The nikkei up. 3 , volumes are pretty light, the seasonality effect as far as that goes. Asx up point tend to the one side. Joining the negative field club, all the way up to 15 years and negative terrain. ,ets look at what is happening german futures there as well. Guild,ed, look at the nearly 1 in negative terrain. Theyre joining with the germans and the swiss here. Treasury at 1. 64 . Where are we with the trade talks . Out as we get over to the first word news with su keenan. Kudlow saying the u. S. And chinese officials have had a productive call on trade negotiations and they are planning a followup in the next few days. He also said there is no change on plans for a chinese delegation to visit the u. S. In september. Chinas ministry of congo comers echo the hope of finding a solution but also criticize the u. S. Approach so far. Postpone the tariffs on some chinese goods has proven there is no winner in a trade war and the u. S. Consumers enterprises will suffer huge losses if the trade friction continues to escalate. French president macron has poured cold water on any hope of a new brexit deal. This after talks with u. K. Promised her boris johnson. He tempered any optimism by saying changes to the current deal will not be significant. Johnson is demanding the eu scrapped the socalled backstop, thats a mechanism designed to keep the risk quarter free of checks after brexit. He still thinks he can negotiate a new deal. Its clear that of course i want a deal, and i think we can get a deal. Italy, the centerleft democrats have until tuesday to form a coalition with the antiestablishment fivestar movement. The president is giving parties more time to try to put together a new parliamentary majority in the hope of avoiding a snap election. Failure to form a stable administration would add to italys economic woes, with the budget do in the coming weeks. And u. S. Aviation regulators are said to be using relatively inexperienced pilots to test new Flight ControlSoftware Designed to help boeing 737 max returned to service. We are told the faa wants to find out how pilots with only one year of 737 experience but one max flight back to the update. Simulator training was set for the start of next month, but our sources say this has been pushed back by a week. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. David think is so much. A couple of minutes ago it was , the standing lending rate down 50 basis once. 7 on the former 8 . Inhaad more wiggle room anticipation of more rate cuts in the u. S. As well. Story,et back to our top investors cautious because they are all waiting for certain man to address certain gathering in wyoming. Meanwhiletrump pushing for more rate cuts. Three sources telling bloomberg they opposed the idea. Pal under pressure. Thats how its looking for the fed chair a Kansas City Fed kicks off at symposium here in jackson hole, wyoming. Markets have been looking for the fed chair to signal another rate cut but lately the voices of dissent have been growing. In fact, the kansas of the Kansas City Fed, who defended the last meeting, spoke earlier and said, number one, she really doesnt see the need for the economy to take out another rate cut of insurance. At the same time, shes not worried about signals from the market. Why you see fear and uncertainty about now. That is the metric i feel we have to focus on. We have a clear mandate and i think the longterm view that we have to stay focused on. The challenge to Monetary Policy, and its clear jay powell has quite a few. The big question for markets is what he will say when he opens the symposium friday morning with remarks where he has two opportunities to what he can signal another rate cut is coming or he can side with dissenters and suggest he is watching the economy to see what happens. That is an outcome that could certainly move markets. News,en hays, Bloomberg Jackson hole, wyoming. David heres the state of play and condition of the world, if you will. The world map you see and read, that basically means markets expect rates to fall in those places. Pretty measure across the board with the exception of iceland and a couple markets in latin america. Story,et more on the vanguard has more than five between dollars in assets under management globally. Very nice to see you, good morning from hong kong. Were just talking about the fed there. Lets start with that. Months points for next seems to be baked in. What comes after that is the specific question. That is our baseline, but i think the problem is that if that is to influence expectations, they better do something that is unexpected. If they come up with a 25 basis out withhey could come the dovish statement saying we will do whatever it takes to avoid a recession, or it could come up with a 50 basis point is not then say the risk balanced enough. I think whats going to happen after september, it really depends on if the fed can normalize and reverse the yield curve inversion. If they are effective in doing so, then we dont really see the need for further rate cuts if that failed to do case we will Start Talking about more rate cuts down the road. That 25 if we do get basis points next month and nothing happens to the yield curve, what is your take . Were looking at the threemonth 10 year yield curve and that has been staying inverted for a while. It has been a reliable indicator but at this time i think the situation is a bit different. The decline at the long end of the yield is probably distorted by searching for yield, especially from global investors. And historically a recession seldom