After eating sevenmonth lows. Theproducers can halt recent slump. The latest trade data from china. The numbers will show how deeply the trade war is biting. Lets see how things are shaping up for asian markets. The s p went after through the largest recovery since december of 2018, we are seeing some modest gains in asia. Nikkei futures down, seeing the new zealand stocks up 0. 5 this is after new zealand, india, and thailand surprised with Interest Rate cuts. We are watching for a slew of Economic Data the big one is the china trade data, expecting exports and imports to decline. We saw some week pmi data before. Also, philippines Second Quarter gdp data will be coming out, it grew faster in the Second Quarter. Expecting japan currentaccount surplus data, expected to widen. We will also watching for singapore retail sales. Paul lets check in on the first word news. War isescalating trade seen pushing the economy toward a first recession in a decade. Larry summers says the risk in the u. S. Is higher than it was two months ago and higher than it needs to be. Morgan stanley said that the u. S. Put tariffs on imports for 46 months and a global contraction is likely within three quarters. An extremely high degree of uncertainty in markets. You see that with all the assets people run to when they are scared. Longterm u. S. Bonds, gold, even bitcoin, that is a sign that people are anxious. President trump is bashing the fed again, firing off a string of tweets calling for faster rate cuts. He said that the fed doesnt understand that the u. S. Is competing with other countries. He also says the fed is too proud to admit mistakes of acting too quickly and tightening too much. Oil clawed back some losses after saudi arabia spoke to fellow producers about recent slide. Prices fell to lows not seen since the start of the year. A surprise surgeon stop miles fueled new worries a surprise search in stockpiles fueled new worries about a glut. Fears of recession. British airways says it fixed a computer glitch that caused the cancellation of more than 100 flights at heathrow and gatwick. They were error messages on the checkin system and services faced multiple delays. British airways could face a compensation bill in excess of 8 million pounds. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Sophie sharp declines has u. S. Investors concerned about more volatility ahead. We are also seeing oil futures move higher after he plunge in almost 6 intraday. Su keenan joins us with more. With a just closing out marginal gain. That does not tell the whole story, that it erased a 2 drop the third biggest reversal of stocks since 2017. Notice the s p 500 Consumer Staples index was an area of strength in the market, up better than 1 . The dollar relatively unchanged and yields had their own wild ride. Lets look at some of the big movers. Earnings happened to be a big art of the story. Cvs health care having its biggest oneday jump in eight years as it raises its forecast. Disney under pressure after disappointing results after the bell yesterday. The star wars theme park ride hurting theme park attendance in the u. S. Weight watchers with its biggest investor, billionaire oprah winfrey, surging after positive results, and an announcement that oprah will be taking a greater role in some of the ads Going Forward. A Media Company announcing it will lighten up some of its holdings. Lets go to the bloomberg rate profittaking is a big question as we look at the unease that investors are feeling. Investors have pulled about 20 billion from the s p 500 this year with a lot of it happening in the past week or so. So, there is concern that, as one strategist said, a lot of investors feel like we are getting ready to hit a wall because of the action of the trade war. This strategist says he hopes calmer heads prevail. Sellinggist said more likely ahead. Paul oil futures, dramatic reversal with new york traded oil plunging before moving in the other direction. Withs. Investors hit surprise inventory data. They were expecting a decline and they got one of the biggest buildups. You saw the Oil Futures Drop off the cliff. Notice the quick turnaround at the far end of the chart. Saudi arabia pretty much announced through spokespeople that they will not tolerate this kind of decline in price. Brent has fallen 14 this month. We mentioned it fell into a bear market. The saudi arabia options do include, as some of their various attempts to reduce production. It is noteworthy that opecs cuts thus far have not successful in halting a slide that we see in price. That is of concern to opec plus and its various members, certainly saudi arabia. Ofl lets touch on one after hours movers. Lyft exceeding estimates. Tothis is of course a rival uber and it has done fairly well with latest numbers coming in much better than expected even though somewhat say it is still operating at a loss or projected one for quite some time. They did see the rally halted a little bit when they announced a lockup period which means more shares can come out. Insurer, travel agent online bookings holdings, and jackinthebox all exceeding expectations. That helps add a bullish momentum to the u. S. Thursday open. The race to the bottom picked up dramatically when new zealand, india, and thailand all cut rates on wednesday, new fears of a Global Economic slowdown. Mossberg opinions dan joins us to make sense of it all. Three different countries, three different magnitudes as well. Are there different threads that link them all over Different Reasons . As dramatic as the day seemed yesterday, upon reflection, the surprises were of degree rather than kind. That is part of the answer here. New zealand was expected to cut it it just cut by a bit more. India was expected to cut. It cut by a bit more. Thailand did something. The thread linking all of these is that all of these Central Banks are citing concern about the Global Outlook as their principal theme, issues like backdrop and domestic are there. Trade are citing conflict, declining business confidence. With the clearing of the throat, and inflation is below target. It helps to keep perspective here. With recent moves we saw from india, new zealand, thailand, a lot comes down to how they intend to support growth. What can observers look to in order to forecast what perhaps comes next given that indicators like gdp and inflation are not as important . If you listen to what the Central Bank Officials said yesterday, they were pretty candid and clear. There is an easing cycle underway here. This is not remotely we are finished. In new zealand, the governor said at his press conference that he was perfectly open about what he called unconventional measures including negative Interest Rates. New zealand has always seen itself as somewhat apart from the troubles of the world. Negative Interest Rates, qe, these were all northern afflictions. I suppose we are all japanified now. Sophie what comes next . Daniel it is very clear that this easing cycle has a way to go. When New Zealanders talk about unconventional measures and they pull a 35 basis point reduction rather than 25, someone is clearly having too much fun. There is an easing cycle underway that has further to run. How much further has to run is an interesting question. Sophie that race to the bottom. Thank you. Dont miss our exclusive interview with the Philippine Central Bank governor live tomorrow at 9 00 a. M. Hong kong time. Still ahead, china trade data due in the coming hours. That will give us more insight into how the economy is faring in the trade war. Next, a securities global strategist tells us why he is staying bullish on u. S. Stocks despite a rocky road ahead. This is bloomberg. Paul breaking news story on the bloomberg. Huntsman, the chemicals manufacturer, to sell two units for 2. 