Stimulus, not less. Yvonne glad you could join us. We are hitting a pause button in the trading, after what seemed like a long runup in stocks. We did see the selloff when it comes to equity markets in the u. S. A lot of talk in asia about the fed and centralbank talks. Indonesia coming out later today. We could see centralbank emergence playing through in this part of the region. Kathleen isnt it interesting coming into this year, the whole story was about Central Banks moving in the direction, that they would all be heading toward the exit. Now the Federal Reserve is like, where is everybody . Everyone has their own reasons to hold tight, including the european Central Banks. I should say reasons to stay easy. Yvonne yes, that is certainly the case. We did not get a good lead up for asia. How are things looking in the wall street session thursday . Seems a lot had to do with tech. Kathleen a lot of digestion, people trying to figure out where they stand with the fed and capital markets. There is a sense of a need deposit and reassess. We will talk about this shortly with su keenan. Yvonne lets get the latest in asia. We did see that pause inequities in the u. S. , dow snapping a nine day winning streak. I mentioned the tech stocks leading losses, apple with concerns of the week iphone 8 orders. As a catalyst, were not seeing today. 7302d that 50 down 0. 1 , for the kiwi on the eve of what will be a nailbiting election. Australia, a key market to watch. We are saying possibly an upside of the 19 points at the open, after we saw 0. 9 drop of the asx 200 thursday. The aussie taking a beating, the biggest out of the g10 space. Saw a slump in iron oree overnight. The rba saying no need to follow the fed when it comes to rate. The boj held rates unchanged yesterday. Futures flat, down 10 points for chicago nikkei futures. The dollar yen is a key one to watch after we saw the boj dollaryen hitting 113 in the coming days, despite the latest on north korea, President Trump expanded sanctions on pyongyang. Kathleen lets get the first word news with courtney collins. Up, hewlettpackard enterprises said to be planning 5000 job losses. The cuts involved 10 of hps global staff and are expected to begin before the end of the year. Whitman has been swinging the asked for two years, cutting divisions, including personal computer printers and services. Pressureer increasing from cloud providers like amazon and google. Sovereignhad its Credit Rating cut for the First Time Since 1999 with s P Global Ratings fighting the threat of soaring debt. The agency said three foreign banks operating on the mainland, including hang seng china and dbs china, would be unlikely to survive, should china default. They reflect concern china can strike a balance between maintaining growth and cleaning up its finances. The European Central bank and other e. U. Authorities are stepping in to provide a alternatives alternatives. The ecb will publish a new overnight rate for unsecured lending. Within a three years, it would complement, not replace, the current. They are not looking for alternatives to missing benchmarks after the u. K. s scandal. Puerto rico is cleaning up from the worst storm in a century after Hurricane Maria left of the whole island without power. Maria followed Hurricane Irma and left to the bankrupt u. S. Tort territory facing billions in costs. Said hisnor of barbuda island is uninhabited for the first time in 300 years. Irma and maria have left the entire population homeless. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am courtney collins. This is bloomberg. Kathleen a volatile week in the markets. Joining us to talk about what happened today, su keenan. You have a lot on your plate. Su we saw the stocks fall from alltime records. Go to the close, you see red. This was the first time in five days we saw a downturn after that. The dollar come a changed after rallying wednesday. Metals from copper to iron ore. Lets go into the big movers. Apple, taking a dive again. That partnership with google and htc, a lot of speculation. Maybe they will come out with a hyper efficient digital assistant that will give siri a real run for their money. Proctor and gamble Consumer Staple Companies were down. Lets go into the bloomberg at g btv 5133. We have seen weakness in the dollar. It was fluctuating in the latest session. Can it regain the dot plot . We see the dollar in yellow has pretty much tract with the fed as it was going up. Check it out, it is coming back down. The question is, where does it go from here . Kathleen hays will have more on that. 500, wee, the s p talked about how it will be narrow. Not all stocks are rising. Lets go to g btv 5726. What you see is the s p 500 market grows. 200t of members over the daily moving average more than normal are starting to grow. They are above the average line. That shows us there is more breath in the market, which is what the bulls like to see, even though there are caution flags out there. Yvonne i thought it was interesting we thought and energy socks selloff, despite oil resilient, 50 for a second day. We are getting mixed signals from opec ahead of its meeting in vienna. Su there is talk about the cutback. One of the veteran traders said is it is proving somewhat supportive. Prices could get punished. See a pullback. Interesting to listen to the ceo and founder on harold him forecast isid the wrong and it is not a good time to hedge because he thinks it will go higher. Is still 360,000 barrels under forecast. If they get it right and the market gets it right, we should pick up 20 . That is about the same amount of barrels. Today is theieve environment you should be hedging barrels in. He sees between 50 and 60 going forward. To be in the oil business and make those