Lets kick it out to constituent movers and fx. Euro is at the top and looking ahead to what mario asghi will probably not do we his last meeting today. European Central Bank Governor, bowing out, replacement christine lagarde. The cable situation is flat. People i have been talking to are saying they cant guess which way it is going to go on this. 1. 29. Und that the European Union keeping Boris Johnson waiting and not letting him know what kind of extension britain will be getting. An Interest Rate decision out of the bank indonesia. The currency moving slightly to the upside. 1313reaching the 14,000 level r the rupiah. Cmy, the fix nothing to write below the we are handle. With that in mind, lets look at first word headlines with su keenan. Su we start with the European Union, which has left Prime MinisterBoris Johnson hanging. Brusselsfficials in debate granting a third extension to the process. Eu ambassadors in brussels agreed to give the u. K. More time but could not decide on how much. France wants a tight deadline of november 15, but other countries prefer a little later. January 31. A decision has been deferred until friday. The u. S. Dent trump, president is lifting sanctions against turkey after it complied with a ceasefire agreement with Kurdish Forces in syria. Trump says it shows his decision to withdraw u. S. Forces from Northern Syria has paid dividends, at the move was harshly criticized by republicans and his own envoy to the syrian crisis. Ambassador James Jeffrey told a House Committee u. S. Forces have not completed their mission of defeating the socalled islamic state. To facebook Ceo Mark Zuckerberg. Testimony in washington warned congress that if the u. S. Does not take a lead in Tech Innovation and cryptocurrencies, china well. Grilling overed a fact checking, political ads, prevention of manipulative videos and online child exploitation. He defended plans for Facebooks Libra cryptocurrency. This project is too big for anyone company to do on its own, which is why we set up this association with a number of companies and nonprofits. It is a very complex project and as you say, it is risky. Is it hasgle, which build a quantum computer that performed a calculation in to second 200 seconds that would have taken the fastest conventional supercomputers about 10,000 years. Rather than storing information in zeros and ones, Quantum Computers deal with cubits. Researchers have disputed whether google has achieved something normal computers cannot do. Global news 24 hours a day, onair and online on tictoc and twitter, powered by more than 2700 journalists and analysts in more than 120 countries. On su keenan. David one central bank is prepared to cut rates for the fourth time this year and the other doesnt seem to have at least on the surface appear to have any more steps to take. Kathleen hays is here with a preview. What is the next biggest driver for Bank Indonesias expected easing . Kathleen there are two things. When i spoke to the Deputy Governor last week at the imf meeting, he made it clear that even though they have cut rates three times this year, july, 75 basiseptember, points, they partly erased the five increases they did last year, so they certainly have room to move and if you want to look at the economy, mixed. Consumer not looking too bad but he said demand for exports remains their biggest external growth risk. Row ofhs in a yearoveryear decline. There is what he said about possible rate cut. I think the room for cut is still open. Looking at some accommodative policies are already there. Inflation, to make another as there is risk coming from global, domestic. The Deputy Governor is pretty confident you will not see in the inflation target breach, nothing that would get in the way of rates. The rupiahs the fact has stabilized, the current account cap is slimmer than it was, hes not concerned about capital flows if they keep cutting rates. What you can see on the right hand of your screen is the key rate was down. 25 2018. They pumped it up but they started cutting, the rupiah has stabilized, and they are ready to cut more. It is something they are out that is out of their control, 20 of gdp is dependent on exports. David lets talk mario draghi. His swansong, last dance. Will certainly hear a lot of welldeserved words of praise for the Central Bank Governor because of whatever it takes. In what shapes, does he leave the economy and the bank itself . Kathleen a lot of people will say he stepped up in the crisis and did what it took to support the euro, to keep the euro area together, to keep inflation at the doorstep. This is something he will always get credit for but despite record stimulus, the ecb remains so far from its just under 2 inflation target. Look at this number library chart. The white line shows you where the overall inflation rate is, 0. 