Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240714

Dozens are west it as protesters target the airport and subway network. Dozens arrested. Argentine in christ it again. Capital controls try to hold the country on the as the default. Reminder on how u. S. Stocks ended the session as we begin the trading week in asia. From the dow jones for the s p to the nasdaq, you have the close and stocks within a range of 0. 15 . Not much moving ahead of the long weekend in the u. S. This s prtly we see futures pair when they opened they were down a percent. They pulled back, maybe a reaction from friday. Mostly everything that is happened since friday. On friday, u. S. Consumer sentiment measured from the university of michigan closely watched survey hit as its lowest level since 2016. Everyone waiting for tariffs which went into effect on september 1. Chinas many factoring pmis, purchasing managers index, one of the most important numbers to watch for 70 countries, when it comes to manufacturing, a big problem a whopping from the trade war. Chinas pmis did fall and we also had the hong kong protest heating up and we have argentina debt crisis forcing the government to put on capital controls. A lot of things to affect markets as trade gets underway. And even though you see, now margin and that close on friday in the u. S. As we begin the new month, people are expecting a lot of volatility. Month the first negative for the s p 500 since may. So a lot going on, a lot for markets to die just as traders decide where they on this monday. Thats right, kathleen, it was a volatile august and looks to be a volatile september as well. Futures are pointing to the mix and lower open. Terrace went into effect. We also expect the trade war to continue to ratchet up. The nikkei is coming off of a 4 losses in august. It looks like that may be set to continue. August. S down 2. 5 in those losses may continue into september. Switching boards, i want to look at the offshore u. N. Which has which hasing yuan been weakening against the dollar. Trading at that level and it could be set to fall more. It has been dealing with the trifecta of bad news, the hong kong protest, the trade war escalation and weak man i pmi data out of china. Berks strategists bloomberg analysts are saying that movement of the offshore yuan could affect all ups are currencies in bad way. The International Calendar events, u. S. Markets closed as well as india, vietnam and malaysia we expect the tie shin pmi data on the backs of official numbers which showed contraction. Officials expect that taishing to show many faction contraction for the fourth consecutive not. Just month. Datasouth korea market pmi expected to show some of the pain trading partners are feeling. Lets check in on the first word news now. Hurricane dorian has made landfall in the bahamas as the strongest storm ever recorded there. It is bringing torrential rain and wind gusting up to 300 Kilometers Per Hour with a likely storm surge of more than seven meters heard whether experts say much of the hamas is expected to be devastated and may need at least 10 years to be rebuilt. Dorian could next affect the eastern seaboard from florida to north carolina. Argentina has imposed capital controls in a bid to halt the slump in fx reserves that has pushed the country to the edge of default. The central bank set a limit of five days for exporters to repatriate foreign currency while institutions will need official authorization to buy dollars. About 3 million flowed out of argentinas fx reserves on thursday and friday alone. South korean exports extended their slump as tensions with japan at the uncertainty of the wider trade war. 13. 6 inshipments fell august from year earlier and a ninth consecutive month of decline. Imports fell 4 , leaving it billion. Plus of 1. 7 south korean trade data serves a barometer of Global Demand due to its early relays. Paul the outlook for chinese factories were sent last month before the latest u. S. Tariffs. Manufacturing pmi fell to 49. 5, rating worse than the 49. 6 seen in a bloomberg survey. The economy slowed in july and early data slow show that continuing in august. However in permitted Small Business confidence is a sign that earlier progrowth measures may be taking effect. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am Tom Mackenzie, this is bloomberg. Paul thanks, tom. New United States tariffs on one header 10 billion of chinese imports are now in effect 110 billion of imports are in effect. Trump says trade talks in washington are still on. we are talkin we are talking to china. That is not changed. China to takew 500 billion a year at of our country. We cannot do that. Lets cross now to our washington editor ros krasny what is the latest with these tariffs . Of very consumer oriented products, footwear, athletic clothing, clothing about kinds, toys, really things you might bite your look at target or walmart. Electronics you might by at target or walmart. The apple watch. It something that gets to the nub of how much more u. S. Consumers are going to be paying for items at the store. This is a big step. Kathleen in terms of what is next, we just heard the president say we cannot let china rip us off, what is the sense coming out of the white house . Is there an endgame . You it is interesting when see stocks falling in asia this morning, even though tariffs put on over the weekend have been expected, it suggests that there had been some hope that may the two sides would pull back from the brink. Now theyre left with a concerned that this is a vicious circle of retaliation and counter retaliation with no real circuit breaker. Where is the endpoint . Moment President Trump seems to fill the u. S. Has the upper hand in his pushing back against critics, against companies, and blaming them for poor results. He says those are badly run companies is also putting back pushing back against the fed. The same time he says talks are still on. That was something he said last week. To sort of steady the financial markets. And it was somewhat successful. He also sees the chinese economy at a pressure and may be thinks chinese will buckle before the u. S. I think people really like to see some kind of proof that they september talks are really going to be meaningful. When theyre going to be held and how senior the people are too are who will participate in the talks. At that point we just do not know. We wait likes to say, and see. But certainly theres a lot of concern about, just as i said a vicious circle, no end in sight. Bloomberg editor ros krasny join us from washington. Franklins now is lavin, chairman ceo founder, export now inc welcome to the show. Is great to have you. You are active to the mid to thousands. We still have a large growing trade surplus with china. As someone has been involved in this is there anything valid to at the president is saying, that if we do not get tough with china they will never change their ways . That seems to be his argument . Frank i think there is significant validity to the criticism with one major exception. A lot of the point about intellectual property problems, high tariff. China has asymmetrical a higher tariffs than the u. S. All Market Segments are closed. Theres compulsory licensing. Those are valid criticisms. The chinese themselves will admit that they are deficient or not level with the u. S. In those areas. I think one area where he is most offbase if i may say is with the trade deficit itself, most trade professionals would say that the trade deficit whether youre running a surplus or deficit does not really reflect whether the trading partners being fair or unfair. With that exception, much of the criticism is valid. The real problem i would have with what President Trumps doing is not so much as analysis or criticism but with his tactics. Because it looks like he is picking that is chosen a tactical approach that hurts the u. S. Economy as much of the chinese economy. And puts at risk the good parts of the trading relations at such as agricultural trade and a lot of the service trade, where the United States is very well in the chinese market. So i say dont put that at risk. Dont it on tariffs that hurt the u. S. Economy. But find a way to increase leverage or pressure on china to try to move them in a more fruitful fashion. The trade hawks would say that bilateral deficit does matter because it is so outstanding in relation to the trade deficits the u. S. Has with the rest of the world beyond that, to the tactics coming back to the same kind of question. The chinese in the past have agreed with