right on that 50. the backdrop of the g20, of course. yvonne: hoping for talks to keep talking, what markets are pricing in, low expectations. that fed rally seems to be fading. rishaad: what rally? let's get to the board. australia,s across getting hit. generally speaking, we are positive. looking at the g20 meeting at the moment. 26,537. , the pmi number

below estimates at 50, neither contracting nor expanding. -yearxport orders at a two low. looking at the korean market. is not helping. a situation where interest rates have gone up. 1.75% now in seoul, korea. we will have a news conference in the next 20 minutes or thereabouts. david: the other thing, argentina. president trump and president xi ahead of this highly anticipated dinner date sunday. yvonne: trump left washington

with mixed messaging, saying he wants to do something with china, that may not be interested in a new agreement. john is joining us in hong kong. it is a binary situation. how do you position yourself, or do you even? >> i have been entertained by the good cop, bad cop comments from the administration. you get a positive statement, then a negative statement, so we go in with some ambiguity. there are three outcomes, worse, better, or pause. our house view is tilting towards this cease-fire where tariffs announced will be enacted and are in the price. future tariffs will be put on hold and we will see a

negotiating framework which will provide context for the trade and reciprocity of access for american companies. that is not in the price, so i would anticipate a bounce if it is announced. david: the fed has been helping. powell and company easing all sorts of gain. >> this reappraisal is important. these comments that were perceived as a dovish clearly are having some recalibration affects in the market. if you read closely the statement he made, it is open to some interpretation. in general, they interpretation was correct, but subsequent comments hint of

uncertainty. we anticipate one hike in december and two next year. the market is pricing out that so-called second hike on the back of these comments. we still feel there is robust growth in the employment market, wages growth higher. i am anticipating strength in consumption overall. our view towards three more hikes between then and midyear some in thebut market are reappraising the trajectory of that interest-rate move. how are chinese equities going to do? can we see a sustained rally if the economy is slowing down and that affect will not be trickling in soon? >> were looking at growth of

6.6% this year, 6.2% next year. that six .2% outlook notwithstanding changes in terms of exclamation or even -- escalation or a deal in china. we think the composition of growth will change. the authorities in china will start to invest more heavily to offset a decline in consumption and services, so we will see growth hitting the levels we are forecasting. that is within the context of a reasonably shallow deceleration. david: what is the trigger for equities in hong kong or msci china? woody think people are waiting for? there has been a lot of selling through the stock connect. >> what are the triggers?

let's watch the dollar. if we see some reappraisal of interest rates, and the expectation the ecb will take up -- i thinkext year that new we will see a weakness as a consequence of pausing, notwithstanding the ecb's move. we are seeing wages growth in the eurozone. there is some inflationary pressures building through that wages growth the ecb has to address. to answer your original question, the dollar is an important point. let's also focus on the earnings expectations and analysts revisions. if we see peak earnings gaining traction, we will see rotation out of the u.s., particularly on

view, elsewhere. we are still position and have a positive view towards em in particular. yvonne: you're are talking about korea and how cheap these violations are. do you look for badly beaten benchmarks or stay on course? offers betterch value than two months ago. that's like saying i like the olympics. we have to say which discipline we like. we are always rotating and analyzing value within the tech infrastructure. energy is likely to bounce post this selloff over the last three to four months. we prefer health care. as that curve starts to steepen in the u.s., financials will

become more interesting. david: let's look deeper into tech. why do you think hardware has been battered so badly? do you buy into the apple slow down, chip slowdown, the dram story? >> it is cyclical and cycles peakseeks and troughs -- and drops. yes, there has to be souring , thement around production hardware production of tech in china potentially impacted by terrorists -- tariffs. yvonne: you are looking at the software side? i'm trying to think of the regulatory risks we do see, even tencent, one that is in focus.

has that then priced in? >> there are risks, but the tech space is not limited. we have opportunity outside. marketfocusing on the ev , prior to that robotics, prior to that ai applications. i'm looking at the broad space of tech. your super trends part of withoutlook, we will talk a john woods about this later on in the show. he is staying with us to parse through 70 pages of goodness. yvonne: in the meantime, let's get caught up with first word news. >> thanks. goldman sachs facing more scrutiny over allegations some executives dodged internal mdbrols why helping the one

investment fund. we are told the federal reserve is stepping up its investigation of the bank and some individuals. the fed does not have the power of a criminal prosecutor, but can sanction people involved in the scandals. robert mueller has publicly connected to 2016 trump residential campaign and the presidents property business to the russian government. michael cohen admits he spoke with officials as late as 2016 and discussed the potential deal hadoscow that he said they ended earlier. petro poroshenko is calling on nato to send warships as natio s relations with russia worsen. there are more than 30 vessels and three german ships prevented from's setting sail. ukraine has sent satellite images to western allies saying

russia wants to annex more of its territory as it did in crimea. threats to financial stability in the single market may become more challenging. related tod concerns related to sustainability and liquidity at investment funds had risen since the previous report. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am paul allen. this is bloomberg. good one. right. keeping an eye on record household debt. implicationes, the and outlook for the chipmakers next. yvonne: india's growth jumped in october, a preview later on. this is bloomberg. ♪

david: let's have a look at the g20. president xi jinping and president trump have landed, a big meeting, dinner date. yvonne: something can happen with china, he says. we will see how both sides are posturing. we have our next guest. take it away. >> thank you. the naftao introduce for theor president-elect of mexico, who takes power on saturday. he will be the next mexican undersecretary for north america and upholding the trade agreement, as well as relations with the trump administration