calls. Veteran traders say there are rumors around the market that veteran traders say there are rumors around the market that opec members are going to make a call to implement extension of the cutbacks. What opec says and does our two different things. That is where the traders ride up in limousines or ambulances. Yvonne thank you, su keenan joining us live from new york. President trump has stepped up pressure on north korea, announcing new sanctions on anyone doing business with kim jonguns regime. It only impacts those who continue to do business with north korea. Does business with north korea, yes, it will impact them. If there are countries that do business with north korea, it will impact them. It is for countries that continue to support north korea. Yvonne lets bring in bloomberg u. N. Correspondent following this out of new york. Good to see you. It is very interesting, we heard from nikki haley about the National Community was pleased with the blunt words that came from President Trump this week. How do you think the president did, overall . The committee was horrified by some of the words that came out of President Trumps mouth, like you threaten to destroy north korea, threatened iran, and venezuela. The interNational Community was mortified at some point that President Trump was worse than they thought he was. On bilateral, he did well. His speech was a dip disappointment to many diplomats at the u. N. Ambassador haley thinks the world likes the words of President Trump. But President Trump should have been more diplomatic. Yvonne that is true. We also saw the news about these sanctions, the new sanctions on north korea, in particular when it comes to Financial Institutions that do business with pyongyang. Are any of these developments going to get kim jongun under start listening to demands from the u. S. And china, russia and rest of the community . First, the Un Security Council resolution, and of the u. S. Is adding more sanctions. The North Koreans are responding, threatening to do countermeasures. We will see what that is like next week. Presumably they will launch more missiles just to upset President Trump. There is not much more the u. S. Can do. We have to give time for these sanctions to take effect. I think a lot of people are a bit shocked. Especially about trump as speaking so bluntly. On the other hand, saying to republicans and democrats, nothing has been really done to stop north korea developing these missiles and weapons, and that at least donald trump is finally confronting it, and finally pursuing a more direct line. How is that being discussed within the walls of the u. N. . Are they acknowledging that we got to where we are because we have not done more . Is a, nobody likes to support President Trumps tough actions, that we are here because of those blonde actions. [indiscernible] they are worried about what is next, and went we enter a military phase . That some space, the sanctions will not work. If they continue talking the u. S. , what then . Kathleen thank you so much for reporting us today. Still ahead, do not miss our exclusive interview with lloyd ceo. We get her views on how the insurer is tapping china, especially in cyber insurance. Later this hour we hear from john mcafee, the man who made his name and antivirus software. He is now into bitcoin. We turn the conversation the Central Banks with here in the new york studio. This is bloomberg. Counting down to asias first major market open this morning. Japan futures firmer this morning, up 30 points. The dollaryen above 112. Given centralbank diversions we do see what the fed and boj. Plenty more to come when we talk about this is daybreak asia. I am yvonne man in hong kong. Kathleen i am Kathleen Hays in new york. They are planning to our already winding down assets, wondering how to balance forces in the future. Lets bring in the executive Vice President at cls bank. Worked at the new york fed for over 20 years. Lets start with the fed, because they did what was expected. They are starting their Balance Sheet reduction, they are sticking to the view almost a promise, that they are going to hike the key rate one more time, even though janet yellen admits it is a mystery. It is below target, not moving in the right direction. As someone who worked in the fed and watching from a market investor standpoint, what do you make of this . What is the logic . They want to normalize the Balance Sheet and Interest Rates. This has been a goal of janet she got into that position as chairman of the fed. Have that bee to her legacy that she began or got the mobilization process well underway. We already had on the rate size moving multiple zeros to a little over 1 . She has moved off of zero. On the asset side, we are still at ¥4. 5 trillion. Still would like to change that direction while she is still in office, since we do not know if she will be renominated or not. Kathleen the Balance Sheet reduction is the easy part to understand. Dont worry, it is not really a policy tool now. During the crisis, it was. But now we are focused on the funds rate. The feds datadependent. One of the key indicators is far from it should be. Did they not change anything, in fact got further behind because they do not want to rock the boat . They start the challenge and Balance Sheet reduction they wanted to be very smooth. In december if inflation is down at 1. 