still to come, the rba, will they go lower? we discussed the chances of another cut as they make a policy decision later. kathleen: kramer capital research cio says a price cut is priced in this month but do not believe it until you see it. find out why. this is bloomberg. ♪ paul: this is daybreak: asia. i am paul allen. kathleen: i am kathleen hays. investors made it through a volatile august but with no trade deal insight and inverted yield curve, stocks may not go far this month. let's discuss all that and more with kramer capital research even vested officer hillary claimant -- chief investment officer hilary kramer. one of your recent notes, i just love. basically, the talk market -- the stock market, people are too scared to short it. there is no real reason to buy. you say don't blame stocks in the economy. blame the nerves, the nerve of investors. what do you mean? hilary: it is all emotion. you have seen so much over the years, we both have. this is a market that really has been about headlines. for somata years, we

is that a risk the rba needs to be conscious of? sally: it is probably something on their radar but the governor was asked about that last week. he made it pretty clear that cities have come up 15%. up a couple of percent is not something you want to get too excited about. he did say he started to see credit growth accelerate strongly and that would present more of a constraint to monetary policy. we are clearly not there yet. yesterday's credit numbers from subdued.ere very i thought that was quite a point from the governor and made me think at the moment housing is no constraint to lower rates in australia. shery: subdued. the rba back to back cuts recently we saw match to the fed's cuts as well. when we have no certainty where the fed is going in the next meeting, i was that being factored in by the rba? sally: that is right. at jp morgan, we expect to cut again this month in december. another 50 basis points cut by year-end. the rba, all of this matters because in a world where other central banks are easing and our shows 42 cen

we have the rba. could there be life in the rally? adam: a lot of this is risk premium having come out of the bond market. think back to six months ago, there is a lot of worry we will be in a labor government, change of government, put pressure on the economy and housing market. a lot of that hasn't happened because liberals have stayed in power. you had the easing of the restrictions on credit growth, and you have had two rate cuts from the rba and the markets are pricing strong chances. you could get a third rate cut. all of this in the mortgage asset spaces leading to a decent around 9% inets up the fixed income space. this of beneficiaries of risk premium. further can this go in people think about perhaps even as low as half a percent on the rba cash trade by the middle of next year, when does that start to be a drag and people don't find they want to take additional risk? looks like that is in place but when we reach infection point, it is hard to say. shery: in china the markets have one day before a weeklong holiday to reacted

possibly checked by pre-rba caution. most economists are betting on a 25 basis point cut from philip lowe and his team. let's discuss that with ig market analyst kyle rotter in melbourne. from the alive meeting rba today. what are your expectations? for: it is going to be hard the rba not to cut today. the market is pricing and 80% chance that that will occur. such is the pricing that if the rba were to fail to deliver on this cut, i don't think the knock on effects in terms of broader financial pricing and what they can do to financial conditions in the short term would be favorable. i think the market has probably gone more aggressive than i would expect it to have in pricing in a kind. last week around this gentle turning point notion should have dampened things. markets, 80% there. like i said, it will be hard for the rba to not cut today given the knock on effects. paul: there was a gentle turning point speech. we have seen house prices taking up. -- ticking up. there is an argument to be made that maybe they will w

i think the rba will sit on its hands at the moment. we have gdp out tomorrow and the markets are getting more negative on what that number could look like. even so, there's things that will bring the economy forward in the next couple of months. they will pause for a bit and at i%, there's not much room to move, so they want to see more about what's happening in the current quarter rather than the backward —looking... what could basically change their minds and make a cut today? you have falling household disposable income, ballooning debts, low wage growth and we could see the lowest gdp numbers in almost a decade. there's no doubt the second quarter numbers will be pretty horrible and the government won't be too happy having to talk to those, but a couple of things are different. tax cuts have come through from the first ofjuly, especially following come households. households are starting —— house prices are starting to turn around, we've had a monthly rise in syd ney around, we've had a monthly rise in sydney and melbourne, t

to the really be left rba to try to keep things going. paul: in terms of the government not doing much and you mentioned week inflation, maybe a bit of a chat with the rba about inflation. >> very interesting. in a post gp press conference, which is a traditional thing every three months, he mentioned a were going to sign a new agreement between the government and the rba. as i understand it, that did not actually need to be done because the government -- it was not a change of governance. it's the same governor. he was talking about bit more focus on inflation because it has been low for a long time and i think the central bank expect that -- accept that. there might be a bit more midpoint,ng past the which we understand. the other thing was there was talk of a letter being written 20 bank of england p are the question is if they will write a former letter or if it might be included in the quarterly statement of monetary policy, but there might be an exclusive statement as to how we got where we are and where we might be. let's get a qui

