Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

Battery day event. He announced a 25,000 electric car within three years. The u. S. And china clash again. This time, at the virtual u. N. President trump slammed beijing for the coronavirus. Xi jinping warns no one should profit from the problems of another. Haidi lets take a look at how we are setting up for the start of trading proper here in asia. We had a reasonable session in the u. S. , that tech rebound continuing to keep things afloat. This as we continue to get a little bit more news flow as to the stopgap measure being reached between the democrats and the gop. U. S. Stocks in the overnight session climbing. Tempering some of these concerns that came through from jay powell, pointing to slow economic recovery as well as Charlie Hedman saying the recession could worsen without more fiscal support. We see the nikkei 225 flat at the moment. We saw that japan markets have been closed. Futures have been dropping. We have seen during that time asia extra pen falling 2 asia x japan falling 2 . Sydney futures looking for the buoyant. Watching tv stocks trading up by. 8 , it is our be in said decision day. We are not expecting meaningful policy changes in this meeting but we will be looking at more details as to whether and how the central bank is laying the groundwork in the past towards the 10 past towards potentially negative path towards potentially negative rates. Shery President Trump assailed beijing over the virus and xi jinping pushed back. Pres. Trump we must hold accountable the nation which unleashed this plague onto the world. China. In the earliest days of the virus, china locked down travel domestically while allowing flights to leave china and infects the world. Virus, we should enhance solidarity and get through this together. We should follow the guidance of and follow the World Health Organization and launch a joint International Response to beat the pandemic. Any attempt of politicizing the issue or stigmatization must be rejected. Shery Tom Mackenzie joining us from beijing for more. It was interesting that in the past, President Trump singled out smaller rivals, say north korea or iran, but this time around, centering his entire speech on china. Who was the real audience here for his speech . Tom china was absolutely front and center. The real audience was the domestic u. S. Audience, just days away months away. The election on november 4. This was a domestically focused speech and he really took china to task. He said the United Nations needed to hold beijing accountable for the pandemic. As you heard from him, accusing china of allowing flights to leave china and spread im quoting from President Trump spread the virus around the world. He also attacked china for its omissions as well as its pollution, saying those who criticize the u. S. Over its environmental standard and progress were missing and not focusing on what was happening in china, which he accused of being a major producer of pollution as well. These comments from trump around the issue of the pandemic and covid and chinas role are not new but he was very much driving this home. This was a pandemic that led to the deaths of around two junta thousand people in the United States, and of course, President Trump is seen by many as having mishandled the response to that so his focus is on china to try and divert away from his handling of the pandemic, many would argue. The comments focus on China Building additional actions from the u. S. Over the recent weeks and months, whether that is in the technology sector, around tiktok, and the wrangling of the debate over that continues. All these issues just reminds us again that the two countries are very far apart on all of these issues but the pandemic front and center for trump in this speech at the United Nations. Haidi what was the tone of chinas response to that . President urprisingly, xi gave more of a traditional speech. He talked about chinas commitment to free trade, to globalization. He predicted, it seems, this attack from President Trump, saying that on the virus, he wanted to see a multilateral response, countries working covid19to tackle the pandemic. One headline really that came out from president xis speech was on the issue of climate. He says that china would attempt to cap its omissions by 2030 and become Carbon Neutral by 2060, and the expert that we spoke to in the climate arena suggested that that pointed to a tightening of those climate commitments by china, ramped up spending on Green Technology has well over the next five years. There was not a great amount of detail in his speech on this particular issue but we may get that detail when the fiveyear plan that officials here are working on now is published in march of next year. Certainly, again, the climate experts we spoke to say there was a significant shift from china when it comes to the issue of Climate Change and doubling down on commitments. Putting it squarely on the others of the platform from the u. S. Which has pulled out of the paris Climate Change accord. In beijing. Ackenzie lets get to Karina Mitchell in new york with the first word headlines. Karina Top White House Economic Advisor larry kudlow says the administration is looking carefully at the proposed tiktok deal as oracle and other bidders try and resolve remaining issues. He said President Trump remains optimistic about a deal but the outcome is still uncertain. Future in theks u. S. Has to do with protecting National Security interests. The u. S. Economy has a long road to travel before it will fully recover from the coronavirus fallout. The economy will need further support, adding the virus must be kept under control. Separately, nancy pelosi and Stephen Mnuchin say may have reached a stopgap plan on funding to avert a Government Shutdown. I do defer to the administration and congress, who have response ability for this. Its likely more fiscal support will be needed. Has closed its borders with france as covid19 cases surge. All travelers hoping to enter are being required to take mandatory virus tests, facing lengthy delays. Global fatalities are approaching one million, with the u. K. Saying the country is on a tipping point. Orest johnson is imposing new social restrictions that could last six months. Has back toernment stimulus measures worth 2 million to boost consumption and jobs. Ministers recommended three additional holidays this year to withrage Domestic Travel the vital Tourism Center being crushed by the absence of foreign visitors. The government hopes to raise purchasing power and lower the cost of living. 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. I am Karina Mitchell. This is bloomberg. Shery, back to you. Shery still ahead, tesla shares fall in extended trading as elon disappointises investors. We will discuss the outlook for the industry later this hour. To ourup next, we speak guest for her Market Strategy and how to trade around higher inflation. This is bloomberg. Haidi jay powell told u. S. Lawmakers tuesday that the path to recovery remains highly uncertain and inflation will be key. In the meantime, Charles Evans says the Central Banks new inflation framework could mean a rate hike could come before the 2 average is reached across a long period. Our next guest is planning a number of different inflation scenarios. The Senior Market strategist joins us now on the line from london. Always great to have you with us. We appreciate your time. It is the potential uptick in inflation really one of the big risk factors going into next year . What Investment Strategies are you putting into place that could deal with the various scenarios . Good morning, and thank you very much having me as well. Its always a pleasure to be on. That welike to say still think it is ons against surge. He inflation will we think because of the covid19, we think the balance of demand and supply are pointing to low inflation even though we are much more optimistic than consensus out there, how quick the recovery will be. We are seeing the market muchcipants are getting more worried about inflation. We are seeing it in higher market Inflation Expectations due to basically Monetary Policy. We ultimately think that the adjust their will Monetary Policy and will not let these inflationary pressures become persistent and lead to higher inflation. In terms of the recovery that we are starting to see in the tech sector, that was driving the stability in the markets overnight with the nasdaq 100. The fact that you are seeing dip buyers coming in even though we are talking about extraordinary gains for big tech, does that