Effect. Is still flat,n and we are watching the korean won, seeing some slight weakness this money. Indonesia is coming on the line at the moment. Chinese stock continues to extend these gains, after the reopening of the holidays. Pointing positive as well. We are spending some Inflation Numbers coming out of india. Where watching the commodities of course. That slide in for the second day. Supply constraints are starting to ease right now. Bolivia and its biggest both owed could be at capacity. And a bit ever treat in iron ore. A bit of a retreat in iron ore. Tom there seems to be potential for the currency to resume gains. Lets discuss now with fred neumann, cohead of Economic Research at hsbc. Let us bring you an update on the nba. The l. A. Acres definitely l. A. Lakers have beat the miami heat. The l. A. Lakers have now won the chairmanship 17 times. This puts them toasted so the caltex. Season one longest record. The nba was effectively frozen out by the controversial tweet back in october of last year, in support of hong kong protesters. That is the latest, the l. A. Lakers have beat the miami heat, the first nba to be chip in a decade. Championship in a decade. Lets bring it back to fred neumann. Pboc, whatrms of the do you think this tells us longerterm about the views of the currency strength, and what are the Practical Implications that we think for the economy Going Forward here in china . Fred im glad that you asked about be rmb and of the l. A. Lakers. , iterms of the remnant be is a tactical move by the pboc to remove these ratios for sorting. It is meant to bring back to a exultations. Raising the ua rally very hard. Is keeping very tight Monetary Policy. If you can extrapolate that further, the pboc is trying to lean against that. That a tactical move, and is not necessarily something that would be a game changer, in terms of how we would think about brought effects directional when it comes to the rmb. To, youn we last spoke talked about the concerns around consumer and lack of pickup and infrastructure spending. Inre are we do you think terms of economic recovery here . Fantastics been a Third Quarter by all measures. If you look at construction, we are still going thanks posters gangbusters. The property sector, we are trying to rein that in a little bit. There are still concerns about how strong the consumer is. Alstoma very strong made festival travel numbers. If you look closely, we are not quite where we want to be. You can characterize this as a fairly uneven recovery. I would not make too much out of this. It is probably Strong Enough for the pboc to continue to remove a little. That explains the strength of the rmb. It is still not even recovery by global standards, but it is a standout by any measure. Yvonne there were some saying itd the volatility, that could be achieving some kind of safe haven status. Theett, given the move from pboc over the weekend . Trade . T just a good fred safe haven is may be stretching it a little bit. There are still concerns about convertibility. Remember, they have room move some of the controls from foreign residents. It is a good diversification play. It offers some security and a bit of an anchor and an uncertain world. Or anythingt a yen that you consider a safe haven. It is still in the emerging market. We are not quite there yet. It has made great stride in bringing foreign capital and diversification. Isause the chinese economy less correlated with what is going out, that diversification is playing itself out, not just in terms of reallocating profiles, but in terms of the cyclical outfit of the economy, and from that perspective you would expect the inflows to continue for quite some time. Yvonne more from fred neumann hsbc, he will be talking with us more about the fiscal stimulus. We have Karina Mitchell in new york. Isina President TrumpPlanning Campaign event in orlando on monday, with his medical team saying that they no longer consider him a covid19 risk. His doctor says that he has met the requirements. The president said that he feels great. I am not on any medication and the medications that i took were pretty much standard and retain. It is incredible how the wind with anybody stuff works. Therell be more that sheds light on the economic recovery. There is revival ever more dependent on a coronavirus vaccine. F has held its meetings, and European Union leaders gather this week with the u. K. Saying that significant gaps still remain in brexit talks. Forrest johnson has set a deadline saying that wants an the u. K. Agreement he is prepared to walk away if necessary. Brussels a set to call its bluff. 73th korean marks its anniversary showing off its new Ballistic Missile, that could deliver Nuclear Warheads to the u. S. It appears to be the largest missile of its type. This was developed when kim jongun was in talks with trump last year. Launch if will only threatened. 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. Still ahead, as we await earnings seasons, j. P. Morgans cohead joins us with his outlooks for asian banks. Policy is on hold, but fiscal stimulus is only darting. Will get more from fred neumann after the break. This is bloomberg. Of wards and washington on who is to blame on the stalemate. Trump says that republicans want a deal. He says that House Speaker nancy plus he is not so. Still with us is fred neumann. D. C. , butoes on and when it comes to covid, does this market a regime change . Take fiscal policy would the reins from Monetary Policy . In parts, and it is because Central Banks are running out of ammunition. Fiscal policy and this type of environment is more effective. Really two types of fiscal policy. One is what you spent during the pandemic, to really help incomes. The big fiscal portion also needs to calm during the recovery. If we assume that the virus fades from the scene and 2021, there still needs to be fiscal policy, as second round the is still needed. Notches in the u. S. , also across asia. Yvonne how long can they keep the tabs open . When does this become dangerous . What are some of the consequences that we can be dealing with . Fred the bond vigilantes are cowed by Central Banks. An evenps things keep keel. The limiting factor is inflation. If you think inflation comes back next year, that will be a limiting factor. The enormous output gaps, there could be a deceleration of inflation going into early next year. That is not really a limiting factor for the time being. Now,u need to boost growth you also have to have credible consolidation strategy in place for the coming year. In emerging markets, like philippines and india, all of these markers that are still spending lacked a signal that there is a credible consolidation pack. If that credible path is not there, then that is going to be 2021. Ern in 20 31 in tom you touched on inflation, and you do not see as a risk that strategy in the shortterm. We are seeing signs of food inflation here in china. Today points to something that is brewing and that investors need to wake up to . Fred it is idiosyncratic. Have factorsts like food prices. There is something else. After the big collapse of activity, we very often see prices and the first few quarters go up because of the disruption to normal economic activity. Once that returns, you actually get the disinflationary shock come through. That is why going into early next year, places like india, are going to see rapid deceleration in inflation. Across the rest of asia, like china, we are going to start 2021 at inflation rates lower than they are currently. Tom you talk about the need for fiscal stimulus and this part of the world