and government of justin trudeau. welcome to bloomberg. >> it is a pleasure. >> the new deal will be signed in less than 12 hours. you have been in negotiations for months. is it an agreement you can support? an agreement you can both recommend to the congress? >> absolutely. honest to god, it is a win-win-win. it is good for the countries. there are minuses. .> on balance, a good agreement what improves from mexico? more aregion becomes good basis to invest in the industry, where most of the trade takes place. toyota, honda, mercedes, the

it goes tokorean, all three countries in different ways. referring to the text the u.s.hat we hear ing subtleak changes to the text? , notere have been changes substantial changes. claims of bigger adjustments and changes to be made. for those, my answer is we have negotiated, closed the agreement. towill listen respectfully the needs and find a way to address them, not changing the agreement. >> do you anticipate being surprised by what's on the table

tomorrow morning? >> not at all. no major changes. >> what are these other issues or changes you are aware of, and do they pose a risk to the fast track process that is supposed to take place after the signing and the ratification by the parliaments? >> there have been a number of references to things they want to change, some things in the area of labor. the agreement we have is a practice liket nothing you can imagine. >> you don't need to tell me. tell the democratic party in the u.s. practice.est what is being requested by the new democratic congress is not labor-related issues, but enforcement of trade-related issues, not labor, but trade.

the good practices of the donement seem to be because there is some certification across the border. that is trade, not labor. we have to build the confidence so people can address these concerns. >> how concerned are you that may hold ofic party this agreement and prevent that fast-track process for moving forward? >> we are aware, concerned. it will be a tough discussion, negotiation. not the normal four to six months. maybe a year. it is up to them. we are ready. support across

the board, big firms, small , gos, trade associations all over the country. littleport has been from in february two more and more. >> how do you tolerate the fact that on the morning you will be signing the agreement, the u.s. will still have tariffs in place on mexican steel? >> that is regrettable. i thought that should have been eliminated by now. it won't be the case, but we have to address it. >> how long does it take to reduces until the u.s. or eliminates those tariffs? >> for me, given that it won't be before the signing tomorrow morning, there is little time.

,et's say the calendar year because it is fully discussed. >> by december 31. >> yes. >> have you had signals that is likely? >> this is not part of the treaty negotiation. this is separate. is england by the current mexican administration starting tomorrow as we begin to talk about that. is the president-elect going to go along with president trump's demand that the migrants, the caravan that has come to the border be kept from crossing the border, for the deported from mexico back to where they came from? >> that is not something that is part of our traditions or practice. is to be handled is still to be seen. it is very complicated. my part of the story is beyond

the current crisis and build the relationship where we address the migration issue at root, where the migration comes from in mexico and central america. >> the backdrop, global trade. you are an expert on china. , a trump hardliner on trade will be at the dinner on saturday night. what does his present signal to you about the trump administration's willingness to do a deal with china? >> they are playing tough. i doubt they will press all the way to trigger the trade war. i doubt it. i think there will be a lot of push, spirited negotiation, and that requires a series push, but not to trigger and all up trade war. , ii am wrong and this is not

am confident the chinese response will to be not accept a ,rade war, but in a strong way but short of an all-out conflict. >> i thank you so very much. so fortunate to have you straight from the airport here at the g20 meeting. undersecretary for north america. back to you. david: good. good interview. right, john woods is still with us. the 2019 outlook is here. you guys are calling this an extended cycle. that is not what the bond markets are telling us. today. >> we are positioning clients -- a late-stitch cycle late-stage cycle in 2019.

this phase of the cycle, risk assets tend to outperform, so we are overweight equities, positive on energy and certain commodities, and we think these will outperform risk assets such as fixed income and credit. that is the central thesis behind our asset allocation. we anticipate growth to remain robust or moderate slightly. inflation to remain benign. china to remain resilient. we continue to see modest growth in japan and the eu. saying this week that growth is decelerating faster than initially thought. the u.s. economy, the impacts of tax cuts are fading. we could see a fiscal drag. what makes you confident growth can stay so robust? the last quarter or so has

been weaker than anticipated. down to theely industrial production cycle ,mpacted by one-all factors disruption to the automobile sector. hows extraordinary important the sector is to industrial production. we had this emissions scandal in europe and these breakups in japan, which have caused global industrial production to fouled away compounded -- to fall , compounded by weather factors. we anticipate renewed growth impulse. however, i partly agree with the view that we will see a deceleration in the u.s. next year. when your second quarter is 4.2% and your third quarter at 3.9%, you want to see some deceleration. general consensus view is that

inflation moderate modestly alongside growth. rishaad: you are very optimistic. let's have a look at this chart here it this is 2018. -- this chart. this is 2018. there has been nowhere to hide. equities, treasury, gold, real cash. this goes back to 1975. these are the returns come record lows for every asset class. >> you are right, rish. you, this is soon 2019. rishaad: you are confident this will not be repeated. >> i am confident. you do see a degree of mean reversion. rishaad: no you don't. how? to 95%thing close to 90% of benchmark assets posted negative returns.

it is hard to see that level of underperformance for the last 20 to 30 years, and we anticipate a rebound in equities. i'm not saying this will be a particularly aggressive view. clients can look forward to performance over the next 12 months in total returns of 5% to 7%, but i don't anticipate anything close to the level of capitulation this year. rishaad: how much does your dollar view dovetail into this? >> it is important for emerging markets. over the first half of next year, we seek dollars stability, but then weakening over the second half of the year as we get the shift to a neutral policy by the fed and a tightening by the ecb. rishaad: thank you very much. john woods from credit suisse. david: plenty more ahead.

