Tumble. Paul the services session in the u. S. The board. On across treasury yields rallying. The s p 500 jumped into a fiveweek high. The 50 day moving average. Tech shares let the gains on renewed optimism over trade and we had rally at the twoyear yield. At one point, it jumped by the most in about a decade. We had very strong Economic Data when it came to the private payrolls numbers but also little changed when it came to the jobless claims, so the focus is turning to the u. S. August job reports that are coming out tomorrow. U. S. Futures unchanged. Lets see how we are setting up for asia. Sophie it remains to be seen whether this will continue after global stocks posted arrest day gainin since two since january. Hong kong on the radar after Derivatives Trading faced pickups on thursday. We have the nikkei futures in chicago looking to gain ground after the nikkei 225 rolls to a win month high on thursday. Japanese data on cap. Tap. Sydney futures gaining ground, climbing to a one month high. Aocks could be added as september 23 of to the aussie 10 year yield is back above 1 , tracking the move we saw overnight in treasuries. A check on risk appetite. Gold marginally lower. Bullion fell 3 , paul. Very much, sophie. Check in on the first word news with jessica summers. Jessica. Embattled u. K. Prime minister Boris Johnson says he does not want a snap election but it is the only way out of the brexit quagmire. His own brother resigning from parliament in protest to his plans. Rebel mps joined opposition parties to block johnson drive towards nodeal brexit. A delay is expected. I do not want to go on about it. I do not want an election at all. Frankly, i cannot see any other way. The only way to get this thing done, to get this thing moving, is to make that decision. Jessica Hedge Fund Veteran ray ofios, a 25 chance recession. He warns the fed has limited tools to deal with it. He says jay powell should cut rates slowly. U. S. Companies are planning the trade war for more than 10,000 job losses last month. A report by the a Staffing Firm says it is the first time the trade war has been given as a reason for layoffs. The Federal Reserve says uncertainty around trade policy is holding back local growth and may prove a drag into 2020. The rise in trade conflicts in the first half of last Year Accounts for the declining global gdp of. 8 in the First Six Months this year. It that had trade tensions not escalated in may and june, the head would have it did the drag on growth to have eased. Meeting growing opposition to his plan to revive qe and support the eurozone economy. The bank of france is skeptical about the need for new bond purchases, adding to criticism from the plan. The ecb meets next thursday. Draghi faces the choice of adding qe without the support of europes leading economies. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am justified. This is bloomberg. I am jessica summers. This is bloomberg. Wall street rally fueled by strong Economic Data and the glimmer of hope on the trade front. Lets bring in su keenan for more on the latest move. We thought riskon across the board. Treasury yields also rallying with stocks. The hands of a trade truce is the possibility that had tech on the rise. Youll notice that the Semi Conductor index was up better than 3 , far and away the bestperforming sector of the nasdaq and the broader market. Lets take a look at the bloomberg real quick. The Economic Data included a continuing drop in the jobless rate and that correlates with the increase in consumer spending. There are many signs that this could be shortlived and that the increase in job is in the lower paying services sector. More on that to come in the friday jobs data. Take a look at the big movers. Are notablyice tech up in a big way. Nvidia pacing the gains in chip stocks. Caterpillar pacing the gains in companies tied to a topical trade truce. Dropping by more than 22 . At one point, it was down more than 30 . A huge about in this company int owns magazines rout this company that on magazines. They expected a lot of earnings, and poof it appears they just disappeared. Lets go after hours where we saw the faangs. Big boost across the board in these heavily held stocks. Facebook having a big difference. Lululemon doing well by boosting its profit forecast yet again. Define the weakness we are seeing. Paul lets talk corporate bonds. The market is on fire. 74 billion dollars in refinancing so far this week. What is the story . Su it is a record since the time we began keeping records. Many strategists are calling it a feeding frenzy. Take a look at the big names that are putting out bond yields this week. Apple selling 7 billion in debt. High Grade Companies following suit. This is very much about the plunging yield. It is a very cheap time to engage in financing. You have a cashrich company like apple coming to the table. The real high grade are treating the Current Situation as a cheap buffet, so they can load up on capital, and they expect many more deals to come in the weeks ahead. Su keenan, thanks i much for that update on the market. U. S. China trade talks look to be back on track. State media in beijing says the signs must meet the broad agreement reached by president s earlierrump at the g20 this year. Talks resume after weeks of uncertainty and escalation. Tom mackenziewith and in los angeles with bloombergs sarah mcgregor. Tom, lets start with you. What do we know this point . Agreementnally got an that both sides will sit down for this next round of negotiations in washington at some point in october. We know that until that point, until the likes of legal help until they sit down in d. C. , deputies will be talking over the phone. It seems like both sides want to finally get some movement out of the back of the negotiations. You have the ustr saying they want to see meaningful progress. Where we are at in terms of the talks and we are waiting for that specific date. And the of the tariffs framework they are, we have seen both sides ratchet that up. 25 to 30 on 250 billion of chinese goods on october 1. It will be interesting to see if that does come to pass. We have the threat of additional tariffs december 15. All chinese exports hit by tariffs. That is the framework. The economic damage is being felt on both sides of this debate. We finally have some kind of agreement on sitting down for the next round of negotiations. The chinese date media saying it has to come back to that consensus. Shery the ustr talking about wanting meaningful progress but this seems a bit more cautious than usual. They did not even specify a date. They are talking about the coming weeks. Sarah there is a lot of lost faith on both sides of the table. There have been so many fits and starts to the trade talks. They have agreed to a timeframe for these talk to progress. No one really want to take out their pompoms and start cheerleading because it has such a negative process so far right now, and i think that are, there is a bar set back to come from these talks. They met 12 times at the highest levels already in their more than your long trade war. They talk about progress. They had not delivered on anything. From these talks, the two sides want to show some incremental, even progress. Shery we have seen that media reports in china saying that president xi jinping was asking people to brace for longterm 2040 nine. O at least have we seen any indications as to what sort of preparation for chinese could be making for a protracted trade war . Is right thatt you point that out because in terms of the rhetoric and propaganda here, they are certainly, the chinese, trying populatione chinese for a long, drawnout fight. In terms of the actual measures on the economic front, what we heard from the state council and other leaders in china is they are increasingly concerned about the downward pressure is on the economy. The domestic slowdown and those external factors. Tariffs are a big factor, a big part of that. We have the state council with another rrr cut, so we are expecting that to come through any time in the next few weeks. We have these additional packages porting the consumer. Saying other economists there needs to be more measures to support growth. You have ubs expecting to see growth of 5. 