4 , we might see the dots change. Dino you might see the dots change. If the s p is hitting new highs day after day, which is what it has been doing recently, that is an invitation for them to keep doing what they set out. You are number 2013 when the taper tantrum happened and they floated the idea of unwinding the qe, the markets reacted, volatility spiked, and then the fed backed off. Right now we have a market that is much more open, willing to accept tightening on both the rate side and asset side, and they are taking the opportunity. Can that change . You bet. If the markets react or the data really turns, what is going to be hard is what is happening with these hurricanes. Because how will that impact data . Will the fate be datadependent or marketdependent . The next few months they might be more marketdependent. What will the markets let them get away with . They will take advantage of what they can get away with. Yvonne the mystery along with inflation is, is quantitative tightening going to have a different effect from quantitative easing . We the success of qe. Saw the success of qe. Why is the mark what is the fed confident markets will stay calm . Dino neither they nor we nor anyone else knows what is going to happen with the unwinding. Youre talking about going from a Balance Sheet of 4. 5 trillion lets say it goes down to 2. 5 trillion, that has never been done. No central bank has ever done that kind of unwinding of a qe program. They are talking a good game. But there is a lot of guesswork here. The markets begin to react adversely, they will modulate and slow down the redemptions or even stop them for a time. Janet yellen told you as much in the press conference yesterday. Yvonne there seems to be offthing room, starting quite slow at 10 billion in the Balance Sheet runoff. In terms of indicators, what are they looking for in the next couple months, if not years, on how this will be a success . Dino we will be looking at the initiatives you would expect. How is the economy doing . If the economy goes into recession quickly, they will have to react. Oft will tell you the tale whether the Balance Sheet is a tool to be used in the future or not. Will they just use rates or reactivate and Asset Purchase Program if the economy dictates . You cannot put the genie back in the bottle. Once the market knows these tools are there and can be used and effective, they will expect them to be used again and there will be pressure on the fed to use them again. I would like to go back to appoint you raised earlier about the inflation mystery. This is a very interesting conundrum. If inflation stays low in the is the case for hiking the federal funds rate in december . Especially because we will do tightening through the Balance Sheet channel by doing these redemptions. I do not think the case is closed for december. It would not take much for them to take that back and decide to take a pass on december. Kathleen i told someone yesterday if they gave me points come i would bet that is what happens if inflation stays low. Is the fed not being clear enough about what their real concern is . Are they more concerned about financial instability . It is not a said tool to burst bubbles. Is that the elephant in the room . Dino if it is not, it should be. We have had close to zero Interest Rates for 80 years going on nine years. The real fed funds rate is not negative. The inflation rate is above 1. 5 . Monetary policy is still easing. Abouthould be worried access levels and exuberance, and i think they are, whether they say so or not. Kathleen there are a lot of right. That think you are i think i mixed my metaphor, unspoken elephant in the room is not quite right. He knows what i am saying, when i dont. Thanks so much for joining us. You can get a roundup of the stories you need to know to get your day going in todays edition of daybreak. Bloomberg subscribers go to dayb on your terminal. It is also available on mobile in your bloomberg anywhere app. You can customize settings to get news on industries and assets you really care about. This is bloomberg. Kathleen this is daybreak asia. I am Kathleen Hays in new york. Yvonne i am yvonne man in hong kong. Dividend, rio tinto is to buy back another 2. 5 billion of its shares from the sales of australian coal assets. 560 million will be used for Rio Tinto Limited shares with the remaining for existing buyback of Rio Tinto Plc stocks. It is a rebound in commodity prices. Japan said to be fully subscribed, offering domestic investors, account for 3 4 of the deal, with overseas portion completed last week. It is partlyt said to fund rebuilding after the earthquake and tsunami. Yvonne a second dreamliner order this week. Turkish airline 4 wants to buy7 new airlines when it bounces back after a terror attack from last year. The deal is worth 11 billion before customary discount. It helps Turkish Airlines work toward the goal of making istanbul a leading travel destination. Around, oneopping of the biggest debt deals to hit the asian market this year, as it looks to fund a purchase. They said would be bond purchasers are looking around. That means syngenta may not confirm pricing until next week. Yvonne chinas sovereign Credit Rating gets cut for the First Time Since 1999. Is it cause for alarm . This is bloomberg. Yvonne 7 30 a. M. Friday in hong kong. Beautiful look outside of the harbor this morning. 30 minutes away from asias first major market open. Kathleen i love those gray clouds. It is 7 30 p. M. Thursday here in new york. Evening has set in, look at the empire state building. And blue, white turning to green. I am Kathleen Hays in new york. Yvonne i am yvonne man in hong kong. Youre watching daybreak asia. First up, the nikkei news says president xi is trying to talk chinas anticorruption chief out of resigning. It said he has expressed a desire to step down and next months communist congress meeting. Members aged 68 or older usually retire. He has led resident xis anticorruption drive since 2013. President trump has ordered new sanctions on north korea, targeting individuals, companies and banks that do business with pyongyang. He me