Through. The 10 year yield in japan did move above the 0 level for the First Time Since march. Copper is on a good run, for a fourth session. Above the 200 day moving average. We will talk about iron ore a little later. 90 per barrel, for a metal that cost why dollars to dig out of the ground, this is looking overvalued. Rishaad the Indian Trading nifty session on monday ekeing out the smallest gain, 0. 1 . Do we see more movement to the upside . The rally has ground to a halt. There were big names driving the benchmark to the upside. Futures contract at the moment, a flat start, slightly under pressure. The rupee continuing to strengthen on the back of the surprise decision not to ease policy last week. We have seen the currency appreciate since. Bond yields continue to lurch lower, pushing up yields. We are still factoring in more rate cuts. 10 year lets join su keenan in new york. She has the first word news. We start with the rba governor was saying he is surprised australias wheat thirdquarter consumption, but does not think it points to a sag in spending. The savings ratio jumped. The governor says too many people have too much debt. When that comes down, he thinks they will start spending. The surprise was the weakness in consumption growth. In the september quarter, households they get a boost in income from lower interest rates. The surprise was the consumers decided to save that extra income. On a trade deal in north america, u. S. , mexican, and canadian officials expect to sign off on changes to the usmca trade deal later today, despite lastminute doubts in washington. It seemed the deal was closer, then House Democrats on the verge of a handshake deal, then nancy pelosi said nothing has been agreed to. Now u. S. Trade representative Robert Lighthizer will fly to mexico with canadian officials expected to join the talks. Hong kong is facing its worst ever economic slump, with thousands of jobs under threat, and shops preparing to close forever. The Retail ManagementAssociation Says a third of respondents are laying off staff. More than 40 expect to go out a business in six months. Many months of unrest have pushed hong kong into recession, hitting retail, tourism and hospitality especially hard. Saysese finance minister Prime Minister shinzo abe should not rule out a fourth term in order to achieve changes to the constitution. Is japans longest serving, and has said he will step down in 2021. Beal media was told it would difficult to bring changes to a National Referendum in that time, and the Prime Minister should consider to hang on. 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 su keenan. This is bloomberg. Juliette inese as chinese inflation accelerated, and extended run of declines copper case the pboc efforts to support the economy. Lets put this into perspective with our next guest, dr. Shaun roache, chief economist, apac, s P Global Ratings singapore. We have that inflation chart, momentume one showing in terms of factory inflation, it could be holding up. How does the pboc help to stimulate the economy when you have cpi at a sevenyear high . Dr. Roache the pboc will look to have doneem that. It you are pointing to the real key issue, underlying inflation is weak. Core cpi excludes food and energy, that is below 2 and has been persistently weak. That is important we think about that it stress and other issues that could come to the for next year. Come to the fore. The u. S. In china continued accomplish kate issues as well. Complicate issues as well. Dr. Roache we do not see any resolution soon. The need the surface we have seen things go in reverse despite the headlines about a mini deal. We are cautious about what will be happening. Juliette what does that mean for your forecast and what we can see for asia in 2020 . Aheadare a lot more risks rather than upside . Dr. Roache i think that is right, but with no disasters and you look at the u. S. Economy in a good place, europe is doing ok , china is slowing and will continue to. We have uncertainty with the u. S. And china, so it is an environment where growth will be below trend and inflation will be low. It is disappointing, but we will not see any hard landings next year. Has generallyh been below trend since the financial crisis. Normality,haps the but is there any part of the world you are most worried about . Dr. Roache at the moment, if you look in asia, we would think china has the most challenges to solve next year and in the mediumterm. That is still a problem with the laborment is trading off market stability and the ability for the economy to remain stable against many of the legacy problems that it is struggling with in terms of debt. It china is close to the top of our agenda, we remain watchful. And as well india has risen to the top of the agenda where growth has surprised on the downside. We see different policy issues. Policy, the transmission to the real economy is weak, and that will not be solved quickly. On fiscal policy, there is not much space to do