Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Country out of its worst economic slump in decades. The deadline draws near for tiktok to divest it u. S. Assets, reports a shutdown of its priced app for sale. We have breaking news. Oftbank will be selling this as bloomberg learned softbank was trying to strike this deal that could be valuing it at 40 billion. Arm, weis deal to sell could have seen softbank reviving those stocks about taking the group privates. We are hearing that softbank divisionelling its arm to nvidia. This would be a 40 billion deal, the biggest chip deal to date. The transaction value is up to 40 billion. Nvidia could be paying more than 21 billion in stock and 12 billion in cash. This would be a 2 billion payment as signing. This coming at a time as we continue to see softbank divest its assets. Softbank could be receiving an additional 5 billion of cache if the performance meets certain targets. This also depends on what regulatory scrutiny they go through. This could be the largest ever in the semiconductor industry. We could see complaints from rivals such as apple and samsung. Haidi lets get more context on this deal from our deals reporter. Me your assessment of the terms of the deal and what the implications and problems might be. Seeing the headlines hit now, this is hot off the presses, this deal is being announced, nvidia buying arm from softbank for 40 billion. A lot of this transaction is in stock. The vast majority is in stock. Softbank will be receiving 12 billion in cash and if you add up the cash, it is a small premium that softbank is making. Billion inrm for 32 2016. Especially having operating targets, it is not always a sure thing. Softbank and arm bar telling nvidia, we will hit these targets to get the additional ca sh, but it is still a pretty good outcome for softbank which has been trying to divest a lot of assets to pay off debts. This is an interesting transaction, one of the largest in the semiconductor industry. Pulling it off or are we going to see regulatory scrutiny . It is a great question. We expect over the next few months and up to a year, there could be pushback from regulators around the world. Nvidia is a customer of arm in arm was viewed as a neutral party in the chip industry because their customers licensed the same technology so with nvidia coming in, they are going to be competing with the apple,tors, so intel, these are all custom ease that are customers of arm that nvidia is going to be competing with. These Companies Know the regulatory landscape so i would not be surprised if there was some pushback in different jurisdictions but nvidia believes in this deal as softbank does as well. They will try to push it through despite the hurdles. Anna baker without latest news on softbank. We have more breaking news, the tiktok owner bytedance rejecting , accordingoft offer to a report by the New York Times. The owner of the app rejecting this offer sunday from microsoft to take over that u. S. Operations. Bytedance coming against that President Trump deadline, midseptember, for the sale of its u. S. Operations. This would leave oracle as the sole note remaining better bidder as that executive order continues. Negotiations have been complicated by china setting up new regulations when it comes to the sale of tiktoks u. S. Operations. Nubia andard from hong kong that bytedance would not be selling or transferring the algorithm in any sale or divestment. Now the New York Times saying bytedance has rejected that offer coming from microsoft. It leaves us with uncertainty as to what comes next with tiktok and other. More breaking news, the outlook for oil. B. P. The first Major Oil Producer to say the era of Oil Demand Growth is over, the ratline this growth of oil demand is over. A lot of people thought of this era could have lasted for another decade or more, Oil Consumption may never return to levels we saw before the coronavirus according to bp and a report just out. In a most bullish scenario, it sees no better than broadly flat for the next two decades as the Energy Transition shifts away from fossil fuels. It is like the market had been anticipating this. We had shortselling, bearish bids jumping by 26 , the highest since early march. Investors are starting to see the fragile demand and supply recovery dynamic in bp, the first major to pull the end of the oil demand heir apparent era. U. S. Futures to the upside. March,orst week since nasdaq 100 now down 11 from that Early September record. The nikkei, upside of 0. 6 . It is a big week for japanese politics as we have the country set to get a new leader. The ldp is holding its party elections. The winner is all but certain to be chosen on wednesday, Yoshihide Suga is the favorite going into that. He dollar Holding Stable we are seeing brent crude just under that announcement. It seems the era of oil demand now over. A lot happening. We start with i pandemic, global cases reaching the 29 million mark. Europe becoming a concern again with that u. K. Set for tighter restrictions on social gatherings following three consecutive days of more than 3000 new daily cases. France reporting a search with 17,000 cases over the weekend. The most since the end of its lockdown. 80 people have been arrested and fined during a series of weekend protests. Restrictions will be eased monday. The State Government has offered in feeses 3 billion waivers, equivalent to a quarter of the annual tax revenue. The fisa ceo says it is likely a virus vaccine will be a lego will be available before the years end. He is confident it will be safe but the final decision will rest with regulators. Oxford university in astrazeneca have restarted the trials of their vaccine after it was halted over an illness in a participant. They are aiming for the end of the year. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Still ahead, japans ruling ldp picks a new leader. We speak with one of the countrys top diplomats and former ambassador to the u. S. , ichiro fujisaki. We will have more on tiktok possibly rejecting microsofts offers next. This is bloomberg. We have breaking news, oracles negotiations for tiktoks u. S. Operations have intensified in recent days in a sign that oracle is gaining the upper hand over microsoft. We have heard from the New York Times that bytedance is rejecting the microsoft offer. Lets discuss with tom mackenzie, joining us in beijing. Give us the latest on this. We have heard reports that china was opposing the sale of tiktoks u. S. Operations. What is going on . There has been a flurry of reporting as we approach that september 15 deadline. President trump said he wants to see a deed a deal, tiktok sold off or shut down. Reports,ack to these this reporting does seem to dovetail with what we have heard from axios a few days ago that oracle has the lead in these negotiations. The New York Times saying bytedance has rejected the offer from microsoft. We will see if microsoft comes back with a better offer or if outspreadut there are out. Tiktok is not prepared bytedance is not prepared to sell the algorithm that comes with tiktok which some have described as saying being like selling a car without the engine. That follows reports suggesting beijing preferred to see tiktok close down rather than a forced sale to a u. S. Company. We have seen china changing its regulations and restrictions around the sale of certain technology products, including ai systems overseas, which appeared to be chinas attempt to make this deal difficult, put the hurdles in the way. We are looking potentially at september 15 in terms of getting more clarity on where things stand. Bytedance has told us that they are working at getting a proposal in front of the white house by september 20. There have been suggestions that oracle is a better fit for business reasons but also political reasons because Larry Ellison is a supporter of President Trump. Maybe it would be seen as a more easy digest for the president , something he is willing to accept. Uptodate. News you have to think oracle gets an advantage by being the only bidder we are getting confirmation from microsoft rejectedtedance has its offer for tiktok. Oracle as the only bidder. How does the Chinese Government fit into this . We heard reports that they would prefer a u. S. Shutdown than a forced sale. As we get into november . Crucial backdrop for this. Some broader tensions between the countries on all sorts of france. Of tiktok islaint around data security. Basically saying tiktok and bytedance is not a reliable partner, it cannot be trusted with all americans data and that is why they wanted to see a sale or the app close down. The beijing perspective appears to be that they