Selassie. Gretasamberg tells says the future has been stolen by greed and arrogance. It is the monday trading which has concluded in the u. S. Lets get a quick reminder of how stocks ended the session. It was a welcome conclusion to see the stocks pretty much flat after a bit of a slump on friday. You can see the s p 500. 0. 1 , butu call down pretty much flat across the board. 2 gain, six points. Lets get things going. This market was a lot about numbers. U. S. , the services indexed stayed pretty good. It was in europe where germanys manufacturing purchasing inagers index went to 41 september, way below 50, in contraction territory. A lot of economists saying that is a recession signal. Indexro Bloomberg Euro is at its lowest since 2017. If you have been watching that as well, what about helping asian markets as they get underway . Sophie we will be hearing from a lot of policymakers across the region. Ahead of that, futures are looking mixed. Kiwi stocks swung to losses and hinting at gains with japan reopening after the long weekend. Eyeeoul, we are keeping an on a conference for key credit issues. We are getting an update from chinas Economic Development from the pboc governor, finance minister, and other officials. We will be hearing from hong kongs chief executive, carrie meeting. Of the this as the situation darkens in the trade Development Council which slashed its export growth. We will be hearing from the governors of the doj and the rba this tuesday. I want to check in on oil futures flipping attached. Holding about 58 a barrel. Traders are weighing reports that saudi can restore output. Analysts indicate a delay in other factors. The data we got from germany and france, that is adding to worries over oil demand, paul. Issues at aramco are continuing to cast a long shadow over the oil price. For more on that and the rest of the days news, lets get the first word news with ritika gupta. Ritika britain, france, and germany have joined in the United States blaming iran for attacks on two key aramco plans. The issue will be discussed on the sidelines of the u. N. General assembly in new york. The Iranian Foreign minister 22 claims of responsibility from rebels in yemen, saying that if iran were behind the attacks, there would be nothing left of the refinery. President trump asked Steven Mnuchin to explain why the u. S. Requested china cancel a planned tour of midwest farms. The visits were called off on friday, causing markets to tumble amid fears trade talks stumbled. Minasian said the timing did not work so the tour was halted. President trump asked why, indicating he was not happy with the decision. I did not want there to be any confusion. They are going to reset that at a different time, but that was pres. Trump just out of curiosity . We did not want confusion. Pres. Trump farm products. [indiscernible] they committed to buy a lot of agriculture. They have started, and we should get them over there as soon as possible. Ritika Boris Johnson has told e. U. President donald tusk that he still wants a deal but that brexit will happen at the end of next month. The pair lets head of the General Assembly in new york. Increasing doubt. This deal can be struck. The u. K. Opposition is promising a second referendum, saying voters can change their mind. Too much has happened in the last three years to be decided without the consent of the public. We need to ask them a basic and vital question. Withou prepared to leave the best deal that can be secured or wouldnt you rather remain in the e. U. . Ritika nissan and its former chairman, carlos ghosn, 16 million by the fcc to settle he waslegations slated to receive on retirement. Nissan will pay 15 million and carlos ghosn, the remaining 1 million. The claims stem from a 2004 decision that 11 silly allegedly gave him 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. I am ritter calypso. This is bloomberg. Kriti gupta. This is bloomberg. Kathleen thank you so much. World leaders and diplomats are gathering in new york for the uns General Assembly with plenty of intrigue in play. Tensions will likely overshadow this weeks meeting. The meeting between President Trump and the iranian delegation are fading fast. He is scheduled to meet nearly a dozen state leaders for some sideline diplomacy. Josh wingrove has been following the president. I have to let everyone know, that was your question about the farm visit by china. You really stirred the pot, man. We had about halfdozen of these bilaterals. It was an ongoing press conference. We talked that out. The delegation was planning on going to a couple of states, touring the u. S. Farm community, and that was called off, the u. S. Saying that was on our call. Happened and left the impression that trump was not, shall we say, totally aware of how that played out. Minasian also said china talks with the Vice President or vice premier of china are now next week and that is a surprise, sooner than some people would have thought. There have been no further comments. I do not know how much people should read into that, but we are getting snippets on the sidelines of what our otherwise, you would imagine, more focused bilateral talks. Kathleen what is the most important one you expect to see happen . Theres a lot of signals President Trump is not going to meet with the iranians. But if that does not happen, what is the most important thing . Siew the french are trying to play intermediary with the iranians. One that just concluded was one with south koreas president , moon. Andsked president moon President Trump, listen, what about these north korean shortrange missile tests . Trump brushed them off. President trump took the answer, kept talking, and ended the event. President moon could have piped up and said something, but either way, we did not hear from him. President trump