1 billion. The deal comprises a cash Purchase Price of 2 billion plus the transfer of up to 76 million in net underfunded pensions. Indorama will acquire huntsman facilities in several locations. Some in texas, india, and australia as well. They say they intend to accelerate share repurchases. And wensaction closes see huntsman shares moving higher by 4 after hours. Sophie asian stocks are set for a muted open after a dramatic reversal in u. S. Stock and bond yields overnight. Our next guest is bullish on equities, saying the bull run has more fuel in the tank. Daniel yoo is global strategist for kiwoom securities. Thank you so much for joining us. It was a turbulent day for u. S. Markets, so we have to buckle down potentially for more volatility ahead. You are still bullish on growth stocks, especially on the nasdaq. Outline your case. Daniel as you said, the Interest Rate environment has fallen quite significantly and we are looking into probably a 10 year bond rate falling to the previous lows of 1. 45 or even lower. If you have such a low Interest Rate environment, the growth second valuations become more attractive. Or 5g, datae ai centers, all these sectors would show continuation of interest. Current trade war, if you look isit, it is more winning who going to be the leader in this industry. We think both the u. S. And china will be investing heavily into these industries. R. O. E. Versus the the Interest Rate, the gap becomes so large that the valuation attractiveness rises. We continue to focus on these sectors. If you look at the i. T. Segments, the bio health care, the alternative energies, all looking attractive. Pimco is outlining structural changes that could push treasury yields into a negative territory. Look at what he told us earlier on bloomberg. What would it take for yields in the u. S. . It is probably not around the corner but what it would take is probably a serious downturn in the economy in which the fed would take the rates down to zero, we would restart qe and see negative yields in the u. S. As we are seeing them and many other parts of the world. Sophie do you agree with his stance . What is the outlook for the fed policy decision . Daniel im not that aeration terms of economic recession. Ofthat bearish in terms economic recession. When trump said they would raise the tariff to 25 , i have anticipated Interest Rate to fall sharply. We were expecting that rates would go down to previous lows of 1. 5 or lower. Obviously, that is because trade disputes cause the concern about Economic Growth rates and you need to boost consumption. Therefore, fiscal and Monetary Policy will be much more accommodative. Fed toam expecting the cut Interest Rates, im expecting about 1 cut over the next year. Rateat is the case, the will go down further, meaning it will probably hit low the previous low. Paul we have a chart that supports your thesis in terms of how much these low rates make equity markets attractive. Yields see the outweighing treasuries. The fundamentals, are they strong at the moment . This rally in equities notwithstanding, is it all propped up by cheap money and not much else . Daniel yes, you can say that. Is astill, the lower rate lower rate, meaning that if you look at the Global Equity on average. Gap of the r. O. C. Versus that the roe versus that is so large that it is looking attractive. Yes, it is driven by the higher liquidity, meaning that if you are generating higher return versus the Government Bond rate, people will probably by these equities versus doing others. Paul when you say the bull markets have another 12, but if we consider this role in easy money, are we setting ourselves up for a rather dramatic end . Daniel sure, that is a possibility. I am comparing current market similar to the. Com bubble era era. Otcom bubble you had seen a sharp rate cut by 75 base points in the fed. If you look at that, clearly the lower Interest Rate environment causes the bubbles. After that, the . Is whether you can exchange with you can sustain that return on equity. Roe sharply. The 20002001,t did in if that happens, that is the case, then yes, we will have more than 30 drop in the equity market. For the time being, you are looking at a much lower Interest Rate environment. People are looking at these growth stocks. If you look at the fourth industrial revolution, theres a lot more to go. If the 5g investment happens, then in terms of the need for these i. T. Sectors will be much larger than people anticipate at this point in time. Sophie lets turn our attention to emergingmarket currencies. They have lost about 2 since the u. S. That on august 1 that they plan to slap more tariffs on china. For your outlook for the dollar, how does that fall in line . With the think that, u. S. Naming china as the currency manipulator, we have seen that in various other countries that it does affect the currencies. We do anticipate the renminbi to appreciate over the next year. People are saying that maybe it might go to seven, 8, 9, but i do think that renminbi will go down to 6. 5 over the next year and the dollar index will probably depreciate from the 98, to 93, 94 rate i think that should be the trigger point for emergingmarket rebounds with emergingmarket environments and a stronger currency. Paul daniel yoo, global strategist for kiwoom securities in seoul. You can get a roundup of the stories you need to get going in todays edition of daybreak. It is available on terminals and mobile on the bloomberg anywhere app. You can customize your settings. This is bloomberg. Paul this is daybreak asia. Im paul allen in sydney. Sophie i Sophie Kamaruddin in hong kong. Symantec surched rged amid reports that broadcom could be buying its business. The agreement would come after broadcoms attempt to purchase operation,symantec which fell apart last month. Paul the Company Behind the chess playing robot has more than a billion dollars in debt. Deep mind was bought by google. Alphabet. Revenues were doubles were doubled last year. Staff costs nearly doubled from the previous year. Deep mind says it has assurances that it will be supported financially for at least another year. Sophie it is a lucrative business, organizing dates. Shares of match group soared the most in two years after a record in growth on its flagship app tinder. 20 nue jumped by more than from a year earlier. It is now targeting japan, south korea, and the middle east. Paul fedex is cutting another link with amazon as the Worlds Largest online retailer continues to build its delivery service. A contract wont be renewed at the end of the month. This comes two months after it ended a similar agreement to fly packages in the u. S. With will now only keep amazon for international deliveries. Sophie a quick check for how bond markets mayfair this morning. Treasury futures pointing lower. A lot of emphasis will be on where foreign currencies will go from here. The aussie dollar and kiwi dollar resuming gains after the losses we saw. Up next, saudi arabia making some phone calls to halt the oil slide. Will it be enough to halt the volatility . This is bloomberg. This is daybreak asia. The escalating trade war is seen former treasury secretary Larry Summers says Recession Risk in the u. S. Is higher than it was two months ago and higher than it needs to be. The u. S. Put 25 tariffs on all chinese imports for 46 months and if china hits back come a global recession is likely within three quarters. There is a high degree of uncertainty reflected in markets. Assets that in all the people run to when they are scared going so far up. Gold, even. S. Bonds, bitcoin. That is a sign that people are very anxious. Three asiapacific Central Banks did cut rates. The reserve bank of india lowered its rate by 35 basis points in its fourth cut this year. The repurchase rate of 5. 