the press conference for the bok. we will talk investment ideas and where we go from here, the cheapest market in asia, really. this is bloomberg. ♪ this is bloomberg. ♪ ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪

yvonne: some live pictures out of buenos aires. the japanese prime minister scheduled to arrive. his plane has landed. the big thing for japan and tradedabe will be between the u.s. and china and the threat of auto tariffs president trump has thrown out there recently, japanese and european automobiles as well. waiting for him to step out of the plane. nothing really happening there. kind of like the inflation story. anyway, another topic, another

day. the other big story is the bok. the governor speaking following the banks first interest hike in the year. it was not a unanimous decision. the policy seen as fairly accommodative. it wasn't unanimous because two members called for a rate hold. the question is, is this one and done? yvonne: let's discuss the implications with our guest. paul, good to have you. is there room to hike for the bok, or the last chance to raise rates before growth slows further? >> this one was expected. they have been criticized in the past for not raising rates. this is the last one they will

do in the foreseeable future. the fiscal policy with an increased budget is not really working. high,employment is still capital investment is still low. i think this will be the last one for the foreseeable future. damage tos this do the property sector? is it enough to move the needle? you flagged a correction in home prices is something we need to watch? >> yes, the property market, there are two tiers. the regional market was already rolling over before the rate the code in tightening measures. regionalrate hike, the property market has a lot of room to decline.

the seoul, korea market will start to roll over from here. a lot of debt went into household debt come mostly into property, so there -- debt, mostly property. ministerhe new finance this month was talking about how growth next year could be considerably weaker and more difficult. how bad do you think it will look? is south korea at risk of becoming the next japan and having a lost decade? long,can't forecast that but right now, economic indicators are getting worse. there is no real sign of improvement. we have not seen the export

.ecline yet this quarter is down 10% from the peak. growth will decelerate. because the bank of korea will hold the rate next year while the u.s. probably raises rates, the gap will be bigger, and the won might get week. the weaker won can help the korean export sector in the second half next year, which will lead korea out of recession. hold on a second. some live pictures at the g20. arriving witht the red carpet, expecting to meet with his peers at that dinner. trump isesident

already in town, as is president xi. we take you back there once we get some news. it is getting late in argentina. paul is still with us. and equities.ok dram.re talking about th how worried should i be an give me three or four names i should be oh pointing like the plague if the super cycle does end? stocks inre only two inea, the number one and two the korean stock markets. the profit from the two companies make of 45% of all korea's corporate profits. am, accounts for one third of overall profits, so

reliance on these companies, especially to memory, becomes very large. that is the risk. quarters, next two the company has already guided the contract is going down, the corporate profit decline is inevitable. the semiconductor is a global sector, and it will not be dependent on the the domestic economy. even if the domestic economy suffers or consumption is down, these two companies will not be dependent on the cycle, which i think at this point is a good thing. chips, what are the growth drivers in the south korean economy? shipbuilding, automobiles, they have been declining,

overcapacity issues. korea is not exactly making headway when it comes to ai or biofarma. what is the next cash cow? >> the segment that is growing harma.metics and biop billionrt is about $5 in the export sector, and if you include the chinese resellers, that would be a little more than $10 billion. biofarma is $3 billion to $4 billion. ship doping is similar, $40 billion to $50 billion. there are segments where it is growing, but it is not big enough to impact the overall

employment or jump creation as well as the export. david: a little more on that quickly. are a fragmented market. give us a few names to explore. well is lghny doing nh. they have one rand establishing high-end china as a cosmetics brand. that is doing well. rma, it is hard to give out and name right now. some have halted trading because of accounting issues, and that doesn't only apply to samsung biologic am a but other names. , theink the second or are

file you wish and zara little bit inflated, so we are recommending our clients to be careful on biopharma names. yvonne: we will leave it there. have a great weekend. david: let's get it to paul allen in sydney with an update of our first word news. the new north american trade afterill be signed friday negotiations and threats to kill it. the agreement. it needs to be ratified by individual nations. fed officials signal a flexible approach in increases. they say almost all artistic

fence agreed another race would be warranted soon, but language regarding expectations for further increases may need to be modified at coming meetings. china is said to be ready to end its experiment with peer-to-peer lending with a surge in defaults , fraud, and investor anger. they're planning to wind down small and medium platforms and ask the biggest players to reduce lending. c has settled with floyd mayweather and a dj for hiding payments they receive for promoting investments in ico's. the regulator found both failed to disclose payments. floyd mayweather agreed to pay $300,000 and dj 100,000.

the world meteorological association says 2018 is that to be the warmest year on record with heat waves and devastating fires in california. the philippines and northern italy suffered serious storms and flooding. the report comes days before climate change talks in poland. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. i am paul allen. this is bloomberg. coming up, the world's fastest-growing major economy ,ill release its gdp report india. we checked the outlook for growth in mumbai next. this is bloomberg. ♪

rishaad: having a look at what

happened in japan. tokyo finishing the session 15 minutes ago. this is what happened. treatment, 34% up. it has four more years of exclusive rights. a watchmaker here on the way down with the downgrade. this won rising due to the oil price. let's look at the carmakers. nissan and mitsubishi working together to resolve what is happening at the corporate level. motto winning green car of the year. suzuki motor with a positive outlook. let's have a look at the here and now. this is the situation currently. health and happiness international, 4.2%.

