Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

You mentioned the vaccine trials with astrazeneca. That is not voting well. Boding well. Chinese markets nearly 2 down for the shanghai composite. The hang seng down 303 points, and the kospi also lower. Watching the dollar declined overnight, given some of the risk off moves. The pound down on the sixth the day, the longest losing streak since may. Streak eurodollar slightly lower. , ian hashe aussieyen been boosted by the haven play. G10 higherthe only than the dollar. Yields pretty much flat right now but we saw treasuries up overnight. This is where we are seeing signs of contagion from the tech selloff, the Commodity Markets and oil markets in particular. Below 40 forst the First Time Since june. Thats get more analysis with our strategist. Mark, the u. S. Session came back from the holiday continuing the tech selloff. How is the market readjusting now . Mark it is not a pretty start in asia. The thing thats concerning wayle is it appears to be beyond tech and is affecting other Asset Classes as well. And asian picture equities broadly on the back of this down move in the u. S. One of the interesting things we are also seeing is the wider s p thiss seeking to embrace bearishness and avoiding some of the pain of last week. Now the labor day is out of the way, it seems that u. S. Equities are having a tough time across the board. We are getting to the stage where people will be questioning their positioning across a range of things, not just tech stocks. That means we could see this spread for a bit longer. People might start beating up ons again. It could affect the u. S. Dollar and some other things as well. That is really what is on peoples mind. Not just that this is a tech infectingis tech other Asset Classes as well. That spread you were talking about, our question of the day today is the drop around the technology sector, is it just a rout or a sustainable correction . Is it the son of a healthy market . Sign of a healthy market . Mark now that weve gone beyond the 10 declines in the nasdaq, i think people will say this is reasonably serious and be looking for projections of things like i want to see a 20 decline before i see this as an opportunity to get back into the market. I think weve gone beyond this being a healthy correction. Weve seen massive rises in the nasdaq. One stage it was up more than whichom the low to high, is dramatic over six months. The numbers have become very big and the swings for the nasdaq, but that doesnt take away that its a more than 10 decline in a short time and that is dramatic. People will be saying this is not something i want to dip my to straight away, i want to see more of a serious move to know if evaluations adjust. Priced its been quite crazy. Some of the day traders have gotten used to this market in the last few months, i think they will be scared by what they see here and they may stay on the sidelines a while. When you take into account also that we are in a period september and october is traditionally volatile for equity markets. It will be surprising if we dont see a longer period before we get a longer consolidation for these markets. This is the kind of thing we have to get used to probably write through the president ial election in november. Yvonne when it comes to you mentioned the dollar, a little spike weve seen here. How is the market position around the dollar right now . Is there a sense that the greenback has bottomed . Been some large short positions built up especially since markets started to improve after the selloffs in march. Risk markets risk assets doing well, and then we saw more selling. Some positions got quite large. Theres definitely been trimming of dollars shorts. Whether it is efficient enough to put a serious floor under the dollar is a question we have the Federal Reserve coming up and the question for them is really that they are in easing mode and they might add further to the easing stance. They will certainly sound dovish beard dovish. The fed by all measures is the big fish in the waters, and when they speak it has a powerful influence on the u. S. Dollar. It is unlikely the fed will come back closer to anything like a neutral policy. But as long as the fed is staying dovish, that is a significant factor for keeping the dollar on the soft side. Cranfield, we appreciate your insight. You can follow more on this story and all of the days trading on our markets live blog on the bloomberg. You can get a market rundown in one click and analysis from expert editors so you can find out what is affecting your investments right now. Here is Karina Mitchell with the first word news. Karina good morning to you. Beijing has made its first comments about an australian journalist being held in china, saying they are suspected of carrying out criminal activities and endangering national security. They worked as an anchor for a statesponsored news channel and was detained last month. Allegations are the most serious ever brought against a foreign journalist in china. Chinese state media say australian intelligence agents raided the residence of a chinese journalist there in june. They cite an unidentified source saying the journalist was question and computers and phones were seized beard reports, a day after australian journalist fled china after been told they were under investigation. Received aumman has contract worth 15 billion to of to Development Americas next intercon 1 next missile. It will be an 85 billion program to replace the aging minuteman missiles from the 1970s. The expected work on the new missiles, which can carry nuclear warheads, will be completed by 2029. Publick of thailand says debt restrictions should be eased to allow the government to spend more. Thailands benchmark Interest Rate has been cut three times this year and are at a record low. The problem now is not so much liquidity. We have to forecast more on solvency problems that will occur. The cost of different sectors and segments of our economy. Karina global news 24 hours a day on air and on bloombergs quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Over to you. Yvonne still ahead, more with the bank of china governor pointing to a bigger role for government and stimulating the economy. Our exclusive interview, later this hour. Morgans head of private banks and rates joins us. This is bloomberg. Welcome back. The pound is headed for its longest a client since may after the u. K. Government said it plans to change part of the brexit withdraw deal. The dollar gained along with treasuries as the selloff and u. S. Tech shares extended for a third day, leading investors to haven assets. Fromng us is Adam Margolis j. P. Morgan private bank. Thank you for joining us. How vulnerable is the pound at this point, and what do you sure it against . Short it against . Adam given the combination of the news flow and the price of sterling in the last few sessions, i think it is fair to say that brexit as a driver for currency markets is back with a bang. It is quite something to read Prime Minister johnson saying no deal could be an outcome a good outcome for britain, and it may be seen more as a negotiating tactic as we head toward the selfimposed deadline of the 15th of october. Weve had a lot of questions of clients in recent months about why sterling has rallied so hard against the dollar, but as always in our market, you need to look under the hood to understand what is going on. At least until the last couple of days, sterling had been relatively range bound against the euro since early summer. It tells us this has been in the last few months a dollar driven move that took haven up to 135 rather than a sterling specific one. If we cast our minds back to the halcyon days precovid, rises in no deal risks ended to be associated with sterling weakness. We can expect the markets to continue to be sensitive to headlines on the topic and we should point out that sterling volatility has picked up this week but not close to the extreme levels we have seen. At this point we have a preference to play sterling from