8 . And long way from the line that the court is 1 . Core is 1 . Last weeks meeting, the chief for the ecb said compared to september, the euro area is facing a more extended slowdown due to trade tensions. What country in the world isnt . And remember, at that meeting where they did so many things reserves, restarted the bond purchases, one third of the governing council opposed that. When mario draghi is speaking at he isess conference, expected to say government, step up. Spend some money. When the fiscal stimulus. In the end, it is christine lagarde. She is taking the reins of the European Central bank and will inherit this divided governing council and unheeded calls for fiscal stimulus. It is clear that they may need more. Editor kathleen hays. Our next guest is from b. N. P. Paribas, head of equity research. It will be interesting to hear some people praising him. What is his legacy going to be . Saved those words which to the euro which many attributed to him . The key takeaway is from his final comments. Essentially, governments need to step in. An acceptable banks all across the world have pretty much done what they could do. Rishaad government have to do whatever it takes now . Step innments need to with fiscal stimulus and that but othert just Central Banks across the world have made similar noise. The problem is even the fiscal pressures thelarge economies, or effectiveness of fiscal stimulus down the ages has declined. Aats why we are seeing degree of reluctance on the part of, say, china to engage in fullblown fiscal stimulus. It will be more directed, calibrated, measured. India is, i think, struggling with the same issues even though they did a pretty Major Corporate tax rate cut about a month ago, but it is a serious case of title or is this point in time. David as in a coup investor, where does that story stand out . Mentioned india and china, korea is talking about that to a weather extent. Incrementally, how does that affect you, if at all . Manishi if governments and Central Banks can stem the slowdown we are seeing across , that is something Equity Investors would look ,orward to and to some extent it is perhaps getting reflected in the expectations of Equity Investors across the world if you look at the risk on scenario we have seen over the past two or three weeks. There is currently an expectation that even Central Banks would be a lot more benign and investors had made them out to be even about month or two ago. Most recentat the Economic Data points, the pronouncements from the central for the majoreems Central Banks of the world, the slowdown is front and center in their intentions and they now dont care about the inflation target that they had put forward earlier. There is no hope of those inflation targets hieved rishaad , the famous 2 . Equity strategists, you look at this. To the Central Banks at this stage, not just this Economic Cycle but in terms of a historic cycle where they have seems to have little left in the chamber, as it were, and if they do have it, it will not work anyway. For Equity Investors not looking at Central Banks anymore . Manishi when it comes to Equity Investments, they are slightly different. While the Central Banks diminish, there are some Central Banks which are likely to do what it takes, like the fed. And a are likely to cut four times more. October, november, march, and june. Which is an acceleration from we expected month ago. Not have aght serious impact, it does as far as liquidity info into risk. We must remember the fed has talked about additional bond 60ng to the tune of billion per month, which almost certainly would have an impact of incremental flows into emerging markets with a time lag. Iss, at this point in time, confusing equity market investors. Kiss liquidity angle is something that is possibly actual rated over the past two to three months and that is why we still remain relatively positive on emerging asia. We have a target of 650. David that is almost nothing. Manishi it didnt quite look like that when you were at the beginning of the year or even when you were in september, when the market was hovering around the 600 levels. It has moved up about 4 to 5 in a couple of weeks. Thats why it doesnt look like a much right now, but it now seems clear that it will be choppy. And will continue to be a volatile narrative, at least until the end of the year or early next year. Central banksme, and governments stay focused on this, collapse can be avoided. David we are very late in the school run. 10 years come almost 11 years. How long do you see the runway for you . Manishi that is a difficult to beon, because i tend focused on emerging markets, particularly asia. To that extent, when you compare the valuations to emerging markets, there is a gulf of difference right now. Valuation difference has only expanded over the past couple of years. There are reasons for it, because while on one hand we have had relatively stable earnings estimates all across developed markets even in the present cycle, the u. S. Earnings are by and large surprising on the Positive Side asian earnings estimates have collapsed. Was one Silver Lining i will point out. Over the past one month or so, we have seen a distinct revival, even in asian earnings estimate by 2 to 3 , partly led by Chinese Consumer discretionarys, greater chinese tech, even the indian Corporate Tax rate cuts have helped. We have to watch and wait to see whether that is sustainable or not but i think over the next couple of years, at least in emerging asia, one can expect Market Growth in line with Earnings Growth, at least. Rishaad stick around with us. Manishi raychaudhuri, b. N. P. Paribas. David plots more coming up. Lets see what else. A lot of earnings to get user in south korea. We will talk about going. They reported earnings. When will they be able to get that plane off the ground . They say maybe this year. We will talk all about this. Rishaad a delusion of positive earnings out of the u. S. , giving the market solace. We will see if asia can provide the same relief despite the trade war. This is bloomberg. Rishaad here are back with bloomberg markets. A flood of corporate results giving