5 for 2020. It sounds like a pretty decent number. If they want to double chinese gdp, they need to get 6 of growth at least, so that is the challenge. The challenges are clearly front and center for policy makers here. Paul i want to get to a trade talks that the more fruitful. Thrashing out details of a trade deal that President Donald Trump wants to sign this month. The result seems to be getting closer, doesnt it . Sarah yes. Obviously, this trade deal was announced at the g7. In limited trade deal between the u. S. And japan. When the leaders of countries announce the things, what is forgotten is theres so more details to hammer out. In the case of this trade deal, there is quite a few issues still. The biggest one looming are these cards are by the car tariffs by the Trump Administration. They want the threat completely removed off the table. For the Trump Administration, it is so it works in motion a work in motion. 25 ving the threat of these car tariffs on japan, whether they are going to make that part of a trade deal, a Binding Legal agreement, or maybe just try and continue to hold the threat of those out against japan just in case, have it in her back pocket. Shery the date for the their back pocket. Shery the date is kneeling. Is nearing. Thank you. Still ahead, chancellor merkel faces a high bar on her visit to china, maintaining a hard line with beijing while pressing for access to the mainland market. Paul up next, respond sentiment returns in a big way after massive market declines in august but we could see more dramatic swings and we close out the final quarter of 2019. This is bloomberg. Paul this is daybreak asia. I am m saikawa i am paul allen in sydney. Shery it was a different story in august with markets swinging and the vix index spiking to its highest. Lets cross to hong kong and it does all of this with sean taylor and head of emergingmarket equities. Great to have you with us. The first week of september has not been any easier. It has been quite a ride. This volatility threaten the strong stock Market Performance we have seen so far this year . Yes, it has. Globally, we had a very good run and equity. Asia and emerging markets has been a clear laggard because of the trade issue and also slower china growth. We have had more optimism. It was a hong kong situation improving. A bit more positive policy response from china. A little bit more clarity on brexit. We are not necessarily going for a hard brexit. I do not think there has been any change of fundamentals. Shery the surge in bond yields is not expected to last here . Sean we are expecting bond yields to carry on lower for longer. The credit side looks pretty good. Were not seeing any real deterioration. Maybe one has to watch the high yield space in the u. S. On the commodities side. Otherwise, people continue to search the yield. Last year, credit sold off a lot. This year, it is looking more positive. Asian credit and emerging market credit held up pretty well. We expect that to continue. Andxpect that to widen emerging markets but we have the beneficiary of reach being cut in the west so we have more positive returns. Were not seeing any credit widening within the global credit space. Positive environment. You are neutral on emerging markets. I wonder if youre seeing any good opportunities under search for yield . Side, we areequity neutral. We are selectively overweight on the credit side. Partly because the returns are looking much better than your and the u. S. Europe and the u. S. What is the story on emerging markets . It is cheap, it is lacking a catalyst to go up. Still we are still seeing earnings downgrades in the manufacturing, the supply chain areas, particularly from korea and taiwan, although those downgrades are beginning to be downgraded less, but we think we. Ill have more emerging markets in asia are held back by the trade issue as opposed to benefiting from the rates going down. Paul do you have any feelings on where the cost be might be headed next . It is strong kospi might be headed next . It draws parallels with the 1998 financial crisis that saw us on the quantity at this level was something of a buying opportunity. What are your thoughts there . Sean i think we are still staying underweight, but more have been increasing our semiconductor positions because they got really oversold. Kospi down 50 . Historic levels of downgrades. The domestic economy is slightly different from what it was financial crisis wise. Growth than expected. One reason the cost be has been weak this year is the dollar return. , but weely increasing are still staying underweight. Ourhere is one market main overweight are brazil. They had a bit of a wobble. Currency is down. That is a very good emergingmarket story, probably the best at the moment. Whether it turns into a structural story depends on whether bolsonaro gets his reform through. A very good market. India, very safe. Indonesia has done very well. The real laggard has been china. I think if people are going to really take and go overweight one market shorterterm, if this response continues, it will be in china, but it is falling fundamentals because we are still seeing, as tom pointed out, a few houses are downgrading their china gdp figure. Dws cio for apac, sean taylor. Thank you for joining us. And you can get a roundup of the stories you need to know to get your day going in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals and this is also available on mobile in the bloomberg anywhere app. And you can customize your settings so you only get the news on industries and assets you care about. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. A quick check now of the latest business flash headlines. Lululemon jumped after the bell. It posted more brisk sales growth. Comparable sales stretch past estimates to rise 17 in the last quarter. The seventh straight quarter that sales have been above 10 . The company sees profit of up to 4. 70 a share, more than forecast. Shery samsungs folding smartphone finally hits the stores on friday. The galaxy fold will be available in south korea after a long delay caused by defects. It has a price tag of almost 2000 u. S. And was originally due to launch in april. The fold goes on sale in the u. S. On september 27 the for launching in france, germany, the u. K. , and singapore. The worlds top ai startup says it is worth 7. 5 billion but it is in no hurry to go public. They have been hosting roadshows around the world. It includes facial recognition and robot deliveries. Thateo told bloomberg setime is looking at other sectors including memory chips. Shery the lawsuit accuses lyft hiring drivers of not doing enough to protect passengers. The company says it has deactivated eight of the drivers named in the suit and is trying to identify the rest. Also making an emergency bussan in the out which automatically the app which automatically called 911. Paul a muchanticipated resumption of work at the brazilian joint bench may be further held up. It has been closed since a lethal dam collapse and it has failed to win permission to reopen from the local environmental agency. The permit cannot be reissued without approval. Hong kong derivatives traders will be hoping they can get back to work today after the Exchange Operator was forced into its first ever trading world because of technical issues. Afternoon and after hour trades were suspended due to connectivity issues on the derivatives platform. They blame the Software Issue in a trading system. Workers are planning an ipo that is somewhat lesser amount of oneonone it was hoping for. Sources tell us the start of is seeking evaluation of 20 billion to 30 billion, half the amount given by its biggest backer a few weeks ago. Wework has wrapped up massive losses. Investor enthusiasm is cooling. Lets get a quick check now of asian markets. New zealand has been trading for 90 minutes now. Currently higher by more than. 8 after we saw a big risk on rally. A number of good news events in the u. S. During the first trading day. Sydney futures also meyer by also higher by. 1 . Stay with us. This is bloomberg. Shery we are looking solid to the market opens in japan. Nikkei futures pointing higher. Hazlitt spending, year on year, growing 0. 