Since worst month 20112012 for that group on the top. At the aussie and kiwi dollars and the kiwi took out its 2016 low and we are now for the lowest level since september 2015. Youve see ny onshore, got this chart. We have the worst month in seven years of e. M. Fx. We also have traders with the onshore yuan weaker than the official reference. David the two Exchange Rates and the fix. We will you show you the chart later on but backward looking. It sets us up in april various situation precarious situation into september. Yvonne we are still dealing with the headline risk. President trump saying the u. S. And china will renew trade calls, although he offered no details or timeline on what happens next. He spoke after beijing indicated it mauled immediately retaliate against additional increases and wants to prevent further escalation. The u. S. Is said to slap extra tariffs on 110 billion worth of imports on sunday. China vowed to strike back with levies of 75 billion of goods but said it will hold off for now on more duties for december. Joining us, jennifer hillman, council on foreign relations, senior fellow for trade. She is a former wto trade official. Good morning from hong kong. Nearer an incremental partial deal between these two sides . I think the increment is very small. It is a good gesture on the part of the chinese not to go ahead with the retaliations but you havent heard anything from the United States that would indicate the tariffs that are planned for sunday will not go on. We have not seen much of a big step. Of the two sides in your view, intractable positions . I could turn around the other way, is it politics holding this up . Jennifer no i think there is a lot at stake here and i think it will be hard to see a deal for three reasons. It is clear the chinese increasingly do not trust president trump. They are not sure they can take him at his word. They are not sure what his word actually is given he seems to be going back and forth, and that makes it hard to get a deal. Secondly, the chinese rightfully dont know what it is the United States wants. When this all started it was under the socalled section 301 report that focused on intellectual property and Technology Transfers and to some lesser degree subsidies and stateowned enterprises, particularly in and around the industry connected to made in china 2025 and get the first thing you heard out of the trump administrations mouth when they got to beijing was all about the bilateral trade deficit. China has the by more american goods. And you added in huawei whether this is a Technology War more than a trade war, then when you think about what happened even a week ago, the president says he is ordering u. S. Companies to withdraw from china, clearly indicating the real intent here is to force a decoupling between the United States and china and until and unless the United States can be very clear about what exactly their goals are and communicate those clearly to china and that those goals are achievable and attainable, i think he will be very hard to see how we get an agreement. Yvonne could we get an agreement before the 2020 elections, i wonder . A trade deal necessary for him to get reelected or is it positive for him to continue stance against china . Jennifer it is cutting both ways. You are seeing an increasing call from many of president trumps strongest supporters to stop the escalation in the war and get an agreement. You heard even today an oped in the Washington Post i the head of the Largest Business Group in the United States chamber of commerce calling unequivocally for the president to stop the escalation and urging him to get a deal. One of theoday from large, conservative think tanks, the heritage foundation, saying the evidence is clear the tariffs are not working. The tariffs are harming the American People. It is the American People, not china paying these tariffs and it is causing a lot of economic pain. I think you are starting to see a turning in the United States. The president has been trying to to the farmers, the ones on the receiving end with the most amount of pain that has been caused by the chinese retaliation, do your patriotic duty. Stay the course. This is all the means to an end and the end is in essence just around the corner, and what you are seeing now is people dont believe that. A, they are not sure there is just a means to an end and maybe in fact the end is really this decoupling from china. Second, they dont see it as around the corner. I think there is beginning to be more of a push back to say that either we need a deal now or we need some kind of clarification on where we are going and the escalation tariffs are harming and not hurting us getting closer to a deal. There is another part of his base and some of his ideological mentors and this fits into the narrative coming out of beijing that this is all done to keep china down. If that is the case, he would endure this pain and let the American People have that pain for a while if that is his ultimate objective. What is your view of that . Jennifer i dont know that i think that is his ultimate objective. The ultimate objective of some in his white house is clearly this notion of decoupling. That they want to push force his tweet a week ago, i hereby order all u. S. Companies to start looking to plot of china, even though he does not have the Legal Authority to Order