combined with a convincing plan. Where are you seeing evidence of this and asia . Which countries are behind in putting these two things together . Fred if you look at the philippines, they have passed a law that very credibly stated that there is only a certain amount of money that is central bank can do to finance it. There is a legal structure in place that provides credibility. That is a very credible strategy. In indonesia, we ideally want to well,legal reassurance as possibly next year with the revised central bank, that provides a very firm basis that puts a framework around the monetary financing that could be done. We know that that could potentially be used again beyond financing to health nets year to help your. Year. Help next investors may have certain doubts about the longterm strategy here. In this whole talk about aggressive fiscal spending, the one economy refraining from pursuing this is china. Our critics right to say that the government is not doing enough on that front . Fred the chinese have had the luxury of seeing a very short covid19 spread through the economy, and that has also reduced the overall need for stimulus, because there have not been in undermining confidence over the months. The overall need has been lower in china because of the better attainment strategy at the beginning of the year. That does not mean that chinas support cannot stop. But on the monetary side, because of concerns of inflating asset prices, youll probably see a bit more tugging of the reins here to ensure that you do not engage in another round of debt rolling. Gas onas one foot on the the fiscal side and is tapping a little bit on the brakes on the monetary side. Other governments have to have both the on the gas, going full into 2021. 31 tom it is always great to get your insights. Thank you so much for joining us. Whyext, you will hear from permanent damage is done to the u. S. Labor market. This is bloomberg. The fed Mainstream Program is a disaster. He spoke to bloomberg about that and the prospects for more fiscal stimulus. It all determines on what the definition of the state of the economy is. If they can put up a package that is proposed, the one plate trying dollars the 1. 8 trillion. To buy enough to bias us up to three months. Run, andof the long the cares act, they have done very little to lift structural growth for the longterm. Longterm policy has saved the credit market in the long term. Allrd you compare that to the access to credit for smaller businesses, as if seen so many of them shut down already . I think what the policymakers are doing is leaving themselves to an open round of criticism, which is that the Government Programs were designed to bailout the big boys but the Mainstream Lending Program has been a disaster. Program is a great of course gone. Aid to the airlines has been used up. So we are going to start seeing layoffs here. Structurally more than half of , americans are employed by small to mediumsized businesses. A lot of those businesses are never coming back. We have permanently done damage to the job market, which some other industry or future growth it is going to have to correct for, and that will take a long time. You called the main street Lending Program a disaster. Is the fed also going to beal to ultimately able meet the needs of main street . I dont think it is much about the fed as it is in combination with the u. S. Treasury. When you look at how the main street Lending Program was designed, the banks are sitting in the first loss position, and they have to absorb a lot of losses if something goes wrong, yet at the same time, they cannot use nor are they going to be capable of the underwriting standards necessary to make good loans. So i can understand why the , banks are not having a lot of success, because they are guarding there capital, but the other side of it is that the banks did get a big windfall here. Especially those that underwrite securities by the record Corporate Bond issuance. We see the fixed income in most of the major banks has been record profitability. I think that there is a sort of feeling in washington that there is a quid pro quo here. Look we did this program that , made you money. You should be taking losses on these main street loans. And i think that they are at a standoff. Lets talk about the banks. Some of the banks have said the Consumer Outlook has got better for them. Do you think that is a lenders bias . The banks have chosen better customers anyway and that there is a large part of the economy not seen by the Banking System . There is certainly a large part of the economy that is not being seen by the Banking System. That has been an issue for chairman powell and other members of the federal reserve. Getting money or capital into the innercity communities and minority business it is nowhere similar to the levels that get to other sectors of the economy. So i think that the structural , issue which is basically embedded in the system is going to lead to a lot more pressure on the view of socialism and other programs which basically directly protect certain groups of our society. Tom scott minard speaking to bloomberg. Here with the latest business flash. Of 21as been a return billion to managed assets in china. It is a part of the global shift to focus on lowcost funds for individual investors. The has managed to put Chinese State administration of foreign exchange. Management of some of the money. The worlds leading maker of rubber gloves is set to be considering a listing in hong kong, with the aim of raising more than one billion u. S. Dollars. Workingsay that it is with advisors on a new shares sale. Bloomberg data is saying that a listing of 1 billion would be the biggest ever by a Malaysian Company in hong kong. Taking a look at the markets right now. We are seeing asian stocks a bit up, slightly higher here. Hshares in hong kong. On head at the u. S. Holiday monday, this is what we are looking at. Cheaper to short the currency. If seen a surge in the rmb country hall. You will continue to hear the commentary. That premium that the chinese 10year bonds have. Rates, pboc cuts hadss pboc cuts rates, we to beat japan lunch break. Slightly under pressure, your dollaryen holding. This is bloomberg. I sent your new prescription to the pharmacy. Any idea how much it will cost . You have a choice. Insurance or goodrx. I have insurance. Insurance is not what it used to be. People struggle to get their prescription covered and prices keep rising. I recommend goodrx. You get free coupons to save on your prescriptions. [narrator] compare prices to get the best discounts. Goodrx, smart. [narrator] stop paying too much for your prescriptions. Download the free app today. Karina it is 10 29 a. M. In hong kong. I am Karina Mitchell with the first world headlines. Stimulus talks remain gridlocked. President says that republicans are having a hard time with lissy. She said that the admission offers have been grossly inadequate. Says that action to support the economy is vital. Republicans want to do it. We are having a hard time with nancy pelosi. He thinks that she can influence the election. I think theyre hurting themselves. Karina china says that it will maintain normal Monetary Policy. Pboc governor says that he will ensure apple the liquidity and reasonable growth of money supply. He also cautions that stimulus could he says the institutions and shareholders are as possible for doing with that risk. Reports from brussels say that big tech may face new rules on market dominates. They are targeting up to 20 large internet economies that would have to accept top or restrictions. Sources say this may go beyond monetary policies. Be forced to Police Illegal content and products sold online. China has removed and out that helped users sidestep the socalled great firewall. Securityacked by 360 and that users visit blocked sites like google and facebook. It stopped working on saturday and was taken off the app store of huawei. 