all kinds of things it comes to trade. But critics say they have agreed and then they cannot change anything, they cannot control small and Medium Enterprises. Theyre all kinds of reason given for this. You have worked in the region for you know it well, you know china so well. Is there truth to that and if that is what it is, how do you get them to agree to something and do it . Frank i thing there is treated that as well, maybe not as much truth as critics light say. There can be backsliding and enforcement challenges in china to a but anytime a traitor commercial agreement is reached in china, you need to monitor it. You need to have a mechanism that polices that, that discipline, that complains. You need to have regular meetings for enforcement and review. You needed to have some kind of clawback mechanism so if youre not happy and there is backsliding you can retaliate. All of that is part of it. It is not just a sign and forget megan is in. As they say, the negotiations it is not a sign and forget it back is a. As they say that negotiations with china start after the agreement is signed you have to be diligent in pushing your side of things after the agreement is signed. Paul im ember earlier this year when were talking trade with various guests, that would be a theme ok we are going close to a deal but then the ample is difficult. You have things like President Trumps tweets. Which come from nowhere, seemingly. And blow the whole process out of the water. And set the talks back several months. In their new tariffs. To that end i give this chart. We see u. S. Trade policy uncertainty spiking. To a quartercentury high. Do think theres a sense among the chinese side that President Trump is getting a bit mercurial to deal with . The previous point and this point for together. On the chinese side you can ever retrogression or gamesmanship. The chinese side is capable of overplaying its hand and being a little too cute as you come to settlement and trying to degrade the offer. That might have been what happened. That might have been the u. S. Contention. That the chinese side really degraded his offer. And on the u. S. Side you can have this public triumphalism, this chest thumping behavior that is in oris lee taking to the chinese. Because the chinese enormously irritating to the chinese. Because the chinese cannot enter into an agreement publicly where the impression is that they have lost or make concessions that is not tenable for any chinese leaders with a negotiate and partner. It has to be a structure or atmosphere that allows the u. S. Side to say we wanted out of it. And allows the chinese side to say we got what we wanted as well. These were not concessions. These were things were going to anyway. Some of the president s tweets unfortunately painted the chinese into a corner and pushed them to walk away or pause and pullback. The weekends tariffs notwithstanding, the talks are settled for later this month. What should realistic expectations be . What is success look like . Mechanism,e pricing if you well. The u. S. Side is trying to determine what it can relatively get from the chinese. Theres not necessarily a strong consensus on the u. S. Side as you what would constitute a successful round. The chinese site is trying to determine what is the least amount it has to give up, so speak in order to get the americans satisfied, to get mad of the room and declare this trade route over. Trade round over. It is debate on how far we have to go on the chinese side how little we have to go to get there. And your earlier question, there is trepidation on the chinese side that no matter what they do, will President Trump just come back after that in 90 days and say youre not doing enough and you are cheating and we do not like you anyhow. So they say, look if that is how the u. S. Is going to behave, why should we resolve any of these issues. Why should we go to the table at all because were just going to get kicked in the rear end regardless. I think theres a little hesitation on the chinese side to go that final yard to get a victory and get something signed. Kathleen that sounds like a site has their issue. China you might drag us back to the table. The u. S. Says yes but you agreed to do something and in the past have not followed up. What is something we are not talking about . What is the contrarian view or the idea that you have that could be in this discussion and help of authority echo frank interestingly the car the u. S. Has to play that it is not played is that the u. S. Has the ability to enter to some initiators tos with other trading partners. If you want to put pressure on china but not hurt the is economy, the best to you have is this tpp initiative, this asia Wide Initiative that is not include china. But that is a strong signal to china that they are the outliers. Theyre the ones not playing by the rules. It also provides benefits to the u. S. Economy. Because it opens up the markets with u. S. Many factors and businesses can operate. So if you wanted to do a little flanking maneuver and do a little side attack if you will on the issue. I would look at the transpacific partnership, the tpp or even the e. U. Initiative to show china we are still in the game, we have options you need to thing about settling. Clients what are your saying about this. In the worstcase scenario all about side say theyre willing to take the pain and the fallout and the casualties of this trade and keep it going. The people youre dealing with now in washington and around the world, what are they saying . Frank two things. First of all i think we can expect the Political Leadership in both countries to kind of tough it out. That there pollack rhetoric has to mirror what you just said. They cannot say there public rhetoric has to mirror what you said. Have to say im the toughest guy in the room even if they are feeling the pain. What is interesting to me is we work in business in the Consumer Products sector. The chinese consumers are hungry for american Consumer Products. The chinese economy is performing very well. It will be at 6 growth this year. The consumer segment outperforms the overall economy. The consumer segment will be up 20 or 30 this year. American products from levis jeans to jack daniels do very well in the chinese market. So it is a little bit of a paradox if you watch the news sometimes you think the whole world is on fire. And everybody hates her buddy. But you go in just everybody hates everybody. But i just fluent l. A. From shanghai and it is bustling, it is a shopping city and has a dynamic economy. If you tour the streets of shanghai, you would say this place is brimming with hunger for american products. Formerll right, undersecretary of congress for international trade, frank levin, thank you for joining us. There is more on the trade war tomorrow and daybreak asia at one we speak live with the australia trade minister simon bringing it during him at 8 birmingham at 8 40 a. M. Us joy time. We will take a closer look at hout trumps tariffs are hitting chinese manufacturing. First hong kong some other violent clashes, the very latest coming up next. This is bloomberg. Kathleen hong kong is bracing for more disruption after a week of bride islands, unrest with after week of violence. Our chief north asia correspondent has the latest on this. Could you also share with us, you live there, what is it feel like to be in hong kong right now . It is obviously a huge disruption to your daily life. When you have to check and see where the areas of town that are going to be disrupted by process are good on the weekend, this past weekend was quite disruptive. Again, turning more violent. The pickets we can also had violence for the first time. The previous weekend had violence for the first time. They had a sidearm discharge. In other to live rounds were fired yesterday. The police say they felt officers lives were in danger. Obviously it is becoming increasingly dangerous. Also when you see the footage every day and ever this weekend on saturday. We had that large fire started the central road to district. Things looked dire on the surface but the city continues to operate on the surface fairly normal. Today is going to be a general strike that is being called for today. And more disruptions are being called for the subway stations. At least three set way stations subway stations, northpoint, liking and callow and calhoun tongue protesters are calling kowloon tong. S anyone getting to the airport had to find their own way and not to silly for five or six hours per they cannot take the airport