anything. We could be living with a sluggish Indian Economy for a while. Rishaad i want to talk a little bit about india, they could have cut rates but decided not to. What in your view is going wrong with india . We see demand falling off. What are you seeing there . Dr. Roache a couple things in the household sector are interesting. As private investing remains weak, that has started with hiring and jobs growth in the rural and urban areas has started to slow. After a long period where household saving has been declining, they are less optimistic about job prospects going forward. They have run down their settings for a long time, and we are seeing consumers pullback a little bit. They have been important to the indian growth story. Rishaad absolutely. Pointless to discuss Monetary Policy with a country that has the economic structure of india . People do not have mortgages, they do not take out loans. Monetary policy is only helpful for Corporate India in many ways, and in defense of what is going on with the currency. Dr. Roache i think that is right, Monetary Policy will only hit certain parts of the policy. Fiscal policy in india has to be more effective. The government is running out of space because it has debt issues , it has committed the Fiscal Consolidation over the mediumterm. While fiscal policy can help, they have handcuffs in terms of what they can do in the near term. Juliette what do you think needs to happen from the australia governor . The australian economy has been holding up better than others, but growing at a slow pace. What do you think you are seeing in the australian economy, and do we need to see rates lower . Dr. Roache we will probably see the rates lower sometime next year. One of the key issues with australia is jobs growth has been robust. The Unemployment Rate is grow. Is low. Part of the puzzle can be solved by looking at underemployment. They are the people who have a longer want to work hours. A lot of jobs in australia are parttime or temporary, and they are lower quality jobs, they have fewer benefits and are less secure. They do not create confidence the old jobs used to. That explains in part why consumers are reluctant to spend , particularly in the housing market, although it has stabilized a bit. Juliette dr. Shaun roache, chief economist, apac, s P Global Ratings singapore stays with me here in singapore. Iron ore is on a tear on optimism china will keep demand going. We will discuss a wild year. Rishaad Global Markets in a Holding Pattern ahead of crucial centralbank meetings, and the weighs evenine further. This is bloomberg. Rishaad we are watching a couple of big events this week. The tariff deadline december 15. Chart that shows us how it is unlikely we see december as a month for the Federal Reserve becomes more dovish. Will they stay dovish through 2020, and are there any asset which are looking at another rate cut in 2020 . We think the fed set the hurdle quite high for changing in either direction. A seam neutral and data dependent. Based on our forecasts, we expect growth to go to 1. 9 next year, close to trend and inflation will get close to the target level. The u. S. Economy is in a good place and there does not seem motivational need for the u. S. To do much. Get much worseo to see a change in any direction. Then we have the trade war on the other side of that. The 15th of december is the deadline, what is your feeling on this . How important is it to get it pays one trade deal done . Or is the analysis you are doing thishaps it is looking at state of affairs as the status quo . Dr. Roache it is definitely important for market confidence. If we do not get a deal december 15, some signaling given that a , hopefullyely at q1 early. That is important for market confidence. The the fundamentals, more important is how these relate to technology, and if anything, we seem to be going in the wrong direction on some of those issues. That will keep Economic Policy uncertainty high, because we may see further measures from the u. S. Related to the Technology Sector in china next year. That will reawaken fears and iscerns that this issue nowhere close to being put to bed. Juliette there has been readiness trump policy makers to act, so it should not be too dire. Dr. Roache extreme escalation seems to haveside been reduced and is reflected in the market pricing. The more broadly, if you look at Structural Technology issues, they are the nerve of the issue. Some actions appear to be taken in china in recent weeks and months take us further away from a solution rather than closer. Juliette i want to get your thoughts on former Federal Reserve chairman paul volcker who died of the weekend, and pushed big regulations after the financial crisis. Dr. Roache very sad news. He left an important legacy. His most important legacy was that he did recognize that for many other people Inflation Expectations were key to stabilizing inflation, and stabilizing an economy, and allowing Monetary Policy to work. He took