Transcripts For BLOOMBERG Bloomberg Markets Asia 20240711

Index, just marginally down. The real story has been the bounceback after last weeks fall for bitcoin, approaching record highs. 19,595. 1. 1 to the upside. Drivings within opec that crude oil price down. Lets look at what is going on in the emerging market context. Asian markets are bouncing back nicely after yesterdays big move to the downside. What has been responsible for this change in mood . , onethink first of all should partly see yesterdays price action as an anomaly. I think the Way Investors are now returning to the positive things like easy fed policy, Global Economic recovery, which was confirmed by asian pmis and the index that just came out, and optimism about vaccines. Juliette and your team has written a piece on the e. M. Currency outlook for 2021. It reads quite positively. What is the basis for all that optimism . Maybe there are three reasons. First, valuation. We believe that emfx is undervalued and conditions should be conducive to pushing them into overvalued territory. Secondly, real yields. They are extremely low in the u. S. And likely to fall further. In comparison, emerging markets gives a generous premium relative to the u. S. Third and finally, positioning. Flows into emerging markets have been like. There is potential for further inflows. Maybe what we saw in november was the beginning of a resurgence. Rishaad that is the question, isnt it . Are people expecting these inflows into emerging Market Equities to continue . Yes, they are. Emerging Market Equities are still considerably under owned. We have a positive outlook next year. Once youve seen one good week or month, you tend to see another. Maye is a persistence which be explained by investors slowly adjusting their portfolio to a new and higher target. And you have some element of behavior as well. I think the outlook is pretty positive. Juliette bloomberg emerging markets strategist simon flynt with us in singapore. Lets head to new york now and get the first word news with Karina Mitchell. Fasterh korea grew at a pace than initially estimated as investment boosted the rebound. Througheased 2. 1 september from the previous period compared to 1. 9 percent earlier forecast. The bank of korea is raising its fullyear readings. Powell is warning lawmakers that the u. S. Economy remains in a damaged state despite progress on developing covid vaccines. He told the Senate Banking committee that recent news is positive for the mediumterm but significant challenges still remain. The fed lending funds expire at the end of the year. I ran has buried its top nuclear scientist, blaming israel for his death. The scientist is seen as the founder of the islamic republics Nuclear Program. The uae and bahrain have condemned his killing as a further threat to middle east peace. The two have strained ties with iran. American airlines plans to reintroduce its 737 max planes by offering staff a series of flights to help build confidence. American is planning five chartered trips before the max returns to schedules around new year. Customer confidence will be boosted. The max has been grounded for 20 months after fatal crashes. Air travel numbers climbed to their highest in months as flyers big nor advice to avoid trips during thanksgiving. That is the most since march when the coronavirus began to devastate demand. U. S. Officials urged people to stay home over the holidays to prevent a surge in covid19 cases. Global news, 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Juliette still ahead, as bitcoin continues to climb, we ask a crypto Security Firm how safe Digital Currencies are as an investment. Delayed opecplus talks to give ministers more time to try to reach a deal. Us on hownalyst joins cartel acrimony may affect prices. This is bloomberg. Rishaad this is Bloomberg Markets. Joe biden rolling out his economy choices, announcing janet yellen as his treasury pick and the heads of other departments. Ross woodhead the council of economic advisors. Blackrock executive brian deese is wanted at the National Economic council. Advisor senior climate to president obama. Citigroups chief executive spoke to David Rubenstein about joe bidens decision to nominate yellen as treasury secretary while the u. S. Needs more targeted stimulus. I would say that the Banking Industry had a Good Relationship elected and if she is into, or she is voted into the seat, i think she will do a great job. I would expect that relationship to continue. Also another Glass Ceiling broken in terms of her becoming the first female secretary of treasury, which would be another great one. Lets talk about the economy. Many people think the economy could use another stimulus bill. We couldnt get one so far before the election, but maybe in the lameduck there might be one and maybe in the early new congress. Do you think the economy needs a stimulus bill . As you point out, david, it is unclear whether we are going to get that new stimulus package between now or late january. If we dont get something done, i think we will get something done in fairly early 2021. I think the question is going to be more about the size of what can get past. That will be largely determined by the outcome of the senate races in georgia. Rise,ovid19 cases on the additional stimulus through unemployment checks, ppp loans, rebates, are all helpful tools to bolster the economy. What we know is that while we are in the same storm, we are not all in the same boat. If we could get these moneys targeted at those most affected, it would be a very good image of restoring the economy. About, lets say we have a stimulus bill. Some people have said we could use a stimulus bill but we cant ignore that the debt is rising rapidly. We are borrowing about half the money we spend each year. How much longer can we keep borrowing this money without people saying it is too much borrowing . I think we all should be worried about it. Weve been talking about deficits for a number of years and what is sustainable. I think the consequence and the prospect of lower for longer in terms of Interest Rates significantly reduces or holds down that borrowing cost. We cant believe that rates are going to stay necessarily where they are. I believe it is very important that we are targeted in terms of getting the moneys to those that are really in need. Because we know that the longer this goes on and the more small susiness, the more individual and certain geographies get affected, it makes the come back much more difficult. That was citigroups ceo speaking exclusively to David Rubenstein. You can catch David Rubensteins full interview this friday on bloomberg. There is plenty more ahead. Stay with us. This is bloomberg. Lowerte oil is trading after an opecplus meeting that had been set but was rescheduled for thursday. Talks on monday yielded no results. Ministers will decide whether to keep the current output cuts or increase production in january. For more analysis, we are going to be talking a little bit in detail, but for the moment, we want to have a look at what is happening with the oil market. It has been falling somewhat amid this impasse. Lets get the latest business flash news now. Exxon mobil has taken the largest impairment in its history, writing down the value of natural gas assets by as much as 20 billion. Exxon is also slashing longterm Capital Expenditure plans which will save 20 billion a year, a 10 billion reduction on precovid plans. Meituan shares rising in hong kong. The Worlds Largest Meal Delivery service posting sales in the Third Quarter as chinas economic recovery boosted restaurants. Meituan is chinas thirdlargest tech company and is considering a secondary listing in the mainland. Tesla jumped on news it will join the s p 500. They sought consultation with investors over adding the stock in one part or two. Tesla will be the seventh biggest name in the s p 500, between Berkshire Hathaway and visa. General motors has scrapped plans to take an equity stake in clean energy trucking startup nicholas and his