would prefer to see tiktok either close down or the crucial part of the business retained in china rather than seeing a wholesale sale of the app to a u. S. Company. Face byld be a loss of china, they dont want to be seen as giving a pass to u. S. Attempts to force this sale through barrett that it seems to be the chinese perspective. Additional restrictions have been put in place by beijing in the last few weeks around the sale of some components. Tom mackenzie in beijing with the latest on tiktok, microsoft confirming that bytedance has rejected its offer, leaving oracle the only bidding party. Japan set to get a new leader, we will speak with the former japanese ambassador about the coming change at the top. This is bloomberg. Raiseans leadership expected to be decided later. Yoshihide suga looked certain to become the next Prime Minister. Joinede analysis, we are by the former japanese ambassador to the u. S. , ichiro fujisaki. Thank you for your time today. We have heard about the potential of Yoshihide Suga becoming the next Prime Minister and how that would mean a candidate of continuity, whether oris for the Economic Policy domestic policy in general. What does that mean for Foreign Policy . Mr. Fujisaki good morning, thank you for having me. If he becomes the Prime Minister, and it looks almost is continuing Foreign Policy as well. What does that mean for the u. S. Japan relationship . Jobnow abe has done a good despite the challenges from the Trump Administration. Think u. S. Japan relations will not change because of two reasons. Mr. Suga has been chief cabinet secretary for eight years. Chief cabinet secretary means like chief of staff in the United States. Engine of thee administration. The second reason is even if the leader changes, we cannot afford to change the policy with the United States around north u. S. Japana, russia, relations has to be the cornerstone of our Foreign Policy. Mr. Suga has pledged the commitment to that alliance. What does that mean with a relationship for china . Coming at a time where u. S. China relations had been deteriorating and he is expected to do so and it is expected to do so even after the election. It does not depend on u. S. Policy after the election if we see the platform or u. S. Policy towards china and others will make a big difference from now because he is saying he will not engage in war orcalls for more engage in tariff wars. Solution, thes most important relation is the u. S. , but we will try to keep , as thes with china biggest trading partner as well. Are in not mean we be onn or the weight will the u. S. Side clearly. One of the complications to that relationship has been President Trumps demands that military partners contribute more. Japan has been opposed to that in that has resulted in some tensions. Suga has the ability to navigate these tensions and negotiations when it comes to the military issue . Mr. Fujisaki i think so. Platform,k at the they say it was not right for the Trump Administration to have asked south korea to increase dramatically as well. Think with trump, if trump remains, we will negotiate and come to an agreement. Trump said since the beginning is not always the outcome that we will be concluding. Shery that seems to be the understanding among people who negotiate with this administration but President Trump has called for a dramatic rise in the contribution of japan, almost quadrupling what it pays. Under the threat also of tariffs as well. Have these issues already strained the relationship and if the Trump Administration continues, can this be reversed . Mr. Fujisaki i think we can manage that. Cost three quarters of the of the u. S. Forces in japan is already born by japan. Cost were to quadruple our , it means be bill be paying even the salaries of u. S. Forces. I think that is not rational. That is not what the u. S. Government would be asking. I think we can come to some agreement if we start negotiations. In 2006, theated cost, the issue, about 20 years ago. At the beginning, our position, we come to an agreement. I am optimistic about it. Shery what about the japansouth korea relationship . It has been strained by those export controls and differences on historical views. Unfortunately, it of been not the best because many reasons. I hope that the change of the government will give some chances to improve. Maybe we have to wait for the korean government to change as well. At least this change in november i think well push it a little better. I think japan has to hang onto our agreement with the republic of korea in 1965. We have a territorial issue as well, other issues that we can issues. Olve those that is how i view it. With trade being ever more important given the pandemic slowdown, do you have any optimism that if there is a change in the u. S. Administration in november, that u. S. May be possible to rejoin the tpp echo tpp . Mr. Fujisaki i am not optimistic about that at the moment because mr. Biden has been saying before he makes that you as strong again, he will not join any trade deals and if he is going to make a trade deal, he has to have environment leader and labor leader aside i dont know if that is dont know how many months or years it will take. I think it is good for United States. I think they could come around. Maybe we should not accept that to happen right away. Former ambassador to the United States joining us from tokyo, appreciate your time. More perspective on the leadership race ahead with investors with us. He says japan is looking like a safe haven in a lot of ways. The eu and china pulling a Virtual Summit today, trade and Climate Change top of the agenda as beijing seeks european counterparts in the wake of the pandemic. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Is daybreak asia. Im Karina Mitchell with the first word headlines. Microsoft says they have rejected its offer for tiktoks u. S. Operations. That leaves oracle as the only publicly known bidder. Any deal will a lot will need the blessing from the Chinese Government. President trump says any deal needs to be breached by september 15. Designated as Financial Holding companies such as financial, ever grand, and on international as it tries to curb risk on the industry. On financial the new regulations mean such organizations will need licenses and meet minimum requirements for actual paid registered capital. The new rules will not take effect on november 1. German chancellor Angela Merkel holds virtual talks with chinese president xi jinping later alongside the Eu Commission president. It comes amid strained relations between the pandemic among the pandemic. Pork will be on the agenda after china whole halted imports to germany. China accounts for two thirds of german pork exports outside of the eu. 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. Stay with those upcoming china eu talks, and a duterte and that he did in the deteriorating sides. Jodi schneider joins us from hong kong. We have seen foreign minister one you tour europe trying to strengthen that relationship. What can we expect from this summit . Could the tone be more conciliatory . Jodi i think theres going to be two messages out of this summit from the eu side. One is we are very unified, or they are trying to be unified in their message. Which is somewhat tough on china, but willing to negotiate. They are trying to insure themselves is different than the u. S. , different than President Trumps stance which is increasingly tough on china. They want to be tough on certain issues, particularly climate goals. At the same time, they do want to keep that door open to have trade with china. They realize the importance of that. And given the Global Pandemic and the economic chaos and economic pain that has resulted all over the world, including in the eu countries, they need this relationship. Haidi why do eu countries feel like they can take that tougher stance on china . And on what issues are they likely to really take that tougher stance . Obviously is going to be on trade. There have been trade concerns and problems. This was noted in terms of the pork, the beef, and just the technology. They are going to be tough on huawei, partly they have been tough on huawei because i have been pushed that way by the u. S. But they will continue that stance. And basically, they will be saying, if you want to do business with us, here is our bottom line and you are going to need to take that into account. So i think and then on climate. That is going to be a big discussion point. What china is doing about its famous pollution, what it is going to do on climate Going Forward, real goals, real benchmarks, not just talk. So i think that is going to be the line there. But