the short side but we should stress its not just the brexit story. We see the currency as among the most structural he challenged in the g10 space, a negative real yield, possibility of negative nominal yield, and large external financing requirements. But the key is to how to reflect that view given the weak dollar view. Our preference is short against the euro or as a relative value play against some of the other high g10 currencies like norway. Tom you touched on the dollar, it is strengthening in todays session but it has had a fairly long downward trend. Weve seen a move toward diversifying away from overweight positions on the u. S. Dollar. To what extent how much further does that have to play out, or is that stirring to change . Adam we have started to see in the last few days in fx, a little more of the reassertion of the relationship whereby the dollar has been gaining ground with stocks under pressure. Think we need to avoid the shortterm noise and equity markets and there is an almost 10 pullback in the dollar since march. Weve had incredible reception of the idea of diversifying away from dollar overweight and we think that has legs. We are not in the camp of the death of the dollars see this dollar thesis, but we have to move through this period of u. S. Exceptionalism characterized by strong u. S. Growth and an Interest Rate advantage with fast markets and we are now in a different phase of the cycle. A dovish fed we think is a key piece of the puzzle to the extent that the recently announced shift in policy last week helps enshrine up all a period of real rates. In terms of how far we may have to go still, i think positioning is key to understanding. It is notoriously hard to get a ondle on it in fx, depending the number of participants, but it could still take a while some of the Asset Managers to cover dollar longs. From the medium and long perspective, it still has room to play out. Howne you mentioned about the market seems to think, when it comes to the brexit deal and walking away from it, it is just brinksmanship at this point. But doubts are creeping in, you can see that in the Options Market as well. Do you think if we dont get a deal by october 15 or yearend, how long could the rout in sterling go . Think we haved, i to accept now that we are probably back into a market where brexit headlines will be drivers and frankly that has not been the case the last few and datahere covid around covid and the economic response have been key. In terms of potential downside for sterling, i think against the dollar, 125 is something we have in mind for the shorter term. Weve been trading well above the 130 level for the next month or so. Is quite break at 130 important and if we can hold below that, that opens up further downside for the pound. I think the point is that participants, particularly in asia, who i think have tended to be quite tired of this story, who have to be on the lookout for the news in the u. K. Press, we have to accept this will be a driver here to stay at least for the next few weeks. Yvonne up until the last couple of days, we have seen people you mentioned the positioning of the dollar to save the dollar strength. Do you continue a tactic like that and you stay in the g10s to g10 space . Adam overall, as i said at the outset, our view is still that we prefer to be sellers of dollars on any rallies. We think whats happening out there is something we characterize as a broader trend toward reshuffling reserve currencies. What does it mean . Overall we are prepositive on things like euro, yen and swiss, and what we are recommending in client portfolios, as i said at the outset, tending to advise clients to be gently diversifying away from what at least on our platform have been relatively longheld dollar overweights and looking to diversify that in the way that we would see longerterm marketplace like the Central Banks are doing, for example. The reserve currencies we have been focused on. Gold, we still have a relatively supported you on that as well. It is definitely a story that is here to stay. We would be taking, if we look at the euro as the pivotal cross to watch, i think any dips toward 117 it could be bought, toward 115 is probably to be bought. That continues to be our view. Definitely dollar sellers on rallies at the moment. Tom what is your call on the yuan . The broaderms of theme of dollar diversification, i think were getting a lot of denominatedyuan assets in the last couple of months. I think it is really interesting to see this move we had from 7. 2 in late may down to a recent low during that period, geopolitical headlines tended to be shrugged off or quickly faded. I think that is a new phenomenon. If we look earlier in the year, clients more concerned about hedging that risk in china, and that has flipped on its head the last two or three months. I think the case for offshore yuan has been supported by accommodation of equity flows and fixed income flows, we saw a record fixed income flows into china in july and august was also very robust. Absent a breakdown of phase one or something fresh on the tariff front, and we assume the weak dollar environment reasserts itself and investors are looking for yield, i think we have to acknowledge that cnh represents a low vol play. We think it will continue to perform ok, almost as an em safe haven at a time when water emergingmarket performance has been more patchy. The last thing to say is if we get a Biden Victory in november, from our point of view, this would support the positive asia trade, a less combative trade policy. Yvonne adam, great context. Thank you for joining us. Coming up, we will talk more about the Trump Administration piling more curbs on china, banning imports from three companies over the alleged abuse of uighur muslims. We will have the latest next. This is bloomberg. The Trump Administration has banned imports from three companies in china over alleged repression of uighur muslims. This adds curbs on additional six firms from area. Joining us is our editor, jodi schneider. Tell us which imports are on this list from the region, and how could this affect the supply chain . We are seeing some curbs particularly,ton and the Trump Administration saying it plans to add curbs on six more firms to the three it has already banned imports on, it targets cotton, textiles and tomatoes from the area. What have a broad impact on the textile industry which relies heavily on chinese cotton. The area produces more than 80 of chinas cotton and u. S. Imports some 30 of apparel from china. This is being done through u. S. Customs and Border Protection order, which it uses to combat force later labor and supply chains. It has already again banning imports began banning from these companies and could from the other six Going Forward. Betweenraising tensions china and the u. S. Even further. Tom talking of tensions, between canberra and beijing also. Angot more news around australian tv anchor being detained. What have we heard . Jodi we heard from a Foreign Ministry spokesperson who said she was suspected of carrying out criminal activities, endangering chinas national security, according to them, which is a serious charge, a serious allegation, obviously. It gives authorities broad ability to hold her for a long time without lawyer. It happened just after we saw correspondents for australias Media Outlets leaving after they were questioned and there was a rushed exit for the pure this raises the stakes for the Foreign Press corps in beijing. Tom it does indeed. Our Senior International editor jodi schneider. Heres the latest business flash. Apple fighting back against epic games, filing a countersuit and seeking compositions for lost fees. Epic sued apple last month after the iphone maker removed fortnite from the app store, alleging the Gaming Company breached its contract by launching its own payment system. They filed a similar suit against google. The company which makes the has removed game tencents rights to franchise in india. Korean, the south partner or parent will take care of all publishing responsibilities in india. 