Itsco prepares to make trading debut in riyadh. Reports say it is considering a secondary listing in asia. I want to get you to some breaking news out of new zealand. We have a fiscal update for you. They are cutting the Budget Surplus forecast. It now sees a budget deficit in 2019 and 2020. And smaller updates after that, specifically 943 million deficit. This is a previously forecast billion dollars. Returning to forecast the following years, but only just. Forecast was for 2. 1 billion. Growth of 2. 1 seeing a sharp wasward revision from what previously forecast as well. 2020 is an Election Year from new zealand, too. Just some headlines there. Thats get straight to the Market Action with Sophie Kamaruddin in hong kong. Sophie lets kick off with tokyo. Topix withand divergence. The end is Holding Steady. A bunch of event risk including the u. K. Election and the upcoming fed decision in hong kong with that tariffs deadline on sunday. A 10 year yield hovering around zero. Lets switch out the board to check in on the seoul trade session with the kospi Holding Ground here, little changed at the start of cash trade, while the korean won is edging firmer, just slightly here, with some Silver Linings coming through in the latest trade data. Export growth was positive for the first time in 12 months, but on the downside, when it comes to economic data, the jobless rate climbed to 3. 6 in november. Moon jaein, a challenge when it comes to boosting hiring as the economy faces headwinds. Aussie shares gain. 2 , led higher by banks and consumer stocks, while kiwi equities are off by. 3 . Lets check in on how the kiwi dollar is faring after the first have fiscal update, climbing. 2 as the spending was lifted while the government saw its b surplus being cut. The aussie Dollar Holding Steady after the Consumer Confidence data we got this morning, showing a drop in december as concerns rose about jobs. The offshore yuan Holding Steady, holding onto the overnight game that pushed it back below 70 c. 03, falling against all g10 peers, falling against the u. S. Dollar. The latest poll shows the tories lead mirroring ahead of the election. Shery lets get the first word news with ritika gupta. Success of rewritten nafta is being welcomed by House Democrats and will be voted on next week. The revised a deal is better for american workers. The usmca is seen as a political win for the president as he heads into an Election Year. The final approval from the senate is not expected soon. Let me start by telling you what will not happen. Usmca inot be doing the senate. Between now and the end of next week. That will come up in all likelihood right after the trial is finished in the senate. Says theresident trump articles of impeachment delivered against him are very weak. House democrats are calling for his removal for abuse of power and preventing congress from exercising its ability as a check on the executive. Also injuring National Security for personal benefits. The Impeachment Vote is expected to pass in the house but stands little chance in the senate. The worlds most Profitable Company makes its trading debut later wednesday, but with only a fraction of its Stock Available to investors, saudi aramco sold 1. 5 in its ipo, which raised a record 25 point 6 billion. It will list on the exchange in isadh amid reports it considering a second relisting possibly in asia. Probable death toll from a volcanic eruption in new zealand has written to 14 after a victim died overnight. Four people are still missing on white island and are presumed dead while 30 are being treated for severe burns in hospitals. The volcano is still dangerous and police are waiting for an improvement in conditions before they can reach the island. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ripped to google data ritika gupta. This is bloomberg. Paul china expects looming tariffs to be delayed as the two sides say they are closing in on an interim trade deal. That would give most sides both sides time for an interim deal. Our strategist, garfield reynolds. We have seen low volumes and sideways drifting. Is trade the key catalyst everyone is waiting on now garfield the key catalyst, not the only one. We have brexit, the fed, we have areecb, so, yes, there other catalogs out there, but trade would seem to be the primary one. The chinese seem to be hoping we are edging towards pretty much what is priced in by markets, which is a delay to the tariffs, which also means we could actually be disappointed if we think moves on the trade deal will actually revive asset moves because it might be that what we get is what is already priced in. About thefield, what fed decision tomorrow . Are markets at all concerned about what could happen there . It seems given it would be a hold. Garfield its a given, shery, rates. Ey will hold if they did not, that would be a real shock. This is the last fed meeting for the year. They will not meet until late january, i believe. Say about the outlook, firmerlly we have had than expected thirdquarter gdp numbers and much firmer than expected jobs numbers, so there might be a risk especially for bondholders that yields could get some upward bias if the fed is sounding confident about the u. S. Outlook going into next year. Metricse perhaps the they need to take such a stance, especially if there is not a blurb on trade, then with all of that, you would have the potential for bonds to continue to pay her gains as they have pare gains as they have over the last month or so. Comments fromome Jeffrey Gundlach saying the odds of recession have fallen and there seems to be an outbreak of optimism going on, doesnt it . Garfield at the very least, a waiting in pessimism. There is cautious optimism growing. Somewhat disbelieving perhaps at just how resilient