haidi: welcome to daybreak australia. i'm haidi stroud-watts. shery: i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major market open. ♪ haidi: the top stories we are covering in the next hour. china puts pressure on president trump's mini deal. beijing is linking higher agricultural purchases to the reduction of u.s. tariffs. sterling reaches a four-month high amidst brexit.

the hong kong drama turns the page as u.s. lawmakers vote to support the protesters and review the city's relation with china. shery: let's get you started with a quick check of the markets. we are seeing u.s. futures under a little bit of pressure after we saw u.s. stocks really rally throughout the session and major indices gaining about 1%. the s&p 500 at one point topping 3000. health care in financial stocks leading the gains. johnson & johnson, unitedhealth and jp morgan reporting solid results. we also have the nasdaq closed 1.25% higher. all of this as 10 year yields gaining for the fifth consecutive session despite the fact the imf came out and cut the global growth forecast for this year for a fifth time. let see how things are shaping up in asia. sophie: it is the bank of korea's turn in the hot seat today with a 25 basis point cut expected and the politically key

jobless rate due as moon jae-in attempts to create employment. futures adding about 6/10 of a percent. cindy futures pointing higher. looking at rio tinto. nikkei futures in chicago slightly softer after tuesday's rally, which blackrock warns is not sustainable. flipping the board, the kiwi dollar reversing losses after third quarter inflation beat estimates. the meeting did stay below the target midpoint. continuing the decline in pushing the yield towards 120 basis points. holding a five day loss, back below 128 after reaching a high. haidi: sophie kamaruddin in hong kong. let's get you the first word news. ritika: thanks. there are fresh doubts over president trump mini trade deal

with sources in beijing saying china wants tariffs rolled back before it will agree to boost purchases of american farm goods. china is ready to start buying more agricultural products as part of the phase one agreement which is highly unlikely to reach the 40 billion dollars to $50 billion by the president and the current circumstances. the imf has lowered its forecast for global growth this year for the fifth straight time, a broad deceleration across the world as trade tensions undermine any expansion. the fund says global gdp will rise by 3% this year. marking the weakest forecast through 2009. estimates for growth in advanced economies like the u.s. and germany were also cut back. representatives have added to the pressure on the hong kong government, passing a bill that requires an annual review of what of the city is officially a taunus from

beijing. the bill also threatens sanctions against officials who undermine the city's freedom. beijing dismissed the move saying it closely interferes with china's internal affairs. hong kong chief executive carrie lam will deliver her annual policy address in a few hours. we will be there to bring you the very latest. turkey continues to send forces and armor into northern syria despite growing calls for a cease-fire in its battle with the kurds. the u.s. has imposed sanctions on three top turkish ministers and says harsher measures are in the pipeline. washington's withdrawal of troops from the region has left russia as that effective powerbroker. moscow says it will not allow turkish forces to fight the advancing syrian army. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. this is bloomberg.

haidi: thank you. let's get back to the top story. china is willing to buy more u.s. agricultural products under the phase one trade deal, but only if tariffs are rolled back. to highlight how far apart washington and beijing remain as trade tensions push the imf to cut the global outlook to a global low, let's bring in tom mackenzie and kathleen hays joining us for the conversation. tom, yesterday, we were talking about beijing wanted more discussions before it signed any deal. it seems like these conditions are building even for this mini deal. tom: it does seem like china is starting to poke holes in this handshake agreement that president trump sealed on friday. what they are saying now is that, yes, we can by $40 billion to $50 billion worth of u.s. farm goods, that is not a problem, at least on the surface. we can by all sorts of things whether it is soybeans, pork or

even fertilizer, but we need for that to happen in the practical sense is the rollback of these tariffs. up until this point, what china has been doing is giving waivers to their own companies, allowing them to start essentially the retaliatory tariffs they put on these u.s. products. that allows chinese companies to buy them without being hit with additional tariffs. with the chinese are saying to get to that level, it is not practical to do it with just waivers. it needs a cut back or scrap the retaliatory tariffs. they will not do that unless the u.s. removes their own tariffs. we have this standoff in terms of the details, at least on the surface. what we are hearing from officials in china is that they are alive when it comes to the broad language, but when it comes to the nitty-gritty of how they will implement this purchase promise of $40 billion to $50 billion of u.s. farm goods, there is still this disagreement.

the chinese want to get in the talks again towards the end of october so they can nail down some of this stuff before they put it in text for president xi to signoff may be at the apec summit in november. shery: the key focus has been the slowing economy in china. we have now seen new yuan loan data come out. what have we seen in terms of credit reaching the broader economy? tom: we have seen a pickup in credit for the month of september. some of that is down to seasonal effects, some of it is down to monetary easing, and some of it is down to greater bond issuance. a key takeaway -- you saw aggregate financing that increased to about $321 billion to about $280 billion in august. bond loansn new yuan but also corporate issuance. the pboc cut the loans for the banks. the governor has suggested he is not in a rush to add more stimulus. bloomberg intelligence thanks

looking at this data that the pboc will probably continue using at a measured pace. the question is whether or not that will be enough for the slowdown we are seeing. haidi: we heard from the imf, another revision to the global growth forecast and i guys think -- again deciding the deceleration. kathleen: that is what it is all about. they imf downgrading the global growth forecast to 3%. the fifth time they have done it. it is the weakest since 2009. that is when we were in the middle of the great recession. fourth time since october. yes, that imf chief economist told bloomberg television that trade is the main driver and ending the trade war will have to be part of the solution. shery: we have that exclusive interview with jim bullard. what did he have to say? kathleen: if you want to connect the dots, he joined bloomberg at

the bloomberg monetary and financial conference in london. jim basically said he wants insurance rate cuts. he is afraid the trade war could morph into something more serious. he's seeing the economy in good shape but there is downside risk. why is the pbc forced to add stimulus? it is the trade war. look at south korea, even japan. pressure on them to consider even more stimulus. in terms of the individual downgrades we saw, china's forecast was downgraded to 5.8% for next year, 6.1% this year. last year, they thought china would grow almost 7% so that is a big change. this is front and center for the imf. it is front and center for the fed. it is front and center for global central banks. shery: kathleen hays, thank you so much. our thanks to tom mackenzie in beijing.