this is the wrong one. i was going to the company that can manipulate your photographs. to the consumer body and china signed they are collecting too much data on people. this is the wrong one. asia group beating estimates. don't read too much with 81% profit growth because it has one off sales. this is the one dragging down .ustralia, nearly 14% down that is something companies bracing for that the moment. we are bracing for the indian gdp figures later on, the oil price, and the rupee. yvonne: let's get to india's economy, back to back interest rate hikes, a funding squeeze start to bite. david: let's bring in our reporter in mumbai with the

preview of these numbers. let's look at it against the backdrop of those headwinds we just mentioned. >> that's right. it is the combination of that and other factors. the survey shows economists are expecting 7.5% growth expansion, slower than the 8.2%. good, but not good enough to generate the jobs that the prime minister wants to generate going into an election year. there is going to be pressure on loosen purse strings going into the election, as well as pressure on the central banks to keep liquidity conditions loose. the reserve bank of india just moved to a hawkish bias, so it will not be an easy reading for

the administration and the bank of india. david: hold that thought. we will get back to you and a couple of minutes. let's take you back to argentina. theresa may is speaking to media on the plane. it is midnight thereabouts. a few of these lines, if lawmakers don't give a thumbs up, then they will prepare for a no-deal. yvonne: she also said she doesn't think there should be another brexit referendum. you have to take it or leave it with what they have come up with with brussels so far. let's bring it back to india. , tiltingoned the rbi towards this tightened stance. i likely to stay for much of this year and next? >> you are right about that.

,iven growth is likely to slow inflationary and pressures are likely to ease, slowing growth, slowing inflation, means output gap has probably widened. that is likely to rbi stay on hold at 6.5% into the coming months. that is what the swaps markets are pricing in. bond and rupeehe have rallied -- bond market and rupee have rallied. rbi, i'meaking of the going to drop something big, oil prices, massive drop. that will probably help things. >> absolutely. it comes as a big relief. pressures will come

off, but the public finances will have a fair bit of impact from this lower oil price. the central government and the had toovernment sacrifice some of those revenues. thatoil prices coming off, pressure will not happen on public finances. the current account decimate about 3% plus, with oil prices coming down, that pressure is likely to come down. it will not look as bad as it did a few months ago. , bondpee is rallying markets and stock markets as well, so we might see some foreign inflows come in that help the rupee and current --ount under a fair bit of

yvonne: thank you. we are counting down to the opening of the session in india. let's get to our reporter standing by also in mumbai. we were talking about the tailwinds. what else are you watching today? start off with the nifty futures indicating a positive start. open inifty and sensex the green, it will be the fourth straight day. sectors and stocks in focus coming down to the non-thinking lenders. the rbi has ease rules for non-banking members and relax its previous minimum holding requirements, which could have impact on the larger names. we have tata motors.

jaguar land rover has production in the u.k. in order to adjust for output. the rupee advanced against the at. dollar to close in 69.84. 12 of the lastor 14 sessions, so that strength continues, but we could see pressure on the technology stocks. yvonne: thank you. let's do a quick check of the business flash headlines. deutsche bank tumbled after police raid the bank, the frankfurt headquarters and other premises, seizing records. it stems from the release of the panama papers. deutsche bank was fined $600 million/year for a buying money

transfers from russia that were highly suggestive of financial misconduct. hna group showing signs of stress. chair isnd vice stepping down. has sold $17 billion in assets this year to lower one of the biggest corporate debt piles in china. yvonne: plenty more ahead. this is bloomberg. ♪ ♪

david: it is time for our capital of the charts. our two reporters who will pick their best charts against each other. yvonne: you can access those charts on the bloomberg running the function at the bottom of your screen. singapore versus singapore today. mine chart shows the birth of a new free market in china. if you look at the three lines here. regulatedis the natural gas price the government sets. this white line that is jumping is the domestic lng price, which

is free-floating, one of the first time she can have a free-floating gas price in china. traders will be looking at that because they want to see a wide arbitrage between the domestic and global spot lng prices so they can sell into china and make that arbitrage profit. david: nice. i always like an opportunity that is tangible like that. michelle, do your worst. >> looking more macro, not such a happy friday for trade watchers with the big meeting on saturday, but what we try to look at are the macro theymentals, how are influenced by tariffs, trade negotiations, and global demand. here we are with the three biggest economies in the world showing weakness in their pmi readings overall. we got the china numbers this morning, right on that

contraction-expansion line, so some weakness in global demand. tariffs of this his versus the cyclical issues? exports,y with the some weakness, especially china and japan. we are seeing cyclical slowdowns here. we have heard of businesses front loading orders ahead of tariffs. that is not showing up in this index them a so we could be on pace to fall into contraction in these pmi's in the coming months. david: all right. two good ones. i have to say michelle i like years -- yours because it is a macro team, but i have to go with dan because it is more tangible, actionable. yvonne: he called it a birth. he sold it in the first line. david: a for effort.

yvonne: thanks, guys. bloomberg users can interact with these charts using gtv , catch up on key analysis and save those charts for future reference. david: weekend reading. that is nice. have a look at the indonesian currency, some strength coming through for the first time since february. we are trading below that 200-day moving average. one of the better preforming currencies in the asia-pacific region recently. this is bloomberg. ♪

yvonne: it is almost 11:00 in singapore and hong kong. the top stories, a quiet day. november draws to a close and investors are awaiting decisions at the g20 in bonus i raise. -- in buenos aires. the new north american free-trade deal will be signed later. win-winells us it is a -win situation. this is "bloomberg markets: asia ,"

david: a bit of a quiet friday for markets. when you look at equity markets, mixed across the region. for the week we are poised for a weekly gain. it is the longest streak, the longest win streak daily going back to february of this year. it is a pickup after the sharp correction there. have a rate hike, first one in a year. the pmi numbers out of china are not encouraging, at about 50, that fence line that separates pessimist and optimist from that survey. look at the u.s. 10 years, rounding up. brent prices are seeing upside

following that move down. we did fall below 50 there. the dollar is weaker. the indonesian currency seems substantial -- is seeing substantial strength. 6.93, we are not doing anything there. we had a bit of a move up. speaking of the currency here, we brought this chart up, earlier this week it shows you pricing and demand for call auctions ahead of the g20. these are cheap trades to be put in. it is not a house call. these are the forecast for the currency, it shows you we are lows.g at two

bids ahead ofhe the g20, and anything from that meeting will be positive for the chinese currency and negative on the u.s. dollar. in a lot of ways, it is a no-brainer to do it. the chart shows you positioning ahead of this crucial meeting in argentina. angela merkel is likely to be late. looking forward to the indian open. inures, contracts, this is light of what we have later on, gdp numbers, growth expected to slow down. we have interest rate hikes, a , we did have the economy growing at 8%, and it helped retain its position.