200 hi found almost banned almost 200 chinese apps from operating in the country. That set up in the u. S. , apple with three Straight Days of falling shares and tesla with the biggest drop in share price in a single day on record. That has bled over to what we have seen in china and hong kong. You can also see south korea, Samsung Electronics down 2 10 of 1 . There are still concerns about the Semiconductor Space and restrictions especially with huawei. The asiapacific down 1. 4 . Down by the likes of alibaba. Plenty more ahead. This is bloomberg. Kong is 10 29 a. M. In hong and shanghai. Im Karina Mitchell with the first word headlines. Astrazenecas u. S. Traded shares fell after the british drugmaker Coronavirus Vaccine trial was put on hold. The vaccine is being developed by Oxford University and is seen as a frontrunner. The company says in a statement it is a routine action after one of the participants became ill. It is working to review the incident and keep the trial moving forward. There is a new twist in the divorce giving everyone a headache in europe. A new bill will be published today in the u. K. That rewrites an earlier art of the agreement already signed with e. U. In relation to britains split with the yo split with europe. Two senior advisors have quit. The changes would allow britain a no deal departure. Trade talks resume today. Europe is seeing a steady rise in new coronavirus cases as people return from holidays and the weather starts to cool. France reported 6000 cases on tuesday. Spain, germany and the u. K. Are also seeing a rise in new infections. England has banned social gatherings of more than six people. Half a Million People in california have been affected by power cuts as he waves and wildfires continue to better the state. Portland general election has also General Electric has also switched off power to customers in oregon. The fires burning through more than julian akers. More than 2 million acres. 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 Karina Mitchell. This is bloomberg. Yvonne take a look at markets here real quick. Continuing to see red on the board here as the text selloff trickles through on the asian session. As we were talking to our team about, it was spilling into Asset Classes as well. You are seeing the asiapacific index down 1. 4 . Futures pointing to a lower open in mumbai. The nasdaq futures are actually in the green right now. You can take a look at your hang seng tech index. That is down some 2. 6 today. You are watching some of these big names in tech. The likes of samsung looking a little better across the board compared to the likes of tsmc, alibaba and tencent. Downba close to being 3. 5 . We mentioned the dollar strength. That seems to be peaking its head. We are watching euro pound in particular given the brexit headlines. Continuing to drive the sterling lower. Aussie yen boosted. 60,renminbi Holding Around 8570. Tom talking of thailand, thailands debt restrictions should be eased to allow the government to spend more. That is according to the Outgoing Bank of thailand governor. Bloombergsing to chief International Correspondent for southeast asia. Rate is quite low, historic low. If you look at the liquidity of that from the macro perspective, we believe that is ample liquidity in the thai financial markets. The challenge for us is moving away from liquidity problems to insolvency problems. Policy, financial policy, Financial Institutions policy. That thefair to say bot is done with rate cutting . No. Policies on the table. By lowering the policy rate alone, the transmission is not working in normal times because the costs have come up substantially. [indiscernible] by looking at some form of provide funding at a very low rate to the banks so the bank can lend. Policies can be more direct, can be more targeted and more appropriate. Given up some of the gains, 4. 5 , among the worst performers in asia, does it reflect fundamentals now . I think it is moving better in line with the development of the economy. Are you expecting more dollar weakness to persist . Seems to be that way, but it can be highly volatile as well. The slr can be moved by a particular incident or news that might change the Risk Appetite of global investors. And 8 contraction this year. 8 deepest an contraction this year. Q2 that rebound is the tort key to that is the Tourism Sector. What are the Downside Risks to the bot . You have rightly pointed out that the Tourism Sector is a key jigsaw in our protection. We do reveal our forecast on a quarterly basis. The new forecast will come out toward the end of this month. We will have the Monetary Policy committee meeting. That assumption under the Tourism Sector has played a big role in the forecast. There is an increasing call for the government to do more with public debt to gdp ratio close to the 60 , which means the government will find it hard to spend more at a time when it needs to spend more. How do you see the government managing the die lemma . My personal managing the die lemma . Lemma. Di it is the zenit the limit that was set out during the normal time. If you look at 60 of public tied gdp, it is not it is not high by compared to other emerging markets in the region. Identifyenge is to fiscal stimulus measures. Onthe government can focus the segments, particularly those that led to creating employment for particular segments of people that have been badly affected by the current crisis, that is more important than the debt ceiling limit. That was the bank of thailand governor speaking exclusively with haslinda. Coming up, a chat with mastercard. Talking about mentoring high female talent as well as mastercards efforts at financial inclusion. This is bloomberg. Yvonne mastercard is tapping asias leap into the mobile era. It is helping Central Banks build their payment networks. Our next guest overseas mastercards digital partnerships in asia and considers Digital Commerce critical when it comes to woman empowerment. She has also highlighted the positivity of women in the corporate and tech sector to kid tech sector. Rama sridhar joins us. Thank you for joining us. You have had to confront inequality at an early age. How does a girl from india end up at mastercard with such a fruitful career and being a game changer in the region . Rama thanks for that question. I think it has been a long journey over 30 years. Technology was always a fascination and. Just fascination. Just growing up in convinced me to challenge the popular norms. A space that was coming up in the late 1980s and 1990s, technology was more about computers. Through my journey into financial services, i guess it was a logical final destination. The fact that over the last few years, payment itself has become itechnology phase has made much more interesting. I think that is in not show my journey through technology in a nutshell my journey through technology. Yvonne the International Payment space, obviously customers are very diverse. How far do you think fintech has gone in building teams that reflect diversity and how does that shape your policies at mastercard . Rama i think there is a lot of progress at has been made over these last few years. Was one ofted, i hundreds of women, but that is not necessarily true anymore. Fintech has done a couple of things. One, it has brought in a bunch of ideas, business ideas, that have encouraged a more diverse perspective and a lot of girls and women have been involved. There is a lot more to be done. The other factor that has helped is there is a general Movement Towards a more inclusive workspace and the fact is, lets face it, over the last so many years, the world has been built with products without women in mind and without the involvement of women and they have adjusted and adjusted well. I think there is a more space to new Business Models that fintech encourages. Differentse require a way of thinking, which is a natural strength of women. Trend towardeneral including women not just because it is a good thing to do but it economic good Economic Growth for companies. There is enough