dropping the idea of jointly building the new badger pickup truck. That sent shares in nikola tumbling. Gm will allow nikola to use its Hydrogen Fuel technology in semis, but it wont take the 11 equity stake it had proposed earlier. Rishaad onto the vaccines. Moderna requesting clearance for its coronavirus shot in the u. S. After analysis showed it highly effective at preventing covid19 with no serious safety problems. We asked the chief executive about the results and how the Company Plans to distribute the vaccine. Analysis the interim of phase 3. Today we are announcing the final analysis. Is the most important serious cases. All were on placebo. Zero were people who got a vaccine. When you think about what happened in terms of serious cases leading to hospitalization, death, this is a big moment in the fight against this pandemic. Our goal is to get the vaccine approved in the coming weeks. Hoping to get approval in the next few weeks. Tothe u. S. , they are likely hours. In 24 to 72 we are working closely in the u. S. With operation warp speed. The general is working to make sure our products will be out the door and the vaccination can start. Delivertill on track to up to 20 million doses in the u. S. Before the end of the year. How do you imagine it actually working . What does it look like when this starts to get rolled out . It is like a typical flu vaccination, just at a scale that has never happened in the world. It is like a regular shot. They inject the product, put the bandaid. Of systems being developed by the government. You want to track which vaccine you got in your prime injection so you get the same for your boost. Data, youback to the 90 chance of having no disease if you get infected. In the small chance that you have the disease, it will be minor. We got zero severe diseases. This is why i think vaccination is going to be so important. Help us break down the data older than 65 . Any sort of effects . What did you notice in your testing . We do that when the meeting meets. We literally got it yesterday. It around one third of the study was the elderly. Is like in the previous interim analysis, the data is similar. , also very diabetes high efficacy. On decemberwe meet 17, we will have all the details and most probably those will be put online by the fda a few days before. Is there anybody that shouldnt get the vaccine . The study has only been done for people above the age of 18. We are going to start very soon this year studying teenagers. Teenagers should not get vaccinated because there is no safety data yet. Ceoette that was modern as speaking to bloombergs alix steel and guy johnson. Back to oil now, lets bring in our guest. Weve got this meeting of opecplus pushed out now to thursday. Do you think this is some kind of aboutface in terms of an agreement . If not, what could we see in the oil markets . It wouldnt be in opec meeting unless we had some drama. On iny that is going these meetings. We fully expect that opecplus will align around a decision to expand the production cuts for another three months beyond the first of january. It really gets to the Second Quarter when we should start to see demand pickup. Theres certainly a little bit of jockeying between some of the members that have been more compliant than others. Really trying to ensure that we get maximum compliance. Ultimately i think the deal will get done. Doesnt,te and if it does this set up concern about 2021 . The risks of no deal are that , as we get into the First Quarter with demand continuing to be anemic on the current levels we are seeing in the market, if we add another 2 million back onto the market, that is going to push up inventories and that will negatively impact pricing. The extent of the cuts is very important. I think with iran, this is the as wesk for oil markets go into 2021. New buying in administration, how will they approach iran . If we see an end to those sanctions, that would certainly be a negative for oil prices as we head into 2021. Quickly, we havent got much time, we also talk about the schism between opecplus. What about opec itself . The uae has been surprisingly cool in its compliance through the early part of this deal. Really, pressure being put on the uae to increase compliance. Theyve done that. They have taken more oil off the market. If you look at the comments from the uae, they pointed the finger at some countries like iraq, nigeria, kazakhstan, and russia. Need to show full compliance, then others do as well. That is the reason for some of the tensions we are seeing. Quickly, youve done a poll or a survey. Tell us about it. Most people are thinking oil prices will be between 40 and 50 bucks a barrel for a couple quarters at least. Telus very quickly the highlights. Opecvestors fully expect to deliver on the extension to cuts. Any decision not to do that would be a negative. It could be a bit of opec delivers a result this thursday. By and large, investors are looking at a 50 barrel price target. Generally, a kind of bullish stance as we go into 2021. The key thing for oil is the. Accine, the recovering ability rishaad thank you so much for joining us. Just having a look at the state of the oil market. A lot more ahead. Weve got tokyo going off. We are rallying there. In a land not so far away, people are saving hundreds on the most Reliable Network with xfinity mobile. They can choose from the latest phones or bring their own. And because they get nationwide 5g at no extra cost, they live happily ever after. Again, again. Your wireless. Your rules. Your way to stay closer together this holiday season. Switch and save up to 400 a year on your wireless bill. And get 300 off when you buy the Samsung Galaxy note20 ultra 5g. Learn more at xfinitymobile. Com. It is the most 10 30 a. M. Here in singapore. We are seeing the times index rising among positive momentum among asian equity markets, up. 1 . U. S. Futures and asian stocks climbing. Data showing december normally good month and we had global stocks finishing november with a record monthly gain. We have heard there will be tightening of gatherings in hong kong. Sending civillso servants home. The hang seng index is up. Tice sheehan rising out of data out of china. 1 , and the asx 200 shrugging off tensions with beijing about rising by 1. 4 ahead of the rba meeting. Stocks we are watching in the asian session. Meituan slightly higher. Tokyo gas causing out 5. 3 lower, its president says he may prioritize carbon goals. We have been watching cnooc following the blacklisting by the target trumpet administration. Trumpet Administration Trump administration. Australianarget at a dollars. Rishaad thailands finance minister said officials are likely to do more to stem the bhat strength but is really out capital control, telling bloomberg exclusively the easing of rules on capital outflows be followed by certain measures. That is only the first step. Capital. Look at our to release, to relax the capital outflow rules. So i think that we will follow by the further strict measure on that. To our policies just [indiscernible]. Ore stable do you see a possibility of imposing capital controls . No, we would not see that. Would you do that under any circumstances at all . We have not discussed that yet. What is the fair value for the thai bhat, in your opinion . When you talk to interstate players they say theyre looking at 32, versus the dollar. Currently at is 30 to the dollar. What is your sense of what would help tie exports . Exports, is there a fair value you are looking at . We could not tell. , i thinkrence in mind we will manage, we will manage. Haslinda are there other targeted measures the bank of thailand can adopt to weaken the currency . Other measures. Haslinda thats right, it measures that could be adopted by the bank of thailand . We could not say right now. But i am sure the bank will do a lot more measures on that. To what extent do you think the bank of thailand cant intervene, to weaken the currency, without being deemed as a currency manipulator by the u. S. . Because thailand is on its watchlist. As i said, you know, we would not talk about what kind of measures that the central bank is doing. Haslinda are you concerned about escalating debt . Household debt is surging. The debt to gdp ratio is also rising. Are you concerned about that and how can the issue be addressed . Many households particularly in the rural area, they are doing farming, business and agriculture. A lot of them they are doing good. I would say that for agriculture, they are not affected much, and they can survive. So i think it is going to be the very short term for Household Debt if we can handle. And if you talk about the public debt to gdp, if public debt, i think right now, our public debt 49. 