also watching some of these chip stocks, we got word from the bank of korea governor speaking about hiking rates today for the first time in more than bank a year. he says it is hard to expect a boom in the chip industry to continue, but he does not think we will see a sharp downturn. he says it is unlikely, we could be seeing moderation. samsung electronics down close to 1%. given that a third of the country's corporate profits come from one specific type of chip, that will be a huge risk for the economy. we have the latest first word. >> goldman sachs is said to be facing more scrutiny, some

executives dodged internal controls while helping the investment fund raise billions that later went missing. the federal reserve is stepping up its investigation of the bank , and some individuals. it does not have the powers of a criminal prosecutor but it can sanction people involved in banking scandals. the new north american trade deal will be signed later on friday after a year of tough negotiation's and white house threats to kill it. the u.s., mexico, and canada will sign the agreement in buenos aires. it is not clear if that will be leadership or level. it needs to be ratified by individual nations. ukrainian president is calling on nato to send warships as relations with russia worsen further. he says moscow is blockading ukrainian ports with more than bank 30 vessels.

ukraine has sent satellite images to western allies saying russia wants to annex more than territory as it did with crimea. special counsel robert mueller has connected the trump presidential campaign and his property business to the russian government. michael: admits he spoke to russian administration officials in june of 2016. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. the g20 summit in aires, leaders including president trump have touchdown. it is dominated by the escorting trade war. day were president

xi jinping has anticipated moves of the gathering. bloomberg editor at large is in us.os aires for you talk about how they are hinting at a possible deal, remember when at meetings like this, the superstars were emmanuel macron or justin trudeau. it was not so long ago the focus is once again on the strongman, president trump, president xi, president putin, and of course mohammad bin salman of saudi arabia. it is all about the bilaterals that are happening between those in the case or as of trump and putin in, the bilateral meeting not happening. they were supposed to meet on saturday. president trump canceled that meeting before he left today.

friday, just turned to it was thursday moments ago. as you point out, president xi and president trump are sitting down for dinner saturday night, and the focus of the meeting is on what they may or may not accomplish. there is plenty of optimism, and there have been signals from the trump administration that trump is going into that meeting with at least goodwill, if not the hope of some kind of breakthrough. it is going to require a lot, because our understanding increasingly is the trump administration is looking for more than bank an agreement on tode, and wants the chinese back down on intellectual property theft. and forced transfer of technology and cyber espionage. and things the trump administration does not just think are important, but european business, and the japanese business too. trump, hespeaking of

said the mueller probe is an illegal hoax. what is the take on the trade war? important to get this perspective, haslinda, the nafta negotiator for the incoming mexican president has been part of the negotiations, and is a result, he knows it or navarro. i asked him -- he knows peter navarro. given that navarro will be in attendance, here is what he had to say. >> they are playing tough. would pressu.s. with the trade war. i think there will be a lot a push. the spirit of the negotiation. >> there you have it, haslinda, a note of optimism from someone

who has seen the trump administration's perspective on trade from the front lines. haslinda: optimism for now. meeting is a focus for the markets, catalysts going forward. rishaad: it certainly might be. speaking to thomas thygesen, head x-asset strategy, skandinaviska enskilda banken apbupl, we have a question of day.ay every and it is, what asset class would benefit the most on a trade cease-fire? thomas: that is what we are hoping for, so i guess the most important thing would be relief. it will be driven by emerging markets and on a more fundamental level, it could ease the pressure on the chinese currency. lead to stabilization.

it will not help europe so much because europe has problems of their own making. i look for this to be asia and north america. bond markets will not move so much. they are looking to what will happen to monetary policy. we will need more evidence to be sure. yvonne: what are markets pricing in? ofit that we need some type cooperation to keep talking, or will there be something more concrete like we will not get twice i percent tariffs next year? the last think we need option, and my feeling is china desperately needs to delay. they are not ready for it. it will take another couple of quarters before other measures can be put in place. headline toke the your outlook for 2019, do not lock in the outlook for 2019. so many of these events are binary. you are holding out for the next couple of weeks.

notas: i know we are supposed to do that, and i am such to say you have to buy or sell. it is not just the g20, there is an opec meeting between italy and the eu, there is that possibility of brexit, there are ecb meetings coming up and they have the ability to tip the balance. if you can wait, the option value of waiting, and have more conviction, that is the key because markets are lagging. it is a little bit of a dr. jekyll and mr. hyde. we need direction from those events. yvonne: when it comes to the fed, everyone was saying the big hurdles will be trade and the fed, and it seems like what we heard from jay powell this week, it eliminated one of those hurdles. is that a game changer? thomas: it is not a game changer in itself, we are past that now.

growth indicators have weakened to the extent that it is unnecessary, but not a sufficient requirement that banks in europe and the u.s. have to back off.