4 is its lowest since 2010. The bank of thailand unexpectedly cut its benchmark rate for the first time in more it hasur years and says more time to ease. The person in charge of Hong Kong Affairs held a special meeting in shenzhen to discuss unrest. The protests have been a challenge for beijing and are raising questions on whether they will intervene. They invited representatives from hong kong. Tension is rising between Nuclear Neighbors pakistan and india after new delhi revoked autonomy to cashmere. A series of measures to oppose what it called indias unilateral and illegal actions including downgrading diplomatic ties and suspending trade. Pakistan says it will also take the issue to the un security council. Global news 24 hours a day on twitter,t to knock on and at tictoc on twitter,powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Sophie we are a halfhour away from the open in tokyo, sydney, seoul. Selina softbank beating those First Quarter estimates by a wide margin next evaluation gains from vision fund investments. Softbank says it will start making those investments in the next 13 months. Rakuten andg unicharm reporting earnings. A Beauty Company has been embracing technology, recently launching an App Subscription Service that promises to give m a tailored skincare regimen. The china offshore yuan right now blowing past that seven level. Yesterday, we did see the pboc rate. At we are waiting on todays fixing as a key policy signal. Investors are worried that it could break seven, which is a sign that room for depreciation could loom large. Label forinas new the u. S. As a currency manipulator, the latest data showed minimal intervention and we will be getting more of that later this hour. Paul oil prices are recovering in new york after saudi arabia says it is considering all options to stop the decline. This halts a threeday decline in crude prices. James thornhill joins us now. What options are realistically available to producers to prop up the price . James what we are really talking about is if they can extend the production cuts already in place. They have gone above and beyond what was already agreed. If they took it upon themselves to cut even more, it would fall on the other members to follow that lead. The more saudi arabia cuts, the more it potentially loses market share. They are in a tricky spot when trying to manage these expectations. The next point to look out for is a meeting in abu dhabi in september where the ministers will get together again. Of course, the other problem for opec is that the u. S. Is not as dependent on imports as it used to be. They are caught in a little bit of a tight spot. Saudi andght spot for the opec space. The oil market, what are the next pressure points . James in the immediate term, the market will be looking to the chinese trade data today to see what impacts the trade war is having on activity. That will be key for a lot of markets. As was mentioned, the daily yuan is lookingthat china to get that Competitive Edge through its currency. Market, like any other they will be looking to those trigger points to see what develops. Certainly, you can never tell when the president and the u. S. Is going to take to twitter again. That is another major focal point as well. Uncertain outlook. Certainly, it is hard to see crude sustaining a strong rebound. Sophie thank you. Now, china is adding to its gold reserves as currency policy is dragged into the trade war with the u. S. The pboc expanded holdings for the eighth straight month starting in july. Tom mackenzie joins us from beijing. How much gold has china amassed now . Tom they have been amassing since december of 2018. About 94 they now have tons of gold. The added an additional 10 tons in july. Analysts have said this is part of a diversification play. They want to diversify fx reserves away from u. S. Dollars. Some economists we have been speaking to, they will continue buying gold gradually in the months ahead. Not enough each month to move the price significantly but this gradual appreciation will continue. Reserves, thee fx latest numbers out toward the end of the day yesterday in beijing. The fx reserves now standing at the month of july at 3. 1 trillion. Marginally below the june number , dropping below 3. 1 2 trillion u. S. Dollars. Still comfortably above that 3 trillion level. Our bloomberg economists say the inflows and outflows are relatively stable and there is no real sign that reserves are being used to intervene in the currency markets in any way. That is largely down to that u. S. Dollar strength that we saw in july, putting a bit of pressure on those fx reserves. We will keep a close eye in the months ahead as they will give us some gauge of the pboc will be reaching for those. Paul another very important piece of data out today, trade numbers for july. What are we expecting . The latest trade picture, exports are expected to have fallen, again no real surprise. Drop of 1 for july. Slightly less bad than the number we got in june when we got more than a 1 drop. Imports are expected to fall 9 from a drop of about 7. 3 in june. A large proportion of imports and china turned around, manufactured exported again. Trade tariffs are a big part of the pressure on chinas trade picture. You have some of chinas trading partners, whether that is the eu or others, where you are seeing weakness in terms of demand. The pmi numbers, if you break those down, you are seeing contraction still. It is not looking particularly pretty for chinas trade data. Something that has been attracting a lot of attention over the past few days is of course the yuan fix. What are we expecting for that number today . Becauseay is a big day on wednesday, we got the fix just slightly stronger than the seven level. The spot price for the yuan onshore closed around 7. 04, so the pressure is there on the pboc. If they did we can it be on that level, that would be the weakest we have seen in more than a decade. Firmly focused on this. There is the question as to whether or not a weaker fix would lead to further depreciation for more capital outflows. What that means for chinese corporate with heavy holdings. All of those questions in focus. This is one that fx traders are watching closely. Some dont think you will get a fix weaker than the seven level because they think the pboc wants to maintain stability. Atare watching very closely 9 15 beijing time. Paul china correspondent Tom Mackenzie and beijing. Next, more on trade. The trade war may be pushing the World Economy toward its first recession in a decade. The views of former assistant secretary of state daniel russell. This is bloomberg. We are counting down to asias first market opens this morning. Japanese futures pointing to gains this thursday while the yen is edging higher. Concerns are meeting around trade friction and global growth. Pressure will remain as the rush to haven continues, driving down again to with insights of the year low. This is daybreak asia. Im Sophie Kamaruddin in hong kong. Paul i am paul allen and sydney. Some has called on have called for the u. S. And china to return to negotiations and a rulesbased framework. Our next guest agrees with that call. Daniel russell was former assistant secretary of state for east asian and Pacific Affairs in the obama administration. Things very much