the u. S. Consumer is being in the face of some other objects that are not that great. You look at what is going on with manufacturing. U. S. Manufacturers are expecting to cut investment next year for the First Time Since 2009. Even the Services Pmis have not been great, so there have been some worrying signs, but there is definitely a feeling that recession panic that we had two months to three months ago was overblown. We are not going to get a recession. Then the risk is how do you manage as it were if a move away from a fed that is using to a safeguard for the expansion of a fed that presumably would be on the lookout for a move back to a hawkish bias if the economy recovers faster than expected. That creates a fresh slew of uncertainties, and good luck he was talking about the potential for yields to rise and for the potential that rising treasury yields will cause some pain for the bond market, especially the lower ranked areas of the bond market, some of which looked rather frothy. Shery garfield, we are seeing more debate on year end funding conditions, especially with the repo market instability we saw in september, and now, we have Corporate Tax payments due next week. Is this across all asian markets . Intoeld i think it adds the concern. They yearend is often a dangerous time. Swaps can gyrate around. We have also got potentially worrying set up with volatility. Which has been very low, and now is ticking up into these event risks. It was at these levels before. It led to an explosion higher in volatility and a retreat in stocks in particular but also other risk assets. Theres a chart to show you, which highlights exactly that situation. Paul mliv asia editor garfield reynolds, thanks so much for joining us, and the bloomberg mliv 2020 Assets Survey is now open. We are hoping to see where you think nine different Asset Classes end up around this Time Next Year. Forecasts in. Sterling under pressure as a key election holder shows Boris JohnsonsCampaign Lead is weakening. Shery after a blockbuster year, where does asia highyield go from here . Our guest shares her views on credit. This is bloomberg. Paul this is daybreak asia. I am paul allen in sydney. Shery i am shery ahn in new york. Our next guest sees volatility ahead with idiosyncratic risks. Joining us now from hong kong, the capital founder and cio, monica. Rate to have you with us. How exposed is this asset class to trade woes as we continue to negotiations on chinau. S. Trade . Monica actually, our markets have not been moving so much with the trade talks and the headlines. As well as equities in our asset class. Recently, we have been rocked idiosyncratic risks. In particular, in china, in the last few weeks, we had big moves in certain bonds that have dragged down sentiment that relates to how we price and reassess risks associated with reliance on government support. Shery shery where in asia are you seeing the opportunities . Monica in china, we continue to see that chinese property highyield bonds are especially cheap. We have highlighted previously bonds. Single b, overall, i would say property bonds today are fairly consensus trade. We really need to dig in and look at name by name, particularly in property sector. The funding conditions have tightened, and you know, this is on purpose from the government that using was not targeting the property sector this round. In indonesia, for example, we actually see that the indonesia property sector, compared to chinese property bonds dont really offer a lot of value right now and the sovereign space. I think they have, and in such a way, much tighter now due to the easing of doi, which has done 100 dips of cuts and the fiscal side is fairly reflected in the spread. For indonesia, we have the coal sector. In that space, you know, we are facing some uncertainties for the renegotiations of coal contracts for the government, and you know, for us, we dont see a lot of upside in the turnaround for the call sector next year. , its generally neutral in investment grade. High yields were generally underweight. Getting back to your thoughts on the property sector in the highyield, there is always a risk of a downturn. How do you mitigate against that . Monica yes, i mean, for sure. The funding conditions, as i mentioned, are tighter. However, we are seeing that, fundamentally, the companies are managing very well. The liquidity conditions, i think what you have to do is really still do name picking, and we are avoiding some of those names that have high refinancing risks that dont have as much access to alternative funding channels. Some of the names this year have been particularly good at tapping into private debt. For example. We are going to continue to see difficulty to access some of the trust loanke financing. We see that next year, i dont think the governments intention is to overdo the tightening measures in property. We are already seeing that they are allowing certain cities to control in their own localities how to targeted easing. I think part of it is really in name how theyg name by manage the capital expenditure. Year we have seen a record on bond defaults in china. Is that a trend you expect to see continuing to 2020 . Monica you know we do. As i mentioned, we have particular . That have been question marks that have been raised what we have seen is that for example, it was highlighted by a Company Wholly owned by they recently this past week offer,ed their exchange and that really paves the way for us to see potentially a lot more restructuring in the soe side. We also recently have seen university bonds. Tech conglomerates had state support. Those bonds fell dramatically. You know,lso lent, tone that spilled over even to other corporates that have potential soes. Shery monica, thank you. Monica