express. Or six hours protester disrupted the tracks. They also destroyed a number of station turnstiles. Causing civic and civil disruption. Paul of course hong kong historically no stranger to unrest when it comes to defending it independence and palooka freedoms. This time and political freedoms. Different. Oes look shots fired as you described. And Water Cannons on the street. How long does this go on . We see response from china . That is the milliondollar question paid we do not know how long this is going to go on. The protesters are saying they have turned to certain levels of violence because the local government has not conceded on any of their main five demands. The government saying that they are not going to at least have serious dialogue until the violence stops. So we are in an impasse right now. Arrested people were saturday. I think that is it probably a conservative number up in we do not have the number is for the arrests yesterday. Police taking a more hardline approach. They banned the mass rally saturday. Therefore making the people who turned out illegal. That was an gathering. It sets it up for these kinds of confrontations. Today theres going to be a general strike. And more disruptions called for across the city. So there is no end in sight at this point. Asianhief north correspondent, Stephen Engle p from the protests and other breaking news wherever you are, bloomberg and twitter have launched tictoc by bloomberg. It is they first Global News Network design for social media, offering live video coverage and hourly updated top news reports verified by bluebird. Tictocwitter, follow by bluebird. This is bloomberg. Paul a quick check of the latest business flash headlines, tesla has won a tax break in china after what seems to be a Charm Offensive by elon musk. Tessas will be exempt from a 10 purchase tax that typically hits domestic electric carmakers. Kathleen south African Airways has placed an ad for a new ceo in a prominent newspaper three months after the previous boss quit. The carrier has been leaderless since the leader resign over lack of government support. Paul American Airlines is the latest carrier to extend the removal of the 737 max from its schedule for another month as boeing awaits reg a approval to lift and let that plain flagon. America is dropping the max release to sever third. Up next, the outlook for market at the start of a new week from aia investments. This is bloomberg. Paul this is daybreak asia. President trumps latest tariffs have come into effect on roughly 110 billion dollars of chinese imports. It affects goods ranging from footwear to textiles and tech products. Laptops and cell phones will be targeted in december. Moreong kong is set for deception after a weekend of violent clashes between protesters and police. Protesters will continue and the city operator says that some stations may not open. The italian Prime Minister says he intends to present a new government i wednesday at the latest amid growing tensions. Markets were unsettled when luigi demaio threatened to force a new election if his demands are not met. He has called on leaders to stop arguing. Germanyshe rise of farright populace. They beat the euro skeptic alternative for germany party. Easeesults will help to the pressure on the coalition that suffered heavy losses earlier this year. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Over a halfhour away from the open. Selina wang, what are we watching . We have been talking about that pmi data coming out of china. Chart,an see from the april 2017, just touching that redline. That stability is always the number one priority. Unemployment hits directly at that. Some of those factors have to do with domestic structural changes. Also, clearly the trade war and other slowdown factors are not helping. I want to take a look at some stocks i am watching. This is going to move when markets open. An affiliate is moving towards a deal. And alks are advanced deal could be announced in a matter of weeks. Than 16 after it was downgraded. That stock is up about 50 over the year. Paul thank you very much. Lets get you across some news on the terminal. Of 45. 3 billion that is a little less than what had been expected. Getting some guidance for the cutting 20 as well cutting the reduction target. 2. 9 billion down. Just some guidance coming from the australian telecommunication company. Global marketse echoed Global Markets editor. We had that pmi data. All that volatility. It does not bode well for a tough looking set up. The first trading day of september. A little bit of yen strength. Reasonably it has come back a bit. We are expecting them to be under a little bit of pressure. The latest development in the trade war already affected markets in august. We were down quite significantly. We just came off of our first in almost a year. The trade war ramping up is one thing and the continuation of the decline in the manufacturing add tocontinues to worries about how strong the Global Economy is. The third issue is the hong kong protests that linger in the background and continue to play into a lot of concerns that have hit markets quite heavily. Lookingup for monday is like equities be under a little bit of pressure. The moves are not huge in terms of yen dollar. There is little in the way of data. Meeting that will come on the back of what they heard on saturday. It is not looking like a great start. Japan, we are waiting for the capriles ending data. That is one thing that could truly suffer. We are seeing unprecedented buildup on japanese stocks. Why . It is an interesting phenomenon that we have not really seen. We can see on this chart that now we have gotten into this period. That ticks down below zero, it indicates the highest on record. Very unusual. What it might mean is if you get any positive news on the trade front or elsewhere, that would positively affect equities, you might get indication if some of those indications have to be wound back, when markets get to the extreme levels. It does not take much to move the dial. Japanese equities have been under pressure on a range of different front. The trade war being one of those in relationship with south korea , but many of the bullish arguments are still intact, the valuation discount continues to look relatively favorable. It will be interesting to watch getgauge and see whether we a swing. Paul lets bring in our next guest on where asias markets are heading next. The regional head of equities research. August of volatility in showing signs of spilling over into september as well. Regardinglot of noise trade wars, recession morning and a lot of action from Central Banks as well. What is your strategy in this kind of environment . Continue to be very selective and bottomup. Thatve focusing on sectors we like. It is driven by an aging population in most parts of asia , as well as increased spending on innovative drugs. Other sectors that we like include the china internetbased. We have seen increasing monetization going forward. Also, we like the accelerated rollout that will benefit the equipment makers and the application providers. You also see some rather unloved sectors as well. Well, which has been hit pretty hard by trade tensions on a couple of friends. These markets have been the worstperforming market to date. We are beginning to see value emerging, and also some tailwind in a case of malaysia. If you look at the exporting sectors, they are beneficiaries. We have also seen it stocked up in construction volatility that will help to lift the sectors to recovery. In the case of korea, a very unloved market, but we see pockets of growth in the outer. Pace, improved sales also, in the consumer space, also industries that support the growing electric vehicle market. Kathleen i want to ask a question that has come in from one of our viewers. It is interesting to see what is on peoples minds. How will that affect bonds in asia . If you look at Interest Rates , it continues to trend lower. To highers investors yields. For example, the bond proxies. There are investors who would be interested in some of the em bonds kathleen . When you look at china in particular, you talk about lower rates and you could look at many it would in asia where be to cut rates. It to boostl expect growth and put a little more steam in the equity market . China is definitely under pressure to trim. We expect another one to cut in the coming months. Not only that. You are right to point out that there is greater pressure to step up efforts in terms of the monetary and fiscal stimulus,roviding more credit