a bit of optimism. They are against a backdrop of concerns over Global Economic growth. We have the apple supplier reporting profits ahead of estimates. This is down to demand for memory chips, which have stabilize after yearlong downturn in sharp contrast to the horrible news out of texas instruments. Ebay, ford, microsoft, and tesla. Seeing a lot of action after hours. David on earnings, lets bring in the head of asiapacific Equities Research on bnp paribas. Order to determine whether the market is cheaper not come you have toake an assumption whether the downgrade cycle is over and we have a graph that shows it is still falling. There might be something there. What do you believe . Will this kick higher or lower . Manishi if you look at the trends of Earnings Growth estimates we are looking at now on consensus basis, 2019 for msci a is negative. The low base, consensus is forecasting 13. 4 next year. Is best rate to look at possibly to combine two or three years, and that would give you compounded annual growth rate of Something Like 5 to 6 across 2018. Rishaad how much of that is down to share buybacks . To know the s p 500 in 2018 come came from that thing because people take advantage of the cheap money. Manishi in the case of asia, not that much. Rishaad how much . Manishi i would say it would be less than 10 definitely. I dont think it is even 5 , actually. Whatever little growth you are seeing in asia, and is actually organic. We are really talking about if you combined 2018, 2019, in 2020, Something Like 5 or 7 continue compile annual growth rate. Rate of with gdp growth this universe, lower than the nominal gdp growth rate because in large come economies like china or india, the nominal gdp growth rate is higher. There is a reason to think that at some point in time, it will possibly come back to the 8 to 10 range, which historically it used to grow at. When that would happen is the milliondollar question. As of now, consensus seems to be saying in 2020, we will reach there. I would possibly say the first half of 2020 would still continue with the kind of at least partly the kind of downgrades we are seeing. Maybe second half would be better. There are variables to look at. The resolution of the trade conflict is an important variable and we have to clearly look forward to what happens. David on one extreme end of the earning story is south korea. It is personally heartbreaking almost, the earnings downgrades. A company came out with earnings and they said the assumption in south korea is deram except next year. That goes from expensive to cheap. After you approach korea . Manishi have underway on korea. Still. Despite what has happened, despite korea cutting down rates to the lowest level of 1. 25 , and it is partly because korea has borne the brunt of the earnings downgrade. Attacked about msci asia, japan having the consistently faced downward 2018 and 2019. If you look at korea, that is down 35 . It is massive. Talk of koreaways as the barometer of the Global Economy, being an export led one. A much of this is baked in . David bargain hunting. Manishi two mixed messages, especially in the tech universe. We talked about the korean tech companys earnings downgrades and the year on your earnings decline they are facing. Look at their share prices. Look at the major leading korean tech companies. Have moved up about 20 to 30 this year, from the end of the first quarter. That is the Biggest Surprise that tells us the market is possibly looking way ahead. While we are still underweight korea as a whole and we have reduced prominently korean banks, we have retained significant exposure to the korean text universe tech universe. Rishaad please got to go, sorry. Coming up, we will tell about the market action. This is bloomberg. David lets get your latest business flash headlines. Saudi aramco is exploring ways to reward loyal investors in its ipo to ensure the record share sale isnt followed by a wave of selling. Comp plan under discussion is bonus shares for retail stock buyers who keep their holdings six months. Aramco is looking to reduce market volatility and benefit saudi investors who expect a windfall. Ework will prioritize profit overgrowth, including job cuts. That was the first meeting since they announced a takeover by their largest shareholder, softbank. Soft take is a Company Moving on the markets softbank is a Company Moving on the markets. That is the imperial palace. You are heading toward the lunch break. This is bloomberg. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. Su shinzo is meeting south koreas leader in tokyo. The countriesen escalated rapidly with japan striking south korea from a list of trusted export destinations and south korea pulling out of an intelligence sharing pact. China is taking another step to opening up to foreign investment. Notill allow foreign engaged in the Investment Business to conduct Equity Investment in domestic companies. This is the latest in a series of moves to make it more attractive and convenient for foreigners to invest. Regulatorss month, announced a timetable for foreign Financial Firms to take full control of chinese ventures. April establishment lawmaker in hong kong is confirmed that beijing is considering a plan to replace carrie lam. He says he has information that the Chinese Government is considering candidates to fill hong kongs top job year, but Chinas Foreign Ministry reiterated its longstanding position the Central Government firmly supports lam. It is a politica