Companies to a lot of china, he tweeted it anyway. It leads to the notion that maybe the goal. Anybody currently doing business in china to pull back out of china. What is the goal of doing that . I dont believe the president s goal is to put down china. I believe his goal is he wants these American Companies back home again. Company that is selling product in the United States to make a product in the United States and i think he believes the way to get there is you build a big tariff wall around the United States and therefore the only way you can get into our market in the u. S. Is to actually make your product here. I worry about, whether the message is being received in china as the one year question raises. It isncern is whether perception and it starts to create more of an enemy relationship, if you will, for a very adversarial relationship between china and the United States. David it certainly incentivizes the communist party to look strong, as well as flex its muscles. To pick up on what you are mentioning, do you think in order to address the tradetional structural imbalances, do you think donald trump is welling to self a recession in the u. S. , or does it get bad enough before the elections that he turns around and signs a bad deal . Jennifer i think the latter. I think the idea that the United States could be in a recession and he could be reelected are not possible. He sees that really the strongest argument hes got going for his reelection is a good economy. He really does believe that his trade measures are pushing the United States into a recession, he will retreat or will do something else. It is clear already he is trying to press the fed to lower Interest Rates. They are talking about another a way to offset the negative effects of the tariffs. President isor the it requires him to actually admit that the tariffs are causing harm and that is going to be very difficult for them to do. It requires them to admit it is americans paying the tariffs and not the chinese are others, and i think it will push him to have doing knowledge that china has responded to a lot of this by exporting elsewhere, by purchasing their inputs from elsewhere, and by engaging in lowering its tariffs to everyone else in the world, which has been caused a lot of so china has not suffered to the degree that the president is suggesting they have. Tonne i want to switch another trade tension we have been following between japan and south korea. Both sides say they are following the wto rules. As a former trade official, who is right . Jennifer this is a difficult dispute and unfortunately, i fear both sides are getting increasingly dug in. The argument to koreans are making is what japan is effectively doing is putting a quota of zero, making it difficult to export some of the parts of semiconductors and other materials that japan has now put onto effectively and export control list. It has made it harder to do exports. It is a violation of the wto to bar exports leaving your country. You are not allowed to have effectively a quota of zero on any of your exports, and in that sense korea is correct. On the other hand, japan will argue there is an exception to the rules in the wto if you are doing something for National Security purposes, so japan is going to try to argue that there are rules in the wto that allow you to break that commitment that says i will not put a zero quota on exports. You can break it if you are doing it under the terms of the National Security exception to the wto. For japan is that National Security exception is fairly limited. You have to show that the goods involved involve either trading in Nuclear Material or trafficking in arms or ammunition or implements of war, or were taken at the time of war or other emergency that is somewhat akin to a war. That will be very hard for japan to say. Thank you so much for joining us. Jennifer hillman, thank you. Lets have a look at what is going on with the first word news as we head to new york and join su keenan. Globalentina, s p ratings is cutting argentinas local and foreign debt to after it saidt it will postpone payments on more than 100 billion in debt. The government will delay 700 billion in payments on shortterm local mode spell held by Institutional Investors this year and will seek a of 50ry repro filing billion of longerterm debt. Meet. K. And eu teams will twice a week next month to resolve the brexit impasse. Both sides are playing down the chances of a breakthrough. Prime minister johnsons office says they remain some distance apart on key issues and the eu is still waiting for what it calls concrete proposals from the u. K. President Christine Lagarde is offering signs she will stay on the dovish pat said by mario draghi. In her first comments on policy since winning the job, she says the bank has the tools to tackle the downturn in europe and must be ready to use them. Policy makers meet in two weeks and are expected to launch another round of stimulus. Lagarde takes the reins at the ecb in november. U. S. Prosecutors are investigating huawei over new allegations of technology theft, this according to a dow jones report. Beyond existing criminal cases against the company and features accusations intellectualaling property from multiple people and companies over several years. Huawei said it is committed to complying with laws and proper ip process. Oni cant