Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

In hong kong demonstrators clashing with police. Doubts grow over Masayoshi Sons investment record. Topics question his strategy after a series of expensive setbacks. Desktop banks question his strategy. Staggered open, not seeing a huge amount of action. We are up. 1 . Looks like a positive day rolling a flat close of u. S. Equity markets friday. Good news from the u. S. China trade dispute, seems to have been priced in. New zealand has been flat all morning. Seeing modest gains for nikkei futures as well. By s p is pointing higher. 1 . We have also had out of economic the midyear and fiscal outlook. The surplus budget is falling, narrowing a little, same story for the following year and the growth forecast, the government trimming. 5 . A lot of data out of china. We will have new home prices, fixed assets, Industrial Production among others. Later on we are joined by the australian finance minister. He will be joining us on daybreak asia to discuss the budget and a look. For now lets check in on first word news. In india protests against the new citizenship law directed in new delhi with buses set on fire and parts of the subway system shutdown. Demonstrations spread from the eastern state. They also forced the postponement of a planned visit by shinzo abe. New law thatpose a grants citizenship for undocumented migrants based on religion and bars muslims from applying. The International Effort to rein in fossil fuel pollution has stumbled after talks weakened language agreed to in previous years. Delegates left madrid after two weeks of discussions, agreeing only on the urgent need for deeper cuts to greenhouse gases. They shelled work on Market Mechanisms shelled work on Market Mechanisms. Smogstralia the choking blanketing sydney is called a Public Health emergency by a group of doctors and researchers. Air pollution throughout the city and eastern New South Wales is 11 times greater than the established threshold for hazardous levels. As of sunday morning there were 106 bushfires in the state. 57 were burning out of control. A heat wave in Western Australia is expected to move east this week. And English Football Club arsenal is facing backlash from china after one of the top players attacked the treatment of weaker muslims. Uighur muslims. They tried to distance themselves from the remarks made by the star player. Earlier the nba was slammed after an after an executive showed the port for prodemocracy and showed support for prodemocracy in hong kong. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. This is bloomberg. Kathleen the u. S. And china have agreed to the first phase of a broad trade agreement, bringing some calm. Tom mackenzie is in beijing. When you look at what the u. S. And china are saying, what can we tell for sure . The we are waiting for details. The lawyers are going through the text. Robert lighthizer has said they are looking to sign in early january. Uri to suggest in terms of the details they are few and far between. Is fromknow is focused the chinese side. The threatened tariffs for december 15 of another 160 billion, they have not come into play. They have been taken off the table. You had a commitment by the u. S. To cut in half from 15 , tariffs from 120 billion of chinese goods. Tariffs relief, even 25 tariffs made on a larger block of chinese goods. They could use it as an enforcement mechanism. The chinese are preparing to purchase an additional 200 billion worth of goods and services from the u. S. On top of the 187 billion it was buying that is according to Robert Lighthizer in terms of the chinese commitment. We have some commitment around intellectual property, transfer and currency but we are waiting for more details. Lighthizer saying the negotiations should happen in early january. Trump has suggested they will move quickly to phase two but we dont have any dates. That is where the tricky issues of state subsidies and industrial policy come into play if they get into those second rounds. Mean for what does it the chinese economy . At least the summer 15 tariffs are not going in. December 15 tariffs are not going in. Tom it is about business sentiment. China is hoping it makes it easier for them to meet the goal juggling 2020 of doubling gdp. It could go some way to helping the meat that goal. They will meet growth of 5. 9 to achieve that. Bloomberg economics saying in terms of monetary easing, the policy response, it is less urgent now the pboc to step on the pedal in terms of aggressive easing now you have this phase one trade deal out of the way and the prospect of further retaliation and breakdown from the trade front looking less likely. China is threatened to retaliate against germany if it bans huawei. One of the details . What are the details . Tom there are still questions with security and particularly in germany. The ruling relation is divided on this coalition is divided on this. Merkel and her minister say there should be no laws that ban huawei, but some of her people are concerned about the security implications of huawei which the Company Denies any links to espionage and concerns around cybersecurity. Some of the Coalition Partners are pushing through legislation which would ban huawei from germanys five g network even if it doesnt name the company. You get the ambassador to germany saying if it happens and goes into law, we will be forced to take consequences. They will be forced to retaliate. He said china is the largest market for german automakers. Something of a veiled threat as the germans get their heads around how to deal with huawei and of course many European Countries do as well. Paul thank you for joining us. The associate director alice brown. Thank you for joining us today. Lets talk about the trade deal. It is great to have phase one done. Very muted reaction on u. S. Equities markets. In australia we are up. 4 . . R people being cautious are the people being cautious . We had cautious gains. This was anticipated since october where we knew they were working on this. It covers a number of items. A lot of the more complex issues, significant issues andnd intellectual property subsidies to stateowned firms will be a part of phase two. There will be some uncertainty on the table. That is why we havent seen much rallying in the u. S. Market. Paul is there a seasonal aspect of this . There has been but the largest story is the pentup investment demand because we have had two major issues and uncertainties on the table for over a year, that being brexit, which we got certainty around with the conservative majority taking power in parliament and u. S. China trade war. So that we have avoided the most worstcase scenario which would ,ave been escalation of tariffs is a positive. There is more demand as business comes back to the markets around the globe. Question regarding actual investment, i am a company. Am i going to get into . It is one thing to buy shares, but i wonder if the absence of how bad the brexit could be or the trade deal could be is enough to bring people back to looking at 2020 where we say i am ready to get off of my chair and really send investment to the economy to help it grow more . You are right. If we think of the u. K. , we can say the heavy toll that has had, it is growing at the slowest pace in eight years. The businesses have delayed their investment decisions. Certainly the initial hurdle that is being passed is a positive, but there will be more in the year ahead. We know that the government has until next december to negotiate the future relationship with europe. Even that deadline is relatively short. It is quite optimistic to believe that will be the case. We might see an extension. It will take some time for businesses to feel more confident. Overall we expect to see a resurgence in Global Trading volumes over the next year. That is why there has been talk of a Global Recovery unfolding. Kathleen the federal Interest Rate reserve bonds was widely telegraphed. There was data and the emphasis on the consumer being strong. Nevertheless consensus on the docks that represent the fomc forecast, the vast majority say we are not going to cut or hike next year. How does that factor in to your outlook . The u. S. Economy throughout the trade war has proved to be very resilient and robust. That is because unlike china, they are not reliant on exports. Gdp is made up the gdp is made of