it is unusual for the rba is the central bank to want to surprise markets. so if the rba is uncomfortable with that consensus expectation heading into next week, we're going to find out about that tomorrow night, as you mentioned with the rba governor's speech. policy, yes as i said, the market is clearly already starting to speculate about what qe and australia would look like, and when it is going to be delivered. there's no question that the rba has already been having internal discussions about this. it is a matter of time before it becomes part of the normal policy toolkit for australia as it has for other central banks for a while. right, thank you for joining us. the central bank decisions role on asia. think of thailand may mirror the federal the cut wednesday as it looks to keep a lid on the bhat. is likely to stand hold. the philippines flagged a cut that could come as early as this week. for action in the currency markets, selena? selina: despite surging oil prices, negative around the trade tension, we are see currencies holding her head above wa

the rba,e minutes from the aussieshe rba, and the kiwi's lead the charge. they have left the door open to further easing. this is the language if not the action we can expect more of from global central banks. is that how we look at the back quarter? >> i guess so, but it is not clear, i guess, the fed has been reluctant to open that door too much. at the same time, trying not to close it. powell was really characterizing this rate cut as the midcycle adjustment. my view is that he will stick to this approach and we will stick to the usual mantra that the fed will be ready to act as appropriate, but i don't think he is ready to indicate too many further rate cuts. the dot plot chart is also unlikely to indicate that. it is really a question of alan active balance-- between -- >> what sort of moves have you been making in the portfolio? risk management moves are but do sing exposure. exposure.ucing pricing over 100 basis points over one year from the fed. , yes, the thinking risk of recession has increased, but the recession is not just upon us. we started t

the prime minister saying this is not include cuts from the rba to get us down to 1%. it not include the tax cuts either. even if it is negative, do you think we are looking at quarter on quarter negative? see fromill be hard to the trade numbers we got yesterday. officials have been talking about the prospects of a gentle turning point post the rba rep cuate cut. it will not take a lot to generate an incremental movement. if you are really open from the rbs perspective try to shoot for the inflation target and get unemployment down, there is a lot of work to be done in terms of the current pace of growth. it will not tighten up the labor markets. shery: we saw some improvement in the property market. the chart on the bloomberg showing the second panel where you see the mortgage rate falling. we have seen back to back monthly rebound in home prices. is this sustainable or is it because of the rate cuts? ben: the rate cuts have no doubt helped. we also have an election outcome that was a bit surprising and that took away some of the downside risk for the housing market

tomorrow, a rate decision from the rba. the fed expected to cut rates for the third time in five months. the reserve bank of india is expected to cut on friday. the decision comes as the country grapples with the negative outlook of the low target inflation. and it's jobs day. payrolls projected to have risen. on of limit rates steady as she goes unemployment rates steady as she goes. ♪ manus: it is "daybreak europe." 7:48 in london -- in paris and berlin. mohammad bin salman has said war between his country and iran would lead to, quote, a total collapse of the global economy. he told cbs a peaceful solution would be better, but he added that in the case of further escalation, oil prices would jump to what he calls unimaginably high numbers. >> the region represents 30% of the world energy supplies, about 20% of global trade passages. about 4% of the world gdp. imagine these three things stop. this means the total collapse of the global economy. talkinge have been about this throughout the morning. my cohost has stopped

as you say, we have had those cuts from the rba. we have also had a few other things that have removed the risk premium going into the election. there was a lot of fear around the restrictions to what would flow through the housing market, if the labor market got in. that didn't happen. you have had a decent. run up as we go into the rba meeting, it looks pretty set up for a market that is expecting a third interest rate cut this year. the thing that may sway of course is what has been happening with the housing market which is enjoying a nice recovery. it does put the governor in a tricky spot as to how far he wants to reinflate prices they are given there was so much scrutiny over the last few years. it will be an interesting meeting tomorrow. the tone and commentary from them will be crucial to find out what the outlook is for the next three to six months. shery: investors looking closely at the report that the u.s. could be cutting access to u.s. finance for china. of course, investors in china will only have monday to react to

australia also dropping after that rba decision. on the far right hand side of your screen, you will see s&p 500 futures also weaker. today is going to be the first day they are trading -- i want to talk about what the cboe -- matt: dani, it looks like we are losing your mic. you may want to check the batteries. we appreciate you being with us. we will check in with you a lot throughout the morning. bloomberg's dani burger. a check on the markets. let's get to bloomberg's first word news. back to london and naomi. naomi: thank you. in hong kong, chief executive carrie lam says she never asked for beijing's permission to quit. neverave never -- i have tendered a resignation to the central people's government. i have not even contemplated to discuss a resignation with the central people's government. the choice of not resigning is my own choicen. ao -- choice. naomi: she also denounced a leak of audio from her meeting. she clarified she is committed to hong kong. a bloomberg scoop -- china and the u.s. are struggling to agree on a sch