really comment ongoing litigation and i believe related investigations. Ip theftncerned about as anyone because we hold a significant number of patents and we want to see those issues addressed, but we are a process and due handling of ip in appropriate manners. Su global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Still ahead, Hong Kong RetailSales Numbers show we are at decade lows as tourists we will preview another week. David we are driving the path ceorofitability, the uber will tell us how the company is closer than ever to making money. This is bloomberg. Yvonne today marks two years since the new ceo took the wheel at uber, inheriting the role from travis kalanick. He faces slowing growth amid the cloudy act Macro Economic backdrop. He explained to bloomberg how uber plans to whether the headwinds. The consumer in the u. S. Is very strong. We are a Global Company and the majority of our transactions are outside of the u. S. , so we look at Global Growth to the extent Global Growth slows down, that could be a negative for us. If Global Growth slows down, we will have more driver partners wanting to come off the platform because we expose very flexible opportunities. The growth of the company is beh that we are going to relatively resistant any macro slowdown and we are not seeing any slowdown with the u. S. Consumer yet. What his plan b if we are in a fullblown trade war . We heard about investing in vietnam or brazil. What is the backup plan . Dara we are an asset like company so we dont have to go out and buy companies. And make surey that our driver partners can source vehicles in an economical way. Many source vehicles through so idhand, used vehicles dont think this trade war we havent felt it unless in small parts of the business where we are importing bikes, for example. There butome expense it is not having material effect and we are comfortable with our growth the next few quarters. Scarlett youve got a food delivery business, trucking, ebikes, scooters, flying cars, health. Dara transportation of every kind. Youve asked for people to think of it as the amazon of transportation but amazon was a bookstore for a long time before they did this other stuff. What if now is in the right time to do this other stuff and the right time to focus on the core . Ridesharing and maybe some food delivery . The weve been in ridesharing business for a long time and that business is developing and its profitability is developing. We are the top player in every andle market we compete in we are taking share in those marketplaces. We have a core business that provides a framework for us to build multibilliondollar opportunities and it would be criminal if we dont take advantage of that. You are seeing more and more apps and companies that are building ecosystems. Uper apps, so to speak tencent , dara absolutely, the super apps are winning. We can be the super app of transportation, so to speak. T allows us to choir acquire customers and keep them because we have a deeper relationship with them and longterm if you can acquire customers and keep them longer, that is the winning formula. Emily uber eats is 20 of the business, 30 . Ara yes, and growing we are the Largest Global player out there and we continue and the category food we believe can be as large or even larger than the ridesharing category. We love that business. Rishaad bloombergs Ceo Dara Khosrowshahi with emily chang. A hong kong activist is under arrest. Details as the unrest stretches into a 13th consecutive weekend. This is bloomberg. Yvonne some breaking news in hong kong. Three of the citys protest leaders have been arrested before this weekends rally that has been confirmed by a police spokeswoman. She didnt immediately comment on the report, but the 22yearold served time in jail for his role in hong kong 2014 occupy movement, detained around 7 30 a. M. Local time this morning. Two other activists according to reports have been arrested. A spokesman has not responded to the report but we are learning three of these hong kong protest leaders have been arrested. Wongs arrest was tied to the police raid of the headquarters in june. We will watch that but a big weekend here. That will drive a lot of people we wont seeully, more violence. David reaction will mainly come thick and fast. Lets turn our attention to south korea where the press conference is ongoing. Rates at 1. 5 , in terms of inflation moving to zero level for a while, part of the statement. At the degreeng of policy accommodation will remain accommodative and supportive policy stance. It was not unanimous. Two members called for a rate cut and you look at where economists see the rate going, that will happen october or november. Rishaad , against a backdrop they mention cpi will move around 0 for a while and they are seeing Downside Risks in cpi which would give more wiggle room to cut Interest Rates. The twos suggesting members called for a rate cut. And the decision was not unanimous. Bloomberg for the clients, track the story on live go on your bloomberg terminal. Where our expert editors have been chiming in, pouring through the statements and we will be reacting to every important phrase that comes out of it. Yvonne it wasnt unanimous. Two members calling for a rate cut so they mean that be done when it comes to easing may not be done when it comes to easing. Saw it asmists efficient to talk about the shortterm risk share and play into some of the structural issues with the economy. We have been watching the kospi, bid onng won catching a the trade optimism between the u. S. And china. Up 1. 