statistics to show that women make decisions and it is a more commercially prudent thing to do. Mastercard,that, at inclusion is front and center of the organization. There are a few things we have done. Many years back, we started a tech,m called girls for which is to take the education into schools and encourage affectiono develop an early. We have rolled it in 29 countries and 14 leg urges. We have already and 14 leg urges. We have 14 languages. Focusing on recruiting more women. Ofe last year, about 70 global recruitments and at least one candidate and 39 of our recruitment last year was women. Issue ander othe. A third one is equal pay for equal work. Arguably, the most effective way to make change at the corporate level is at the board level. How far are we away from seeing real representation, really quality at the board level at this part of the world . How are we much of a fight are we seeing for that change . Rama i would say we are probably at the starting of such fight, tom. There are two things that need to happen. There need to be the men with the right kind of experience and the right seniority to be eased into some of these work positions. Two, at a systemic level, there needs to be a drive to invest women of diverse experiences. Both are i believe in this part of the world in a much more nascent stage at this point. I do know that there are countries like india where there is a mandatory women with representation on the board. I am not sure if it is true for every other country in the region. I think there should be some amount of governance on that that should probably trigger this movement to happen. The other thing really is continuing careers for women post and after [indiscernible] encouraging that to happen and actively reaching out to people who are at that stage is also something that can be done. Tom we talked about some of the partnerships you involved in across the region in the fintech space. What are the key innovations you are seeing that are going to change up the Digital Payment space Going Forward . Rama there a few. Week there are quite a few. We are lucky in asia that it is a region of constant innovation. One of the things that comes to mind is, given the backdrop of the socioeconomic distribution of demographics across the region, i feel that the wallet in asia is a significant game changer. What we have done is work with the large wallet players because they reach a population that is perhaps yet underserved by the Banking Sector and included these wallet players, unable those wallets to actually be used. Outcome is, the real a huge swath of people have been digitally included, financially included to conduct electronic transactions, create spending and buying behaviors and therefore, over the longterm, gain more access to credit. I think that is what i would like to talk about. Ofre is a silent tsunami thought happening across asia. This is in the form of reoccurring payments. Bankost most central regulators are thinking about enabling or accelerating digitization and the cashless agenda. The key for doing that is introducing realtime payments and for structure across markets. We saw this in india or in thailand or singapore. The realtime infrastructures and the chronic transactions have galloped. We are working with many of these Central Banks to introduce payment infrastructure in the market so that a huge population, which is at this point not carded is not doing electronic transactions and can now start using there accounts there accounts to send and receive money. Tom we have to leave it there. We do appreciate your insights into the need for greater quality greater equality in the tech space. Idhar fromma sr mastercard. Plenty more ahead. We are going to be talking tesla and its rival, nikola, and its ties with g. M. This is bloomberg. Tom welcome back. Its as had shaving 82 bullion dollars from its valuation. Investors spooked after the vehicle meikle missed out on being included in the s p 500 index. Worse, General Motors announcing a true billiondollar equity stake in rival electric truck maker nikola. Spoke withder bloomberg. It is a great deal for both parties. The most important thing about this is we are able to get an oem with the best supply chain in the world i can build our nikola badger they factory with a factory that already exists. It takes decades to learn the supply chains the right way. The second thing they bring to us is their ability to leverage their batteries. The batteries alone are going to save over 4 billion over the likes of this agreement. Even just from the batteries alone, we have doubled what we exchanged. We gave up about 2 billion worth of stock. We gained over a billion in savings on the batteries alone. Their battery costs are 30 less than hours. Imagine than ours. Imagine having one of the best teams in the world to manufacture your truck for you. Obviously a lot of comparisons to draw between your company and tesla because of the name and you are both in the electric vehicle industry. Your approach to manufacturing is a lot different than the approach tesla took. You also have these ancillary businesses regards with regards to hydrogen. How does the partnership with g. M. , has that is that going to allow you to sidestep some of the challenges and pitfalls tesla went through in trying to ramp up production of its vehicles . We took a totally different approach. Tesla had access to an immense amount of capital. They kind of do things on their own. We knew there was no way to raise that kind of capital immediately. It was important for us to build these relationships. We really focus on the big semi trucks. That is where our company came from. We have over 10 billion in preorders for those trucks that are waiting to be built. Margins are huge. They are really good. We know we could not do it alone. We partnered with eve echo to do iveko to do it. It allows us to enter a supply chain that already exists. For the badger, it allows us to be competitive against everybody in the world. We will have a truck out in year and a half in production. With regard to potential sales, what types of volume argue hoping to reach in the short term within the first year or so of production . I think we have to be careful not to run too fast. We have seen this and i use tesla as a good understanding because they have been through a lot of problems and they learn from them. When the model y came out, there were problems with paint and having issues coming off the factory line. We can go build as many trucks as we want. The problem is, can you make your customers happy . We are not looking to build half a million trucks a year. We want to focus on a small quantity that is very profitable and make an item that Everyone Wants and there might not be enough supply of it. We are not trying to build a half a million a year. How about sales and servicing . Is that going to be owned by nikola or driven by g. M. . Directly through nikola. And we sat down with g. M. We said, the world is changing. Tesla does everything themselves. We do not do everything. We just do some of it. We think direct to consumer for the sales definitely is important for us. We are the ones in charge of the. We are going of that. We are probably going to partner with someone on warranty. We want a nationwide infrastructure immediately. What about states like texas where you cannot do direct to consumer in that way . That is a big truck market. There are a lot of ways to handle that. They have figured that out. Distributed out and brought in. If you are doing service with them, we believe they are going to allow you to work with them. In the next year and a half, we will have those pretty much all figured out. Yvonne that was the nikola founder. We will continue to follow the text selloff. The chinext down some 4 . This is bloomberg. It is almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. A look at top stories. It is a universal picture of gloom across asian stocks despite nasdaq futures pushing higher. The risk off mood spreading to commodities. Sentiment not being helped by astrazeneca, reporting its phase three coronavirus trial on hold. Shares tumbling after hours. Rishaad waging battles on multiple fronts. Tech trade and media driving chinas policy. Lets check in on these markets because asian stocks are tracking at a onemonth low on these vaccine concerns. We see the tech sell off all age as well. The taiex under pressure. Asare watching the chinext well which has fallen as much as 5 . A lot of these biotech stocks that have been the best performers really tumbling on these vaccine concerns. Looking at the asx 200, it is also under pressure. One of the worst performers because it has also been hit not only by the double lambing of what is happening in tech but also what you saw in the Energy Market with brent below 40 for the First Time Since june. The Australian Energy sector down almost 4 . It is really about investors looking for the exit and ignoring the data because we have had a lot of positive data. When you look at consumer inflation in china, some good news coming through in terms of Consumer Sentiment in australia. Rishaad lets have a look at what is going on in the open in bangkok. Following the regional trends. 