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. Lets turn our attention to the Banking Sector and discuss how acxiom banks are positioning for the next six months or so. We are going to be speaking with harsh modi, cohead of Financial Research at j. P. Morgan. He joins us from singapore. It is great to have you on. What is the Health Status of banks . Banks axion a they are reasonably and challenge portion right now. Singapore is offering something to improve. We are looking at asset quality risk. That was take a wild for the banks to navigate. In part of 2021. The way that we are thinking about most of the market is looking to build positions for the longterm. And select singapore banks, whereas for the most of the banks, it would be more keen to positiveive and more on trading around those names, rather than building a position for the longterm, just yet. Caution. You talked about asset quality, and that is central, given the Economic Contraction that we have seen. Placed tos are best handle bad loans at this point . Marketthe growth in the has been fantastic. Singapore is increasingly looking better. The domestic activity in singapore is holding up well. But, the rest of the asean banking market, you have varying degrees of risk. What we have in every asean market is one or two banks that have a pretty good 20, 30 year quality. Those are the banks by which we would be looking to buy for the longterm. As a rule of thumb, would be looking to trade most of the broad Banking Sector in asean with preference of vietnam and singapore banks. Yvonne we have here in the region, some debt releases that are set to expire. Are any of the banks in the u. S. Capital raising, and which one . Harsh some of the indian banks have already raise capital, and some of the asean banks are raising debts. We do not really needs capital raising. Dividends have been cut. Buybacks have been extended. We are getting whatever dividends are being paid. Way ande gone a long allowing the banks to preserve capital. There may be one or two banks that are slightly weaker. Mergersseen some of the is a mean of producing capital risk. Widespreadt see capital raising. And 2008, we015 are in a much better position for an event like this. Capital see widespread at this time. Yvonne you have a line coming up. And youre quite positive about indian banks outperforming asian windows over the next few years. Aboutld show our viewers the situation in india. I know that this is more of the headline figures. What are you saying there . Supports that kind of thesis . Harsh indian banks are at a very interesting point. Large corporations and india and do leveraged meaningful recent years. Year lows. Those who are part of the Banking System, these are the top 3 of households of india. These are the guys who can work from home, telecommuting, all of that. White collar, mostly. In on the banking of these borrowers is relatively limited. Risks have been elevated. We have seen very significant tightening of loans and values over the last three years. We have a two track Banking System in india. You have 45 banks that are in a very good position. Four or five banks that are in a very good position. And you have some where the risks are meaningfully higher. We have to pick and choose, but some of the large corporate banks in india are very well positioned, not only now, that as a real everyday happens, and it starts now and goes on for the next. For the next period. For markets like thailand and the philippines and malaysia . Harsh some of the consolidation has been happening. Reason, asset quality risk has come through. Some of the capital related risk has come through and some of the markets. Sellers orme of the basically sell. When you are going through a high stress situation, shares more to limiting systems at risk, rather than anything else. Regulatory, you have my sense is that most of that is hopefully behind this. We should not see any meaningful deals on a short notice now. Secondly, with technology now ofoming a big enabler improving distribution reach, it becomes rather tough to justify a high priced branch acquisition. Branch is important, but not as about not as much as a few years ago. I do not see a lot of deals happening. You will see some plugin deals. Ones rge transformational beyond a point. Yvonne you mentioned about sin tag. We have seen a lot of tech tiktok,like ant and what are the chances that these players could get some type of Digital Banking license and singapore . How big of a threat is it for some of these big players . Arsh we are seeing valuations and applications. Next couple of months, we should see the outcomes. What i would say, all of the and the partnerships that have been built up, have their own unique. What is probably underappreciated is that across incumbent, singapore banks are probably the best prepared to take the digital banks, and challenge the banks headon. These banks have been preparing for this eventuality for seven years. Some of them are best in class. I am not as nervous. I am agreeing that with every new competitor, the complexity of running the business increases. I think that singapore banks have done a fantastic job, and a do not worry too much about them being sidelined. Yes, there will be marginal competition in certain areas. It will become a more vibrant market,. This will bring more to the table. To thating forward competition in some senses, but im not getting worried. It is about to get more interesting for your research. Thank you, harsh modi from jp morgan. Coming up, Hong Kong Investment bankers are losing out to mainland arrivals, and we have more on that story coming up. This is bloomberg. Tom welcome back. A quick check of the latest ban the latest business flash headlines. Pandemic, light up to sell shares. Biotech look and ready to still the ipo pipeline in the future. A rush ofhas seen Mainland Companies listing as tensions grew between the u. S. And china. The chinese regulator confirms the application but gave no further details. Mainland security factor is opening up to banks that would allow for control. J. P. Morgan and Goldman Sachs are also looking to open up in china. Chem shares fell at the open. At 7. 