this morning. Adding. 5 , writing after rising after a two day drop as the korean won is trading at the start of the trade. The offshore yuan is Holding Steady after it firmed up and is back below its 100 Day Moving Average. Checking on the into buddies, seeing as he shares snap in the worst today slump. Banks are among the gainers. Cba and westpac gaining ground on the back of the rb z decision on Capital Requirement and extending the transition time by 27 a year. The kiwi dollar has topped is 200 Day Moving Average, rising above 65 on the back of that decision. With this softening of the proposal, the bank dropping one of its rate cuts for 2020 from new zealand. Checking on bonds, seeing aussie 10 year yields moving higher as we are waiting for retail sales and trade. Traders awaiting on a 30 year auction later. Treasuries are fairly steady at the start of the session. Keeping an eye on nintendo which is on the move. We have nintendo shares on the move, gaining ground, 1. 3 higher after reporting the best sales report. Selling more than 830 thousand switch consuls during the thanksgiving week. They announced plans wednesday in china ong it december 10 for 297 u. S. Dollars. Haidi lets get to first word news. Nato leaders have a wrapped up their 70th anniversary summit with a but a fewof unity bumpy moments along the way. President trump canceled his own conference calling canadian Leader Justin Trudeau show himideo appear to joking with other leaders at trumps expense. Macronpresident emmanuel stuck to his message saying nato should discuss strategic rather than how much each country spends on defense. Indian government is said to be weighing the easing of rules for shadow banks to allow access to wider funds. Willes tell us ministers discuss letting banks offer credit enhancement against b plusies rated triple two nonbank entities. That is five levels below what is committed under current lending rules. Foreign investment in china year despiteg last a worldwide decline and the emerging trade war. Global fdi slid to 1. 3 trillion in 2018. Inflows to china rose 4 from the year before according to a u. N. Report. The report shows that for the first time, the asiapacific was the largest destination and the largest source of fdi globally. Global news, 20 of hours a day on air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. Shery telling bloomberg the u. S. And china are moving closer to a green an initial trade deal. Despite recent harsh coming up next, another raid. Retail Sales Numbers next. This is bloomberg. Haidi getting breaking news crossing the bloomberg on the state of the australian economy. The balance coming in at 4. 5 billion aussie dollars. Thats lower than the 6. 5 billion expected. Retail sales unchanged month on month. Looking at a gain of 3 10 of 1 . That is coming in unchanged. Number,e balance breaking them down. Seeing october experts falling 5 from a month earlier. Imports were little changed from a month earlier. Certainly a little bit of a damper given the trade had been a rare bright spot amid mixed signals on the australian economy and disappointing numbers we had yesterday. Lets get Immediate Reaction with our bloomberg economist. Great to have you. A little bit disappointing. Thats right. The first rate is a disappointing one. Looking at the trade data, it is not unsurprising that the trade balance would be declining. Ofis just not the right type decline. It is not the decline we will want. It is coming from the export channel. It would be good to see the trade figures showing imports. That is one of the key things it is showing. The sign that we have that weakness in the domestic economy. Not pulling in those capital imports. Not pulling in those consumption imports. What we have now is the trade surplus down on that export data. Once we get a chance to look at the details, we might be seeing that that is some of the rural side retail. Another weak spot there with those retail sales flat in the month. We had a been seeing we needed a. 3 to keep the retail taking over at the 2. 5 year on year we had a been seeing over the last couple of months. Nonetheless, what we have there is another flight outcome. Still too soon. This is the october data. It is too soon to see the transmission into the economy. Not only from the junejuly but from the october rate cut coming through. We got it in those property prices where we saw november data coming through earlier. Property prices, that translating to something we would expect to see in the early months of next year. I dont think we will get any clearer reading on the retail sale data. We have seen we have the anecdotes coming through that in november, keeping in mind of this flat outcome for october and november, we have indicators and anecdotes that black friday sales was a strong piece of activity. That is probably some pull forward of the december retail figures. They may have difficulty over the next couple of months with seasonal adjustments. Exactly. It will be a couple of months before we get that clear error. That is probably what we will see the r. B. I. On the sidelines waiting to get the reading. Of whetherme signs their rate cuts are coming through or transmitting into the economy as they hoped. Shery we are already seeing the Market Reaction to those missed numbers with the aussie dollar plunging. Is that investors factoring in the fact that the rba could be forced to cut again despite the three rate cuts we have already seen . James i think thats right. What we see here with the economic data, with yesterdays gdp, this is another downside surprise. We will be looking at the economic surprise for australia shine that we have been missing quite a few things. This is not the only data since the rba put out there november forecast. Wages was soft. A little on the downside. Overall, the pictures looking like one that suggests the economy may be threatening to the downside of the rbas forecast. In his speech, he indicated 0. 