of it. shanghai comp, for tens of 1% lower. a relatively good week for the asx. other asset classes making themselves felt. taking a look at what is going on with that. the 10 year japanese yield continues to trade below the zero level, which is the preferred boj level. we have a bond program announced att 5:00 p.m. -- announced 5:00 p.m. tokyo time. reflective of it being near six month lows. gold is pretty much stable. nymex crude oil is up again. bute down in the session, over the last 24 hours, moving to the upside. back and looking at what is going on with regards to the opec plus meeting, another deeper cut in oil production. we have breaking data. decision for sri lanka. they kept the standing lending rate at 8%. the deposit rate at 7%. that is pretty much unchanged. what is going on with some of the first word news. we have a man who has been relatively quiet. kim jong-un making himself heard today. president trump is facing a new challenge when it comes to north korea after the launch of what is reported to be a super large missile. the north has tested a multiple rocket launcher. having earlier found -- fired two short-range range weapons. it comes as pyongyang threatens to abandon stowing nuclear talks unless the u.s. offers concessions through the end of the year. orest johnson says he will walk away from a trade deal with the united states. president trump insists the health service is part of negotiation. johnson also refused to attend a tv debate with party leaders including jeremy corbyn. the host of channel for turned away michael gove who had been sent by johnston as a substitute. a huge sigh of social media relief as the number of people desperate to upload photos. prevented problem users globally from using the apps. protestersusands of gathered in central hong kong thursday night for a thanksgiving rally to celebrate u.s. legislation that requires annual reviews of the city autonomy. -- the city's autonomy. the foreign ministry said no one should underestimate china's resolve to safeguard sovereignty. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm yvonne man. this is bloomberg. rishaad: let's get more on china's retaliation threat. the key question is how beijing might hit back. joining us is the bloomberg opinion editor. everything seemed to be on track for the phase one deal. it is kind of like what we had in may. what is happening? what do we know? >> everything was on track. trump said we were in the throes of an agreement. equities were rallying. the s&p hit another record high. and then, trump signed the hong kong bill. the hong kong bill could put some of that into jeopardy because china does not like a lot of foreign government's meddling in their affairs. things could slow down. rishaad: that is the danger. david: i just want to pick up there. it is hard to imagine donald trump just signed the bill -- i would like to think he in some way communicated to beijing that he had no choice. affect the trade progress between the two countries? >> i think it could. things have slowed down. is, what doeson success even mean? the phase one deal was rather neutered as it was. a lot of investors were expecting some sort of progress. what is project -- what does progress mean? you have some of the biggest factors going into this deal, andh were ip protections agricultural purchases and the rollback of tariffs. the rollback of tariffs and agricultural purchases are big run numbers. -- are big round numbers. when you look at the ip protections, those -- we were not able to now those down. -- to nail those down. some of the biggest grapes were about subsidies. what is the phase one deal really mean -- what does the phase one deal really mean? it could mark some progress, but there is a lot left on the table. rishaad: what are some factors that are likely to draw both back to the table? one, trump has to get to the table because he needs a win. he has the election hanging over him. he also has the impeachment hanging over him. it is important to remember what the climate of the united states is. out of the white house in 2020, you have a democratic field that is very oppositional to any sort of progress with china. more hours of democratic debate than i care to admit. china comes up very infrequently. trade comes up very infrequently. right now, americans care about taxes, immigration, gun control. the trade war is not hitting americans in their pockets just yet. indications of consumer confidence are still relatively high. some measures have started to come off. americans are not feeling this yet. if there is a democrat in the white house, the contours of the debate could change. the trade war is dolonc. -- is still on. david: would it be possible to target those two things together? with the absence of a trade war be a high enough probability risk to the actual u.s. economy? the trade war of -- i think the question really -- can the u.s. manage swallow a trade war continuing? i think it could. the major pillars of the u.s. economy are still doing strong. it consumer -- it muggle -- boggles the imagination how they are spending all this money. they are holding up. housing is holding up. earnings have been fair. can the u.s. withstand a trade war? sure. the bigger question is, can china withstand a trade war? even if you rollback to 2016 before trump ascended the escalator, we were still in a place when china was slowing down. they thing about having to add stimulus, but they are nervous about leverage. they are easing somewhat, but they are not in a position where the economy is looking really strong. would things be better? yeah, but i do not think we are going to wake up in january 2021 and be back where we were. rishaad: let's get over to sydney. think is going on out there right now? we have the s&p hitting record highs. . we have a rally in place. the news behind it does not seem to be reflected in these moves. are we in a state of pollyanna? are we being complacent? >> it is strange. of bad news, yet, the markets keep hitting record highs. sentiment, at the the rally does not have much enthusiasm. the news is bad. under the surface, a lot of bad news is priced in. you look at relative performance of cyclicals. they are trading at 2008 lows. there is a lot of bad news priced into the market. when you look at the headline index, you have all the trade war risk. yet, we see markets pushing up higher. maybe climbing more worry. rishaad: is there still the divorce between what bond investors are looking at and what equity ones are? a periodow, there was when monetary policy was good. it was good for bonds and equities. if bond yields fell anymore from the recent lows, you would have a risk of deflation. that would have been bad for equities and earnings. there is a point that falling bond yields does not help. since then, bond yields have stabilized. bond yields hitting -- despite the recent drop in yields, bond yields are hitting higher. it seems that equity markets are hitting higher as well. markets are moving the focus from recession and deflation into potential reflation and recovery. on that point, is there a n event on the near-term agenda that realistically might see the u.s. 10 year yield break two and a half percent? is quite possible because when you look at it from an economic point of view, you look at the global manufacturing cycle. it has been in a downtrend since 2018. we have pretty much had a two-year slowdown. the u.s. does not feel that initially because they had the tax cuts. 2018, things fell apart in the u.s. as well. we have been in this downturn for quite a while. if you look at inventories globally, they were very low levels. if you look at