Yields, lets look at how the bond markets in asia are looking. Boj stepping in to stop the slide in yields. Yields have been below the target of the boj. How much can the boj do . It cut its bond prices by ¥30 million today. Will it do more . Stimulus over the next six years not helping. We have new zealand 10 year yield below 1 currently, ann australiad 10 year yield below one as well. We talk about inversions of two and 10s, it looks like asia may be looking at the same phenomenon. Some are looking at singapore and australia to experience those inversions. Yvonne lets take a look at india. We potentially could see a catchup rally. We are seeing that in the cost the already kospi already. The nifty closed up 110 of 9 . 10th of 1 the rupee at 71. 44. We heard a speech from Narendra Modi heading back at critics on his decision to revoke kashmirs autonomy. Impact talk about the that violence has seen on the economy. Lets get to first word news. China has slammed looming u. S. Tariffs, saying they violate agreements reached at the g20. A short statement from beijing says plans for duties on an additional 300 billion of chinese goods takes the u. S. And china offtrack in trade negotiations. Choice beijing has no but to retaliate. Singapore exports posted another doubledigit decline in a further sign of economic downturn. Nonoil domestic exports declined 11. 2 in july from the same time last year. Electronic shipments jumped to 24 . The contractions mark the fifth straight month that fell on a year on year basis. An Iranian Oil Tanker detained by the u. K. Has been released, but the u. S. Is threatening sanctions against anyone who supports the vessel. It was seized six weeks ago. It was released after tehran provided assurances it wont the washington says the release of the ship is in achievement. Alibabas cofounder is meeting to take control of an nba franchise and their home court. He is expected to sign a deal valued at more than 700 million, while at the same time picking up 51 that he doesnt already own. The whole deal is worth 3. 5 million. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im rosalind chin. This is bloomberg. Haslinda another escalation in the trade war rhetoric, with china saying looming u. S. Tariff s violate accords reached. Beijing is vowing unspecified retaliations as pushing back on trumps attempts to link to trade war with the turmoil in hong kong. Meanwhile the president says he will schedule a call with xi. President trump i think we are having good discussions with china. We will see what happens. They had a deal, and then they decided not to make it. I think they would like to have had that opportunity again. We have a call scheduled to president xi. We will be speaking to him very soon. Haslinda joining us is a jp morgan Asset Management strategist. You have the yield curve inverting this week. How significant is that yield curve for assets . It is significant in that it is the signal investors have been looking for. We have been talking about the yield curve inversion, whether it is the twoyear or three month spread the fed likes to look at now. Investors have been looking for confirmation that the anxiety they are feeling is reflected in prices. While i think investors shouldnt overreact to this signal, because i dont think it is giving us the same quality it ite did in recent history, certainly is a reflection of investor anxiety. It is something we should be paying attention to, because it will move prices moving forward yvonne can you continue buying treasuries . At what point does this become a bubble . Where is that bottom for you . Hannah i think it is too soon to call a bottom in yields. In the nearterm, yields have fallen so much, it is hard to see the move significantly lower barring an economic shock, which i dont see on the horizon. However, over the longer run, you could see further downside, especially when the u. S. s Business Cycle moves into its next phase, which is a recession. Haslinda some say this yield inversion could be a global phenomenon and there are already indications that asia will be looking at that too, the likes of japan, australia. What are you anticipating . Hannah you already saw most Asian Central banks moved toward a decidedly easier to in communication easier tone in either their communication or policy past the fed cut in july. It controls a lot of liquidity in Asian Central banks. That is going to be reflected as a response to fed policy i would say more so than the u. S. Yield curve alone. Haslinda what will the fed do . Will it make sense for the fed to keep its powder dry . Fed will beink the cautious to not over interpret or overreact to marketbased a hightors that change on frequency. Looking at economic data, unemployment numbers are Still Holding relatively strong, so the consumer is in a relatively good place, all things considered. However you are seeing weakness in industrial action numbers, the production numbers. I think the u. S. Will take an easier town with those macroeconomic tone with those the macroeconomic indicators. Yvonne what is this disconnect we