25 is there lower band. They have two cuts left to get there. They will be patient be on that point. I think we are starting to see increasing signs that the data, the early data, is not lining the way the rba hoped. Haidi the reliance on exports and reliance on the growth of china is well documented with this economy. How much is australia meaningfully suffering from the trade war . James it depends. One of the things that has come through while china has instituted its own policies to keep its domestic economy going has been the stimulus which is supported on oil prices. That is one of the key linkages. Between a trade war asked trade war perspective are a little different. The key impact is more on the confident side of things. That is where we see indicators like in last weeks data with those Investment Intentions by firms. As theeing curbed a bit uncertainty and business confidence. We are not seeing Business Investment come through or the expectations shaping up in a way that we need to get investing in hiring in order to get the labor market outcome that we need for the rba to tighten things up, to generate the wage pressure. To get over the longterm that both rba governor low and Deputy Governor the bell are looking for there to hit the inflation market target. Haidi james, appreciate you joining us. Very busy week for you. Bloomberg economist James Mcintyre in sydney. A big a a bit of softness in the aussie dollar in response to those data points. Retail sales as well as the export number. What else are you seeing . Sophie lets take a snapshot of the aussie dollar decline. Retail sales and trade balance estimates. We do have a Holding Around a low 68 levels right there. Lets switch it out and check the broader view. Not seeing the mood for australian stocks yet. Gaining 1 . Overall, asian stocks bounced bouncing back. Staying pretty range bound given the backandforth we see on trade lines. Japanese stocks, the first session in three. Not much reaction to shinzo abe announcing a smaller than expected fiscal spending package of ¥15 trillion. Aussie bounce back when it comes to share market, recovering from the worst two days slump with banks among the gainers. This comes with a seven year transition period instead of five. Given there was a picture on the domestic economic out front, kiwi bonds under pressure. Seeing the kiwi dollar gained ground, breaching the 200 Day Moving Average for the First Time Since july, climbing further above 65. We got more lines from the governor this morning saying the decision on Capital Requirements are final. Central banks is on hold when it comes to the Central Bank Monetary policy. On the back of these proposals says it sees one more rate cut in may. Certainly something to consider this morning. Shery thank you. Lets turn to ritika gupta for the first word headlines. Ritika japanese Prime Minister shinzo abe has announced a massive stimulus package to boost growth in an economy dealing with a slump in exports, we string of natural disasters, and the fallout from the sales tax hike. The measures total 230 billion making at the equivalent of 4. 5 gdp at face value. The Hong Kong Government has announced further stimulus measures worth more than half a billion u. S. Dollars, aiming to support businesses suffering from the fallout of six months of unrest. Nine new measures include subsidies of the utility bell and waivers on corporate property taxes. The total of hong kong Stimulus Initiative since june now amounts to more than 3 billion u. S. Dollars. Opec seems to be getting its ducks in a row ahead of thursdays talks in vienna. Iraq is dropping its surprise call for producers to deepen output restrictions, now saying it would be better to extend the limits for another year. Withbrupt turn combined complete silence from saudi arabia has led the left the oil market wondering what will emerge from thursdays meeting. The decision to step back from running after the two billion dollar retirement boost, google founders. The announcement lifted shares and added 1 billion each to their net worth as investors welcomed the elevation of that. They each own about 6 60 of google and control alphabet. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Shery thank you. Amazon is facing widening antitrust scrutiny in the u. S. Beyond its retail operations. Sources say investigators are looking at the companys massive Cloud Computing business. Naomi makes covers corporate influence in washington and joins us now. How significant is this move given that we have seen earlier this year the u. S. Regulators realigning and dividing their jurisdictions with of these Huge Tech Companies . Naomi we have known for quite some time that the federal trade commission has been looking at amazons businesses. Specifically its retail business. Looking at how does it treat thirdparty sellers on its platforms . Ist bloomberg is reporting the antitrust scrutiny by the federal trade commission has expanded to include its Cloud Services division, which makes up the majority of its operating revenue and it is a significant and one of the strongest parts of amazons overall business. This is a significant development. The onlyis is not front which amazon is fighting antitrust concerns. It is not even the only jurisdiction where it is facing these questions. Naomi yes. And we have state, federal, and investigators looking at a number of Technology Companies in washington. Faces area that amazon scrutiny is the House Judiciary Committee in congress. They are looking at amazons Business Practices as well, including when the question of whether amazon is treating thirdparty sellers on its platforms fairly. Is it fair for independent sellers to have to also compete against amazons private label platform . While depending on amazon for that business. That is something the house has. Ttee been looking at it is also an issue for Amazon Web Services at that that the federal trade commission may look into. Haidi haidi we will watch the space. Naomi nix, our washington reporter looking at corporate influence. We have breaking news crossing the bloomberg. Not trading in the aussie session. Confident of meeting their requirements without needing Additional Capital presumably capital will make capital raising. They are saying the announcement on increasing Capital Buffers from aussie banks are saying that will translate to around a 3 billion aussie dollar increase when it comes to their common capital ratio by july 2027. Response onviding a those Capital Requirements that were allowed a few hours ago. Something of a relief given they have seven years to come up with that money, essentially being banks have two higher ratios to 16 . We have seen bancshares trading at the likes gaining that more time has been given to provide those changes. Coming up next, we will be live in tokyo joined by the vice chair for her outlook and the banks outlook for 2020. This is bloomberg. Is bloomberg. Shery this is daybreak asia. Im shery ahn in new york. Haidi im haidi stroudwatts in sydney. Investment opportunities defined by some tectonic shifts in the Global Economy. Japan is set to be at