5 trillion one yuan. Smashed mediumt estimates of around 69 billion. Its batteryeen off movement. Checkking to a blank firms about a share firm, triller is working on a possible deal with the socalled special purpose acquisition company. Triller hopes to lure users from round. And at fundraising it has already raised 100 million. To boost itsg freaks and staff to meet the demands and the postvirus world. New aircraftour planes to its current 11 strong fleet. It is launched over 40 routes and aims for two more by the end of the year. Hong kong bankers are being overtaken by their counterparts. New figures are showing the lowest share of investment has fallen to 30 . This is not so surprising when you consider that 90 of the sears ipo were brought to the market. Lets get more from jonas bergman. If you look at the business being done here coming out of the mainland, i guess this trend was inevitable . This is a longstanding shift that has been happening really since the last 20 years. More, this has been the mainland focus from hong kong. Ipos foroned the big example. There is also much more talent now coming from the mainland. More immediatend reason for why we are seeing this shift. It is because of the protests and the enactment of the security law. And banks have become more reluctant to hire homeowners. Tom that is a fact. You have named a couple of factors driving the change. What does it mean for hong kong bankers, and to what extent are other jobs being moved out of whatkong right now . Jonas we are seeing in the Investment Banking is that Morgan Stanley and ubs and credit lease are also moving and shifting Investment Banking jobs to china, and this is likely to accelerate as the mainland opens its Financial Markets this year. There are simply less reasons for the big global banks to have people and china when they can place them in hong kong or beijing. They can rapidly build out their operations to go after massive amounts of Investment Banking security dealings and everything in china. As well as a wealth management. Taxne what about the regime change that we have seen in china as well, we saw earlier this year where they are onosing possible taxes offshore income for chinese residents as well. Is that going to impact for some of these chinese investors go . Jonas they have taken some measures and china and hong kong to mitigate that. We have already seen some mainland bankers who are looking at moving back to the mainland. That could be a small Silver Lining for a local hong kong banker, in the sense that they could compete better for the jobs that were daft that remain here in the city. Tom that was a jonas bergman. North korea shows off a new Ballistic Missile that may be able to carry Nuclear Warheads to the u. S. The invocations just ahead. The implications just ahead. This is bloomberg. Tom welcome back. North korea marks its 75th anniversary as a nation, showing off a new Ballistic Missile that may be able to deliver Nuclear Warheads to the u. S. We are joined by Stephen Engle in hong kong. Apparently, this was developed even while President Trump was in talks with kim jongun last year. Roll theseot just things out overnight. This is the largest icbm so far. It looked longer and with perhaps a greater payload capability. This is the first and they have rolled out such new equipment since they started that dialogue with donald trump in 2019 in 2018. With trump summits, with kimut and later jongun, and that is when he said he would have a new strategic weapon. You could say that kim jongun was coming through on his pledge to provide an roll out new strategic weapon. What does it mean for the relationship . We will have to see Going Forward. With the grand finale and the midnight parade, oddly it is in the middle of the night. They had soldiers and fighter jets and fireworks. At the end, the finale was this thatocket the kinds of kind of shows strength to the United States and a standing up to the unnamed enemy to the domestic audience. That is the theme of the speech of kim jongun from the top overlooking the parade. He said that we will continue to strengthen our war capability to deter risky attempts and threats, including nuclear, that are being constantly aggravated by hostile forces. He did not mention the United States or donald trump mining. He showed some restraint and attacking the yes. Why . Shed some tears when he was talking about the hard ship the has fallen upon north korea this year. He has had his own health issues. There has been flooding and north korea and damaged crops. He got a little bit teary. Talking about some of these peace stocks. They are rallying. It is being viewed as more of an overture to south korea. He is kind of hinted that once the pandemic has subsided, he would be more welcome to exchanges with south korea. It was not all hard line. It seems that he is willing to talk a little bit. We are coming into what could be potentially a very harsh winter and north korea. Tom you talk about peace talks. The expectation is that maybe you could see improved relationships between the two koreas. With the south welcome further talks . Or where they want the backing of the Trump Administration . How much longer could the Trump Administration be in office . Be its own scenario. I am sure that south korea is open to it. The relationships recently have gone south between the north and south. If constructed, i think that there could be dialogues and exchanges. Or so a lot that needs to happen. There is still a lot that needs to happen. Yvonne that is Stephen Engle with the latest. Assets lookingsk solid on this monday morning. Offshore with the pboc, making it cheaper to short the currency. The last i that they made this move, we saw the renmninbi weaken. 671 for your offshore,672 for your onshore. When it comes to asian equities, it is china driving this charge. You seeing marginal gains in korea and singapore, as well. It seems that at this point, the narrative is that no matter who wins this presidency, that this years election risk seems to be less of a headline risk at the moment. It seems like november they be uncontested. Some people are pricing in that we could get additional stimulus, perhaps risk assets could still perform. Take a look at southeast asia. Asia is back. We will happen anymore. This is bloomberg. We will have plenty more. Haslinda welcome to bloomberg markets. Yvonne here are the top stories. Renminbi asout the the hsbc looks to rein in the rally. President trump is back on the campaign trail later, saying he feels great after being deemed no longer a transmission threat. He wants an event each day until the election. Yvonne and most valuable. Lebron james is mvp as the lakers win the nba for a recordtying 17th championship, with the nba back on tv screens in china just in time. Haslinda it is risk on in asia. Asian stocks rising for the th day, expanding gains extending its gains, up by about 0. 5 . Not shall be for the csi 2 not shabby for the csi 200. U on weakening after the yuan weakening. Yuan dragging down other currencies. You take a look at that net in fact. You do see a stronger dollar, so that could be hurting some of the sentiment, but not when it comes to risk assets. You do see some of these proxies, like the aussie dollar and the korean won, a bit weaker. The taiwan dollar basically unchanged at this point. U. S. Treasuries are pretty much in a sling boat right now. We do have a holiday coming up on monday. Asare watching oil, as well gold futures. For he much mixed when it comes pretty much mixed when it comes to brent crude. Gold futures above 19. 