1. 25 down. We heard from the bank of thailand governor. He is suggesting there should be more fiscal policy to prop up the economy and recovery. That would send a signal they are done with anything in terms of cutting Interest Rates. They cannot do much more at the moment. At the moment, it is trading slightly weaker. Elsewhere, look at indian bond yields. They have been creeping up. A bit of confusion out there because indian bond traders are on tenterhooks. Days ago, the rb announcing major low yields. Announcing. The rbi announcing low yields. Looking like it will be a down arrow story for the nifty when things underway in 43 minutes. Lets get more analysis with Mark Cranfield. What on earth is going on . This was perhaps anticipated, this meltdown with tech stocks. The thing is what precipitated and how much further does it have to go . Mark good morning. Where else is it going to spread . I think that is what is concerning people a lot today. That it is starting to spread to other Asset Classes. At the beginning of the move last week, people saw it as a tech correction. Tech stocks had gone out of line with their fundamentals. Pricing was skyhigh. It was reasonable enough for tech stocks to have a correction. It is now going into the the stock market is starting to have an effect on other things to some extent. Bonds are starting to go to bid. The fx world is getting a lot more volatile. Is beginning to spread across Asset Classes. That is why you are seeing the followthrough in asia today. People are starting to question whether the big runup we see in risk assets since march is justifiable. They are looking for places. Looking for gains in other situations. People see this as a good excuse to get on to the sidelines. Juliette they are looking for the exit despite the positive data we have coming out. Brings us into the question of the day. Is a getting a little bit of froth off the top or is this the start of a deeper route . Mark i suspect that now we have downside,on the people will see this as a reason to reassess several things. Not just tech stocks. You consider the fact that we have this u. S. Election less than two months away. Whatever we get in terms of polling and messages from the u. S. Will have global consequences. Much higher degree of attention between the u. S. And china, china and australia and germany and russia. There are semi different factors pulling into peoples minds that will take them away from how to assess financial markets. It will become my situation where they are looking for defensive moves. It will be a good reason for people to sit back and take a pause about all of this. When you have had such a runup in markets, that will mean people take money off the table and they moved to the side. We could see a put we could see a bit further. There are a few places where people have not extrapolated these moves we have seen in tech. We have quite a few bumpy days ahead of us. Also, itthe thing is is not just the tech side of things that is sending off these alarm sides but oil as well. This coming as we have seen oil prices decline. Brent below 40 a barrel. That reflective of weaker demand. Perhaps looking fundamentals again. We are nowhere near out of the woods with regard to the pandemic. Mark exactly. It was quite a brave move from saudi arabia to cut pricing to their oral counterparts there heircounterpart t oil counterpart. Suggestingtuation they are ready to start selling that as well. Speculations coming back in. The rebound we have seen in oil prices seems to have come to an end. We have had some levels on pricing markets, which people will be looking at is a good point. As a good point. When you see the risk aversion, that will feed back into it as well. All in all, it is the wrong time for people to be playing with the oil market, thinking they can really trying to gauge prices by what opec are doing. It looks like the is not good enough. Traders the demand is not good enough. Oil could have a bit more downside particularly if equities stay under pressure. It will be a pretty ugly picture. Juliette Mark Cranfield with us in singapore. You can follow more on everything mark was talking about and all of the other days trading on the bloomberg. You can get a market rundown in one click. There is commentary and analysis from bloombergs expert editors. You can find out what is affecting your investment right now. Lets get the first word news with Karina Mitchell. Karina you touched on it were at the top. Astrazenecas u. S. Traded shares fell after the vaccine trial was put on hold. The vaccine is being developed with Oxford University and is seen as a front runner in any potential treatment for covid19. The company said it is a routine action after one of the trial participants fell ill. It is working to review the incident and keeping the trial moving forward. There has been another twist in the brexit saga. A new bill will be published today in the u. K. That rewrites part of an earlier agreement already signed with the in relation to britains divorce from europe. Critics have called the changes to the agreement unlawful and two of the u. K. s most senior advisors. Quit the changes would allow britain a no deal departure. Europe is seeing a steady rise in new coronavirus cases as people return from holidays and the weather cools. France recorded 6000 new cases on tuesday with numbers climbing for the past three weeks. Spain, germany and the u. K. Are seeing a rise in new infections and anglin has banned social gatherings of more than six people. Up to half a Million People in california have been affected by power cuts as heat waves and power cuts continue to better the state. Rictland general elect has switched off power to some customers in oregon. 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 Karina Mitchell. This is bloomberg. Juliette still ahead this hour, Bloomberg Opinion columnist trade mcgregor weighs in on chinas worsening relationship with the u. S. And australia. Rishaad are interview with the Outgoing Bank of thailand governor our interview with the Outgoing Bank of thailand governor. This is bloomberg. Looking back to Bloomberg Markets. Thailands public debt restrictions will be eased to allow the government to spend more. The Outgoing Bank of thailand governor has been looking at options when Interest Rates out an alltime low and it faces a world ripped by a pandemic. He was speaking with haslinda. The policy rate is already quite low, historic low. If you look at the liquidity from the macro perspective, there is ample liquidity in the thai financial markets. The challenge now is moving away from liquidity problems to insolvency problems. A combination of policy. Military policies, financial policies, Financial Institutions policies. Is it fair to say that for the year, the bot is done with rate cutting . No. Policies on the table. By lowering the policy rate transmission not working as in normal times. It will not pass through doors better passed to those passed to those in need of economic assistance. We provide chief funding at a low rate to the bank so the bank can lend. Policies can be more targeted and more appropriate for the current situation. Gains, are some of the 4. 