the center of these developments. Bloomberg live big year ahead is in tokyo. Lets get over there and in enjoying Erik Schatzker for more. There are technomic shifts taking place here in japan. With me to talk about them is kathy mcsween, vice chairman i goldman sachs. How are you . Good. Erik Prime Minister abe is due to announce as soon as today new packages of fiscal reform, stimulus, for the japanese economy. The headline figure appears to between ¥5 trillion, roughly 230 billion. What do you want to see in this package to believe it can be effective . I think it is frankly going to be a multiyear package, meaning it is not all going to be spent in fiscal 2020. It is going to be divided over a course of multiple years. I think in terms of the content, there are a number of Priority Areas given the slew of math of natural disasters that has hit japan not just this year but the year before. A lot of the spending will be quite explicitly directed at bolstering japans infrastructure whether that is roads or flooding of rivers around the tokyo area. Drainage systems, all of that will be a primary focus. I think another potential area is japan raised its vat a couple months ago in october. Maybe the government will say hey, we need to cushion the blow, mitigate the negative impact by doing something for the consumer. Exactly what that thing will be, we dont know. Doing something to help boost a Consumer Spending so as to ensure not a repeat of 2014 or after the vat was hiked back then, consumption and the. Economy fell off a cliff they are very nervous about that happening before the elliptics. Erik can these measures stave off a recession . Can japan afford to borrow more given it is caring the worlds heaviest debt load . Kathy very good questions. Think the answer to the first one is we think it will definitely help reduce that probability of japan entering a recession. If the globe enters a recession, may be the spending will not be sufficient. The way we are painting the World Economy from Goldman Sachss perspective for next year is it looks like more of the same, in fact, a little bit of acceleration of growth for next year. Some of the traderelated exports are going to be somewhat mitigated. We have fiscal fiscal stimulus in the developed world and we have Monetary Policy that will stay very lax and easy. Assuming the fiscal stimulus comes in a timely fashion, assuming the boj stays put with zero Interest Rates, we think this will be enough to stave off recession. In terms of can they afford it . Of course it will balloon the already large fiscal deficit that japan faces. Frankly, better to do it when rates are zero than one rates are 2 or 3 . That is part of the logic. They are looking at the boj, people saying why dont you do more . I think realistically speaking, there is not much more they can do. The leverage of policies is shifting away from monetary to the fiscal level. Erik japan has been at the forefront of policy experimentation, massive fiscal stimulus, debt monetization, negative Interest Rates. Is modern monetary theory the next step . Should it be the next step . Kathy that has been the buzzword in japan over the last couple of years. People trying to find ways to rationalize some of these very highly experimental policies that japans central bank has pursued. At the end of the day, i dont think anybody in this country, at least in the policymaking sphere is naive enough to believe we just create this new economic concept and wave a magic wand and it will disappear. We have a lot of debt. The population is aging. There is not enough people to pay into the system. The expenditures are blowing out of proportion. Give. Ing has got to the reality is the government is recognizing this as a pragmatic reality. How are we . Going to deal with this theres no magic wand. It is grow your economy, grow tax revenues, and try to cut expenditures. They have now decided to hike the retirement age which is going from 65 to 70. Erik a lot of the attention, if not all the attention in this part of the world is on hong kong. After that, on taiwan. What about japans geopolitical vulnerability . Kathy i think it is quite real if we think about a north korea and that threat that is very obvious. From a japan perspective, chinas longterm geopolitical ambitions, quite uncertain. Russia, japan is still technically at war with russia. There was never a peace treaty signed. There are lots of hotspots around in japan. It is theecisely why government pursuing the uncomfortable structural changes like getting more women into the workforce, embracing Corporate Governance anglosaxon style, like embracing technology. Before it was like now, we have allergic reaction to this because it will mean job losses in the future. Not anymore. I think they are beginning to embrace these things. Im not saying this is guaranteed for success but they are embracing these reforms because they know they have no other option. If they want to make themselves a little bit less vulnerable to these geopolitical threats, you have got to have an economy that is not an a, but is breathing and is thriving. Erik thank you so much for joining us. Great to see you. Sherri, that is kathy matsui, vice chairman of goldman sachs. She talks about women coming into the japanese workforce. That is a policy she helped to inspire with womenomics. Shery Erik Schatzker, thank you, are editoratlarge in tokyo. Plenty more ahead from japan. We will speak to chairman and ceo florence how and Financial Group president and ceo. This is bloomberg. Haidi you are watching daybreak asia. Hey check of the latest business flash headlines. Saudi arabia is said to be considering pricing its ipo at the top end of the range, confirming the sale of as the biggest ever. Bloomberg is told aramcos pricing shares at 32 riyals aps having marketed them at 32 each. 1. 5 ofabia is selling aramco and would raise more than 25 billion if they shares are priced at the top end. Shery saudi aramco ipo is redrawing the table in the banking world. Hsbc will enter the top 10 10 of equity arrangers in europe, the middle east, and africa for the first time in five years after barclays missed out on the offering. They had a general role and will ipo priceser the later thursday. Morgan stanley remains at the top spot. Haidi the owners of the new york mets are in talks to sell up to 80 of the Major League Baseball billionaire steve cohen. A deal would value the team at 2. 