domestic consumption. Consumers have remained strong. That is cause for the Federal Reserve to indicate rates will be on hold throughout 2020. The next indication they have given is an Interest Rate hike in 2021 all the seem more skeptical. They are pricing in one Interest Rate cut next year. Overall it provides a supportive environment for businesses and american households to continue feeling confident. They have got a record low rate of unemployment and steady growth. We are going to continue to say the economy is expanding in its 12 year next year. That is really why in terms of investment we are still comfortable investing in the u. S. Market, although we need to be selective because it is expensive. We want to be looking for companies that are innovating at disrupting executives. Paul i want to get your thoughts on a straily of. On australia. We are seeing a big runup on the asx. You are cautious. We are. With the government, they have trimmed their Budget Surplus estimate. Expectations on growth, wages growth. A big really seeing disconnect between a strong share Market Performance and very gloomy economic act drop. That is really what i have spoken about the u. S. Consumer, if we compare that to australia, here is a lack of confidence by businesses and consumers. That is because households are preparing to save rather than spend. We have seen that pick up. Sadly it doesnt appear to be the case there is any momentum. That is the reason we are cautious on the asx. Paul one wonders how much worse that would be with a conservative estimate. I want to talk about Infrastructure Spending. We have seen new zealand together a generous stimulus package. The rba has been calling for something similar. Is it time to break the election process . That is an interesting comment we have seen for quite some time. The reserve bank has been advocating for fiscal stimulus. They wont get it today. There have not been any big announcements when it comes to h care. A lot of it had been accounted for and it is formalizing it. We would like to see more stimulus because the rba is so constrained. They have they dont have with recorder left low Interest Rates. It remains to be seen. That is one of the reasons investors have penciled in another Interest Rate cut for february. Paul on their own at the moment. Thank you for joining us. We want to get you an alert from the bloomberg terminal. The enzi i. E. Are, a consensus survey of new zealand, published its results. Seeing 2019 to 2020 gdp growth at 2. 2 , a little weaker than they had forecast. Still to come, seeing oil market stabilizing. We will have highlights from our exclusive interview ahead. Kathleen and more clashes in hong kong. Carrie lam going to beijing. This is bloomberg. Loomberg. Paul this is daybreak asia. I am paul allen. Kathleen i am Kathleen Hays. Hong kong antigovernment protesters clashed with police after an otherwise peaceful weekend. Carrie lam met with top officials in beijing to give a debrief. Editor Jodi Schneider is joining us now. Nteresting juxtaposition carrie lam is explaining something in china. The protests continue. They do. Part of it is frustration by thatof those demonstrators there has not been more done. Carrie lam has not responded what they view as an effective way since a record turnout elections last month. Another very large demonstration. Demonstrators say as many as 800,000 people a weekend ago. It was relatively peaceful until sunday night and then there were clashes with police and then there was one in a tourist market. Things thrown into your gas. Looked like the unrest we had seen in the past six months since the protests began in june. Kathleen what do we know so far about carrie lam in beijing . She is there to meet with them to describe the situation. It is interesting timing given the major generation major demonstrations and elections where 71 of the population turned out and largely were supporting prodemocracy candidates. They were very local elections. These were not Legislative Council elections which will happen later next year. That is interesting. Interestedle here and some concerned about how the discussions could go. Carrie lam has continued to be supported by officials in beijing even as she has record low Approval Ratings in hong kong. Lam no sign of carrie making any concessions on the remaining four of five protesters demands. What will happen next or is nothing . The protesters here and those helping organize a protest and even in Civil Society feel that without a reaction or anything given to cut from the elections, the situation is likely to continue. We have had the economic effects rolling in. The economy, which slid into recession in the third quarter, has continued to show effects from the unrest. We got some numbers in from the airort authorities saying traffic was down, passenger traffic was down another 16 in november from a year earlier with 5 million passengers. Up ofe seen a drying passengers from, visitors from the mainland which has been the main source of visitor traffic to hong kong. Last february we saw a Record Number of mainlanders coming, support that has had dire economic effects particularly for the hotel, restaurant Retail Industries which have been feeling the effects. We will continue to see that in the new year. There is nothing to tell us anything is going to be different especially with carrie lam visiting with officials in beijing and not really talking to the people of hong kong. Those conditions happening on carrie lams watch, she is in beijing at the moment. Is there any evidence in beijing of appetite for a new chief executive . What is her future . That is the question that comes up in many conversations in hong kong. There has been no indication from beijing they will replace her. One would think with such low Approval Ratings and her being a target of the protests, all of these signs that are about carrie lam, it would make sense totry to come up with a plan replace her. Beijing has shown no signs. We have not heard that. She keeps saying she is not resigning even after a tape that said she wanted to. She will continue to serve out her term which she is several years into. She says it is important for her to stay on to resolve this peacefully even though she hasnt given, after getting finally, withdrawing the extradition bill, that was the start of the protests, after doing that, she hasnt given in orall to any of the demands some of the discussion among people in business and legal circles for things like an independent investigation of the police. She said she cant do that. What she needs is for the protesters to stop, the unrest to stop and then they can have a conversation. Doesnt look like it will happen anytime soon unless something is given from her and the government. You very much for joining us. We have plenty more to come. This is bloomberg. Quick checkw for a on business flash headlines. Leading chinese automaker plans to double its stake in daimler. 10 and could to bring a seat on the board. The move could make it the biggest shareholder. Paul a Chinese Private equity firm has received government approval to buy a 15 stake in the largest maker of airconditioning units. It is worth 7. 5 billion and makes chinas push to reduce state ownership in his most competitive industries. About chineserts groups taking over british steel. The deal is at risk of falling through but the guardian says it is still on. Capital controls being imposed on senior Chinese Government officials could still uproot the deal. The deal is done and new tariffs are on the table but details are sparse at best. More just ahead. This is bloomberg. [ dramatic music ] this holiday. Ahhhhh ahhhhh a distant friend returns. Elliott. You came back and while lots of things have changed. Wooooah woah its called the internet. Some things havent. Get ready for a reunion 3 million light years in the making. Woohoo yeah pictures of sydney harbour, smokefree. That is thanks to the wind direction. The smoke is circling the city and expected to return. Up. 75 currently percent. All sectors are higher. The sydni dollar pulled back a little bit. After the midyear outlook. Forecasts forecast surplus was turned back as was the growth rate. Down to 2. 