the necessary actions in the 1980s which were costly, but in hindsight worked fantastically well and provided us for three decades were Monetary Policy in the United States was incredibly effective. You, dr. Shaun roache, chief economist, apac, s P Global Ratings singapore. Coming up on Bloomberg Markets asia. Spendarabia expects to saudi aramco proceeds on the domestic economy. This is bloomberg. Juliette saudi arabia has unveiled a Fiscal Program that marks a shift away from stimulus that helped Economic Growth to the fastest since 2015. The finance minister spoke to bloomberg about the saudi aramco ipo. 2020 is an exciting year if we continue to access the success we have. Revenues as announced today take into consideration the likelihood of what we will get the factoil, but also we have been successful in expanding and growing revenue to levels we have not seen before. Yousef would it be fair to say you are making an assumption of an oil a Lower Oil Price going into 2020 . 2030 is was a vision about diversifying the economy and revenue. On it, threerk years ago, a lot of effort to bring sustainability to our revenues. Saudi arabia and their partners in opec to bring stability into the market. Leave where does that the ambition of achieving a budget balance in 2023 . That continues to be the inget that we will achieve the midterm. A specific year is not a specific target. Budget, deficits in the are dropping below 3 . That will enable us in the midterm. Yousef how will the ipo allocate the proceeds from the saudi aramco ipo . They have their own board and they are clear on asset allocation, and a lot of their allocation go into their economy. Sectors that are promising and large, large investment that the private sector cannot invest in on their own. Our conversations would not be complete without looking at your funding plans for 2020. Are you going to be tapping the International Bond market . Most likely we will. The local and international markets, we will look at the market conditioning government financing. Diversifyke sure we the borrowing. It all depends on the market and our needs. Definitely we will. Rishaad the saudi finance jadaan. R mohammed al the latest news flash headlines , a part of an efficiency drive with losses in tech and operations. The cuts run at about 2 of the banks work in new york in london. And Deutsche Bank also eliminating hundreds of jobs this year. Management. Ling its it is replacing its Top Investment banker, the chief operating officer and the chief risk officer with announcements coming ahead of the widescale restructuring next year. That plan may show a focus on asia. Starbucks chief executive officer could be set for a 50 million cash bonus if the stock companiesof s p 500 over the next three years. His payout will be reduced and eliminated altogether if it is less than 40 of its peers. The chief operating officer has terms, highcaliber leadership. Have a look at one Company Making waves and has become juliettes stock of the hour. Slumpte we are saying a in this drugmaker from korea which produces a lot of pharmaceutical products including anna biotics, and beverages. Says they will end their Diabetes Research to focus on other areas such as cancer, and that has seen the stock fall as much as 11 . You can see it down 6. 5 at the moment. Ceo it is down 36 on year. When it comes to broker recommendations, it is strong on the korean pharmaceutical stock, 17 buys, but having a tough day today on this news that apple enddiabetes that it will its diabetes coverage. That is not pleasing some of the investors. We are pretty much where we were before. 2 . Nes to about their stronger inflation reading than anticipated. Youre looking at live shots of my hometown of sydney. Bushfire smoke continuing to smother the city, setting off fire alarms in the city and suspending very services. We are seeing the air quality index compiled by the New South Wales state Environment Department reach as high as 2500 52 in some of the Eastern Suburbs of sydney. That is way past the hazardous threshold of 200. It has set off smoke alarms in Office Buildings are crossed buildings across the city. Of 1 . 200 down a 10th lets get the first word headlines with su keenan. Su we are going to start with the latest. We will begin with russia and ukraine who say they are committed to a ceasefire by the end of the year after talks with paris. The conflict in Eastern Ukraine has claimed at least 14,000 lives with russia annexing crimea. The meeting between the leaders of russia, ukraine, france, and germany also secured agreement on a full Prisoner Exchange by the end of the year. Rose the mostts in more than a year on a higher demand from china. Highlights the status as a crucial chip supplier in the rollout of 5g. Shipments climb to 3. 