6 billion and it would take and he would take full control. Steve cohen is an investor in the mets and has a net worth of more than 9 billion. That is according to the bloomberg billionaire visit. Employees and Financial Firms across hong kong say diverging views on protests are fueling workplace tensions. This as unrest in the city continues to drag on. Our asia attack reporter joins us. It is really very interesting, the different ways that the protests in the unrest and malcontent on the streets has permeated every level of the academy and of hong kong society. Thats right. Personal political views that use to have no bearings on work is now taking on a new significance. The key challenge for hong kongs finance industry is that 20 of the gdp here and senior managers for the first time right now, they need to really balance the active being considerate and incorporating all the staff employees political views. At the same time, trying to not to get caught in the controversies. That is adding to the challenges of the slowing economy, slowing pace of dealmaking here in the city. Shery give us some of the examples we are seeing across the city, especially in those Financial Firms in how they are handling this. Lulu i think where we are hit most heart is among the state owned chinese banks operating in the city. We have seen incidences at a chinese banks where employees are saying they are feeling this pressure, analysts saying their soes,n so wes on feeling a direct pressure in the way they write their reports. Also at International Banks across the sector from bnp to jp morgan. Seen incidences where employees have had a divide on protests because the on. Have been dragging for months thank you. Our asia haidi haidi reporter, lulu chen in hong kong. Lets get a preview of what to watch and markets later this morning. We are seeing that. Sophie at least at wellington with shares not trading yet in sydney. Asian shares in new zealand rising. 5 . A two day drop as banks say there is no reason to raise Additional Capital to meet the requirements. When it comes to what we are watching later this morning, alibaba shares, the stock has been rated a new buy at goldman with a 252 hong kong dollar price target. That implies a 33 increase from the last price. Topping targets, which also have a buy calls. The data docket today, we will get inflation expected report, a tick up for november after slowing in october. The headline number will probably stay below the range and Consumer Prices are also expected to have highs in taiwan. Rising the fastest pace in five months. Indias bank may deliver a six straight rate cut with observers saying it is time for the r. B. I. To take unconventional policy measures failing to stimulate the economy. Shery coming up, Credit Suisse head of aipac Equity Research joins the show to talk trade in china markets outlook. Haidi that is just about it for daybreak asia. Markets coverage does continue. We look ahead to the start of trading in hong kong and shenzhen. Standby for Bloomberg Markets china open. It is almost upon us. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. It is 9 00 a. M. In beijing. Im selina wang. Yvonne im yvonne man. We are counting down to the open and mainland markets. David lets get here top stories. The u. S. And china are set to be moving closer to a trade deal despite heightened attention over hong kong heightened tension over hong kong. Yvonne japan announces massive 119 billion in fiscal measures. Selina president ial candidate Elizabeth Warren tells bloomberg she supports capitalism but the system needs shaking up. Im a capitalist. I believe in capitalism. But markets without rules are fixed. Selina the on trade headlines continues. Days ago, trump was saying he was lax on the timeline and was willing to wait until the 2020 president ial elections. Now markets are rejoicing over what looks like sources are saying likely to reach a deal before the december 15 deadline. The question is can they separate these human rights issues from the trade talks . David based on the latest story, and i have to emphasize that because these things are changing by the day, sometimes you dont know who to believe, it seems those two things might be able to be separate and distinct. I think the question for markets is how much will be the rollback . The rollback in tariffs, if it is included in the phase one deal. Theres that, we are also waiting for inflation out of the philippines which should come out. It is out now. 1. 3 for november. That is higher than the survey. Is not enough to actually make it hold . Yvonne the philippine peso, a stray coming on the back of those numbers. The trade headlines, the whipsaw. We are set for this rebound on the asiapacific. We are seeing upside when it comes to stocks. The nikkei 225. Up 7 10 of 1 . Not making up the losses we saw yesterday. We are set to hear from the japanese government on unveiling this massive fiscal stimulus package of up to 230 billion. We will see what that entails. Is it enough to offset the growth picture we have seen given the sales tax hike we saw earlier . Asia, lookingf positive. Watching yields. We were down about five basis points overnight. Up five basis points overnight. We have nearly made up half of the drop in yields we saw yesterday on tuesday. 170 seven right now. You wrote pound, two and a half year lows for this pairing at the moment. The sterling is continuing to strengthen ahead of the u. K. Election which is eight days away. The latest poll that suggests it could hold that lead. Watching the kiwi as well as they announced seven years for them to raise their buffers. Brent crude holding onto the gains. A Massive Movement when it comes to brent and wti, leading up to the opec meeting. Are they going to roll over the output curves or can we see deeper to cuts . A lot of questions ahead of that. David breaking news here when it comes to south korea. And japan. One of the sticking points was relationship. They will be holding an export policy meeting december 16 in tokyo. That is an 11 days. We have a date on what they agree on, we will have to wait and see what that looks like. Certainly good news that they are coming back to the table to discuss. December 16, mark your calendars. Su keenan is in new york and has an update for your first word news. Su we will start with u. S. China trade. The countries are said to be moving closer to a trade deal and this is despite heightened tensions over hong kong and changing. Sources tell us the two sides are near an agreement on the amount of tariffs that will be rolled back as part of an interim deal, adding that president trumps comments