8 in japan. This is in line with estimates for the month of july. Deceleration from the previous month when it grew 2. 7 year on year. Still, growth of 0. 8 . There were a couple of factors at play for these numbers, including poor weather and weaker sentiment. We had seen some surveys of Consumer Sentiment looking pretty weak. Supermarket Department Sales falling more sharply in the month of july. We have seen the japanese yen weakening in the past couple of sessions as we continue to see this risk on mood across the market. In the meantime, Household Spending year on year growing 0. 8 . Labor cash numbers also coming in contracting 0. 3 year on year. Lets get the first word news with jessica summers. Jess. On chinesemmentary state media says trade negotiators must aim to reach the consensus agreed by president xi and trump earlier this year at the g20. They say talks in washington next month must aim to take action to create sound negotiations for negotiate conditions for negotiations. The two teams need to expand common interest. India says landLine Communication has been restored in Jammu And Kashmir after being cut last month and a security crackdown in the disputed region. The suspension almost completely isolated the area and cell phone and Internet Services remain cut off. Local media say there are no longer restrictions on daytime travel but police and Army Checkpoints remain in place. And Hurricane Dorian its strengthening as it moves slowly towards the eastern seaboard of the u. S. The storm is at the gun a category three system. It has sustained winds of 185 the storm is once again at category three. It is moving 10 kilometers an hour is expected to touch the north of before heading northeast new england. Pressure is mounting on the nissan board after the ceo admitted he and other executives and managers have been paid more than they should. Toward members will meet monday to decide what action to take. Reports say the beneficiaries include the senior vp, who is one of the key whistleblowers in the downfall of former chairman carlos ghosn. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am jessica summers. This is bloomberg. Paul thanks. We are half an hour away from the open in tokyo, sydney, and seoul. Lets get over to Sophie Kamaruddin in hong kong for what we should be watching. Sophie in the face of rising bond yields, i am keeping an eye on the companies lining up to tap the bond market. If dollar bond sales for september are set for the best start for the month ever with over 5 billion of bonds priced so far this week with Investment Grade issuers in full position. This after the slowdown we saw anaugust when orders fell to 11 month low. The scene may be set for yield chasers who have been less flush with cash. Just receding a touch from that level. Says do not be surprised to see better rated names treating debt markets like a buffet. Shery a catholic a call on thursday. A wakeup call on thursday. On trading is a twoway street. Kathleen hays has been sifting through the wreckage. It really was a perfect storm. Kathleen it certainly was. John email me. He said it is like everybody was on one end of the boat and they all went to the other end. It started in the morning as bond traders came in and solve the white house, china, talking about getting together at a trade talk table in october. That started this all off. It was around 10 00 eastern when sm Services Index came out after a strong rally. This shows you the imf Services Gauge and what it did. Big move. Lets dont forget, three days ago, the manufacturing gauge after it had not been down there since 2016 at least. Really going to 2015. Diverting messages. This is one of the things that drove the bond market. Take a look at the twoyear note yield. You have an amazing move. Posted the biggest hold a jump in yield in a decade. At one point, it was 14 basis point move higher and then it pulled back to 11 basis points. Move and itquite a has regained some ground. Not all of it. European bond yields were rising. U. K. Bond yields were rising. We have a whole week with a wave of corporate bonds. All of that has been hitting treasuries. As we move onto another chart, it is one to be the 10 year note yield. Another one that is interesting. A biggest one year oneday yields rise in the treasury market. The 10 year yield since january. Quite a move. Nearly nine basis points. It was dramatic, quick, a lot of things making it happen at once. When it has been such a big rally, such a big move in one direction, you have a lot of people who have to cover them in a hurry, and that is what you have got. Going to be sustainable or is everybody going to go from one end of the vote to the other boat to the other . Kathleen u. S. Bonds often selloff. A lot of bonds do, after a natural disaster. Insurers may be selling treasuries to raise cash they will need as they start looking at claims they have got to pay. U. S. And bnp paribas have not forecast yet. One more thing of course, very important. 8 30 eastern, will it be weaker than forecast . Will it be stronger and put more fuel into the selloff . Jay powell speaks after the report comes out. The last fed speaker who can say anything before that meeting on september 18, that will be closely watched. Some people wondering, Bloomberg Economics, in fact, will he signal a 25 basis point cut . Will he inclined towards 50 basis points . That will get things going. A noted Hedge Fund Manager saying he thinks the fed will take the more cautious root. Lets listen. Followt now, you would cutting slowly. In other words, maybe you cut a 25 basis point not a fast as is discounted in the curve. Kathleen our Bloomberg Economics team in the u. S. Is suggesting three rate cut. September, november, december on their radar screen. We will see what jay powell signals. We will see how the bond market reacts. It has been quite a week for bond traders, hasnt it . Certainly has. Kathleen hays, thanks very much for joining us. German chancellor Angela Merkel is packing her bags for her 12 trip to china, flying to beijing with the domestic economy teetering on the brink of recession. Selina wang is watching this. What should we expect from this visit . Chancellor merkel facing a few challenges, isnt she . Kathleen this is her 12 selina this is her 12 visit to china. Setfaces a very difficult of policy objectives. Maintaining a hard line on beijing while pushing for greater, reciprocal market access, and the trade deal between the u. S. And china. Germany has a strong incentive for the two countries to reach a deal since it is very export dependent and there has been weakness in the german economy. Germany is chinas biggest european trading partner by a long shot. 195 billion last year. Germany is one of the few western companies to have a trade surplus with china, with automakers like vw and bmw now more dependent on china sales than those in the u. S. On top of that challenging picture, you have the ongoing hong kong protest. There have been prodemocracy activists in hong kong that urged merkel to intervene and she has taken a very careful approach to this matter, urging beijing to engage in discussions, to follow the rule of law, but she has declined invitations to meet with the protesters. Shery where do bilateral relations stand at the moment . Selina we have seen an increasing view from berlin in viewing china as a competitor. There has been this switch when berlin was very prochina to being one of the leading advocates in the e. U. For taking a harder stance on the country. One of the turning points that has been noted is the 2016 takeover of a german robot maker by chinas midea group. Backlash toong that deal. We have seen germany taking a stronger stance when it comes to pushing back against intellectual property theft and investment. We saw germany block the deal from china wanting to take over a german toolmaker. On the huawei front, we have seen germany take a more nuanced approach instead of all together banning huawei. They are holding them to technical standards. Lastly, i want to point out the belt and Road Initiative which has been challenging relationships. We