4 of gdp. Know,e have to do is you we have to expand our gdp base as well. So if you do not, if youre a qanon my if your economy is not growing, that will be increasing other time. But we believe our, even though we have the foreign, the loans, 1. 9 trillion, but the disbursement will be at the same time, so disturb edition of the debt will be covering for five years. And in the four or five years we are not exceeding that 60 of gdp at all. Haslinda another thing, you seem pretty optimistic over the prospects of an economic recovery for the thai economy. Could that recovery be derailed, if the protests gets [indiscernible] . The protests is a little themselves in certain area, a very short time. The rallies, the rallies normally they are doing the, in the evening, and within a few hours, so that would not affect much to the total economy. We have to look at the production side. The factories outside bangkok. Affect. A barrier also so i think that would not affect the economy. But the thing that you mentioned, are we too optimistic . To look forlso have a better future. If you are pessimistic then you have no power to work anyway. So please delete and thailand. Inso please believe thailand. York forhead to new first word news with Karina Mitchell. Karina bitcoin is on the move, jumping 6 to 20,000, its rise echoed the search three years ago that was followed by a dramatic plunge, although enthusiasts insist things are different this time around. 170 thisas gained year according to bloomberg data. Shares of companies with exposure to the currencies also surged. Meanwhile, oil fell again, as talks between oil opec and its allies found up with no agreement on output. Ministers pushed a final decision into a second day and laid those talks until thursday amid signs of division over keeping supply cut at current levels or to increase output as planned next year. Minister isi energy threatening to resign as chair of the opec plus committee overseeing production. Former french president Nicolas Sarkozy denied corruption and abuse of power as his trial opened in paris. His accused of offering to help a senior Court Official to win a prestigious job in monaco in return for his aid in a legal dispute. French only the second french leader to be tried in modern times and the first to face corruption allegations. He was President Trump 20072012 he was president of france from 20072012. Global news 24 hours a day on air and at quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. The wto says south korea broke International Trade rules when it renew tariffs on japanese stainless deal bars. The ruling could inflame a simmering trait spat between tokyo and seoul. Lets get to our politics reporter isabel reynolds. Why are korea and japan fighting over a few Million Dollars of trade here . Thats right, the wto ruling over south korean tariffs comes in a dispute over those stainless steel bars and it is absolutely minute in terms of global trade, it involves 4 million according to south korea. While japan has won this round of the argument and the tariffs have enrolled violation of International Trade, it appears seoul is set to appeal the decision which route means it may remain unresolved because the appellate at de brito is not functioning at the moment. The background is that the two countries are involved in a raft of trade and other disputes so from disagreement aware whether japan compensated south korea sufficiently for its colonization of the Korean Peninsula between 19101945, so that stretches to other trade disputes and court cases against Japanese Companies that have businesses in south korea. The Appellate Court at wto is not functioning at the moment. My conversations with both sides indicate the sense that improvement is needed. Tokyo has recently hosted visitors from seoul, including the head of south koreas intelligence agency, to talk about north korea, and a group of south korean lawmakers visited the japanese Prime Minister last month. Also the change of government in the u. S. Next month could provide some input us given both south korea and japan are both u. S. Allies. While Donald Trumps administration did not involve itself in the disputes, joe biden and incoming secretary of state Antony Blinken are more focused on maintaining these alliances and may push demand and south korea japan and south korea to work these things out. Reynolds, ourl policy reporter in tokyo, thank you. Coming up, bitcoin rallying to a record. Some say this time it is different, but is it . This is bloomberg. Rishaad this is Bloomberg Markets. It was a record november even if it ended with a whimper for stocks. Year,tcoin up 170 this it ended with a bang. As it speculation or has this time finally come . To answer that we are joined by cofounder of afintech Fintech Cyber firm. Michael, is a different this time . It is different than 2017, definitely the economics is different than what we had their , and the drivers seem to be different. Among retail investors. Rishaad adoption is key here, of crypto generally and digital wallets in the future perhaps. Tell me what you do, in terms of linking up these Virtual Currencies into the Financial Network of the world or the Financial Framework . Some of thered adoption of cryptocurrencies and Blockchain Based assets including bitcoin. We work with Financial Institutions and help them with three main objectives. The first one is to set up a secure custody of those assets. Basically being able to store them securely for themselves or on behalf of clients. The second aspect is around the settlement and movement of those assets for payments and for weer type of activities facilitate a secure link or secure network between the institutions. The third thing, we help them to use those technologies to issue what we call tokenized assets. Those are essentially assets that are representing realworld assets, like fiat currency or securities, and bring them into the blockchain in a secure fashion. So, mike, the thing is, you cybersecuritys currencies in one sense. About the value . Because how can these crypto howk to bob adopted can these cryptos be adopted fully if the prices fluctuate as we have been witnessing with bitcoin . Generally there are two forms of cryptocurrencies. That are cryptocurrencies like havein that they sort of historic value. And if you believe in bitcoin it is something similar to gold. And we have other cryptocurrencies, for example ethereum, a financial infrastructure that is designed to deploy other realworld assets on top of it. So you can think about ethereum and other cryptocurrencies Like Amazon Web Services infrastructure. Top of that you can create assets that are not fluctuating. Those are basically real assets, like tokenized u. S. Dollar or thatized yuan, or security is backed by a Real Security that is issued offline. And you basically use those Cryptocurrency Networks to represent those assets and move them efficiently between different Financial Institutions and retail customers and so on. As you mentioned in terms of comparing it to gold at a lot of people have been saying is bitcoin going to replace gold or remain as good as gold in terms of a safe haven . There is still this big threat you mention of cyberattacks. How do you answer that, bitcoin being an alternative to the likes of gold . Bitcoin is a gold, bear asset. The