suggest there is a feeling that there is no alternative trade is still in place in the absence of Real Progress being made on vaccine the openings . Reopenings . Lale it is still important to maintain exposures to tech for the long term. The debate over stretch valuations will continue to carry through the end of 2020 and into 2021. We do see in the coming months that there might be some Vulnerable People in the tech there is election season volatility and increased tensions with china and text, as we know, is a battleground for those types of tensions, so although, yes, longterm exposures makes sense, just be ready for higher volatility until the end of the year, i would say. Shery shortterm, do you switch say whereover and valuations are lower or do you go somewhere else . We have seen lots of analysts favoring regions like asia. Lale i think maintaining proper protection for risky assets is always a prudent strategy, but you need to stay present as well. Especially during this Recovery Process which is happening right now. Its a key factor in reaching your investor goals. Asia is a good place to be right now because it is a safe haven terms of their virus dealing with the virus right now, expertise in dealing with these types of viruses in the past, plus the monetary and fiscal policy space that they have, and how targeted their fiscal policy has been. It is quite impressive actually. China,ll i think lead to in particular, that will lead to a positive outlook for chinese equities, at least until 2021. Shery given the faster recovery in china relative to other parts of the world, do you go to cyclical names or do you stick with the big tech giants that have been doing really well as well like alibaba and tencent . Lale yes, i think when we look at industries and sectors we would go for, i think the cyclical stocks make a lot of sense, but some of the sectors are also being helped by the pandemic right now, such as, you know, internet stocks, which benefits from the virus environment. They tend to have strong cash generation. Again, we like Online Education and other Virtual Service companies in china, and if you it is inhat, you know, place in asia, consumer goods and Financial Services are promising sectors right now. To emergingit comes markets, you would think some of the fundamentals are very isorable, high among factors the weaker u. S. Dollar and the strength coming out of the chinese recovery. Given the limitations in the emerging markets complex, would you be getting a lot more choosier, particularly in the credit and bond space . Lale absolutely. For emerging markets in general, and this is true for all asset class emerging markets, the way we think about investing in a pandemic environment is based on three factors. First, is the country able to deal with the pandemic in an efficient way . Policy spacesch are left to fight the effects on the economy . Monetary policy is not so much cut rates any further. But im talking about mostly fiscal policy. Lastly, we are talking about which countries are much are having much more macro and financial stay away from those countries. Believe that the u. S. Dollar will be finishing with ar flat but depreciating bias, which we do, i think it might make sense for slightly favoring local debt versus hard currency, but you need to be very selective in your risktaking as there is room for rate cuts. Many ems are limited right now, but theres still some opportunities where, you know, such as russia and mexico. Theres still room for risk. Be very selective and emerging Market Countries and take this account when you are looking for investment opportunities. Shery good insights by lale akoner, Senior Market strategist. Up next, pfizers vaccine trial and getld look at data faster results than rivals. We will explain. This is bloomberg. Haidi in the u. S. , the death toll from the coronavirus is now more than 200,000. Bloomberg Health Care Reporter Michelle Cortez is with us. As we get to the grim new milestone, will lockdown to be necessary across the country, and if so, where they potentially happen in terms of the states that are doing worse . Michelle everyone is trying to avoid lockdowns at this point. The weariness with the pandemic, social distancing, and even wearing masks, have started to grow on people so there is this concern that people would not take it well to go into a locked down. We are actually seeing some decreases in the hardest hit , you early in the summer know, across Southern California arizona, florida, and texas. In other areas, in wisconsin, in ohio, minnesota, the dakotas, we are seeing increased rates. We are also seeing increased rates tied to universities. Its those areas where we are going to have to do some targeted work to get the virus under control. Shery it seems pfizer and biontech could be having an advantage over their rivals when it comes to an early read on the effectiveness of their products. Michelle its interesting when you want pharmaceutical companies that really know what they are doing and how they are trying to design trials. Pfizer was very clever and how they set up their clinical trial. They are looking at the data four times before they are expected to finish it and at each one of those interim looks, they could stop the trial. The first look is going to be in under 40 patients, under 40 people, so its a trial of 440,000 people, fewer than 40 of them will have gotten infected with the virus after having gotten placebo or the vaccine, and depending on how those numbers break, they could stop a trial and say this is a beneficial product. The question will become whether or not people can trust those numbers, and of course, we are starting to see others, how they will monitor all of the patients who are getting early coronavirus trials. Michelle cortez, our bloomberg Health Care Reporter. The u. K. S Hospitality industry is warning extended restrictions will devastate the center without more government help, but the Worlds Largest brewer is hoping the impact will not be as severe. Francineld bloombergs lacqua he is confident consumers will adapt to the new limits. Countries are talking about the restrictions but not really a full lockdown. The u. K. Would likely have to close it but they are still open. They also learn how to live with social distancing. They were able to put tables outside, sidewalks, everything. The mayors allowed to that. Society is trying to Work Together in partnerships because the problems of big pharma and the only way to bridge this and solve this will be through partnerships, so mayors have to allow bars to expand their footprint so they can have customers come in, so people can but withal activity social distancing. During the lockdown in the u. K. And other countries, we did vouchers. You could buy vouchers during the lockdown. We would match 11. When the pub reopened, we could read deem that voucher with food and drinks at your favorite pub. We will try to facilitate and so they willmers help the establishment go and be there when the situation comes to a new normal. Year catchphrase has been beer bringing your catchphrase have been beer bringing people together. Do you think you will have to produce less beer . Francine consumer carlos consumers will find a way. Restrictions. Consumers are smart and they will learn to live with those restrictions. They will arrive earlier at the pub and go from the pub to home and continue at home. They think consumers will find a way because at the end of the day, when you think about the human being, we are a consequence of millions and millions of years of the way your brain is wired. We need social interaction. Zooms only so much that can replace. People have to be together again. That could be in a home, in a pub, in smaller groups or bigger groups. People will always try to go back to what brought us here. Haidi that was carlos brito speaking to francine lacqua. Lets get a quick check of the latest business flash headlines. Goldman sachs is making a uturn in the u. K. After Boris Johnson britons to work from home. The bank is encouraging people to login remotely. They offer they will be open for those who need to go in. Goldman had been preparing to welcome employees back in london and new york after months of lockdown and social distancing measures. The body that represents Global Airlines says universal mandatory virus tests offer the only realistic hope of reviving demand for travel until a vaccine is widely available. He says obligatory quarantine in many countries is crushing aviation with many carriers facing collapse. The boss of indonesias flagship carrier says aircraft loans will