have seen china flight of individual e. U. Countries to their sign up individual e. U. Countries to their program. It is making it so there is not one unifying voice from the e. U. When it comes to making a harder stance on china. Shery selina wang, thank you so much for the latest on relations. Markets welcomed the resumption of trade talks next month, but it is not clear if the optimism can endure. This is bloomberg. Paul this is daybreak asia. I am paul allen in sydney. Shery i am shery ahn in new york. Lets turn to sophie in hong kong for what to watch in markets. Sophie you are watching for clues to see if this riskon trend may continue. Nikkei futures nudging higher while the yen is trading near a low, set for a third day of weakness, and it is eying a second weekly drop, given the backdrop that we have. Checking in on jgb futures, they closed lower, given we do have focus on what has been going on in the bond space. The boj is to buy debt in the one to 10 zone. Tokyo does see jgbs falling. That is likely to underpin prices today. The 10 year yield could trade between a 25 to 26 basis points. Paul. Paul they ferry much, sophie. Lets get back to the trade war. Talks are set to resume in washington next month. The news lifted markets and Chinese State media says negotiations must be effective. Lets discuss the chances of a breakthrough with Council President greg allen and d. C. Craig allen in d. C. , we have gotetings a lot more tariffs. It is important to head into this october meeting with expectations will managed . Paul, i think you are absolutely right. We have three ways of tariffs going into affect waves of tariffs going into effect. Impetus certainly adds to these negotiations. Lets hope the number 13 is the lucky number at which we will be able to find a little bit of a breakthrough here. But we have seen this movie before. The issue is, is the cycle broken and will we get to a breakthrough either in october or when the two president s meet at aipac on november 16 . Paul china is looking for an effective outcome. What does that outcome look like . What is the best we can hope for here . Craig the chinese have put down a few conditions. They want negotiations to be balanced, they want them to be wtoconsistent, and so, they have put down a couple of conditions. Side issee if the u. S. Able to accommodate that. The u. S. Side has approached this thus far as the aggrieved looking for concessions. Hopefully, there is room for compromise here, but it is not obvious on either side that there is. On the chinese side, stateowned enterprises, subsidies, industrial policies, remain very difficult issues. They areinese side, looking for a little bit of improvement in the trade relations. Is the white house willing to provide that . I do not know the answer to that. Shery we are seeing Chinese Media reporting president xi jinping is telling the communist party to embrace for a longterm to brace for a longterm struggle back window through 2049. How are your members preparing for such as an article . Such a scenario . Craig Different Companies have different approaches. Those with supply chains between the United States and china are hurt most badly. Those who are producing in china, for china, or less effective. Are less affected. Everyone is concerned with the uncertainty. Anyone wishing to make an investment are clearly affected. Many investments, not only American Investments in china or chinese investments in america, but the others have been put off. Third countries, be it the imam it vietnam, malaysia, mexico, they are picking up some of the slack. Uncertaintya lot of and investors are sitting on the sidelines. You cannot move that supply chain, that also means that businesses will have to pay more. The tariffs are still in place. We have heard from President Trump this week, he insists the prices for u. S. Consumers have not gone up despite the trade war. What are your business is telling you about the costs that they havent heard so far . They have incurred so far . Craig the far, it is low. The new tariffs that came into effect on september 1, and the third on september 15, they are all consumer goods. They will be felt at the tilt. Of coarse, these tariffs of course, these tariffs are regressive. Will payome americans more as a percentage of income. The implications of this are just beginning to be felt, but that gives an impetus to the negotiations and will lead us to the end line. Paul you heard any evidence of lifer members getting harder for u. S. Companies that are operating in china . Craig i think it is definitely the case that American Companies who are looking for approvals or licenses are worried that our japanese or european competitors are being serviced much more quickly. Riskadverse chinese bureaucrats are naturally less enthusiastic about approving giving approval for america onen companies. There have been some reports American Companies. There have been some reports of inspections and audits, however, i do not think that is not a systemic level. Thus far, i believe that the Chinese Government has reacted to the United States side with a balance and a carefully calibrated response rather than a nationalistic response. Shery is the weaker chinese yuan helping at all . Craig certainly, the weaker yuan helps chinese exporters an american importers. And it allows those supply chains a little bit more flexibility, but tariffs are going up, so from 25 to 30 and from 10 to 15 , and thus, if anything, that is merely a temporary swave. Longterm answer. As the president had noted, tariffs could go up beyond 30 . Surprised whene the president went from 25 to 30 . There is no natural limit equity percent. They could go up further. If that was the case, there would be an inflationary impact. Go, theer the tariffs higher the inflation impact, and the more inefficiencies within supply chains. Shery thank you very much for your counsel. Greg allen joining us from d. C. If you missed any part of that conversation, tv is your function. You can catch up on past interviews, watch us live, also dive into any of the securities or bloomberg functions we talk about. You can become part of the conversation by sending us instant messages during our shows. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. S is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. A quick check now the latest business flash headlines. Starbucks says it is still opening two new stores every day in china in a bid to stay ahead of growing competition. It posted its fastest Quarterly Sales growth in years. Starbucks says there is no limit to expansion plans on the mainland. A hugeidly, china is platform, and you know, we can build new stores and grow for the rest of my lifetime in china. It is that big of an opportunity. Shery Deutsche Bank is cutting dozens of traders and sales tax in its Global Fixed Income and. It was spared from the first firmsf cuts in the overhaul to months ago. The Bank Targeted traders in highyield, distressed, and debt, and weade are told its closing some underperforming units entirely, such as the credit business and not in america. Tokyo,kets open in sydney, and seoul at the top of the hour. Lets turn to sophie. Sophie we are seeing modest gains potentially across stocks in tokyo, sydney, and seoul. The nikkei 225 closed near a high. We will be keeping and i think on gold stocks. They see 1400 being a floor for bully and prices. They pushed after forecast for gold prices through 2022. Were keeping i think on reaction to the latest an eye on reaction to the latest data. Bonds very much and focus given the amount we saw in treasuries we saw in the rout treasuries overnight. The aussie 10 year yield back we saw after the wrap in august. It looks like bon jovi in focus and the bulls maybe bonds will be in focus. Shery lets get you another check of the asian markets because we continue to see this riskon rally as we had wall street surge to a fiveweek high. At the moment, gaining. 