will

haslinda: the market is pricing in a 23% chance of a no deal. there's a lot of disappointment. guest: i would agree with that. markets are not willing to engage in the discussion because we were never supposed to have

this discussion anyway. we are a few weeks away from the decision. i think if you took the risk more seriously, we'd be looking at lower numbers across market. at the end of the day, the hope is you'll see something like a backing off out of the fear of the consequences. the bank of england's assessment is that this could be leading to the worst recession since the 1930's. that would be a game changer for the eurozone. you have to cross your fingers and hope key members of the parliament will change their views. it's not about the g20 summit as much as it is about britain. i don't think the 25% covers the risk of a hard brexit right now. haslinda: we're looking at the pound, down 14% against the dollar. it's predicting may will suffer a 200 vote defeat under brexit

plan. worst-case scenario, hard brexit, how low will the pound go? guest: that's going to be anybody's guess. nobody knows how it will pan out in reality. there's some flexibility in terms of a no deal scenario. my guess would be you don't want to touch it and it can fall prey far because a hard brexit and a weaker pound won't fix it like in 2016. this is about market asset and not prices of goods. and thek might much her past few months, the probability of the scenario has gone up. it has not led to weakening in the pound. haslinda: taking a look at british lenders, markets have become more negative with them. brexitbanks handle a no situation and all the stresses that come with that?

what is your own take? thomas: i work in a bank so i would be reluctant to say that, but there will be a huge amount of stress, so the long-term prospects for a london bank quite significant late. we have to go through the next few weeks and cross your fingers and whistle while you work week is this is close to 50-50. it may be even more. rishaad: germany is not looking great. was that also a blip or does that signal more trouble? thomas: you could see something not so good in the german economy. it's not that they are dealing with specific troubles, they are increasing the saving rate and they are the ones supposed to take that -- rishaad: nobody has ever relied

on the german consumer. thomas: no, but they are this week. incomes are going up and credit is available. it's suggested there's something else going on. the negative interest rates means your retirement goes down. there are limits to how far the ecb can go in terms of picking up pieces. it's not just hard brexit. it's also italy. rishaad: talk to me about italy. the biggest market in europe, the biggest debts in europe, and certain accounts surfaced. thomas: you would imagine this would not be so big. the biggest surprise is the commission decided to play hardball with italy. we saw seven years ago what happens when you force the country to do this in the middle of a downtrend. the second thing the ecb needs is a reconciliation where they are allowed to go forward with a

fiscal stimulus. other words you keep the pressure on draghi to do more than imagine interest rates. rishaad: very quickly, you think a september rate hike will be by the ecb? thomas: if it gets to christmas and all these events pan out right, i do think we are looking at a nice inflation scenario. right now, looks close to 50-50. but you get to september next year, draghi has the dollar open. this is not the time to talk about this. no hikes at all next year on the december meeting. rishaad: thank you so much. chief strategist across asset strategic allocation. much more on the way on bloomberg. looking ahead to the g20 meeting taking place and beyond. ♪

haslinda: -->> a quick check on the business flash headlines. investigators searched the headquarters and other premises, seizing records. documentsstem from like the panama papers. deutsche's was fined $600 million for allowing money transfers from russia and what regulators said was highly suggestive of financial misconduct. rishaad: buyers cut thousands of jobs and quit the animal health business. plan, then takeover company says it's leaving the foot care sectors and will boost its core pharma and agricultural operations, 10% of the company's work force. yvonne: china's hna group is showing signs of stress. two top executives in the search of a new $1 billion loan.

the airlines says it is stepping down as chairman. let's have a look at markets in korea. .4%, they talk about the chip sector, the government said it's slowing down. it not likely going to fall off a cliff. implications are quite massive. a lot of guests pointed out the outside portion that it needs to make up in the index, 25% and a function of corporate profits, 40% if you do the math. let's have a look at the terminal. it's trading over eight times earning. it thinks the valuation done on the sector. the other piece of news is dollar weakness against the indonesian currency, now trading below the 200 day moving average for the first time since february. we are putting together some

decent momentum heading into the weekend. it depends what happens there, of course. it's been a while since we've had five days -- days of gains. plenty more ahead. this is bloomberg. ♪

paul: it is 11:29 in hong kong area first word headlines, president trump casting new doubt on the trade breakthrough with china at the g20, offering mixed messages as he flew to point osiris. he said the u.s. is close to an agreement, but adding he is happy. onna facing higher tariffs $250 billion in exports to the u.s. and president trump has threatened duties on all chinese imports. off -- ire putting doubt all the way to figure the trade war. i doubt it. i think it will be a lot of push

. the spirit of the negotiation. gaugethe first official of china's economy showed manufacturing continue a continued to 50, on the divide between contraction and expansion. the nonmanufacturing pmi also from 50.9. 15.4 it underscores concerns about slowing domestic economy and uncertainty over the trade war. the bank of korea raised its key rate for the first time in a year, choosing to focus on record household debt and the widening gap between u.s. and korean rates. they lifted the repurchase rate to 1.25% from 1.5%. they join indonesia and the philippines in hiking through the governor said the decision was not unanimous with two members voting against. of fcc has settled on a box

-- allegedly hiding payments they received for promoting investments and court offerings. fromfailed to show issues their respective social media accounts. mayweather agreed to pay the fine and the other as well. global news 24 hours a day and twitter, from 120 analysts in -- here is a scoop today, the u.s. is stepping up investigations into goldman sachs and malaysia's one and be -- 1mdb. take us through this investigation. >> the fed is stepping up looking at how [indiscernible] internal controls raising funds

for 1mdb. another day of bad news for goldman. haslinda: we talk about the fed, how much a bite does it have? >> significant. they managed to cap wells fargo sized based on -- even though the authority to prosecute, they have some jurisdiction or control on what goldman can do. they can penalize them. pushing toalaysia give back the $600 million it got in commission, where are we in those talks? are they taking place? reporter: malaysia is approaching goldman for talks and getting money back and we don't have the status for these to fish -- these discussions, but we know the leader has said he is outraged by what has happened, and they are looking at how to improve. haslinda: where do we go from

here? we will look at what the boj will be doing and the fed. but investigations are going on around the world not just in the u.s. sogapore and also malaysia, a few more months for the goldman executives. haslinda: it has been a long process, and malaysia is trying to push through, making it faster, but there is no indication it will succeed. can they do anything? they are putting pressure. reporter: it is a slow process. this thing that happened years ago, it takes time to do the investigation. it is not just one jurisdiction. there were a lot of folks involved, money in accounts around the world, 10 countries at one point investigating what went wrong. so you could hear about it in years to come.