hsiao, cio. Lets turn to south korea because we earlier reported their trade data for the first 10 days of december, and we saw exports rising nearly 8 on the year while chip exports plunged. We have unemployment figures earlier. Our markets live reporter joins us now. Also what caught my eye was the import numbers. Imports rising. Could we say that we are starting to see a turnaround for the south korean economy . , the preliminary trade data is positive and encouraging. Has ag under the hood, it positive tilt. , basically, you know read by the key exports. The slump has moderated because the export in volume continues to increase. Although prices remain in a slump. I think that this is an ongoing trend. If Samsung Electronics is in focus, prices will turnaround next year. We have seen growth in the next year. Another positive thing in exports. A turnaround. The pmi turnaround in china continues to be positive for korean exports. I think the economy rebounding next year, and then the chipmakers and other manufacturers prepare for the rebound. The reports should increase together. Shery what about the Unemployment Rate came in higher than expected at 3. 6 . Why are we seeing the jobless rate go up . Kyoungwha korea has stubbornly high last year, we saw a big drop because of the stimulus. They create a lot of jobs in the public sector. This is not sustainable. Are creeping higher. I think it will continue to a lothigher when we have of students coming out to get a job. Shery you know kyoungwha you know, in south korea, we will have an election. In between, the government tries jobs about to create this is not sustainable. It helps to contain the rates. Right. All right. Markets live reporter kyoungwha kim, thank you very much for joining us. Still to come, the white house says it will push hard on a usmca bill before the end of the year despite the senate objections. We will have all the details, just ahead. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. Naftawritten successor to will be voted on next week. Nancy pelosi a lot of the changes her party has been able to negotiate to the usmca, saying the revised deal is better for american workers. Jodi schneider has been tracking this. What were the key concessions the democrats managed to win to get this over the line . This deal has been languishing for over a year. It is a priority of President Trump. Democrats really wanted labor rights protections in that bill. They wanted some key things that they had not been getting. Those appeared. , heady labor union chief of the aflcio, signed off on it. A rare moment of the democrats and donald trump being on the came out, but they with 30 other democrats saying they like the deal and they will push it forward. It will go for a vote. It appears next week in the u. S. House. Shery at the moment, we have President Trump now speaking at a rally in pennsylvania. He is addressing the crowds on that make America Great again rally, and we have heard President Trump earlier today talking about the usmca, saying that is a Silver Lining to the impeachment that House Democrats have been trying to carry out. As you said, why have the democrats been willing to sign onto this nafta 2. 0 deal . For the reasons i just mentioned on labor rights. Also, its about impeachment as well. This came the agreement that they are going to move forward next week. A vote came just hours after they made clear what they were going to move forward on on the articles of impeachment against President Trump. Nancy pelosi said the timing is not coincidental. The democrats in the house want to prove they can do more than just work to impeach the president. They want to show that they can also do something to govern all the democrats who are running for reelection are up next year, so they have campaigns. They dont want to just be running on the impeachment issue. In the senate, its a little bit different. In the senate, they will not move forward as quickly on this trade legislation. Paul Jodi Schneider in hong kong. Thank you so much for joining us. Coming up next, Boris Johnson says a brexit will not happen without a tory win. We will assess how the pound is reacting to the latest election lines and of course the yougov poll which seems to indicate the tories will have a majority but perhaps not quite the size Boris Johnson would like. More in a moment. This is bloomberg. Might be very doubtful. We put new tariffs on. It declines 10 in a matter of days. Would not be surprised to see a bit of a giveback. A pullback. That will end up being the buy in opportunity. We have seen that before. We get good news about trade. That would not surprise me. The markets rallied on hopes for Something Else in the future. A lot of risks. The conditions do not seem to have changed. What is optimism but too much complicity . Earlier guests awaiting signs of trade progress so we are very much in wait and see mode. Not much going on early in asia sessions. Treasuries ahead of the fed decision. 30 year sale. Asian stop little changed. Some muted gains coming through in sydney. The events being wiped out on the kospi pretty much right there. The kiwi dollar pretty much erasing its earlier advance of. 2 that was sparked by the new Zealand Government announcing plans to boost infrastructure cut rates. The parliament heads late tuesday. A smaller than planned 2020 budget. Showing an improvement in export growth thanks to wireless equipment and passenger cars. Chip shipments continue to slump. We have the korean won Holding Steady this morning on the back of that. Highlight what is going on in the pound, pulling out the board to show how they are getting nervous with cables slipping from a ninemonth high that we saw overnight at 132. Jordan rochester and nomura points out the park it will not welc