Taxes and nuclear topping the agenda as candidates stake out their campaign ground. Sayse the baidu President Donald Trump is bad for the world. We hear exclusively from chung. Let us show you the reaction to what happened last week to the move on the reserve rate in china. Happenedou what has because we have Smaller Banks with different reserve ratios to the larger ones. It could boost the confidence of investors in china. Not to say china is turning to easing policy but there is a vast improvement. One of the strongest Central Banks can execute some easing when required. You can see this as the reserve cut is taking place. Interest rates, 4. 3 , way above 1. 75 interestts rate there. Inflation at about the same, about 2 . Releasedhe pboc september new lending today. That is what we are looking for. Paul allen has the first word news. Has baidus president warned that President Trump approach to free trade may be bad for the world. He said protectionist policies would limit flow into this u. S. The chinese Search Engine is opening an office in seattle. Happens, america benefits from openness and talent flow. Any form of protectionism will be bad for the u. S. And the world. Rishaad you can see more of that exclusive interview with him later in the show around 9 30 p. M. In hong kong. Paul japans political leaders are staking out key policy differences. Shinzo abe and the party of hope leader koike are basing their campaigns on taxes and nuclear power. North korea will also weigh in on the discussions. As well as the aging population. The extraordinary easing and fiscal packages brought only a marginal improvement to the japanese economy and the results are not commensurate with the changes we have made. While i think rapid policy changes are not the state that are not desirable, we must think carefully about the exit strategy. Turkish markets tumbled for a third day as divisions between ankara and washington even. Theseo sides have caused set services after the arrest of the turkish man at the u. S. Consulate in istanbul. The lira fell again with a seventh straight day. Global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. I am paul allen in this is bloomberg. Looking positive at the moment across the board. The nikkei is up. Let us findt out more and go to Juliette Saly. Juliette things looking a little better than they were on the open in terms of what we were seeing in south korea and japan. South korea has been having a great session. Samsung reaching a record high. That is lifting the south korean kospi index by one point 7 . Malaysia and singapore coming online. Taiwan is closed for a holiday. Taipei is a. Elsewhere, we are seeing other markets starting to turn around a little bit. The nikkei up by 0. 4 . You are seeing most of the currencies are strong against the u. S. Dollar. A little bit of weakness coming through on the commodity players. We have heard from kuroda saying that we are seeing a little bit of momentum coming through in the japanese economy. Monetary base to expand 2 . The Financial System in japan is fairly stable. You are seeing some pretty good moves coming through in export stocks. And a quick look at kobe steel. No movement yet. That is one we will be watching. Our focusbe steel and there. Thank you, Juliette Saly from singapore. Focusing on china as well. Outflow pressure continues to ease. Our chinese correspondent, tom, joins us for more on this. Tom another ticket in the box for policy makers they lead up to the big political event that kicks off on october 18. A sign that the outflows have eased. What we saw was eight straight months of increases, around 17 billion for september. Comfortably up to the 3 trillion level. E have a chart 2296. It goes back to it 2011. It shows what is happening with the fx reserves. A reverse correlation between the fx reserves and the dollar strength. The white line. And the fx reserve is the violet bars we see there. There was a peak in 2014. And then they come off quite sharply in 2016. This year, grinding higher. A couple of the factors include the capital controls, not just for individuals but corporate is as well. There has also been a tick up in the inflows. Improving Market Outlook on the renminbi. This tell us does about the fluctuations when it comes to the currency . Was quite anr interesting month for the renminbi. There was strength in the first few weeks of september and then weakness as the pboc stepped in to take the steam out of the rally. First of all, in terms of the fx reserve, there may have been some big corporate with a cash pile and they may be converting that into renminbi. And then, you have other factors Going Forward like the real estate sector and the curve there. Says itg intelligence could weigh in on other assets. Another factor is post party congress. If we get a clear eyed stance to could prove to be supportive for the you on yuan Going Forward and another one is the fed. Sophie how closely are policy makers watching things tighten . Tom pretty closely. Onterms of the feds focus winding back its Balance Sheet and potentially lifting the rates further. The pressure is likely to be on the renminbi as the dollar strengthens in light of that. That isthe expert the expectation from bloomberg intelligence. You are likely to see a continued focus on the stabilization of the fx reserve. They want to ensure these are stable. This is a crucial will for policymakers to use, to support the renminbi if it comes under pressure. You have all of these different is, whether it is the fed, the real estate market, or the increased inflows pushing in the other direction. The Chinese Investment bank said today that there was a significant tick up in inflows is the fed, the real estate market, or the increasedin september. Interesting given that it is traditionally a month when people try to get their money offshore to pay for things Like University fees. Increased stabilization for the fx reserves is the expectation. You, tom. Hank trade data coming out of the philippines. Exports improved but a worsening condition for the impress. Sophie we see the trade balance coming in at negative 2. 