germany, inventories for the highest on record. sector has been depressed. if you get stability and the trade war does not flareup again, there is a lot of room for things to get less bed and pushed bond yields -- get less push bond yields higher. david: i want to show our viewers one of the things you pointed out in some of your research. you are pointing to the credit impulse in china. to 2009 when back china said, global recession? hold my beer, gents. should i be excited they can reflate the economy again? >> it is off. on that chart, you can see the third wave. the first one was 2011. , 2016. on top of that, you have ongoing fiscal spending. i do not to expect the credit reflation to be as strong as what we saw in 2016 to put a fire up the chinese equities and commodities. that is a great stabilization. that would help the chinese economy stabilize. also, if the trade war settled down and the global manufacturing cycle starts to turn up, together with easing policy, that would be enough to push the risk from recession to midcycle slowdown. scenario, or 1998 what we had in 2007, judging by that and by the global manufacturing cycle taking backup, i think that credit impulse is an encouraging story. and we are sure on the u.s. dollar, which we will talk about. later naomi from amp capital investment. we are talking china. some of the indicators as well. balancing financial stress within the market. can the nation's policymakers handle the current test? we ask why india is bracing for a gdp show. coming up, what the prime minister is trying to do about it. this is bloomberg. ♪ david: a comeback to the program. let's get you a check of your major currency markets. here's everything from sterling to the aussie dollar. gains today would take you to the longest daily winning streak , all the way to early 2016. here is the other issue in your currency markets. nothing is happening. global volatility is at the second lowest on record. why? nature naive me is with us. he is with us out of sydney. why have things been so quiet? is it time for me to bit this -- market, yourrency should look across the board. the u.s. dollar has been steady. that is after a big down move in several currencies. the aussie dollar. two recently for the past or three weeks or so, we have had some anxiety over trade. markets are not ready to pick a direction. it is one of those things. volatility can break up. it does not have to be currencies. the u.s. dollar breaking down. the market is in suspend. the trigger point would be the trade being signed. that will give some direction to the market. rishaad: i want to move to equities. tell me about the possibility of there being a santa claus rarely. 10 --was saying december saying december could be a good month. could we see the reverse of it, a santa claus downturn like we had in december of last year? >> exactly right. it was not so much of a santa rarely. it was disappointing. if you look at history, the possibility of two negative decembers in a row is low. if santa is not friendly one year, he tends to be friendly the following year. this december is likely to be better than last year. you will see a take up -- a tick up in economic data. we had trade tensions heating up more. we have the rivers. the fed -- we have the reverse. global economic data has fallen quite a bit. offe tensions are coming the boil despite recent angst around hong kong. i think december is likely to be a continuation of what we have seen. the markets will push higher. rishaad: quickly, encapsulate 2020 for us and what you like and what you think is going to be the -- what you think the asset classes should be in. >> 2020 -- my view it is going to be close to what we saw in 2017. a synchronized upturn should inventories are low. -- a synchronized upturn. inventories are low. at the expense of the u.s. and the u.s. dollar. it will be a year of reflection in my view. rishaad: thank you. at head of dynamic markets asp capital investors. you can catch up with all of our interviews by using our interactive function. you can delve into any securities we mentioned. you can also send since the messages during our programming. this is for bloomberg to subscribers only. this is bloomberg. ♪ david: let's get to your latest business flash headlines. huawei is said to be in talks with tap banks for a loan. the smartphone maker is in negotiations with domestic and foreign companies. sources tell us the proceeds will be used for general corporate purposes and working capital. pressuremains under from the ban on buying u.s. technology. morgan stanley has fired or placed on leave at least four traders who concealed losses of as much as $140 million. we are told the bank has opened an investigation into the issue. means the value placed on securities does not reflect the actual current worth. this spat between japan and korea, the latest in the firing line have fallen flat. this dispute over historical tensions that have severely soured relations. zero.s fell tenderly -- exports fell to nearly zero. last year, south korea was the biggest export nation. the nfcilet's look at index. the market is down at the moment. off by .75 to 164. this is what the movers are looking like. the biggest gainer, the chinese pharma company. up 10%. normallyre eight times what they normally would be. we also have pharmaceuticals in the last column. further signs that there are price cuts for drugs in the pipeline. that is affecting those. as a result, they are being sold off. a look at the electric industries. a new form of coaching. coating.f we have more news from the bank of korea. david: they are outlining in this life press re-think, their forecast for next year. they rose 2%. the. -- the previous forecast was 2.2%. long story short, they are cutting their growth forecasts for the economy, which i should emphasize, are still a little bit above where market consensus is. -- keepingand why things at a record low of one at a quarter of 1%. we will get you updates out of the bank of korea. live pictures out of seoul. you can check life go to follow that -- check live go to follow that story. you are watching bloomberg. ♪ everyone uses their phone differently. that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year. and now get $250 off google pixel 4 during xfinity mobile beyond black friday. that's simple. easy. awesome. click, call or visit a store today. sydney. 1:29 p.m. in i am yvonne man with the first word headlines. no surprises in sri lanka where the central bank -- policymakers are trying to balance a slowing economy with rising inflation. sinceeting was the first the new president one the platform. meetinge final policy for the departing governor. the bank of korea left it rate unchanged amid an economy increasingly undermined by weak global demand. mentioned them cutting the growth forecast for 2019 and 2020. we also learned that meeting was not unanimous when it came to the policy decision. one member did vote for a rate cut. industrial production slumped in october, slowing much faster that economist were expecting. factory output was down to and a half percent last year. ofan may reimburse the power public spending. it was one of the biggest stimulus packages of the era. a string of natural disasters have given the government to shift towards a mix of fiscal measures and ultra lose monetary policy. that would be bochum news for the bank of japan that has appeared reluctant to ramp up its own stimulus program. >> space for the japanese government is somewhat limited. wide spendingled is required. >> india is bracing for a growth shock on friday with data that will likely show the economy at its weakest in six years. the upcoming figures are expected to show gdp growth falling below the 5% level after several months of downbeat data from plunging cars sales to shrinking factory output. opec and its independent allies are sending more signals they will stake with existing output curves at their meeting next week. a committee in vienna was told there will market will be balanced if the cartel maintains levels. a parallel meeting in moscow also gave no indication of supply changes. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm yvonne man. this is bloomberg. david: as yvonne was just mentioning, the bank of korea is not outlining some of the thinking that went into the decision not to cut rates at the moment. it was first not unanimous. there was one member who called for a rate cut. they have reduced their projections for this and next year. here is the potential silver lining. the bank of korea government announcing the government is currently passing through the bottom. from korea, let's talk about china. we are seeing more signs of financial stress in the economy, putting policymakers to the test from real banks to surging consumer indebtedness and an unprecedented bond restructuring. the warning signs are all flashing red. turning us is our financial regulations reporter. great stuff and great work. tell us what specifically these warning signs are. are seeing a lot of strain. we are seeing the government come to the rescue of at least three banks this year in the financial stability report, which came out this week. itsbank said that 13% of 4000 banks are high risk. risinglso wrong about consumer leverage, saying that household debt -- income has risen to 99.9%. the landmark debt recast this week had a lot of analysts wondering at the government was taking a changing approach to supporting its state owned enterprises. rishaad: what is the deal here? the tensions, in other words. >> right. it is a matter of pacing for the government. -- they would like some depot and maybe some institutions to exit the market to introduce more market risk. at what point is that going to result in a wider risk? investors right now seem to be thinking the policymakers have things under control. a $6 billion in summer debt for .his week was oversubscribed volatility in the chinese stock market has dropped to the lowest levels in 2018. at the moment, things seem under control. authorities are still doing something. the finance ministry earlier this week said it asked local governments to speed up the issuance of debt earmarked for interest -- earmarked for infrastructure. rishaad: thank you very much. let's bring in our next guest. he is an emerging economist. what do you make of this? talking to andrew tilton from goldman sachs. policymakers are doing the minimum necessary. this is something coming out of left field, but it is also not. >> when you have an economic slowdown in the u.s. and china is engaging in a trade war, we want to see the slowdown of the economy to bring some financial stress to the overall financial system. that is arguably what you have seen. there is some small bank stress. i do not think this is systematic in nature. aging and pboc and other -- beijing and pboc do have a lot of ammunition to provide support if they need to. the bigger concern right now is the real economy. the slowdown of the connelly has not been arrested. that is way you see the pboc has continued to provide the moderate policy stimulus. frontloading the infrastructure and the bond issuance provider. rishaad: as you look at 2020, you have your perspectives on what you think is going to happen. does this figure in? i'm going to take the example of india. suddenly, you see the economy falling off a cliff. the same kind of danger that credit health worsens. it becomes a self-fulfilling prophecy in a way. outlook, we020 think there are three things that will shape the trajectory. firstly, you have the natural growth of the economy. we think it is going to slow, given by structural and cyclical factors. the second one is the lingering impacts of the trade war. the tariffs would give you a level share of expert. when you calculate growth for a 12 month period, the 2018 tariffs impact the 2019 growth for export. for 2020, the tariffs are that are implement it in 2019. -- that are implemented in 2019. we think it will have an impact of 20 to 30 basis points. the third one, it is how much of a policy stimulus we will see from beijing. beijing has been very cautious with monetary policy easing. floodgate, like you have done in the past, you might get a short-term stimulus, but the long-term repercussion may not be something you want to deal with further down the road. evening cautious policy -- policy easing. it will not offset all of the other growth treasures. that is why we are looking at the 5.8 for next year. david: david here in singapore. i want to turn your attention to korea within the china context. for the nthkorea -- time, cut their forecast for the economy, which puts the negative output gap for seven or eight years. not just in korea. where, if any, should i be wary of inflation. rearing its ugly head across the economies that you cover. inflation is a concern to the downside and not very much on the upside. korea is a very clear example. level inthe lowest every case. that is a testament to the still significant downward pressure in the korean economy. position -- you are seeing some stabilization in certain segments. over the coming year or two, we think the korean economy will still be subject to downward pressure from the slowing global demand. inflation is also a concern. physical authorities have already announced a stimulus measure. we think the be ok will have to play a part. we are looking for one or two rate cuts in 2020. david: is there any space across e.m.'s that might be talked -- about thise time next year? >> i am looking at asia in particular. in the near term, these are clearly -- there is clearly some optimism with stabilizing domestic demand from the u.s. and europe and to a lesser extent, china. he also have the u.s. and china engaging in trade talks that , by ourenerate expectation, a trade deal. look beyond the near term and looking at the 2020 a whole, we think slowing global growth, particularly the u.s. and china, and to a lesser extent, europe, put further downward pressure on the asian economy. we are looking at a gross -- at a growth deceleration. rishaad: as we look at the production numbers out of tokyo today, that was horrible. year on year, 7.4% down. 4.2% down. that doubles the contractions. the economist we were talking to -- caps on hold to these reflect what is going on globally, do they not? >> absolutely. if you look at the slowdown we have seen over the course of the past 12 to 18 months, you have the two main drivers. one is the slowdown of a global trade cycle. you would argue that part of that degenerated to the u.s. and china trade complex. the other is the slowdown of the manufacturing industrial. that is also an indication that the slowdown is very synchronized, not just for the u.s. and china. it is across asia and the globe. that is why i think the policy easing will continue. otherwise, the deceleration is going to get more entrenched. david: tell me, we have spent the last six minutes talking about that stuff. tell me one positive thing for next year. >> i think the positive is we are hoping for a cease-fire in the trade war. look to theed, we previous question -- a lot of the global slowdowns -- the bearish sentiment and pessimism -- is because of the u.s. and china trade talks -- china trade complex. if you get a prolonged trade truce, that in the near term