help it from falling into bankruptcy. Airline is expecting a 580 million bridging loan from the government which will save it from insolvency. They reported a 710 million loss in the six months through june. Coming up, jay powell makes the case for more fiscal aid, warning that the u. S. Economys recovery remains highly uncertain. This is bloomberg. I think that it is likely that more fiscal support will be needed. I think the next package should be much more targeted. It should be focused on kids and jobs and areas of the economy that are still hardhit. The recovery will go faster if we have both tools, continuing to Work Together, as they have so far. They work very well together. We are inclined to allow for additional flexibility on the money that has gone out to state and local governments. We need to reopen the economy so people can go back to work and we need to do it in a sustainable way. Shery jay powell and Stephen Mnuchin testifying before the house Financial Services committee. Kathleen hays is here for more. This is of course day one. We are inspecting to hear from them again at the senate. What were the Key Takeaways on day one . Kathleen starting with jay powell and what he said about the economy, we knew he had prepared remarks 24 hours ago. It needs more help. It needs more government help. The fed is doing so much. We know he is really focused on the fiscal side, on the federal government. Interesting that Steve Mnuchin said a targeted package is still meeting. The white house is ready for a bipartisan deal. It helped bridge the gap between 1 trillion the republicans want to spend and it was 3. 5 trillion dollars down to 2. 2 trillion dollars that democrats want to spend and now trying to come to the table is even harder because republicans and democrats are in this heated battle over about replacing Supreme Court Justice Ruth Bader ginsburg, who died unexpectedly on friday. We are 42 days ahead of the president ial election. It is not unlikely a package will be passed. There are a lot of questions about how the money is being spent from the cares act and how it is being controlled or affected by the federal reserve, particularly the main Street Lending program. A big complaint is that with treasury backing, the fed is authorized to lend money out. They have only been able to lend out 1. 5 billion dollars. Steven mnuchin says maybe we could drop the loans to Something Like 500,000 from 1. 5 Million Dollars. Jay powell said about that, fine, except we would need to create a whole new lending facility. Presumably, that might even be created and then given to the treasury, so a lot of back and forth, but very important, how much difference does it make . Bloomberg economics points out that a new stimulus bill, another one, would limit damage as the economy is trying to recover from the virus. The virus is still there. Cases are still high. Kids have gone to college, and they are coming down with it. How is that going to spread . Bloomberg economics calculates what they called the fiscal factor, not getting the package passed will contribute to the gdp, which is supposed to rise 30 in the Third Quarter annualized, falling to 2. 5 to 0. 5 in the first quarter. Its very important. This could really make a difference. Shery and of course, we heard from the president of the chicago fed, seeming to shed a bit more light on the framework. What does he say about the context of what inflation might average and what it means for moves in the key rates . Kathleen it was kind of surprising because jay powell was so circumspect. James bullard stepped back from. Hat, having to overshoot Charlie Evans came out and said some things i think the markets were a bit surprised by. The dollar even rose on this for a a while. Lets listen to what charlie said at this virtual event. We sort of said we are looking to get inflation up to 2 , and then after that, we could be raising rates and still have an accommodative setting of Monetary Policy. If you read the statement, that is in the cards. We could start raising rates before we start averaging 2 . We still need to discuss that. This strikes me as a very important thing. A lot of people put it in extremes. Lets say unemployment foster 3 , gdp is going up 5 , and you are at or above 2 but you have an average above that. Would you really not start raising rates . Charlie seems to suggest, sure, maybe we could. These are details we are working out. It really added something to the debate and im sure we will put an x or close ear on everything onextra close ear everything. As jay powell said today, they want the economy to get as strong as it possibly can, but they have about the model. They have got the idea on the table. It will take a while to work out and practice. The bottom line is we will not get to 2 for a while so they had time to figure it out. Haidi kathleen hays. Do not miss our exclusive interview with richard clarida, later at 8 00 p. M. Hong kong time. Aeden is sticking with forecast of years of zero interest rates, pledging to continue its historic Asset Purchase Program through the covid crisis. The banks governor spoke with bloomberg from stockholm. Bithings are improving a compared to our view in july, but when it comes to doing more order doing this or doing less, we have decided to expand our Balance Sheet substantially earlier so there was no need to to those various programs this time because basically, to the extent we are comfortable with the expansion going all the way until roughly the summer of 2021. Given covid is resurfacing, do you see risk for new setbacks, and how would that affect your policy Going Forward . Stefan everybody is wondering about what is next. Case, imports and exports are roughly 50 of gdp, and that means that whatever happens in the rest of the world, it will hit us in one way or the other. In a bad scenario, that would probably force us to do more. Areou still say that you open to using negative rates as a tool . Richard technically. Stefan technically. We are practiced for many years. That is to be a meaningful measure. Its hard for me to imagine that things will sort of hinge on negative rates only. We are going to be stuck with this kind of package that we have put in play for quite a while, which is very similar to what many other Central Banks have done. Are makingare you a historic move into the Corporate Bond market. Can you give details on these purchases and whether you are planning on extending them . Expanding them . Stefan that is a small amount compared to the entire slice of the market, but at the same time, we are quite comfortable ith that measure because increases the stability in the market, and we are ready to be there actually for quite some time. So far, it has taken a wild to deal with all sorts of practical aspects of how you actually do this. We are up and running. We know how to do it. What is important in the long run is it means that we know how to do this and that means that if there is a need, we can expand those purchases if need be. The Corporate Bond kiwi has been subject to a lot of controversy given the risk of distortionss from what we saw in march. What do you have to say to your critics . Richard we have a talk stefan we have a choice here between stopping too early and sometime later. Its very dangerous actually to withdraw these programs to really because then you might too early because then you might have to step back in. That would not be a pleasant scenario so its much better actually to try to do these things in such a way that when eventually things normalize, stopping buying Corporate Bonds or Government Debt or whatever it is that we do, ideally, it should be considered to be nonevent because things have improved and it is time to move on, but we are by far not in that state of the world as of yet. Given the controversy, why not made that report transparent . Stefan they are providing us with reflections on the Corporate Bond market. That is for internal consumption. What to to us to decide do and what not to do. And now, when we have started our program, we have also clearly stated how we gradually will move and how we will change over time. And increase transparency. Why not keep it as transparent as possible . We are absolutely in , but this is a market thats different from the Government Debt market. It takes a while to gradually increase transparency. We are absolutely not against transparency. It will take a while to gradually increase transparency and it also has something to do with the maturity of this market and this market is less mature. Lets say the market for mortgagebacked securities or Government Debt. Governor stefan ingves. Tesla tempers expectations on major developments on Battery Technology while promising to have a 25,000 electric car within three years. The action from ihs market, coming up here it coming up. This is bloomberg. Shery we are counting down to the start of trading in japan, here in sydney, and in seoul. Taking a look at south korean equities, the benchmark dropping the most in five weeks on tuesday. It looks like the kospi is on course to move below the 50 Day Moving Average for the First Time Since april. We saw the biggest loss to the cost become almost 2. 