for joining us. Fair bit ofracted a Media Attention since you have been in australia and you have made comments that australia should link with the u. S. To combat chinas economic sins. We have a chart on the bloomberg with australia with a dilemma. China is australias biggest trading partner, the u. S. Is australias third biggest trading partner. A fine line to walk. Daniel it is a fine line to walk but a line that i think australia has and can walk, which is to reconcile marriott interests of the australian nation and australian people. ,bviously, trade is a Part Technology as a part, and National Security is a part. You shouldnt think of these things in terms of strict binary choices. It makes sense for australia to pursue a policy of maximizing benefits. Certainly, there are tradeoffs. My point is that if china intuits that australia is going to compromise on his national on its National Interests in one area, say security and democratic values, the fear of economic retaliation or punishment from china, then there will be threatening behavior that australia wants to avoid. If australia can stake out a did take out a position not based on what the u. S. Wants or tells it to do, but based on authentic australian values and interests, i believe it can have the best of both worlds. Paul in terms of how the u. S. Has been approaching the trade dispute, they have been effective at gaining leverage but it hasnt translated to results. What is the best path to getting something tangible done . Daniel leaking as a diplomat, and i am letting my bias show, you cant effectively communicate with your other negotiating partner through telepathy. You have to really talk. While there have been encounters between the u. S. Trade representatives, they have been pretty unsatisfactory and they havent really reflected either a very good understanding of the other side or the spirit of compromise. Hade President Trump has occasional meetings with president xi that resulted in at least the appearance of a truce, none of those have lasted. There has to be real engagement, discussion, negotiation it i have dealt with china on behalf of the u. S. Government for many years. Im not naive. China will not accommodate our interests by us just saying, pretty please. You do need leverage but you also need a strategy and engagement. There are many forces within china pushing for economic opening, writing those waves. Sophie as we turn to the security dynamic between the on. And china, the secretary his tour of asia this week, accusing china on militarization of the global commons. He since walked back remarks after chinas ire was raised. Australia on monday said it would not host u. S. Missiles on its territory. This surely is an indicator of one other dimension of the u. S. China relationship. How do you see this Going Forward . Daniel well, the world has serious questions and serious about militarization,. Trategy, behavior paramilitary ships flooding the zone, not just in the South China Sea and east china sea, but in the pacific. There are questions about chinas intention in terms of utilizing ports and other facilities that are part of this belt and road network. I think it is legitimate and natural that respective militaries of the u. S. , otheria, japan democracies should be taking a hard look and looking at other allies to make sure our ability not only to deter but also to strengthen Regional Security continues to grow, but that be nonaggressive toause our mission is not prevent china from exercising. Egitimate rights our collective interest is instability. I think there is a good case to be made for the u. S. And australia doing more to enhance our joint nests, our operation our jointness, our operations. Maybe that includes facilities, deployment of new assets. Whatever it is, nothing would happen without full consent of the democratic government of australia or other governments concerned. Sophie you are a part of obamas pivot to asia strategy. Currently, the trump inistrations, there it there engagement with the region has been less so. Managing welldressed managing unrest in hong kong as protests have continued in the city for nine weeks. When it comes to the u. S. China conversation on that aspect, what do you see as the Biggest Challenges to smoothing out the security gap . Daniel the first thing i would ay is that nature abhors vacuum. Or leaves. S. Retreats vacant seats in multilateral meetings, if the u. S. Doesnt choose to fill important slots,dorial participation in these regional what,nd so on, then guess china will fill this space. Manifestingply not that kind of commitment to the rulesbased order and a fair and countriesn that value. Kong, thee of hong question is whether issues of the right of citizens to have a say in their own future is a , to champion democracy worldwide, or whether the demonstrations and protests in hong kong are really just a tool to be used to discomfort beijing to back foot china and maybe gain leverage in a trade dispute. Andink that Many Americans many people throughout the world find it unnerving if the president of the United States is championing the cause of democracy and civil rights instead tells xi jinping that you have been patient in dealing riots, and do what you will. Paul we will have to leave it there unfortunately but, daniel russell, thank you for joining us. That is daniel russell, former u. S. Secretary of state for asia and Pacific Affairs. He is speaking at the Asia Briefing event that is just beginning in sydney. Terminal users can access proceedings and watch live. Some breaking news on the bloomberg terminal. We have japans current account balance for the month of june a little better than expected, billion yen. We had expected eager decline in imports versus exports. We have of course also secondquarter gdp numbers for japan coming out on friday. Not a great deal of reaction, the yen trading hundred six. This is bloomberg. Ul this is daybreak asia im paul allen in sydney. Sophie im Sophie Kamaruddin in hong kong. Samsung, the galaxy note 8 open to challenge apple and huawei. Mark gurman has the details from new york. Mark we are here live at the Berkeley Center in brooklyn where samsung has taken the wraps off two new phones today. These arent dramatic, revolutionary upgrades over models from years past, but they do now have 5g support in the u. S. On verizon for the bigger model, exclusive to south korea for the smaller model. 10plus,r model, the is 1100 dollars. I like the bigger display. They showed off a bunch of new features for integrating with their stylus. The big question, are phones like this going to return samsung and other smartphones across the Market Worldwide back to growth . I dont think so. In governmental upgrades just like the iphone 11. I think the next two years or so, we will see more foldable devices, a redesigned iphone. Samsung hasnt pushed us any closer to that today with the note 10 and 10plus, as impressive as the devices. Paul weve got markets opening in tokyo, sydney, and seoul at the top of the hour. Selena, what are you watching . Selina i want to first take a look at the japanese yen it has overall been rallying in that flight to quality is rushed to havens continues. Estimates. Lowing there are still those lingering fears about the trade war, slowing Economic Growth really pressuring equities. Morgan stanley actually is estimating that if the u. S. Puts 25 tariffs on all chinese imports, contraction will be likely in the next quarters. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Click, call or visit a store today. Good morning. Asias major markets are about to open for trade. Im Sophie Kamaruddin in hong kong. Welcome to bloomberg daybreak asia. Our top stories this thursday, Recession Risks turned more optimistic on global growth. The threats are rising daily. Oil has some losses after hitting sevenmonth lows. We are standing by for the latest trade data from china. The numbers will show how deeply the trade war is fighting. Lets get straight to the markets with selena this thursday. Selina this thursday. Selina on the heels of the s p recovery since december of 2018, we are seeing a mixed open in asia with the nikkei 225 just barely changed up almost 1 10 of a percent. Also seeing continued strength overall in the yen as the haven assets continue. Japanese bonds have been approaching the lower end of the bank of japans range. The Second Quarter data is set for release on friday. We will be watching to see how that will turn out. It is forecasted to show the economy is still cooling. Switching boards taking a look at korea, the kospi offering a glimmer of hope. There may be some relief for the up aboutwn kospi 8 10 of a percent. They will allow exports of key; after materials key; dr. Materials materials. Conductor the basis points was double the expected reduction. Change, like a mixed slightly positive in new zealand of about 3 10 of a percent. Up about 3 10 of a percent. Paul lets check in on the first word news. War isescalating trade pushing the Global Economy towards a recession the first recession in a decade. Larry summers says the risk in the u. S. Is higher than it was two months ago and higher than it needs to be. U. S. N stanley says the with 25 tariffs on chinese inputs imports are four to six months, and it beijing hits back, it is likely with and three quarters. An extremely high degree of uncertainty reflected in markets. You see that in all the assets people run to when they are scared going so far up. Longterm u. S. Bonds, gold, even bitcoin. That is a sign that people are very anxious. President trump is bashing the fed again following a string of tweets on the rate cuts. He called on incompetence one things can be dealt with easily saying the fed does not understand the u. S. Is competing with other countries. The fed is too broad to omit their mistake of acting to quickly and tightening too much. The white house has not commented on the fed policy. Three asiapacific Central Banks move by anfter the unconventional 35 basis points. Rates of 5. 4 is the lowest since 2010. The bangkok, thailand unexpectedly cut their benchmark rate for the first time in four years the bank of thailand unexpectedly cut the benchmark rate for the first time in four years. Global news, 24 hours a day, onair and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. Tv this is bloomberg. Paul lets get some more on the markets today. We have mark in singapore. Equitiesovery in u. S. We saw a recovery in u. S. Equities, but the yield curve is telling us Something Different about what the future might have in store. Indeed. The fear factor now is extremely higher across the markets as Larry Summers was saying earlier. You have people grabbing the kind of assets which typically they would do so if they were really fearing the very slow growth, possibly recessions. You are seeing treasuries and gold and haven currencies like the yen doing extremely well. There is a risk here. The more people talk about it, theyre more the] the more danger there is. You can see the trading is very erratic. If you look at the s p 500 trading this week, we have had two sessions where on a whole day basis by looking at the futures, we have had 3 swings for two consecutive days. That is enormous. Plusses are going from to minuses, not even one direction, it is very erratic trading. It shows the theory is very high and people are jumping at the most innocuous things. Just yesterday, the pboc investigated why there was a story going around they were about to cut Interest Rates. People are willing to jump on the strange stories at the moment. At the same time, you have the central bank cutting rates early. When the data is not yet supporting the situation that deserves deep rate cuts, it is a strange environment. People are really not sure where to go. Of course, they will go for a defensive posturing, which is why you had treasury yields crashing. We were at 3. 2 . Yesterday, we were at 1. 6 . That is a dramatic change of events. It is not likely to get better in the shortterm. sphie looks like the bank maybe looking to jump into the even as the gdp growth is accelerating in the Second Quarter. Where do you see the stance . It would only be now a surprise that they do not do anything. We saw three of their peers cut rates yesterday. It was a remarkable day. Without there we thought there could be to rate cuts and there are three. There were three. Philippines not to join in, that would look strange. It is a very likely it is very likely they will follow. Cap plenty of room to do so. They have plenty of room to do so. They are at 4. 5 . They certainly can get the ball rolling. There is more to come. Central banks and asia are looking at this saying they are behind the curve. We expect more to follow. That is the trend. There is no time to be left out. It will be surprising if the philippines does not cut rates. Sophie turning to another apology, we are getting reports that japan is allowing some exports of Semi Conductor materials to south korea. How does that play out . Stocks korean stocks are badly in need of any help they can get. Kospi was the lowest in 16 years. There is no doubt korean stocks by any measure are relatively low on the radar. Any help they can get is definitely welcome. They will get some sort of a boost shortly from this move from japan once it goes through. There is a lot of external factors still going on for korea. They are caught up in the overall dispute with japan. They are a big victim of the u. S. And china trade disputes as well. There is a long way to go for korea. They are definitely at the forefront of all the global contraction we are seeing through the trade flows. Any shortterm help will be very welcome. We couldk see a decent bounce in theospi. We could see decent bounce in the kospi. A lot of activity in korea today. Kospi up a 10th of a percent. Thank you so much, mark. You can follow more on this story in our blog on the bloomberg. You can get the rundown in one click with commentary and analysis from expert editors. You can find out what is affecting your interests right now. Oil prices are rebounding after saudi arabia said it is considering a luncheons to stop the decline. All options to stop the decline. Aaron clark joins us now. What options are at available to sell their what options are available to saudi arabia should they act on that will decline . Like you said, oil is rebounding a little bit today. The u. S. Benchmark is up as much as 2. 