3 last month. Sinces the fastest pace october of last year. Economists had been expecting an increase of 1 . To russia now, where president Vladimir Putin is dismissing a decision from the World Antidoping Agency to ban the country from the olympics and other International Competitions for four years. Oficials are accused fabricating it isir putin says politically motivated and russia has the right to appeal. The defector leader of myanmar is said to appear at the International Court of justice in the netherlands. This, to defend her country against charges of genocide should myanmar charges of genocide. Of carrying out the rape and murder of thousands of muslims and forcing hundreds of thousands more to flee to bangladesh. As many as 13 people may have been killed in a volcanic eruption in new zealand. Injured. Re were five deaths have been confirmed with eight more people unaccounted for and a total of 31 have been treated at the hospital. The injured and missing include local people as well as tourists from around the world including australia, the u. S. , britain, china, and will asia. 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. Lets take a look at asian markets. They are in a Holding Pattern. No major developments on the trade front. The major focus for investors is the fed decision from the ecb. Andcan see hong kong japanese markets unchanged. A little bit of an upside. The asx 200 is down by almost 2 10 of 1 . One been focusing a lot commodities. Crude prices at 58. 96. Goldman adjusting their forecast. Everyone seems to be at cold at the moment. Colluding an investor who says, if he were to invest 100,000, 10 would go to physical gold peered copper, physical gold. Copper, above the moving average in london. We have seen a spike up in the shanghai futures. A little bit weaker on the lma. Rishaad lets keep the commodities team. To keep growth in the reasonable range and to strengthen spending on infrastructure. It will pursue other structural reforms. Ill admit external threats to growth. Our next guest runs the irc. It is the chairman of the company. He is with us right now in hong kong. What a roller coaster ride we have had for iran roe for iron ore. We saw it take down again. The arrival of greater option ding and rater liquidity and greater liquidity is one of the reasons it is looking strong today. From our point of view, the big 65 ge in the value of the highgrade concentrate, which we produce, that premium is back six to 10, 12 and forecasts rishaad in simpler terms, what is your breakeven cost . Around 50 something dollars a ton. Rishaad a comes against the backdrop of, is it a supply or demand constraint . Changeink the original was the said things that happened in brazil. That made people concentrate on ron ore. The Chinese Market has strengthened again. They areng looking very good about again. Is truly inter, it singapore. I have a chart showing the spike you were talking about. We had an interesting comment from one of our strategist metalday saying, for a that cost 200, this is way too high of a price. Are you worried about the prices . It is not caused us to get 20 out of the ground. Juliette what is it cost then . We are talking about 50 some dollars a ton. The big difference is port then to transf iron all the way over here. Of course, as you have been mentioning, the forward curve suggesting it is likely to move. What about in terms of seasonality and the impact on prices . That is what we are seeing. Causes a pollution uptake. People are less willing to produce iron ore. The highgrade material is less producing. That is what we produce. Juliette are you seeing any impact as well when you look at some of the other aspects of your business such as health and safety and how that factors into your cost . We have run a very Strong Health and safety ethic throughout the group. It has worked very well. We have had very few problems point of view. I am grateful to our team for achieving that. Rishaad i want to get to your business itself. Tell us about how you have these mines. Where are we with that . People suggesting k s could achieve 100 capacity. You have the chance of increasing that capacity substantially. It did not come out of mothballs. It is being wound down completely. We rishaad even with the prices we have now . It is a complicated mine it is harder to produce than k s. Been producing over 100 of its capacity. That looks all good again. We had a bit of a disruption with the heavy rains and a october, which caused rains in october, or november. That is 10,000 tons a day of concentrate. It is a big business. Violate you talk about having to ship all of their materials. Have thisoing to bridge that was meant to be opening up. This is it still is. It is about opening. Rishaad is it really about open . It is about to i am told. Rishaad leo you promised me this time . Will you promise me this time . Certainly not. We are exploring seaborne exports to china. By putting the material on the railway and to the sea and shipping it down. Relatively small 20,000 ton boats. We can get up the rivers where big ships cannot get paid cannot get. We went to open up our Customer Base that way. Once you are a new producer, you only have