5 in the tuesday session, the major outperform in the Asian Session there as we saw both foreign and Institutional Investors selling their. Watching the kospi at the open and futures indicating that that selloff will in fact continue. Lets get to Karina Mitchell with the first word headlines. Karina the u. S. And china class virtually at the uns General Assembly as leaders offered prerecorded addresses. President trump renewed his attack on beijing for its initial handling of the coronavirus, saying the u. N. Must hold china accountable. Xi jinping pushed back, saying the fight against the pandemic should not be politicized. Meanwhile, india and china have agreed to lower tensions on their disputed himalayan border. They will halt troop transfers and avoid any move that may trigger clashes. The two sides have held discussions after a series of fatal attacks in recent weeks. New delhi and beijing described mondays talks as a candid and indepth exchange of views. Hong kong and singapore were the biggest destinations for illicit Bank Transfers in asia according to least suspicious activity reports and despite being only a fraction of the estimated 2 trillion of potentially laundered money, singapore processed 4. 5 billion dollars while hong kong accounted for 4 billion. Hsbc, standard charter, are among the banks under scrutiny following the leak. 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. Shery, back over to you. Shery lets turn to teslas long anticipated battery day, which has arrived. Elon musk announced what has been an elusive longterm objective. Probably about three years from now, we are confident we can make very compelling electric vehicle on also fully economist. Shery investors are selling the news and some other headlines from the event. Shares down in late trading after falling in the regular session ahead of the announcement as well. Joining us for reaction is Stephanie Brantley at ihs markets. Great to have you with us. So is this event all that it was made out to be . Give us your impression on the Key Takeaways for you. Stephanie in some ways it was. If you look at the development of battery processes and how much they have gone into rethinking how it is developed and manufactured top to bottom, there is meat in there. Again, tesla and elon musk have made bold promises and we will see if that threeyear target turns out to be exactly where they pitch. He does have a history of taking really bold promises and getting there eventually, but not quite always on target, so but that is the way that he operates. Shery tesla now saying elon musk saying the company aims to one day make 20 million vehicles a year, so it seems to be a very ambitious target. Of course, they do have the global lead, but with so many other competitors coming into the markets, is there really consumer demand enough for all of this manufacturing . Stephanie its going to take time to build it. Right now, we really are ahead of the consumers. There are consumers interested in it. There are still infrastructure challenges, cost challenges, i would not say range anxiety so much as charging anxiety, and consumers are interested but not fully there yet. When he says 20 million vehicles, that is not a nearterm goal. One of the things that is important to remember about the ev market in general is that it is emerging. We want to really replace. We are talking decades of time. We are not talking about 10 years, 15 years. Theres still a lot of time to get to there. 20 million is a pretty big number. The shanghai think one million annual goal is lofty or is it something that is achievable in the shortterm . Stephanie you know, that is still pretty lofty. There are not Many Assembly plants that are kicking out that much volume in a given year, but he does that. He sets lofty goals and gets as close as he can. If they implement a lot of the plans they are talking about, the bones are there for being able to reduce the manufacturing footprint, to be able to manufacture a little bit more quickly and cheaply. All the tools are there. As he pointed out in the presentation, scalability is difficult, and taking a process that you figured out how to do from there Pilot Program and in california and scaling that to one Million Units in china, that is where the real difficulty lies. You talk really interestingly about the fact that this is a longterm perspective hes taking. Do you think investors are not taking the same perspectives given the Market Reaction that we saw when he said that its going to be a couple years before we have that inhouse Battery Capacity . That was always going to the be going to be the case, right . Stephanie that has always been the case in terms of the ev market. Tesla is not the only Company Making a longterm game out of this and really looking for yes. The reactions from investors seem to value this really high. Im not sure what they are expecting to happen in the next five years from an investors viewpoint, but if you talk to tesla, if you talk to other oems , to get to ev penetration that we are looking for, and to get to profitability and scalability and all the cost levels we need, we are not talking about a shortterm process at all. Shery does it make sense to go anywhere else other than china . We just heard president xi jinping at the u. N. General assembly again reaffirming their commitment in fighting Climate Change. Stephanie right, theres a couple reasons for being in china. They do have that commitment and they are pushing a little bit harder on getting evs on the road faster, but another part of teslas announcement and another part of automakers strategy over time is to build where you are selling as much as possible. It is not a story of something going to china and building in china. Its also about increasing manufacturing in europe and in the United States. You want to try and close that gap between where you build the vehicle and where you are going to sell it. As part of the process. China remains important from a production standpoint but it is not the only place they are going to build. That is not the only environment they are looking at. Haidi appreciate your time with us, stephanie brinley. Nike soaring in extended trade after reporting a Strong Quarter and crushing estimates in china. Recovery playing a big part in the turnaround. We will get the details, next. This is bloomberg. Shery japan reopens today after a two day holiday. Take a look at futures right now under pressure,. 8 . This gtv chart on the terminal showing japan could be playing catchup. Risk off sentiment around the world, and that line in yellow showing the drop in futures, and we could see a drop of about 2 at the open. This of course as we continue to see strength in the japanese yen as well. In the meantime, shares of nike soaring and extended trade. This after quarterly revenue blew away estimates and sales growth in china helped boost profits. Su keenan following the afterhours action. Also giving us competitors a boost. Rally after hours,p double digits at points pulled companies along for the ride. Their shares got a boost. It shows investors really wanted to see the worlds biggest athletic wear maker shake off the pandemic blues after its surprise locked last quarter and it certainly did that. It blew away expectations. Online sales jumped 82 . Quarterly revenue came to 10. 6 billion in the fiscal first quarter. Thanis 1 billion more expected and the Company Posted . 95 a share in earnings. That was more than double the expectation of . 