41 billion. Versus the estimate. Compared tong 10. 5 the fall that was expected. And exports rising 9. 4 . Some skewed forecasts. Rishaad it is quite something as the trade balance is negative. Ahead, for Chinese Foreign reserves will the boom continue into next year . That is next. Ophie support wanes can a Political Insider can a political outsider win back voters. This is bloomberg. Generally positive start for asian equities as japan and south korea returned from holiday. Andrew mulligan joins us now from amber dean standard investments. It is heavy right now on emergingmarket debt and equities. Andrew, we want to get your view on Global Equities . On Global Equities. Going into the earnings season, what are you anticipating . Analysts are revising their Third Quarter profits. Andrew your question sums it up perfectly. Through . Cash flow come you are right that analysts have been downgrading their expectations. They often do that at the start of the earnings season. This week, with the u. S. Banks. At expectations are only about 4 or so. I would be surprised if companies could not beat that. Tax cutsihood of u. S. Are coming through in the impact that could have on u. S. Earnings this year and next year as well. Considerable debate about the size of the tax cuts. Will it be more personal or corporate . It could provide an important boost for u. S. Equities. Sophie u. S. Equities have been getting a boost. I want to share this chart with our viewers. What this illustrates is that we do have asian stocks serving up a world beating rally this year but they are still considerably cheaper than u. S. Equities. They are trading at the lowest price relative to the s p 500 in the last 15 years. Movement intore asian stocks rather than u. S. Equities . Andrew i think we have been seeing capital outflows out of america and into european and asian assets. I think that has stopped temporarily. Thefactor that is saving dollar against the euro. As those capital flows become more to way. It comes back to the change of view about the possibility of u. S. Tax cuts. When that is priced in, i would expect people to look for more value. Assumingountries of course that the Global Economy continues to expand at about 3 or 3. 5 into next year which i think is likely. Rishaad andrew, that will be contingent perhaps partly on what the dollar does next. What camp are you in . I would bertterm, expecting a dollar rally. I think we have seen a somewhat extended move. When the euro is getting close to 120. With the political news coming out of europe, it reminded people of some of the complexities of the political debate taking place in that part of the world. The Federal Reserve looks relatively hawkish. Governor replacing yellen, that possibility. I would expect the dollar to appreciate more but as i say, once that news about the monetary and fiscal policies is priced in, i think we could see a reversal in 2018 as people look for better asset values outside of america. Rishaad where are you finding them . Em is a place. Are you looking inside china . There has been a decent rally by the shanghai market. What is your thinking . Level is much more regionalbased rather than specific country based but certainly, asia as a whole looks quite interesting for the reasons that you are just said. Is fairlye government ably stage managing a nice expansion in the chinese economy clearly because of the series of conferences taking place this autumn into next spring or so. On the back of that, i think we can see some noticeable improvement in global trade. Capital spending is beginning to pick up. Parts of asia look more attractive from an emerging market point of view versus latin america. Europe can be debatable depend on what is happening with the euro currency. China is stage managing the economys there. What do you make of the pbocs push for deleveraging . Andrew i think it is a slow process. We are all aware of the many strengths of the chinese economy and some of its moves up the value added chain. Debt, also aware of the bad debt, nonperforming loans. I think we have seen this year, a finetuning process. I would be surprised if that does not continue into 2018 and 2019 and onwards. I dont inc. This administration wants to make major changes on that front. It will always be a problem but i have always thought about the chinese debt issue as manageable. I think it will be continue to be manageable. It does not mean that it will go away. But it is manageable. Threats, youing of are looking at the emerging markets with a fairly optimistic view. What about the turkish assets what does this tell us about the move towards highyielding debt . Still fairly positive despite the risks that come from it. I think in terms of emergingmarket debt, one has to say that it is because so many other parts of the fixed income market are very expensive or under some pressure. For example, the upward pressures on inflation that are beginning to be seen in the u. S. , encouraging the fed to be more hawkish. The credit market is becoming too expensive. Is highyield bond market becoming too expensive. The emergingmarket debt is one of the few remaining places that investors can look at. We are still quite keen on emergingmarket debt that i think turkey sums up nicely the problems of politics and fundamentals coming together. Deficit anda 5 then the recent news of america and turkey and the diplomatic spat reminding investors of some of the political fragility of some of the emergingmarket countries out there. My emergingmarket debt colleagues as a whole, it is one of the few areas that still sees some yield in the low interest world. You go to the region from time to time. You are there in tokyo. What are you doing there . How is tokyo