romaine: rba dissent --kathleen: rba decision day. we will discuss it with an excessive chat with simon birmingham. it's get to the latest market action. take it away. selina: we're looking at a trifecta of grit -- bad news today. a new deal insight. unrest in hong kong continuing at week pmi data looking withrld, the nikkei is down and we will continue those losses from yesterday. switching boards here. what's he was going on in south korea. speaking about the week inflation coming in at 0%. a little bit of a muted change. down slightly. data groww the gdp slower than expected it to percent versus 2.1%. the south korean economy has been adversely impacted by trade spats around the world. looking at what is happening in australia and new zealand, kathleen mentioned we had a expose of interview with the finance minister coming up. a little bit chain -- little changed. i also mentioned the new zealand dollar earlier. one of those risk assets facing pressure. -- rba's keeping threats things on hold today. simon birmingham is the trade mi

, but stillxpected below the rba forecast of one point 4%. -- 1.4%. it supports our view of another 50 basis point of cuts to come in the next few months. probably november for the first cut. the rba has already taken rates to 1% and moving down to 50 basis points over the next six months is our view. plenty in bond portfolios, staying in long-duration. david: susan, thank you. we appreciate your time. you are looking ahead to what else is coming up on bloomberg today. we will bring in christine lagarde in the european parliament later on. rishaad: and speaking exclusively to the eu trade commissioner, the annual meeting in brussels. lots more on the way. ♪ ♪ to the latestet business flash headlines. usc foodchain red lobster is due to open its first restaurant in hong kong. it sees china as its biggest overseas market and expects business to thrive when it opens in november. the ceo says brands often do well when things become a bit turbulent. rishaad: denial of speculation on social media in china of support of the hong kong strike that affected

the rba governor is in a handsy to provide support for the economy. government set to return to a fiscal surplus -- surplus. aussie dollar below that 68 handle. paul? paul: let's check in on the first word news. minister boris has told eu president donald -- the eu present that he wants a deal but the brexit will happen at the end of the month. there is increasing doubt that a deal can be struck in six weeks. the labour opposition is promising a second referendum, saying voters can change their minds. >> too much has happened in the last three years for this to be decided without the consent of the public. we need to ask them a basic and vital question. leave withpared to the best deal that can be secured or would you not rather remain in the eu? >> president trump has asked steven mnuchin to explain why the u.s. requested china cancel a planned tour of midwest bonds. the visits were abruptly called off on friday, causing markets to tumble amid fears that trade talks had stumbled. mnuchin said the timing did not work, so it was halted. president trump

rodrigo: for now we think the rba is on an easing path. a rate cut is likely and we think another cut in february looks likely. for australia trade in the limits are a concern because we are an export economy and have a domestic story but it will be challenging. the labor market is weakening. we expected to be weakening more and therefore the rba will need to support this as well. paul: you have a call on the aussie recovering to $.70. rodrigo: we have two calls. then the near term we are concerned. because he could hit 65 cents by the end of the year. we see weakening or strengthen in the past week given all of that sort of mood music is changing in terms of trade developments with the u.s. we remain reluctant to sort of run with that theme. there are tensions between china and the u.s. which stay longer. if that is the case it is reasonable to suspect another round of weakening, and that should take the aussie down to $.65 by the end of year. with some trade hesitation it would be good news. paul: british pound, is the worst priced in ye

nab on the rba. yvonne: they will have to cut rba on october and december. we have that bad aussie jobs number yesterday. rishaad: if you look at the headline numbers. let's have a look at the markets. this is what we see now. the central bank governor -- david: the central bank governor, just wanted to mention that. rishaad: of course. you have to talk about the philippine fed governor. david: why not? let the filipino do it. he will be coming up in eight minutes from now. he might bookmark it. rishaad: profiling, that's what it is. [laughter] rishaad: let's move and have a look at the markets. hang seng up to positive. just below the gain line. zhang line, signing up to the upside. feeling that we may see interest rate hikes coming -- cuts, should i say, coming in october/november. this is the position for the nikkei to 25. up 5.5%. look at the topics. doing rather well. five straight weeks of gains for the broader market. let's have a look at the constituent movers and take a look at these different asset classes and how they are behaving. we had davidhat

