In new zealand and in germany. Before germans went to the polls, we did see what was going on with valuations in the benchmark dax. The dax is showing Equity Investors are not conflicted. The dax trades at about 13 times its expected profit. That is well below msci priced ratios. Ndexes overweight. Just half an hour to go before we get these art of the session start of the session in hong kong and shanghai. It is now 135. There has been guff of Interest Rates going up. We have been doing this for years. Once has oit faulted. Rashaad every time i go to england, my trip becomes more expensive. Entering the 4th quarter. High grade. F expect thos three to hike. Equity markets doing good. Japanesef the weaker yen, it is no longer here. A little into ems. Getting out of the bond markets, we are seeing yields of. Up. Percent. Is up 0. 4 starte seen a downpouturn to flow. Watch out. This is your 200 day moving average. There is your chart. 51 on our terminal. We could be talking about elections in japan. The last time we went to the neverin japan the topix looked back. Pop on 2016, massive that day. You had a tight range when you have doubts on the currency market. Reflation back up. Highest. Ld be the there we go. 15 are just past the 20 15t peak. We are up for six straight weeks in the asia perspective. Rsi, 30 is your oversold. So far it has held quite nicely. Tenure high on the asiapacific. Rashaad thanks so much for that. Lets get you some of the first word news. Paul allen for that. A snap election in prospect. Says a weekend poll of japanese voters disapprove of abes plan to call a snap election. Opposition parties and other critics say he is trying to cling to power despite the scandals of resignations. The air force flew as close to north korea in a century. Said u. S. Aggression is the reason his country needs nuclear weapons. President trump has ordered new travel restrictions on eight countries, replacing his into soon to ban his expire ban on six muslim majority nations. The president says it will admit no one it cannot vet properly. Ascribing the new ban tougher the better. For 15 , trump called down from the current 35 and an announcement is expected on wednesday. The plan is to cut the top individual tax rate despite earlier Administration Promises of no cuts. Tighteralled for a corporate economy. He said the Banking System needs to improve international health. The Indian Economy expanded at the slowest pace in three years. Panic. Eed for there is merely a need for analysis and responsive action. Global news 24 hours a day powered by more than 27 journal of and analysts in over 120 countries. This is bloomberg. Rashaad a bit of an upsetting night. Inconclusive reports in new zealand. Thanks for joining us. Power merkel, she had won but she cannot be convinced shes getting a mandate. It will be interesting to see how she builds that coalition. If she has to go with the free democrats. That would mean giving something away. His germany going to be a bit looser on the fiscal side. Europe is thinking about what happened with the insurgency. Rashaad this is the rise of the right, which is causing consternation. This is not something she needs to worry about in the near term but thinking about the next election, she will have to say her party bolseter will want to retain power in the next term. Peoplethey get to those who voted for the extreme right and bring them into the center . Rashaad a lot of anger in germany because of the refugee policy which she instituted. That is perhaps why she has inconclusive results in part. I think understanding where the social aspects of where the policies have been need to change. Csu and spd need to think about it. New zealand, there has not been an outright majority for the National Party and they have to think of what kind of coalition they have to build. No one has a clear mandate. Thatations are split and is going to make the job tougher for governments around the world. Expectationre is an we will see abe capitalizing on the residual support he has left. We saw news about a proposed fiscal plan he put out recently. That is in advance of something election. He general they need the mandate of how they stimulate the economy and protective hand on a nationalistic front from any tensions in the korean peninsula. Rashaad that is front and center when it comes to Global Politics and with what is going on with geopolitical nerves and how they filtered through into market sentiment. When you think about it, you say you want to be flexible. Invested areto be with benchmarks is not going to help. The environment today is about targeted investing. Rashaad we will go to that in the next segment. We will talk about active investing. More on the way but also we go to hong kong. Its main take. Place in a new report on best place to invest in apex properties. China has been slapping sanctions on north korea but will they actually work . This is bloomberg. Rashaad this is Bloomberg Markets. We are talking about alpha politics but lets move on to investment strategy. Active and passive investing and how passive has been in the foreground. You are saying now the active. The cycle is going to be much longer than most people expect. We have entered the new phase where liquidity is flowing out of the market. What that means is theres going to be a lot more dispersion and markets. Theres going to be a lot of ways to capitalize by choosing the best from the worst. And choosing sectors that suffer from rising rates. It is about being more selective both geographically and pictorially in the sectors. Rashaad it is a crowded trade that you are still into it . We think it is one of the most interesting sectors to be in. We would like for european and chinese banks over the u. S. The u. S. Have interesting angles in terms of the regulation extent youat to what get