9 , while sydney futures are higher as well. 4 . Remember, after the asx 200 gained in the last session. We also had the aussie and kiwi dollars rallying on those u. S. China trade talks resumption that we are expecting in october. Australia, for example, posted a pretty solid trade surplus last night. That the rise in exports we saw. Nikkei futures up. 7 . We have the japanese falling for a third consecutive session against the u. S. Dollar. Risk on mood again, that is the theme for the markets today. Cost be futures are higher kospi futures are higher. The korean won gaining for a session session. Session. We will see how it trades at the top of the hour, paul. Paul lets check in on how commodities are performing as well. The oil price we will look at currencies first. The aussie dollar all right. Fine, we will do commodities then. Crude is sideways recently. Gold we saw decline to present in the 2 as well wake of the good News Headlines coming out of the u. S. In the past 24 hours, particularly the news on trade. Silver has been one of the Unsung Heroes from the last week. Given up a lot of those gains in the past 24 hours as well, now off about. 3 . We have the aussie dollar trading at back above . 58 u. S. We have the dollar showing a bit more strength against the japanese yen as well. We have the won, 1200 to the dollar. Plenty more to come on the next hour of daybreak asia. The andbank of America Harris giving us his take on the mounting uncertainty. This is bloomberg. Morning. Markets paul asian are about to open. To day break asia. Paul our top stories this friday. Are under way for trade talks to assume. The Chinese State media says negotiations must effective. Starbucks opens new stores in china and sees the mainland at its greatest market. Hear from c. E. O. Kevin johnson. Get straight to market action. With sophie and see if this risk on rally continues. Yeah, thats the case. We have the nikkei 225 extending a onemonth high. On this one the yuan is on the back foot. Set for a second weekly drop. Withng to stay range bound super long demand keeping prices sustained. Lets take a look at whats in korea with kospi gaining ground. The yuan is continuing to advance setting for the best since june of this year. Ere keeping an eye on gold mineners sydney. Gaining. 1 of 1 . Trading, lars just just hanging on to its three day 68 u. S. Cents. Kiwi also gaining ground this morning. In on how bonds are faring. Yields aussies 10year above 1 . Asiamorning, early, in the session, u. S. 10year yields just Holding Steady so far, gold extending its drop, marginally, after gold rices fell nearly 3 on thursday. Paul . Paul all right. Hanks very much for that, sophie. Et your personal alerts on the bloomberg terminal. Buying for 2 billion. Confirms a report that we couple of weeks ago that haven rout was looking. Buying import ecommerce kaola from netease for 2 billion. News nowck in on first with jessica. Thanks, paul. Holding al reserve is back global growth. Rise accounts for the ecline in global dbp responsibility 8 of 1 . It adds that had trade tensions and june ted in may the fed would have expected the drag on growth to have eased. Outgoing ecb president mario is meeting growing opposition to plan to revive kiwi and support the eurozone economy. He bank of france is skeptical about the need for new bond purchases, adding to criticism german, lan from austrian and dutch policymakers. Next thursday with draghi facing a voice of the ating q1 without support of europes leading economies. Embattled Boris Johnson says he doesnt went a snap election but its the only way out of the quagmire. He faced the cameras with his policy in at that timers and his brother resigning from parliament in protest at his plans. Rebel conservative mps joined opposition parties to block the a new threemonth delay in the process is now expected. I hate i dont want i want an i dont election at all. I dont want an election at all but frankly i cant see any way. The only way to get this thing one to get this thing moving, is to make that decision. And Hurricane Dorian is it moves slowly towards the eastern seaboard of the u. S. Once again a category three system. T has sustained winds of 185 Kilometers Per Hour and a storm surge of about two meters. Ts moving at about 10 Kilometers Per Hour and its expected to touch the coast of orth carolina in the coming hours before heading northeast towards new england. 24 hours a day on air and at tictoc on twitter 2,700 by more than ournalists, analysts in more than 120 countries. Im jessica and this is bloomberg. Thanks very much, jessica. Paul asian markets follow the u. S. Lead with bond yields rising as stocks well. Us from arfield joins sydney. Recession. Like a sit rational . Its perhaps more rational rally that got a little overexuberant for bonds. E had the sort of broad and deep rally in global debt that was last seen in the middle of Global Financial crisis, and while there is plenty of concern trade warsthe global are doing to the economy, no one quite 2008, an economic temperature. Were were set up that vulnerable. The market, perhaps somewhat quite ingly, got exuberant at the idea that the trade talks that were scheduled now going to were be in october but at least they were going to happen there. A shift inmething of general in the tone, you know, there hasnt been much hostile from trump or from the other direction. He easing of the hong kong tensions has also helped. There seems to be some capacity scenariothe worst case of a hard brexit so all of that back drop that has left bonds vulnerable. We also had a couple of other things. Huge issuance of u. S. Corporate investmentgrade debt. Up andnds to push yields thats been Different Companies going, wow, the yield is so great, we want to sell. And then for technical reasons the fed was supposed to buy maintain its balance sheet, and it called that off. Bit of was a little demand out of the market as well. Basically, a perfect storm. All of these n positive developments when it comes to asian equities. We continue to see the rally, that first started here in the if the what happens risk on rally continues . What kind of road to recovery do these asian stock markets face . Well, i mean, its still a also rough road and arguably a narrow one. It would be quite easy to fall off of it. Obvious risk is, whatever happens overnight with jay powell appearing in zurich and there, about matters about the economy and so on, i markets need to see another fed cut this month, if nly because the rates pricing has been so certain, that its coming, and then even if the fed try and avoid further cuts, it needs to be ery nuanced and subtle if its going to avoid spooking bonds bonds ly and through stocks. The same thing goes for, in the sheri, into the program, here was a talk about what are they going to do with qe and rate cuts. They are pushing back on the just because they have moved towards easing, or they ave moved to ease, that means they will go full board easing as has been priced in by a lot markets including rates and equities. So if they are going to hold they need to hold it very gently to avoid spooking still have a lot of, you know, mental scars from gone on over the past year or so. Much. Ank you so our asia reporter joining us from sydney. On e talks look to be back track. The two sides must meet the broad agreement reached by xi and trump at the g20 earlier this year. Talks will resume in washington month after next weeks of uncertainty and escalation. Lets go to singapore. The trade talks will resume early next month, with the that it was only nnounced by china, the u. S. Really not performing the exact time, just saying in the coming weeks. Certainty do we have going to happen here . Im glad you picked up on that. Ing. Was interesting read whig a re sort of taking it as broad agreement. But there should be some reparatory talks that should happen this month. Four more talks would happen in in washington. Getting back on this footing of having talks in the first place, seen as a very positive Market Development for trade. Certainly a step forward. The problem, though. The problem is the same underlying issues between the now are thena right same ones they were in about like april and may. Really been a t lot done since then, so there is amount of pressure for both sides, really, since weve kind of been in a holding for several months to actually show that there is some progress being made on any these key