haslinda: the man at the center of it all is joe low. everyone is trying to track him down. give us a sense of why it is so complicated to track him. reporter: there is no clear indication of where he is. malaysia has retracted his passport. we are hearing there is no one , no concrete information even from the malaysian government where he is. they have asked interpol to help, but there is no news where he could be. haslinda: do we have a sense white has been so difficult? the world is tracking him down. reporter: [indiscernible] if there is money, it is easy to disappear but one thing we know -- earlier this year, and an opportunity for it closed earlier this week. probably wouldn't be able to get around. .aslinda: it is a super yacht

still to come, why bloomberg economists say india's upcoming gdp read is likely to end the fourth quarter streak of deceleration. this is bloomberg. ♪ ♪

global tech leaders are gathering in guangzhou for forum , amid the trade tensions. one of the key questions is whether to list or not. dwindling vc fund, increasing market volatility and toy pondering whether, when actually go public. let's get to the event. tom mackenzie is standing by billionuest, the $1 angel investment fund. thank you. i am joined by the ceo and

partner at jim fund, invested in companies like horizon robotics, a sharing company. let's kick off with opportunities you see in the tech space given the slowing economy, the trade tensions, the challenges around fundraising. in terms of market opportunities, it doesn't feel like anything is slowing. the most interesting segment is social commerce. social commerce like little red interesting one that is emerging that the early vc's are watching is social buying that is off line in communities. they can about how people buy, ,t is called the three p's people, product and place. if you can target a specific community, like we are neighbors, we are probably buying the same things.

what is happening because of we chat is there are a lot of a company like the good stuff has 50,000 we chat groups. so they push things to you like tom got a shipment of 30 pounds of potatoes. can you distribute to your community? you resell it. some people are getting notifications to buy corn, potatoes, bread. this is interesting. tom: so are these companies looking still at ipo's as an exit given some of the disappointing listings this year, or are they serving to think of a longer-term strategy building to fundraising? >> this is really early. for the startups looking for an ipo in five or seven years, the market could be different. they are just thinking about how to get new fundraising. you think is their funding, and there is. for some of the hot sectors, there is a herd mentality.

everyone is looking at this. the companies will get more had more money and gradually only the top few get a lot of money. tom: does the trade war have any impact on how you approach your investment? but it doesy, impact our companies in an interesting way which is, there is a reemergence of support for local brands. the government is supporting brands. we have a cosmetics company called perfect diary. what theyoing 40 x are doing last year. they are the leading local domestic brand after double 11. the global brands, they are exporting and come back in, they are becoming more expensive whereas these brands are cheaper and can target customers in a different way. they are using the social methods i mentioned. domestic companies

focusing on this. in terms of ai, that is a topic of conversation of this forum and more broadly in terms of the trade tensions. you are not so hot on the aia space. is that a question of monetization, because they don't have strategy, because generic use is already there? what are the reasons? are a lot of successful examples. you mentioned robotics. there are various tools. the reason you might have read i am bearish is because of new opportunities are there are already these behemoths that are successful in doing ai in china, relatively few startup opportunities. according to people i have spoken, valuations have fallen the last year. it do you think? >> the top companies are still

getting astronomical prices. i would say no. for the no -- the middle, there is a slowdown. for us it is half as many deals as there were the first half of the year. writeups are slower, people are taking their time. there are term sheets eating dropped. one interesting thing is the new scientific technology board which i am not sure you follow. it will be launched next year. that will really focus on ai opportunities. there will be a lot of exits we see in the local china market if the board goes out. tom: in terms of fundraising, people talk about the challenges. from reuters, they say it is not a big issue. is this a challenge for you? >> no. the best funds have the best time to fundraising. there is always money especially in the u.s. dollar market. there will be few people are we have few r&d deals.

it will make things tougher. but the core, a lot of the core technology startup space has been u.s. dollar anyway. tom: and it is good to focus on the consumer upgrade story. economists have said maybe we are at a peak now given retail spending is slowing, which group -- wage growth is softer. what is your view? >> there is still a lot of growth, but it is slowing down. consumer upgrades in its entirety is more segmented. people are more targeted like second-tier cities, third to fifth tier cities, so i that products are more segmented. consumer upgrade for the fifth tier city is different for the first. products are different. pdp is not a downgrade but an upgrade for the underserved. tom: do you expect fewer listings given the turmoil this

year? >> for the u.s. dollar hong kong markets, yes. but technology is one to watch. we could have up to 10 ipo's from our technology portfolio on the market. ceo -- given interesting insights here in china, the opportunities and the new tech board announced in shanghai, one to watch. yvonne: great insights, tom mackenzie. us from guangzhou. markets in india are about to open. we have been watching oil price. the rupee gaining in favor of though trade. david: that will benefit the trade account. to what extent, we will explore later on. 20 seconds to the open in india. to give us the