the deregulation of Financial Balance Sheet and leverage ratios in the u. S. An easier call to make is in europe, japan and china. Rashaad what about technology . That has been the absolute king of the stock market around the world. Every time i ask the question it is seemingly redundant. Over the Longterm Technology firms will make market share. They tend to trade sidewards. Tech mayformance of take a backseat through the end of the year. We want to think about what could be a headwind to those strong earnings those companies have been generating. We have seen regulation. Antitrust and esg factors. Environmental, societal and governments issues where we have seen uber coming under pressure in london last week. Rashaad we will see what happens. You could argue it is politically motivated. Some have done that. I think governments will use any type of reason to bring some of these companies under bear and it could be under the issue of taxation. Do these Companies Pay the right amount of tax and is that something we as investors need to think about when factoring in future earnings. Otherd there are some places with momentum. Stability being the watchword rather than the acceleration of growth. We think stability is something, we have seen the downgrade for moodys last week think that is fair. Moreink china has gotten stable. The Party Congress will bring some stability. Rashaad if we do not have inflation we cannot inflate the debt . Growth is going to be the primary goal of every government out there. No government is going to want to choke off growth. Mild inflation is going to be something we are going to live with for a wild. Strong inflation is hard to generate. Surroundingue automation and robotics which tends to keep wages under wraps. Rashaad what is your real thought of the day . People think this is a cycle that is just about to end. I do not think that is the case. Growth is going to persist. We have a synchronized great around the world growth around the world. Rashaad china is calling for restraint on all sides. This is after more accusations and reviews from the United States and north korea. China also putting sanctions on pyongyang. Tom, what have we got . On saturday, this is when china started to take steps to of oilown on exports and natural gas. Of north korean textiles. This is after another sanction where they stop the import of north korean seafood to china as well. Ordered the pboc had downs lenders to close north korean owned accounts in those banks. It is another example of these pressure points being put in place by the chinese authorities. It is something china has come under pressure on from washington to act. We got some reporting from my colleague who went along the chinese border of north korea and did some digging into the Economic Impact and the economic pain is being felt by chinese communities and traders who spent years training with north korea. There are still smuggling routes but saturday was the latest round of sanctions imposed by china on the north korean regime. Anythingcan we glean about chinas relationship with north korea on this . It certainly seems to have deteriorated. It has been down a downward sector for a while since kim jonguns brother was killed. He was seen as much of an ally to beijing. Hear from sense you the experts and historians that the relationship continues to sour and china is prepared to take certain steps to further pressure the north korean regime. They continue to say that this crisis best be resolved diplomatically. They are allied on russia on that. They want to see the u. S. Sit down for talks. They want to see this freeze for freeze, the United States freezes there military exercises and north korea freezes their test. That is what the chinese want. Many in washington want to see china cut off all exports altogether. Thats not something beijing is prepared to do. Rashaad a bit of breaking news coming through. Chinese fix in fix. Ncy seeing its weakest end of august. Also they have been injecting more money in the form of reverse repos, keeping liquidity in the system stable. This is bloomberg. Rashaad you are back with Bloomberg Markets. Withdrawlcrapping charges after they tried to save their reputation. They are acting immediately. The banks are trying to head off calls for wideranging inquiry into the industry. Moving to new zealand where this company is prepared to beingmate. K in fonterra chief executive says it is a good result. We are quite pleased with the results. The payout to farmers is significantly higher and we were able to stick to the 40 cents of dividend we did last year and we have a strong internal capital. Rashaad reports from the uks say uber is ready to make concessions to win back its london license. This at two days after uber said it would find that suspension in court. Meetingsr lyft held with londons transport officials over the past year. This is what it looks like, start of the trading day in hong kong. Futures on the way up. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. In hong at the peak kong as we approach the trading day. A bit of a downside from the hang seng. Looking at a snap election in japan. Mario draghi will address eu lawmakers later today. Fed chair janet yellen is in cleveland on tuesday. Fed vice chair stanley fischer, or i should say outgoing vice chair. And we have eubrexit negotiations continuing. We have a lot to get to, not least the possibility of a japanese snap election and indecisiveness in new zealand even after the election. And not quite the result angela forkel was hoping for ou germany. Down 0. 1wi dollar percent. Substantial pressure coming through. When you look at the currencies, you have the euro, the kiwi, to a lesser extent the sterling take it awayry and from what we are seeing broadly speaking. Risk on. Bonds are up. Gold up. Movement coming through in a lot of these em currencies. Peso coming off a fairly good day on friday. Record high on the philippine composite. Just to give you a sense of the broader picture. Floor. Ding the icbc down 1 . 