9 with trading around 52 or 53 a barrel. That is after Bloomberg News reported the saudi arabia that saudi arabia is considering a policy response to low oil prices. They are in discussion with oil producers. We dont know details beyond that. A saudi official told Bloomberg News it will not tolerate low prices. Theyre looking at policy responses. This is significant because saudi arabia is the Worlds Largest oil exporter, the defect a leader of a group de facto leader and includes russia. Stimulate prices and cut global inventories a little bit. They extended those cuts to the second half of this year and clearly, they are considering additional options. I think everyone is going to be watching for any more news out of saudi arabia as they look to curve the decline in prices. Fell intobrent crude the bear market this week and with oils recent decline, it comes back to the old story, the u. S. China trade war. That is really overshadowing Everything Else right now. It is this escalating trade war between the u. S. And china. The concern is that will impact Global Economic growth, which trickles down and impacts feel demand. Demand. Demand and oil there have been other things traders are watching. There continues to be tension in the strait of hormuz. Iran has seized several tankers. Traders are watching that. It is really important for energy markets. Throughd of oil flows the strait of hormuz. Fairly any tension there could impact prices. They are shrugging off the tensions so far. Another bearish factor reported yesterday, the u. S. Government said Oil Inventories expanded for the first time in eight weeks. Gasoline inventories also rose. That suggests weakening feel demand in the u. S. Fuel demand in the u. S. The factor is the u. S. China trade war and economic weakness for oil demand. Paul aaron clark in tokyo, thank you for joining us. Still ahead, the exclusive interview with mike wells, the ceo, joining us live from kuala lumpur later. Sophie china is set to release the trade numbers. With a china economist. This is bloomberg. Paul this is bloomberg daybreak asia time paul allen in sydney. This is bloomberg daybreak asia. I am paul allen in sydney. Sophie we will get the impact of the trade war in a few hours. Now, china releases its state of this morning. Exports continue to decline in july, reflecting pressure from higher u. S. Tariffs on chinese goods. Joining me is an economist from ing. I want to demonstrate where trade has been going. We have seen pressure come through in both imports and exports. The consensus is for export growth to moderate further at around 1 . You see a bigger decline of 2. 6 contraction. What is the thesis here . The first thing is that this is july data, not august 8 a. In july, not august data. In july, the trade war escalation has not been so aggressive. Look ats do not have to exports. In july, we generally believe that the trade talk is constructive was constructive. This is one thing. The second thing is that tariffs really hit trade volume. Then, you see that not only exports, it has a very low estimation, but it is because i coulde that exporters reduce inventories. Sophie we could see import growth and recovery in the China Securities journal today. It is reporting china is considering measures to stabilize s stabilize trade. Do you see this as a positive . Yes. There are actually two general positives here. One is the first one i explained. Tariffs ofect 10 300 million from the u. S. , so chinese exporters will run before september 1 to export their products to land in the u. S. August data should be a little bit better. The other thing is there will be more imports for Domestic Technology developments. Mustis really, i think, a for china. Iris, you were saying the july data will reflect a per iod of Good Progress in the trade work and the august that i will not, but it may also reflect a weaker yuan. What effect will that have on trade with china Going Forward . You are right. We now have a weakening yuan. In terms of percentages, it is actually very small. , it is suc it is negligible compared to the tariffs. Depreciation. Paul that was the tactic this week. In coming weeks, you see there are possible reactions here. There could be some retaliation or increasing tariffs on u. S. Goods, as well. How do you see the tactics being deployed . The first thing we have to understand is that i believe that china is now playing the trade war very slowly. It couldbe because delay the trade negotiations until the next u. S. President is elected. The other thing is that china has already told the press and the public that it may increase tariffs on u. S. Agricultural products. Them,k this will burden it is possible, for u. S. Farmers. We see some possible u. S. Companies that could be included in to be announced as unreliable. They have changed the behavior of doing business. The announcement of unreliability could be delayed a little bit. Paul all right. Pang, thank you for joining us. Plenty more to come on bloomberg daybreak asia. This is bloomberg. This is bloomberg daybreak asia. Sophie Abu Dhabi National oil company is acquiring a 10 stake in worldwide storage businesses, boosting their capacity to store and supply crude into expert markets. Russell hardy discussed the deal exclusively with bloomberg. Very exciting a deal. Istainly, our relationship very aligned in terms of growing the business. It in as a shareholder, we have the opportunity to further expand the company, take it to new markets. Also bring the opportunities to nocshareholders and to ad in terms of their ambition. Is there a slowdown in demand . And if so, what kind of momentum in terms of slow down are you seeing . The trade war commenced about 18 months ago. Mood over the last six to nine months has soft and. We have been continually revising our expectations down. Our internal Research Department has been revising their expectations. 606 we are at about 650 demand products for this year, and we are expecting but it hundred thousand barrels a day growth for next year. Those numbers are 800,000 barrels a day growth for next to. Those numbers do not include ngos which we regard as slightly separate and when importantly quite important. The u. S. Changed the landscape of ngo production and Gas Production significantly over the last couple of years. We are a little bit concerned about growth. The numbers are not as strong as they were. I think the market is reflecting that. It is baking into the problem with growth. Past 24ve seen over the or 48hours hours, significant escalation in currency and rhetoric. Or 48 hours, significant escalation in currency and rhetoric. Am slightly less pessimistic. We had a lot of difficulties this year. There has been a drop on products. Launch quite a bit more production through additional pipelines to export out of texas to the gulf coast. The market has to deal with that extra crude oil. They are not running at the sort of levels they should be running due to maintenance and other problems. That have occurred. The product markets do not actually look to bed. Products look pretty good. Bad. Products look pretty good. Crude supply is probably where as thecern would be spike comes onto the market. I think overall, these price 50 in thereaching permian for the producers, it is reaching levels where investment probably is being reduced, people are looking at capital efficiency. That will rebalance the market a little bit. Larry summers sent a note out last night on twitter saying we might be in the most dangerous financial moment since the 2009 financial crisis. Do you think the markets are at that type of a Tipping Point . Energy consumption is pretty resilient. Years,e last 10 or 15 eight or nine was the only period where oil demand bucked the trend and certitude and started to shrink paired with a significant global slowdown in recession. We dont see that is the most likely outcome currently. The most likely outcome is what we baked into those Growth Numbers of 600 for this year, 800 for next year. Slightly subdued growth, but still growth for the emerging world. Do you see any slow down from china still buying u. S. Crude . So, it is moderated. They were a big buyer a year or so ago. It has moderated since then. It is still part of this higher level discussion going on between china and the u. S. Across all imports and exports. Paul that is the ceo, russell haidi, of vitol. Mark wells joins us for an exclusive interview to