brings confidence and normalization back to the global economy. is goingink that this to be long-lasting. the slowdown of the u.s. economy is very consistent with the late cycle characteristics. the slowdown for china is structurally driven. short-term, there are some positive elements for the medium-term. david: you did not say anything positive there. maybe the low base for this year. thank you so much. coming up, the -- the indian economy, will be live for aestors brace growth chakra. this is bloomberg. ♪ rishaad: india is bracing for a growth shock with quarterly data that will likely show the economy at its weakest in six years with gdp falling below the 5% level. to this sudden and sharp slide in the growth rate? invery clearly, a collapse private consumption and investment. india is going through what many economists are calling a triple balance sheet problem. lending banks are not because of stress. we have the year-long shadow bank crisis where shadow banks are falling like dominoes. consumers are also not spending because the fear of job losses because of the slowdown. the global slowdown makes a heavy cocktail of a slowdown that india is currently staring at. economists expect there might be a joker in the pack to higher government spending that could offset some of the slowdown in a private consumption and spending. even despite that, the most a 5.4%tic call it's for growth. it is a far cry from the 8% plus we saw in the april to june quarter. david: the question we have been asking since the start of the dor, can policymakers anything to arrest this triple threat which you have just outlined? >> that is a very good question. they are probably at their wits and. -- their wits end. the reserve bank of india has already cut interest rates by 135 basis points. banks have been very parsimonious. they have just passed on a fraction of that cut to bar euros. credit growth is slowing. the other problem is the government is cognizant of this problem. they have been addressing the fiscal side. theya have been doing, as have been addressing it to the supply side. have cut corporate taxes for companies. what economies -- what economists are calling -- that is where we might see some tweaking, in the budget of february. corporate tax codes could be cut so that consumers have more money to spend. clearly, policymakers are aware, but the room for easing or losing honda fiscal side is perhaps closing. -- or closing is perhaps closing. rishaad: is it being ignored? huge divergence. are hitting record highs almost every day. the rupee is rallying because of that. the markets are looking through these bad numbers. some of the investors might be a bit more cautious if the numbers might be a bit of a shocker. take avestors might just look -- a second look at india. david: that is barely above the u.s. growth rates for context. thank you so much. let's have a look at the market. here at of mumbai. what else is top of mind? said.ord highs like you we have been making record highs in the last three trading sessions. the --ay, we closed for this raises questions for when foreigners paid 20 times earnings. that was when the growth rate was closer to eight and a half percent should -- 80 and a half percent. the question arises, whether or not you see the public from the record highs. the margaret ignored the macro sentiment. aside from that, you are managing to see some amount of influence. domestic institutes have been supporting the kind of rally we have seen. that is one silver lining. thanks are doing well. all of the banks in anticipation of faster resolution through the ibc are doing well. sbi leading the pack. most of the other stocks. today's session is likely to be neutered ahead of the data points we are anticipating. david: thank you so much. great stuff. a quick market check. it is getting quite bad in hong kong. 1.7% is your damage. we just take you through the benchmark. we are going into the weekend on fairly weak footing. 216 on your eight shares index. big moves into the pharma sector listed in hong kong. aspc, one of the big movers to the downside. they are on concern that perhaps these drug price cuts might not be over. that relates to what the earnings expectations should be given the changes in the regulatory framework. have a look at that plus year broader markets. rishaad: let's take a look at what we have coming up in the next hour of bloomberg markets. singapore meets its newest billionaire. david just arrived. could it be him? find out how a 39-year-old government staff joined the ranks of the ultra-wealthy. this is bloomberg. ♪ rishaad: president trump made an unannounced trip to afghanistan. saying that the peace talks with the taliban have resumed. what was the main message in this surprise thanksgiving visit? >> he was there to rally the troops, but he said two things. one is that he anticipates there will be a cease-fire. they are in talks with the taliban on a cease-fire. he says the taliban wednesday make a deal. the wording he often uses about deals. also, that the u.s. is looking to reduce the number of u.s. troops they have. he is hopeful that will be happening. those were the two main messages of the visit. comments from the the president reflective of his campaign events? a trump 2020m like reelection campaign event. he came out in campaign rally style with the afghani president. music, prouded the to be an american, that he plays at his campaign rallies in the u.s. he also used similar language in talked about similar things. he talked about the recent death of one of the top leaders of the islamic state trade talked about -- of the islamic state. he talked about lowering taxes. he talked about the dog that was involved. he had a lot of the same themes. these were not potential voters, but president trump has always -- is always cognizant of a rally and having ap -- having it be a rally style thing. this is thanksgiving day. he played to the cameras on this. rishaad: do we have an idea of what kind of troop levels he wants to reduce down to? troopse are about 12,000 now. when he took over, it'd already shifted to a support maintenance operation. it was not any longer the same military operation and had been for more than a decade. he wants to reduce to 8600 troops. he says he thinks it could go further. he did not specify how much further, and how you do that and still maintain the operational goals. he said he wants to bring that down. he said he is hoping to make that deal on the cease-fire. that would lead to him -- supportive and when out with a with the troops -- with the troops. plansry supportive of the in the region. david: thank you so much. support, the have equity markets. the broad picture. up, taking the seat -- the next hour of bloomberg markets. stay tuned. this is bloomberg. ♪ >> it is almost 11:00 in singapore. i am juliette. rishaad: i am rishaad salamat. investors distressed across asia red flags flying in the chinese economy. there is rapidly rising debt levels. >> japan seems ready to embrace the biggest ever stimulus program. factory output falls again. for ad: india bracing growth shock. they performed the weakest in the last quarter and more than six years. this is bloomberg markets. >> wall street closed for thanksgiving but it does look like u.s. markets might have the upper hand in the u.s. china trade dispute. finally, some reaction coming signing on the hang seng index. friday is coming into play. yesterday we did not see much at all in terms of hong kong investor reaction. the bank of korea leaving rates on hold. we are seeing weakness and the nikkei. look at the outlier as a continues to hold onto records. let's have a look at moves in