especially to the smaller and Medium Enterprises to support growth and to stem the potential losses, especially in the weaker export centers. Not only that, they need to focus more on ramping up its transformation program. The development of industries. Paul in terms of other central blood Central Banks, you see more easing there inspired by what the fed is doing. To move . Be the next we see easing happening across the board in asia. Paul so who next . Most of the young countries, we expect rate cuts and kathleen . Or korea a lot of people are talking and thepply change countries that could actually benefit. Where do you see these occurring most deeply and broadly . What kind of opportunities or challenges does that present . We are going to see a progressive shifting into the rest of asia. Philippinesaysia, and even some of the south asian markets. If you look across the supply chain, they are going to realize that they will probably have two supply chains for the u. S. And the chinese market. The flip side of it is that you will see increased inefficiencies rising and acreased business, as well as squeeze on profitability. I have to ask. What is the biggest risk to your outlook for asian markets . I think to an extent, this has been happening for more than a year now. It has already been priced into market and we are expecting growthown tariffs to cut. Risknk the next downside for markets has not been priced in. The barriers that can be implemented on both sides this includes export controls, restrictions on u. S. Investment in china and vice versa. This is going to be very disruptive for businesses because it drives them to further investment positions that is lowering traffic further. Kathleen thank you so much. A very comprehensive look at the investment landscape in asia. The regional head of equities. A lot more to come on daybreak asia as we wait for the latest news on Capital Spending. Keep it right here and find out. Kathleen this is daybreak asia and i am Kathleen Hays new york. For thee outlook Manufacturing Sector fell in august. A new round of u. S. Tariffs is kicking in and Tom Mackenzie joins us now from beijing. What were the Key Takeaways from the weekends numbers . Tom the top line was that we did see a fourth straight month of contraction for the Manufacturing Sector in china. Forecastt below that was the number that we got on saturday. When you break it down, new export orders to cup from july. New orders are also further into can contraction. It will be a concern for policymakers. You have the trade war and tariffs impacting the manufacturing. Put innal tariffs were place over the weekend. Dragging on the exports or production of the Manufacturing Sector. In terms of nonmanufacturing, that was a bright spot. You see that firmly in expansionary territory. Maybe you are getting something of acceleration in terms of the services sector. We have seen some policies unveiled to try to support to get the Manufacturing Sector. The tax cuts came into play early in the year. Policymakersg that will really have to up because the pressure is continuing. Suggesting that the slowdown does continue. Even if they outlined additional measures to support the consumer last week, there is more that is needed. Kathleen we are waiting for the private survey data that brings in more of the small to mediumsized businesses. Is there an expected downward trend . That seems to be that part of the economy has been hit the most when it comes to the trade. It is expected to reflect the official numbers as well. Further contractions are expected at 9 45 local time. This is focused on the private sector, which has been friendly and focus from officials in terms of support. We heard from the state council over the weekend, the cabinet saying that the economy remains stable and the risks arkansas controllable. Growth hasration in really been misjudged by chinas officials. We were expecting the policymakers to step up support, whether that is continued credit or even a restricting or easing of restrictions. We will get that data around 9 45, but it is expected to confirm what we saw. Kathleen we also have breaking news from japan. Second quarter Capital Spending up 1. 9 yearoveryear. However, bear in mind the 6. 1 and on a was , 6. 9. Veryear basis these numbers are better they are weaker than the forecast, but we sort of expected a deceleration. Looking at last year compared to profits areompany also out for the Second Quarter. The same quarter as Capital Spending. Up andll 12 after being we have seen pressure from the trade war. , maybe note numbers as bad as they could have been, but not in the plus column. Argentina imposing capital controls in the hope of halting a plunge in foreign currency reserves. Nowip sanders is joining us from santiago. What can you tell us about the capital controls . Can they work . You cannot take the dividends out of the country. They cannot pay dividend. Buy dollars for the purpose of saving. Individuals cannot take more than 10,000 a month out of the country. You cannot do that. , they are allowing people access their account. Dollars. Uy you can take money out of your bank without any problem. They are stopping people getting access to their money. Paul what are the implications for market . The currency market should strengthen or stop the decline in the peso in the next few weeks. It was running out of dollars. They lost 3 billion in two days last week. They were going to exhaust within a few days. It sent the peso tumbling far lower. Maybe they can control it for a while. Tradingnds are already at . 40 on the dollar. People are already predicting a fault and a big fault. It should help to slow the decline in the peso over the next few days. Thank youip sanders, for joining us. Daybreak asia. This is bloomberg. Kathleen now for a quick check of the latest flash headlines. The slowdown continues for macau. Tofelt a. 6 year on year the equivalent of 3 billion u. S. Dollars. That is more than twice as big of a decline as in the survey. Have fallen to percent so far this year compared to 2018. Financeh pot ministers says he is. But they have sold the locomotive is this to chinese train maker. The European Commission allowing the sale said they projected a bid from french train maker to merge with german rivals on antitrust grounds. Markets opening up in tokyo. Lets get over to selina wang for what to watch. We are seeing asian futures set up for a mixed to lower windows market. We have those trade headlines that came over the weekend. They are not a reason for positivity. Taking a look at japanese bonds ahead of the weekend. Intensifying efforts to stop benchmarks from bowling to record lows. The are seeing those yields rise a little more. To come onenty more daybreak asia. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Paul good morning. I am paul allen in sydney. Asias major markets are about to open for trade. Kathleen hays i am Kathleen Hays in new york. Selina i am selina wang. In beijing. Welcome to daybreak asia paul our top stories this monday, new tariffs kick in and chinas factory sector shows further weakness. U. S. Futures fall. The yen gains as a traditional haven. Oil under pressure as trade tensions further threatened Global Demand. August was a crudes worst month since may. Kathleen hong kong braces for more unrest after a violent weekend. There are signs that International Companies are reviewing their plans. Paul well get you across some breaking news on the bloomberg terminal. This is corelogic house prices on the month for august. Up 1 for the month. That is the first backtoback monthly gain we have had since october 2017. Also the biggest rise since april of 2017. The Housing Market here in australia appears to be showing signs of life again. Corelogic saying that stegall stable government and tax cuts and lower Interest Rates all behind the surge level p they note a deeper poll of buyers and a lower stock of housing being offered. Housing forf 1 in the month of august. Lets get to them Market Action with selena in beijing. We are coming off the back of a volatile august with no positive catalyst it looks like we may be up for a volatile september. The nikkei is trading down and it has fallen 4 in august. We did get the numbers out of japan showing spending rose more than expected at 9 . The yen is strengthening amid the global uncertainty. Recession headwinds still ahead. We saw rally in the yields of japanese bonds ahead of the weekend with the boj intensifying efforts to stop benchmark yields from teaming to decline. Taking a look at south korea, we got data showing export slumping following 13 point sex percent year ago just 13. 