5 , among the worst performers in asia, does that reflect fundamentals now . I think it is moving better in line with development of the economy. Expecting dollar weakness to persist . Way, butms to be that even the dollar can be highly volatile as well. You look at the size of global slr cany out there, the be moved by a particular incident or news that might change the Risk Appetite of global investors. Trendline gdp is assessed for an aide to 10 contraction this year. The deepest false sense 1998 false sense 1998. Key to that rebound is the torah some sector, which is at risk of a meltdown. What is the Downside Risk to the projections of the bot . You have rightly pointed out that the Tourism Sector is a key jigsaw in our protection. We do reveal our forecast on a quarterly basis. The new forecast will come out toward the end of this month. We have the Monetary Policy committee meeting. Assumption under the Tourism Sector has played an Important Role in our gdp forecast. There is an increasing call for the government to do more. The public debt to gdp ratio close to the 60s safety percent ratio which means the government will need to spend more will find it hard to spend more at a time when it needs to spend more. My personal view is 60 public debt to gdp limit can be relaxed. It is a limit that was said at was set up during the normal time. If you look at safety percent of public debt to gdp, it is not high by the national standard. It is not high as compared to other emerging markets in the region. Identifyenge is to fiscal stimulus measures. Focus onvernment can the segments, particularly those related to crating employment for particular to creating employment for particular segments of people who have been badly affected by the current crisis, that is more important than the debt ceiling limit. Juliette that was the bank of thailand governor speaking exclusively with haslinda. Coming up, geopolitical tensions and large discrepancies in economic recovery is shaping up global currencies. This is bloomberg. Juliette chinas consumer inflation moderated in august due to a slowdown in food prices. Bloomberg economics says prices in china should give the central bank more room to ease in the months ahead. Cheung as head of macroeconomic strategy at westpac. What do we see from the pboc . Frances the latest inflation outcome means there is a little more room for further Monetary Policy easing. In china, it seems the pboc continues to be quite targeted, focusing on liquidity measures only. With still very heavy bond supply and also the certificate of maturing this month, we believe more liquidity is needed. Ideally, some longterm liquidity injection rather than only through short term omos. Juliette so we have chinas economy doing pretty well coming in at first in an firstout. You have this dollar weakness and you have tensions not only with the u. S. And also with australia as well. You have a bold call for the cny by next year. What level are you looking at in the more shortterm and where do we see resistance here . Frances upon this reversal in the trend, in the short term, we would enter a consolidation period for dollar cny so we would expect some range bound between 680 and 685. More room would be for next year. We see basically one supportive robust which is chinas system. Than recovered earlier surface trade. Surplus. Hina had good that put china in this pandemic can change. May be up to a few months. There also more sustainable flows, in particular, bond inflows. The Government Bond whether or not to be included in another index. Even without this decision, we reckon that the corresponding bond growth has been lagging behind. In other words, there may be some catch up. Flow that is supportive of the women be of the renminbi. The renminbi is going to be strengthening as you are protecting. How far does dollar weakness persist . The other part of my question is, what is the impact for other currencies in this part of the world . Frances we still believe this bearish,end is still mainly because of the unfavorable with the fed dovish and Interest Rates staying low and debt for an extended period. Asian Central Banks are arguably less dovish, especially with the pboc, which has been reluctant to deliver outright Interest Rate cuts. Tom that perspective, continue or maintain for a slightly longer period. In the short term, definitely between now and the u. S. Election, would expect market to become slightly more riskaverse, raising some headline risk. That is why we are expecting range bound in the coming weeks. Rishaad and the impact for the rest of the region for the weaker dollar . Because normally frances right. We have a weak dollar. Trend, there is likely to be a weakening trend. Anything is just bilateral. A lot of the shares will be supported. [indiscernible] i think there is a little bit of relative performance as well. Recover banks trade first. Trade such ass tourism and education recover at a later stage. We are seeing more confidence in the merchandise trade. In the shortterm especially when risk aversion is heightened, the taiwan dollar used to be resilient. Juliette what you looking at in the bond market when we see such differentials in the yield space . Frances we are looking at both nominal and real Interest Rate differentials. Widening in china and india. Stay quite low in the regions, which are korea and thailand. For real defense, which is more mediumterm considerations and we have to take into account the different credit ratings. We compare the real yield defenses we still have markets in asia. The korean you want in the the korean yuan and the dollar market. Volatility. Investors would like to increase their hedge. [indiscernible] something that is kind of making foreign inflows from coming in even more aggressively. Juliette always great to chat. Do not miss our Bloomberg Live virtual event. The future of forex later this afternoon. Will hear from experts from jp morgan and ig asia, others. A quick check of the latest headlines. The company that makes the pubg videogame has removed rights to distribute in india. Appselhi banned almost 200 from operating a the country. Apple has filed back in its legal battle with epic games, filing a countersuit and seeking compensation for lost fees. Epic had sued apple last month after the iphone maker removed fortnite from the app store, alleging the Gaming Company breached its contract by launching its own payment system. Rishaad lets have a look at what is going on in major indices across this part of the world. High on the heels of what we saw on wall street. We have concerns about the covid19 vaccine being delayed. Astrazeneca suspending its trials due to an illness. Quickly looking at china. Is going on as they head toward their lunch break. We are seeing the tech side of things. 10 year yields on the way down marginally as people look for a haven. More on the way. This is bloomberg. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Juliette it is almost 11 30 a. M. In singapore. We are in the middle of the trading day. Have holdings in china have surpassed the home market of singapore for the first time. This follows gains in Companies Including alibaba group. Lets get the first word headlines and head to new york with Karina Mitchell. Karina Chinese State media say australia intelligence agents raided the residence of a china lease of a chinese journalist. The chinese reporters were questioned and computers and phones were seized. Reports come a day after two australian journalists fled china after being told they were under investigation. Vedthrop grumman has recei an air force contract to develop americas next intercontinental ballistic missile. It is the first installment of what will be an 85 billion program term place the aging missiles in Service Since the 1970s. It is expected to work on the new missile, which can carry nuclear warheads, by 2029. Mitch mcconnell is hoping for a vote on the latest stimulus package as early as this week. The republicans proposal is expected to cost between 500 and 700 billion. Democrats are looking for at least three times that amount. Nancy pelosi told bloomberg the packages nowhere near enough the package is nowhere near enough. What they have is so meager it insults to the intelligence of the american people. It does not solve the problem. We know we have to compromise. We know we have to negotiate to reach an agreement. We all want an agreement. Make no mistake about that, but get real, mitch mcconnell. Karina 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 Karina Mitchell. This is bloomberg. Juliette just getting some breaking news on the terminal that softbank is said to be getting 12 billion in orders for its wireless unit. They have sold 12 billion of the stock they are selling. Covered with securities leading the distribution. This according to people familiar. Local and International Investors droned by the dividend yield, which was lower than in 2018. We had softbank going in to the luncheon down 5 as we continue to see that move coming from the latest that on derivatives. It will be interesting to watch softbank coming back online. Softbank said to be getting 12 billion in orders. The asiapacific tech index. Nasdaq futures are tracking higher. We also had the vaccine concerns. You see a lot of Biotech Companies coming under pressure on the chinext, which has fallen by as much as 5 . Lets have a look at what else is happening. We had a little bit of data out. We had some positive data in terms of china and south korea employment and Consumer Confidence in australia. The Energy Sector a particular drag in sydney. Chinas state media has been reporting intelligence officials rated the homes of intelligent of australian reporters in june. And Australian Television anchor was being held over security violations in china. Joining us is a senior fellow of the lowell institute. Welcome to the program. I want to start off by talking about the various pushback, the animosity china is showing to various countries, the likes of australia. We have the u. S. , india and pushback with the e. U. The hawks are firmly in charge it would seem in china. From your studies and writings about the internal workings of the Chinese Communist party, who put the hogs in charge and are the in charge the hawks in charge and are they in charge . The hawks are in charge. Would slightly qualify that by saying xi jinping really is doing a lot of the things any chinese leader would do if they were in charge at this point in time. China has been consistent in my view. They want to regain territory, which they think is theres. They want to be the dominant country in the asiapacific. China was not powerful enough. Xi jinpings china is powerful enough to do that, so that is what he is doing. Also, i was going to ask you whether his position was as secure as it seems. If you are hawkish and you play the populist or nationalist card, it is a cover for somebody weak. What is your view . Richard there is a lot of discussion about that. People say he is not as strong a was. S if you look at china right now whether it is because he lost many of his critics and are a lot of them, we know that, he is unassailable right now. On top of that, after a disastrous start, china has done a lot better than many other countries. , recovery isconomy patchy. On the a much better story nonetheless, a much better story than other countries. It is hard to see at the moment. Course, trump is calling for the total economic decoupling of the United States from the chinese economy. We have. Xi jinpings policies. I think you call it old wine in new bottles. Something called the dual circulation. Is that the same thing is decoupling . Richard it is in a way. Ist of it obviously consumption should consumption. [indiscernible] is decoupling, with just domestic security. The emphasis on global integration. Like Many Companies around the world, the chinese are talking about domestic security. I think the difference in the chinese case is they started much earlier. People are talking about people are criticizing the u. S. For talking about decoupling. China started much earlier. That is what the new policy is about. I think you will get to see that spelled out in greater detail in the next economic plan, which will come out early next year. Chinate that plan from and how china has handled the pandemic, does that give them an advantage to overtake the American Economy in real terms sooner than many had anticipated . Richard it certainly does. That is the way covid has accelerated its trend. China was on track to take over the u. S. Economy in real terms by 2030. I know there are people who had their own estimates. According to recent calculations, putting in the new expected growth rates post covid, china was the biggest in real terms by 2028. If the world does not change on that day, if you accelerate a huge trend like that, it has a big impact. In terms of real power and psychologically as well. Juliette i want to get back to journaliststhe detention and the fact that two other correspondence or rushed out of china. Colin correspondents were rushed out of china. How concerning is this for other journalists placed in china and independent journalism as a whole . Richard it is certainly concerning for australia. It is the First Time Since 1973 we have not had a single australian journalist inside china. It certainly worries me. I think generally, the u. S. And china [indiscernible] i think the general point to be e is the chinese [indiscernible] i think china increasingly does not want them or does not tolerate them. They are doing the sorts of things they did not do much of a few years ago, which is kick them out or drive them out. Deteriorationhis in relations is quite concerning and we have touched on a number of other points as well. When you look at chinas view of how it has come out of the pandemic, you make an interesting point about the wuhan pool party, which got quite a few hairs up on peoples necks. Is this a story of propaganda as well of china showing how strong its economy is faring . That makesphoto like me tired. Party ishe wuhan pool interesting i number of levels interesting on a number of levels. People had all sorts of reaction. Some of them indignant and angry. In china, there is a double element. Wuhan itself [indiscernible] i think generally, it assured china china is back unlike other countries. Most people outside of the country look at these things and consider them as outsiders. You have to look at the internal dynamic of such stories in china ause that is the primary rishaad it is turning to a bit of a tech war. Tiktok and huawei all in Donald Trumps crosshairs. Is the future one of a berlin wall . [indiscernible] maybe trying all sorts of things before the election. I think we are in a Holding Pattern until we get a result in early november. The u. S. System as a whole and even some of the u. S. [indiscernible] now [indiscernible] that is the general direction of policy. The u. S. Has had more success than people expected them to have. For sides are looking partners. If the u. S. And china competition continues, which of course it well, it is hard to see how you will, it is hard to see how you turn that around. Juliette coming up, one of the leading candidates for a covid19 vaccine faces a delay. We will have more on why astrazeneca had to hit pause on its research. This is bloomberg. Juliette a big setback for one of the leading covid19 vaccine candidates has jolted markets in a the europe and asia and u. S. This after one of the participants in the Clinical Trial became ale. For more, we are joint became ill. We are joined by su keenan. Illnessngle unexplained has triggered a pause in the study. Astrazeneca saying the pause as part of its standard review in such trials by reaction to the setback was swift and harsh. U. S. Traded shares fell sharply