about waiting until the election did not mean talks were stalling. As he was speaking offthecuff. The Hong Kong Government has announced further stimulus measures worth more than half a billion u. S. Dollars, aiming to support businesses suffering from the fallout of six months of unrest. Nine new measures include subsidies for utility bills and waivers on corporate property tax rates. The total of hong kong Stimulus Initiative since june now amounts to more than 3 billion u. S. Dollars. They could banks in new zealand now. They are working at being they are being told to carry more capital as strengthen the financial system, they want lenders to raise capital by the equivalent of 13 billion u. S. Dollars. They are being given seven years to make that move. It is another blow to australian banks operating their which already have major financial challenges back home. Finally, nato leaders have wrapped up their 70th anniversary summit with a statement of unity. A few bumpy movements along the way. President trump canceled his own final press conference calling canadian Leader Justin Trudeau twofaced. This after a video appeared him to joke with other leaders at trumps expense. Emmanuel macron stuck to his message saying nato should discuss Strategic Priorities rather than how much each country spends on defense. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. Selina just want to recap the lines david mentioned when it comes to the relations between south korea and japan. They are said to hold at export policy meeting on december 16 in tokyo. At least we know the two sides are willing to meet. We will see if we get any results from that meeting. Any resolution. David certainly. Things like certainly activity has suffered between the two. The last we got was 95 plus percent drops in exports from japan to south korea. Southr numbers as well, korea to japan, plunge. Hopefully they can work things out and see a path forward. Thena time to improve situation in japans economy. Shinzo abe has announced a massive stimulus package to boost growth. The economy had been dealing in a slump in exports, a string of natural disasters, in the fallout from the sales tax hike. The fiscal measures will total 119 billion. Yvonne thats right. Japan set to be at the center of major developments in the coming year, bloomberg live, the year ahead event has kicked off in tokyo. One of our keynote speakers is jun ohta. He joins us live from tokyo. Thank you for joining us. Big news today in japan is the government is set to unveil this massive fiscal stimulus package. Tell us, what do you think you would like to see in this package to help the economy as well as the banks . Jun i think it is hurtful for the economy of japan. After the tax, there are some who are afraid of the economy. To stimulate the economy [indiscernible] this is david and hong kong. Im beside yvonne. Question,n yvonnes Interest Rates for the most part of the last 10 years and japan have either been at zero or below zero. Do you think lower rates have helped the Economic Activity pickup and how do you look at that, because you are also sitting with a bank and lower rates dont necessarily help your business . Obviously, it affects it negatively. Already have a negative effects. Deepen, it further theaffect negatively regional banks of japan. I think they should consider the policiesimpact of the before they make a decision. Sumie when it comes to moto banks revenue, a peak during the bubble era. Now you are facing difficulties, structural difficulties in the economy like an aging population. Also when it comes to the fintech adoptions we are seeing in the market. How do you think you should transform the bank after what we have seen here in the economy, as well as after the 2020 olympics . Think the sanction on the banks will remain unchanged. Whoever does that and how they will do that will be changing. Become ange it to to have that expansion in the future, we will change ourselves. In terms of revenues, we should pursue the top line revenue to increase the incoming 30 years. , it is quitemarket hard to improve the topline revenues. The energy for growth in this case, it is all vesely outside of japan. Selina in beijing. Yvonne mentioned those structural difficulties. You have a challenging macro environment, the economy is shrinking following the tax hike in the distractive typhoon. What are the concrete plans to continue to grow amid the challenging backdrop . Jun society is decreasing. It is hard to expect rapid growth of the economy. We have some demand that it will be increasing in the japanese markets. Cash risk is the annuity market. The total volume of the settlement will remain unchanged. The settlement will be changing, just like the automobile. All types of the settlement business will be disappeared. The business will be rising. It will be a new challenge. David right. Just to build on what you mentioned in trying to look growth, i wantor to clarify, what is your biggest market in terms of your revenues . What do you see as your biggest revenue markets in 10 years time . Jun we would like to expand our existing business, because the u. S. Is the biggest market for us. We want tohat, pursue the Economic Growth of that country. We have twoe, stories. The first story is the existing extension. The second story is to establish the new platform. Yvonne you mentioned about that. You started this whole Banking Service in indonesia by merging february. M this tell us about this business. What are the prospects now . Jun we would like to have the second in india. We will expand the commercial banking business. On top of that, we would like to look for the new opportunities of the business, credit card business. And then the other business. Selina in july, the bank signed to invest in softbank Second Division found. Where do you stand in terms of that investment . Now we have that ratio. Have the capital surplus in the coming years. The path used for the future for the business my we have two types of investments for the future. One is, as i said, improving the roe. For that purpose, we were investing in business portfolios, we return as much as we can. Is as i said, we would like to have future platforms on which we expand our business in specific countries. For these two purposes, we may consider the union investment. Just as you were speaking and we were asking you about the fiscal measures out of the japanese government, we now in fact right now know how large the stimulus is. We are talking total size, 26 trillion yen. ¥26 