6 a year ago. Trilliond provide 3 etiquettekorean won interest rate. We also expect pmi data to come out of south korea to show continued construction. China showing contraction reflecting a lot of its big trading partners are also facing weakness. Switching boards taking a look at what is going on in australia and new zealand, the asx 200 was down 2. 7 in august, seeing muted change there as well as marikas more weakness in new zealand. We did hear from paul about betterthanexpected number is in the australian home sales data. Kathleen lets get the first word news with Tom Mackenzie. Howard Hurricane Dorian made landfall in the bahamas is the strongest storm ever recorded there. It is bringing torrential rain and winds gusting up to 300 columbus power. With a likely 300 Kilometers Per Hour with a storm serve of up to seven meters. Much of the bahamas is expected to be devastated and may need 10 years rebuild. Jordan could next affected the eastern seaboard from florida to north carolina. Dorian. Cane held to don to slump in fx reserves. They set a limit to repatriate foreign currency. Officials need official reauthorization to rebuy dollars. 3 billion dollars flowed out of argentinas fx reserves thursday and friday alone. South korea next parts extended their slump as tensions with japan add to the uncertainty of the wider trade war. Outbound shipments fell 13. 6 percent in august from a year earlier. The nine consecutive month of decline. 4 , leading a trade surplus of 1. 7 billion. South korean trade data serve as a barometer of Global Demand due to its early release. Designateime minister to seppi conti says he intends to present a new government by wednesday at the latest amid tensions within the latest fragile coalition. Markets were unsettled when fivestar leader luigi demaio threatened to force a new election if his policy demands are not met. Fivestar founder has called on Party Leaders to stop arguing and start governing. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am Tom Mackenzie. This is bloomberg. Lets continue now to new u. S. Tariffs on roughly 110 imports now effect. China following up with its own retaliatory measures. President trump says trade talks in washington are still on. We are talking to china. The meeting is still on. That has not changed. They havent changed and we havent we will see what happens. We cannot allow china to rip us off anymore as a country. We cannot allow china to take 500 billion a year out of our country. We cannot do it. Lets cross your Senior Editor in singapore. What is this trade war stand now . To me it looks like maybe does escalate. I think it is on point. There had been talk about a truce that the u. S. And china had sort of paused things. That is not the case. It is interesting because we were saying here last week these tariffs were supposed to take effect. If you look at currency markets this morning, it is clear that not all of this was priced in. Instead, the tariffs to take effect as expected. That took effect september 1, now you sit and look forward to a complicated vence. The key events we are looking key events we look for to come later this month. Youre talking about talks between the us and china in washington. Those are supposed to happen, we are not sure when. Were not sure if was going to go. This with key data points. The other thing is october 1. There is a tiny tariff escalation that President Trump threatened on october 1 before the really big one on december 15. I think that is going to be a thing to watch. Because that is a small thing. That is a possible give a bull item if the president decides to give on that. It might seem that we are looking at some sort of deescalation. But i think you are right, kathleen, there is a clear escalation over the weekend. Tariffs did take effect as signaled. We are on that same trade war footing. In the month of september. Paul derek, you mention a few key dates. Talks to be confirmed this month to the october 1 deadline as well. Are there any other milestones the markets need to be watching out for yucca need to be watching out for . For think the thing to look is to look for actual action items. With President Trump, people tend to look for what is the soundstweet, how does he on china. The thing i would look for clearly is the action items. Do something that is scheduled to happen happen or doesnt get pulled out. The other thing i look for, paul, you have to watch for is if there is any consecration with hong kong. With the protests there. The president said and kid visors reiterated that the escalating situation hong kong if theres a crackdown ill make it harder for the u. S. To come to a deal politically. Key advisors reiterated. The u. S. Comes back after monthlong august recess. You will start to see congressional scrutiny on hong kong and china. And hearings and calls for action those voices are only going to get louder this next month. Paul Senior Editor, thank you for joining us. Theres more on the trade war tomorrow on daybreak asia when we will speak live with australian trade minister simon birmingham. That exclusive interview 8 40 a. M. Tuesday morning hong kong time. Hong kong is bracing for more transport disruption today after a weekend of unrest and violence targeting the airport and subway system. Our chief north asia correspondent Stephen Engle has the latest. Down, theettling tension keeps ratcheting up . This is the 13th consecutive weekend of demonstrations. I keep saying that every monday morning here recapping the weekend. Frustrateders are that the local government is not meeting any of their demands. The local government, im guessing is frustrated because the violence is escalating and they say they are not going to have sears dialogue im paraphrasing, and im paraphrasing, serious dialogue until the balance as out. And are they talking to the right people. On friday we heard they rounded up a number of the figurehead leaders of the protest movement. That angered a lot of people who turned up on saturday afternoon for that band demonstration. March. Banned that had a barricade set aflame on hennessey road. Ofleast two live rounds sidearms fired by place. They felt their officers were in serious danger. Devolve and chaos on the mtr. That is the subway line. Several tastes several stations had their subway turnstiles damaged. The link to the airport in central hong kong, that line was disrupted yesterday. Seriously. Actualst disrupted the as protesters disrupted the rail line. The train cars were disrupted. People were inconvenienced. This is being called for today. At least three different states and protesters are calling for civil disobedience and disruption. Kathleen steve, what is he going to take to move this forward . For example, if carrie lam were this, i have not settled i will step down, would that get the Chinese Government off the hook . Would be enough to get the protesters to step back and be ready to talk rather than protest . What scenario can you imagine that would break through this impasse. The real question at the rid of that is carrie lam being allowed by beijing . Im guessing the answer is no. There have been numerous reports that i cannot substantiate though that she has offered to resign. She has offered or gone to beijing and asked, this is a reuters report, asked to officially withdraw that controversial extradition bill. Both times on the resignation and on the official withdrawal of the bill, beijing reportedly, i have to stress reportedly, has denied those requests. That is where we stand now. It is a standoff in the up enemy of a standoff. Neither side giving in the it of a me the epitome standoff. I would like to hear any solution. Thank you for covering this for us. Our chief north asia correspondent joining us in hong kong. Still ahead, reaction to the hong kong protest this hour with the Vice President of pinkerton asia. We ask what his clients are thing about all this. Paul up next we get the outlook for chinas economy with Standard Chartered economist. This is bloomberg. Kathleen it is the imposition by the u. S. Of more tariffs on china. And a weakening china manufacturing pmi. Here key events investors are watching this week. Markets looking for signs of fallout from the trade war. We will start with that. We get it check on chinas small pmiters with the caixin output rating on monday. More factory data will be out in indonesia, south korea, taiwan and india this week. Central bank of the week will likely keep its cash rate unchanged. Many expect governor