happens when the Monetary Policy is this accommodative. Recessioneally see a , and after theh two any five basis point cut if the yield curve stays inverted, i would say the chance of the recession is deftly going to be recoverand we need to our view about economy growth down the road. Yvonne weve been hearing a lot of Asian Central banks going quite aggressively when it comes to cutting rates. We heard from the rbs governor speaking to Kathleen Hays at jackson hole. Take a listen to what he had to say about where rates go from here. Forward everyone is telling us that Global Growth is slowing, so lets get ahead of this move now and reduce the probability of having to do a lot more later. Benne new zealand seems to not alone here. You had pretty drastic cuts from of r. B. I. And the Bank Indonesia as well. It seems Asian Central banks are deviating away from the fed now because we cant string a consistent message from the fed here at the moment. The question is, do Asian Central banks follow what the fed does, or should they focus more on the domestic economy . It, theu think about preemptive even ugh Global Economic growth from the asian economy perspective, there is no longer an insurance cut. It is already responding to the weakness in the economy. Lotn economies suffer a from the disruption of the Global Supply chain due to the chinau. S. Trade war. Trade sector,the Manufacturing Sector and private investors are all suffering. To that extent i would say theyre not only going to follow suit but probably surpass the fed in terms of rate cuts. When you look at the asian economies, even countries like they korea or thailand, used to prioritize their Financial Stability overgrowth stability. But most recently they started to recalibrate their reaction function and started to prioritize growth over Financial Stability. I would definitely say they did they are doing the right thing when their Economic Growth outlook does not look very promising. David shes staying with us and still ahead we will get more on that interview. He tells us what he can afford to wait and watch on rates. Rishaad apple running a clutch of new hardware including the largest laptop in years. Thats coming up. This is bloomberg. Yvonne the value of bonds with below zero yields, we have to check this every week now. Now topping 16 trillion as Central Banks take radical steps to prop up growth. Considered by economies in chronically low inflation, but something the rbc is now considering. Theres point, far from best case. More from our interview. The thing about negative Interest Rates, they are very impactful across of fraud sector of the economy. When youre buying or selling particular assets, all tools are useful. Come some could be more effective at times. I like the Interest Rate run one as well because innocence, is moretrage economically efficient and less distorting. At the moment that is far from our central scenario. Andave growth picking up were looking at in the near term declining if not negative Interest Rates. Kathleen hays speaking exclusively with the rbc governor. Our guest,ack to thanks for sticking around with us. Negative rates, we heard from adrian there and he would on to say negative interest is the most impactful tool because that would have a broad effect across economy and it would be less distorting than buying particular assets. Qian when i look at japan, i just think, why did they have solo Interest Rates, yet the Credit Demands like Business Investment is not as strong. When you think about the Business Corporate side, what matters for them the most, when theyre making hiring decisions is about the median economic outlook. Are they confident that when they make the investment they will be able to generate profit and return. To a certain extent i think yes, when you lower the Interest Rate it will have some impact. But there is a limit to how much that lower interest will have on Credit Demand and real Economic Growth. Sweden inooking at the 1990s when they were negative and the rest of the world certainly wasnt, point to one country whose economic recovery has been fomented by such a policy . Qian well, i would say it really depends on what is the cause of the recession, or the downturn of the economy. It it is just a cyclical downturn, recession, i would say lowering the Interest Rate can really lift up the Economic Growth and have a recovery. I think this has been proven to be effective in many recessions in the past. Rishaad but you cant mention one country. You look example when at the u. S. Economy, there are fed lowerswhen the Interest Rates to save the economy and the economy rebounds after the lower Interest Rate. I think of the recession or the downturn of the economy is more stressful is because people have a depressed expect tension about the longterm growth. People have to adjust their balance sheet. In that case i would say lowering the Interest Rate may not be very effective. Thats where i think either the fiscal policy has to come in or the structural reform has to come in. Do you think that is the state of the aggregate demand in the chinese economy . Is pretty much where the benchmark rate is, said so they can do whatever they want, but it doesnt seem as if theres demand for credit on the others. Qian this is a structural reform, its rebuilding the mechanism that will help to improve the Monetary Policy mechanism down the road. But it is not a cyclical policy itself. See the ratey coming down significantly because banks wont have the incentive to narrow down their own margin, especially when their Risk