25 . No fiscal stimulus from the government. We will get more on this with our interview with the australian finance minister later on what we will discuss the content of the budget and outlook. Lets get over to su keenan. Su we start in hong kong where protesters clashed with police at a subway station. This was a small scale demonstration. Standoffs continued into the night as protesters blocked roads and Police Fire Tear gas. The violence came as the chief executive carrie lam visited beijing to give xi jinping a full account of what has happened in hong kong the past year. Protests continue to hurt the economy. Passenger traffic at the airport fell 16 . The total number of flights in and out of hong kong dropped 8 . Cargo throughput dropped 6 . 4. 5 million tons. Property speculators in china are being even a warning to think given a warning to think carefully about the real estate market. Homes are for living in an some see it as a veiled warning. They could boost Financial Support for manufacturers and lower financing costs for the private sector. New northndmark american trade deal was hammered out by the u. S. , mexico and canada, mexico is raising objections surrounding ratification of the accord. Their Deputy Foreign minister says the bill includes a provision for u. S. Officials to monitor labor reform in mexico which was not part of the deal signed last week. It is mexicos position it was not consulted and it is projecting the proposal. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. Selina the u. S. Kathleen the u. S. And china reached a trade deal but it will be a few weeks before they come out with the entire report. Trade representative Robert Lighthizer said several issues remain. One will be implemented right down to every detail. It is a remarkable agreement but it will not solve the problems. Kathleen now the former trade representative who worked under george bush. She joins us from washington. Assessment of this deal knowing we dont have all of the details . Some kind of deal in place, President Trump going right into phase two. Already skepticism. What do you see . Reachedad they have phase one and there will be a suspension of tariffs. Oure have really hurt companies, workers and competitiveness. And i mean both the ones we have imposed and the retaliatory tariffs. Come to someave positive conclusions on the issues even though some complained there are so few, the fact is it is progress. I applaud that. We showed Robert Lighthizer speaking earlier today. He said one of the things that determines how this plays out is whether or not the hardliners are in control in china. What do you think he meant . I think about trade having a political component. We have sharp differences in congress and china has its differences in its bureau. I hope what we are pushing works with what china needs to do and once to do. They want to move more to a market oriented model of growth. What we are asking of them will help them. It could be a winwin. You were a u. S. Trade representative so you have been in these negotiations before. What is your assessment of how these were conducted . In the negotiating room. Everyone has their own style. I would have advised my president to address the grievances the government and the public here have, if i were, if the time was right, to say, to join with our allies who have the same complaint. Worldsic things of the trade organization is no discrimination. Chinas rules do discriminate against foreigners. If we had joined hands with japan, canada, south korea, we would have represented 65 of global gdp, we would have gotten a faster and more harmonious outcome because china couldnt afford to turn its back on that coalition. Paul do you have any hopes a mightollateral approach be taken when it comes to the hard things like ip and subsidies . We should. I believe in the rule of law. To have a good agreement others is whatjoin or copy america has always done. Yes. Team toor the home negotiate a great agreement. One of the deal things the deal includes is an enforcement mechanism. Most people say that is what held back so many try deals trade deals in the past. They were not multilateral but this is something that could make a difference. Clearly right Robert Lighthizer thinks that. Do you . I havent read the text. I cant give an answer whether one that ism is going to be successful or not. I hope it is. I hope he has what he needs to have. An earlier guest said this is lighthizer trying to make President Trump look good saying we made a deal. Others have said it is just President Trump not wanting to get the economy and to further trouble or hurt stocks. Or from what we know now, do you see a deal that is going to take steps towards what you said, getting the u. S. And china more on the same track . We dont know. There are a lot of details in this agreement. The fact we have stopped imposing tariffs and apparently china is, i heard from the press this morning, was going to remove tariffs on corn and auto, that is good. One of the worst things apart from the difficulties tariffs is the uncertainty. People dont know what the rules are. Here we have, we have stopped fighting, we have got a truce. We have agreed to some things we are i cant list, and going to move on to addressing other things. We have to root for the home team. The home team has been doing well. The u. S. Economy hasnt weathered some of the worst of the trade war. But you pointed out losses were escalating in china. Chinas economy has slowed. Some of our vectors our sectors have slowed. China would benefit from nondiscrimination. Why put percentage caps on inward investment . They dont put them on their corporations. They filed more patents last year than any other country in the world and they will not get innovation and people working ifd to develop inventions they dont protect those ideas. There are a lot of reasons why we should join hands and work together. Paul it is next year an Election Year in the united states. You feel that could affect the negotiation dynamic between the u. S. And china . Being tough on china is going to be a Popular Campaign line. Army nk getting getting harmony will be the most Popular Campaign line and it will also be very good for the economy. You mentioned our economy is doing well. Some sectors are hurting. Deal, jobe, for every that we created by reason of the 232 tariffs, we lost 16 jobs on steel users. Estimated by moody that by the end of the year tariffs and retaliation tariffs will have cost us about 400,000 jobs. If you lose your job or in a sector that is really hit, you dont think the economy is doing well. Kathleen you were the primary ago shooter for nafta. Now this new agreement has been signed is in place. What do you make of it . Thet a plus to the extent trump team suggests . It provides some certainty. If it has things i wish were not in it. I also heard the provision that has envoys from the u. S. Going to mexico for enforcement of labor and environment was not discussed according to the minister of mexico and i created friction. Is in the addendum and that has created friction. That is in the addendum. We will see how they work through it. Assuming things like that can be worked through, will it boost growth . Will it be a bus or minus . The fact is we need to have our supply and chains supply chains with northern and southern neighbors. We have 12 million jobs that are connected to mexico and canada. And if we cant be competitive in the world, we break up those supply chains, i think we will have a terrible downside. An agreement have so we have certainty for our companies so they can hire and be comfortable. And for our farmers so they can plant and plan. And this lack of certainty is, has really created turmoil economically for so many. I would like to see that fixed. Kathleen do you expect that to be fixed while President Trump is in office . He came in getting rid of the lateral deals. He is take on being aggressive. Do you think he is leading us down the right path . Were i in advising him, i would be in favor of multilateral deals. We have worked hard to try to develop rules of the road, whether it be on the safety of or the safetynomy of the Global Security with nato, with the united nations, with the world trade organization. So many other things i think are precious and we ought to preserve. But we will see. I am a multilateralist. I believe in working with my, the countries that are our allies and him trying to develop friendships and good economic bonds with them. But everyone has their own style. Kathleen they certainly do. Thank you so