points, that could be intellectual property. Pharmaceuticals, which the u. S. Is annoyed about importation. It could be all sorts of various things there. As to be some sign of actual, tangible progress ahead of ctober 1 and what is another threatened tariff escalation on moment. Rd at that paul so derek, while the be as ina talks seem to intractable as ever, there seems o be at least a little more fruitful progress when it comes to japan, right . Yes. Urprisingly, there was an announcement, you may remember, sometime back, by said that rump that the u. S. And japan had agreed to would be a of what trade deal. The funny thing about that was people t kind of caught by surprise in japan, and there reaction, ill paraphrase it to say sort of like, really . E did, fantastic, thats awesome. Lets move forward. And so there is a big rush by the japanese and u. S. To try and actually put pen to paper on this. To sign trump wants this at the u. N. Later this month. Actually a bit of pressure to get something done here. One. Hings to flag on this youre looking at japan needing the u. S. To get rid of a threat put tariffs on imported automobiles. Thats obviously huge for a lot of reasons. Playing up the idea that a lot of these cars manufactured in the United States, that President Trump won in the last election. Way, ther thing, the other is japan anuary oing to open up certain sectors, im thinking about agriculture. Once again, agriculture for the u. S. , you hear this come up a talks, agriculture in states primarily that 2016. Dent trump won in you will hear me say that a lot. Thats a theme, there is a for that theme. President trump very, very very about his farmer base the 2020 election. Paul all right. Contextor giving us the on those trade talks. Of l to come, threat recorrection. Banc of americas ethan harris talks about what turns recession resting into recession reality. Yields may be bouncing back dig nvestors still need to returns. Ood finding yield in asia next. This is bloomberg. Next. This is bloomberg. Asia. His is day break our next guest says asian credits are attractive. Union investment cio henry chan. Henry, great to have you with us. We continue to see this risk on across markets and now spreading into asia as well. Were continuing to see this in around the world, whether its or slowing Global Economy which doesnt bode well for merging markets. It for lenging is investors in the region . Obviously, its very. Ard to say that. Usly, we all know at least that we have the global to the banks coming rescue now. Immediate policy response thats been helping the markets. Are looking at how things are filtered through to economy going into next year. Safe to say, its not everywhere. As were navigating the markets to be more selective whether were looking at credit r whether were looking at equities. I would say that the stocks and bonds are probably more the markets. Han in your notes you say that and the 5g component. Tell us those sectors that you like at the moment. Yes, if you look at the whole 5g n, you have the infrastructure. Related areas. Whole chain thats building into the 5g infrastructure, so if you look a lot of the Companies Listed and, to some xtent, a lot of the electric companies in taiwan, you have Different Companies playing in ifferent parts of the food chain. We believe in this buildout, create a lot of the new winners new opportunities for investors. If you go deep into looking at companies that have a ompetitive advantage and can actually benefit from this buildout, we have been quite looking atn terms of these names i would have to say, a trend that will benefit. Infrastructural, and were looking at the operators, that will go more into the next stage. Paul you described this as a pick, but do you need to find the right entry points but now are close s or near all time highs. To find ind of hard those entry points . Yes. This is an environment that i cheap. Say nothing is you have average liquidity, that cushion asset prices in general. A big believer in cycles. Companies, best companies, will go into a sort earnings soft patch so the way we look at it, e try to get ourselves ready looking at companies with good growth, with good long term competitive advantage. We just want to be patient and wait for the entry prices. I mean, you look at the in markets over the months, there has been plenty of opportunities for sort of pull o back, and we get ready to pick them up. You just t like what mentioned. Some of the 5g related play. Pick up quite a few of over the there is a few months. You mentioned some 5g related names. Other particular stocks or sectors that youve looking at closely . Well, we look at the broadest space in general. E dont, a lot of these specific names are in taiwan, nd we dont actually particularly name them, but that we feel names hat they are more in the component chain, that were placing more focus on. Tell us, what do you like in asian credit at the moment and what sort of sectors in asian do you like as well . Asian credits, high yield and investmentgrade. We think at the moment its space n investmentgrade but the high use space we like get a very good carry. The lso, if you look at companies involved, they are or the ected by, exposure, the more domestic sectors, they are in the financials, real estate, or some in southeast asia, they immune from a re lot of the trade related areas. So domestic growth is where we on, and the good thing is the Balance Sheets, in back more i go years, after all of these turmoil or the Asian Financial mean, Balance Sheets companies are an quite strong. So were focusing very much in a on a risk that there is more exposure to demand. C i think more importantly, the we feel sset class, quite comfortable, but just like always areas, youll have some bad apples. A situation, we feel being selective, having the nvestment discipline, is something that we try to be more to be more try mindful. Henry chen, thanks very much for joining us. Of stories a roundup that you need to know to get your day going. Bloomberg subscribers go to customize your settings so youre only getting news on the industries and assets that you care about. This is bloomberg. Ou care about. This is bloomberg. Paul this is day break asia. Im paul allen in sydney. Pressure is mounting on the after c. E. O. Board after the c. E. O. Dmitted that he and other executives and managers have should. D more than they Board Members are being informed what inquiry and on action should be taken. Dave, so what sort of impact on the broader case . S goen well, you get to consider this definitely undermines the nissan executives who have provided evidence in they themselves have received overcompensation that suggests that there could some motive on their part to shift the burden lsewhere, and to identify carlos goen as the one receiving compensation. Also opens the door to further investigations and them,er probes distracting and undermining their overall credibility but keep in mind, been ase has always progressing along two tracks. One is the court of public in that court, goen as argued and his lawyers have argued that there was an attempt to frame him, to basically set im up and this certainly plays into that. But there is another track, which has been based on the and based on the evidence that has been dug up specific transactions that carlos goen has been involved in. Dont think that this will necessarily impact that second up being more end important to the case itself. At the end of the day the court have to prove with documents that transactions that goen undertook were illegal, and other illegal transactions or overcompensation, its not clear whether these were regulatory actually crimes, would have an impact on that. Not clear at all yet. Paul dave, im just wondering this deliversblow to automakers prospects for recovery . Already, this has caused a delay in pricing of a bond issuance. Thats very important. This is a company thats losses, and the industry itself is not in a good place. This comes as a terrible time. It will be significant. The board is now having to focus n this amid this other scandal so they basically got several wheels spinning at the same time necessarily in a good direction. We still dont see a plan for itselfpany to revitalize and to get back on track. This is yet another thing lowing them down, so i think this will be significant, and ill broaden the depth of their problems. All right. David combs. Ditor hanks for updating us on that story. Next labor e, the market data, stoked recession fears. More in a moment. This is bloomberg. In a moment. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. This is day break asia. Summers. Ca outgoing president mario drag meeting growing opposition to revise kiwi and support the eurozone economy. About the keptical need for new bond purchases dding to criticism of the plan from german, us a triian and dutch policymakers. With eet next thursday draghi facing a choice of adding it without the support of leading economies. Embattled Prime Minister boris says he doesnt want a snap election but its the only quagmire. The brexit he faced the cameras with his policy in at that timers and his resigning from parliament in protest. Ebel conservative mps joined opposition parties to block dealons drive toward a no new threemonth delay in the process is now expected. India says land Line Communication has been restored after being caught last month in a security crackdown the dispute region. The suspension almost completely isolated the area and cell phone Internet Services remain cut off. Local media say there are no longer restrictions on daytime an army t police remain in place. Hedgefund veteran, hes a 25 he says there is a percent chance of recession this year and next. He also says jay powell should cut rates slowly. S. Companies are blaming the trade war for more than 10,000 job losses last month. Staffing firm challenger says its the first time the trade war has a reason for layoffs. Dorian is strengthening as it moves slowly towards the eastern seaboard of the u. S. Again a is once category three system. It has sustained winds of 185 per hour and a storm surge of about two meters. Ts moving at about 10 Kilometers Per Hour and its expected to touch the coast of orth carolina in the coming hours before heading northeast towards new england. 24 hours a day, onair and at tictoc on twitter more than 2,700 journalists and analysts in more 120 countries. Im jessica summers, this is bloomberg poochlt pooh thanks very much, jessica. Get a check on the markets with sophie in hong kong. Paul, heres the way of the land. Asian stocks are gaining ground. Having their best week since june. Nikkei 225, uphe. 8 of 1 while autos and hesing the rise in tokyo. Financials are among the best performers. At whats going on, about. 4 of 1 as were seeing like bhp, the biggest boost in sydney. Trading around a twoweek low. Check out whats going on with bonds. The aussie 10year yield rising as much as 10 basis points above 1 . Lets check in across the region. Tokyo, o highlight falling on a nikkei report that it will delay the full start of until the Service Spring due to slow progress bay station and network infrastructure. Entering riding after a capital and Business Alliance and a Security Firm mitsubishi gaining ground as its entered a path to negotiate deal for 100 space jets for mesa air group. Also want to highlight soft bank group shares under pressure as doubts are cast over ipo. Set to price is its biggest every yen bond offering as the hunt for yield continues. Soft bank could boost the size about sevenyear issue to 1 billion yen. Investors may overlook concerns quality. Dit thank you. Hedgefund veteran ray spoke exclusively to bloomberg about chances of recession in the u. S. Take a listen. Do you see a chance of any recession in 2019 or 2020 . I think its probably a 25 each of those years probably. Of the recession. Says a ext guest recession is some way off. William harris is head of global at the banc arch, of america and merrill lynch. Give us your reason for why you recession is still a way off . I think its because of the way trump and the fed are behaving. If you watch the trade war develop, when things get good, tends to escalate. The Trump Administration becomes bottled, to accelerate the trade war but when things weaken they tend to back off. That as we go into year end and into an election year, will slow istration down the trade war, so the trade war acts as a ceiling on growth in some ways. Ts certainly not what trump wants but thats what hes doing. When things get bad he backs off. Think the fed side, i its important to recognize that the fed easing, in july, was the preemptive ive easing ever by the fed. The fed has never cut interest kind of labor market and economy we had this summer, and they are likely to again in september. And so they will have done 50 cuts before of rate they would have done any in the past. The fed really wants to make dont have a recession. That there cant be an ax along the way and certainly ongoing war is an source of problems for the Global Economy but i dont think we should be talking about recession right now. Point on the labor market, of course, we have the jobs report coming out on friday u. S. In the the chart on the bloomberg showing how the unemployment low is now near a 50year 3. 7 , of course, were now seeing even more fed official otherg that weaknesses in sectors, in manufacturing and so orth, could start filtering in to the consumption side of things. Happen andis this to for how long can consumers the economy . Upport i think fed officials are right. Process of the broadening of the slowdown. Headed by Michelle Myers has growth dropping to Fourth Quarter and First Quarter of next year including a slowdown in the consumer. Cutting d were not aggressively, the weakness would obviously, if nd the trade war were to escalate dramatically further from where are, that would also cut growth further so the consumecer the support for but, you know, even with question that no there is, that there is an eating away at growth. Ive been calling it the kind of eating away at fundamental strength of the economy. How close are you going to be watching the u. S. Jobs report today . Later on friday, a critical read. One survey saying more than 14,000 jobs were lost but result of the trade war it will be curious because if the fed is too good will back off. Yeah, i think at this stage is kind of a cut done deal. Going forward from there i think t becomes much more important whether the data support further rate cuts. You know, i think the job market its lagging the rest of the economy. One of the things that happened when we had the big fiscal stimulus last year, companies couldnt keep up with demand. This is a big increase in job openings. Whats going on right now is the reason jobs keep growing because hey are filling those job openings. Over time as the trade war kind f starts to dominate things, and those jobs are filled, were eading toward weaker job growth, probably down to about a hundred thousand by years en. Its not the end of the world its definitely another sign could have ow, what been a much better economy is being hurt by the trade war. You m just wondering what made of some of the moves that we saw in the bond markets today. Big move in the twoyear. Bloomberg news reporting, it was eally acting as if a recession just ended. Do you see thats rational and the there be a snap back other way . I think bon markets got increasingly volatile around expectations around the trade and expectations around the fed. The bond market got way ahead of itself, in predicting 50 basis points cut from the fed. Never on the table. I think that was a communication error by the fed. So markets taking out those extraordinary moves. Already extraordinary. And the bond markets also, this true for stocks as well, is kind of flipflopping on some pretty small news on the trade war. The reality is, a deal between and china probably wont happen in the foreseeable future, even with the ups and negotiations. The best we can hope for on the wars probably is ceasefire. He markets have gotten very sensitive to kind of more noise than news. Are you watching china and what can we expect on wevest rate cuts because already seen the them hitting at cuts . Riple we think at some point the cuts come. A lot of sense. O me, its a its a little puzzling why thats been delayed so long. Ut yeah, no question, as were seeing with the u. S. And global growth, china is not going to be immune. Of are right in the middle this thing, and so growth will ontinue to weaken into the Fourth Quarter and probably into the beginning of next year. So there has to be more policy we thinkt of china and rate cuts are coming. All right. Ethan harris, banc of America Merrill lynch, thank you for joining us. Watch the me, asking for what . Next. This is bloomberg. Next. This is bloomberg. Well start with an alert on the bloomberg reannouncing the has cut the 20192020 gdp for the for hong kong fourth time. For the 2019 growth forecast, it. 6 , while 2020 to 1. 