32. Some say when it comes to the renminbi trade, you take a look at the spread between the chinese and u. S. Tenyear. Some say the trend is not going anywhere and could support a stronger renminbi moving forward. Lets stick to that right now with our guest. In slightly weaker than expected when officials tried to restrain the currencys rally. Joining us is simon flint, bloombergs emergingmarket strategist. They scrapped this rule. Tell us what the intent was from the pboc. Reporter the intent was clearly renminbi andthe possibly stop it. At august 2018, it all came as attempts to stall the significant remember moves. Whether it works is another question. Will it haslinda be haslinda will it be successful . The economy is doing really well versus the others. Right, theou are fundamentals are so strong this rule will probably not work on its own. What we need this morning is a significantly weaker fix. Or we would need intervention by the authorities. When it has worked or has coincided with significant depreciation, it tends to be combined with the weaker fixing intervention. We have not really seen that on this occasion. Footnote, it is often cited in the december 2017 example where the renminbi depreciated after. The dollar was also higher, because we had a fed hiking cycle. The depreciation of the renminbi cannot really be attributed to change on that occasion. Yvonne given the moves we are seeing from the pboc, it seems likely they are trying to do something to rein in the strain. Does that damper what some of the market is saying, that the renminbi is seen as a safety haven . Yes, because they are willing to change the rules and stop the depreciation. But we also have to think about this in context. This is actually scrapping the capital control. , you are making the yuan more free and it does not really diminish the safe haven aspect of it. Are cognizant. A biden presidency is more priced in. You can expect to see more Global Growth and to create global trade. These are positive forces which will add to the appeal of the renminbi. Ourinda simon flint, emerging markets strategist. Lets get the first word news with Karina Mitchell. Karina stimulus talks remain gridlocked in washington with President Trump and Speaker Nancy Pelosi blaming each other. The president says republicans are having a hard time with pelosi. She responded by saying the administrations offers have been grossly inadequate. More talks are expected this week. Minneapolis fed president Neel Kashkari says action to support the economy is vital. Republicans want to do it. We are having a hard time with nancy pelosi. She thinks she can influence the election and i think they are hurting themselves by not doing it. Karina and a wave of Economic Data will shed more light on the state of the global recovery. Revival is ever more dependent on a coronavirus vaccine. The imf and World Bank Hold their annual meetings, with both calling on the g20 to extend a freeze on debt payments for the poorest nations. The European Union leaders gathered this week with the u. K. , saying significant gaps remain in brexit talks. Boris johnson has set the 15th as his deal, telling chancellor merkel that progress is increasingly urgent. Johnson warns that wh while the u. K. Wants an agreement, he is prepared to walk away if necessary. Brussels is set to call his bluff. North korea marked its 75th anniversary as a nation, showing off a new icbm that may be able to deliver Nuclear Warheads to the u. S. Weapons experts say the missile appears to be the largest mobile rocket of its type, allegedly di developed while kim jongun was in talks with President Trump. Kim jongun signaled a willingness to resume talks. The l. A. Mes has led lakers to their first nba title in a decade. They steamrolled miami in game six. The lakers triumphed 10693 to claim a record equaling a 17th title. Envy p for the 11th time james is mvp for the 11th time. No one else has more than three. James has now won the title with miami, cleveland, and the lakers. 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. Take a look at those live pictures out at los angeles. You are seeing a lot of celebration here today after that win by the lakers. You see them hitting the streets. We did learn that lebron james won the mvp, and what was the longest season on record for the nba. Chinese fans were able to watch as well, just in time. They started the season stuck in china, taking heat over this tweet that happened a couple months ago. Also, when it came to being able to watch it, they were able to do so today. There were lots of celebrations overall. You can see plenty of fun right there. Still ahead, we take a look at the rbis central bank. In a tight spot, reducing costs without cutting rates. We will have more with our guest. Next, mary nickel are on her strategy as the u. S. Elections draw even closer. This is bloomberg. Haslinda stimulus talks remain gridlocked in washington, with President Trump and Speaker Nancy Pelosi blaming each other. With bring in mary nicola Global Market assets. Good to have you with us. We had some saying the stimulus is not essential for the u. S. Recovery, but for the markets, it is essential for the rally to persist. That the believe market continues and the Global Economy as the u. S. Economy will continue to need some sort of stimulus, some sort of measures to continue. If you look since covid began, the reason why the markets have rallied over the last months has largely to do with massive monetary stimulus, massive fiscal stimulus, and the fact that vaccines are likely to come sooner rather than later. But the key thing here is the fiscal stimulus, and that is not going to go away, for markets or for the recovery to strengthen. How much of the stimulus has been in the markets . When you look at the difference between the fives, and the threes it is by 11 basis points. What is the market telling . The market is concerned. One of the key reasons we did see this in september was it looks like the fiscal talks were package continues to be on and off again. That has been a key concern for markets. If you look at the u. S. Economy, it still needs that support, if you look at the difference in terms of how much people are saving. The u. S. Consumer is saving a lot more, and the reason why is because of the fiscal transfers. These fiscal transfers have been crucial for the average u. S. During theseanage difficult times. Trackinge have been what is going on with pboc, the radhika moves today the from nb moves today the renminbi moves today. What do you make of this move . Is it meaningful enough to remove the strength we see in the currency, and what does this mean for risk assets . Guest i think what we have seen from the pboc and the central bank is the key is not to have rapid currency appreciation. We see that the concern is on the pace of depreciation rather than the actual appreciation. It has moved quite a bit. And for strong reasons. The data out of china has been quite positive. But we have moved quite considerably from 7. 16 down to 6. 17. That move has just been from the end of may into early october. Pace ande about the limiting the pace of appreciation rather than halting the currency appreciation completely. Yvonne do you think it changes the dynamics in any way on risk assets . We have been asking that to our viewers as well, how this could affect risk assets moving forward. How do you see that . Guest the key thing here is they are not concerned about currency depreciation. Currency depreciation is really what can set a reversal on on risk assets in the region. Economic data out of china continues to be positive, it is hard to dampen risk assets in that environment. The key thing is to show the strengths of the chinese economy is continuing forward. It is just a matter of not having the currency move as quickly as it has over the past few months. Speaking of risk assets, how committed is the fed in keeping risk asset prices elevated . It has been interesting to see some of the comments from the fed recently, whether it is from powell or some other members of the fed. The key message here that they are trying to relate to the markets is unless they get more fiscal, there is going to be no more monetary stimulus. We have seen this in the past with several central bankers, in pushingghi, policymakers in europe. If they want more fiscal support from the Central Banks, then fiscal will have to come as well. Jerome powell and other members of the fed are saying the same thing. It is not only monetary stimulus that will be supported and is needed to get us through this covid crisis, but it is also fiscal that is absolutely crucial. Haslinda taking a look at your conviction calls, you are liking