at the same time, i think they are going to try to strike this town of, we want to work with you. On all of these issues, including climate. Shery europe has always been divided when it comes to china. Will they be able to show a united front this time around . Jodi thats the real question. You have 28 countries, they each have their own different particular priorities. A lot of them are shared priorities, but they each have their own real concerns. And amid the pandemic, some of these countries have been hurting worse than others. Some are in much worse shape still because of the pandemic. Andetting them all to agree Angela Merkel is the one who will be having this meeting virtually with xi jinping, so again, taking everything into account is going to be somewhat tricky. But they are going in with this very much, at least optically, united stance. Issuesparticularly the like climate goals. Haidi our Senior International editor Jodi Schneider there with us. The u. K. And European Union chief brexit negotiators have had a spat on twitter over claims that food imports to Northern Ireland have been threatened in the talks, a sign of deepening tensions in these negotiations. The irish finance minister told bloomberg that it is a matter of work and creativity for the eu to find a way forward when it comes to the brexit deal Going Forward in an exclusive conversation with us. Level ofry high solidarity within the European Union, and amongst my clock my colleagues here in berlin, continues to be palpable. Continues to be at the highest level. And the European Union is not walking away is now walking away from the process. What the European Union is making clear as we have an agreement, an agreement that protects the good friday agreement, and also stands by the Single Markets which is at the heart of the european project. And also a Core Foundation of the Irish Economy and of our country. In order to look at those agreements in the future, we have to honor agreements that have already been made. This is an agreement we have made by the british government. This time nearly a year ago, it was an agreement that was made by the current british government, and a prerequisite of any future agreement with honorary agreements that have just been made. The basis for current and future agreements is trust. How damaged has trust been . Damage has been done as a result of this. It has been damaged because of the nature of the announcement. It has been damaged because we have a process underway that was always predicated on an agreement that was just made. That being said, the European Union and ireland is very clear that we want to engage, we recognize all that is at stake. We have recognized the value of an agreement in the future between the United Kingdom and the European Union. And ireland and the European Union will not be found wanting in work, and creativity to find a way forward. But that does have to have a foundation. That foundation is honorary is honoring agreements made, and honoring an agreement that was passed in the house of commons that looks to get the balance right between protecting the good friday agreement, recognizing the desire and democratic will of the british people to leave the European Union, but also standing by the Single Market for those of us in the European Union, who relies on want to protect because it is important to our future. You laid out a strong case for walking away from the talks. If the u. K. Does not back down. You have to have some planning going on in back rooms. What is the contingency plan, what is the scenario where you walk away . Minister donohoe from an irish point of view, this time again, nearly a year ago, outlined what kind of Contingency Planning we would have to deal with the consequences of brexit, if an found. Nt cannot be within the European Union, my colleagues in all and all of our Member States put out an agreement that was put out before the summer. The agreement that looked to look at how we can create a new budget for the European Union. That agreement was within us and put funding in place to deal with the consequences of brexit, for countries that are most affected by it. We have already done the kind of planning that is needed to deal with the consequences of brexit. We stand ready to be able to see what those consequences could be. But before we get to that point of having to deal with very, very difficult circumstances, again, i what echo what many of the european leaders have said. That standby an agreement that is already in place and lets redouble our efforts to put in place and build upon that, in agreement that could lead to a good future relationship between the eu and the u. K. Ireland finance minister Patrick Donahoe speaking with guy johnson and alix steel. To the, with a preview big Economic Data and decisions this week with chief economist constance hunter. This is bloomberg. Than 20here less minutes away from the open in japan, south korea and australia. Lets get to Sophie Kamaruddin in hong kong with a check of what to expect. Sophie we could be seeing a cautious start to the asia session with futures pointing to modest gains. You have nasdaq getting 1 with attack and focus. Given the is a front we have had on new so far this morning, on tiktok, micro focht microsoft saying its bid has been rejected. Giving oracle the upper hand. Keeping an eye on softbank this after it agreed to sell arm to nvidia for 40 billion. Samsung is on watch. On a local media report that it has clinched a 1,000,000,000,001 order for qualcomms flagship chip. Makers, wees to chip had Credit Suisse saying asian chip stocks are where it is at. When it comes to the u. S. In the chip industry, burn strain bernstein is warning valuations are looking to extend, doing part to the industry hoarding we see in china. On that front, flipping the board, we do have stricter curbs being imposed on huawei from september 15, which will release all access to partners by tsmc while we have suppliers like i makes an samsung looking to other buyers for orders. Haidi all right. Investors keeping an eye on the busy ego week ahead. We have a big china data dump to rate decisions in the u. S. , to japan and from indonesia. Joining us to discuss is kpmg, constance hunter. I will start on china. We are expecting domestic activity. Retail sales expected to climb out of contraction. Industrial production expected to pick up pace. Is there a sense that the improved conditions in the Global Economy will continue to feed into the recovery we see in china . Constance sure. China has been a laggard in terms of retail sales. Already in the United States, in july, we are up 2. 7 yearoveryear. Whereas even in china with month over month improvement, we are looking for a flat yearoveryear sale. Aboveta that comes in expectations i think will be quite good news. Then of course we have started to get Industrial Production statistics in europe last week. You can see the Global Manufacturing cycle beginning to turn. And unlike other recessions, this one has not hit the Manufacturing Sector the hardest. It has hit the Services Sector the hardest. So we do expect to see continued turnarounds in Industrial Production in china. And moving into positive territory yearoveryear, we are looking at about 5. 4 yearoveryear. A little bit above expectation. Haidi we do have breaking news crossing the bloomberg. The latest development, it is tiktok. Oracle has been chosen as the winner for the tiktok u. S. Operations. This is according to dowd two dow jones. Oracle is said to be announced as tiktoks tech partner. We are waiting to get more details on that. This coming after microsoft had confirmed that bytedance had rejected its bid for tiktok, leaving only oracle they as the only known bidder at the table for tiktoks u. S. Operations. This as the deadline looms. We are hearing from dow jones that oracle has been chosen as the winner for tiktoks u. S. Operations as a trusted tech partner. We will continue to get more on that. I will get your views on this, and how this plays into the u. S. ,nce of tech in the but also the political overlays and how this potentially could threaten the contributions made by the tech sector to the u. S. Economy, and to the Global Economy. Anytime youertainly have issues around the capital, you are going to hamper growth. So that is sort of a backdrop that we are living with. Because in the case of the u. S. And china, the u. S. Believes there are security concerns that take precedent over the economic benefits of having Free Movement of ideas and capital. The concerns around tiktok are centered on the security concerns. And that is what is taking precedent. Economists started to factor in this