trillion. That works out to be yvonne about 235 billion. David u. S. Dollars. Your initial thoughts . That size of fiscal help from the finance ministry will help boost activity in japan . What is your point . David we now understand how large the fiscal spending measures will be out of the finance ministry. It is 26 trillion japanese yen. Your initial thoughts, sir . Huge. Think it is very david ok. All right. Jun [indiscernible] david i guess we will have to wait and see what the effects will be. A final question, i will ask you straight up. We talked about indonesia. Is there another bank anywhere in the world you are looking to buy . Jun [laughter] focus on, we like to countries where we can expect digital growth. Vietnam in the future, maybe india. David ok. Thank you so much. Looks like you will have a lot of traveling ahead of you looking at those targets. Jun ohta, Financial Group president and president group. We have the vics out of the pboc. Yvonne we have seen a little bit of drama when it comes to the currency. When you talk about the stocks and bonds in china, pretty quiet. Wake me. Yvonne some strength to the trade headlines. Offsetting the weakness we saw earlier this week. To talk more about that, we will talk about trade talks. They have been complicated by the u. S. And the bill to support chinas eager minority. We will speak to the researcher, adrian, about his report highlighting the situation in profits. Selina we discuss what is driving market optimism out of washington and beijing that are closer to a deal. This is bloomberg. Yvonne you are watching Bloomberg Markets china open. We are a few minutes away from the open of chinese trade. We are watching when it comes to the latest trade headline, it is all about that as we can down to december 15. Pretty quiet when it comes to futures here today. The big news today has been about the stimulus package coming out from the japanese government. Talking about that, ¥9. 4 trillion is the actual spending, according to the draft here. The extra budget is at ¥4. 3 trillion. Getting the breakdowns of what this full ¥26 trillion means. David dollaryen, 108. 92 right now. It is 26, year fiscal is 13 points. Half of that. The extra budget is 4. 3. The actual spending you have to read between the lines. It is not as if they come out with a big figure and that is it. 9. 4 as yvonne was pointing out, that is what, 83, 80 4 billion u. S. Dollars. We will have to wait and see whether that moves the needle when it comes to the economy. That is your market so far. Certainly the big use, despite this ongoing headlines on trade. Yvonne lets get to our next guest, erica poon werkun, head of asiapacific Equity Research. Glad to have you here on the program. How do you prepare for december 15 . Do you care or do you think you have to look past it and see what happens in 2020 and hold your breath . Erica first of all, nice meeting you. It is a pleasure to be here. I think obviously, we care about the december 15 because if we look at what the trade war has been affecting the economy, quite a bit, and if we look at the tech sector, i think one of the sectors that is most affected, we have seen earnings downgraded since late 2018. This is certainly an area focus focus and we should continue to monitor. I would say as a firm, we think the impact of with the trade war on Global Economy has been diminishing. Still there, but diminishing. The market continues to be affected by some of the gesturing, some of the negotiation between the two sides. Or what weeing are hoping for is some sort of a deal over the next three to six months. I think even within Credit Suisse, there has been this debate whether we are going to see a comprehensive agreement or deal. Going to see a mini quite interesting, i will point out that when we had our China Investment conference last month in shenzhen, we had about 1200 clients and guests coming to the conference. We actually asked everybody to vote and asked them, what do they think will be the outcome in terms of the trade war . Whether it is going to get better, going to be similar, going to get worse . Near mediumterm. I will let you guess. But basically, it came out one third, one third, one third. It is pretty dispersed. I think a lot of the equity markets have actually priced in that uncertainty. David there is probably maximum 10 people in the world who really know whether we will get it or not. We can speculate all we want. At the moment, what assumptions do we work on . A lot of people say we get a earnings recovery next year across asia. It is not contingent on a trade deal or does that take care of itself on its own . Seeingwhat we have been lets take tax as an example. This is an area where it is most affected by the trade war and we have seen any full earnings downgraded since late 2018. In recent months, we have seen earnings upgrade for the tech korea, china, taiwan, into a certain extent, it is a positive surprise as well. What we are seeing is the Global Supply chain for tech that is quite resilient. What we are seeing is we have got the 5g, the ramp up which is accelerating. We are seeing the price and the content related to 5g. That is on an upward trend for certain commodity parts. I think if you look at the operating leverage, that could potentially surprise on the upside as well. Of itviously, and a lot is depending on the oh can of the trade war, whether we are going to see more tariffs, if we are going to see a rollback of the tariffs. The prospectsre for chinese equities based on if those tariffs are reduced, shelved, or completely removed entirely . Erica you are asking about the prospect of china equities, should be should the trade war david i think the question was if we get a rollback, what will be the net effect on equities . Yvonne on how large the rollback is. Erica sorry about that, trying to get used too a voice coming through my ear. David it is not just you imagining it. [laughter] geta i would say should we a rollback by december 15, a think the market will react positively. Currently as i mentioned, i think the market is pricing in continued uncertainty, although we are looking for easing of the trade war, they geopolitical tension, and what we would see is the sectors that will benefit the most will be the i. T. Sector, tech sector, and the cyclical sectors including industrial, infrastructure, property, financial. Yvonne thank you. Erica poon werkun, stay with us for a little bit more from Credit Suisse, head of aipac. Staying with us. David feels like it is almost friday. Not quite yet. Thursday. A couple minutes away. In case you missed it, we were talking fiscal stimulus out of japan. Hong kong came out with a couple bullets yesterday. Have a look at this graph. We are talking in total from everything they have announced for june, about 3. 