european small caps. What is the story here . Is it about playing catchup . Guest a little bit of both. We see that especially in this environment the likelihood of growth and Economic Growth is likely to broaden out, especially we had the european recovery funds and that has been quite supported for europe overall. We had a minor setback in europe with cases increasing in covid after summer holidays, but we dont expect that to persist. We expect policymakers will make sure they mitigate that. They are not looking to shut down the economies again. They have repeatedly mentioned this. As Global Growth broadens out, and as we see the environments, the economic momentum improve, Something Like european small caps should benefit from that sort of environment. At pinemary nicola ridge investments, thank you for joining us. I want to bring you back to the pictures out in l. A. You can see the celebrations after the l. A. Lakers have won their sweet 17, defeating the miami heat in six games to take home their 17th championship. This is the fourth title for lebron james, who did win the mvp. As we see, the crowds of people are cheering. We did get a tweet from the l. A. Mayor eric garcetti, saying they are telling people to celebrate at home, saying please remember it is not safe to gather in groups. We have plenty more coming up as well. This is bloomberg. Haslinda the u. S. State Department Says it is making Good Progress in its efforts to commence allies to create clean networks, which avoids using 5g technology from Chinese Companies such as huawei. We spoke to the undersecretary of Economic Growth, who told us where things stand at the moment. The tide has totally turned. It was eight countries, 10 cities. The big news is the integration of the clean network, with the eu clean toolbox. The countries i went to, luxembourg now has nothing but clean vendors in 5g. This morning, belgium announced it. The big one was germany. They are about ready to issue regulations that in essence will exclude huawei. We saw the same thing with regard to austria, portugal, spain, estonia, albania. Transatlantic alliance in 5g is secure. It is about 25 of the 30 nato nations. Reporter why the shift, specifically with germany . It seems that in recent weeks there has been a shift with germany. What changed . I think it is a combination of three factors. And i spent ais, lot of time with nato, with the deputy secretary. Afford toe cannot have a fractured nato. We need the 5g civilian networks in peacetime and wartime. We cant have some that have trusted vendors and somewhat on trusted vendors. I met with the eu commissioner. A lot of people dont know this, but he announced that the board of directors the telcos in the eu have to make the decision. If they choose a high risk supplier, which is basically the chinese the players, and something the chinese suppliers, and something goes wrong, they are liable. The second was the integration with the clean network. They can see that momentum all around the world. Reporter if you look at some of the Economic Data, some of these telecommunications firms, whether it is huawei or cte, and or zte, and they are making a lot of money, their profits are booming. Does that concern you . How does the u. S. Diminish some of the clout of these companies . By the way, i think you will see it show up in huaweis numbers eventually. They are a private company, so who knows with these guys . But you can see their deals are evaporating all over the world. Last february, they announced contracts. The most we can count out of china is seven. Reporter you were just in taiwan. Specifically on chinese payment, digital payments, you look at alipay for example, what will the administration be doing, or what are your team doing for these economic concerns pertaining to these companies . I cant talk about our internal deliberations. Obviously, it is a cause for concern, so that is about all i can. Reporter a funeral. Tell us what happened you were in taiwan attending a funeral. Tell us what happened . I went over for the funeral for president lee. He was the highest ranking state Department Official since th 1979, when i went over there. Sent over toers break airspace. I had such a great meeting with the president , and many of the ceos. We had an economic dialogue. They are a great partner, a great friend. They are a role model for capitalism and democracy in that part of the world. That was the u. S. Under secretary of state keith krach speaking to kevin cirilli. Time for the morning call. Lets go to sophie kamaruddin. It is all about the renminbi. The offshore trading around 6. 71, after the new rule to cut the fx reserve risk. What is the overall assessment so far . Sophie the general view is there will be a nearterm pullback in performance. The sense is that the pboc is not wholly comfortable with the u. With the appreciation. Pboc willets at the encourage hedging activities and allow more twoway flows. Flipping the page over at citi, foreign rates are rising by 100 to 300 back in september 2017. The cost of shorting is anticipated to be down by much. Up off anbyd shares, upgrade. What is starving the optimism . Sophie they are lifting the price targets for those shares, along with the profit forecast. This is after the chinese ev maker released a report for september showing contributions from the highend models. That trend with new model launches, that should boost their profits. This giveso cicc, the backdrop of china wanting to energize fossil fuels. Yvonne we are a couple minutes away from the mumbai open. The nifty is about 2 away from erasing 2020s losses. What is the outlook now for indian stocks . Sophie i want to highlight a note from Morgan Stanley. They see indian stocks outperformance continuing over em thanks to strong corporate activity and attractive valuations. In a stock figures market, Morgan Stanley prefers midcaps, cyclicals over defenses, overweight discretionary, industrials and energy. Lets take a look at the live pictures in l. A. The crowds getting a little more rowdy as haslinda you are looking at celebrations for l. A. Lakers fans, who defeated the miami heat in six games for the women. It is the sub for the win. It is the 17th championship, the third for lebron james. Victory over the miami heat. So far, pretty peaceful. They are blocking entrances into staples center. Celebrations for fans of the l. A. Lakers, as they defeated the miami heat in six games for the win. Lets get the first word headlines with Karina Mitchell. Karina and we start here in the u. S. The president is planning a Campaign Event in orlando on monday, with his medical team saying they know lager consume they no longer consider him a risk. Thedoctor said he has met criteria to stop isolation, though they declined to say when the president last tested negative. The president addressed supporters saturday at the white house, saying he feels great. I am not on any medication, and the medications i took were standard, pretty much routine, other than the one, which is a miracle. It is the antibody stuff, which is incredible how it works. Willa china says it maintain normal Monetary Policy for as long as possible while boosting Household Savings and income. Says he will yo ensure reasonable growth. Excessiveutions it stimulus could create asset bubbles. He says institutions and shareholders are responsible for dealing with risks. Reports from brussels say big tech may face new rules on market dominance. They say the regulators are targeting up to 20 Large Internet Companies that would have to adopt tougher restrictions than smaller rivals. They may go beyond penalties and force them to allow access competitors and share data. They may be forced to Police Illegal content and products sold online. China has removed an app to help users sidestep a firewall. The browser is backed by 360 security and lets mainland Internet Users access blocked sites. It stopped working saturday at was taken off huaweis app store. The move came after social media hailed the ability to access sites without a vpn. 