we will be waiting on central banks, speaking with the governors of the boj and rba. flagalia low and may further easing as the government signals and wants to return to a budget surplus. at noon today, we will hear from the pboc governor and other officials for an update on the mainland economy. carrie lam's usual meaty appearance this tuesday is likely to be overshadowed by trade developments counsel slashing its forecast, making for the worst year since 2009 for shipments. paul: let's check in on the first word news now. ritika: thanks. asked stevenmp has mnuchin to explain why the u.s. planned a tour. the visits for montana and nebraska were called off on friday, causing marcus to tumble amid fear. trade talks have stumbled. mnuchin said the timing did not talk so the tour was halted. president trump asked why, indicating he was not happy. the trade deal that president trump says he has agreed with japan may be in trouble. sources close to the talks have told the new york times and washington post that tokyo remains concerned the president may impose tariffs on ve

do you see the rba going further? datad some weak employment overnight. i see the chances of a cut coming next time around. >> absolutely. our belief has been for a long period of time the rba is a little behind the curve and they will ease policy. it looks like they're going to be moving next month. our expectation is they're probably going to move twice over the course of the next six months and really follow on to what the fed and other central banks are doing. the fed is really leading the charge. while other central banks may have cut rates first, the reality is, most central banks will be looking to the fed as guidance. if they're cutting interest rates, you better believe the rest of the world will be as well. guy: can the rest of the world keep cutting interest rates, though? look at ecb. talking about the fact we may be getting to the point where we are pushing on a piece of string. there is an expectation growing europe may deliver some kind of a fiscal impetus. what would that do to change your model? does that keep you awake at night when you

the rba, leaving rates on hold today. . has dovish in the commentary as some had expected that the bank of england -- ink in new zealand expecting to cut in november and february, bringing the cash rain down -- cash rate to .5%. in jgb, yield curve has steepened, the yield on the five-year hitting a record low on the back of that commentary we heard from governor kuroda suggesting stimulus as almost effective as providing stimulus. you seen the yield curves between the two-year and 30 year up by 20 basis points already in september after kuroda told the nikkei the long bond yields have falling too far and having this momentum. we could see stimulus from the boj at the october meeting. nejra: juliette saly in singapore, thank you. let's get the first word news. naomi: chinese companies are preparing to buy more u.s. pork as trade talks restarted washington next month. it may be about -- around 100,000 tons as president trump used his speech to hit out at china saying beijing has failed to adopt reforms to make the nation mor

the aussie dollar is back ajead of the art -- backat -- is back at 2.009 ahead of the rba. trade, allerms of the back rate cuts we had in june and july might be reasons to get in and start buying the aussie dollar at this point in time. that's one of the top trades in the asia-pacific. have a look at the chart, the aussie dollar. that's what they think at this point in time. we have to talk about property. we had two straight months now of month on month increase. that's your top panel right here. 1% from the previous month and the month before that was a fraction. as you can see, these are average mortgage rates across median cities in australia, median rates. when you see it, every time mortgage rates go low it's intuitive. you do get a spike in prices as well. the question is whether or not banks will pass on those rate cuts to consumers. rishaad: absolutely. that's what the royal commission was about as well. that -- let's have a look at this trade war, with no end in sight, australia has been amongst those suffering collateral damage. simon birmingham caught up with us

markets still suggesting the rba may need to pump more stimulus in by the end of the year. now let's get the bloomberg business flash. >> walmart has promised to curtail ammunition sales after deadly source shootings -- store shootings. sales oflso stop handguns in alaska, the only --te where it is still walmart is also requesting customers refrain from openly carrying firearms in its stores. samsung is preparing to unveil its second foldable device next year. the new phone will have a 6.7 inch display that shrinks to a square when it is folded. it will be more affordable and thinner than this year' yes year'sfold area -- this galaxy fold. u.s. sales of a car will end in 2020, the latest move by the to reduce exposure to the american car market. that is your bloomberg business flash. nejra: donald trump is trying to get china to agree to a trade deal before the presidential election next november. he tweeted if he won, a deal would get tougher. u.s. manufacturing unexpectedly contracted in august, coming in below 50. the week data provided traders with ammunition to pile pr

be to cut rates -- the rba to cut rates aggressively. but there are concerns that fed cuts now could cause capital to flow out of india, into u.s. bonds, weakening the rupee, so that is maybe not a done deal yet. as for oil, india is very dependent on imported oil. and oil price spike could boost prices, boost inflation and hit people's pocketbooks, cutting spending and investment. the big picture for governor das, weaker growth and prices in india that could add up to a rate cut. when we see price stability maintained and our inflation well below 4% as expected in the next 12 months, there is room for a rate cut, especially when growth hasn't slowed down. that is one target which has been given to us. the main target is price stability. and keep in mind the objective of the requirements of growth. a rate cut,room for you heard him. they are going to assess prices, the economy, and make a decision at the meeting. paul: how compelling is the argument for a rate cut next month? theleen: let's jump into blueblood library. when you look at t