one that holds what we call a private key, a password for that while it. Basically controls the asset. If an entity, institution, or retail customer is hacked, then someone, hackers are able to gain control, they can transfer that asset to their possession. Issue was at the base of some of the main issues in terms of adoption of cryptocurrencies and bitcoin particularly in the form of, do we have a secure Custody Technology . And for the majority of the evolution of this ecosystem and the asset class, we had those facilities but they were very cumbersome and very not accessible. And what happened over the last two years with Companies Like firebox, is we came up with the technology that allows you to do both in a very secure way and also in a very accessible way to Financial Institutions and retail customers. And as our technology is being into this newcomers market, we are seeing at secure infrastructure that will enable people to do it. Interestingink is is the raft of analyst notes coming through now looking at bitcoin and other cryptocurrencies as an allocation in their portfolio. There was one yesterday from jenkins saying he has changed his mind from 2018 and now dusting perhaps you should have a inner put folio. You expect and outdoes think perhaps you should have it in your portfolio. Do expect more of this . And what removal of costs and complexities do we need to see . Definitely we see more and more of those analysts coming out and changing their mind. Did a fewp. Morgan months ago. And some others about blackrock as an example. What is really interesting is that the regulation. Their regulation being formed specifically in the asian market, in hong kong, and singapore and other jurisdictions, that gives clarity to Financial Institutions to bring those assets, and offer them as an allocation option, for either Institution Clients or retail. We see it with paypal, two month ago. And a month ago when they launched the offering, now in the u. S. If you have a paypal account then you can buy bitcoin and create an allocation. Michael, cofounder of fire blocks. Coming up, j. P. Morgan trader set for a bonus boost after a record year but other staff may see a less generous pay out. Details next. This is bloomberg. Traders at j. P. Morgan are set for a bumper bonus season. The bank is planning to boost annual compensation by 20 for sales and Training Staff up to 20 for sales and trading staff. But the rest of the company could see payouts fall. Su keenan, what we know about jp morgans compensation plans and how they compared to peoples comps and expectations . We hear jp morgan is planning to boost annual bonuses for traders from 1520 after trading generated a record 23. 5 billion in revenue this year. Bloomberg also learned payouts will vary widely from desk to desk, depending on performance. For instance we are hearing it could freeze raises for executives at the Vice President level and above. Also the bonuses could still change as the process is said to be in the early stage. What is important here is the traders who would get the 20 bump in bonus will likely be disappointed and that is because they were hoping for much, much more. As you know, the increases they were hoping would be more inline with the 48 surge in revenue generated by the banks marketing business. We have all been reporting this year the record bonanza on the trading desks. Traders generated more in the first nine months of 2020 that they did in all of last year. It was the workers, busiest and most stressful year ever. And they were expectations or have been of hefty bonuses. The diversions we are seeing in compensation at Different Levels of the bank, are also a reflection of the lopsided way the virus has impacted many financial firms. Rishaad we have bank of america saying bonuses will be flat, last week. What does this mean, this story mean for the rest of the industry . All, bank of america and j. P. Morgan reported actions draw attention to the bonus issue. Many firms look to each other to figure out the trend and the way to move. Jp morgans reported plan is in stark contrast to bank of america where, you remember, executives are said to be discussing keeping the bonus pool close to last years level. And that really was seen as a bad omen, and a big surprise for many traders. J. P. Morgan chase seen as pumping the bonuses for some of the better traders, better talent, a. Different story and more logical. But clearly the banks have been stockpiling a lot of money generated by the desks to handle the Economic Uncertainty there industry is faced with. There is concern trading volumes will not last. There is also concern about dad loans. And most important bad loans. Hearost important we executives are weighing the optics of paying up big money during tough Financial Times. Absolutely. Su keenan in the art. Moving on if you have in new york. Wanted to ride in a super toio kart, universal plans open its Super Nintendo World february 4. Kurumi mequicktake already has been to check out. We get to see mario carr in real life. Mario kart in real life. We are at Universal Studios in japan and osaka, and the first ever Super Nintendo World will open on fabric 24, 2021. February to 4, 2021. February 24, 2021. This castle is the start of the mario kart ride. It is cool in here and you can see the fittings inside. I am sitting in a four player cart. You get a handle and an ar headset. It is also a competing game and there are two tracks he will be racing against other players. They will be they have been working on this for six years come a Long Time Coming and ever but he has been waiting. It is on a rail also it will not be exactly like the game, you will not be freely driving around the course. I want to point out Super Nintendo World did look a little small. I wonder how they will handle the crowds in the pandemic, and what about the interactive elements . Will they sanitize everything . Still alive . Questionll a lot of marks. Building at donkey kong area nextdoor, still a lot to look forward to. Rishaad bloomberg reporting from Super Nintendo World said to be opening in february. Hour,to come in the next markets with big games, hang seng to the upside and big gains in tokyo as well. Stay with us. This is bloomberg. It is almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. Having a look at our top stories. Highland warning of strict measures to rein in the surging baht after initial moves prove unsuccessful. Capital controls are not on the agenda so far. Asian markets shrugged off a slide on wall street. Investors return to risk assets after not unprecedented month of gains. U. S. Futures trade higher and the dollar dipped. Trade tensions between austria and time a form the backdrop as the rba prepares its latest policy statement, economists seeing no change in the cash rate, that decision 30 minutes from now. After a pullback on wall street on the final day of november, the november 2 remember, a record for global stocks. We are seeing u. S. Futures rise along with asian markets, msci, asiapacific index getting back toward record levels. Normally sambar a pretty good month for stocks. In fact the msci all country index had only had seven losing decembers since 1991. We are watching this rise and rise in bitcoin as well as it continues to hit records. Longerterm its climb on pace with what we signed 2017. Had gold coming back a little although we did see a lit a dip, a flipflop between perhaps between bitcoin being seen as a safe haven, gold rebounding from declines he saw in the ascension. Look at itsaving a opening for the tuesday session up by 1 . Prospects for the indian open are that we are looking at a flat start to the trading day after a slight fall for the nfte. After wethe way down had argument with an opec plus. Itiland in focus, is lingering at tenmonth highs . Act on thekely to currency according to the finance minister. And that is the subject of our next interview. Lets get more on that because the finance minister of thailand says officials are likely to do more to stem the b