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. Haslinda, back to you. Haslinda lets take a look at the markets. It is risk on here in asia. Asian stocks at twoyear highs. We see this esi 300 index extending its gain to 2. 5 . The hang seng as well. Investors mull over the stimulus talks. In the fx market, the dollar getting up. The pboc made it cheaper against the yuan. Well. Re all weaker as market, oildities under pressure with supply constraints starting to ease. Production is resuming. Libya coming back into the markets. Brent crude down 0. 7 . A look at are taking the india market as well. And 2 away in the syntax from the fintech and nifty erasing losses. Are b. I. The are debt purchases. Foree numbers due out september and production numbers as well. Lets bring in radhika rao. Specifically mentioned the issue of inflation, that it was transient, that the higher prices will start to reverse soon. How confident argue that prices will be controlled in the Fourth Quarter . Guest hi, yvonne. Certainly i think with inflation, one of the big risks from the private meeting is we now know what the central bank thinks and the official predictions of inflation. On inflation, they made it clear that what is happening now is completely supply driven, not so much to do with demand. Term, peoplee near will continue to see the Inflation Numbers. Later today, we get september numbers. , 10hink it will be about 7 months of above target inflation. Reverse and we will have effects kick in. The economy is reopening and as it reopens the supply mismatch continues to narrow. A move onat will have inflation. Addressed ase well. In the very near term, you will continue to see 6 numbers. September might be closer to 7 . After, i think you would see it get to 5 during the course of the year. But in the near term, i think it is an uncomfortable territory. There is concern if we see the government step up with another round of spending that we could see the rbi struggled to keep inflation capped once again. Does the inflation targeting regime need to be more flexible in india, similar to what the fed adopted . Bank i think the central is targeting until march next year and it will be under review thereafter, but we dont think there will be any pricing changes. I think it has worked well so far and will anchor inflationary expectations, as well as keep inflation largely within targets. When it is out, it is because supplies have been impacted. Within this construct, within the framework the central bank had, they have enough room to make support available. But then is high, Forward Guidance is a tool and the goal is to anchor it. Want the limited room to go into higher borrowing for the banks. The emphasis is on staying within the framework, but anchoring rights. That is why you see strong Forward Guidance. Think this is within the confines, so we dont think there will be any reassessment. One aspect that always gets significant who has rates in india . It is about 40 , 50 . It tends to swing inflation. Over time, that may be down, but i dont think the contours of the frameworks in place will change. Thereda apart from food, is also oil. Inflation in india is contingent of where oil prices are. Said there could be a 30 basis i point increase for inflation. Imported inflation is one part of the problem. It is not that big a problem, particularly in the past year or so. This year, even gold has been affected has affected inflation. But what happens with oil and faction been a bigger is indias prices have not corrected dramatically. That is because of liquidity in the taxation system. Hardened prices so you have not seen the full benefit of low oil prices see through seep through. If you see the numbers stabilize, that does not have a negative effect. One of the factors is we would assume that globally oil prices would go up, then you would have some benefit. Right now, between fuel and food, i think food is the bigger factor. Yvonne we do have some breaking news from hong kong. Be chief executive will delaying her policy addressed to late november. It was supposed to be scheduled for later this week. It was supposed to include some china supporting measures in this policy addressed, but it we are hearing from the government that carrie lam will vision beijing in late october as well. There was speculation that they would have to purse phone they would have to postpone this address because president xi jinping was also planning to visit shenzhen later this week as well for the 40th anniversary of the establishment of that special economic zone. At this point, that is what we know, that they will be delaying the policy address here in hong kong. Has . India, just toto continue our conversation, we have the rbi projecting a contraction of 9. 5 for the year. That is better than what was a contraction0 , of almost 15 . What is the Downside Risk to the rbi . It was the First Official assessment we got from the central bank, and i think that was supposed to be one of the most important takeaways from this meeting. What the 9. 5 tells us is they do think the economy will contract for the next two quarters. The court or we are in and the next quarter. Thereafter, we will see a return to profit. But i think the bigger picture, this is evenly balanced with downplayed risk and is to do with pandemic management. India has the second largest number of cases. The number of active cases has been falling, so that is a positive. But the curve will be very important because the economy is in the midst of the unlocking process, and that is where more ,ctivities, in room dining different activities opening up. Our own project and is about 9. 5 percent contraction, not far from where the central bank is. But the assumption is the reduction we are seeing will continue to happen and the economy will continue to unlock. The bottom line is this needs to be under control, or else we will have to put back some kind processized unlocking if the tensions go up again. Something that would be the center of attention for the policies. Yvonne i am looking at the market right now. Those yields have been trading in a tight range. The 10 year around 6 . Can investors continue to count on the are b. I. To stabilize yieldbeyond implicit curve control . Bank i think the central has managed expectations very well in the first half of the fiscal year. Fromnk one of the apart the policy part, i think the bond markets were significant. Verynly was the commentary supportive of the bond markets, but they made clear they will do open market operations. They will not only extend support to the center bonds, but the state bones. At the same time, banks would be allowed more room. We do think that combination will continue to happen in the second half of the fiscal year as well. One thing you may not see is the monetization, which has been spoken about. I think from experiences from the past, that would not be the right thing. Operationsore market. The central bank and the banks will be the top two players in the do bond market. In the domestic bond market. Yvonne still to come on the show, President Trump intends to return to the campaign trail with a new selling proposition. We have the latest on the u. S. Elections. And we are counting down to the opening of the session in india. Nifty futures currently pointing to a higher open, up 0. 