lowdown of how things will shape up. as you put it, we are likely open in the green. i should have rates on the screen in a few moments. but this will be the fourth straight day when we are looking at the benchmark indices trading higher. the nifty banking index, also it seems it is trending higher as well. a quarter percent for the nifty coming through. more strength for the indian rupee. that is the most important factor, considering it is trending around 69.7 and it will be the fourth straight day of gains for the ruby as well. checking these banking financials, how are they looking? relaxationseen some

when it comes to secure -- tization. both of these -- one of them is higher by 1%. the other is higher 2%. motors, this unit will remain shut after adjusting for output. because of that we are seeing pressure here because we are seeing a 2.5% here decline. haslinda: thank you. it is gdp day in india. our next guest is forecasting india's third quarter to go lower than the market consensus. he is a chief economist for southeast asia and india. he joins us. the markets looking for 7.5%. you are looking for 7.4%. most countries would be jumping

for joy, but for india it is not good enough. >> it is not. the fundamental issue, it is not translating into the kind of profitability you would expect. second even within that you are seeing in this quarter that consumption and investment has slowed. and traders really have fallen over the last several years. it remains a concern. haslinda: this is a country, the biggest importer of oil. cheaper oil could be a boost. it certainly is, but we also need to put it in the context of the current problem. you have got a banking sector .hich is reeling now you have some kind of problem, liquidity or a solvency issue, and you have got the fiscal position which looks tight with the government having a four-year target or has come close to it, the first few

months of the year. from here on we could say growth is going to slow further into the next two quarters. haslinda: and the problem is consumer activity, the slowdown in the demand for autos. how is that looking? challenginge a year. many of the indicators that will follow, steam production, auto sales, wages, they will be stagnant in two weeks. it will be a challenge. david: david here in hong kong. aboute spoken at length how the banking sector, and you have alluded to this, how it has privatedicapped, the that is nonexistent, but the economy is growing over 7.5%. would you say if india is able to address its banking sector

problem in the next five years, do you think 10% growth is realistic? >> i wouldn't say 10%. we have to look at other variables. there is a big drop in the savings rate which is going to define how fast india can grow, but certainly if the banking resolved,blem is growth rate of 18.5% certainly is feasible. real potentialhe growth is at this time. the relieft about with oil prices dropping? how big of a game changer is that? >> it is a game changer. when we started the year we were worried about the account deficit and how we would fund it. in terms of simple metric, the fall in oil prices, the on the currentp

account. that has been a positive. what does this mean for the r.b.i.? they have gone towards a calibrated tightening. willie have to step back? -- will they have to step back. >> we expect so. they will go on an extended pause. neutrale we moved from neutral to one of calibrated tightening, i think we could revert back to a neutral stance. yvonne: when do you think the lower oil price, windows affects start to kick in? first half of 2019 or maybe next month? what is your forecast? >> we will start to see a fairly immediate impact, and in november i would show a decent drop in terms of the deficit, but in terms of the impact on the economy, it will take another two orders. year, the elections next

remind and refresh us, what typically happens? usually there is a front loading expenditures, which has been the norm even outside of elections, when you look at the fiscal data for the last two years or so. but beyond that, you have non-fiscal spending that comes from various avenues, donations, in terms of people participating, and that gives a boost to consumption. it is a fairly short-lived boost and immediately after the election we see it go down. how reliable is the data now? the controversy this week about the revised gdp series, should we tell -- trust the data from now on? remaine still

inconsistencies. we look at the past data, it is still a volume measure. the new data we have had, relatively newer data is not based on that. it is based on value of output. what we notice is the sectors that were not there in the past or have not been measured, we used a statistical estimation and spread them out. backdatedt say the series is giving the most accurate picture still. lots of problems with the indian government and the r.b.i.. have you been surprised how long it has been and how the truth has been short-lived? and it will continue for a while if you are referring to the spat between what we are seeing in the central bank and the governing body. some of the issues, particularly with the dividend transfer -- by

our estimates it cannot be resolved without an asset sale by the bank of india. haslinda: we will have to leave it there. the chief economist for the southeast asia and india at the anz. plenty more to come. this is bloomberg. ♪ s is bloomberg. ♪

quick checkt's do a of the business flash headlines. tesla isant to be to losing its -- people worry after leaving three years for personal reasons effective december 17 -- namehave yet to lead a successor. she was a figurehead in the effort to compete with more rivals. rishaad: softbank will announce the price for the upcoming telco

unit. a sales target of $21 billion. the lead underwriters had little trouble placing sales with one brokerage completing half of the volume on the first day. intradaytheir highest sailors -- shares price in a month. others fell in response. haslinda: this tourism group plans to tort -- start taking orders for a chunk of ipo worth as much as $548 million u.s. medr unit owns the club brand. they are aiming to price september 7 and start treating a week later. hong kong ipo has already got $33 billion, more than double 2017. mutedve is looking at a after the euphoria yesterday. david: tied down, good timing

into the weekend. it has not been quiet as far as the news flow is concerned. the last few hours you have had pmi data out of china, rate linesout of the bok, with out of g20, most notable is about another subject, brea -- brexit, theresa may speaking and saying she doesn't think there should be another referendum as lawmakers -- they would prepare for a no deal if they don't take it. we are looking at a recession and there is not a lot of momentum. have a look at the currency markets. doing this.on yvonne: we saw three weeks highs for the one leading up to this be ok decision. they were pricing in if this was going to be a hike area find them where we are selling, but a perhaps fors saying

the bok this is a one and done scenario now we see the growth sputtering. but there will be gains with the rupiah. have a great weekend. this is bloomberg. ♪

♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, amazon under scrutiny by regulators in its biggest market outside of the u.s. now german authorities have new concerns about the company's size and scale. a chinese scientist has shocked the world with claims about producing gene edited babies. how they used the same pool to kill cancer, the international