made a surprise appearance today at the Climate Summit on the sidelines of the uns General Assembly, but he did not stick around terribly long, did he . Josh it was about 14 minutes. He got there is the president of the Marshall Islands was speaking and, you know, this is one of the countries on the front lines of Climate Change. He stayed through the end of that and the end of the next two speeches around modi of india and merkel of germany, and then he was gone. He wanted to touch base for 14 minutes or so that he was there. Hosted his ownhe event on religious freedom. He was more keen to talk about it. He, his Vice President , his secretary of state, on gave remarks at that event and called for more religious freedom globally, and they happened to single out countries they have other beefs with, people like china, iran, venezuela. He was asked a couple times after why did you show up . Why did you go to a Climate Change summit . This administration has not put emphasis on Climate Change. He said i want clean air and water and nations should work to do that together and on their own. Paul we could always pray for it. Muchwingrove, thanks very for joining us. Market enthusiasm for planned trade negotiations between the u. S. And china ran headfirst into disappointing European Data overnight. Germanys economy is suffering its worst downturn in seven years with its manufacturing pmi. Our lowest of Major Companies adds to growing concerns about a global slowdown, pressuring Central Banks around the world tes further to ease further. Kathleen joining us now is theresa. It is great to have you on the show. In a few minutes, we want to dive deeply into the asian bond markets but when you look globally at the forces that are driving yields right now, south korean sports are so weak. Exports are so weak. U. S. Holding steady. What does this mean for bond markets . I think right now, it is going to be very difficult to call, so for example, if you look more closely at the u. S. Data, u. S. Economics surprises are better than you expect, so u. S. Continues to be the one area of potential solid ground for the whole world economy. However, for the rest of the world, as i have spoken before, many of these countries already are in a manufacturing contraction as shown by pmis being below 50 and falling pmis. Make of what do you the growing number of executive bond yields around the world . Not as high as it was. People are blaming european Central Banks, blaming the bank of japan for having negative rates. The pan with yield curve control. We heard mario draghi saying today that put a much what he has already said, the ecb will remain accommodative as long as they need to. Teresa it is a really interesting question. Negative yields continue to be one of these, you know, new phenomenons that we really do not know what the longterm implications are. The point about japan versus europe, i think one of the things that always, you know, is interesting about japan is that even though they had very low most of japans last seven years, we are in a net cash position. Even though yields were very low low,ost of capital is very japan corporates did not go out and take advantage of these lower yields, so on the governments side, the government used these very low yields to step on the gas pedal with regards to fiscal stimulus. We are not seeing that at all in the euro zone. If anything, the feeling on euro zone fiscal deficits have really prevented a lot of these governments to do what is really necessary to provide the fiscal stimulus that is necessary to offset the lack of investment on the corporate side. That point about negative yields, lets bring up one of our favorite charts on the bloomberg at the moment. This shows the negative debt around the world pulled back a bit. It was around 17 trillion for a while. It is 14 trillion but appears to be rising again. I saw a line from Bloomberg Intelligence saying there is something vaguely troubling when the unthinkable becomes routine. When you look at that line, do you find it vaguely troubling . It veryi find troubling. Albert einstein once said the most powerful force in the universe is actually one of compound interest and we have negative yields. I am not sure what you do when you have a compounding negative interest. What this really means is that it is important for asset owners and investors, you know, who are still looking income and positive yields to really look at places where you are going to find positive yields and we know that these negative this phenomenon has gone into bonds in many parts of the world. We still see, you know, asian debts, positive yields. The backdrop of the current trade dispute between the u. S. And china, we are seeing some great opportunities in asia, specifically in china. Paul we want to get to that in a moment, when you rejoin us after the break. I want to get your thoughts are little bit more on this idea of fiscal stimulus. It is not as if cheap money is a problem, really. Why do Central Banks continue to push rates lower and nothing really changes . It is the definition of insanity, isnt it, to keep doing the same thing over and over again and expect a different result . Teresa i think the u. S. , the if you listen to what jay powell said, he was quite clear that the u. S. Would stay clear of negative Interest Rates, so yes, while japan and europe had gone on the path and it is not clear how they could pull back from that path, i thek the u. S. Have seen negative implications, especially in the Banking Sector and the inability of banks to be profitable when your net interest margins are low and the negative yield environment, so the u. S. Has really taken a step back. We will do whatever we need to do in terms of asset purchases and signaling to not go down the path of negative rates. Stays with us,ng