much. Chair and ceo of hills and company. The impeachment drama continues in washington with the house expected to push forward with a crucial vote this week. The latest live from d. C. Next. This is bloomberg. This is daybreak asia. I am paul allen in sydney. Kathleen i am Kathleen Hays. The impeachment process is moving ahead in washington. The chairman insists it will not be a failure if President Trump is acquitted by the senate. Lets bring in ros krasny. What are the next steps . Ros on wednesday, the full house is expected to vote and expected to make President Donald Trump only the third to be impeached. It will be tough for members. We have been watching a number of democrats in moderate districts that trump got in 2016 to see if they might waver. House Speaker Nancy Pelosi has some votes to give if she needs but looks like democrats will have a majority. There are impeachment counts that will be counted on, abuse of power and obstruction of congress, stemming from President Trumps fateful july 25 phone call with ukraines president. One thing we have been noting is really impeachment proceedings, the hearings we have had and the vote are not changing any mines in washington. Positions are firm between democrats and republicans. Looks like those are holding and no mines are being changed. Very serious constitutional process that is going ahead this week. Paul so what can we expect from the senate trial beyond political theater . Ros that is a good question. Containsion sort of the answer. The trial would go ahead in the new year, presided over by john roberts. Republican lawmakers, allies of President Trump, have said they want a short trial. They dont want to hear from witnesses and think they can wrap it up quickly. We heard lindsey graham, one of trumps key allies, saying he doesnt feel he has to be a bearish or are. A fair juror. Others from pennsylvania said they had a more open mind and want to hear from the impeachment managers and consider the evidence before they vote. Really it seems like republicans will not vote to convict trump and that he will continue on. It will be an extraordinary thing for the president to than run for reelection. Democrats are furious about mitch mcconnell, the Senate Majority leader, who said he will coordinate impeachment strategy with the white house. A lot of democrats wonder what that means for the whole checks and balances system. A lot of Big Questions that go beyond the political theater that we wont have answered until january and possibly beyond. Krasny, thank you for joining us. North korea says it has conducted a crucial test on a longrange launch and that it has boosted its deterrent capabilities. The latest act in the drama that marks escalation appears to be different. Lets bring in breaking News Reporter g haley from singapore. What does this imply . Will implies that it continue launching short range ballistic missiles. The latest announcement was what it called an important or significant test. It was conducted on a satellite launching test site but we dont know what sort of a test it was. But by them announcing constantly and through the propaganda channel, korea central news agency, it shows north korea is trying to imply apply more pressure on the u. S. , demanding the u. S. Counterparts to bring forth an alternative to the response measures the u. S. Can offer in the price of news north korea denuclearize and. What they had to offer in hanoi apparently was not enough and it has given the u. S. Until the yearend to bring forth another alternative. [speaking simultaneously] kathleen i guess i will hop back in. Kim jongun [speaking simultaneously] go, kathleen. Kathleen kims death kim jongun and donald trump are namecalling but why arent experts as concerned as in the past . Kim jongun calling donald tard, a duterte donald trump back to his rocket north korealing, has talked about disrespect, but north korea has continued to not launch icbm, which is a promise kim jongun made to donald trump and this is what experts call the red line. This redline the u. S. And south korea will not be crossing which is a moratorium on hostile action between the u. S. And north korea as well as south korea which is what will break any hope for continued talks between north korea and the u. S. , which is something north korea and the u. S. Have yet to break. Next . Hat is envoy tos. Special north korea is already in south korea. He is Meeting Foreign Ministry ul. Icials in seo he will be meeting moon jaein and making it trip to tokyo as part of this too far. Try peculated he may. Art of this tour it is speculative he could try going to the border of the koreas to attempt to meet his north korean counterpart. Donaldmet her before trump and kim jongun met, so what is the outcome of the talk they hold, we will have to wait and see. Kathleen thank you for joining us. More ahead. This is bloomberg. Paul lets get a quick check of the business flash headlines. Couldhe bank goods bring down bonuses as they try to bring down costs. His could cut as much as 20 a final decision will not be made until the end of the current quarter. They have pledged 6 billion in cost cuts. Kathleen following the grounding of 737 max, it is hitting jobs in china. Expert pilots can earn 300,000 a year in china. The carrier has stopped hiring from abroad while the jet is out of service. Chinese airlines can offer 20 of the global 737 max fleet. Masayoshi sons bankers are looking at their most important client after the costly setbacks. Senior executives that two of japans biggest lenders are saying they have grown far less comfortable with his management of the vision fund. The banks have been approached on softbank for a new low. Two big interviews in the next hour of daybreak asia. We will speak to the australian finance minister about the midyear budget outlook. We have seen some downgrades, plus the exclusive interview with dell technology, aipac and japan president. She joins us later. And of course the market open is next. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Paul good morning, i am in sydney. Asias major markets are open for trade. Kathleen good evening, im kathleen. Welcome to daybreak asia. Paul our top stories this monday. The u. S. And china welcomed their trade deal. Robert lighthizer warns important issues remain. Shinzo abe wants to leave a legacy, saying he is the one to revive the japanese economy. We will show how much needs to be done. The u. K. Heads for brexit. Boris johnson insists he will get the job done next year. We are in for a check of the markets now as we continue on this monday trading day. The futures are still lower by a quarter of a percent. That is the nikkei 225 itself. The news on trade has not done anything to lift equity spirits in japan. The topic, just about flat as you can see, a small loss. If we look at the currency, weve got this dollaryen up about 0. 2 . A little more weakness. Not enough move to get the bank of japan spirits lifted. You can see in terms of japans 10 year jgb, still stuck with the bank of japan wanting to see it around zero. It will probably happen where the tenure had a big rally on friday. The kospi is down a 10th of a percent. You can see that the korean won is just a little but stronger here. Australias market is finally moving up almost a full percent. The news on the budget was maybe not surprising. We will be speaking to the finance minister in a minute. New zealand, you can see that the entry day loss is 2 10 of a percent. Lets check in on the first word news and get over to su keenan. Su we start in hong kong. Hong kong protesters clashed with police in a mall and subway day of monday, amid a smallscale demonstrations. Standoffs continued into the night as protesters blocked roads and police fired tear gas to disperse crowds. As carrie lamame visited beijing to give president xi jinping what she calls a full account of what is happening in hong kong over the past year. And the protests in hong kong continue to hurt the economy. Passenger traffic at the airport fell 15 one year ago. While the total number of flights in and out dropped more than 8 . 