bifurcation in the tech world between the u. S. And china . And the the divergence readjustment of supply chains away from china . Constance yeah, sure. I mean, that is something that we are likely to see. Although so far it has not yet shown up in the data. Seet will be interesting to how actual supply Chains Really do realign against the political backdrop. Shery in the meantime, focusing on the chinese domestic economy, we have seen china tightening rules and imposing capital demand on sprawling conglomerates like china ever grants for example. They are trying to curb the risks of the financial industry. Are we going to see more of these tightening measures across the chinese economy, given the surge we have seen as they try to overcome the coronavirus pandemic . Constance yeah. And i think this is a global phenomenon, really. You have seen the growth of certain tech firms and the concern around the power they have, and sort of the extra governmental power that they begin to amass, just by virtue of their size. So this is obviously something that china is concerned about. With regard to bad loans in china, unfortunately, china was experiencing some of the ramifications of having such a credit driven expansion before coronavirus. Then coronavirus hit. Obviously caused a significant downturn in Economic Activity, which is not something that you want when you have a high amount of debt. That just exacerbates any downturn. So i think it is one of the things that is making it harder for china to come back after coronavirus in a comprehensive way. So of course, we see positive yearoveryear gdp. But the question is, is that a balanced type of growth and how healthy is the economy when you really look under the hood . What youm wondering are expecting to hear from the fed this week. You see in the treasury markets there is some doubt over whether under this new framework, policymakers will be able to drive inflation higher. If you look at breakevens or 10 year yields, it is certainly showing that doubt. What would you like to see from the fed that gives more meat around the edges of their plan . Constance well, one of the things that they can do which they have not yet announced, would be to indicate to the markets that they are willing to do some sort of yield curve control. So controlling the longer end of the yield curve, keeping the long end anchored so that you can continue to see the bloom we have seen in the rebound in the u. S. Housing markets, to continue to provide low cost of capital to corporations. Now, this is something that would also boost Economic Activity and have a greater chance of keeping inflation up. But really, the problem here that the fed faces is that covid has really decimated the demand side of the equation. And having on a terry policy for longer helps at the margin but it does not solve this problem of decision demand. The only thing that can really solve the problem of sufficient demand is getting a handle on the virus, and having some sort of vaccine. Happens, lets remember that we have seen money supply increase in the u. S. , over 20 yearoveryear. This is akin to what china did after the Global Financial crisis. And that type of money supply increase in the massive savings that we have seen built up in the u. S. Economy really creates a situation where once we have people able to go out and spend, and once we have a vaccine, i think you are going to see a savings finance spending boost that really might help the fed achieve its goals. But until we get a handle on the virus, it is good to be very difficult for Monetary Policy to solve its problem. Shery constance hunter, chief economist, thank you for joining us today. We have those breaking news recaps. We have heard from the dow jones that oracle has been chosen as the winner in that deal for tiktoks u. S. Operations that oracle will be announced as tiktoks trusted tech partner. Bloomberg had reported earlier that the terms being discussed would be more of a Corporate Restructuring rather than an outright sale. This coming at a time as microsoft is saying that bytedance has rejected its offer for tiktok. We will have more next. Coming up, the widest gender pay gap set to get even wider as the pandemic imposes a deeper impact on south korean women in the workforce. We will have more out of soul next. This is bloomberg. Quick check of the business flash headlines. Softbank is said to revive talks of going private after reaching a deal to set its chipmaker. Senior executives are said to be revisiting a management buyout plan which had earlier met internal opposition. Softbank has confirmed it is selling arm to nvidia for 40 billion in cash and stock with the sale to be completed around march 2022. The deal may still face regulatory hurdles. The fintech affiliates of tiny ecommerce giant jd. Com has started an application to enlist and shanghai. It is hoping to raise about 3 billion with its listing on the nasdaq soft market. Gilead is to buy a immuno medic for 21 billion, adding the companys prized Breast Cancer drug to its growing oncology portfolio. The deal values the new jerseybased format more than twice its market close on friday. Pharmaceutical companies have been coveting immuno medic since the fda accelerated approval for the drug in april. South korea has long lagged other developed countries and promoting equal pay between men, reporting the widest pay gap among all 37 member countries of the oecd. And the disparity risks get worse this year due to the impact of the pandemic. Lets get more with our seoul bureau chief. How bad of a gap are we talking about . Well, south korean women took home 32. 5 less income than men last year. That is significantly wider than the average of the 37 member countries, which is at 13 . I mean, that is triple the average. And the worst part of this is that it is getting worse because of the pandemic, because south korean women account for two thirds of the countrys Service Sector and parttime jobs. The country has posted the most losses in the sector since march. Peter, obviously we see the closing of the gap difficult for a lot of different economies. But why is that gap so wide in south korea . Peter again, part of that is of course that women vastly outnumber men in the Service Sector and parttime jobs. These are particularly face to face service positions. Gap has a particularly announced in managerial positions. Where only about one out of five are women. Is in executive positions. A csuite version found 1 of the executive positions at koreas top 30 conglomerates were women. There is already a huge disparity. And also the jobs that women are having to take our pronounced are the hardest hit. Shery why isnt the government doing anything about this . Peter they have been. This is where the pandemic has been a real big fallout because the government has been trying to issue policies and mandating, for instance, that companies provide more flexible hours. Paidhave instituted parental leave, for instance. The government has been trying to create all kinds of incentives for companies to hire more women, and into positions. Unfortunately, this pandemic is going to set that back. Bureau chief peter pae there. Coming up next, Laura Fitzsimmons joins us with her outlook as the trading week gets going. We have a lot to digest on the equities front. We will be getting the views of a ceo and analysis, including her views on the tech sector given the latest of elements on tiktok. This is bloomberg. G. Shery welcome to daybreak asia. Im shery ahn. Haidi im haidi stroudwatts in sydney. Asias major markets have opened for trade. Our top stories this hour. They reject microsoft offer for tiktok. Dow jones reporting oracle has won the bid to buy the apps u. S. Operations on the eve of trumps deadline for a deal. Softbank agrees to sell its chipmaker arm for 40 billion in the industrys biggest ever deal. Masayoshi son may revive plans to go but go private. Asia stocks are set for a quiet start. Investors looking ahead to this weeks fed meeting. Lets get a check of the markets. We are setting up at the start of the trading week. What are you watching . Onhie in japan, the vote is for who will replace shinzo abe as the chief of the ldp. There is a shoe and markets will be waiting on more reforms and measures to support the economy. Morning, we are seeing the nikkei and topics gain ground after benchmarks have the best week in a month. We begin looking at a change ahead of the bojs decision on thursday. Keeping an eye on softbank on its agreement to sell arm to nvidia for 40 billion. Over in seoul, we are keeping an samsung. This on local media reporting that it has beaten out tmc to win a 1,000,000,000,001 order for chips. In qualcomm, the stock gaining 3 . For theeeing gains kospi as well as the cause tech. The kospi is asias best performer so far this month. We are seeing concerns around valuation. Switching it out to check in on the into bettys, after a fourweek truck drop, we are seeing the benchmark at. 2 . At the start of the staggered trade in sydney. We have aussie bonds gaining ground while the aussie Dollar Holding Steady ahead of the rbas meeting, and it is due on tuesday. Over in new zealand, kiwi stocks adding. 