we had back-to-back rate cuts from the rba in june and july. they are really trying to get the jobless rate to four and a half percent. -- 4.5% and it has ticked up to 5.3%. we saw 37,000 jobs created in august overall that there was a big drop in the number of full-time jobs created. and youf full-time jobs saw participation rate pick up, so it will have the rba scratching their heads and have money markets suggesting are we going to see another rate cut coming through from the reserve bank of australia? matt: things very much, juliette saly in singapore with a look at the markets. let's get an update on the aramco attacks. the saudi military has displayed what it claims are parts of iranian drones and missiles, saying the strike on the oil to see in that facility came from "the north." they added the attacks were unquestionably sponsored by sensex. president said new sanctions are .oming -- sponsored by tehran start.s easy to we will see what happens. matt: let's go to riyadh or yousef gamal el-din joins us. after 24 hours of international di

and then, holding their ground, boe, rba, and bank of japan. sugby fans, that came a surprise froma the nordic bank yesterday. matt: the lone hawk. there are risks to navigate, of course. wars,rum has seen trade geopolitical tensions causing problems. how to navigate that? half touad needs a fly open the door, like jeffrey gundlach, and if all else fails, rely on your fullback to hold things together. ecb president mario draghi, this month seeing his last or second to last chance to salvage the eurozone economy by restarting quantitative easing. he only has one meeting left in charge. sticking with central banks, pressure is building on the fed to permanently increase its reserves as it prepares for a fourth straight day of liquidity injection. carl weinberg from high-frequency economics is still with us. i have been seeing so many debates online, iit's seeped ino twitter, reddit now. what caused the credit wrench driving rates to 10% on tuesday? was it really corporate tax payments and too many debt sales? or it the euro carry trade, the saudi

tuesday, a decision from the rba. wednesday, we see pmi numbers from china. in the u.s., the beige book drops. this is the same day that we hear from the fed. thursday, we get the u.s. adp employment change and initial jobless claims. this all leads up to the payroll report for the month of august. back with us are james athey, greg staples, priya misra. to wrap things up, we have done almost the whole program without talking about trade and china. i just wonder whether we are focused too much on the tone and not the substance? the optics change every week. the tone shifts. for the last 18 months, tariffs have gone on, have stayed on, and more have gone on on top of that. priya: that is putting all of this uncertainty on the business sector around supply chain. last friday, the tone went very negative, very dark. the fact that we didn't have a further darkening of that tone mattered for the broader macro market. if you look at the structural issues between the u.s. and china, we have had the same issues for the last two years -- ip, cyber. i'm not seeing any

of australia is going to deliver a 20 point basis cut and it's been quite a swift evolution for the rba. last year, it still looked like it was going to be rate hikes and now we are firmly on the easing path. it's not surprising because gdp growth is forecast this year to for 2019ade low at 2% and households are really struggling and they are a key point of weakness and uncertainty. further monetary stimulus is needed to improve the outlook for the household sector and the broader economy, as well. with that, it will be nice to see a more supportive fiscal environment as well to support and provide greater stimulus to the economy, as well. rishaad: thank you very much. have a great week -- weekend. coming up, saudi arabia will drop dress code for foreign women. more on the kingdom's bid to attract foreign tourists. more on the way. that's next. this is bloomberg. ♪ tom: global oil shipping thrown into disarray after the u.s. slaps sanctions on chinese companies. appalling iranian crude. any failed energy report. how is the market reacting to this? dan: the shipping market for oil went

as for the rba, there's more scope for easing after the pace of gdp growth fell to a fresh five year low. kiwi dollar, steady here after raising most of the overnight losses on that second quarter data, beating estimates earlier this morning. paul: all right, thanks very much. let's check in on first word news with ritika gupta. ritika: thanks, paul. new zealand's economic growth expectations, but still is at a five-year low giving the scope to cut interest rates again. second courter gdp rose 2.1% from a year earlier falling from 2.5 in the first quarter. the data slashed interest rates to a record low, 1% last month. most economists expect one more rate cut before the end of the year. president trump says new sanctions against iran are coming in response to the drone attack on a major aramco plant. secretary of state mike pompeo flew to saudi arabia to coordinated the reaction to the strike. we added displayed what it explains as an iranian missiles saying the attack came from the north. the officials didn't elaborate but added that it was sponsored by tehran. the saudi finance min