6 in theed more than first 11 months of the year. Meanwhile, in india, protests against that countrys new citizenship law erected in new delhi. The subway system was shut down. Demonstrations spread from the eastern state, they also forced to postpone the planned visit by the japanese prime minister. The protesters oppose a new law, which grant citizenship to undocumented migrants based on religion. It also bars muslims from applying. The International Effort to rein in fossil fuel pollution has stumbled after u. N. Talks watereddown language of pre agreedupon. Delegates left madrid after more than two weeks of discussion, agreeing only on the urgent need for deeper cuts to greenhouse gases. Is work on market mechanism a tool for customers to meet their goals. They failed to agree on the next financing. Global news, 20 for hours a day, on air and at quick take on Bloomberg Howard by more than 2700 journalists in more than 120 countries. I am su keenan, this is bloomberg. The phase one trade deal of washington and beijing have agreed to not be what some analysts were hoping for. But is the tariff relief enough to spare a rally in markets in asia . Joining us with the answer to that question is our bloomberg mliv strategist. Are we expected to see a rally, or has it all been priced in . I dont think it has been completely priced in. There is probably a slight disappointment, but the rollback of the tariffs is not as big as the speculations last week. More importantly is the fact that there is going to be a phase one deal. Ahead and think that a significant headwind for investors into 2020 is being removed. Probably what they are really hoping for here is, the trade headlines and negotiations go into the background. We talk less about friction as we going to 2020. Investors can focus more on economic fundamentals, companys earnings, what is the direction for acid allocations, and the usual thing that people prefer to talk about in the trading environment. When you go into a new year, that is the time when people are positive on the outlook for allocating money to growth companies, to sectors of the economy that are likely to improve. It is possible that we will see a decent investment flow into emerging markets. In particular, in the First Quarter of 2020. Something more of a typical environment that we get. The end of 2018 was unusual. December was a bad year. People were extremely hesitant. Compared to one year ago, the outlook is much more positive. You should see that the reflected as people come into the markets. It is better for equities than it is for bonds in the first part of next year. Currencies could be pushed into the background. It could be a relatively quiet period for currency markets. Yieldsn yields up, down, we will see what happens as trading gets underway in the next several hours. I want to ask you about the yuan. There was a bullish outlook that now seems tempered. Mark there was speculation that there would be a very significant cutback with the old tariffs against china. Possibly as much as 50 . That would have been extremely positive for the yuan. So much of it reflects those tariffs, which have been caught on to china, and the threat that even more on the way. Removing that is a positive for the yuan. It is still good. The worstcase scenario is being removed quickly. The threat of more tariffs is being taken away. That is a good thing for the yuan. Gaining bullish traction, it will need more. It will need the chinese economy to seriously get better. It also needs the people to be confident about the future path of the yuan. They need to see a chance that the yuan can go back towards the 625 area that we saw in 2018. Something like that. For that to happen, obviously it needs that are than forecast chinese growth. It also needs to see the u. S. And china in a place where they are no longer attacking each other. Those things are yet to come. At least the yuan downside is probably restricted. We have probably seen the worst of the yuan this year. It probably wont get as bad as 720 again, unless there is a complete breakdown between the u. S. And china. In terms of Serious Games for the yuan, we need to see people getting more confident. We need to see structured products building up. Those things will take a while. Will see a gradual improvement in the yuan, but it will be slow progress. It will not be exciting, but it is better than the risk of the yuan devaluing suddenly. That will not happen. At least people can be confident that the yuan will be quiet. People can focus on the Growth Prospects of chinese companies, particularly the hightech sector. Kathleen a lot of positives will require some patience as they evolve in 2020. You can follow more on this all the news trading on our markets live blog at bloomberg at mliv. You can get a market run down in one clip. There is commentary and analysis from bloombergs expert editors. You can find out about your investments right now. Trade oneeconomics phase deal creates policy room for china, but the economic challenges are still far from over. Minas november retail sales and production numbers this morning may give us more indication. Isning us now from hong kong i really want to get your reaction. We know that we dont all everything about the trade deal. We are going to wait a couple more weeks, at least. What is your assessment so far . I think the biggest positive is there is a truth that the tariffs that were supposed to go on on december 15 is no longer going on. That removes a huge headwind for the chinese economy for the global markets. Whether and when the september tariffs are cut, that is not phase one isen actually signed is not so clear. Also, part of the deal is that china will commit to Exchange Rate stability. And that is another anchor for expectations next year. China has committed to do a lot of structural changes from the ustr and from the chinese side. We have to see how they are carried out next year. But there is a lot of potential positive. For now, i think the biggest positive is remove a big headwind and some uncertainty. Kathleen you wrote an note about the Central Economic were conference are wrapped up in china and how important economic , looking ahead to 2020. So many banks like yours are still looking for a slowdown. How much difference do you think again, what we see so far, slowdown in tariffs, what this can mean for alleviating some of the slowdowns so many see in china next year . Wang we just upgraded this morning on the back of the tariff rollbacks. We now see growth stabilizing at 6 in 2020. That is likely going to be the growth target around 6 . Of course the Central Economic policieserence said will be flexible. They are prepared. They wanted to ensure growth is pretty good. They have fiscal and monetary policies ready. We will see some easing coming through, including our infrastructure, including more lending, or easier financing for local government, and probably for private sector companies. With that, and with the list from the tariff rollback, we think china can achieve 6 growth next year. There is paul another potential benefit of this phase when trade deal. Will the cheaper prices benefit the Chinese Consumer . Wang china is importing as much as possible, as much as there is in the world market of pork and proteins. So that should help. Although, i think chinas overall consumption is multiple of global trade of pork and proteins. I think it helps, but not that much. We are looking for pork price to continue to rise into chinese you your test chinese new year. We are looking for a to break size in december and in january. In the next few months the rise of cpi inflation is probably going to inflame the rates and Monetary Policy a bit. We are goingickly, to have the outlook for property prices later on. The pboc warning that homes are for living in. Do you expect to see a crackdown and speculation on the chinese Property Market . Wang i dont expect much of a crackdown. From the Central Economic conference, you can see the policy tones on property is quite measured. Stabilizing land prices, stabilizing property price. We have seen some softness in property prices in some markets. In general, i think Property Markets remain quite resilient. Sales in large cities pick up again in the last couple of weeks. Prices in some cities may continue to fall. More cities will see price increase in price fall. Within the government we take the differentiated policy, which means they will allow some cities that are facing downward pressure to ease, but otherwise take a very mutual policy attitude. Property should state relative. The could fall modestly next year. Ubs Investment Bank chief asian economist. Thank you for