75 . We saw samsung turnaround helping the benchmark, and no on strengthening. 4 . Stocks, oners, bank is surging after we heard Morgan Stanley put it as one of its top picks when it comes to the energy majors. Watching Samsung Electronics up 1. 75 . This is bloomberg. Su it is 10 29 a. M. In hong kong and shanghai and 10 29 p. M. In new york. There seems to be no agreement on territorial disputes in the south china sea. This despite toplevel talks in beijing. President xi jinping met his philippine counterpart as the two failed to reach an accord. Consensus on oil and gas exploration. A range of deals were signed for a new project on the island. Most u. S. Companies will ignore president trumps socalled order to leave china and will continue to work there. China Business Council says 87 of responding said they have neither moved not plan to move operations out of china. The survey was conducted in june, before trump tweeted a directive for American Companies to start looking for an alternative to china as a production base. The Iranian Oil Tanker stopped by the u. S. For allegedly killing seems to have changed seems to smuggling have changed course and the mediterranean. A tracking website shows the vessel apparently sailing away from its suspected destination of turkey but it is unclear if the course is temporary or permanent. Still showing a turkish port as its intended destination. The reserve bank of india raised its holdings by more than 9 in the year end of june. Biggest purchase in nearly decade as global Central Banks bolster defenses against trade tensions and the global slowdown. The r. B. I. Bought more than 50 tons of gold last year, raising total holdings to 618 tons. Global Central Banks have had more than 370 tons this year, pushing bully ondemand to a threeyear high. Global news 24 hours a day, onair and online on tictoc and twitter, powered by more than 2700 journalists and analysts in. Ore than 120 countries im su keenan. This is bloomberg. Busy news morning when it comes to hong kong. The party of prominent hong kong democracy activists joshua wong say he and another founder have been arrested. All of this coming this morning and as the city braces for a 13th straight weekend of demonstrations. Rishaad Stephen Engle has been reporting for us and is this a crackdown . It is an Interesting Development when you have joshua wong, not necessarily a figurehead of this movement but a key member of the Umbrella Movement five years ago, which this rally tomorrow was supposed to be a commemoration of the fifth anniversary of chinas controversial introduction of political reform that would have, according to democrats, limited prodemocracy movement in hong kong. Wong, allegedly arrested according to his movement saying he was on the way to a subs subway station, a private car that is not joshua wong. Then he was taken to the police apparently on three charges. What you are seeing here is another leader. Lets get this straight, we have joshua wong arrested allegedly, has been detained, another activist as well as another activist agnes chau. That other leader was the leader of the civil rights front which called for this rally yesterday. It also called for large rallies that led to anywhere between one to 2 Million People marching on the streets. They also did a human chain a week ago across hong kong. More peaceful protest, not necessarily the radical violent element that are clashing with the police with improvised weapons, but police have confirmed jimmy was attacked yesterday and two of his friends shielded him. They were injured. It is an interesting and dangerous time ahead of this rally planned tomorrow which, by the way, has been banned by police. A think it is too risky right now. David the answer to that question might be fluid given what has happened this morning. What is the status and are we hearing anything else on what might come on protests . Stephen these protests and the tomorrow was a ban could fuel more anger and in the past when certain rallies have protesters show up anyway and their ends up being more people. It is forecast to have heavy rain tomorrow. That, according to protesters, works to their advantage because tear gas is less effective and their tactics work better in the rain to the police. I dont want to advocate any of that saying rain, rain anyway, it is an Interesting Development ahead of what was expected to be a large march just outside the center to the China Liaison Office not far away, the site of the defacing of the chinese emblem in previous rallies. Rishaad Stephen Engle, thank you. Reporting on the protests and arrests taking place this morning. David lets get more on this. The economic impact, we are joined on set with the chief Greater China economist. Metrics the several pointing to a precarious situation. Do you think august is going to be worse than july . I think it is easy to see the retail sales job dropped by 20 . David that would be a record. But know consensus is 15 we see the impact of both the trade war affecting sentiment and the economy as well as the protests and impact on retail sales and restaurants, and you see a lot of sales and discounts. It can clearly tell you the