are seeing with the equity market . At what point do equity markets after christ in more of this trait price in more of this trade war . Hannah businesses have become convinced they have to take uncertainty into account as their base case. Barring any future tariffs or negotiations between the u. S. And china, businesses will still be uncertain about outlook. Globalization, where production lines crossed several borders, not just the u. S. And china, it is something to take into account. That is why you see a lot of business uncertainty. Tonne what am i supposed look at equities and call for . Do i see as the receding of the yield curve as an indicator, or do i look at the 30 year back below 2 . Hannah i dont think it is wise to call equities based on the bond market. I think investors have high anxiety, so they have moved into fixed income assets and are bidding up the price. Inever in equities we are late stage economic expansion. , you need to look at names that may be more domestically oriented. Amidst this uncertainty, i think it is too soon to call a top. Especially if you consume you assume the yield curve is a safe indicator, if we assume it is a golden indicator, you still know the equity market peak tends to come sometime after yield curve inversion, but before a recession, which could be anywhere from a year to two. Haslinda having said that we are in a late cycle, even with the correction we saw recently, the s p is up 14 . Equities, yous. Will look at what happens for earnings expectations. We have an earnings season that is almost wrapped up that was betterthanexpected. Going forward, regularly as you see tariffs feed into the corporate bottom line, as well as continued support from the consumer and weakness in industrial production, you will see a next Earnings Report mixed Earnings Report. How expectations respond to that will tell us more in a couple months time. Haslinda how much should investors hedge . Some say 40 , 50 at this time. Hannah when it comes to application, that is an individual decision. That depends on your base horizon and currency. Foreignd investors are responsible for taking higherquality names, more domestically oriented tilt, and companies that have offered a higher return on equity to their shareholders. Yvonne what would that be in particular . Do you focus on asia, china, or do you stick to treasuries, government bonds, and gold . Hannah from a strategic percent of, the strategic perspective, the u. S. Does pay out more, as well as having one of the more positive real yielding quality bond markets. That makes sense to have a higher allocation toward u. S. Assets than the start of this year. However when there are technical opportunities in some of the names benefiting from the trade war, you are seeing more active Central Banks that provide additional liquidity and could set up shortterm growth, particularly in em asia. For investors, it is a consideration where you are located now whether you should move up or down. Yvonne Hannah Andersson from j. P. Morgan will join us in the next hour. Indonesia announced record stimulus measures. We hear from nomura. Haslinda hong kong braces for another weekend of protests. One billionaire tycoon finally speaks out. This is bloomberg. Yvonne you are watching Bloomberg Markets asia. Im yvonne man in hong kong. Haslinda hong kong has announced its stimulus package worth more than 2 billion as the government looks to avoid a recession brought on by the u. S. China trade war and protests that have rocked the city for a most three months. Hong kongs billionaire tycoons have stayed quiet, but one highprofile figure has broken his silence. Lets bring in our chief north asia correspondent stephen engle. You have to wonder if he was under pressure or worrying about his wealth dissipating. Stephen three or four days ago when i was at the airport, i went on a bit of a rant on camera. The first Real Property tycoon to come out and Say Something about this protest. Are these others . Where are they . When the Umbrella Movement was on, a lot of them made statements. The city listens to these tycoons, especially one whose headquarters are right behind me in hong kong center. I guess they were listening to me. I am being facetious, of course. [laughter] but they came out with a fullpage advertisement in the newspaper. Saying no tot is violence. Im speaking mandarin. Love china, love hong kong. It is a plea to have a peaceful solution to this crisis. There is a lot of speculation as to why these tycoons did not come out. It took more than two months to make any sort of comment. This extradition bill is very different than all past crises in hong kong. Sars a common enemy was a common enemy, it was an airborne disease. The extradition bill potentially threatens the Business Community , because Business Leaders could say, wait a minute, there could be a charge against us in Mainland China and we could be extradited. I am not saying china is coming up and plans to extradite any of the big tycoons, but there was a concern amongst the Business Community. Maybe that is why it took a