joining us. Dell technologies asiapacific joins us for an exclusive interview. We will talk strategy in the region and impact of the trade war. To then next, we speak australian finance minister about the governments midyear budget and outlook. This is bloomberg. Australias midyear budget update shows the economic realities are starting to bear down on government finances. Ministers lowered the forecast months through12 next june, and for the following three fiscal years on the expectations of tax revenue. We discussed this with the finance minister mathias co rmann. Thank you for joining us. Have we have seen the government reducing the size of those forecast surpluses, 2 billion this year and over the forward estimates. Is the reality of a slowing economy starting to hit the Budget Bottom line . Economy continues to grow. We are not immune from whats happening in the global economy. After Global Economic growth downgrade. Economy, andon our is impacting on our revenue base. That is the adjustment that you are seeing in our budget update today. Even though we had to write down 30 billion plus in the tax revenue, we remind on track to deliver services this year, and each year over the mediumterm. If those surpluses grow to more than 1 of the gdp. Paul in terms of growth, we have a chart on the bloomberg terminal that illustrates what you are saying. Thatalia is still growing, a record remains intact. Growth is easing. Is it time to consider maybe walking back on the side of having the budget back in the black and following the example of japan, new zealand, and doing what the rba wants to see, thats a bit of fiscal stimulus . Mathias no. Obviously we have delivered significant income tax relief, which has provided stimulus for the economy. If you look at our Economic Growth performance in the first three quarters of the 2019 calendar year, they have been stronger than the last two quarters in the 2018 calendar year. We are heading in the right direction. Our outlook is a positive. We have had significant income tax relief. We have had significant Monetary Policy relief. We have had significant additional Investment Infrastructure pickup in the resourcess structure. Stabilization in the housing market. Things are headed in the right direction. We are impacted by whats happening in other parts of the world. Paul you did mention the pickup in the resources sector, and the budget predicated on an Iron Ore Price of 65. Australia has been very fortunate. The price or soup the price has been closer to 90 at time. How grimwood the revenue picture be if it had not been for that . It is obviously cautious and conservative forecasting. Governing, wento inherited a forecast of iron ore of what hundred 28 a ton. A 10. T down to 45 a recognizing the volatility in our Commodity Prices for our tea exports. Key exports. 55 in 2019 was against the actual price of 17 over that financial area financial year. We are forecasting 55 a ton by the end of june of next year, essentially. Its a matter of caution and conservatism. Seen not justalso Economic Growth forecast, but wage growth forecast lowered as well for the coming years. Is it time to consider bringing forward some of that tax relief that is in the budget . We have legislated more than 300 billion worth of income tax relief in the last two financial years. A lot of that is still waking its way working its way through the economy. Carefulnue to make considerations in the lead up to the next budget. Real growth reminds remains stronger. It continues to grow above inflation wages continue to grow above inflation. Growth in disposable income in the most recent quarter. More than 5 growth in disposable income over the most recent 12 months period. These are good figures, but we would like to see wages growth rising to the future. Our plan before the economy is designed to achieve that. Kathleen it is Kathleen Hays in new york. Yes, disposable income may be it, but one of the things happening in the economy recently is, consumers are not spending. Some people feel the consumers have looked at the rate cut by the rba and is worried about the economy. Could this be a signal that they see things in the economy that are worrisome, that is why they are pulling back . Mathias i think there is a range of things that flow into perceptions. Obviously, a lot of the uncertainty at a global level, people in australia are very aware that we are a trading economy. When you have significant trade tensions between the u. S. And china, that has an impact on us. People are aware of brexit. We are very aware of brexit in australia. On bold those friends, the outlook has been on both those fronts, the outlook has been improving. The discussion between the u. S. And china are encouraging. The resolution of brexit a few days ago, with the reelection of the johnson government, also very encouraging. Expect that in the reeks weeks and months to come, the Global Environment will become more benign. That should help with Consumer Confidence in australia. Kathleen i know ministers of finance dont want to comment on their central bank, but broadly speaking, it seems like the rba, reserve bank of australia, is not keen about doing bond purchases. Not keen of doing quantitative easing. A lot of Central Banks are trying to get away from that. Youey speaking, would rather not take steps to do Infrastructure Spending . Do something that would help the economy in this time when things are a bit tight . Are you content to see that kind of step taken and hope that it works . Mathias our economy continues to grow when quite a few other economies around the world have been shrinking. Have a very significant infrastructure that has been programmed with more than 100 billion over the next decade. We will continue to make these judgments. You are right, monetary policies is a matter for the reserve bank. The reserve bank likes makes these decisions independently. The reserve Bank Governor made it clear that he cant foresee a scenario were they would be required in australia. Our economic circumstance does not warrant that sort of discussion. Our economy, in a global context, continues to perform comparatively well. Our outlook in the global context is positive. Kathleen when i interviewed your colleague josh at the imf in october, and it came to the impact of the trade war on australia, he says, this has a lot to do with uncertainty. Business people around the world are uncertain. They have not been investing as much. Is it your sense from what you know, and where the u. S. And china are going on their trade deal, with so many questions about how far this goes, is that going to be enough to relieve uncertainty and take the pressure off the australian economy . Mathias things are heading in the right direction. We are very encouraged by recent developments. Obviously we understand that there are still more issues to be resolved. However, we have always said its in the interest of u. S. And china. We believe it is the interest of countries around the world for trade tensions to be resolved, and for there to be a new sustainable accommodation in relation to the u. S. And china moving forward. An open trading economy. We are globally focused, but also globally exposed. Anything that helps to improve the Global Growth outlook is obviously good for us. Paul in terms of things you cannot control, australia grouped by a draft. What extent is that weighing on forecasts . That is one of the significant challenges domestically we have been dealing with. Ofs route and large parts regional australia, which is had an impact on the Agricultural Sector and the output from the Agricultural Sector. And bushfires from large parts of australia. These are things that we have to do from time to time. Weeed, these are things that cannot control, but we have to sake the best of the situation we find ourselves in. Paul just briefly wondering if you regret paining yourself into the corner on returning to it would now be an opportune time to spend. Veryas we think it is important for the australia people and for the strength of the australian economy for the future for longterm. Australians rely on the welfare, health and education services. They rely on the government funding the services, we thought creating taxes to a level that we would harm Economic Growth into the future. We are working very hard to ensure that australians going into the future, the best opportunity to get ahead, and to keep taxes at a reasonable level is an important part. That means we have to continue to control expenditure growth moving forward. Paul thank you. Australian finance minister corpmann joining us. Plenty more to come on bloomberg. Stay with us. This is bloomberg. News on theeaking japanese economy, we are looking at the purchasing Managers Index , coming in at 49. 