14 point close, are downng seng we 130 points. Oil markets up 7 . This chart takes you back to 2015. Rate. G to reach upper expectation . M or the Oil Producers are looking to extend the cuts beyond march. Up implemented 100 of the curves. Tothe rest remains opend see this out because three. Let me scrapping the with a look at sterling. Sterling. Ot it is the median forecast. The rally taking it well past where the market says. 129. We need to get an adjustment. We have managed to retrace this 50 percent mark. This big drop after the brexit vote. There is very little to indicate where we go from here. Lets see what happens. Should i book a holiday. Get to the first word news headlines. Fell against the dollar after the general election result. Angela merkels cdu came out on top but faces tough Coalition Talks after the spd fell out. Afd won 13migrant vote, putting the far right back in parliament for the First Time Since world war ii. A major challenge has come, the fact that the asd has entered the afd has entered the parliament. We want to gain back those solvingf the afd by their problems, giving them solutions and by good politics. Productionan says curves have started to stabilize. They say attention must be set on rising output in nigeria and libya. For changes calls in the deal because of recent turmoil. He did not elaborate. Fitch ratings say the first of false on bonds by Chinese Government financed vehicles are becoming more likely. The agency says more than 600,000 in bonds remain outstanding. Fitch sees the greatest risk in aser tier bonds such property with urban development. The growing dispute over respect for the u. S. National anthem as now drawn in stevie wonder. He made his protest in new york after President Trump says that appellees who fail to stand for the and him should be fired. White houseed ana appearance by Stephen Curry w hich caused reaction on twitter. This is bloomberg. The japanese Prime Minister shinzo abe expected to a snap election. Stephen engle is with me now. What do we know . It is becoming more a snap unpor but then the opposition has been in disarray. There is another Splinter Party the formed by associate of the popular tokyo governor, the first female governor of tokyo. That is one of the reasons why shinzo abe is going to announce this snap poll. It could come on october 22. With the Splinter Party being formed, they want to jump on them getting some national traction. You have the opposition in disarray, you have this new party which does not have new traction yet. N the tokyo metropolitan election in july that they do not have a big Capital National base. Is that the real reason, we have the opposition in disarray. Is this a chance for him to deliver . The third arrow. Abenomics, this is going to be a referendum on the nearly five years of abenomics. They have pushed back the target for the inflation of 2 . Unprecedented monetary easing. Government spending, has begun what it is trying to achieve . The voters are suggesting 64 percent of respondents say they do not favor a snap election. There has been cronyism allegations scandals. Mess in a big japanese politics right now. Rashaad thank you very much for that. He is expected to announce a ¥2 trillion stimulus package which is streaking rashaad thank you very much indeed. To Prime Minister bill english claiming a mandate to form the government. Theid fall shy of majority. The opposition refusing to concede this week. Concede defeat. What is the latest . We are in a stalemate situation with english having produced quite a stunning result points clear of the shy ofpposition is just what he needs. He has no coalition to lean on. Itshe other side labor and green ally could form a government with winston peters. We have the king maker in the middle and we have to figure out which way he gives. Rashaad what should we be looking out for . Two sidesent the are expected to Start Coalition negotiations in the coming days. Thats his last 23 weeks. Past experience shows that he will try to extract the highest possible price he can for his support. We do not have any indications about where he might lean. Rashaad coming up, hong kong has been rendered the top property market. We will find out why they make that call. This is bloomberg. Rashaad you are back with Bloomberg Markets. Based homebuilder has a value of 5 billion. Afraid, why . G be sumax,ke ever grand and kaisa has not made any promise to deleverage. Rashaad this is a company that defaulted on its dollar debt. It is coming back from a debt. In mainland china. Investors are looking at this saying it could be the next evergrande. Evergrande has pledged to reduce its leverage. Rashaad that is why it is not the next evergrande . The Company Needs to have a concrete plan to try to reduce a leverage ratio. In the Second Quarter earnings, it said it would improve the debt structure. But it has not said anything about reducing the debt level. Rashaad Country Garden is down. It has fallen 7 . It has hit thed pause on expansion. This is a new story developing. To what else is going on. The state group colliers has said demand for property in asia firm. Mained andrew, a lot of through this story. Specific transaction values have been strong if you exclude australia and look only at asia. Transaction volumes in the first 19 to the year are up 61 billion u. S. Dollars. The markets, which were particularly strong if you are focusing on urban centers. Hong kong right at the top. Rashaad what is the driving that . Strength across the board. We saw Strong Demand for office properties, hotels, retail is beginning to turn in hong kong. It is important