2 billion people in hong kong, in case you have not gotten your tax bill. You might get chances of that in installments. We will recap that later on. It is fairly risk on today. 9 10 of 1 . At 705. In on the open is coming up next. This is bloomberg. Yvonne you are watching Bloomberg Markets china open. Seems the u. S. And china getting closer to a deal. Of rbi, andns out that massive fiscal stimulus in japan. Markets are placing more dealt they will get a versus trumps comments is willing to wait. China,itive data for Foreign Direct Investment jumped billion. To 139 marketsook at mainland coming off the tailwinds of that positive sentiment. Indexes reversing some losses of the past few days. The shanghai composites volatility at the lowest level for two years in volatility. , one mainlandds stock that went public is a the firstuct stock to close the load listing price in seven years on its first day of trading. Down here. The offshore yuan, fixing steadily weaker. Broke the level. See howhave to wait to it reacts to trade headlines to. Headlines. David that tells you how dizzy we are following these trade headlines. Say is this much to is where we were on monday. Have a look under the hood. Rs. Ot of decline bernstein up there price target for tencent. We are tracking hsbc. Closed at a september low yesterday. A more broadbased rebound from yesterday. We will see where we go from here. Interesting take on that tencent call. This on the back of jp morgan trimming their exposure to tencent. Guest fromus is our Credit Suisse. The volatility in the chinese theets, despite drama in renminbi, why . , the hshareina equity market continues to be resilient, although trading at a meaningful discount to the eashare counterpart. Counterpart,re also the msci, the rebalancing keeping a lot of Foreign Investors interested. Inclusion hast , so thisre inclusion marketsing one of the where investors will have to focus. Within, consumer consumption sector has been very resilient in china. It is a global phenomenon. Showsst recent sales consumers to want to buy, although they may be looking for a bargain. We look at the Property Market are seeing quarters of restrictive measures hurting the overall transactions, but also some stabilization and bottoming out. That could be another area where we talked about earlier if we see the deal coming through, into thehat will spill more cyclical sectors. Bouncing off of the earlier have saidsome traders this is the result of Chinese State intervention. Do you buy that . If we look at the china currentlyrket, it is still retail heavy. At this point , moving upr 3. 4 gradually. As china continues to open the Financial Market and liberal , the liberalize Financial Markets will behave with global counterpoints. Mentioned some opportunities despite the macroenvironment, 5g in particular. Are there specific stocks you are recommending . Tech,we look at asia for for Credit Suisse, our team is looking for 20 over three years , more than double what we are expecting for the market, and a lot of the excitement is coming , and also the content upgrade. If we want to look for relative valuations, taiwan and china tend to be a bit richer. Korea at this point is showing good value, especially the memory space. Year, weoking into have seen a lot of reforms in the chinese ashare market. One is access to quality information. You are in Equity Research. What are the challenges in terms tryingand your analysts to get timely, reliable, credible information in these companies . Are you hiring . We have seen very encouraging er the last couple of years in terms of quality and oe andibility, both s privately owned companies have been doing more disclosure voluntarily. Some even have the function, so again, the market is becoming more institutionalized despite Foreign Investment only being at 3. 4 , but High Quality Companies have been prepared. It is an increasing focus for china and a lot of companies have been voluntarily disclosing that kind of data, but certainly getting regular access to information may not be as easy, so at Credit Suisse, we have used our team of researchers to do Grassroots Research to get more evidence to support or challenge our investment thesis. Yvonne thank you. Lets get to first word news with su keenan in new york. Investment in china remained strong, despite a worldwide decline in the emerging trade war. Was 1. 3 trillion in 2018, china rose 4 from the year before according to a United Nations report. The report also shows the asiapacific was the largest fdi globally. North korea has released propaganda pictures of kim jongun writing up a sacred mountainitehorse on a white horse. Protests resumed in beirut after the Lebanese Central Bank announced emergency measures amid the worst financial crisis in decades. Temporarymposed a Interest Rate cap on dollardenominated deposits, and 0. 5 percent on local currency deposits. Weeks of undress have topple the government and raise concerns they may struggle to pay bond holdings. Global news 24 hours a day on air and at quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you. Support ahead of talks in vienna. Ministers are set to decide 2020 policies and looking at an extension of curbs as the most likely outcome. Jim, what can we expect . As you mentioned, the expectations heading into the meeting are the cuts would be extended to the halfyear of 2020. I think that is still broadly the expectation, although the remains uncertainty over what they will be deciding this week. Iraq has said they would like to see an extension of cuts by raised barrels, which eyebrows given iraq is one of the members who has not keep into the cuts. Iraq pushback overnight. Is theing this understanding saudi arabia would like to see a bigger cut from what is already on the table. Demand outlook is pretty weak for the early part of next year with strong supply out of the deposits, so you can rule out the cut, but right now it just looks like an extension. David you cant talk about oil without talking about aramco. We are hearing pricing might be towards the top end . , that is the message overnight from people familiar 32 saudideal, 30 to riyals. Ofestors will be the bedrock support for this ipo. That would make it the biggest ipo in history and would value the entire company around 1. 