8, unchanged from the month of november. We will take a look at the closely watched manufacturing number which has come in weaker, 48. 8 versus 48. 9. Getting, that sub index stronger, 50. 6 versus 50. 3. Anything above nifty signals growth. Above 50 signals growth. The shinzo abe government is concerned about growth in japan. Especially with the weight of a consumption tax hike on its back. Theyve announced big stimulus. We will see how markets respond to this. Japanese stocks not doing much, but we will see if it has an impact. Lets get you uptodate with what is happening on the markets. We have got new zealand looking flat at the moment. The nikkei is off by. 5 , the topix is flat. The kospi and australia, standout numbers. The is after the release of economic and fiscal outlook that father both both of the growth and the Budget Surplus forecast. The asx still in positive territory. Boris johnsons big election win was the u. K. On track to quit the European Union at the end of january but there are still questions and tensions that could lead through to markets. David joins us from singapore. The elections out of the way, what should we look out for from sterling . Positive,is sterling but with major u. K. Data coming out this week it will prove keen if the sterling can keep its rally going. We have pmi data. The service and Manufacturing Sector last time were in contraction. Subsidies are a big important part of the u. K. Economy. Data, retailpi sales, gdp and employment data. Which a lot of big data has to navigate through if it will keep rallying. If the data is better than expected it will be a positive. This feeling for the bank of england also this week really a stunning thing to juggle before it can resume its rally. As you know, the bank of england has been all over the map this past couple of years on hard brexit, soft brexit, what it would mean for the economy. Some have been critical of that. How will the Rate Decision this week play into any sterling moves . David it will be very key. Fort now it is factored in the end of next year. Most of the cuts priced in the second half. You are going through june. Cutmarket, we think it will. If you look at the back the last bank of england discussion, there were at two people that dissented. There were two people that dissented. Now it looks like it is sorted out. Boris johnson has got to pass the bill. It takes no deal off of the table. How does the bank of england interpret it . They could say the economy is still in a bad position. They could be positive and say it will unleash animal spirits and investment, given no deal is off the table. If they come out more dovish, remember we are looking for a chance of a rate year, they come out more hawkish dovish than expected, the market will have to factor that quickly. Approach,op the sterling will be happy. If the data comes out fine, you will see kathleen this will be a meeting that will have a lot riding on it. Our asia rates and fx reporter. Investors are watching a whole host of asian Central Banks as well. Policymakers in japan, thailand, indonesia and taiwan meeting for their final rate meetings of the year. Previewe joins us to those decisions. Lets start with the boj. They are not expected to do anything, but what could they signal that would tell us something about what they are thinking for 2020 . Not there is a lot going on. The impact of the sales tax is starting to show up. The is consumption side internal story has been weak, red effect reflected in the manufacturing side. All of this would suggest more support is needed but the pendulum is swinging a bit. We have them rolling out this big fiscal package. If the government plans to spend more money it would take pressure off of the boj to have to stop top off its own stimulus. So we have inflation numbers, that will show a bit higher, the consumption task. The boj will probably stay where it is and point to the government to do more. It will be interesting to see what the takeaway from the chinau. S. Trade agreement and the u. K. Election has been because the boj has been flagging brexit among their worries. There could be a modestly better tone from the boj. What about the other three Central Banks . Indonesia, taiwan thailand, do you expect anything . Enda on the whole it is not that they will cut again but thailand and indonesia have cut consistently but a few things are changing. The fed has gone on pause diminishes room for the emergingmarket Central Banks to push. Now we have another trade story from the u. S. And china. It is not a game changer for growth but it will boost sentiment and take pressure off of policymakers to support their economy. We are in a wait and see. For indonesia and thailand, the risk or expectation of further easing remains into the early part of next year. Paul all right, and the current, thank you our reporter joining us there. Su we start with a north american trade deal. Days after a landmark new deal with canada, the u. S. And mexico, mexico is raising objections to u. S. At inflation surrounding the ratification. Mexicos Deputy Foreign minister said the bill includes a provision for u. S. Officials to monitor labor reform in mexico which he says was not part of a deal signed last week. It is mexicos position it was not consulted and is therefore rejecting the proposal. Property speculators in china are being warned to think carefully as the regulator will control the real estate market. The pboc said holmes are for living in. Some view it as a veiled warning against buyers attempting to inflate prices. The bank says it will be policye with monetary and boost Financial Support for manufacturers and lower financing costs for the private sector. Arsenal istball club facing a potential backlash from china after one of its top players attacked the treatment of muslims in china. They said this, despite the immediate attempt to distance themselves from comments by the star player. Earlier this year the nba was slammed in china after an executive showed support for the prodemocracy protests in hong kong. In australia the smog covering sydney is being called a Public Health emergency. Air pollution across the city and eastern New South Wales is as much as 11 times greater than the agreed threshold for hazardous levels. There were 106 bushfires in the state with almost half burning out of control. A heat wave in Western Australia is expected to move eastward this week. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am sick in. This is bloomberg. Kathleen an exclusive interview with the Dell Technologies asiapacific president. This is bloomberg. This is daybreak asia. I am Kathleen Hays. Paul i am paul allen. Dell has cut its annual Sales Forecast as component shortages from intel hurt Growth Prospects. Now we are joined by the del technologies aipac and japan global president. Thank you for joining us. I need to start with the big story of the weekend. U. S. China trade reaching a phase one agreement. Is that going to give a lift for business . Good morning and thank you for having me. It is an exciting time to be in the business, given the data growth everywhere and new outcomes and businesses getting built on the back of Dell Technologies. Part of our electricity and steam powering the businesses and internet, changing the business, data will define the next era of business. We can talk more about it. Say we do believe in free trade and our ability to serve customers with multiple factories. We have 25 plus locations. The outcomes people are looking for in terms of digital outcomes. We welcome any progress towards free trade and globalization off of our supply chain. Has this made any differences to your supply chain . You are now able to organize again . We certainly specified before that we are ready for the changes that are coming through. Our intention, we urge alterable parties to work together. We have been ready, regardless of the outcome. But this is, we are focused on our business which is to see how we can help customers with data