46 a share. Our growth in china and better margins played a role in returning to profitability. The ceo said no one can match nikes pace in pumping out new products, which they continue to do despite the disruptions from the covid19 related shutdown. Nike said on the conference call, it sees improvement and full price sales. It expects margins to be flat. In fiscal year 21 revenue, they expected to be in the high single to lower digits. Haidi. You mentioned china. Why does that continue to be such a major growth driver . Stefan it was clearly a driver of sales. First of all, it is further along in the recovery from the pandemic. Most of the u. S. And the numbers reflect that. It also is quicker to come out of lockdown. China has been encouraging citizens to exercise more. All of that, a huge boom for sportswear and nike in particular. Sales were up 6 in the quarter and that compares with the big decline in north america. Lockdowns are very state to state. Sales in north america were down 2 . The lack of sporting events here in the u. S. Has hurt demand for team related apparel. Bige has been a buildup and inventory. To put the report in perspective, their sales overall did not grow. It was down 1 from a year earlier. Given the last quarter and the dire outlook, these numbers were far better than anyone expected so and so were the margins and the biggest is from china. Back to you. Shery su keenan on nike. Lets get you a quick check of the latest business flash headlines this hour. A chinese ev maker boosted fund by 1. 5 Million Dollars as it heads towards a potential ipo. It was led by shanghai automotive, the parent of the main lands against automaker. Others include several local government funds. Wm is working with advisors on a listing in its hometown in shanghai which could come before the end of the year. Warren buffett is in talks with mercedes to supply automotive tips for electric cars. We are told negotiations involve socalled bipolar transistors that reduce power loss while racing reliability in electric motors. Sources say there is no guarantee the two sides will reach agreement. Byd also talking to other carmakers. Rvana has ca made the ceo very rich. His son is the third to run the show. Shares surged in new york on projections of record revenue and profit, and together, it is worth more than 21 billion. Homecoming ipo raised 2 billion in hong kongs second listing, adding to a wave of share sales by Mainland Companies already trading in the u. S. Latest surprise, both offering a small discount. Chinese companies are headed back to asia amid threats to capital actors in the u. S. Amazon is saddling up to take on peloton, launching a new prime bike in a bid to compete in the home exercise market. The new machine sells for 500 on amazon prime website, a steep discount to peloton. Exercise banks have become increasingly popular during the pandemic. Peloton shares dropped as much as 6 before hearing those losses. Coming up in the next hour of daybreak asia, will the bank of Thailand Join other Central Banks on Holding Steady . Joinsest joins us and us with his markets outlook as trading in the asiapacific gets underway. This is bloomberg. Welcome to daybreak asia from new york. I am in city. Asias maker major markets have just opened. Investors remain concerned about the fed warning of the long and difficult recovery in the u. S. Tesla is on a bumpy road as elon musk held his battery day event. He announced a new electric car in three years the u. S. And china are clashing again. In termslammed beijing of the coronavirus and warned no one should profit from the problem. Shery major markets coming online. Back after a two day holiday. Nikkei falling 4 10 of 1 . Asian stocks falling for the past two sessions. Kospi losing ground. Japanese yen, a little weakness but significant resiliency against the u. S. Dollar with the dollar gaining ground on sentiment and japanese yen touching a six month high. Japan pmi numbers and a number of hours. The kospi is up 9 10 of 1 after seeing the fourth day in the month and some analysts are saying there is a growing possibility of a shortterm correction in the korean market despite the fact South Korean Parliament just approved an extra budget. The korean won, a little strength after falling for the first time in seven sessions. Haidi and we are watching this part of the world when it comes to new zealand. Bond yields with room to extend their record lows. The governor has set he would use the next few months to develop a package of Monetary Policy. The question is even if we do not get much of a policy change today, what details will we get about potentially moving into negative rates next year . Up 8 10 of 1 e ahead of the decision. We are watching the aussie and and u. S. Dollar staging recovery. 71. 70 is where the aussie is traveling is trading with the start of trading in sydney. Get started. Japan coming back from holidays after the japanese yen being resilient despite the fact we have the u. S. Dollar strengthening. A new Prime Minister in japan. What will you watch for to influence the market and broader economy . It is good to be back. I would watch on the japanese side if the new Prime Minister is able to continue with the economic policies of the outgoing Prime Minister and be able to create an economic recovery, which shielded the japanese economy for so long. On the economic side, the question is how will the new Prime Minister deal with economics, will he push the bank of japan to a lower interest ratio hasdebt to gdp increased to over 240 of gdp. Will he push it further . Those are the questions on the economic side. On the International Diplomatic side, Prime Minister abe did a good job of balancing the relationship between the u. S. And china, and china is the big economic partner. The u. S. Has a great global economy. Will the new Prime Minister do that . Those of the key issues for me in watching japan. You spoke about the yen appreciating. Japan is considered a safe haven, especially for asian investors, so it is not surprising to see the yen appreciate despite the fact you also have a strong dollar in terms of the bloomberg index. Minute you mentioned the diplomatic front. A letter wanting a forwardlooking relationship with soul. We know that relationship has been fraught with tension. Someospi showing how analysts are warning of a potential correction after the slump we saw this week. What should we watch out for . I think the korean side, i look for a further correction, even though korean numbers on the economic side have been good , for example in the first 20 days of september, korean exports went up 3. 6 compared with the same one year ago. This is the first increase korean exports have had. Korean trade is doing well. It is an export dependent economy. Have astion is, if you second wave of coronavirus and the recession deepens globally, global trade and koreas ability to export will be affected. I think the korean stock market is looking forward and looking at these as potential risks and i think the stock market is doing a good job with the prediction in my opinion. We have a confluence of positive sentimental is when it comes to the emergingmarket. This get placed into doubt after comments that the fed would move ahead with raising rates . This is significant risk because i do not know how influential mr. Evans will be. Keep in mind in 2020, he is not a working member of the fed so well he expresses his opinion in public my he does not get to implement it in terms of the chairman saying it will be no rate hike until 2023. But set that aside and let say he influences the others of his opinion. If he goes through with it, it will be negative for emerging markets, the weaker dollar has been good for emerging markets and a stronger dollar would be ,egative but the question is will this have a Significant Impact in policy . If not, i would not worry much about it as far as emerging markets are concerned. Interesting, we have seen the handling of the pandemic by the u. S. And china play out in different ways across market but in terms of ambitionsnd beijings for supremacy, are we seeing this come to fruition thanks to the weakness in the dollar . It seems it is a strength in the r d driving the moves. Thats a great question. Start out 10 years from now, where will the yuan be, you will see a stronger currency that is more global in nature. But what we have seen in the last six months with the yuan going from more than seven to the dollar to the 675 range, thats not the start of a longterm trend. Is ahas happened so far shortterm movement, the chinese economy has recovered faster than the u. S. Has, china has conquered the covid crisis more efficiently than the u. S. Has, there is no sign of a second wave yet in china and in the u. S. It looks like even the first wave is deepening. Put it together and you get a weaker dollar and stronger yuan. If you go into 2021, you could see this traversed if you have a global stock market going down, global recession deepening because of a second virus crisis, even if china escapes it, you will see a strong dollar on the others of it will be a weaker yuan. Always great to have you with us. Atll ahead, we will look bank policy. Banks across the World Running out of ammunition. And the u. N. Virtual General Assembly. This is bloomberg. A the u. S. Looks to avoid shutdown of the federal government and the house saying they have the votes for a stopgap bill. The u. S. Economy has a long road to travel before fully recovering from the coronavirus fallout. The economy will need further support with measures needed from all levels of government. I differ to the administration and congress who have the responsibility for this but i think it is likely more fiscal support will be needed. President trump says he will announce his nominee to replace Ruth Bader Ginsburg on the Supreme Court on saturday at 5 00 p. M. The decision to push ahead with the process before the election has drawn criticism but Senate Republicans have all but quashed democratic hopes of a delay. A vote is expected just before or just after the election. Larry kudlow says the administration is looking carefully at the proposed tiktok deal as oracle and others tried to resolve remaining issues. He said trump remains optimistic about a deal but the outcome is uncertain. He added tiktoks future in the u. S. Is a matter of protecting american National Security interests. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi tensions between beijing and washington were on full display at the u. N. General assembly. Trump we must hold accountable the nation which unleashed the plague onto the world. China. In the earliest days of the virus, china locks down travel domestically but allowed flights to leave china and infects the world. Infect theect world. Facing the virus, we should get through this together. We should listen to the World Health Organization and launch a joint response to beat the pandemic. Any attempt of politicizing the issue or stigmatization should be rejected. Usdi Stephen Engle joins from hong kong with more. You have to think through directedomments are at. At the u. N. He focused so much on china. That is right. You have to take it for what it is. This is Election Campaign time and he is in Campaign Mode and made his whole speech about the ills he feels china inflicts upon the world. That is why in this reported speech to the yuan general unembly, he is blessing General Assembly, he is blasting china for locking down their local borders but allowed andhts to go abroad blasting the World Health Organization that allowed china to do this, essentially virtually controlled by china. You heard xi jinpings response. What is interesting to me is the other members of the u. S. Theral assembly, including secretarygeneral, basically rebuking his rivalry between china and the United States. Obviously trump has taken china on a number of fronts like huawei, tiktok, sanctions on chinese officials, over hong kong, the environment, restricting visas for chinese students, he is taking them on all fronts. But people like Emmanuel Macron said todays world cannot be left to the rivalry between these two great powers. He said as a result the u. N. Runs the risk of impotency. Antonio can tariffs warns gutierrez warns that we are moving in a dangerous direction in the world cannot afford a future where the two biggest economies split the globe in a great fracture, each with its andtrade and financial rule ai capabilities. I found that more interesting. We have heard these comments from trump and we have heard xi jinping poetry to the world as the leader portrayed to the world as the leader of globalization but now we are hearing from other leaders, enough with your sandbox fight. Shery give us more about xi jinpings recorded video. It came after trump. Did he respond directly to what trump was saying . He did, but he did not name trump. I can read you some of the comments and you can read between the lines. He says the fight against the virus should not be politicized, as we just heard from donald trump right before in his prerecorded speech. He said, he repeated previous talking points of the chinese leadership about free trade, globalization. He slammed countries that asected globalization burying their heads in the sand like an ostrich. Made moregly, he commitments on Climate Change, taking the lead, he said china will be Carbon Neutral by 2060. So giving a date on Carbon Neutrality and also reasserting chinas claim that before 2030, chinas emissions of Greenhouse Gases should peak. But Carbon Neutral by 2060. He said major countries should act like major countries. Shery Stephen Engle. Breaking news. House in the u. S. Has passed the stop that stopgap funding bill. Hearded given we have nancy pelosi say they had the republican and democrat reaching a deal to add 8 billion in nutrition assistance and adding farm aid to the legislation, reaching a compromise between the two sides. This will go to the senate and needs to be signed by the president before becoming law. This would avert the Government Shutdown october 1. Lets return to the tensions between the u. S. And china. Andrew murtha says beijing is not comfortable with the way the Trump Administration is doing business. Ofthis is a whole new way negotiating complex International Commercial deals. China tends to be more comfortable when things are being done quietly, out of the public eye and then announced have beenf the is dotted. They are simply not used to this. How alone they . This came up over the weekend. Do they feel isolated without Russian Support and u. S. Support . Talk at the u. N. Yesterday, you got the sense he was really talking to multiple audiences, not simply the u. S. , although the u. S. Was the primary one, along with the chinese domestic audience. You got the sense things have changed from a year ago when everyone was talking about china and the build the road initiative. There is really a towards chinas role in the international order. Very different from one year ago. What is the role . Is there a difference between what they see as the role and what the International Community does . It seems to be they are figure out what the global tectonic plates will look like. Watching tohers are see what happens in the u. S. In november and one of chinas cheap sources of international leverage, the ability to interact with and invest in much of the developing world, has now been complicated by covid as well as other International Trends we are seeing. Overall, is that trend going to play out in technology . Is that where the biggest fight will happen in the next 10 years . It seems to be one of the areas where the fight will be the hardest. I think recent developments in europe have tipped the balance, at least for now, away from china. If the chinese wait for President Biden, how do they calculate the outcome . Do will they measure what to versus President Trump or President Biden . I think with trump it is all surprises. The tiktok deal is just the latest of pretty much airing dirty laundry usually kept within the negotiating room. So we do not expect biden to be easy on china, but they do expect him to be somewhat more predictable, which is a key that of the relationship has pretty much left the barn under the Trump Administration. Andrew talking with tom and francine. The school of Public Health is supported by michael bloomberg, founder of bloomberg llp and bloomberg philanthropy. Aming up, elon musk announce 25,000 a electric car in three years. This is bloomberg. Aery elon musk has announced 25,000 a electric vehicle in three years. Ed in san is francisco. We saw stock prices begin to fall. What have we heard about this new car . Caresla plans to make this within the next three years but no solid deadline. We do not know what it will be called but elon says it will be semiautonomous. It is made possible by all of the innovations tesla announced, things we knew were coming. The Company Plans to cut costs by using dry electrodes to use less machinery so they are cheaper to make. It is seeking to output in terms of supply chain. E line talks about investing in nevada. Tesla having a plan in producing batteries. The public has a short memory. In 2016 he promised a 35,000 are, three and yet here we so the idea of a 25,001 in three years might be met with some skepticism. How crucial is shanghai production . They want to ramp up production to around one million. They talked about have a localized the supply chain in china. Adoption is higher than in other markets so they have been investing heavily and elon spoke about how you will see a rampup in production in shanghai in the next couple months. Shery ed ludlow with the latest. Up next, we look ahead to the bank of thailand policy decision and the outlook for Central Banks globally. This is bloomberg. Shery japan pmi numbers for the month of september. These are the preliminary numbers. When it comes to the manufacturing side of things, 47. 