relatively small amounts of stuff to produce. You have one or two consumers. In, we are producing nameplate capacity. We can supply a far broader bunch of consumers. The for i imagine upsides in terms of the belt and road adjective in china. About some of the downsides or headwinds you are seeing as you go into 2020 . The impact of the u. S. China trade war for example. It has not helped us. We do not need capital at the moment. The trade war is definitely annoying, but not pivotal. For a change, we are in quite good shape. I feel much happier about the business than i have done for a long time. Juliette thank you so much for joining us in our hong kong studio. Coming up, the results of the 2020 u. S. President ial election looming large for geopolitics here. We are covering the biggest global risk. This is bloomberg. Rishaad the u. S. Election campaign will have a palpable effect and impact on geopolitics next year not only because of the but also because it adds uncertainty for countries and businesses around the world and in asia. That is according to a new report from the global risk consultancy. That is the broad level of analysis. Give us an idea of what you are thinking. The electoral cycle in the u. S. Is one of those things that can affect Foreign Policy and can affect companies in this part of the world. What we are seeing is that in order toump may, bolster his electoral prospects, does something a game changer what people perceive as a game changer. Might a deal with north korea. Iran. Ht be with china or into the environment operating globally but particularly in asia. Rishaad we have had a situation where this has been building ever since the beginning of the presidency. It did not carry the house or the senate. Now, he seemingly has created a situation where they are in some ways, even more hawkish than the executive branch. The point being, how does that play in terms of being eight phase one being a phase i trade deal. One of the other wrists we have talked about other risks we are talked about as tactical leadership. You can see him going for something that he thinks will benefit him in an electoral way. Every something that is more strategic. The mood in the u. S. , not just in congress, but across government and in some business sectors is what you might call antichina. Certainly the most antichina we have seen in a long time. The other side of the potential agreement is the china side. Does china think they can get a better deal from him, or do they possibly wait until there might be a new occupant of the white house . Whose side is time on . It is probably more on china side than President Trump side. Juliette you talked about tactical global leaders. Are twot trump and xi big personalities. What about in terms of some of the other leaders . They are dealing with everything that is happening from these two superpowers. The tactical issue is not unique to the United States. Ec in the u. K. , parts of europe, and across the developed and developing world. Asia is a bit of an outlier in that respect. In asia, the leadership is the only on the second or third terms, but also pretty strategic. You think about china, japan, india, vietnam, the leadership has a program. You can argue about how effective it is, but they have a multiyear vision. They are not driven as much by the next electoral cycle or vote. That goes to stability. That is good for investment. It is good for corporate. If you look at the way the economies are growing, you see that reflected. Generally speaking, a group of longer serving leadership surrounded by economic technocrats. We also have a lot of natural disasters happening. We are just seeing the awful photos of sydney. Howconcerned in terms of you can control as much as you can, the risks in the environment how that plays into leadership as well . Last year, one of our top risks was the effect of climate on policy. You see it playing out in different ways. One of the things we have seen already but will probably see more of is the social activism. You see this across the world as well. You will see climate change. You will see that playing a greater role in the social activist space. Something that corporates have kind of been behind the curve on. It is about governance. It is about how you message. We expect to see those climatic issues being of greater focus on some of the social activist movements across the globe. Rishaad i want to get back to what is going on with the electoral cycle. We much are we in stasis as await and watch what is going on in the race for the white house . I am talking the global sense as well. You have the one half, which is the trump have. And then you have a real mix on the others of the political spectrum. Kind ofot have one theme. You have economic populism on the part of the Democratic Party. Taylor Lee Elizabeth warren. They have kind of stolen particularly elizabeth warren. They are pushing that. You have other people pushing a different agenda. It is still unclear as to who