ahts strength but is really out capital controls. He says the easing of rules on capital controls will be followed by further ushers. That is only the dust further measures. Further measures. That is only the first step. To relax capital outflow rules and regulations. I think that will be followed by a strict measures on that. Policies just to keep, they can manage revenue as well. To see a possibility of imposing capital controls . No we would not see that. What you do that under any circumstances at all . We have not discussed that yet. What is the fair value for the tie baht, in your opinion . When you talk to industry players they are looking to early to versus the dollar. Currently it is about 30 to the dollar. What is your sense of what would help tie exports . Thai exports . Isre a failed value there a fair value you are looking at . We do not have a reference in mind but i think we will manage. Are there other measures the bank of thailand can adopt to weaken the currency . Other measures . Thats right. Measures that can be adopted by the bank of thailand. We cannot say right now. But i am sure the bank will do a lot more measures on that. And minister, to what extent do you think the bank of thailand can intervene to weaken the currency, without being deemed as a currency manipulator by the u. S. . Because thailand is on his watchlist. As i said we were not talk about what kind of measures that the central bank is doing. Are you concerned about escalating debt . Household debt is surging. The debt to gdp ratio is also rising. Are you concerned about that . Many households particularly in the rural area, there during farming, they are doing business in agriculture. Lots of them, they are doing good. I would say that for the agriculture, they are not affected much. And they can survive. So i think it is going to be ,ery shortterm for household if we can handle. If you talk about the public debt versus gdp, public debt, i think right now our public debt. 4 of gdp. What we have to do is expand our gdp base as well. So if your economy is not growing you probably will be increasing all the time, but we believe that even though we have foreign, we have loans, 1. 9 trillion, but the disbursing will not be at the same time. Distribution of the debt will be covering five years. ,ithin four years or five years we will not exceed 60 of gdp at all. Oflinda he seem optimistic the prospects of an economic recovery for the tight economy thai economy. Could that recovery be derailed if the protests gets a lot prolonged . The protests themselves are in a certain area. Normally they are , and within evening a few hours. So that would not affect much to the total economy. Of course we have to look at the production side you know, the factories outside bangkok. Earlier. Affect so i think that would not affect the economy. , arehe thing you mentioned we too optimistic . , we have to look for a better future. If youre pessimistic that you will have no power to work anyway. Thailand. Believe in rishaad thailands finance minister speaking exclusively to our quaker haslinda amin. Coanchor, haslinda me. The msci emerging markets index getting 9 last month so what will december bring . Lets ask the head of fixed Income Research at the bank of singapore. Move,we have seen this the emerging market move into equities. What about the bond market . Constricted for emerging markets fixed income. We expect emergingmarket highyield to be up 7. 5 at emergingmarket investment great to be up to 2 . We think this for a few reasons. One, growth is accelerating come in fits and starts. We appear to have an effective vaccine. ,he u. S. Dollar is weakening typically a major positive for emerging markets. Also commodities are improving, a positive for emerging markets. Copper, used in every thing from Home Construction and autos, is up 50 since march. The last thing i think investors are under appreciating, is the positive impact that a president elect biden could have. Under President Trump u. S. China relationships were often, he is, confrontational. Under president elect bided we could see more of a multilateral and diplomacy based let is under president elect biden, we could see more about multilateral and diplomacybased relationship. Rishaad is the dollar weakness a function of these flows . Or is it just something that is cyclical one could argue . Where is the money going in emerging markets . Is a going to sovereigns, credits, highyield . I think it is going everywhere. Weak as a function of the fact that u. S. Rates are low, and theres no longer the big advantage to go into u. S. , visavis foreign currencies. But i think if you tech a look around, 17 trillion in negative yielding debt. Two thirds of the market is under 2 . If you look at emergingmarket ,ebt, whether highyield at 6 or investment great at 3. 5 , it looks attractive comparatively. Ask you todd i want to about some of your specific text picks. You mentioned the biden presidency and we are looking at Renewable Energy at perhaps a boon to investment in 2021. I understand youre looking at some names in india in particular in this sector . Yes, we do like those within highyield. We actually, our top pick is china property. But selectively would you like somethings in india such as renewables. And within indonesia, some of the energy and property names also. One of the things we could have, in the u. S. Now we have a tie, or we could have a tie depending on how the senate and elections turnout in january. 5050, vice with president harris will break the tie, and that could be a positive for some of the programs for biden, like his green energy program, which will be positive for growth overall, and particularly positive for green energy and Renewable Power in green energy projects. Juliette what about treasuries in general . You mentioned as well the vaccine. But what about the risk of the vaccine not being rolled out as fast as many hope, or being as strong as the efficacy as the data is showing . Does that make you want to take a bearish tilt toward treasuries . I do not think it necessarily does. I think we are looking out longerterm treasuries rise. I think in 2021, when we have a new president , we are going to have a fiscal stimulus bill. The only question is, how big is that bill going to be . It is going to have to be funded. It will be funded with treasuries. So expect longerterm treasuries to go up. Our house forecast is for the 10 year treasury to move to one point 25 of the next 12 months. 1. 25 of theright next 12 months. But you are right the market has baked in that either the moderna or pfizer backseat will have efficacy at 95 90 90 5 are talking about and if it is not could be disappointed to risk markets. 90 95 . Rishaad what about the appetite given the defaults in the saga de, as anng ever gran aspect of all of this. You have to hold on tight, dont you . In china you have seen selective default. Up faringa has ended better under covid, has not been impervious to the Economic Impacts of covid. I think the government is using it to some extent as the fig leaf, to say we cannot support every company all of the time. So if you are not the company that is you do systemically important or can stand in your own foot commercially, that perhaps, that is about the. The thing to look at china is whether these are systemic. We do not see these are systemic. We see each of these defaults as being an idiosyncratic situation. Juliette todd, thank you for your time, todd schubert, head of fixed Income Research at the bank of singapore, with us. Lets head to the first word news with Karina Mitchell. Growing faster than expected, gdp revised to put 1 from september compared to 1. 