3 . The kiwi dollar holding below 67. Holding a twoweek decline, as we see negative rates bets climb for new zealand. Quickly checking in on what is going on ahead of the feds meeting, checking in on u. S. 10 year yields. We are seeing at hold below 67 basis points. This as traders are getting doubtful about whether the fed can drive inflation higher. We are seeing oil trade near threemonth lows. Bp calling the end of an era when it comes to demand growth, looking relentless. We are seeing nasdaq futures gain more than 1 . This after the worst week for the index since march. Markets have the latest of elements around tiktok. This as microsoft says that its offer had been reflect been rejected. Shery that is really topping our news right now. That war not only over tictac but tiktok, but we chat. Chairman. Is of dowson investments she joins us on the line from santa monica, california. Thank you for joining us. We dont have any clear information of how the sale look. Bloomberg has learned it could be more of a Corporate Restructuring rather than outright sales. As we try to figure out what is going on with tiktok, we also have that deadline for chipmakers which use u. S. Technology to stop supplying to huawei. How much will this bifurcation of tech between china and the u. S. , not to mention the supply chain readjustments we have seen in the markets, and the added cost that comes with it, weigh on the markets Going Forward . Belita i think it is pretty where the tech is economy will grow Going Forward. As networks are established and the world becomes more digitized. With that said, we have had this incredible run in Technology Stocks against a backdrop of many, many troubling areas. Up. U. S. Election is coming with that comes a great deal of uncertainty about who might win and what the consequences might be if biden wins. Including tax increases and risk of more regulation. Youve got that concern. The tech war continues and will not end anytime soon because the two supply chains are bifurcating. They are splitting up so that each country can have its own secure supply chain in areas of national interest. Finally, you have the tech sector that has benefited from the pandemic and from the lockdowns. Once we get closer to a point in time where economies can resume their normal activities, the rotation might move away from technology to more cyclical sectors. So you have got all sorts of ongoing backdrop issues that are likely to be problematic for the tech sector. Haidi in terms of opportunities, as we still to see valuations when it comes to tech and the u. S. Trading at high levels even after this 11 correction we have seen on the nasdaq 100, where do you see those opportunities taking place across asian markets like taiwan, south korea, som . Some of those better value bets . Belita we are optimistic for finding opportunities in japan, taiwan, and korea, south korea, and in india. All of those countries have tailwinds beyond just benefiting from the relocation of supply chains. For instance, in taiwan, for a sector or have market dominated by technology that is very advanced. A third of the taiwanese market. It has strong ties with the u. S. It is building a foundation that has been announced. Very strong balance sheet, very strong operator, all sorts of lines of interest between the owner, operators, and shareholders. Future. Ry secure so youve got some Companies Like that that are even not cheap, but reasonably priced given the Growth Prospects of the company. On the other hand, you have other companies that are actually quite inexpensive because they are not well covered. In korea, there is a Company Called han solo chemical that it makes chemicals used for the technology sector. For easy batteries, for semiconductors, for fuelcell technology. And that is trading at Something Like 10 times pe. So there are all sorts of Interesting Companies in the tech sector. Not so much in the u. S. , but in asia, that are quite attractive and recently and decently priced at this point. Haidi you see opportunities in japan with companies being set up to potentially benefit from the u. S. China decoupling. How does that factor in as we get into a week where we will have a new leader in japan . Belita we like japan a lot. Successor,e likely who is the chief cabinet secretary who has been the righthand man throughout the term, has strong support from the ldp. And he has a full slate of things to do once he gets elected into office. The first thing on his plate is to deal with the pandemic. The next thing is the economic recovery. And then he has to deal with china and north korea, that every now and then will cause trouble. And are problematic in the background. So we believe that, and all the indications are that he will abenomicso pursue which he and abe worked on. And besides continuing the monetary and fiscal policy, he will work harder, we believe, or do more on the structural reform standpoint. And specifically, he has already spoken this past weekend on some of the items on his agenda. And one of them, for instance, is a desire to try to address the problems that cause japans pro reaction to the virus, initially. And he is very much a government an old hand at government, and is able to navigate different parts of government well. His idea is to establish a ministry of Digital Transformation so that the different parts of the japanese government can Work Together well to address emergencies like covid. Another thing is that he has talked a great deal about how mobile industry prices are too high. Clearly he wants to do something about that. And also he has talked about consolidation of regional banks. So he has may be a keener domestic agenda than abe did. And may be more focused on it. Shery quickly, how much more activism are you expecting in the equity markets in japan, and what about all of that private equity cash sitting on the sidelines . Belita we think the transfer private equity are very good in japan. We believe we have seen the bottoming out of corporate profits already. And japan, as you know, is flush with cash. The Japanese Corporate sector is net cash which is really remarkable. The corporate governments report reform has been in place since 114. Every year, the government has done something to solidify progress. And we have seen companies return more cash to investors and take seriously bids from other companies. So we think this will continue. Increase, in what is important is that the increase in the number of independent shareholders Means Companies cannot just simply by investorsches who want to buy the company or make an approach to some sort of merger or acquisition. Shery right. Of dowson, chairman investments, thank you for joining us. We do have breaking move breaking news. Softbank remains on traded. We have seen news that nvidia is agreeing to buy softbanks Chip Division arm for 40 billion. They are set to gain on the arm deal, and also on the privatization talks. We continue to see perhaps softbank trying to take itself private, trying to get away form from more public scrutiny. Softbank remaining then traded after two sessions of gains on that nvidiaarm deal for 40 billion. Haidi yeah, we will continue to watch that and get more Details Behind what is causing the trading halt. We are also watching shares trading to the downside in the early part of the sydney session. Taking a look off those session those, down for percent. The Australian Investment banking giant, the manager withg profit will fall 35 an uncertain speed of recovery seen from the pandemic. Saying Market Conditions will be challenging. They were also unable to provide meaningful earnings guidance. That stock has been on a roller coaster. It is up 75 since bottoming out in late march. It is still down more than 8 this year and resuming the downward trajectory amid the challenging operating environment. Lets get you the first word headlines with Karina Mitchell in new york. Karina thank you. German chancellor Angela Merkel holds virtual talks with chinese president xi jinping later, alongside the Eu Commission president. It comes amid strained relations over the pandemic and as europe looks to protect his miss interests in china. Agendall also be on the after china halted imports to germany over swine fever concerns. China accounts for two thirds of germans pork exports outside of the eu. China has tightened rules on conglomerates designated as Financial Holding companies as it tries to curb risk in the nations 49 trillion financial industry. The new regulations mean organizations will need licenses and meet minimum requirements for actual paid registered capital. The new rules take effect november 1. Air quality in oregon and california has dropped to Dangerous Levels as firefighters battled the devastating wildfires ripping through the region at a record pace, forcing tens of thousands of people to evacuate their homes. At least 33 people have been killed and hundreds of homes and businesses have been destroyed. There are concerns that the storm could bring winds they could further yield fuel the fire. 