is going to triumph in that space and which measures will be the resounding one. Which message will be the resounding one. People forget that President Trump was a democrat his entire life before he ran for president. Michael bloomberg was a republican mayor of new york city. Now, he is running as a democrat. It is an interesting flux to see these things. The personality becomes more important than the party label. To answer that question of who would xi jinping like to see in the white house next year . Right now, our thinking is he would probably prefer the trump administration. What they see is, it is a devil you know. He is not, it is as effective as the messaging would lead one to believe. If you got an elizabeth warren, that is a wildcard from a china perspective. To your point earlier about how this sentiment has come across congress and the aisle with respect the parties, the Democratic Party could be much tougher on china. Human rights for example. The republicans might be. We think xi jinping and china in general might prefer to deal with trump 2. 0 rather than somebody new they have to figure out all over again. Rishaad thank you very much. Indias market just open. Lets get to mumbai. We may be looks like seeing this Holding Pattern happening in india, similar to what we have been seeing across asia today. That is absolutely right. So far, it has been flat. Yesterday, we swung both ways paid we opened in negative, and there was some buying coming in at lower levels. This week is also where Indian Markets will be dependent on some data we will be getting this week with regard to cpi. The u. S. Fed will be coming out with its outcome tomorrow. That is going to be the key thing to be watching. Stocks are mildly outperforming. The nifty bank is seeing gains of nearly 31 points. Ended the daybe off of the day low. The entire list was on negative. Tell me about yes bank and some of the other stocks you are watching. Yes bank making these headlines that could see it reject and financing. How is it seeing it play out. The stock continues to be in focus. Today, there is a board meeting. The bank announced there were some investors who had interest and a putting interest in putting some money. This bank requires some cash injection. Wills board meeting, we get to know whether the allotment happens. Whether the approval comes or not. Bloomberg yesterday reported the board is likely to rigid 1. 2 billion of her, which came from sgp holdings in canada. The announcement that came in regard to cash injection. The stock has opened. It is down two and a half percent. Some positive hues coming in from here omoto. Price hike will come in across. We want to downgrade from a brokerage. They cut to 2130. This particular stock is down 23 so far. Rishaad thank you. Us from mumbai. Next, a a via up vietnamese auto. It is something that even honda could chief. This is bloomberg. Rishaad we are back. Looking at vietnams richest man kidding he is founder of the fast. Tart up, vin reporteromberg senior for Global Business in asia. Who is this man . How big of a gamble is it . He is vietnams first original billionaire. Now, he is worth about 9. 1 billion dollars. He is very reclusive. He is very shy. The not like the shop spotlight. He only gives one interview a year. He told us he is willing to pony up 2 billion of his own fortune to invest in vin fast to bring vietnamese made cars to the u. S. If he is able to do it, he will have bested tioga and hyundai bested toyota and hyundai. He has an uphill battle. Juliette a huge uphill battle. Why does he think he can do it, and also tell us about the car because i understand you gotta drive one. Thee is known as businessman who does impossible feats. He made his first million in the ukraine, selling instant noodles. He thinks he can adapt the approach and make americans look at a vietnamese made car and a different way. I was really skeptical about it. I got to test drive their sedan. I was really pleasantly surprised. It was a nice smooth ride. It felt really spacious. There were lots of premium features. You see on the screen that they have a touchscreen dashboard. Od paneling. Ce wo for a lot of people who are not expecting a lot, youre pleasantly surprised with the experience. Juliette i am very jealous. I cannot member the last time i drove a car. Of course, we have been seeing a Holding Pattern coming through in asian equity markets. Today, we saw the indian open. It is pretty flat. That is it from Bloomberg Markets asia. Bloomberg daybreak middle east is 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 wifi up there . Uhh. 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 local xfinity store today. Taylor i am am taylor riggs in San Francisco and this is bloomberg technology. Coming up, opening statements. Lawyers for tmobile and sprint off to court monday to fend an antitrust challenge. We will have details. Plus, cleanup crew. Goldman sachs arranging a massive line of credit to help revive one of softbank