discuss the impact of the global headwind. This is bloomberg. Sophie this is bloomberg daybreak asia. Agency in charge of Hong Kong Affairs held a meeting to discuss the ongoing public unrest. Become a widerve challenge to be ring and are raising questions whether china will intervene directly. And are raising questions whether china will intervene directly. Tries after saudi arabia to halt crude. Lows not seen since the start of the year with a surprise surge amid sinking demand. Oil has been causing a meltdown of stock and Commodity Markets after rate cuts in new zealand, india, and thailand increases fears of recession. New delhi revoked seven decades of autonomy. Islamabad announced a series of unilateral indias and illegal actions including downgrading lamented ties and ascending bilateral trades. They will also take the issue to the u. N. Security council. British airways says they have a glitch that caused the cancellation of more than 100 flights and stranded thousands of passengers. There were messages on the application as checking systems and services faced multiple delays. British airways could face a bill in excess of 8 million pounds. Global news, 24 hours a day, onair and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks very much. Lets get a check on what is happening in the markets now. Looking at the stoxx of theouth korea kospi contents of a person with some relief after reports that japan may resume exports of the key Semi Conductor materials. New zealand, also up, digesting surprising Interest Rate cuts by the central bank. I want to mention again on the afterkorea front, this is a lot of concerns about whether or not some of these Key Companies like samsung would be able to operate after some of the curbs. Looks like tension is starting to fade a little bit. Some ray of hope. Took the raft off the galaxy 10, the latest generation of the devices that comes with a stylus. It looks like samsung is up about 1 10 of a percent. A little bit of a positive reaction. Slire trying to stop a de and profitability. There is some relief, up more than 1 after those reports that japan may allow exports again for Semi Conductor manufacturing materials. Taking a look at softbank, little change. They beat firstquarter profit estimates on valuation games and said they will start making investments in the next one to three months and will take less than nine months to close. Positivity for investors. Shishedo is set to report earnings. Lets watch out for the operating margins and the rise of the yen impacting purchases by Chinese Tourists in japan. A lot to look at. Paul thanks very much for that. The Insurance Industry is changing fast with Many Companies planning to have more ai. Market tos the first introduce this did to my mobile allocation high mobile penetration. 23 of applications downloaded are healthrelated. Joining us exclusively from kuala lumpur is credentials ceo mike wells. How does this application work . What has the uptick been like in malaysia . Good morning. We are just rolling the application out today with the minister. We have gone through a very extensive beta testing. Quite exciting. It is a very comprehensive app. Diagnostics, health inclusion, location of telemeds or an actual doctor. In malaysia, it has the capability to identify areas, regionally, a concern. It is a fairly unique privatepublic partnership we are very excited about. The government is, as well. Paul i assume you will be gathering data on this app, as well. Hiya so is this for your business and the malaysian government . How useful is this for your business and the malaysian government . The data itself is secured and will not be used for underwriting purposes. It is artificial intelligence, so the application itself gets smarter and provides more personalized information for the computer. We took the sets you would expect to protect the data and make sure the Consumers Trust the application. It is highly secure. Mike, i want to ask about the outlook when it comes to the business in asia. They are doubling down on businesses in the region. This, even with the u. S. China trade spat in the background. About credentials in asia. We are going to be back with bloomberg next week when we announce our halfyear results. Without getting too far into that, what we like about asia is the structural demand. We are in 14 markets, markets where the consumer outofpocket spending is almost 40 . Savings demand is that there. They major market, government is concerned about aging populations, changes in diet. There is a tremendous need for the services that a firm like ours can provide. With the structural demand, it takes you away from shortterm market cycles. Sophie were seeing a race to the bottom when it comes to rate Central Banks piling onto the bandwagon. What is your strategy when dealing with headwinds on Interest Rates . We have worked across a lot of rate cycles. Our product is not particularly rates focus. Our earnings last year came out of the health and asia. A lot of the consumers here prefer unit linked products, where they participate in portfolios. Disproportionately, we are very capital efficient and less of a fixedrate towards competitors here in the region. Thought. More malaysia is not a particularly mature market in terms of reference. When itical is this comes to risks in the region . Malaysia has got right now, a very welldeveloped infrastructure particularly in the cities for medical care. The Government Faces a challenge of changing lifestyles and diets. Illnesses like diabetes, things are on the rise, as well as extended Life Expectancy even though asia is a young country. They are living longer and longer. Getgovernment is trying to ahead of the demand and be efficient with the medical spen d. Billion for health care. Our intent is to work with them and make the spend more efficient. The app is available to all malaysians and it is free with a variety of services. If you are the government looking at help provision, it improves the efficiency of that provision. Paul we have a viewer question on the bloomberg terminal about this. Do you have data on how this reduces visits and improves health . Will you be looking at rolling out the application and the u. S. If it is successful . In the u. S. If it is successful . No on the u. S. And europe. There are 11 markets in europe. Picture from a consumer point of view is in markets that have unique geography, people can be hours away from proper medical care. Not only does this have assessment capability, but you makingide if it is worth that drive or going to a physical appointment. We know from the data it is successful and very important that consumers in malaysia kn ow it is present. Sophie could we shift attention to hong kong briefly . Are you seeing impacts from the protests and the instability . Releasing our firsthalf numbers next week, so not getting too far into the specifics of how that business is doing, we are generally a risk off product provider. When consumers are uncomfortable about politics or the economy or a variety of things that can cause concern, we generally are where the go to. Historically, we found that political changes a long data sales or decision process. The sales or decision process, but dont change the outcome. With hong kong, we are certain ly monitoring it carefully. Sophie turning to your strategy to china. Are you looking to raise the stake . We have created a successful business with citic. Were up to 20 provinces now. The gdp of china is under a licensed footprint. The structural demand is just incredible for products and Services Like ours. It is one of our most modern markets