while for them to come out. As weonomy is suffering get secondquarter gdp numbers today. There is a second reason we are out here. You can roll the video if we havent. If we have it. Another person unfolded a banner today. Climbed the center today, the third time he has done that, to unveil his own dinner, which is a own banner, which is a handshake of a peace offering between beijing and china. People saw a man climbing out of their window. W hes doing it before and no is in detention at one of the police stations in central. Yvonne i think my phone has blown up with all of the people watching him klein. Him climb. Listening to the likes of these tycoons calling for an end to the violence . What will happen on sunday . Stephen you and i were both there at the airport. We were camped out there. It felt like my home. We talked to a lot of the protesters. When the interim injunction came down, they went home and bowed and apologized for the inconvenience they cost. They caused. They adopted this slogan, if we burn, you burn with us. Today they are calling for a secret protest against the financial community. Go to the bank, stand in line, withdraw your money, slow things down. They want to cause social disobedience. Sunday there will potentially be another rally at victoria park. It is not over. There is a lull now. Everyone hopes there is no violence. It is which side of the political fence you lie on. It depends on what happens with the crackdown on what usually starts out as a protests. Yvonne stephen engle, our chief north asia correspondent. A pretty eventful morning for all of us. Still with us is hannah anderson, j. P. Morgan global asset strategist. We talk about the economy, it is slowing. We have seen some fiscal measures, but what is your view on the equity market in hong kong . Orwe consider this noise do we have to ignore it . Hannah you can see the Stock Exchange is not immune to the worries we have seen. There is additional risk investors are pricing in based on political turmoil in hong kong. Most hong kong located Companies Listed on the exchange, the vast majority of revenues are not coming from hong kong. Aside from a couple property names, you are looking at the broader china complex. Those worries have dragged down equity market performances, which is why you are seeing hong kong lag the global indices. Haslinda would you buy on weakness . There are still some Good Companies that are not connected to the political situation. Hannah there are certainly buying opportunities for companies within broader southeast asia. For certain investors willing to take that tesco that tactical risk, it could potentially be some good names on sale. Youinda how concerned are when it comes to reports that funds, investors are getting the money out of hong kong and perhaps to place it in singapore . Hannah there are always reactions whenever there is political turmoil of certain investors saying they dont like the risk and will move their money elsewhere. We have seen that in Mainland China and singapore. That is an individual investor call, because we all have different tolerances for the level of volatility in markets. When you have greater volatility coming to equity markets, for some investors, that might be too much to handle. Haslinda 500 billion to 600 billion worth of value wiped out. Hannah anderson, thank you so much for that. If you are a bloomberg subscriber, you can catch up with our interviews by using our interactive function tv. You can send instant messages to our team and guests during live shows. Check it out. This is bloomberg. Haslinda lets do a quick check of the latest business headlines. Alibaba beat the highest estimates of quarterly revenue, defining the slowdown with a june sales bonanza and robust shopping demand. Income rose to more than 16 billion in the period. Alibabas business is primarily domestic and has been able to ride a surge in demand and Consumer Spending despite a slowing economy. Themp in profits thanks to stock market rally and a rise in new Business Value growth. Almost 14climbed to billion in the First Six Months of the year. A 19 rally in chinese stocks helped quadruple investment income. May. F announced in profits in the Second Quarter boosted by extending credit financing and services it provides to other financial entities. That is a rise of 42 , which tops the highest analyst estimate and offsets the ability to make money from funds and its pay while it ever since the pboc oncame the custodian of oil thirdparty payment platforms. Yvonne take a look at chinas markets before the lunch break. Csi 300 close to 1 . This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Haslinda we are looking at live pictures out of singapore. Almost 11 30 a. M. In singapore. Almost in the middle of the trading day. Stocks down 7 10 of 1 . Domesticdont ask import numbers contracting less than expected, but doubledigit drop for the second consecutive month, further signs of a looming economic downturn. The markets of japan coming back online, up by 1 10 of 1 . Nifty futures pointing to a higher open. Up 5 10 of 1 . We will call it half. For now lets get the first word headlines with rosalind chin. Rosalind the Worlds Largest shipping line or is adding a gloomy forecast for the Global Economy. It released earnings along with a warning about trade and potentially weakening demand for containers. Profits beat expectations, but fell as it was said the escalating trade war could eliminate Global Demand for containers next year. Theident trump says letting m visit would be a sign of weakness. The netanyahu government says Rashida Tlaib and ilhan omar are being boycotted because of their boycott of israel. One republican denounced the move. Another company is under fire cleaning taiwan is claiming taiwan is independent from china. Outrage that some huawei owners listed taipei, taiwan for some to select as their language of choice. Some calling for a boycott of one of chinas corporate crown jewels. At least one person has been killed and dozens more have been hurt as a powerful storm lashes southern japan. It made landfall in western hiroshima with winds gusting to 150 kilometers per hour. Operations in the west were suspended and hundreds of domestic flights were suspended. A meterogist expected of rain. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im rosalind chin. This is bloomberg. Haslinda lets take a quick look at where the markets are at this point. Pretty much firmly in the green. The benchmark for asian up 3 10 of 1 . We know hong kong is gaining for the third consecutive day. We know there is some bargainhunting given how the stocks. Smacked in the past got smacked in the past few weeks. Protesters are beginning to buy into that. We are looking at the opening of india pointing at a higher open. By 6 10 of 1 . R the rupee at 71. 27. 75. Yvonne you mentioned indonesia. Said to unveils measures to boost the economy and bring government to a record Government Spending to a record. Our politics editor is joining us out of jakarta. We heard talk about reforms and expediting businesses. What were some of the Key Takeaways . In the second speech he will be delivering today, he has said steps are no longer enough. Safe but slow is no longer relevant. I am reading from his speech right now. What we need is safe. Reading between the lines, he is earmarking ambitious reforms set for later today. Indonesia has been hovering around 5 growth for several years. Announce jokowi to 5. 4 today. That would be the fastest growth since 2013 we would expect movement on labor market reforms. Reviving indonesias manufacturing sector, which has been any downturn for several years now. Haslinda put it in perspective for us. How does the budget fit into indonesias broader Economic Outlook . How does this deal with the slump in Global Growth . P inf anything, the slum Global Growth, the trade war perhaps is an opportunity for indonesia to boost its fiscal allocation. In theknow, structure has been the hallmark of jokowis first five years in office. Indonesia drafted a plan for 400 billion in spending over five years. This budget speech later today will no doubt highlight the infrastructure developments, but will point to the need to do more. Ago, intioned moments his second speech today, he said they have to move faster. They are looking at the domestic economy to insulate themselves from the global headwinds. Forinda challenging times joko widodo. Lets bring in a nomura chief economist for india and asia. Good to have you with us. Boostidodo is trying to growth at a time when it is slowing down. There is space. This is the time to use the fiscal space indonesia has. We think the deficit target set this year will be higher than last year. They are expecting a 2 of gdp fiscal target versus last year. The focus on more physical infrastructure will continue in a second term. We expect more focus on Human Capital development, manufacturing incentives. The other thing we will be watching if there are any hints ,round the influence of policy which could be positive if there are clarifications. Spacel, indonesia has the from a fiscal standpoint that will be used. The reforms are from a structural point of view, sending a signal in terms of the longer growth prospects. You talk about how you are optimistic for introduction spending. How optimistic are you more private Sector Investment will happen . It takes time. The first term has been a challenging environment in terms of the Global Growth outlook and quantity prices have been weak. We need to assess it in that context. We are seeing reforms in terms of the ease of doing business. Bank indonesia will not deliver a cut next week, but will be delivering the rate cut. You have monetary easing, reforms, which are sending the right signals. We think it will lead to private investment picking up. Haslinda we talked about the forecast the government had of 7 growth. We are far from it at the moment. A chart shows indonesia has been stuck in this range for nearly a decade. Why do you think we are stuck in this range, and what are the biggest risks to the economy . Is it something more external or that they can grow internally . Cant grow internally . They definitely can grow internally. While net exports are a drag, private consumption demand picked up. I think the domestic demand side has been fairly strong. When countries are struggling is a pretty good relative performance. You are right, the risks have been more external rather than domestic. Past this external soft patch, we will start to see the impact. Uf you look to 2020, o expectationr is growth will pick up from 5. 