3, slight improvement from the previous month. When it comes to the services sector, 45. 6. The pmi composite, 45. 5. All of them in contraction territory again, and of course it is a slight improvement as we continue to see the economy reeling from the coronavirus pandemic, and of course pressures as we see decline both in manufacturing and the services sector, and of course soft Global Demand as well. Again, another month of contraction territory for japan. The manufacturing pmi has been in contraction territory since september, or april of 2019. Take a look at what markets are doing at the moment. We are seeing the japanese yen a little bit of pressure. Eyeing that 105 level. This, after we saw significant strength in hitting a six month high against the u. S. Dollar. Nikkei catching up to the losses after they comeback after two days of holidays. Kospi paring back earlier gains after seeing its worst day of the month. Despite the fact that we have just seen south koreas parliament approving a fourth extra budget. Gaining 1. 4 at the moment. The aussie dollar around the one month low against the u. S. Dollar. When it comes to the stock market, tech and Consumer Discretionary leading the gains. Kiwi stocks gaining ground ahead of the rba Rate Decision. They ared of course expected to keep policy on hold after its latest meeting later today. We will be trying to glean some signaling as to where it is saddening where it is heading next. Kathleen is here. Asian or has said they are preparing a package of other policy measures that can be used in the coming months. We will be looking for details about negative rates. Kathleen i am not so sure. I think he will Say Something about negative rates but he also make the referring to a somewhat broader set of tools that will be employed if needed. The rbnz is. Here , down tobig surprise 0. 25 . That is the white line. It is interesting how the twoyear note yield is seeming to anticipate or open the door to those negative rates. And finance minister grant robinson, a great interview we had right here on bloomberg television, saying the rbnz at gdp reboundr the which he is looking for. He said that people thought maybe they will not sound so easy at this meeting. He said nevertheless they will consider that in a negative Rate Decision in 2021. If things pick up, does that mean they will not go ahead to negative rates . For now, they are really sitting back. Number one you have the october 17 election just around the corner. Maybe do not want to make any big moves at of that. That is what Central Banks are often seen doing. And this is an interim policy meeting. It is a november meeting where they have the opportunity to really lay out what they are going to do, how seriously negative rates are being considered. Surprised a lot of people around the world by being ready, willing, maybe not able yet to embrace just that. We will see, as you said, it will be very important to hear what adrian or says at the press conference. Whatever they might signal or any statement they put out. Because that is a big thing people are waiting to hear. If he is not so dovish, if he would signal any hesitation on that move to negative rates, that could put a floor under and maybe turn around and bit that recent record rally new zealand has experience. With justhleen hays, one of two Rate Decisions expected today. Also watching the bank of thailand out with their Rate Decision littered today. Policymakers are expected to hold at. 5 . Lets bring in Oxford Economics priyanka kishore. I want to start off with this chart showing in comparison to the rest of Southeast Asia, just how thailands economic recovery prospects are doing. They are pretty much the worst there in that chart down at the bottom compared to their peers. In that context, you expect the bank of thailand to hold. Are they just preserving what is already limited ammunition, and will they need to do more heavy lifting . Priyanka i think if you i am not expecting them to raise the policy rates today. They seem to be near the lower bound. They are working with targeted liquidity,ch as bond etc. That is where more and more trust is and that is what we onld expect, more emphasis policy and more on the fiscal side rather than the actual policy rate doing more of the heavy lifting. Haidi the governor said previously he is studying unconventional policy measures, yield curve control. What do you expect to be announced in terms of this unconventional toolkit today . Priyanka i think the low hanging fruit will be in terms of just expanding the purchase of highquality Corporate Bonds, something they are providing. More targeted measures targeting credit to the sector. And stealing up the reversal of some of those funds which have delayed so far. There is also the possibility that they step up their buying off of bonds. Because we know almost 1 trillion in addition in additional spending is expected. What will it mean for Southeast Asian nations as we see these travel curbs as the pandemic rages on . Priyanka that is a very good question. Because we are talking about so, the, almost 9. 8 or direct contribution that is not even taking into account hospitality and additional sectors of tourism to gdp is pretty high for thailand. Also very high for the philippines. Asia also relyst to a large extent on tourism. The only offsetting factor i would say is it can take a big hit because of this. Because domestic demand is collapsing and you have seen a it is looking better. Overall on the current account, it is not as high as you are seeing from some of those balance expected. Shery Oxford Economics recently has rearranged the list of leaders and laggards when it comes to Economic Growth in the second half. You are saying North East Asia is no longer the leader in the second half recovery. One us a bit more insight where Southeast Asian nations rank. Priyanka we have seen a very interesting shift in the last days in june. More or lesswed is with china, hong kong, the rest of north asia, stacked up on the top. Now we clearly see singapore has moved up the ranks strongly as it has proceeded [indiscernible] malaysia prospects have also improved relatively. On the other hand, hong kong has slid down sharply the ranks. So there is a reshuffling going on out there. Haidi we heard some interesting, and maybe fairly unexpected comments from Charles Evans overnight saying the potential for the fed to move rates even if inflation has not averaged 2 for a long period. T are the implementations implications for Asian American market currencies . Priyanka asian Central Banks do keep a close eye on the federal rates. Some more than others. Analysis shows Something Like that which is not our base case. Suspects inusual terms of the currencies that come under pressure. That is where you will see more action. An important caveat is usually these are current deficit currencies. At this point, because of imports coming up sharply, we are in a much more comfortable situation. So even if these banks do not move in tandem with the fed, the currencies might not come under as much pressure. Arei and of course we awaiting the feds decision from the rbnz, more details as to what is a net policy toolkit there is in that policy toolkit there as well. We have seen the Market Pricing we could get to the negative rates by next year. Is that inevitable for that central bank and other Central Banks as well . Tooanka i think it is early to say it is inevitable. It is something definitely being considered. Have seen australia talking about it. It is fair enough to say that even if you do not have policy moves imminently in thailand or the rest of asia, the leanings are likely to be dovish for some time to come given that the recovery from the pandemic is still quite wobbly. So we are not really out of the soft growth zone yet. Shery priyanka kishore, great having you on. Oxford economics head of Southeast Asia economics. Turning to the fed, german Jerome Powell kept up his demand for more fiscal stimulus when he appeared before a house panel earlier. Whether the central bank is trying to provide guest you could hear a lot of people complaining. The general process of printing money. I share the concern. But there is something few are seeing in it. Crisis for . There is like a fire. It eliminates prunes that shouldnt be there, to accelerate the evolutionary process. A firm should go bust now, early, when the cost would not be high on their shareholders, on the owners, on everyone. And give you a chance, as they say in california, to start again, to start again. You fail early. That is a process by those who need to fail, you do them a favor by allowing them to fail early. What the fed has been doing is the reverse. Injecting tons of money to keep afloat firms that should not be around. Then delay that failure. Because eventually it will happen. Eventually they are going to stop. And that is not part of the discussion. This country got strong because they had the highest rate of bankruptcy. Because there is a high rate of bankruptcy in america. You are speaking about the u. S. And not lebanon . Guest no, not lebanon. 