for low to keep the door open for further easing. That will be key. Looking at the end of the week a big number will be heard around the world. That is the u. S. Labor market jobs report expected to show that in all remains robust with the addition of one under six to 5000 jobs last month. However any surprise with 106 jobs. 165,000 any change could affect fears. Cut in the profit forecast after factoring in latest figures for the broadband initiative. The nationwide project aims to improve the countrys chronic to any and is the biggest of its kind in the history of austria. Expect profit of 17 billion u. S. Dollars per the strauch at astana strong year so far. In 30 a strong year so far. Tesla won a victory in china after a Charm Offensive by elon musk. He met with lee chapman on friday. Minister. Tesla be exempt from attacks it typically hits domestic lecture carmakers. Newtart production at a plant in shanghai before the end of the air. South African Airways has posted an ad for new sealer prominent newspaper threemonth after the biggest bus quit. The carrier has been leaderless after the previous boss quit. Also looking to fill another senior post. The announcement in the do has burke set a times suggest there has not been much suitable interest so far. Airlines is the latest kyrgyzstan removal of the boeing 737 max for its schedule the latest carrier to extend the 737 max for a month. American is dropping a max at least through december 3 with the announcement coming two days after united pulled the jet to the middle december and southwestern moved it from the lineup until early january. Daybreakdy murder, and asia, stay with us. This is bloomberg. Kathleen this is daybreak asia. Kathleen hays i am Kathleen Hays in new york. Paul i am paul allen in sydney. Here in australia we are off by 1 5 of 1 . A similar story new zealand. In japan the nikkei weaker by 131 in the kospi is lower as well by one third of 1 . The nikkei weaker by one third of 1 . Kathleen lets take a look at currencies across asia. As we move onto this board. You can see the dollaryen rate, we will small decline. That 106. 19 level as we get ready for the bank of japan to meet. As its belows long the 105 level on the end that the boj will not be inclined to do too much. See a little bit of a strength here in the offshore yuan. Surprising perhaps dollar and you on trading off the pmi, purchasing management index. You can see the aussie dollar. Oving a little here were waiting for that big rba meeting tomorrow. The rb is expected to hold steady. Just the rmb is effective hold steady. Of 14. 9. A level week many factoring numbers. Korean pmi expected this week. Plenty of macro data for the markets to digest as the trading week gets underway. Thanks, kathleen. A check on chinas small pmiters with the caixin reading later in the next hour. We have the Standard Charter economists to discuss this. Lan shen, china economist Standard Chartered bank thanks for joining us. You would have to imagine that caixin reading is not good to be too pretty. Tariffs have had an impact on chinas exports with growth of 6 year today compared to 9 in 2018. Exports to the u. S. Declined the most among the Major Trading partners. That the actual growth could possibly decline into negative territory in q4 next year, due to the much faster position of additional tariffs. Things may. This will likely to wait on the Business Performance of smaller business and exporters where thinking that the pricing export or pricing pmi are likely to climb deeper into contraction territory in august. Chinese feeling quite a bit of pressure as a result of the trade war. We expect to see more supports coming from them coming for them. The manufacturing pmi from official sites shows [] ande is growing rising deficient [] in chinas economy. This warrants more policy support from the government including continuing expansionary fiscal policy and more accommodative Monetary Policy. We think the government will fully implement its official year andt for this will continue to accelerate the the Government Bond insurance proceeds to help boost the investment side. And also on the monetary side we interestt the reason rate reforms pave the way for more Monetary Policy easings after a sizable new loans got benchmarked against the new loan prime rate. Where likely to see the pboc to cut its mediumterm lending rate further to lower the funding cost for the real economy. Kathleen did i hear you correctly when you said that chinese growth, gdp growth could be negative by the first part of next year . Sorry i mean that we think that the export growth could intobly decline further negative territory in q4 next year. As export growth slows, we think the net export contribution to gdpth could decline growth could decline in the second half of this year after 1. 3 of gdp growth in the first half. We estimate that the already announced tariffs could trim a gdp growth by 1. 2 over the next 12 month time. Kathleen so if the trade war continues, how much can the government do to prevent growth from decelerating like this . It is a different version of what people are sing about Central Banks around the world. They just do not have as much firepower as they used to. How much could the pboc do with lower rates and the government with targeted spending . That the fiscal policy will continue to take the lead. And combined the consolidate budget we think that we still have room for further. Xpansionary fiscal policies and more accelerated fiscal spending in the second half of this year. And also we think that the Credit Conditions has already ] growth ish the [ compensated with normative gdp growth. We will likely have room for lowering the funding costs by the lpr reform as well as. Ossibly rate cuts so this policy easings will likely to have an impact on economy over time. That economy likely to see, yes, sure. Paul i was going to say 30 seconds a viewer question has the slow down in manufacturing affected state owned medium and small many fractures . You can be brief. Manufacturers. War has that the trade andrmined Market Sentiment affected corporate profits, we think those manufacturers and smaller exporters are likely to bear the []. Onl plenty more to come daybreak asia. This is bloomberg. Paul welcome back. This is daybreak asia with the first word headlines. Tariffs onrump with of5 hit on 110 billion chinese imports. From footwear to clothing to home textiles. A further one hunter 50 billion of imports including laptops and cell phones will be targeted in december. 150b further in december. To 49. 5,ring pmi fell worse than the 49. 6 in and of bloomberg survey. The economy slowed in july and early data show that continuing in august. However an improvement in Small Business confidence is assigned that earlier progrowth measures may be taking effect. Hong kong is set for more disruption monday morning after another weekend of violent classes between protesters and police. As masse were arrested demonstrations spread throughout the city including more targeted ofion disrupting operations the airport. Protests are set to continue monday in the citys subway operator said some stations may cost of due to damaged the classes. Hasla merkels coalition stamped the right of ahem stem the stem to the rise of journeys germanys antiimmigration alternative party into votes in brandenburg and saxony. The results will help ease the pressure on the coalition which suffered losses in e. U. Elections earlier this year. Global news 24 hours a day and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Im Tom Mackenzie. This is bloomberg. A lot going on in the markets. Back to salina for the latest. Can see athleen, you see of retta my board. We are coming off backtoback monthly declines for those asian equities you see here the south korean kospi is leading the losses with health care and financials as the biggest losers. You look at the nikkei, it did fall about 4 in august. Today we are seeing energy and communication sectors at the biggest losers there. We did see japans Second Quarter Capital Spending provide positivity, rising 1. 