the currency markets. you can see the implication of whether or not this will be another step in the u.s. china trade talks. the offshore is fairly flat and we can there. the korean won is weaker. futures fall before of a plan from the boj. rishaad: that is evident has been of bond programs. let's have a look at what is going on for the prospects of the indian trading day. the nikkei futures looking a bit weaker today. this is a market that has been boiling up for the last three trading days. highs.at record the rupee is flat. the yield on the tenure is 6.45%. all of this with one eye on what happens later on this evening. that is going to be the release of the latest gdp data. that is according to the economist we surveyed. that would be the lowest growth rate of the indian economy since the first few months of 2013. many policy measures are being backed into this. more interest rate cuts. we have been discussing this with our guest in the upcoming half hour. >> president trump made a surprise visit to afghanistan to visit with troops. he met with the president and says that talks have resumed with the taliban. it -- he convinced the militants to a agreed to -- to agree cease-fire. tens of thousands of protesters gathered in central hong kong for a thanksgiving rally to celebrate u.s. legislation that requires annual reviews of the city's autonomy. china repeated its price and retaliated to president trump signing the ball in -- bill into law. they said that nobody should underestimate china has resolved. boris johnson says he will walk away with a trade deal with the trump insistsent that the national health service is part of the negotiation. johnson refused to attend a tv debate with other party leaders including jeremy corbyn. china for had turned around -- turned away michael. he had been sent as is destitute -- a substitute for johnson. discover says that this decision was not unanimous with one member calling for a kind. production slumped in october, slowing much faster. economists were expecting that yeart would be down 2.5% over global news, 24 hours per day. 2700ed by more than journalists and analysts in 120 countries. i am yvonne man. this is bloomberg. rishaad: more financial stress in china is putting policymakers to the test. there is surging consumer indebtedness. also, a president -- unprecedented bond restructuring. we are joined by our guest from beijing. tell us what is going on. >> we are seeing a lot of strain. comeve seen the government to the rescue this year. at least three banks were in the financial stability report earlier this week. the central bank says over 13%. it alsoe high risk and warned about rising consumer debt. household debt is a percentage of disposable income. course, there is debt recast earlier this week. the government is taking a changing stance to its approach to supporting nato enterprises. >> what is the intention for the government? what is at stake #--? >> it does seem like investors are confident the government has control of the situation. the government sale of $6 billion in sovereign debt this described. we also saw stock volatility fall to the lowest levels since 2018. of course, the government is not just standing by earlier this week. it told local governments to speed up the issuance of debt your mac -- earmark infrastructure. there is concern that the government is quite concerned. it will all be timing and pacing about whether any of these strains will result in a letter risk. -- wider risk. >> thank you so much there. joining us in singapore is our guest. max, great to see you. by signing of the bill president trump, you are saying this is not necessarily a game changer. markets were pretty resilient. what is happening in hong kong? max: we think assigning is more symbolic than anything else. from a practical point of view, that will not change much. we think that is another piece of the puzzle that will be taking plus with respect to u.s., china and the negotiations. --are looking at the nevitt negative markets in hong kong. .hat is to be expected overall, we don't think this is a major changer with the respect to the equity market going forward. >> i have a chart on my terminal saying the u.s. stock correlation has started to weaken. they are parting a little in that sense. you maintain that it will not be a significant game changer for the markets. max: not specifically. the main plate is going to be about how the u.s. china trade agreement develops. you will see a change in the markets based on how this trade agreement ballots. if there is interest of the -- is a truce agreement, you will see strong momentum. if this thing drags on, you will see the u.s. were many more resilient. correcting antinue little more. rishaad: it seems that this rally we are seeing does not have the characteristics of these exuberance as we have had before. that gives some people to hope that it has legs. there are others out there suggesting that whether there is a conviction or not, it will all go pear shaped. max: the rally we have been seeing over the last few weeks -- global investors are relatively under investing. after it started, we had this fear of missing out. investors --are global investors remain cautious. just because of this relatively cautious position, we think the current equity rally could keep going until your and. at least equity markets should remain supportive. we are telling investors to get a little bit more exposure. bank here.the that would take advantage of the equity legs the market would have. rishaad: even if we don't get a phase one agreement on trade, that could send everything south. it does look a bit like the run of the maze. it looks like people are baking a deal into that stage as well. max: most of the u.s. china trade has been priced in. you are correct. even if they would be just a postponement but with a relatively positive messaging, we believe that should keep markets supported. keep in mind, the things that we are seeing out of the u.s. remain resilient and robust. that is what has helped equity markets keep printing record highs. that is why we believe that on the u.s. front, equity markets will remain supported and can move higher from here to you are and -- year end. in china, it is different. this will depend on the china trade deal truce. >> just getting back to that u.s. point and what you are saying in terms of equity markets continuing. you're talking about the fed and the likelihood of more cuts next year. would you rule out the forecast of some kind of global recession in 2020? a recession inee the u.s. in 2020. we see a gradual slowdown. the reason why we don't see it is because as of now, it remains resilient. you have a fed that will remain accommodative. they are saying that interest rates are roughly in line with where the market is. there is going to be more and more pressure from an overall slowdown in global growth outside of the u.s.. the fed will remain accommodative. you will have a high level of liquidity into the market. yvonne: what does that mean in terms of seeing yields go back about 2% in the u.s.? we are seeing this yield premium over the u.s. looking wider. fund, we seeenure it move up to 175. desk you mighte see the 10 year -- you could see the 10 year gradually moving higher. it will remain accommodative. they make it a little bit of deepening -- steepening of the curve. that is if the market keeps pricing in a recession. this --h all of rishaad: with all this in mind, how does it translate into what is going on with asia? here, perhaps the proximally of hong kong makes a difference. what do you think the key factors are at play? max: asia depends on how china is