ritika: rba chief or philip lowe says he sees a gentle pickup in the australian economy, repeating that policymakers are ready to plant rates if needed to support that recovery. he stopped short of -- the imminent move some have factored in for next week. the aussie dollar on his comments while bets on a cut from the current cash rate of 1% fell. >> after having been through a soft patch, a gentle turning point seems to have been reached. while we are not expecting a return to strong economic growth in the near term, we are expecting growth to pick up a little bit. against this backdrop, the main source of domestic uncertainty continues to be the strength of household spending. sophie: yvonne is checking out conditions for any potential talks for the united states, but there appears little likelihood of a meeting at the u.n. this week. the president said the u.s. must end illegal sanctions and return to tops on the -- talks on the nuclear deal. president trump hinted at negotiations but struck a tough line at the u.n. pres. trump: no responsible government should subsidize iran's bloodl

they will probably use the bounty from rba transfers. but what happens on orders? to balance a push up the budget, or do they have to borrow more from the market? that's after the announcement of the tax cut. india cannot afford significantly higher bond yields. yvonne: you mentioned about the reaction of the bond market. doesn't that complicate the rbi? the whole transmission gets distorted now. can they ease more? binay: i think rbi will cut at least once more. then it will see the impact of the tax cut. in terms of transmission, they are taking steps to ensure the gets better.r ating banks lend loans better levels. that transmission hopefully get solved with that and the state own banks. in this entire announcement, fiscal deficit remains the key. yvonne: thank you for joining us. we are glad to have you. joining us in hong kong. america can keep on trucking as president trump drops tariffs on japanese autos. we will be live in tokyo next. this is bloomberg. ♪ yvonne: let's get to the latest business flash headlines. the world's biggest exporter posted a secon

clearly the ecb, the fed, and of course the boj as well, in addition to what we have said from the rba. rishaad: larry kirkley, mario draghi's last one, last ecb meeting. he is likely to go out with a bit of a bang rather than a whimper. how would that manifest itself? laura: our case is that quantitative easing will be relaunched. purchases from the next month which is more than the market is expecting. we only expected a 10 basis point cut for the deposit rate with no tearing which might be less than the market might be expecting. overall, we expect the ecb to extend forward guidance to take us through the transition period away from draghi's. always -- draghi's presidency. rishaad: laura fitzsimmons joining us in sydney. a lot more coming up right here on bloomberg including a look at some of those equities on the move as we head towards the china lunch break. this is bloomberg. ♪ juliette: a quick check of the on the and nissan is verge of losing a second later in less than a year. asked to stepen down by monday amid the fallout that he and other senior executives received more p

dollar on disappointing economic data and potentially more rba cuts being priced in. i am shery ahn in new york. paul: i am paul allen in sydney. strengthens and the yen slips as trade talks have been constructive. let's look a new week of trading. thank you for joining us. we are seeing equity markets sort of searching for direction. what is going to be the catalyst? is it news on the trade front or something else? the catalyst -- >> the catalyst could be headlines on the trade front but the backdrop is unchanged bridges the cyclical slowdown in global industrial growth and is manifesting in china in one way, in the u.s. also now in a similar way with industrial downturns you are seeing showing up in the data. i think each country kind of knows it is happening in the backdrop. the headlines can kind of i guess edge you along and the markets. they seem salient, but i don't think they change the underlying trend quickly. of the cyclical global slowdown, the pillar of strength this continues to be the u.s. consumer but can you see risks -- i am thinking only in terms of

we had the rba at the start of the week not as dovish. then the bank of canada similarly disappointed. today we had the third in a row not a more dovish approach. they are starting to question how big a package ecb can deliver. vonnie: i wanted to point to the pound index for one second. againstook over time the broad basket of currencies, look how far we've come, going back 14 years at this point, but .e've been in this range what has it done to the british economy, and what if it goes even lower still? paul: there are some interesting effects on the british economy. one of the arguments people predict is that it is a safety -- itthat will allow doesn't seem to be doing much to help the economy because there is so much uncertainty out there. people are holding off from , taking theirnt business elsewhere. it doesn't matter what the currency is doing. on the other hand, influencers finding it harder to get a hold of their goods. business in the doldrums as a result. consumer spending under pressure , the economy looking in a soft spot at

expecting little progress when it comes to tightening the labor market, despite the rate cuts from the rba. speaking up flipping the board, following the fed we will have a busy day when it comes to central banks in asia. the boj on hold. we will see if they turn more flexible when it comes to managing yields, given that the 10-year yield is knocking on -20 basis points once again. bank agenda,entral indonesia is expected perhaps to cut for a third straight meeting while taiwan is seen on hold this thursday. on first's check in word news now with ritika gupta. a: president trump says new sanctions against iran are coming in response to the drone attack on a major aramco plan. secretary of state mike pompeo flew to saudi arabia to coordinate the reaction to the strike. riyadh displayed what it claims is an iranian missile, saying the attack came "from the north." officials did not elaborate but added the strike was unquestionably launched by tehran. the legal hearing into boris johnson's suspension of the u.k. parliament initiated thursday with judges asking him to explain what he would do