9 in earlier forecasts. The bank of korea is raising its fullyear rating seeing a contraction less severe than it projected in august. Oil fell again as talks between opec and allies wound up with no agreement on output. Ministers pushed a final decision into a second day and the light talks until thursday amid signs of division and keeping supply cuts at current levels or to increase up next year. The Saudi Energy Minister is threatening to resign as chair of the opecplus committee overseeing production. Joe biden rolled out his economy choices, formerly formally announcing janet yellen as treasury peck. Treasurydon peck pick. Brian deese is wanted at the National Economic council, a senior climate advisor to president obama. Fed chief jay powell is warning lawmakers the u. S. Economy remains in a damaged and uncertain state despite progress in developing covid19 vaccines. He told the Senate Banking Committee Recent news is positive for the mediumterm but significant challenges remain including production timing and distribution. The feds lending funds expire at the end of the year. Officials say they should continue. Global news 24 hours a day on air and at quicktake by bloomberg. Powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Still ahead this hour, ambani Group President talking about how pharma will play a major role. Juliette tensions wrapping up between canberra and beijing as a diplomatic dispute adds to the economic offensive launched by china against australian products. Details next. This is bloomberg. Worsening ties between australia and china jeopardizing billions of dollars in exports at a crucial time for recovery. In the latest escalation camera is demanding an apology for a tweet by a senior chinese official teaching of fake image of an australian soldier threatening an afghan child. Tom mackenzie joins us from beijing. How has china reacted to the demand for an apology . Tom they refused to give the apology and they were asked about this and the ministry of Foreign Affairs yesterday in relation to the demand from the australian Prime Minister scott morrison. They flatly refused to issue an apology and what they did was question the morality of australs Prime Minister, and again at 100 of the blame at the feet of the australians, our relationship that continues to spiral downwards between canberra and beijing. You have had similar sentiment articulated in editorials and also on the front page of the never subtle level times, that nationalistic tabloid here. Saying then sent morrison blame game is taking bilateral relations into the abyss. And editorial also in the global times describing australia as people and suggesting morrison should kneel on the ground and slap himself in the face. So, no signs china is going to back down on this. It follows what many would describe as economic can andcion by china on trade materials like coal and lobster and the 200 tariffs on australian wine. Rishaad it seems they are doubling down on this, part of this wolf warrior type of diplomacy. There are risks that we could see all of the strategy backfiring. Tom absolutely. From chinas perspective this is about sending a strong and clear to those meddling powers of which australia is one, also u. K. , canada, is lame, European Union and japan, that they need to effectively stay in their lane and do not follow on the coattails which is how china would describe it, of the u. S. What the risks are for the chinese strategy are as you mentioned that you actually push these countries further toward deepening their relationship with the u. S. , particularly if biden is preparing to take over as president after january 20. He has made it be it clear he wants to build an alliance, coalition to push back on what they see as some of chinas most egregious behavior. I was speaking to a diplomat yesterday he says this type of action is playing into what the Biden Administration is hoping to achieve to rebuild alliances to contend with china. You have in the last couple of years seen a revival of groupings like the quad which involves the u. S. , japan, australia and india. Five eyes working on technology and surveillance and security data. There are new initiatives in the pipeline around 5g technology. Yesterday you had the Financial Times reporting the European Union put together a document it hopes will appeal to the Biden Administration, that would look like joining and rebuilding links to help contend with some of the issue china presents to those nations. There, some good stuff Tom Mackenzie in beijing for us. We are going to take a break and on the other side top Analyst Recommendations across the markets. That is to come along with plenty more. The hang seng at the moment a bit up like the rest of the asiapacific. Msci asiapacific up. 9 . This is bloomberg. Lets have a look at the latest business flash headlines. Their banks review seen back to office push in hong kong a surge going back to ofo work from home regime from wednesday. Standard chartered urgent nonessential employees to do the same. Hong kong government introducing tighter social curbs monday as a new wave of covid19 cases has been rising. Up in hong kong, the Company Reported a 29 jump in quarterly revenue. The worlds biggest Meal Delivery service posting revenues of 5. 5 billion in the Third Quarter as chinas economic recovery boosted restaurants i feel demand for takeouts. Big tech company and considering a secondary listing on the mainland care. Morgan with a bonus jump up to 20 as other employees face declines. The biggest american banks saw traders lift revenue to a record 23 billion in the first ninemonth of the air, as they cashed in on a volatile market, which has been buoyed by government funds. Bloomberg understands pants will vary widely and plans could change. Understands that payouts will vary widely and plans could change. Juliette Sophie Kamaruddin in hong kong. After a november 2 remember, is a pullback now imminent . Sachs, sayingdman it would not be unusual given advances we saw last month but in the longer run he is seeing significant upside if 2021 delivers what he calls a good state of the world which would drive 7 12 appreciation for height beta em currency in a white tell scenario that would end in asia. He says sensitivity to chinese growth is key. Rupe, andes the won as top korean performers next year. Rishaad we heard from the thai finance miniature saying they would act to curb the strength type finance minister saint would act to curb the strength we have been hearing. Sophie their watching 30 spot 20 and Capital Economics sees the end of 2021 even with intervention from authorities, seeing who perhaps might get restrictions when it comes to shortterm supply or restrictions on capital inflows. We had the finance minister of thailand saying capital controls not likely now but we look to december 9 for details around forex measures. The bottom line according to Capital Economics of thailand, we will have to get used to living with a stronger baht, given that the Global Economic recovery was he continued inflows to thailand. Rishaad Sophie Kamaruddin giving us an update on morning calls. Heading to the china lunch break, lets have a look at what is going on. A good day of gains, not as pronounced as what we have been seeing elsewhere. Shanghai composite gaining speed as well. The latest manufacturing pmi 54. 9 asfrom tyson, up opposed to 53. 5 penciled in by the economists we surveyed. Tai shin. Let get to sydney. We are three and a half minutes to go before i decision out of the reserve bank of australia, looking at them to leave their cash target rate unchanged at. 1 , a record low. It is the last meeting of the reserve bank of australia for 2020. That decision on the way. This is bloomberg. [narrator] this is kate. Hey. [narrator] she takes two prescriptions. Kates son jack, takes one too. Kate works hard, and thought she had good insurance. But she still pays too much. Thats no good. So kate downloaded the goodrx app. Now she can compare prescription prices, to find the best discounts. She even beats her insurance price. Good for you kate, good for you. Goodrx, stop paying too much for your prescriptions. Download the free app today. Juliette we are awaiting the rba decision, 2 30 p. M. Local time. Not much expected to happen after we saw the rba unveil its 100 billion aussie dollar program. Yield target. Year the rba expected to be a sensing the impact of the qe program. A vaccineso had optimism. And encouraging signs in the australian economy. And Approval Rating up. A lot to grapple with. You mentioned the economy. Soaring. T sinceence at the highest 2019. The price index is a little bit soggy. We should be getting that decision any second. The cash rate standing at 0. 