doing. that is obvious. we know that china will likely continue slowing down. that will keep some downward pressure on asian markets in general. the hong kong unrest does not help. asia is trending down in global trade. a valuation perspective, asia is more attractive than the u.s. from a pure evaluation -- valuation perspective. we don't think there is a catalyst yet. we will remain a little bit more cautious. that valuations are more interesting for the long-term investor. >> we want to get more of your thoughts. thank you, max. still ahead this hour, the recent bad news seems to be getting even worse for india. we will be live in mumbai as investors brace for a growth shocker. rishaad: governor lee says he still has space for monetary policy. we will discuss that with max. that is on the way. this is bloomberg. korea isthe bank of leaving its key interest rates unchanged as it expect governor lee to opt for two interest cuts this year. the economy has been hurt by global trade tensions. the growth is going to be around the 2% level for next year. that is the ims projection. yvonne: japan has focused industrial production. headline inflation rose 6%. the figures add to otherwise worrisome data as the government considers potential stimulus measures. horrible numbers coming through from both korea and japan today. these industrial production numbers don't read very well. that tells a lot about the state of the global economy. do they not? max: absolutely. ,ll of these economies especially for south korea that rely on exports, they are being massively hit because of the global trade coming down a lot. you are seeing much more pressure and an overall slowdown as we saw in china. it is definitely worrisome numbers. what the central banks in asia will remain that way going forward. rishaad: we're looking at retail sales falling off. you can put that down in japan to the sales tax hike and dead weather. nevertheless, much worse than the economies have been calculating. what room is there left? we need fiscal stimulus. he will come on the show and say that is what needs to be enacted now. it is getting too late. max: the more time goes by, the harder it is going to be to tackle this downward trend. we have seen the data. growth is coming down. impacting the retail, manufacturing, even consumers. it is becoming worrying. have enacted this threat the year. monetary policy, given the fact that it has not been widely used throughout the year will do not be enough -- will not be enough. if the government was to get calculations to pick up the growth in the company -- country. this will policy is a bit more tricky to have lamented that monetary policy but we believe the governments will be faced with a situation that will require them to react. yvonne: what does that situation look like? in japan, you have this impact of consumers not spending. rishaad: that is a very different -- max: that is a very tricky question. japan has been in that situation for a long time. they have not managed to get inflation or growth up. with respect to tax cuts, that could be one of the easier ones in terms of fiscal policy. exactly how much the multiplier in japan that works remains to be seen. could target specific economies in the country like china has been doing on their side in order to try and wrap up a little bit of investment overall. yvonne: i wanted to talk little more out soh koa well. i do have a chart on my terminal showing korea is very much growing below potential. there is in -- impact of what you're seeing and perhaps a bottoming out coming through. at the same time, it has been hit on the export side on the u.s. china trade concern. we see further weakness here. max: we expect further weakness. the semiconductor space could be going some of the pressure. overall, the industry will remain under pressure. the margin is coming down. demand is coming down. global trade is what has impacted south korea. until we have a turnaround in china growth and an overall turnaround with respect to the improved,obal trade until that time, we don't see south korea improving much from these levels. rishaad: we have this data point out. it has been touted as the worst read for gdp growth since the early part of 2013. what is going on there? we have a banking system that is creaking and huge credit issues. tell me about it. is the country that we are a bit more positive on. they have implemented some structural changes and legislations over the last month in order to basically improve growth in the longer term. look at the monetization and everything they have been doing on the financial side. obviously it takes time for this to play out. again, this will coming don't of global trade is impacting india as well. india has some different problems that are a bit more in terms of the death and underperforming loans. in general, as much as we see the numbers coming down and disappointing the markets and pressure to remain here in the short-term, in the longer term, we are more constructive. we believe they are doing the right steps in order to build an environment where to mr. growth can eventually pick up. yvonne: have a great weekend. thank you for joining us. that is max. we should max a lot of charge just event.s you can catch up with all of our charts on the interactive function and on tv . you can send messages to our hosts and guests on our live shows. check it out, this is bloomberg. ♪ rishaad: let's take a look at the latest business flash headlines. hong kong airlines is delaying salaries for much of its staff. it says business has been thoroughly affected by months of unrest. only seasoned employees will receive their wages on time. flights too cancel los angeles from february. a cost-cutting drive coming. --aims to reduce they are seeking to lower ad spending. markets outside of mainland china falling by more than a third since the beginning of october. huawei is said to be in talks to for $1.5 billion. we are told they are in negotiations to raise a similar amount from five mainland banks in july. the proceeds will be used for general corporate purposes as well as working capital. huawei remains under pressure us tech.ban on buying let's have a look at the stocks. farmer stocks in china under a lot of pressure. >> absolutely. i am looking at csp seat pharmaceutical. there is speculation that beijing will accelerate a centralized program that is driving down generic drug prices . csp's he is one of the biggest laggard. when you look at volume, a documents of -- secular social media suggests that the government is adding dozens of new drugs. they have already driven down the price of some drugs by 90%. 