2 ahead of inflation data. Onlation forced the rbi t friday. This is bloomberg. B do a check ons the indian markets. Indian benchmarks joining in on asia. Both benchmarks are in positive territory. The nifty is expected to cross the 12,000 mark. Both are just 2 away from erasing losses for the year. Shares moving from strength to strength, and banking shares also showing promise. We have had earnings season positive. Donald trump aims to return to the campaign trail as white House Doctors say he is no longer a transmission risk. It comes as joe biden pulled ahead with a 12 point lead in the latest polls. Lets bring in our Senior International editor jodi schneider. We have three weeks to go. President trump seems to be back on the campaign trail. Tell us about his health and what are some of the questions that are still unanswered at this point . Than just a little more three weeks to go until election day in the u. S. President trump is touting that he is no longer considered transmission risk to others because of the coronavirus. His doctors saying he has been fever free for well over 24 hours and all his symptoms have improved. What his doctor has not said is that the president has tested negative for the virus, and if he was fever free for 24 hours, when did he have that fever . Weekend wasver the the first of sean conley, the white house physician, updates. It was the first since the middle of last week. Freeid that he was fever for four days. There must have been another fever in there. Otherysician answered questions, including when he did last test negative. There are questions, but President Trump is feeling like he has the goahead to go out and campaign. He said he will be going back on the campaign trail. A rally is scheduled for monday night in orlando. He is expected to go to pennsylvania tuesday and iowa wednesday for additional events. And over the weekend, he gave that 18 minute speech from the white house with his supporters surrounding the lawn. That was his first event since returning from the threeday hospital stent. The supporters, many were wearing masks, but they were not socially distanced. Haslinda International Editor jodi schneider. Some breaking news. We have vendetta plunging 10 in mumbai after the denison offer failed. Businesses in india include zinc, aluminum, and oil. The commodities giant failed to get approval from minority shareholders to dealers. Plunging in mumbai after the delisting offer fails. That is what the investors are saying. Still to come, the nba back on tv in mainland china, just in time to see the lakers win the championship. This is bloomberg. Yvonne the l. A. Lakers have won their first nba championship in a decade after beating the miami heat just over an hour ago. It is also their 17th championship and their first with lebron james. Fans in china were also able to watch the last two games of the season as state tv aired basketball for the first time in a year. The nba matches were polled last october after a Team Executive publicly blocked back hong kong independence. That is estimated to have cost the league 400 million in lost revenue. It is unclear if regular broadcasts will continue, but we see a little reaction in the chinese Sporting Goods stocks. They are all gaining, one getting 4 . Meanwhile, the nba and nfls investment arm has helped push up the value of a maker of recovery Performance Products to 700 million. Professional athletes were among those who helped raise 48 million for the company. We spoke to Blake Griffin from the detroit pistons, one of the early investors, set to be elected to the board later this year. When i first got involved with this company, recovery was a newer thing. I think as people get smarter and learn more about performance, i think it trends more to recovery. The better you can recover, the harder you can work out, the better you can perform. That is the reason i got in so early, because i realized this would be a trend and this was how it would happen. I am really proud of the work hyperice has done because they continued to take the next step and push the envelope. Reporter suddenly more athletes are becoming hip to the idea that they might be involved in their own investments, as it benefits them more than just giving their money away. You are going for a seat on the board. What do you want to accomplish without . What do you want to accomplish with that . To move the company forward. It is already in great hands. Is theovation, his drive reason i wanted to be involved in the beginning. For me, it is about getting that experience and also making sure i am available to help this company grow in whatever way possible. Reporter unfortunately, you are no stranger to injury yourself. How do you use this device . I use it almost every day. A lot of the products, whether it is icing or using the hypervolt, whatever you need in terms of recovery, i think we have that in our possession now. That is the beauty of this company. It has grown, it has been able to reach Different Levels of recovery. Reporter can i just ask you, because so much of the rumor mill is grinding at the moment. These are talks that you might end up at a Different Team very soon. There are a few teams mentioned, the lakers, the heat, denver maybe. Can you give us details on what is going on in your life that way . Honestly, i have no clue. For now, i am a detroit pistons. Whenever the season starts, i will be ready to play for them. I will let our front office and my agent deal with all that stuff. For me personally, it is all about focusing on the team i am on. I am a detroit piston, so that is my only focus. That was Blake Griffin of the detroit pistons. Taking a look back at those live pictures outside in l. A. This is around the staples center, where you are seeing the crowds gather after that the 17th win for the l. A. Lakers, defeating miami for that 17 championship. We did hear from the mayor of l. A. , eric garcetti. He did tweet out to people out there saying, the covid situation is still something they are watching very closely. It is still not safe together in groups. They still want to be able to protect people out there, so they are urging people to go home. But as you can see, not many people are listening. Haslinda [laughter] it is a great day in l. A. Lets do a check of the latest business flash headlines. The current room in ipos in hong kong look set to rollon as companies affected by the pandemic line up to sell shares. Says theyf listing are ready to fill the ipo pipeline in the near future, as covid19 boosts investments. Hong kong has seen a rush in Mainland Companies going to invest. A chinese regulator confirms an application, but gave no further details. The trillion dollar Security Sector is opening up for foreign banks, which will be allowed for control of ventures. J. P. Morgan and Goldman Sachs are among the banks looking to open up in china. Jets are looking to boost demand. The carrier is recruiting pilots, cabin crew, and engineers, and adds four new airbus planes to its fleet. Viet jet looks to extend overseas. Two more new routes, planned for the end of the year. Back attaking a look those pictures in l. A. It is certainly a day for celebration, but cautious as well, as the mayor of l. A. Telling people to go home and celebrate us win of the nba championship title. It is the first title that the l. A. Lakers beat miami for the first championship in a decade. 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