doing and what is the atmosphere like and what are you looking at their . And what are you looking at there . And what about valuations . The japanese economy is doing quite well. It has had 57 months of success of growth. It is seeing a bit of an upturn in capital spending. The domestic side is underpinned by things coming down. Economy is making some decent profits and the government is improving the dividend yield. The japanese equity market is one that we like and one that we are overweight in. We are here for my companys annual conference. I am going to be seeing more in the next couple of days. It will be interesting to get their views on the politics. The japanese election is a phenomenon that we have seen in many countries around the world. Clearly money could flow or could flow out of japan under various political scenarios. And we have to address those quite carefully. Overall, japan is a country that we like in terms of its equity market. Become more of a headwind or a tailwind, we will find out later which way that is going. Rishaad it is always a pleasure, never a chore. Tom joining us from aberdeen investments in tokyo. We will take a look at some the markets at some pre markets, next. This is bloomberg. Starting out the trading day in china and hong kong. The market is pretty flat, the hang seng. Futures are also flat. Watching property stocks there as well. Flat figures from home sales. Revenues are disappointing. We had the economic information from geely saying that new home sales have tumbled in beijing and shanghai compared to a year ago. We are watching an automaker and the property stocks. Geely we are watching after it posted record sales in september. Up 3 for 2017 for that company. The chinese bank has upgraded 30. 5 hong kong dollars. The bank says the new models are growing. The question is can they hit their sales target for 2017. Rishaad it looks like they will be able to do that. There was a huge uplift. Sophie record sales. Jump in sales in september. Sales are healthy. You what we us tell have on the way. A sign of the times. Will be hearing from the baidu president. He says Artificial Intelligence is arguably the single most important force in the world today. He sits down with our colleague, emily chang for an exclusive interview. You will hear from him in a few minutes. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. 9 29 right here in hong kong. Just about just under a minute to go. What do we have out there . And a slightn pullback taking place on the dreams, wall street deliberating as to what to do view taxwhat way to renfroe, which is tax reform, presented byg donald trump. Gotal stocks rally, weve stocks across the globe near record highs. Treasuries moving to the upside, as more investors believe there will be a december hike. And it is the earning season. Some of the big banks in the jpmorgan and wells fargo out with their figures. And south korea back online today after their holidays here. We have the index. Playing catchup after that weeklong holiday that we had for south korea. Have gains in tokyo with automakers leading the rise there. They are now raising their ugly given whats happened with kobe steel. Be some pessimism. This is going to call for this year. Toshiba before that. Olympus. There have been so many of these through. T come i was asking whether they are drawing some of these companies out and taking them to whatever happened anyway. Okay. Thats what we have at the moment. Hong kong shanghai, markets, they have just opened. Julius, whats happening . Hang sengshanghai and the index opened fairly flat. But have a look at south korea. That is what you want to be watching. Up by 1. 8 , thanks to the surge that we have seen in samsung trading volumes of samsung also rising quite strongly today. Remember, this is the first time that south korean stocks have had a chance to react to what Global Equity markets in six sessions. South korea coming back online the First Time Since the 29th of september. Malaysia looking a little bit first half hour of trade, as is singapores market. But elsewhere, youre seeing pretty good turnaround. Weve had that commentary from bank of japan governor kuroda today. The nikkei up around a third of 1 . The yen has been holding with a 112. E of most other asian currencies doing quite well against the greenback. In terms of bonds, not much happening. We did have the u. S. Treasury close monday, so there wasnt a lot of direction in bond movement there. We are seeing it fairly flat in returns in asian bonds as well. But it is looking good in terms benchmark index. We are seeing this big move in samsung electronics, one of the performance. Samsung sti also looking good. Of these korean stocks lifting the index. Electronics did have a downgrade. We will also have seen some up downgrades coming through. Of course, the other major stock we are awaiting to see whether or not it trades is kobe steel. Still very much in the focus. Sales to each buy order on that stock, this after falsified data in terms of aluminum and copper parts. Toyota, one of its clients, saying this breach of compliance is a grave issue. We will be watching that as it online. Ck over the past 12 months, that 55 . Is up by about stocks leading the gain. There has been a switch out of both Energy Players as we see wti fall below that. Right. Earlier whichws suggested the yen is putting a smile on some of those people in charge in tokyo. Lets get that and the rest of the news. Japans current account is by growingpported exports. By a billion was helped goods trade of 2. 8 billion, well ahead of forecast. Japan has recorded a surplus since june 2014, reflecting the its overseas investments. The most in four weeks as chinas foreign reserves rose eightmonth. Also advanced as the worlds by 17 stockpile climbed billion. Is the of increases longest since mid2014 when 4 trillionked at before declining. Hasnesias Central Bank Inflation will r