Appetite is not that strong. I would say down the road if the Central Banks in china want to lower the financing costs, they will have to cut the rate down the road, but again, i would say from the pboc perspective it is a balance between how much they want to lower the financing cost and on the other hand they want to prevent the Financial Stability risk, especially that dont want to inflate the asset bubble in the market again. Final it may not be the tier four trying to boost the economy. Thank you for joining us from san francisco. Coming up, apple is just weeks away from revamping its most important product. Will have details on what to expect. This is bloomberg. Back, checking in with the business flash headlines, aia did not disappointment did not disappoint, expanding putting much in line with analyst thinking. The company saying its china fastestns are the growing segment. New Business Value expanded, the Company Significantly up by industrywide perspective by 80 . Las vegas sands is shifting its focus to yokohama. It will expand to three locations in japan to be developed in the casinos. An integrated resort will be built there and revenue could reach 20 billion. David is the time of year when apple is getting ready to unveil new hardware. Were talking maybe three new iphones, upgraded ipad and the largest laptop in years. Rishaad what is the buzz about iphone 12 . The thing that always happens with apple in september, you have new iphones. Over the past couple of years apple plus strategy is having and onetier devices budget. Being upfrontust about it and calling it pro. The going to do a lot of upgrades around the camera but otherwise it will look about the same as the previous year. Is apple falling behind when it comes to technology with the smartphone features . Thats the thing, with the doing,upgrade apple is theyre adding an ultra wide , things we have seen from other manufacturers. So apple can be said to be technically behind the curve. At the same time, apple is such a big technological leader that when the Company Adopts features, they enter the mainstream. Of thesedoption technologies will be the big things that make it a hit. Yvonne apple started the year with the big push into services. How important our hardware releases to the future of the company now . Introduced news plus ntb plus, to new subscription services. Its really trying to build into that. Last year they stop disclosing iphone Sales Numbers because iphone is not a Growth Business for the company. Its not the thing thats going to drive growth going into the future, but it is still the hardware baseline. Do ispple is going to interesting, it has a new processor thats going to speed up angst. It will also add a processor called the amx and that will help with math calculations, which in turn will feed into augmented reality applications. Were heading toward the lunch break in tokyo. Talking about trade talks to have a winwin conclusion. Also talking about south korea and saying the relationship there will damage the countrys trust relationship. And oh former bank of japan board member has been saying the boj is likely to cut Interest Rates more as japanese bond yields sink. And we go into the lunch break in tokyo. David welcome back. Jackson hole will be a big same. Big theme. Symposiums, and the keywords we are tracking, the number of times in the last year, inflation was a big hit. Back in 2014 mario draghi, unemployment was the big problem. 2010 mentioned the words securities 32 times. I wonder what we will talk about this time. Rishaad talking about inflation 57 times when there is not any inflation. Itid just because you say does not mean it will not happen. Rishaad maybe it becomes a selffulfilling prophecy. Any negligent inflation. Hays,talking to kathleen waiting to see before further easing. Where at jackson hole people are gathering for the symposium. We are looking forward, everyone is telling us the Global Growth is slowing. Lets get ahead of this and move now and reduce the probability of doing more later. We are pleased with where we yard. On the Downside Risk materializing, Manufacturing Index posted a first drop below 50, signaling contraction. Yes, without a doubt there has been a lot around uncertainty. Our fiscal position is strong, the government is outstanding. Global trade uncertainty has held everyone back from investing. It is the Business Confidence that is the anomaly. When you look down the road, people are talking about the next cap. Maybe 25 basis points. Are they on the right track . Is that the decision you have to make, when to cut . Out think we do not hold from doing anything. We will do whatever it takes. We like to think we are in a positive position, our Exchange Rate has come off relatively competitive particularly against the u. S. We are in a position to say how much of the global slowdown benefits new Zealand Economic activity slowdown . Government fiscal policy spending and government debt, it is a good position. We canot afford afford to watch and wait what is happening. We have taken a preemptive double cut. 50 basis points, that saves time doesnt it . It does. That forward curve was there, points, andic 75 they are surprised we went there. What are you watching now . What will be the trigger where you say, we cannot wait and have to do another 25 . I think Inflation Expectations are important. It is harder to lift expectations if they are declining. As long as we can keep people ourerned expecting inflation and pass under wage costs, that is a good thing for the central bank. Things that