and we will talk some more about opportunities in china treasuries. Still ahead, Deutsche Banks top shareholders are taking the search for a new chairman into their hands paired we will have more on this scoop, later in the hour. Kathleen we will be joined by the brazilian environment minister to discuss the burning controversy over the amazon fires. This is bloomberg. Kathleen this is daybreak asia and i am Kathleen Hays in new york. Paul still with us is our guest, teresa kong. Lets return to our topic that we promised, chinese bonds, and take a look at this chart. It shows the chinese yield advantage over other sovereign debt. To my earlier point about bizarre parallel universes, that bottom line is japan. You say there is some pretty attractive riskadjusted returns in china bonds. The white line at the top. I have to say, you have a point. Teresa thats right. You know, if you look at chinese yields, especially compared to its g7 peers, it is offering positive yields. People tend to forget that china can actually be very much compared to emerging markets as ratess compared to developed peers. You might remember that just a couple weeks ago, jp morgans gbi index included china into its basket. Recognition that the barriers to entry into the china onshore bond market has been lifted. There is one barrier to entry that remains. The fact that this area is rather underresearched. Does this put off investors . Teresa definitely. For many years now, many firms have been quite reluctant to invest in china. Difficultt, it can be to have a Research Capability that has been built around china. Specifically in the case of the u. S. , even with the inclusion of china into the barclays ag index, on the side, barclays ag x china global ag exversion to minimize their tracking error relative to the index. So theres definitely some reluctance, especially on the part of u. S. Managers to go into chinese markets. I think it is not a question of if but when. I think theres no doubt that over time, as more and more indexes include china we have both the barclays ag as well as we will bean gbi seeing much more interest and research that will be done the into the onshore bond market which will ultimately lead to greater inclusion and much more ubiquitous on the part of the owners around the world. Kathleen the Government Bond chinesell be including bonds. The peoples bank of china, the chinese government, they are thrilled because this is a big deal for them to open up their bond market and get the money in and really kind of relieve some of the financing pressures on banks. Theres another sort of financing. Do you think part of it, quite apart from research, are Global Investors nervous about a market that is not more open . The currency is managed. What do you think about that part of it . Teresa all of these are very good points, kathleen. I think if you look at the Chinese Capital markets, very simply, as having two superhighways, one that is inbound and the other one that is outbound, within the context of the current trade war, it is more important than ever for china to widen the lanes within the highway that allows capital flow in. If you think about that as one additional tool for china to manage a currency, it becomes that much more necessary in todays environment, but to your point about Foreign Investors and their reluctance to maybe invest in china, we think that there is a lot of education that still need to be done and i think that will happen over time. Kathleen i hope you will join us as that development continues. I appreciate you taking your time very much. Teresa kong. There is plenty more to calm on daybreak asia, come on daybreak asia, so keep it here. Kathleen this is daybreak asia. I am Kathleen Hays in new york. Paul and i am paul allen in sydney. Britain, france, and germany have joined the United States and blaming iran for attacks on two key aramco plants last week. The issue will be discussed on the sidelines of the u. N. General assembly in new york. Derek wallbank joins us now. Seems to be a bit more unity building as regards to who was responsible for this attack on the aramco facility. Know, there certainly is. And it is actually a little bit of a diplomatic who for the United States because britain, france, and germany came out with a joint statement saying they believe iran was responsible and there was no other way this could happen. Such a precision strike, multiple holes being struck into multiple different facilities at this aramco center. In a way that suggested you had to have some knowledge of how the oil business is done at a mechanical level. , once saudi arabia was trying to get this Coalition Pressure the kind of iran over the attack, which they u. S. Says iran is responsible for, ultimately, and which iran denies responsibility for, and they come away looking like they have done exactly that. Kathleen it is interesting to me, when you look at our bloomberg story, they point out our reporting team that the europeans did not criticize donald trump withdrawing from a deal as they have in the past. They said instead the moment has come for iran to accept negotiations on a longterm framework on its Nuclear Program as well as regional security, and eating its ballistic missiles. Are we starting to see more unity coalescing around trumps pushback, and what does that mean for investors . Derek i think you picked out the really key part of that article and the really key part of the statement there. They u. S. Has been trying for a long time, since trump got in, to try and link irans other activity in the region to the nuclear deal. This is a think europe resisted in the past. They said they want the nuclear deal to be held up for sale but the idea of getting something together that links all of the other stuff in the region is a key u. S. Priority so it