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. Shery up next, we will have more on tiktok. Bloomberg has learned oracle is set to be picked as winner for tiktoks u. S. Assets. This of course after microsoft confirmed that bytedance had rejected its offer for tiktoks u. S. Operations. We will have the details next. Plus, softbank selling arm to nvidia for around 40 billion in the biggest chip deal ever. Could a move to go private be the next step for Masayoshi Son . This is bloomberg. Shery check out softbank right now trading and gaining more than 9 . This would be the best day since march. We are talking about the three day of gains for softbank. Nvidia saying it agreed to buy softbanks division of arm for 40 billion. We also had news that it is pushing to go private. They could be reviving buyout plans after they seal the deal to sell arm to nvidia. Take a look at this gtv chart on the bloomberg. Because you are seeing the market cap is still around 115 billion, but they have lots of liabilities. Almost aand yellow, quarter of a trillion assets. In blue, 70 billion, of which cash is about 50 billion. Stalks,seeing softbank ongoing private. Nvidia saying they will buy arm. Pushing the stock and seeing its best gain since march. Haidi lets get back to our other top story. Its been a busy morning. Oracle emerging as a winner as the winner for tiktoks u. S. Operations. Its been described as a trusted tech partner suggesting the deal may not be as structured. It comes after microsoft concerned its bid for the company was rejected by bytedance. Lets get more from our seattle chief. We are really curious as to what the sale, this restructuring, if you will, might look like under oracle . We are all trying to figure that out. What we have heard is what youve said. The terms being discussed are more of what people described as a Corporate Restructuring rather than an outright sale. And that structure harkens back to bytedances original in tenses intentions where they want to sell a partial stake or restructure the company with a global headquarter or Something Like that. One of the things that remains to be seen is whether that goes far enough for the u. S. Government, which when this process started you may recall, said that they wanted an outright sale and a complete separation between the Chinese Company and tiktok in the u. S. In order for tiktok to operate. That said, on the other hand, we have the fact that oracle, if very close relationship with the white house. Its possible they were able to come up with a way to satisfy the white house domains in the structure rather than an outright sale. We are waiting to see exactly what the structure involves. Shery do we have any idea what will happen to the algorithm behind tiktok u. S. Operations . We had heard from local media that perhaps bytedance was not willing to sell that part of the business. Dina no, we dont. It is not just bytedances willingness. The Chinese Government order that came out after the bid from oracle and microsoft were already submitted, also raised questions about whether the government would be willing to allow algorithms developed in china to be exported to a foreign company. We are awaiting to hear that. This is all just coming in in hour. St microsoft informed everyone that they had been told by bytedance that they were not the winning bidder, and we know oracle is. Bass, showing us this news. Bureau chief with the latest on tiktok. Next, we will have more on the negative deal between softbank and nvidia, as the move sets softbank up to go private. The details ahead. This is bloomberg. Haidi some breaking news crossing the bloomberg. We are continuing to watch softbank. The stock on a roll. Surging the most in six months after that 40 billion arm deal in the semiconductor space. This is a big deal. This is what we are seeing when it comes to the trading of that stock, up by jumping the most in six months. It is the largest ever deal in the semiconductor space. Softbank is selling its chip unit arm to nvidia for 40 billion dollars amid regulatory concerns and questions about the manufacturers independence lets. Get more from our reporter. Clearly, investors like this deal. What are the terms . What are some of the challenges . The founder of softbank, they paid about 32 billion for arm, if im not mistaken, around 2016 or 2017. At that time, it was highly controversial. It was a huge premium for a company that is already that has already gained quite a bit in share price. It was not clear if softbank could do much more with it. And they have struggled since then. Popping a lot of money into their iop segment, increasing hiring significantly. It was not clear that business was going anywhere fast enough to justify that valuation. Certainly happy for it to perform to get out with a premium. I guess, it did create some dissonance considering the extent to which he painted arm as a centerpiece of his Ai Investment strategy. As you said, markets certainly love it when sales staff, and shery they are also hearing talk about Masayoshi Son taking softbank private. What is this about . Right. It has been rumbling at least since 2015. There has been a persistent discount on softbank multicap. Some of it is justified. Softbank is worth less than alibaba alone. We know that son has struggled with this. Even after announcing the tremendous ¥5 trillion buybacks the company is cheap to what it owns. Arguing that having to take the Company Private frees them to a deal, it has always resonated with son and management. Haidi at this point, what is stopping him . Thats a good question. Company is heavily loaded with debt. And they are constantly relying on Public Market to refinance it. So to take the Company Private, chces are the creditors would not be as forgiving and he would have to use some of that cash to pay off the debt before he can get back to investing. This could mean months and months, if not over a year of not cutting deals. And making deals, investing in tech companies. The telecom operations, investing in the lifeline of the company. It could be a tough one to swallow. Asia tech reporter there in tokyo with the latest on softbank. Lets get a check of the latest business flash headlines. Gilead is to buy a immuno medic for about 21 billion adding the companys prized Breast Cancer drug to its growing oncology portfolio. The deal values the new jerseybased firm at more than twice its market close on friday. Pharmaceutical companies have been coveting immuno medic since the fda accelerated approval for the drug in april. Asis still in talks with a Company Despite failing to finalize the terms before a deadline. The carrier says it is looking to Saudi Telecom and Telecom Egypt to find a suitable agreement in order to seal the deal. Thai airways is facing one of the Biggest Challenges in its 60 year history with a local court said to rule on its debt restructuring monday. The court will decide whether tylans flagship carrier can proceed with the plan to rehabilitate 10. 6 billion in debt and a rescue plan that could take seven years to implement. A favorable ruling will allow thai airways to begin talks with debtholders. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. More voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music gains across asian markets. Lets turn to sophie in hong kong for another check. Soph . Sophie asian stocks aging edging higher after back to back to clients since march. He was futures are edging higher, and the selloff in markets could be at an end if history is a guide. The nikkei 225 ending. 