12th centurys in a monastery here. The United States and particularly within the United States, the tech sector as the highest rate of bankruptcy. I do fiddling with this, werenow when you discussing the election years and four, five years ago, donald trump, and if i told you, you would have never spoken to me again. Covid in its way, donald trump, the First American president , to give universal income, and require [indiscernible] they bought paper. That is not socialism. Making sure everyone has a floor of income. That is a central aspect of socialism. We live in a strange world today. Everything is driven by covid. Shery next, china has bettered banks are dodging bailouts through socalled stealth mergers as authorities look to ensure stability for the financial sector. This is bloomberg. This is bloomberg. U. S. And china clash virtually at the u. N. General assembly as their leaders offered prerecorded addresses. President trump renewed his attack on beijing for its initial handling of the coronavirus, saying the u. N. Must hold china accountable. Xi jinping said the fight against the pandemic should not be lit a sized. He warned should not be politicized. Chinas leader also told the u. S. That the country will become Carbon Neutral by 2060, as xi looks to move china ahead of the u. S. In carbon and injury carbon energy. They are currently responsible for 20 of global emissions. Xi gave no details on how Carbon Neutrality would be measured or achieved. The International Space station has urgently moved position to avoid a potentially catastrophic they shifted approach to within a few kilometers, a true Close Encounter in space terms. But it has not been revealed what the junk was or how close it got. Hong kong and singapore with the biggest destination for illicit Bank Transfers in asia, according to leaked suspicious activity reports. Only seeing an estimated fraction of 2 trillion in potentially laundered money. Hong kong accounted for 4 billion. Among the banks under scrutiny. 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. Im Karina Mitchell. This is bloomberg. Chinas banks are facing more pressure at home as beijing leans on his lenders, putting the weakest at risk of failure. The solution, authorities are engineering socalled stealth rescues for regional banks, quietly merging them together to form stronger entities. Lets get more with jonas bergman. Last year we actually saw a very public bailing out of banks. So what is driving this change in approach . Jonas that is correct. Authorities really spooked the markets last year with the first bank seizure in more than two decades. Then a fairly public bailout of two others. That was an attempt of inducing some moral hazard, but now with covid, the landscape is totally different. I think the authorities are very cognizant of not introducing more instability at this point as they seek to revive the economy from the virus lockdown. Also with the ongoing Political Tension with the u. S. Haidi and of course these banks are also playing a central line and supporting the economy. How crucial has this role been . Jonas that is another big piece of this puzzle. China has leaned hesitantly heavily on its banks to help the economy. That has definitely allowed the central bank to save some firepower. So obviously they do not want to rock the boats too much in terms of destabilizing the banking landscape at this point. Shery tell us a little bit about the broader risk picture them. Jonas we talked earlier about how banks are hoping to save the economy but that is coming out a big costs. They are settled with sagging earnings and a ruined capital. So the stealth approach is papering over things for now. But it will be interesting to see next year if again they will start allowing the weaker banks to fail. As many experts and analysts say they will have to. And what the Market Reaction to that will be. Shery all right. Jonas bergman with us. Dont forget, you can always find indepth analysis on bloomberg radio. We are broadcasting live from our studio in hong kong. You can listen on radio plus or bloombergradio. Com. More ahead. This is bloomberg. This is bloomberg. Take a look at trading in the aussie dollar which is seeing some price movements at the moment after westpac said it sees the rba cutting rates at its october 6 meeting. We are seeing the aussie dollar dropping by as much as. 5 on the call for an rba cut. It joins the ranks of the likes of goldman sachs. The timing of former easing by the rba and seeing that the rba will be cutting rates and announcing a 100 billion dollar kiwi program. Seeing that weighing on the aussie dollar, down by about. 5 against the backdrop of broader dollar weakness. Shery lets now get a quick check of the latest headlines. Top indian Conglomerate Reliance Industries is said to have asked local suppliers to ramp up smartphone production over the next two years. Were told reliance wants a version of its geodevice that would cost about 50 u. S. And run on android. It would be marketed with lowcost wireless plans. They struck a deal with google in july which sees alphabet invest more than 4 billion. German chancellor Angela Merkel threatens to trigger criticism at home and abroad by resisting a sweeping ban on huaweis 5g technology. She is holding out of against security hawks in berlin and rig and rejecting pressure from the u. S. The chancellor is refusing to compromise on her view that germany must not single out huawei with targeted legislation. Ipoese socalled homecoming has raised a combined 2 billion u. S. In hong kongs second listing, adding to the wave of share sales by Mainland Companies already trading in the u. S. Drug developer zeit lab are the latest to price. Those offering a small discount to the new york close. Chinese companies are heading back to asia. Ev maker boosted funds by 1. 5 billion as it heads towards a potential ipo. It was led by shanghai automotive, the parent of the mainlands biggest automaker. Other investors include baidu, and several local government funds. Warren buffett backed byd is in talks with mercedes parent daimler to supply automotive shifts for electric cars. We are cold we are told negotiations are advanced and involve socalled bipolar transistors while raising alert reliability in electric motors. But there is no guarantee they will reach an agreement. They are also talking to other carmakers. Haidi before we handed over to Bloomberg Markets china open, lets get a quick look at how markets are trading at the moment in asia. We are seeing japans nikkei to 25 really having to play catchup, or more accurately, catch down to the last couple days. About twopan down point 5 monday and tuesday would japan offer holidays. The kospi also seeing downward pressure of. 8 , dropping the most in five weeks into tuesday session and extending those declines. It is on course to fall below its 50 Day Moving Average for the First Time Since april. Also watching stocks in april stocks in sydney. Concerns about a nearterm pullback in iron ore prices weighing on the miners. The aussie dollar taking a hit from westpac calling for an rba rate cut in the october meeting. And kiwi stocks up. 5 ahead of the rbnz decision. Shery plenty more coming up in the next hour. Lilian leung joins us for the china market open and tells us how she is betting on a mainland recovery. Plus the biggest takeaways from teslas battery day. Mark newman gives us his view on elon musks 25,000 electric car. Be sure to also catch our coverage of the bloomberg equality summit later. Hear from activists, policymakers, business leaders, and more. This is bloomberg. Is bloomberg. It is 9 00 a. M. In beijing and shanghai. Welcome to Bloomberg Markets china open. Im Tom Mackenzie. Im david ingles. We are counting down to your session open. Lets get to your top stories today. The u. S. And china take their differences to the u. N. , clashing at the virtual General Assembly