impact of the Retail Sector and the mystic income. Aroundi was walking yesterday and anecdotally, i was walking down from the office to central and every single Jewelry Store was empty. I passed by a handbag store and this is the picture i took. Discount, 25,000 was the original price. It is now cut to 4000. Yvonne it is used, though. David still, quite a massive rishaad which business . David we are not in the business of is that the feasible thing to consider . The and also the Shopping Mall rentals adjusted accordingly. It gives hong kong the chance to revise downward in terms of Market Sentiment and also they take a share of the footfall so that could make a difference to their bottom line without having to bring almostnts if they are being partners when times are good and thought those times would carry on to be good. Raymond the point i like to make is both the domestic economy and external economy has been fairly uncertain. The problem now is not about what is happening in august, september, but what about next year . The trade war showing no signs of cooling and there has been a lot of flipflop and the uncertainty has prompted a lot of corporates to cut the capex and the outlook for next year is already very bad and we expect hong kong is easy to run into a recession because the Second Quarter already points. 04 drop in the Second Quarter on a quarterly basis and another quarterly contraction of maybe 0. 4 could easily drag the year on year to negative, which is perhaps the first one since the gfci. Yvonne the fiscal package we saw is not going to be enough. , who will spend when there is political unrest . Is it right for the government to focus on the Property Side and fix structural issues . Yvonne i believed for the past 20 years hong kong is run by free market. It is not what the government can do. Ist the government can do target some sentiment that has been affected. This the tax relief, government can do but in terms of infrastructure projects, it is not easy. Weve seen the city has already done even the push. These infrastructure projects, the less we think about the housing policy getting room, that could help. How does this play out for the rest of the economy . How damaging is it . In terms of the hong kong economy from the gdp ratio number,port there is more an external driver that probably leads hong kong back to recovery but at this stage, we just dont see any positive news from that front. Rishaad ultimately after this, you got to get those tourists back, as well and particularly those from the mainland who are used to doing their shoppings and are frightened to come over. Raymond true to some extent. The protests themselves have some impact on domestic sales. Tourists change the destination and i have a lot of clients trying to come to hong kong but have had to cancel the trip. They come to hong kong and stop here and go to shanghai and beijing, and now they have to pick another destination. Yvonne the amount of hotel discounts i have seen in the last couple of weeks, even small packages. They are doing different ways to get people to come in but it has been tough. I wonder when it comes to what this means for the greater bay area because that is something that tried to push forward before this all happened. Is that at risk . Raymond this is a longterm project and the greater bay area is a project that xi jinping tried to plan for the next 5, 10 years down the road for the development of the whole region. It is not only hong kong. They escalate or lift the status of shenzhen as a signal this is a regional projects and how hong kong can play a role to come up with a framework by 2022 according to documents. Project and itrm is difficult to predict the impact of the current condition. Fiscal. Ets talk about what else can the government do to save growth . Raymond we dont have an interestrate policy david the whole power cut, apart from that. Raymond globally, we see the rate cuts cycle miss this year. Hong kong does have some room to support the economy, even if you dont have the Monetary Policy but we do have a property policy and macro measure that can be relaxed to alleviate the credit condition. Rishaad who are the beneficiaries of this . What cities will benefit from people not coming here . Raymond i dont see anyone or. Any winner. Andspending and outlook, there is no winner. Same as the trade war. I believe it is not difficult to find any positive it is difficult to find any positive, although we see some relocation of activities. Manufacturers are thinking about moving factories to Southeast Asia but this is pretty longterm. At this stage, the shortterm outlook we remain pretty weak. Anyd have you met companies that were supposed to move to hong kong that said maybe not now or have moved out . Raymond this is very reasonable that some of the corporate i have spoke to think about options. It is still pretty initial at this stage. David raymond yeung, anz chief Greater China economist. Retail sales are coming out later. Some bank of korea lines coming out. Talking about how the governor they have room to respond. One headline i enjoyed his he realized there was talk out there that they might cut in the future. Says hard to predict the impact from the trade spat with japan yet right now. They are paying attention to fx and market conditions. Won has been under pressure recently but we have seen since won paringtalking, back gains, strengthening. 