2 . The cumulative effect of fiscal policy spending, regulatory reforms, etc. You should enable indonesia to be one of the reasonable performers. Yvonne great stuff. We will have more out of nomura coming up. More signs of distress in the Indian Economy as imports plunge. We look through the latest trade figures, next. This is bloomberg. Haslinda you are watching Bloomberg Markets asia. Im Haslinda Amin in singapore. Yvonne indias trade deficit narrowed in july as imports faced a deepening slowdown. Imports plunged 4. 4 on year. Exports meanwhile rose 2. 3 . The r. B. I. Says a global slowdown and trade tensions are posing risks to indias economy as it slashes rates for a fourth time this year. Our nomura chief economist for south asia and japan is still with us. Many people believe if you minas oil, minus gold, minus japan could be coming to a slowdown. I agree. The headline is exaggerating, because last july it was up 30 . The goal is not necessarily reflect domestic demand. The core imports has been lower. Having said that, i think the fact is that the consumption side of the economy is still quite weak. After the shadow banking crisis, the lingering effects are still there. What is positive incrementally are the policies we have seen in terms of rate cuts, liquidity easing, and the expectation is most likely the Second Quarter gdp numbers will mark a recovery because of easier domestic financial conditions. Haslinda the risk from the global trade war isnt quite impacting india, but given that consumption is still week, how do you drive weak, how do you drive indias growth Going Forward . Sonal from a nearterm perspective, stimulus will help consumption. Some parts will be the housing market. The rate sectors will pick up. This is a shortterm solution. I think the more mediumterm issue is some of the asian economies have had an exported growth model. If we dont have in india that global environment, how will india have Sustainable Growth . It implies we see export shares more focused on competitiveness. Second, more focused on domestic manufacturing, because india imp orts its needs. It is a big market, and if we can make our exports competitive, that is the strategy. Haslinda you said Monetary Policy is not the answer, but it will help. After the cut, what do you expect the r. B. I. To do . How much more . Onal the focus right now is transmission. We do think they will deliver another cut of 15 basis points, but it is important for banks to pass it, and it is important for liquidity to stay positive. I think transmission is ongoing. Policymakers need to be forward like forwardlooking. They have done a lot. Is it more in terms of token easing, but now waiting for signs of the economy to pick up. Yvonne we have been watching last week the tensions between india and kashmir and the decision for india to revoke kashmirs autonomy. I am wondering how the politics play into economics. The president says revoking cashmeres autonomy kashmirs autonomy is about boosting its economy. When there is violence going on, how can you bring back jobs to the economy . The answer depends on whether one is assessing this from a near term or longterm perspective. Mir has been in kash going on for decades. If it is able to ease and attract development it is a great place for tourism, for instance if we see development happen, it will be positive not just for kashmir but all of india. The risk is the law and order situation. If that is not under control, these risks could divert the attention of policymakers from nearterm economic issues. Yvonne we talked about indonesia, we talked about india. How do these countries rank compared to japan . Are these more bright spots in the Global Economy . Where perhaps are you seeing more of that growth trajectory . Sonal when we look at the entire asiajapan landscape, indonesia and philippines, the standout is they are big performers. Domestic demands are not exposed, for instance. Importantly, from a mediumterm perspective, because you are looking for high potential reform prospects, these countries tick all the boxes. Haslinda i want to touch on singapore. The data out of the country not looking good. A doubledigit construction for the fifth consecutive month. Will the country fall into a recession . The government says no. Sonal it is a touch and go situation. What is concerning is the slowdown has spilled over into the domestic demand aspect. The we will be watching is aspect to which there is further deterioration in the job market, then this could have nonlinear effects. That is when the risk of a country takes a tipping point. All the open economies in the region not just singapore, but