an extended training a standard trading while shares of thosend biontech shares rose. All three companies are in a race that is being widely watched. To develop the first viable Coronavirus Vaccine. They are also participating in the u. S. Federally funded Program Involving billions of dollars, called operation warp speed. Astrazenecas vaccine was in a phase 3 study. It was viewed as the leading candidate to reach the market. Regulators are investigating and conducting an indepth review as to what happened. The quote from astrazenecas spokesperson is that this pause quote, a routine action, which has to have been never there is a potentially unexplained illness in one of the trials. It is too early to determine the six person diagnosis the company says. Some scientists are downplaying the significance of the setback. There are those concerned a could disrupt the most closely watched scientific race in history. Setback is impacting more than the health care side of things. How widespread has the reaction been . Su what we sow in extended trading in the u. S. Is, fairly widespread in those industries impacted by the pandemic and depending on a vaccine to the store normal demand, that had hard. That would be the cruise stocks. They all dropped in extended hours. Also, the airlines, which have been forced to ground the planes and canceled flights and lay off tens of thousands of workers. We also saw Ride Sharing Services like uber and lift drop. Their has been a view, particularly in the u. S. , because the Trump Administration is promoting an end of the year virus vaccine, that normalcy would come along with that. This particular setback seems to push that timeframe out more. Back to you. Juliette thanks so much. Hangtimeo watching biological, which has slumped in the morning session. The most since going public in 2017. It had reached a licensing pact with astrazeneca to bring the vaccine to china. It is worth noting the stock is still up with 80 for the year. Certainly still seeing the ramifications of this on other vaccine makers in the region. Makersher vaccine have all beens falling substantially today. Indian just had the market a couple minutes ago. This is where we are. A move to the downside. Fairly muted currently. Sense thanks down good news. The s p Global Rating saying indias economy is likely to recover starting next year. Med the rapidly spreading epidemic. India is the epicenter of all that. That is a look at the indian markets. Coming up, trumps deadline for bytedance looming. We will hear from tiktoks chief lobbyist about the saga and how does affecting business. Another interview is next. This is bloomberg. Rishaad u. S. Assets in American Companies seem to stall thanks to chinas surprise announcement the country could restrict overseas tech deals. Limber technology anchor emily chang spoke with the vp of u. S. Public policy. Talked to him about recent geopolitical tensions and how that would affect future growth of the company. This company is taking the world by storm. It is something beloved by over 100 million americans that use the app all the time. We are continuing to grow our engagement numbers. The creators keep coming back. Which is created a billiondollar we just created a billiondollar fund. It is creative, fun and joyful. We are doing great. People are loving it still. Emily i know you cannot tell us the timeline of where you are on the deal, but we are a week away from the president s deadline. What can you tell us about what tiktok is looking for in a suitor and whether microsoft or walmart or oracle and body that . I can tell you we are optimistic and our focus is on our community and our creators and our employees. We have over 1500 employees in the unit states. We have been growing rapidly. Employees in the states that do not have tech jobs like michigan and florida and texas. We plan on hiring another 10,000 employees over the next few years. Our focus is still on the growth and on the community. We remain optimistic to be around for years to come shared emily are you concerned about the Economic Impact if the president does succeed in banning the platform if a deal is not done given how many Business Owners and young people across the country are using this platform . Optimist as im an mentioned. The worstcase scenario would be unfortunate for 100 million plus americans that loved the platform and use it everyday and the Small Businesses relying on tiktok and our employees and the future employees in seven different spaces across the country. There would be a major impact. We are focusing on the positive and plan on doing what is best for our community. Emily there are a lot of questions about what tiktok and bytedances relationship with the Chinese Government is. What is tiktok doing to win approval from beijing given that the Chinese Government is going to exert some sort of influence over the deal and how do you balance two opposing governments . We certainly find ourselves in very interesting geopolitical times. This situation between the u. S. And china and the Global Economy , where we fit today is a difficult one and as a private company that is trying to look to bring entertaining content, as i mentioned, tiktok is not available in china. We are trying to stay out of geopolitics the best we can and focus on the business and the creators and the users but certainly the microeconomic and macro Political Climate is a challenging one at the moment. Emily i know you involved in tiktoks transparency and Accountability Center. For all the joys tiktok has brought users, there also criticisms it does not play to the best parts of our humanity. What are your priorities, especially going into what is bound to be a contentious u. S. Election . It is an important question. Many Technology Companies have been criticized over the last few years i not being that transparent or accountable. We are looking to go a step further. That is why we created this transparency and Accountability Center where we have had government visitors virtually. The physical center needs to be remaining closed because of covid. Showing an unprecedented behind the scenes look at the algorithm, how the source code works. Talk about her content moderation policies, how content goes on the platform, how and what we are removing and how the Privacy Security practices, all not just tiktok but for all platforms. We want to set the standard for transparency and accountability for all platforms. Juliette that was tiktoks photos president of u. S. Public policy speaking with emily chang. A quick check now of the latest business flash headlines. Tesla shares had their worst day since the company was listed 10 years ago. The plunge followed a decision by the s p 500 not to include tesla on the index. The stock is still up 300 this year, making its market cap bigger than toyota and volkswagen. Teslas fortunes were not helped by gm taking a 2 million stake in its arrival, nicola. 11 deal sees gm taking stake in nickel and getting one seat on the board. Nickel has yet to generate any meaningful revenue. Nicola has yet to generate any meaningful revenue. Rishaad we see this trend of private equity. Silver lake is going to invest 75 billion rupees. Just over one billion u. S. Dollars. It translates to one and threequarter percent stake in reliant veto reliant retail ventures. A company that operates retail businesses. Large inate in large part of india. Iance retail coming in at 75 billion rupee investment in the company. Lets have a look at hong kong stocks. We have the down arrow at the moment with these Tech Companies at the moment. We sell facebook, microsoft, amazon and google losing in excess of 4 . That is what is going on here with the tech heavyweights leading the equity markets down in hong kong and elsewhere. The following is a paid presentation brought to you by rare collectibles tv. The Morgan Silver dollar is the most iconic point in the United States numismatic history. Design by United States mint george t morgan, this Silver Dollar series was minted from 1878 to 1904. Then again for one year in 1921. The