9 percent versus estimates of 17 . We are still reeling from those tariffs that just came into effect. They were expected by the markets but are not providing any reason for positivity. As we can see from the red across the border today. Switching boards, i wanted to take a quick look at some stocks im watching. Telstra one we have been talking about cut its total income forecast for the full year, seeing it down a little bit in the red because of that news. We are also looking at rio tinto. It was one of the biggest gainers on the asx 200. And is becoming arbitration process with Liberty House group over nonpayment of customary postclosure adjustments including working capital. Also looking at peta view our holdings. Rmentioned earlier on p w holdings. We are seeing it reverse gains down today after it was a bell graded at del potro. That stock is up 50 over the past year. U. S. Futures and asiapacific stocks down to kick off the week with investors have had a lot to digest from the weekend. Not to unpack it we have Bloomberg Asia editor Garfield Reynolds joining us in sydney. Trade tariffs, pmis, what are you watching . Theres also hong kong. I think hong kong is adding to where the level of turmoil is act as a drag on sentiment. Investors are having to take into account concern that this is a situation where what is going on is making things worse and it is hard to see what sort of resolution comes along that could offer a rapid turnaround. If protests die down your of damage to the hong kong economy. And to the way the asiapacific financial and Economic System was set up. A prosperous hong kong as part of one country to systems set up that was working moderately well. That seems to been thrown out along with trade between japan and korea. The trade relationship their the worlds two largest economies it then theres europe in the background and all the rest of it. Point tother pressure bring risk off. Is one more reason for the be buying global barones global bonds. Prices surged. A 30 or bond looks like what i threemonth bill used to look like. What are we set up for in september . The risks ine of see this month. Bonds have gone so far so broadly. Theres no diversity left anymore. Every single one of 24 developed markets that bloomberg tracks saw tenured yields sought 10 year yields drop by at least 12 and a half basis points. Furtheruld have dropped it was not for the iron hand of the bank of japan. That broad relentless bid for bonds tells us that the stock market is living on borrowed time time. It also raises the concern that bonds have gone so far so fast that they could face some savage reversals. Because they all look overextended. There is been a lot of movement on the assumption that Central Banks are just going to go on easing and easing and easing. When out of jackson hole one of the things he got was that Central Banks central bankers themselves are starting to worry that maybe they do not they cannot solve the worlds problems just by adding another 25 basis points and then another and then another. In that set up, you could see bonds across the board or inverse places breakout. You could see yield surges. The concern with that is that if yields do serve sustainably, for a while, that might actually even worse for stocks than if they keep growing. Paul thanks for joining us. You can follow more on this story and all of the day trading on our markets live blog. You can find that on the bloomberg in rrb go. In one click and db go. Then find out what is infecting your investments right now. Lets talk about oil extending its slide after the Trump Administration slapped for their tariffs on chinese imports markley further xplays and further marking a further escalation in the trade war. Now our Energy Reporter james thornhill. Were seen for their downside in the oak and oil passes in asia. Dachshund oil markets in asia. The market canen spin on a dime with the latest from the u. S. President. I prefer to look at the actions rather than words. Tariffs came into effect on the weekend. That will have a Material Impact on demand for a range of commodities including oil. And it will be negative. As long as that trade uncertainty is hanging over the market it is difficult to see upside. As to where we go from here, watching comments from both sides and seeing if there is any sign of a thought. Another focus will be on the u. S. Inventories data. A big mover for the oh market. We saw drawdown and supplies last week which was positive for the oil market theyll be looking for a continuation of that to lend support. Beyond that theres a meeting of opec producing nations coming up the next week or two which will be important to see what they intend to do about the price situation. Kathleen how about the latest news of saudi arabia splitting the role of the energy minister. What kind of impact and what is the purpose doesnt mean anything for oh prices. For oil prices. May not have an major near term impact. It shows the saudis are preparing for getting ready for a new world. Ipoave the saudi aramco coming up that will open them up to public scrutiny that they have not been used. They will need to have more focus on this industry in particular. Splitting out petroleum from the other two, they will have scope to do that. They will also have, the global for Climate Change and more oversight of the industry. They need to talk about as well. It is part of global broader trends going on. They want to give more focus to the energy ministry. ,nd the Petroleum Minister khalid, man of great power, this dilutes the power a little bit. There could be political maneuvering to spread the power load in riyadh. Paul lets talk about the weather and Hurricane Dorian. Is that having any effect at the moment . A huge not think it is mover for the oil market. It is a devastating impact for people on the ground. Chevron cherub ron had to evacuate some staff from rigs in the gulf of mexico. It is something to keep an eye on if it comes across with any intensity, that could have up and impact on operations in the gulf. Florida is not a major producing area. It is not a huge impact right now. Thanken james thornhill, you. Our Bloomberg News Energy Reporter. We appreciate your insights now watching oil per up next. Hong kong reels from another weekend of unrest. International companies are reviewing their plans for keeping the city other asian headquarters. This is bloomberg. Paul this is daybreak asia. I am paul allen in sydney. Kathleen i am Kathleen Hays in new york. Our next guest says some International Companies are reconsidering investment, and the cover stations are turning to longterm viability of hong kong as a regional headquarters. Joining us now is pinkerton asiapacific Vice President grant strudwick now please have been removing protesters from stations on the mtr subway system in hong kong. From yourou hearing clients . Are they worried about what is happening . It varies considerably in the clients we are dealing with, defending depending on the footprint and the nature of their operations in Mainland China. Some that have a more agile footprint are looking to move and some have already enabled Business Continuity elements offshore perhaps in singapore other cities in the region for the short term so they are looking about their Business Continuity in the shortterm. But also the short term. But also longerterm issues as well. Companies coming into asia for areaps the first time, we aware of some that have changed their decisions to set up their operations in singapore. His playing on their mind both for the shortterm and the safety of their people and Business Continuity. And now we are seeing businesses decisions being made for the longterm recognizing that this might be resolved in the short term. Theyre still 2047 that is looming. There needs to be some resolution that is cast into the future for hong kong. Kathleen it seems to me you are alluding to the question of how stylehis hong kong democratic structure still linked to china, basically still at chinas control, how long that will last. Halep how part is that to people, the customers you have how important is that two people, customers you have, doing business in china doing business in hong kong. Itcompanies are looking at as the longerterm reglet tory and Legal Environment operate in hong kong. Those that have operations in Mainland China recognize what that environment might be. From a business point of view there able to make decisions around how to operate in that a varmint. How to operate in that environment. The business varmint could be anything for what it is like now environment could be what they see in Mainland China. The other issue is more about the habitability, the living and varmint for their people. And indeed the World Wellbeing of the environment for their people and the wellbeing of their hong kong workforce. There urging people to take lawful action as is their desire. And within the laws of hong kong. But i think over time understanding what the social of our mens going to be like for International Assignees the