1 . Juliette there we go. The yield target unchanged. And the cash rate target also unchanged as was widely expected. No change. We wont hear from the rba until february. It will be interesting to see if we get some insight from the rba governor when he has his appearance tomorrow before the house of representatives. This is where the government gets to grill whether or not he has done a enough to help the overall economy as we continue to see the impact of the coronavirus. The rba says further rise in unemployment is still expected but they are seeing recovery in the u. S. And europe. They will keep the size of the bond program under review. You can also follow what is happening on our g live blog but the rba reiterating that they are not expecting to raise the cash rate for at least another year. The aussie dollar holding its high of the year. It has risen about 4. 5 over the course of the year. They expect unemployment to be a around 6 at the end of 2022. Thes get more now on rba. Michelle joins us from singapore. To say thatinuing they are looking at the risk of for the overall level of the economy and what is occurring also in australia. On hold across the board on the policy settings. As is what we expected to say. At theteam looks accommodation from the year. Spur some demand. Also mentioning the caveats europe and the u. S. Seeing some spotty recovery. The rba has a lot of on can unconventional policies this year. We have seen some results already and confidence has lifted. We may hear from the rba later this week about house price appreciation and whether that could cause some risk to the recovery. It will be interesting to see if they comment on the geopolitical spat with china. Not a lot the rba can do about that but they may mention indirect effects on the economy and that would be notable. It has been quite a journey but now, i think it is more of a watch and wait mode. Contextually, how does it fit into the broader regional theme of policymaking through yearend. , a whole boatload of data. We saw the regional pmis showing global trade continues to be a bright spot for the economy. That is certainly true here in asia. Some electronics rebound. This week we have the indian Central Banks decision on friday. We expect them also to hold but for different reasons. Inflation remains higher. Everyone is looking to yearend. Maybe more robust with some signs of recovery but there is a lot of hope that a turn of the calendar will artificially bring some brighter days ahead. We do still see a theme of Central Banks using remaining intoower dipping unconventional policies and talking about what they might need to do to further spur the recovery while also calling on fiscal authorities to keep juicing the recovery. It continues to be a fragile period. Governmentsat across the board are having to judge how they can get more support out to households and businesses while also making sure it does not become unmanageable. And those that become and those that receive the support do not he, reliant on it. There is no sure sign that everything will be all well from here on out. Michelle, thank you. We have japanese markets coming back to their trading session after the lunch break. Regard toat guns with what is going on in tokyo. A bit of a recovery for the dollar against the yen. Lets have a look at some of the key movers. Take a look at Japan Exchange group. The chief executive resigning after the outage or the whole day that we had on exchanges in tokyo. Gas makingtokyo headlines. Off by about 5. 2 percent. It says it will review shareholder return policy. And it will allocate resources towards a net zero carbon goal. The reduction of phone fees. Eight of its investors. That is a look at japanese markets. Lets look at what is going on in new york. We join Karina Mitchell for the first word news. Bitcoin making headlines jumping more than 6 , almost 20,000. Surge was followed by an equally dramatic plunge. The coin has gained more than one edge is 70 this year at 170 . American airlines plans to reintroduce its 737 max planes to commercial service by offering a series of flights to build confidence. It is planning five charter flights this month before the max returns to schedule in the new year. For 20 has been grounded months after two fatal crashes. Top nuclearied its hisntist blaming israel for death. The scientist is seen as the founder of the Nuclear Program for the islamic republic. The uae and bahrain has condemned his killing as a further threat to middle east peace. The two have a strained relations. And a former french president has denied allegations of corruption. He is accused of offering to help a senior Court Official to win a prestigious job in monaco in return for his age in a legal dispute. He is only the second french later to be tried in modern times and the first to face corruption allegations. He was president from 2007 until 2012. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Juliette coming up, we will president dvani group about his outlook on the indian market. That is coming up next. This is bloomberg. Juliette indias economy recovered some lost ground in the three months as the lockdown eased. Fell seven point 5 sending the economy into its first recession on record. Joining us from mumbai is a body Group President , pashupati advani. Great to have you. Getting your thoughts on where you are seeing the Indian Economy. We are getting some optimism on the Global Economy as we look towards the vaccine but what are you expecting from the r. B. I. And when will we see a better recovery coming through on the Indian Economy . The Indian Economy has gone through a few changes apart from covid. A tough place before it came. Small businesses are actually hurting and the bigger are getting eager. Is that good . Bad . Shortterm bad, longterm, good. That does notry like change. Change is extremely painful and a lot of people are affected. And sometimes, change is introduced without taking consideration and that causes a lot of problems. It is what it is. I was just going to say you say yourself that the bottom of the pyramid is being government bute it is the next layer that is hurting. If you could advise the government or give an incentive to the next level, what needs to be done to create a more equal footing . Pashupati the challenge in all of these packages and we have seen the u. S. To be the best where they have given money to bottom of theheir pyramid. But we just dont have the money and we also have a huge number of people so we have to be more inventive. The challenge is without money and without job creation, it can be painful. We willhe other hand, probably be the second largest player in vaccine production in the world. The institute is a big player. Byy have been contacted astrazeneca and there are three or four other players that will also export vaccine locally. That is a new venture for us and that will help our economy get out of the rocks it is in. Out of the rut it is in. To bed but more needs done especially in terms of stimulus or should i say, triage in many respects. You have the central bank, the reserve bank and the government. Pashupati the challenge we have in india is that our rating is heavily. Is triple e. Our cost of borrowing will go up a lot. Why we the real reason are sitting on the fence. And we are not doing things. The government is trying to push things under the r. B. I. Hoping it will take some of the risk. At the end, there will be some losses taken. Those losses have to be taken up by the government. And they dont have the money to do it so they are trying to push it onto the r. B. I. Who was trying to push it off to the private banks. Wherever they can. As opposed to other countries where they have swept the room clean and gone back to business if you know what i mean. Theaad when you look at Indian Economy itself, is there an irony that it could actually be in the post covid world emerge stronger . Can it be stronger if it doesnt get support now . I said, the big are getting bigger. I mentioned the pyramid situation. 