6 with the vote in focus. Yoshihiro sugar is issuing to replace is a shoein to replace shinzo abe. Stocks rising the most since march, extending gains for a third day after it agreed to sell arms to nvidia. Samson shares gaining samsung shares gaining ground. The huawei probe kicking in this weekend. Samsung canreported win an order for qualcomm chips. W ere sing were seeing macquarrie lose ground. Lets check in on the corners. We are seeing the kiwi dollar gaining the most. There could be Downside Pressure if we see new zealand reports and soft ecodata. That could up even more. The eurodollar build up even more build up even more. The common currency remains undervalued. Check out cable this morning, Holding Steady after the worst week for sterling since march amid brexit. We do have the british pound the worst performers so far in 2020. A word on the yen, trading ahead of the bojs decision thursday. They have been holding it around this level since july and it doesnt look like it will cause boj to shift its policy anytime soon. Haidi well stick with abenomics and the legacy. Thats a three hour program launched in shinzo abes second term as Prime Minister, targeted fiscal stimulus and muchneeded structural reform. Did these guys hit a bullseye . Or did they partially miss the mark . Kathleen hays has been taking a closer look. Kathleen to attack chronic deflation, abe shot his first arrow his second term. Campaign ofjapans bond buying negative rates and yield curve control. It was accompanied by his second policy arrow, direct Government Spending on critical infrastructure. The challenging third arrow aimed at structural reforms, Corporate Tax cuts and women in the workplace, to nurturing a tourism boom. Claim,ax cuts were in a but his other reforms missed the mark. Abenomics record on inflation is mixed. The boj braked the back of deflation, but has not been able to reach its inflation target as negative rates crushed bank profits. Government spending did spur growth that pushed down unemployment, but also left japan with the highest net to gdp ratio in the world. What many consider abes biggest misstep, an illtimed tax hike before the pandemic hit. The combined forces pushed the country into its worst recession two rd, leaving shery japans ruling party set to pick a new leader, who will then be elected Prime Minister. The front runner remains his righthand mine, yoshihiro sugar, seen as a continuity candidate. Someone onoined by the ground in tokyo through the election. Decided on a slimmeddown version of the election after that shot reservation announcement from shinzo abe, and the vote is being held here today inside the hotel behind me at 2 00 p. M. Local time. There are about a total of 535 contested votes. When it comes to the general election, it must be called by october, 2021. Some senior lawmakers hinted at a snap election after the new p. M. Is elected. After, an election may come soon, and the timing is very important. Dissolvehe couldnt parliament because of the financial crisis. Know he is the continuity candidate when it comes to the economy and fiscal policy. What about International Relations . What are the challenges he faces, potentially, as we may get a change of government in the u. S. , post november . Well we know abe has a Strong Political pedigree and diplomacy is a strength of his. Suga has way less experiments. He has moved up the ranks since starting his political career as a secretary to a politician. About Foreign Policy and he emphasized the importance of the alliance with the United States. With the u. S. Japan alliance key, its important to get along with other asian countries, too. Two china and south korea when it comes to china and south korea, he said he would pursue it through communication. Shery what are we seeing in terms of domestic reforms in order to shore up support among the public . Yeah, the telecom industry. Suga kept pressure on the top carriers. Hes been continuing his push to lower cell phone fees. He said mobile phone charges in japan should be cut around 40 from current levels, and in particular, is that he wants the cost of plans with large data packages to come down further and government should consider charging carriers more for the use of public radio waves as a way to generate more revenue. Maury there in tokyo with us, going into election day. More perspective with investment advisor, cio joining us. He says japan is looking like a safe haven bet in multiple ways. The u. K. Secured a freetrade agreement with japan. Guy johnson spoke to the u. K. Minister of state for trade policy about the deal. Our first major freetrade agreement has an in the rush as as an independent trading nation since we left the European Union. One of the biggest economies in the world from japan. Its a very significant moment for the country, for the government. And actually, it improves on the eus existing deal with japan, particularly on data and digital, financial services, and thaton u. K. Food and drink are beginning to sell in japan. There are improvements on the existing eu trade agreement with japan. Its a very good statement for Global Britain as we move forward. Guy why should the japanese believe, the terms of the agreement, if prepared to renege on an International Treaty with the eu . Well, we havent. What we have done is published the market still. We markets bill. Were hoping we get a deal with the European Union that would fill the need for those provisions to come into place. But its also important for the u. K. Government to guarantee the integrity of the u. K. s own internal market, which is what the market built up, to make sure goods and services can flow freely, unfettered, between anglin, Northern Ireland, wales, and scotland. Thats important for the people of this country and for the u. K. Government to procure. You may not think you broke international law, but other countries disagree. Is u. S. , in particular, concerned about reneging on the deal to ireland. What do you say to that . You whatook, ill tell ive said is that the u. K. s market is the most important thing for the United Kingdom government. If weat weve done is dont come to a further deal with the European Union, we will just apply more elements of the eu law to make sure that we preserve the u. K. s internal market and also will secure peace in Northern Ireland. Were still, as weve seen with japan, our Major International partners outside the u. K. , still a reliable country, particularly in the area of trade. Weve shown confidence in the government, and rightly so. Guy do you think the eu will walk away at the end of the month if the bill does proceed . Thats a question to put to the European Union. We have been clear we are speaking from the European Union is a canada style freetrade agreement, similar to what the eu has granted canada, and actually japan and others, no more, no less than that. That is what we are seeking. If there is no further agreement, we will go to trading with the European Union on australia. Shery that was great h greg hands. Up next, we ask jp morgan what a suga victory means as traders base brace for a busy week. This is bloomberg. Shery this is daybreak asia. Im Corinna Mitchell with the first word headlines. Tiktok is said to have chosen oracle as the winner for its u. S. Operations. Oracle has been described as a trusted tech partner, suggesting the deal may not be an outright sale. Microsoft confirmed its bid was rejected. Any deal will require the blessing of the Chinese Government. In other news, global coronavirus cases are nearing the 29 million mark, more than 920,000 deaths. Europe is now becoming a concern again, with the u. K. Set for tighter restrictions on social gatherings for monday following three consecutive days of more than 3000 new daily cases. France also reporting a surge with more than 17,000 new cases this weekend, the most since the end of its lockdown. And more than 80 people have n arrested and hundreds during a series of sporadic protests. Restrictions will be eased slightly for monday. They offered businesses another 3 billion australian and tax relief, and fee waivers. That will amount to about a quarter of the states annual tax revenue. Likely ao says its Coronavirus Vaccine will be available to the American Public before the end of the year. He says hes confident it will be safe. The final decision will rest with regulators. Oxford university and astrazeneca restarted trials for their vaccine after it was halted over an unexplained illness in a participant. They are also aiming for the end of the year. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. Im Corinna Mitchell. This is bloomberg. Haidi . Ahead it is a busy week of the geopolitical and macro calendars. Were 50 days out from the president ial election. That window for a trade agreement is closing fast for the u. K. And eu. In this part of the world, japan set to anoint its new Prime Minister. Lets take a look at how this plays out. Were joined by j. P. Morgans Laura Fitzsimmons. A little exhausting running through those event risk situations that are coming up, some of which is happening this week. Let me get to you about the u. S. Dollar first because we are waiting to hear more on the inflation framework from the fed this week. You take a look at treasury markets, and clearly when you look at breakevens and tenure investors, theyre going to push the inflation 10year investors, they are pushing inflation a prior. Where do you up higher. Where do you see it Going Forward . Laura we are looking for continued weakness on the u. S. Dollar. We downgraded our forecast by 1 toward the end of last week, essentially looking in particular more selectively, dollaryen we expect to move toward theds 1. 01 terminal period. We are looking for some of the em currencies to do better against the dollar, as well. There has been a position we have seen clients look to focus on, particularly dollar max, dollar brazil, our other favored dollar shorts, which has been interesting to watch. And really, we are seeing clients trying to become more constructive on those riskier currencies. Clearly, its not for the faint hearted. Where to for the dollaryen, particularly if Prime Minister suga, seeing as he is the favorite . Do you expect it is steady as she goes . What if we do get that snap election later on this year . Moment, theat the snap election is not something we are immediately expecting. The general feeling amongst clients on dollar yen, i do feel positioning has moved much, particularly via options, they are looking for the dollar to move lower. There is concern it is crowded in terms of a view. Clients have been frustrated it hasnt continued with the momentum we saw a couple months ago. Things have started to stall a little bit. I would expect more range bound trading in the shortterm. I think clients will have to be a little bit more patient to wait for dollaryen to move towards one of one and even beyond. But even at 101 and even beyond, but even at this stage, its a stretch. Shery let me talk about the u. S. Election. We have seen a call earlier that if we do get shinzo abe, the Prime Minister, resigning, plus President Trump losing the election, you could see huge volatility and strength in the japanese yen. This gtv chart on the bloomberg showing how it implies volatility already for the chinese yuan around the onemonth measure. Laura yeah, i think whats interesting, as well, when with thick about dollaryen, as an election hedge, the election is cheap. Thats something clients have been attracted to. Thats why we have seen downside hedges placed. There does seem to be a feeling u. S. Election is going to bring volatility because the outcome is quite divided, and what it could mean for risk markets is very specific to either candidate. But i would say this is one of the favorite hedges. Fx still represents the best opportunity for hedging into the election because it does seem to be the market where applied volatility has cheapened, whereas if you look at swaps and volatility, its very expensive to put on election hedges for the u. S. If you are looking across asset classes, fx still offers great opportunities to be able to hedge. Ozzie is another one for downside hedges. When we look at the aussie, it does look overvalued, 6 or 7 , so thats another where you could pick up something quite cheap to prepare for the election. Shery we saw a little bit of a rebound in the u. S. Dollar given the weakness of sterling, brexit returning to haunt the currency market. Where is that going . Laura were looking for126. It does feel, overall, what we have been thinking around brexit is starting to play out. I think 5050 is where our economists see risk of a no deal brexit. And clearly, the events of last week intensified. For us, it didnt change probabilities so much. For the market it did. The market had been lulled into a farce sense of sick false sense of security, that was more broad u. S. Dollar weakness story. For us, its coming home to roost. And Going Forward, i would be cautious you are not going to see further declines on the pair, just given the uncertainty around this internal markets bill. Shery very quickly on the kiwi dollar, take a look at this chart. Has that rally faded in our markets . Are you pricing in well see negative rates from february next year . Laura whats been interesting is the disconnect between the currency and rates market. The rates market is of the opinion we are going to see negative rates in new zealand. At this stage, markets are thinking around 25 is where we think some of the more terminal. Oil is pricing but it looks like market is gearing up for a 50 basis point move, almost 50 priced for february. So, i think whats interesting for us, were going to cut to zero in november. Beyond that, they have indicated they are happy to take rates negative. The kiwi has been slower to respond. I do think some of the weakness against the aussie through september is indicative of starting to pay more attention to that rate differential story. Yes, i would expect further declines for quibi. It does need to for kiwi. It does need to be the one, where ozzie is quite resilient, but does offer potentially given how valued aussie is, something to look at for downside hedges. Alwaysalways shery great having you for your thoughts. Coming up, will beijing complicate efforts to push through the tiktok deal with oracle as the clock ticks down to President Trumps deadline . We continue to track the fastmoving story. This is bloomberg. Haidi a quick check of the latest business flash headlines. Profit will slump around 35 on last year. This rally says it is unable to give guidance for the next year, saying conditions for profitability are likely to remain challenging amid unprecedented uncertainty. The forecast suggested net income will be around 950 million australian, down from 1. 5 billion a year earlier. This intech affiliates of chinese ecommerce diet giant has filed an application to list in shanghai, facing reports the technology is hoping to raise 3 billion of its listing on the nasdaq style market. Disneys latest offering, mulan, has taken a lackluster 21 million. The film has been beset by controversy after the leading actor stated her support for Hong Kong Police over prodemocracy protesters, and they gave thanks to authorities, a province criticized for its treatment of muslims. Shery back to our top story, tiktok has chosen oracle as the winter for its u. S. Operations winner for its u. S. Operations. Microsoft confirmed its bid was rejected. Lobbing is on the line. Oracle has been described as a trusted tech partner. What does this mean . Well, we have a source telling us this is something not quite a full sale, but something that sort of falls a little short of that. It remains to be seen what that looks like exactly in practice, how that will satisfy the Trump Administrations concerns about sensitive technology. As of thiss unclear, moment, to see what the final valuation looks like here as its structured there. Remember, beijing, the Chinese Government was very sensitive to the idea of tiktok disposing with its underlying algorithm and underlying technology. So without that being on the table, the valuation is a little bit unclear. Were expecting more details in the coming hours today. Ofdi in terms of this issue not selling the algorithm, the force curve, how value is the company, is the app without that . What are the implications of this restructure deal in that sense . Derek well, i think the question on valuation is one that we all sort of want to know the answer to, both of the actual valuation and also whats actually getting exchanged and what a trusted Tech Partnership actually means in the real world. The other thing were going to be wanting to see this ho is how this satisfies the white houses demands. Well be able to hear from the president speaking to supporters in the next couple of hours. Will he bring this up . Is a not sure, but there possibility he might say something. He likes talking with the traveling press while hes there, so well bring it to you if we hear something. Haidi bloomberg Senior Editor Derek Wallbank with that story. Gene munster is with us at the top of the hour, be telling us how we speak to tiktok and video, too. The big events are back. Xfinity is your home for the return of live sports. It is 9 00 a. M. In beijing and shanghai. Im tom mackenzie. Im david ingles. We are counting down the open of the first session in the chinese mainland and hong kong. The top stories, oracle winning the bid for tiktok u. S. Microsoft waser rejected but stakeholders await reaction from beijing in