3%, one a down about their way for the worst day since early august. the stock has lost 12% of its value. when you look at the anr there is some bullish recommendations out there. i think there is something like 33 buyers, for those and zero four holdshis stop -- and zero sells on this stock. there is renewed concern about falling drug prices in this industry. to get it looks at these and other stocks that are of interest today, you can go on your bloomberg terminal. rishaad: thank you for that. let's look at what is going on with the china markets and what we have at the moment as we head into the lunch break. we are extending losses at the moment. it is coming against this backdrop of asian stocks. this is a relatively positive start to the day. a southerly direction, they are reversing the gains. we see some fluctuation in sydney. shanghai is seeing some improvement there. the lack of any further news on what is going on with the trade war, that is possibly responsible for what is going on. we have no lead out of new york either because it was a thanksgiving holiday. european equities did slide back a little bit. that is shanghai. it's is bloomberg. ♪ yvonne: it is a mozilla .30 a.m. in singapore. we are in the middle of the trading day. -- -- we are in singapore. we are in the middle of the trading day. this is an anti-market manipulation tool introduced after a penny stock crash. this is in favor of the more focused approach of monitoring share prices. this will start a month-long public confrontation on the removal of this minimal trading price policy. let's get the headlines with yvonne man in hong kong. yvonne: president trump is facing a new challenge from north korea. korea has news that the north has tested multiple rocket launchers, having earlier fired too short range weapons across the sea of japan. the firing comes as pyongyang threatens to stop talks unless the u.s. arbors concessions by the end of the year. opec allies are sending more signals they will stick with existing output curbs until next week. the oil market will be balanced if the cartel maintains current production levels. delegates tell us they did not discuss any deeper cuts. a parallel meeting in moscow give no indication of supply changes. japan may reimburse the power of public spending with one of the biggest it was packages of the europe. global growth, supply taxes. the government is shifting toward a mix of fiscal measures and monetary policies. that would be welcome news for the bank of japan. they appear reluctant to ramp up there on long running stimulus program. the -- the the japanese government is limited. >> the bank of korea left its key rate unchanged. the economy is increasingly undermined by week global demand. the governor said the decision was not unanimous with one member calling for a cut. the industrial production slumped in october. the factory output was down 2.5% last year. in line with traditions. global news, 20 hours per day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am yvonne man. this is bloomberg. rishaad: let's look at the markets. this is what it looks like. hong kong is leading the declines right now. this means that any hopes of the political index would grind its way toward the third straight monthly gain have been kibosh. investors hope this will remain the main china response to the bill.ong kong rest and be able to that rally to the end of the month. we have china it shares sliding -- h shares sliding hard this week. on the 26, there was a surge in volume. what we have is a southerly story for hong kong. that continues to affect what is going on. hardly industrial output numbers. likewise for the nikkei 225. the australian market is turning negative after a positive, juliet. this is one of the few polls to guess the u.k. election roughly. it shows boris johnson's party on track to win its biggest majority in three decades. things could still change. >> i know we are saying there is going to be a big concern to the majority at the moment. if you look at the data underlying this, he does not have to be a massive shift in terms of the national polls. there are 30 states -- seats where we have the conservatives ahead by less than 5%. if you see the labour party start to squeeze the national polls a bit more and close the 5% gap, it is very easy to see how we could end up in a hung parliament territory. >> it is possible. our voters waiting on brexit? -- are voters waiting on brexit? >> i think it is all three. i think brexit is important. one of the big boat or we are seeing is the conservatives -- voter shifts we are seeing is the conservatives losing. think the labors will try to turn the issue back onto spending things. they know they pull better on that. crucial problem that boris johnson is significantly more popular than jeremy corbyn. rishaad: coming up, the recent bad news seems to be getting news -- worse, even worse for india. we will head over to mumbai and have a look at investors as they brace for growth shocker. this is bloomberg. ♪ rishaad: a bit of news coming in from taipei. the initialering public offering of brewery assets. be them looking at singapore as an ipo of these bury assets. there is a lot of consolidation taking place in the space. company that does have a 45% family holding in it. we would be looking at an ipo for some of that. this is of 42%. we have seen other companies come to market. this group is really catching on. there is the headline. we are talking about a tenderloin dollar value attached to all of that. juliet: that will be good for singapore. let's turn to md a. it is bracing for a growth shock later today. to india, it is bracing for a growth shock later today. gdp growth fell below the 5% level. the lowest in six years. joins us from mumbai. what has led to size -- such a sharp slide in india? >> some economists are calling this a triple balance sheet problem. loans taken earlier, banks are not lending because there is fear of higher rates. we have crippled shadow banking. along with the global slowdown, that means external demand for our goods has stagnated. there are many factors. we will see them's -- we will see growth slowed to the lowest in six years. they are hoping that this could slowdown the sliding in the private sector. quite a bit away from the a percent expansion that we saw just last year in the june quarter. -- april-june quarter. rishaad: what can the authorities do about this? >> they are trying their best. the heavy lifting will have to be done by the banks of india. rates already come -- cut by 135 basis points. as have already -- only cut a fraction of that. has done a bit on the fiscal side. they have addressed some of the supply side constraints. they have given 20 billion back to companies. what the government is saying is that the demand side has to be addressed. that is where some tweaking in the personal taxes could happen has -- happen as early as next february in the budget. a want to get india out of this -- they want to get india out of this. rishaad: let's get you more insights as we go over to the lead economist in mumbai. threes one of the top female economists in india. what is your take on the current shocker we have coming down later today? >> i agree with most of the things he said. we are looking at growth to plummet to around 4.7%. that is the lowest in the last 40 six quarters. we have had considerable slowdown. across the north sectors, there is a lot that is visible. in the last three quarters, we have seen the consumption cycle plummet. that was supposed to be part of the growth story. they're getting more broad-based as we go ahead. >> we have talked about the credit side of things and have corporate india is really feeling it with the inability to access funds. this is also a story about the vast population of the country. is it not? if you look at the volatile commodities prices from the inflation rates, we get fairly benign inflation in many ways. that is indicative of a lack of demand. white has demand also fallen off a cliff? it probably has opted to do with the consumption cycle. in the last three years, you guys have seen banks delivering. we saw in that november of last year has where it to the level has affected the balance sheets. this is leading to further tightening of the financial conditions. we are not seeing this happen. monetary policy has been weaker on the back of this conversion in the financial sector. given that all of these sectors are struggling, with regard to any productivity we have seen, you are seeing a bit of feedback loop happening in the consumption cycle. extent, it ist getting more broad-based from here on. >> nose-down a very positive. it sounds like the trend