4 . Coming up, the latest avengers movie may have been the biggest hit globally but in china, a surprise competitor has knocked the heroes off their perch. Find out who next. This is bloomberg. Rishaad just an hour before the session in india. Devina is in mumbai. With moretive closes losses. I have no idea what im talking about but you will. Devina monthly futures and options expire, so this expired yesterday and he saw tim tebow last month. The next month. That is probably not looking too great at this point. Kind ofyou see the positions moving into the next month, it is in line with august. The system is called shallow in terms of the positions. Holding ontoat, the 10,000 mark. The government with various initiatives but that hasnt put any interest in the equity market. In the armief shot that has come down to 10,948. Banks have suffered a bigger blow. Down 2. 5 percent. Todays session will be important because you will get the figures coming out, gdp growth for the quarter. Expectations are 5. 7 and the r. B. I. Seeing things need to change on the ground for the economy. Despite the dollar, it is not reflecting to on ground growth. Aside from that, the dollar market space continues to rebound and that will be a pocket to watch out for considering the deep discount to the benchmark index. In essence, windowdressing. Divina, thank you. What are the stocks we are watching today . They have entered into a packed where they will be selling some of its solar assets to a green energy member. Andave been bogged down orders came out saying they are trying to reduce that, they will be asset monetizing and this is what we are doing. They are selling some of their solar. Sell someooking to steak some 9 is expected to exit group finance. Khanna, thank you. Lets check the latest headlines. Saudi aramco is to be reevaluating plans for an ipo. Dow jones says considering a plan to split would be expected to be the biggest ever share sale in two listings. Following up with an International Offering next year or the year after. Aramco sources say management is inclined toward tokyo for the second listing, edging ahead of new york, london, in hong kong. Ford facing the retrial bribery, putting more pressure on his company as it navigates the turmoil of the trade war. The Supreme Court overruled an lier decision to spend suspended a prison sentence and is sending the case to the lower courts. Lee was arrested in early 2017 and spent a year behind bars. The ruling means he may eventually returned to prison. Audi in volkswagen talks to add Warren Buffett backed company as a battery supplier but no guarantee a deal would be struck. 22 million fully electric cars by 2028 with more than half built in china. To raise forlift expansion. Yvonne take this, thor. Surprise movie hit is really snatching box office. It is chinas secondbiggest movie ever and will turn around the years slump at the box office. Look at the pictures of this animated person or demon, as they call it. An underdog demon child who chooses good over evil to avoid , 644ifying fate million as of this week according to some data but that has been quite a smash hit here. Rishaad id never heard of him, where good triumphs over evil. Wasnt the most popular ever wharf wolf warrior 2 . Film, at is a Domestic Company listed in shenzhen and some of the investors of the company rishaad i bet tencent is involved somewhere. David it is actually an alibaba affiliate. It, go checkt seen it out. Up, our favorite segment. Rishaad chart to chart, reporters fighting it out with these graphs. This is bloomberg. Rishaad it is that time. Battle of the charts. Markets david lets kick things off in singapore. Joanna, good morning. Joanna ive got monthend rebalancing for you. Month,he big moves this you had bonds moving up, stocks moving down and the extreme between them is in the top 10 of extremes. People are looking for a big rebalancing. And the going to today s p 500 rose 1. 3 yesterday but a lot of people think it is not done so look for those close today flows today affecting bonds and stocks. Rishaad nicely done. Suit, maybe hes going to coordinator. Ill ignore that. What you are seeing in this chart is big momentum trade. Pretty straightforward, by the winners and sell the losers and that has been a good strategy this year. You can see how much the strategy has outperformed the broader market. What is not obvious from this chart is the composition of the trade exchanges low. A couple of years, this would have been growth focused stocks, technology, facebook, amazon. Now it is more Interest Rate sensitive stocks, like real estate and other defensive sectors that are now the momentum names of the moment. This is a good one to watch if you are worried about the market getting wrongfooted by this big bond trade china has pointed to. Vote. Gregor, that is my rishaad im giving it to the accused, as well. Sorry, joanna. David you are free to go. Yvonne ah. Rishaad this is Bloomberg Markets in hong kong. Emily i am emily chang in san francisco. This is bloomberg technology. Coming up in the next half hour, or regulatory and Health Concerns for juul. The u. S. Food and Drug Administration is investigating the link between ecigarettes and seizures. Plus, my exclusive interview with the uber ceo. He comments on the path to profitability, how the ridehailer will fair in a trade