400 vaccines by the end of the year. They are the have 100 million ready and will probably get to 300. That is a lot of vaccines. The point is that everyone says if you want to be successful in the post covid world, you have pivot your business. It looks to me like the vaccines will stay. We have a lot of vaccine manufacturers that will not be job creating. There is a tradeoff. Who knows . At the end of it all, and extremely resilient country so we will manage, im sure. Andette resilient incredible momentum coming through in equity markets. When we look at the indian stock market which has been holding at records, we are also seeing a lot of inflow coming in from foreign investors. It poured in in november. Do you expect that to continue . Ishupati it looks like it continuing. When you look at the foreign press, india is one of the places to be if india can do manufacturing and take some away from china. We certainly have the resources to be able to do that. I think that the fact that everyone is looking towards india as a china alternative or i think that is going to be a big difference and a big plus for us. Money is coming into new areas. It is also coming into real estate. That was affected also. Blackstones of the world by yang real estate buyings of the world real estate projects. Foreign investors are taking advantage of that. Ofare going to see a lot companies, gaming companies, all of the businesses that have benefited from covid19 are going to be in the market soon. Certainlythat has been one area. I wanted to get your thoughts on relations with the likes of china and how that impacts trade because you were talking about mobile phones dropping. Does that give a bit of an advantage to some of the telcos in india . Pashupati we dont really have proper mobile phone manufacturing. It has been primarily assembly. I think what will happen in the next 23 years is a large portion of the mobile phone will be manufactured in india and critical components will come in creating some jobs. The reality is given the there is aith china, lot of dealing across the border and a lot of unhappiness in india because of it. Right now, we have less because it is the winter season. There is really nothing to be done in the winter except to dig in because it is extremely cold on both sides. Thinghole antichina because of the war situation is stopping chinese from reaching india which is helping with balance of payments. As well as Lower Oil Prices and lower oil demand. Those three things are helping our balance of payments a lot. Times, we covid actually had a couple of months where we were positive which is unheard of in the last 10 years. Rishaad thank you so much. That was at on a Group President , pashupati advani. We have the open for equity markets. Moving to the upside. As we playing catchup did have a Public Holiday in india yesterday. As the Airline Industry grapples with the fallout of the pandemic, several safety concern issues have risen with pilots not having practice. This is bloomberg. With almost one third of the world jets grounded because of the coronavirus, pilots are not flying as much as they used to which is raising concerns. There was a landing ins bent or was a landing incident in indonesia. Karina, watch a walk us through what happened. It happened in september. An airplane carrying 307 passengers and 11 crew. There was some Stormy Weather upon landing. Momentarily moved off of the runway. No one was hurt but there was an investigation. The pilot had flown less than three hours in the previous 90 hours and the first officer had not flown at all since february 1. The pandemic has made it a lot harder for pilots to maintain proficiency and flying experience. Katrina, it is the first instance where we have beingilot rustiness blamed for the cause of an accident. It has also been cited a europes top Aviation Organization as the cause for another crash in may which killed all but two of the 99 people on board. The European Aviation Safety Agencies said the pilot did not seem to be as fluent in conducting the flights as he should have been. You really need to be retrained in some way in order to come back if you havent flown in a while. Are some of the possible solutions being recommended . One possible solution and this is something that one organization has suggested creating special travel bubbles so that pilots can access machines to remain current. Because lion air does not have a simulator come its pilots were being trained at a thirdparty indonesia as well as malaysia and singapore. With the travel restrictions, it has made those harder to access. The International Civil Aviation Organization has also called for a flight crew to be recommended as essential workers so they can maintain certifications and expertise they need to have the requisite number of hours to fly. Others have pointed out that a specialized job like flying is takingy to pick up after two months off. Bloombergs Katrina Nichols nicholas. Exxon mobil has taken the largest impairment in its history. Is also slashing longterm Capital Expenditure plans which it says will not exceed 25 billion a year. Recordprevious writedown was just over 3 billion. Tesla jumped on late trade. Given the companys massive market cap. It wouldve been unprecedented. Tesla will be the seventh biggest name in the s p 500 between Berkshire Hathaway. 580 thishas soared year. It is dropping the idea of jointly building a new batch of pickup trucks. Shares were sent tumbling more than 27 . 11 ill not be taking the equity stake it had proposed earlier. Rishaad lets have a look at the markets as we had towards as we head towards the hong kong lunch break. The kuala lumpur market is up to play 5 . Japan is doing well in the equity space. We have at the moment some of the biggest export led economies rebounding in november. In china coming better than expected and hitting a decade high. We have oil in focus. On its way down. There are risks within opec plus currently. We are also watching what is been happening with australian assets. No surprise that the r. B. I. Stayed on hold the rba state on hold with an assessment of its qe program. The yield target is at 10 basis points. They do say they are ready to act if needed reiterating that point that they will not be raising rates for at least three years. The aussie dollar will not be happy with that. We will be hearing from the rba governor tomorrow when he appears before the house of representatives to talk to the government about whether the rba has done enough to support the economy during this pandemic year. And watching for what the fed chair powell has to say to congress. That is it for Bloomberg Markets. Daybreak middle east is next. Its moving day. And while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. It only takes about a minute. Wait, a minute . But what have you been doing for the last two hours . Delegating . Oh, good one. Move your Xfinity Services without breaking a sweat. Now thats simple, easy, awesome. Xfinity makes moving easy. Go online to transfer your services in about a minute. Get started today. Emily im emily chang in San Francisco and this is bloomberg technology. Coming up in the next moderna hour, clears another approval and is applying to the fda for approval of its vaccine. The first doses could be available by december 21. The cofounder and chair will be my guest. Plus, as covid cases continue to spike, facebook is stepping in with a new initiative. To ease the toll the virus is taking on families going into the holidays. One of the longest running employees at facebook, the product head, will tell us all about it and how the Company Plans to fight continued covid and political misinformation