7 trillion. They would like to see some upside in the share price once the ipo gets underway, but we should know the final price later today. David good stuff. Up, we meet a researcher whose revelations has put china in the west over odds on human rights and prompted the congress to act. This is bloomberg. Senate is attempting to stop impression and china has threatened to retaliate. Our next guest is credited with exposing the situation. Thank you for joining us. Billis your view on this making its way through congress, and does the increasing scrutiny actually change chinas direction in the region . Yes, always a big question. This important to look at from different angles. One is saying this is that doing this is necessary, the right thing for humanity, even if it doesnt change what china is doing and harming the interests of the United States from but what they are doing is the right ,hing, not only speaking out but taking action. They have gone a step above any other government in the world to move from naming it by its name to doing something about it. Opacityre is a lot of around the numbers detained in detention camps. It has been estimated there are as many as one million. What does your Research Show . I have been able to benefit from lead documents and other data sources that give us unprecedented insight into the the nature and scale of this atrocity. , looked at spreadsheets calculating the percentages of certainterned in regions, and consequently i increased my number estimated to 900,000 to 1. 8to million in 1300 to 1400 facilities. The u. S. State department imposed visa restrictions in october for chinese officials responsible for the detainment of the people. Companies fromd shipping products to these chinese surveillance companies. This latest bill, how far can it go . Is globalest bill for thosesanctions significantly involved in this , the main culprits are named in the bill. It is next level up. The previous actions were taken by the state department. Ma is mandating the administration across the board to do something about it. Magnitsky sanctions were discussed before. Treasury has to ok it because of the implications. They were resistant because they prioritized the trade deal. Are bill means lawmakers rights of theman weakest above the treaty. David do you think it eventually makes the chinese perhaps adopt somewhat of a different policy from what is going on right now . Does it move the needle . Yes, that is a good question. This is unilateral. It is coming from the United States, a government and country already in a trade war with china. Some speak of the beginning of a new cold war. The chinese have no option to back down, because if they did, it would be seen as a sign of weakness. What we really need is a multilateral approach and the involvement of the european union, especially nonwestern belt andts, from the Row Initiative countries that beijing is seeking the court. The main difference here will with databe made weeks because governments in europe have had media requests put to him, so they have to come out and say something. They are saying this has to stop and measures have to be taken. I think we are seeing a tectonic shift. The cost of not speaking out on this moral issue is increasing by the day. The New York Times published hundreds of documents detailing the policies of the government and set the leaker was part of the chinese political establishment. What does this say about the internal dissent within chinese leadership . Whether theondered chinese officials are simply going along with this atrocity. The list clearly shows there is more dissent than what we have known. Been ine resistance has a lackof implementing, of following through as hard as beijing at has demanded, but even passive resistance is dangerous. There is one case of active resistance were a county chief released 17,000 detainees cannot make my i targets if all these people are placed in camps. He was heavily punished as a result. It is interesting insight into the workings of a very large and notoriously difficult to control bureaucracy, and it will be interesting to see how much longer china can push through with this internment without more passive resistance on the ground. Thank you. Warrenup, elizabeth wants a rethink on how the trade spat with china is handled. We hear from her next. This is bloomberg. Warren isizabeth calling out donald trump on his trade policy. The president has no plan. You have a plan. What is the Elizabeth Warren plan . It is saying we need an overall strategy. Trade is about tariffs, but not just about tariffs. Much about regulation as is about anything else. I want to see a coherent plan for anyone who wants access to american markets. I want to ease up so our farmers being squeezed like they are now. The third part that is important to be working with our allies. We want to trade deal with china that is favorable to the u. S. , but lets not declare a trade war on canada, our asian allies, european allies. Lets get everybody to Work Together to get china to follow a reasonable set of rules on trade. To wait outhoping the Trump Administration for a worn administration, you wouldnt lift the tariffs on day one . We cant do this as a one off. We need a coherent strategy that works with our allies and makes clear where our longterm interests lie in trade. By one to see i want to see trade occurred in a way that is helpful to the american worker, the american consumer. Donald trump is destroying markets in value around the world. Which you tied chinese human rights abuses to a trade deal . Again, working with our allies, we should be putting pressure on china, and part should be diplomatic and part economic. We need to use all the tools in the toolbox. Elizabeth warren talking to Joe Weisenthal earlier today. The foundermberg is and majority owner of bloomberg lp. Now for a look at markets. Asia,across the board in bouncing off the trade optimism. David . David pretty much looking across the screens, volumes are low. Indonesia opens at the top of the next hour. This is bloomberg. Why doesnt wall street Value Airlines as much as you think they should . Guysarren buffett said you are the chicago cubs of the business world. You had a bad century. David you went to fritolays . Ed i consider that my postgraduate work. David what percentage of people lose luggage . Ed mishandled. David mishandled. [laughter] would you fix your tie, please . David well, people wouldnt recognize me if my tie was fixed, but ok. Just leave it this way. Alright