what i want to know is the ceo in your business -- two rate cuts from the rba, does it impact your business? >> i think you need to look at the economy beyond rate cuts. the results we reported today across a number of retail businesses and our industrial portfolio in many ways shows the australian economy isn't into -- in too bad shape, if you can deliver that level of growth. there are clearly some levels of growth, a bit of a slow down and economic growth and consumer spending, partly impacted by concerns around house prices. we are seeing the stabilization, and as we showed in the results, things aren't too bad. >> tiffany sparkling today as its quarterly profit shattered estimates. but despite the good news in terms of the profitability, foreign tourist spending threatens to crumple the outlook for the year. >> tourism has been a problem for tiffany for several quarters now. this goes back to before last year's holiday season. foreign tourists coming from abroad a lot less, not spending as much at these big destination stores that tiffany has, like their flagship in new york city. chin

rba chief philip lowe says he agrees with a gentle pickup in the australian economy, seeing policymakers are ready to cut rates if needed. however, he stopped short of flagging limited move that some markets and economists have factored in for next week. the aussie dollar rose on its comments while a cut on the current cash rate of 1% fell. >> after having been through a soft patch, a gentle turning point seems to have been reached. we are not expecting a return to strong economic growth in the near term, but we are excepting growth to pick up a little bit. against this backdrop, the main source of the mystic uncertainty continues to be the strength of household spending. ritika: 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. this is bloomberg. paul: thanks. for some more to watch and what to watch and markets, let's go to sophie kamaruddin in hong kong. sophie: after that low inspired rise, the aussie dollar pulled back as we get frustrated and political lines adding. bets on october easing now a

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also tomorrow, a rate decision the rba. the central bank is expected to cut rates are the first time in five months. -- the third time in five months. matt: the reserve bank of india is expected to cut friday as the country grapples with a negative output gap and below target inflation. plus, it is the all important jobs day in new york. washington, really. non-farm payrolls are projected to have risen in september with unemployment steady at 3.7%. we will have someone stationed in the capital under lockdown until those numbers are released. we are minutes away from the open. next, a look at the stocks to watch this morning, including ab inbev. the asia unit is rising in hong kong after its listing. this is bloomberg. ♪ anna: welcome back to the european market open. let's get around the newsroom and have a look at what the team has picked us there stocks to watch. annmarie hordern is looking at ab inbev. --i burger is focused on of abuccessful launch inbev's asian unit, rising 7% at the debut of those shares. they raised

. >> dan suzuki of rba. >> love dan. >> we chatted off camera. >>> i think dan makes excellent points i mean, i have to say that because he agreed with me. con edison making an all time high today up 2% on a lousy tape is grade for con edison but you have to say to yourself does this make sense in the context of a broader market. i agree, i mean, i think you're hanging your hat on fewer and fewer things and if you think the fed is somehow going to bail us all out you have to ask yourself is the fed the fireman that's putting out the fire or are they the arsonist that's adding gas i would suggest it's the latter. >> speaking of safe haven and defensive plays the dollar hitting a two-year high today. metals, gold spiking to a six-year high, silver touching levels not seen as 2016 as a global selloff had investors rushing to safety. our next guest says this red hot trade to get even hotter let's go off the charts with todd gordon. >> first gold i think it's important tolook at what we've done in the last two decades i'm sure you guys at the desk can remember trading gold at $250 an ounce

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the rba coming through with its decision tomorrow. weakness in both the kiwi and aussie today as the tariff impacts come into play. just concerned about the ongoing trade dispute hitting those commodities. soothing words coming through from authorities, saying liquidity example and the risks are controllable. this is despite the fact that the official pmi came in weaker than expected here in hong kong stocks still being hit by the protests. a lot of weakness coming through from the casino and property players today. let's have a look at the impact the protests have had on retail sales. on friday afternoon after the bell, the first official read of retail sales in terms of four months of data since the protests began. they fell by 11.4% in july. much worse than the mere 7% drop in june. bloomberg intelligence is saying it will tip hong kong into a technical recession when we get the third quarter numbers coming through. even though retail sales are not a huge component of the overall gdp, they do under score the weakness you are seeing