4 . To was according to city reflect damage to retail and the ourism sectors and its now saying that hong kong needs more Decisive Action to address the problem. The economy know contracted already,. 4 in the Second Quarter and its now on a technical to recession for the First Time Since the financial crisis. City cutting hong kongs growth forecast. Paul . All right. Meanwhile, hong kong leader carey lamb says her decision to her controversial extra big bill is only the first step unrest in the city. Shes resisting calls to other from protestors. Joining us is the vice chairman of the Democratic Alliance for of progress of hong kong. Thanks very much for joining us. About carey lamb talks additional steps, are you able or understandlain those are . The chief executive with n announcement that different actions taken together, shes willing to start sort of tablish some dialogue with people in hong kong. One of the things she talks to withdraw the extradition bill. The past few r months, shes already declared the bill is dead. Particular a difference at all, but the word she used this time, withdrawal, think, is more kind of a an Olive Branch People who rout against her. A dialogue art off ith the people in hong kong, and also, appoint two more to the board,ers, hich is the one, the platform, existing platform probe into the two persons, reputable persons in hong kong, former chairman. Former one is a investment of hong kong. Steps are these taken by her with a sincerity to stablish a dialogue with the people because, in order to solve the problem here, in hong ong, and get out of the is oil, i think dialogue very important. The withdrawal of that bill, one of the key demands of protestors, they say its too little too late. One can only wonder what the situation would look like now if ago. D been done 12 weeks now instead we have four more additional demands but there any t seem to be willingness from the chief executive to meet those demands. Way forward look like . Pointed out earlier, its not easy to pacify everyone hong kong. Ven if you meet some of the demands from the protestors, be enough to pacify the crowd, the protests would stop. That remains to be seen. Have doubt on that because, opposition om the members, these two days, they all the demands, ive demands must be satisfied, and there is no sign of them. Ssion from even if the chief executive make the announcement yesterday, of said, its ae, as i gesture, because its not only y using the phrase exactly proposed by the people who but at the nst her some action th seen a ut i think weve lot of sort of huge dispute is finally orld solved by dialogue, so i think, by l, chief executive, taking one step forward think its still uild the dialogue. Is held so you can meet somewhere in the middle. If these protestors have five ifferent demands and one of them has been to withdraw the extradition bill, universal difficult. Ooks pretty are there any other demands that easier to meet . I think when people talk about, say, establishing inquiry into the police wrongdoings, but right we have the existing platform which is called the they have already begun their work on probing into past two duct in the months. , the ief executive obviously, when they finished their report, there of d also be some kind minority report, which is view. Ting some other reflecting some other view. O make sure that the investigation is complete, and make sure ent, and that people have confidence on the investigation. Thing, we k one more urge the government to do, because even they have already on the eir work investigation, because people are still waiting for some sort of progress. Would urge the government, they should bcc, expedite the entire progress, so know whats been happening, and if the investigation or some sort of nterim report is released, at least that would address some peoples concern. Is carey lamb the right to take hong kong through this process . Think its not the time to blame the chief being ve for the time the se, you know, she has power to deal with everything. Or deal with it right now the and shes in a position to do that. Of course, of course, restoring and tability of the city law and order is the first thing city. D in a trust her to we deal with the entire problem. Of course, if we, say, for example, we ask or even if we who would replace her . So during this exceptional period of time, i think we on how to deal with the entire turmoil, and, at least, i think yesterday, she take one step forward, and well goes. W it but of course, i have to point out, i have to point out right now, the turmoil has already tremendous damage to the city, including economic consequences, because the retail medium a lot of small, size business, they fear whether survive this societal unrest. Everyone hopes to bring to an the he social unrest and government should take the necessary measures to offer help o those small and medium size enterprises. For example, to facilitate, to loan from the banks. Weve been talking to some of he major banks in hong kong, the representative, to facilitate these small and edium size enterprise to make sure they can survive, and if they have the cash flow problem, secure a loan. N this is going to be very important because, this is life hong ath situation for kong. Your nk you so much for insights. Hong kong. Plenty more to come on day break asia. This is bloomberg. This is bloomberg. Paul this is day break asia. Netease, theirng kaola. Erce platform its investing 700 million in music. Kaola will continue to operate independently under its current netease will remaining its ontrol shareholder of music division. Having boosted its full year and posted more brisk sales growth. Comparable sales past estimates, rising 17 in the last quarter. Its the seventh straight lululemon sales have been above 10 and the 4. 70 y sees profit up to per share. 12 cents more than previously forecast. Lyft is being sued by 14 sexual assault. Accused of hiring drivers without adequate background checks and arent doing enough protect passengers. The company says it has deactivated eight of the drivers is trying e suit and to identify the rest. Its also making an emergency to on in the app available all customers which automatically calls 911. A preview of what to match in the markets later this hong kong. We want to focus on taiex at in more than ael month. T will likely keep piling in with one of asias three best listed there. Along with fellow apple more than its up 115 yeartodate but whoever of the action will have to buy valuations about twice as pricey as apple. Be in Hong Kong Well watching for the restart of Derivatives Trading after glitch. s it expects a fouryear net loss sentimentker consumer and a Business Environment due city. Otests here in the mtr strongly condemns attacks on subway station. Thank you so much for that. We have a big guest coming up bloomberg television. U. S. National economic counsel kudlow. Larry thats it for day break. To the start of trade in hong kong. Markets. For bloomberg the china open, thats up next. In the bloomberg. In the bloombe. It is 9 00 a. M. Welcome to Bloomberg Markets china open. Yvonne we are counting down to the open of trade in hong kong and mainland markets. David the entire gang is back and here are your top stories. Optimistic data from the u. S. The impact it will have on the policy narrative. Yvonne reservations underway for resumptions of trade talks. This time the negotiations must be effective. Tom it is not clear how much progress has been made but a hedge fund veter s