is going to continue. should we see even more decline in growth in 2020? we wille a sense that see a much better growth. that, these policies that have been done by the government of india will be a very shallow one. docking .5%end up growth. what about the structure of the economy has corporate india feeling it? is it getting more and more difficult for small and medium-sized enterprises to actually get access to much-needed capitalism? is there a liquidity problem? >> there is not a liquid like -- liquidity problem. the transitional liquidity has been a problem. the crisis continues to linger. to some extent, a part of that has been taken care of. the government is trying of the policy and af's and new i.s. -- i stuff. i think that this is taken care of in the medium-term. the problem should linger. the industrial cycle is bearing the brunt of it. banking is not lending must to these segments. rishaad: where do we go from here? when do we get to these reforms -- when do we get these reforms coming? there is a lot of regulation surrounding the hiring and firing of workers. when do we see material improvement? >> it will take some time. this growth is more entrenched. it could take 9-12 months. we could see an uptick in growth. we could see some improvement in the coming quarters. this could tend to yield some results. it will be a long run of uptick you will see. it is hard to say how the global growth will be in the next couple of years. we are looking at a much more strict cycle. at least 9-12 months is what i think it would take. >> thank you. that was our lead economist there in mumbai. and is markets have just opened. let's get right back to mumbai with our correspondent. we have been seeing indian markets hold at record highs. it looks like they could be back a little in line with what you are seeing in asia today. >> that is right. we are seeing some profit coming in the opening session. our markets have been trading at record high levels. even week macro backdrops -- the gdp numbers, the liquidity in the global markets has opened well. even for the indian markets. atsee the nikkei trading plus 135 points. banking has been outperforming of rally in the month november. it has seen some cool off. it is down .3%. the nikkei 500 index has seen a good start as of now. rishaad: a big game. this very crucial fundraising plan. >> yes, that stock is in focus. in the opening session, we are seeing gains come in for the bank. todayok will be admitted -- vote will the meeting today. -- they both will be meeting today. investorrom a global to the tune of $2.2 billion. there is about $72 million with a few ip drops. the bank has been looking for growth capital. analyze has upgraded -- this sector has upgraded the stock. is over 40% according to the valuations. all of the negatives have been driven in. i am also watching out for india's housing. it has opened with gains of 11%. the stock was up 35%. -- 25%. the corporate sector has not found any violations. we see some positive news coming. there are some reports suggesting that this crisis could go up in the month of december. back to you guys. rishaad: thank you. the former prime minister of japan has died at the age of 101 according to the state broadcast er. he served as prime minister of japan and president of the liberal democrat party from 1982-1987. he is best known for pushing through privatization of state-owned companies and helped to revitalize japanese nationalism during his term as prime minister. he passed away earlier. this is bloomberg. ♪ >> a quick check of the latest business flash headlines. a chinese film maker has had a failingating cast after to pay upon with 40 million dollars. even after given extra time to find the cash. the groups estimate they would make that was the deadline and the printable and the interest due on october 24. the province had the highest value in china in the first half of the year. they are in talks with other companies for a joint -- the discussions include the insurance arm of ocbc bank and involves the formation of a consortium to produce of its banking license. singapore plans to rent up to five licenses to boost competition and innovation in the banking sector. japanese exports to south korea have fallen since last year after a dispute over political tensions. exports fell to virtually zero in september following a 99% year-over-year plunge in september. south korea was the biggest export destination for japanese n ansrs such as kiri apporo.-- kirin and s after months of negotiations, prices have been cut by an average 61%. licenses forme to coverage. approves 72 since his for coverage. -- new licenses for coverage. rishaad: we are talking about lux share. they make apple air pod. the stock has more than tripled this year. let's get with cindy wang in taipei. down to airhis all pods and the shift apple is making toward more wearables? yes, the share price performance of luck share has -- lux share has tripled. the slowdown of smartphones this year has shown that air pods have become a new driver of apple. they stand to be the biggest beneficiary of this plan. they will grow another 50% to about 90 million units. for the stronger demand for air pods also posted another chinese stock. luxhsare's is. >> i think the forecast for 2021 is 100 million air pods sold. >> people could see shipments of air pods raised to 120 million. apple just lush is latest air pod products. that it couldar make a strong demand from consumers. luxhsare has enjoyed some major share if not the only one of the airpods pro. that leads to a serious revision of its earnings estimates from analysts. analysts are still very bullish on the outlook of luxhsare. only one for sale rating and one neutral rating. it still has 80% potential upside from is 12 month target price. it seems that the strong rally that we have seen this year will go into next year. >> i have been ready that air pods are respected to be very heavily featured in black friday sales as well. cindy wang, thank you so much for keeping us up-to-date. here is a look at what is in store for the week ahead. over the weekend and into monday, we get key manufacturing data that will be another read on the chinese economy. the nato summit begins in london on tuesday. the alliance is celebrating its 70th anniversary amid concerns about its purpose and stability. decision have a policy from the reserve bank of australia. the house impeachment inquiry .aces a new phase president has been invited to present his defense. -- president trump has been invited to present his defense. thursday brings the rate decision in india. they could deliver a six consecutive rate cut. than second of rate cut. and the u.s. jobs report is coming on wednesday. rishaad: let's check on the markets. another date that the investors in the territory would like to repeat. nearly 2% down. we have it shares responsible for quite a lot of the slide. that has made it especially painful for investors who jumped on this market this week. this is likely the same story for the neck a two is hong kong. this is bloomberg -- nikkei 225, this is hong kong, this is bloomberg. ♪ yousef: the major stories driving headlines this week, ofna hits out as president signs a bill backing protesters in hong kong. beijing denounces the severe violation of international law. the fed governor paints a positive pitcher of the u.s. economy. she expects growth for the next year. aramco ipointo the at it will invest billions as riyadh taps neighbors for support. dubai-based construction company arab tech could see a record loss suffering its biggest three-month loss. canhe

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