in terms of technology. The entire business we have is with mobile payment technology. It is highly skilled. Changes a regulatory that you highlighted where we could legally own 51 and a commercial discussion. I think those would be worked out. Potentialerms of acquisitions, theres a number in malaysia, are you looking at buying . Alwaysknow, we are looking at good opportunities, but we have the number one insurer in malaysia. We have east spring as a leadin leading provider. It is successful and fully developed. We are one of the firms people approach. There is a part of our Business Plan in malaysia that we are lacking any sort of license more capability. Or capability. We are not looking to solve any problems with acquisition in malaysia, we like what we have. Paul the ceo of credential prudential, michael wells. On tv you can catch us life. Live. You can also become part of the conversation by sending us messages during our show. Check it out at tv this is bloomberg. Daybreak. This is bloomberg daybreak asia. Paul samsung has announced the new galaxy note 10, the latest device the Company Hopes will help sliding profitability versus rivals apple and huawei. How excited should we be about the note 10 . Point isst interesting that samsung is now offering two sizes. One is a 6. 3 inch phone and the other is 6. 8 inches, the note 10 plus. The event in new york, they showed major in the event in new york, they showed major upgrades and a more functional s 10. The latest model is crucial for samsung to boost profitability for the rest of this year. Samsung is planning to unveil the updated galaxy fold in september as well. The end of the headphone jack era, they dont have one as well. They are competing with chinese funds as well . One of the Biggest Challenges for samsung is that it is getting harder to provide eyepo pping features. Smart phone makers have an aggressive approach in design. They want to offer new functions that could easily connect pcs and the note 10. Basically, it could match the strong synchronization between apples mac and iphone. Samsung is also ahead of the competition in 5g and hardware. The question is, how fast can huawei catch up to this technology . Sophie are tech reporter. For asia. Our tech reporter for asia. Next, giving insight on the impact of the ongoing protests. This is bloomberg. Sophie this is bloomberg. Bloomberg daybreak asia. Im Sophie Kamaruddin in hong kong. This is bloomberg daybreak asia. Im so make a road and in hong kong. Im Sophie Kamaruddin in hong kong. Paul the u. S. Road Safety Administration sent tesla a ceaseanddesist letter with information on several crashes related to tesla. The u. S. Safety the Company Estimates up more than 250 million shares of classic stocks may hit the Public Market on august 19. Lyft rose after the bell, boasting thirdquarter and for your revenue forecast. Paul problems for bmw to make minis inanys china. The issue relates to pending government approvals. Plans are proceeding as planned. The aim to make the Battery Powered mini. Exploringey are options as the auto sector struggles with slowdowns. Told monetizing parts is on holding, including issuing exchangeable bonds. Paul semantics symantec sear symantec searched, announcing the deal could be announced thursday and be worth about 10 billion. They want to buy or the entire symantec operation. The u. S. Is the latest country to raise their travel advisory to hong kong, advising exercising increased caution due to civil unrest. This comes as a number of firms are to release earnings later today. Joining us now is our hong kong chief. Are the two sides tightening their positions . About how they characterize this protest. Made themnk really nervous would be the slogan about resolution, free hong kong. They might say that as a call for independence. Werenk the protesters protesting last night about laser pointers, it was peaceful. Want tothe protesters revisit the strategy. I think china, as well as hong kong as well on the protesters, we will have to see what happens if we can. This weekend. Paul we are seeing crowd control tactics. What has been the reaction to that . It depends on where we talk about. The tear gas in the residential areas, the residence are unhappy with the tear gas coming into their house. Some of the local reports are that pet hospitals got affected. It is less of an effect in other areas where there are offices in hong kong. Was prettyar gas massive, on monday, 800 rounds versus 100 rounds the first two months. There are calls for police to revisit the strategy here. Sophie how significant is the impact on businesses in the city . See a dip they they saw a dip in july for business in hong kong. They talked about how in retail, it happened before the protest, and the yuan is now at the 11 year low. That also would impact the spending power coming into hong kong. Sophie where waiting on nrt ntrs earnings today. What could china do next . Some of the have Construction Projects theyre working on, we have to take that into effect here. I think overall, the next would be coming into the weekend, the protesters, it doesnt look like the government will yield at this point, so it is back to the protesters what they want to do next and was strategy they will have. Sophie thanks so much, fion li. Heres a preview with selina wang of the markets. Selina we will be watching for chinas july trade data coming out later today. As you can see from the chart, exports and imports have been declining amid the trade war. The data leading up to this point has been pretty negative amidding the pmi data this Macro Economic slowdown. I want to point out a report from chinas securities journal, now considering a series of new measures to stabilize trade. Boards, currency traders have really been fixated versus the dollar, but the chinese currency has actually been weakening against the basket of trading partners. In this graph, it is reaching levels that were not reached ince this was first created 2018. Thepboc is breaking out of impossible trinity on shackling Monetary Policy to support the currency. Also, as we wait for the china market open and hong kong, we want to point out chinese domestic equities and Saudi Arabian stocks are going to be getting a boost in the msci benchmark Imaging Market emerging market in deficits. Paul expert much. Thanks very much. Lets take a quick look at how we are trading right now. Japans nikkei at the moment is off by about a fifth of 1 . Topic is giving up the gains for the year, 4 10 of 1 now. The kospi is on positive territory. In australia, another risk off day after seeing solid rallies on u. S. Equities. Sophie checking in on u. S. Futures, and the ages session, we are seeing losses potentially for the s p 500 Going Forward, but check out taiwan futures. We could see gains despite unexpected drops in exports for july. Components. Checking in on the currencies, the japanese yen, we have it edging higher heading towards the handle. I will show you when it is holding steady. We have escalation brewing. David you have been to north korea. Youve met with the leader of north korea. You have been that with the president. What type of person is he . Do you communicate in english with him . Summarize what your impression is. Mike ive spent more time with him than any other american. I passed dennis rodman. David President Trump has tweeted things that are not favorable about people working for him. Hes never tweeted anything unfavorable about you. Mike its early. David sometimes when people get close to a president , they see the job of close, they say, i can do it. Has that occur to you . Would you have any interest