you have the rba, bank of canada, riksbank, and behind the scenes, the bank of japan buying a lot less fixed income and particularly at the long end of the curve. central banks are telling you the price -- fed has priced too much. confirms what was get a sense in terms of liquidity, if we see bond markets spin around as we did, negative to positive, 1.20 5 trillion, 10-year at a one-month high. not take much to push these yields much higher, is it? we've learned the fat -- last few years is liquidity and market is less than it used to be. that was the case in august. things are improving now but these are not the types of liquid markets we were used to seven years ago. nejra: at the moment, we've made inone third of the move august, so a way more to go to the upside in yield. economy, i the u.s. know you've look at sign's the u.s. economy isn't looking as robust as some think. what are you seeing below the surface? jim: even above the surface, you see some real weakness in the corporate sector. last week, looking at global pmi data, and most interesting message was the u.s. catching do

the aussie dollar up, we are waiting for a speech from the rba central bank governor. when it comes to sovereign bonds, japan is the interesting space to watch. we are seeing the yield curve continue to steep coming out steepest since may. they can see the front end of the 10 year 5-year at also been gaining as well. i want to talk about what is going on when it comes to pound volatility. town volatility finally picking up as we have this up in court decision -- pound volatility the supreme court decision today on whether johnson was lawful and the suspension of parliament. the way, this is a butterfly trade on volatility per it we can see that butterfly options are picking up. in other words, traders see a wider range of movement from the pound. it is not just the parliament, this up in court decision today but also the you and starting to have discussions around brexit, so trader starting to gear up for that and starting to take out protection. matt: thank you for joining us on the market check. we have just gotten a share price for the each cutie ipo, it looks like

you can see the aussie dollar .oving a little here we're waiting for that big rba meeting tomorrow. the rb is expected to hold steady. just the rmb is effective hold steady. of 14.9.a level week many factoring numbers. korean pmi expected this week. plenty of macro data for the markets to digest as the trading week gets underway. thanks, kathleen. a check on china's small pmiters with the caixin reading later in the next hour. we have the standard charter economists to discuss this. lan shen, china economist standard chartered bank thanks for joining us. you would have to imagine that caixin reading is not good to be too pretty. tariffs have had an impact on china's exports with growth of 6% year today compared to 9% in 2018. exports to the u.s. declined the most among the major trading partners. that the actual growth could possibly decline into negative territory in q4 next year, due to the much faster position of additional tariffs. things may. this will likely to wait on the business performance of smaller business and exporters where thinking that the pricing export or pricing

holding at 68.63 cents after the rba reaffirmed it's prepared to cut interest rates further. we have seen nikkei futures gaining as the nikkei stocks continue to see the longest winning streak since october of 2017. yen holds neare six-week low. paul: thanks. let's get some more on what we should be watching us trading gets underway in asia with the bloomberg global markets editor. more and more investors are queuing up to see bond yields. how much of that has been driven by easing expectations from central banks? sentiment has gone a little bit too far. adam: that is part of the picture. of course, markets had run so high. august got toin extreme levels. there are a lot of people who wanted to get slightly shorter and thinking that yields would climb someday. you can see the market reaction in the last month. that chart shows it clearly. how much of a move we have been. we've barely retraced any of the past 12 months moves. we're 30 basis points on the u.s. 10-year off that 150 low. so, it's getting into the realms where in two weeks, it is a big move but if you compare over

we have aussie contracts snapping a four-day gain ahead of minutes from the rba along with the data from australia. new home prices from china and south korea, we will be getting the meeting minutes from the bank of korea. today, korean officials will hold a meeting on the rising oil price impact on the economy. paul. paul: first word news now with ritika gupta. ritika: wall street may soon see one of its most consequential victories of the trump year at with regulators considering scrapping a rule that forced banks to set aside billion's of dollars for trades. the requirement was approved during the obama administration and makes lenders post billions and margins when engaging in derivative transactions for their own affiliates. lobbyists argue the requirement is redundant. greece is asking its european union creditors to approve the early retainment of part of its bailout loans to the imf. the government says paying ahead of schedule would reduce servicing costs by more than 70 million euros. it adds the annual interest rate of the loans is 4.9% and greece can borrow money much more ch

japan's sales tax hike, the rba decision, china's 70th anniversary, and companies going public are getting a very hard reality check. today, we will get industrial profits for august from china, likely to show that rebound we saw in july, and also, the chip industry on watch after the downbeat outlook by macron which has slashed its capital -- micron, which has slashed its capital spend. given is in view signs the u.s. may not renew the temporary waiver. paul. the: let's check in on first word news now with jessica summers. jessica. the u.s. slaps sanctions on chinese companies it accuses of shipping oil from iran. rates for vessels capable of carrying 2 million barrel cargoes of crude jumped 19%. shares also rose. sanctioned costco companies includes shipping. thehe u.s. disregards legitimate rights and interests of other parties and wields the state of sanctions that well. it goes against the trend. jessica: hong kong's embattled leader, carrie lam, says it is up to her government to find a solution to the months of unrest in the city. she told a public event she accepted responsibility