taiwan, korea, and to an extent malaysia are exposed. Haslinda these economies are so vulnerable. Economist for india and asia. Indian markets have just opened. Lets get to mumbai. Saw futures point to a higher open. Is i it is up, isnt it . Indian markets are playing catchup today, considering we were closed in yesterdays session. There is a period of recession coming out of the u. S. On inverted yields. Isthe opening trade, 10,966 where trading has once again slipped below the mark of 11,000. Half of 1 lower. For the broader markets, the nifty 500 is down almost 50 points in trade. The nifty bank, which was up in wednesdays session, is off by almost 200 points. Not to forget the indian rupee, which has depreciated in the month of august. It is seeing some strength coming back for the second straight session, trading around 71 points. The volatilities seem to have cooled off in todays trade. Haslinda playing catchup, what else are you watching for today . Stocks, the banking think of india is one stock in focus, although it has opened lower with cuts of 1 . Approval has been given to explore dilution of stake, which could be why the ipo is trading right now. The reports are indicating it is also looking to raise additional funds of 600 million. Last week they disclosed their qip. The stock today is seeing a bit of a relief rally, but it has been an underperformer. It has been said it will be observing almost 10 days off in its plants in the Second Quarter to align their production to the sales requirement stocks, at a 52week low. Yvonne coming up, a good week for ecommerce players in china. We check out the numbers of alibaba and jd. Com. This is bloomberg. Yvonne lets do a quick check of the latest business headlines. General electric fell in the most in 11 years after a prominent financial examiner accused it of accounting fraud. Ge needsnted of said to increase its insurance and an additional noncash charge of 10 billion under new accounting rules. Ge called the claims market manipulation, pure and simple. After a lackluster sales forecast, sayers reacting badly to the ongoing trade war and slowing Global Economy. The transformation is being stymied by the trade war and its negative impact on Global Sentiment and spending. Spotify is said to be planning a more expensive version of its service in scandinavia to see if it would be able to raise prices around the world. The test does not necessarily mean it will be extended further afield. The current family plan costs 15 a month and lets up to five eeople use the surface th service. Haslinda alibaba posted betterthanexpected earnings and revenue despite economic and geopolitical headwinds. Toppedsurprise revenue the highest analyst estimates. Our china correspondent selina wang has the latest. It looks like jd and alibaba defined the chinese slowdown. How did they do that, and how does this reflect the broader Online Retail industry . Selina it really reflects the strength of the Online Retail industry, despite these macro headwinds and the trade war, even though we have seen sales, under pressure, bigticket sales like cars, under pressure. The smaller higher frequency items are doing well. There are a couple structural factors working in alibaba and jds favors. Cities, youger tier are seeing a consumption upgrade. People want to buy higherquality goods, and more of them. You are seeing rapid urbanization and some people beginning to experiment with mobile buying for the first time. In addition to that, they are benefiting from their expansion far beyond the ecommerce sector. They are investing in groceries, cloud services, artificial intelligence. That combined with their sales promotions and rationalized shopping recommendations are to help bolster their earnings. Haslinda when we look at the headwinds for alibaba, what are they . Selina there are a lot of questions from investors about what will happen with that Hong Kong Ipo and whether the protest will delay not. Delay that. Questions around the margins as they expand to other areas. We have seen them manage expenses at a good rate. Cloud computing, we saw growth slow and negative operating margins widened. Losses continued at their Digital Media and entertainment sector. That is coming up against regulatory issues, same thing tencent has been facing. Broadly speaking, a lot of the concerns investors have have been allayed by this recent Earnings Report. Haslinda selina wang, our china correspondent joining us from beijing. That is it for Bloomberg Markets asia. We are getting closer to that lunch break in hong kong. We are seeing the bond story when it comes to today. Points when you are talking about your tenure. Byare lower line lower one basis point. The boj reduced the purchases of bonds in the short end. We are talking about still some 1 sub 1 when it comes to new zealand 10 year yields. Australia is watching 1. 5 when it comes to 10 year yields. We saw a resteepening in the curve out of retail sales from the u. S. Session highs for the csi 300. Taipei having a good day. 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