for better outcome. How can we help with Cloud Technologies in their businesses, how we can have a better predictable ip i. T. Cost structure and how we put them money revenue and Business Growth and feeding a new customer experience. I think of opportunities are tremendous and we are excited. I have to ask this. I am a micro person. The japanese government announced a very big fiscal program. We have seen Business Uncertainty hurting many in thees economies asiapacific region. So how has that been a challenge or dell and how do you see it playing out in 2020 . I would tell you our business in asia continues to do well. Asiapacific and japan, this has been our 11th consecutive quarter of growth. Customers are saying that while they need to make their Current Operations more efficient, they have to invest for the future. That comes from i talked about the data driven technologies and more and more digitization and cloud enabled technologies. I do think the uncertainty increases, customers take a pause but nobody stops. We have seen our business go from strength to strength. Top ofn what is at the your list . You have cloud on demand, enabling asia, japan pacific innovation. What is your biggest priority in 2020 . Level of think of the data growth coming together, carriers, all the u. S. Carry only 87 petabyte of data. Today we transport that much in less than an hour. In 10 years we will be doing it less than 10 minutes. That is 52,000 times growth of the data. Car. Er example, autonomous one company will have seven zettabyte of data. Humongous. Growth is from our perspective, to enable that kind of outcome, we need autonomous infrastructure. We are launching self driving data centers. We are launching cloud consistent operations and infrastructure Application Centers which is available as a service. This is the new realities of the business with data and ai will play a bigger and bigger role and we have to be right there with our customers. , andhas to be managed sustainability will matter. All of those things are part of our agenda as we move into 2020. Rivalslso you have your lenovo and hp attempting to undercut you on price in the asiapacific. To what degree is the price war going on . Business is focused on the data driven technologies. We remain competitive, but if you think of our customers, they want to modernize applications and migrate to the cloud, so call it modernize and migrate, and we remain focused on the application layer. We remain focused on the data layer as well as overall cost and the transformation. Security transformation, workforce, i. T. , as well as overall business. So those are the areas we are focused on. That puts us in quite a Different League altogether versus the competitors we mentioned. We have to remain competitive but our story is much higher at the customer agenda. Is the job made more difficult by dells pursuits of achieving investmentgrade debt . Financially we are making Good Progress paying down the debt. To create antinue sustainable business, we have to make sure we are focused on the data driven technologies, more on the application and customer outcome, versus just a product or hardware. As we announce 22. 8 billion of revenue with 2 growth, i think those scenarios continue to make our investmentgrade pursuit very much within reach. We look forward to continuing to make progress. Kathleen thank you for joining us. Globalchnologies asiapacific president. Masayoshi son efforts under scrutiny, we will look at the growing doubt of japans big banks. This is bloomberg. Loomberg. Asia. this is daybreak i am paul allen. Kathleen i am Kathleen Hays. The leading banks growing comfortable with softbank founder also you she sown in his vision fund. We spoke to executives of major lenders after a series of highprofile and costly setbacks. Asias Top Executive editor Peter Elstrom joins us from tokyo. What is the relationship now between Masayoshi Son and his bankers . It is important to understand this relationship goes back decades. He got his first loan from a predecessor when he was just 24 years old in 1982. Since that time he has evolved into one of the most successful business men in japan. He has taken risk after risk, built business after business, borrowing money from banks and then paying it back. He has been a great client, the biggest generator of banking fees in japan. He has borrowed billions of dollars. The relationship has been profitable and close over decades. Now the relationship is being tested in ways it has not before. For a long time softbank was focused on telecom. It generated lots of steady cash that could be used to pay back these loans. Three years ago he set up this enormous Venture Capital fund, 100 billion and began shifting the focus to taking big bets on startups like huber, we work and , wework,es and uber and other names. They sold off part of the equity and Telecom Business to public shareholders to focus on these startup ventures. That has been a change in the risk profile of the business. Work fiasco, it has changed the look at outlook for the banks. Softbank lost 6 billion, the first loss in 14 years. That has shaken up the bankers and they are growing concerned. Kathleen there is straight in the relationship now strain in the relationship now . The bankers want to understand how softbank is going to manage the relationship wework in particular. They were thinking of an initial public offering. It was blocked and it had all sorts of governance problems. They pulled the ipo and softbank into ended up interrupting more money into the company and bailed it out. The banks want to see how softbank will manage the bailout. It could be a proxy for how it will handle other enormous startups. They have invested in 80 Companies Since the establishment of the vision fund. There is a lot of money writing on this. The bankers want to see how it will play out. Paul what does Masayoshi Son need to do . Work, he case of we has sent one of his lieutenants to take over as chairman, marcelo, and entrepreneur who built his own business, then which after sprint softbank bought, turned it around and negotiated this deal for a combination with tmobile in the u. S. So he is in charge of trying to turn around the wework business. Growth has slowed down and they are from the on availability. If they are able to turn the company around and show progress, they are seeking 3 billion in loans to finance the turnaround. That would be a good step in reestablishing the relationship with these bankers and showing they are able to manage this new business, Venture Capital and startups the way they had with older is this is including telecom. Thank you so much are joining us. Lets get a quick check of business flash headlines. Deutsche bank could bring down bonuses as the ceo tries to eliminate billions of dollars in costs. Extra compensation could come down as much as 20 . A final decision will not be made until the end of the current quarter. They want to retain top talent and they have pledged to deliver 6 billion in cost cuts. Kathleen the fallout of the grounding of the 737 is widening and now hitting lucrative jobs in china. Expat pilots can earn 300,000 boomingn chinas aviation market. The carriers have stopped hiring from abroad while the jet is out of service. Gerald Chinese Airlines account for 20 of the global 737 max fleet. Paul this hong kong Property Developer wants the government to help the hotel industry. The executive director says Hotel Revenue fell 40 in november and december with secondhalf revenue expected to have fallen 30 . Government should look at policies employed during 2003. Kathleen before we go to Bloomberg Markets china open, looking at markets now, you can see the nikkei down. 2 . The kospi is flat. A small gain. Australia 1. 2 even after the budget outlook was cut. The economy growing less quickly. Down. 1 . Aland numerous to come Jim Mccafferty is going to be here to talk trade for 2020. That is it from daybreak asia. Bloomberg markets china open up next. This is bloomberg. Lets cater top stories this monday morning. The u. S. And china welcome their trade deal. Robert lighthizer warns important issues remain. Markets wait ecodata from china including home prices, Industrial Production and retail sales. They will show how the trade war is hurting the economy. Starling remains in focus as the u. K. Has four roxette. Asstarling remains in focus the u. K. Heads for