social environment is going to be like for International Assignees in hong kong which has been a great destination for many, many years to bring people into and work. Now we are saying some company saying canada is knocking back the offers to work and live in hong kong. All these things start to play while they my people operate in the business environment, attracting the people they need to work for them in hong kong a be an issue for them in the future. We are several weeks in. The protests have become more dramatic we have seen shots fired. There was a fire on the street. Weve also seen satellite images. We get to a point where china does not were china intervenes, would you advise your clients then . Is a question that is looming it a lot of questions and concerns our clients have around that space. We are now in the area of working with them to understand those risks to understand what could be the most extreme environment theyre likely to manage in the short term. Understand the policy considerations. That if theyre going to move people offshore for peers uptime, howling and support them for. For periods of time, how long they support them for. Who they are going to move. And how they support them. So i spiked. Their concern about two things. People safety and their duty of care obligation to International Assignees. Theyre not just response before the workplace but also response before in the general living sense. That is one area there grappling with. The other areas their daytoday Business Continuity. Denial of access for short peers of time. A lot of the protests have occurred over weekend spare now were starting to see general strikes and other impacts that are going to perhaps be happening more into the future. At a more unpredictable approach to protest. Which were initially fringe elements of legal protests. Now we are seeing unilateral action in other areas that are not necessarily an extension of an otherwise peaceful protest. Workingry much about with them to understand the shortterm options to maintain Business Continuity. And also looking into the medium and longterm s to how they can do that in a changed environment. An sentiment in hong kong. Paul he mentioned a minute ago one of the beneficiaries of this could be other places like singapore, possibly even kuala lumpur or bangkok might be beneficial to businesses looking to hub themselves elsewhere. But you lose something dont you you lose that access to china. Can you cap your cake and eat it too. Ofthere august their range things businesses will weigh up when they make those decisions theyre obviously a range of things. Including loss of relationship with her hong kong workers are the heirs are all considerations they need to make. It is not an easy environment to make those decisions. In the end, they will make them on the basis of future economic viability and Business Continuity. How they manage that transition to that in varmint is certainly something they need to be very careful about how the message that with their people. Two that environment. Have a long career of managing situations for your clients is there another time you compare this to. There are been similar examples, where it is warranted a temporary rather than longterm change in thinking. I think if i look back to more of a Natural Disaster environment, rather than a political varmint. If we go back to japan, the tsunami and earthquake rather than a political environment. We saucing if can impact on supply chain. Company started to think through how they would operate in a sustained environment. Secure theircould supply chain by diversifying into different locations. If seen that in china in recent years. Which has been more of a function of economic reasons. And the increasing cost in certain parts of china. Where companies have diversify their supply chain. That is one example were supply chain itself has been an impact. In other locations we saw in 1998 and decrease her car to where there was a significant political situation in jakarta that required expats to leave. That has now morphed back. Center is a far more stable environment to work. There other examples. I think hong kong is unique. Because of the nature, and the affection, the stability that it is had over many years for many International Assignees. And indeed hong kong people themselves. It is unique. But there are some of larrys that have forced companies to look at their longterm viability. In a particular there are similarities that have forced companies to look at their longterm viability. To be resilient in this of future by making their supply chain and headquarter adjustments. Kathleen let me ask you, when you talk to clients and theyre making this assessment, is that like, ok, you have a bottom line and you have your business plan, hows going to affect it. Or is there some element that extends to, worker security, personal security, safety, et cetera, that actually has a tinge of apprehension or fear in it . Certainly the clients we are working with the number one priority is safety other people and their workforce. Beensay, that has always their first priority, to ensure people can operate safely either to and from the office or just their general living environment. That has been an overwhelming concern. And they will look at their duty of care, their legal requirements to ensure that safe workplace. Then there are the ethical and low moral approach as well. Some of them are going well beyond that whatever their legal requirements are. To look at whatever they can do to encourage safety whether it is working from home. Some people moving offshore, just to provide continuity. Certainly the two key themes are peoples safety, and also fitness continuity. And People Safety is something that also Business Continuity. Peoples safety is something that also extends into the way of communicating with them. Some have mainland offices as well as hong kong offices. They are mediating to make sure the relationships between the two are such that people can have their own opinions, but people should inspect those opinions as long they are operating within the law. Respect those opinions as long as they are operating within the law. Kathleen you brought a very interesting angle to the story as well as what is happening in hong kong. Thank you for taking the time. Remember ourrward interactive tv can function, tv for blue subscribers only. For bloomberg subscribers only. Check it out. This is bloomberg. Paul lets get a quick check of the latest business headlines per the slow down and what china and the wider trade war continue to put the brakes on macau. Casino revenue for august fell 6 year on year. That was twice the decline forecast on a blue burke survey. Casino revenue fell almost 2 this year so far compared to 2018. Kathleen french finance minister Bruno Le Maire is furious German Rail Company sold its locomotive business to chinese train maker crc peer he slams the European Commission for allowing the for sale in february the commission rejected a bid front french trade maker elstrom to merge with rival siemens on antitrust grounds. Now a preview of what to watch and markets. Selina we are watching for the impact across stocks on the new tariffs. We know theyre going to impact apples projects including the apple one the apple watch, air pods and macbook. Appletching suppliers to including foxconn. We are expecting volatile trading when markets open in hong kong. Switching boards taking a quick look at other stocks. That subway station in hong kong. It is down 10 in august. We saw protesters basically trash some stations over the weekend. But mtr saying they are open today. Also watching the operator of the city gate ball next to the worst hit station. Putting out on mtr there still some damaged facilities even though it is now open. Significant pressure on stocks in hong kong because of protests. Will watching to see how they open at the start of trade. Paul thanks very much, selena. That is it from daybreak asia. Our markets coverage continues as we look ahead to the start of trade in hong kong, shanghai and shenzhen. Bloomberg markets. The china open. This is bloomberg. 9 00 in beijing. Welcome to the china open. Im Tom Mackenzie. David im david english. David ingles. We are counting down. Lets get the top story. Hong kong braces for unrest after a violent weekend. There are signs of some companies are not reviewing renewing their plans in the city. Tom new tariffs kick in. President trump says talks are still on this month. David tesla wins a tax break in china. It will benefit from a measure us