the other developing story today, brexit. sterling jump as the eu and you cap are set to be closing in on a new draft deal and the legal text could be ready to present to national delegation on wednesday morning in europe. john joins us now. how much of a difference with this make if prime minister johnson still needs to take it to the u.k. parliament? john: he does need to take it to the u.k. parliament. the critical point is whether he can get an agreement that will satisfy those who have been against it so far and that is the party in northern ireland. and the members of the european research group, the hardline brexiteers, and the conservative party. what we have seen so far is nothing truly committal from the eup, but they have not been

totally against what is going on. we have seen some great splits among the erg who have previously been united. there have been one or two talking to british journalists, attacking the proposal going on. we still don't know exactly what the proposals are. it is conceivable it could pass parliament. it is certainly not anything like a done deal yet. haidi: given his own political future uncertainty we are seeing, what sort of offers boris johnson would have made? with a be upheld at the end of the day? john: i am never going to comment on whether he might not be operating in good faith. when it comes to northern ireland, we have already had under theresa may 2 years ago when she persuaded them to

support her in government when the conservatives did not have majority. that involved a large amount of money going to northern ireland. any packagee that here will include a sweetener. they have to work in the interests of northern ireland. we can assume it will happen this week and it will include quite a lot of money. how cynical you want to be about that, i don't know but that clearly is the big issue. boris hasf what offered to the eu that will change the way they will operate, it is possible to see anything other than the move to a position of a backstop that would include only northern ireland. in some way or form, there is going to be a border down the irish sea. it is hard to see any

resolution. shery: the liberal democrats are pushing for another referendum. they are going to parliament with emotion. how likely is this to happen? john: very unlikely. you need the majority of parliament to vote in favor of that happening. you are not going to get that from any conservatives at this point. and, the labour party policy at this point, although there are divisions as well, the labour party policy is they want a general election and then a referendum, not the other way around. it is very unlikely we would see that. it is in the interests to call to do their job by doing so but i don't see any way that happens. shery: we have seen the u.k. economy contract. that was one contraction. blanchflower

earlier last week, he was telling us the u.k. is already in a recession because if you follow other metrics like pmi and business and consumer scores, they are actually there. what are your thoughts? john: i would tend to agree with that. there has been a chilling effect on u.k. businesses in general from uncertainty that is not the most original thought. you have to bear in mind whatever the eventual outcome of the brexit talks, the u.k. will continue to be extremely exposed to the euro zone economy. it is very exposed now. germany in particular seems to be the most troubled of any of the world leading economies at the moment. it is very clearly in recession so it makes all the sense of the world that the u.k. is now already into a contraction. a lot depends on -- if we can avoid a new deal brexit, if we

can actually have some kind of a deal in the next few days, that makes it much easier for the u.k. economy to find its way through. haidi: we are still waiting on more news. a breakthrough may be imminent. john authers joining us in new york. a quick bit of m&a potential news. apollo global management offering $130 per share in cash for tech bakdata corporation. a purchase offer to acquire the u.s. i.t. company, an equipment reseller to retailers. billione to $5 according to people familiar with the matter. tech data shares are moving. they have already been hovering at all-time highs. there also be demand despite the u.s. economic outlook cooling.

no certainty that negotiations will take place but we will continue to monitor that breaking news. still ahead, the u.s. house passes the hong kong rights and democracy act, giving support to pro-democracy protesters shery: shery: in the city. next, j.p. morgan leads the way with bank earnings stakes. more on that with rebecca cummings just ahead. this is bloomberg. ♪

shery: u.s. bank earnings season has kicked off with j.p. morgan climbing to a new high after beating estimates. on the other hand, wells fargo is taking another legal hit before its new ceo takes the reins. let's discuss this with whittier trust portfolio manager rebecca cummings.

we have seen j.p. morgan being the standout. can you reasonably jump into the bank narrative when we have the fed clearly in an easing cycle and more regulatory hurdles to clear? rebecca: absolutely. happy earnings season. i think the most notable take away really today that we saw was that the monolithic view of banks of nothing more than an interest rate proxy is really beginning -- j.p. morgan and goldman sachs, or wells fargo frankly, every bank is trading with regard to its fundamentals. j.p. morgan is now at all-time highs, where goldman sachs was down 3.5% on the day. even though the macro picture continues to be a challenging one for banks, this was expected to be a tough quarter for revenue. however, you still had a great report from j.p. morgan, a solid one from citigroup.

a little more of a mixed bag from goldman sachs and wells fargo continues to have its litigation issue. i think it is actually healthy for the market to see some real diversions and share price performance. shery: how challenging could the fee banking environment be as we see tensions weighing on the cross-border dealmaking's? rebecca: markets -- bull markets do not end in fair valuation. they end in euphoria. for somebody who is bullish on u.s. equity markets, i like seeing that some ipo's like getting pulled. frankly, the wework example really pushing the threshold for common sense with regard to some of their financials and the leeway they were taking with regard to how the calculated operating earnings. it is a healthy sign the market said we are not buying this. it resulted in some pain for goldman sachs, absolutely, but

that just means as an analyst, unit to look at fundamentally what are the business is doing? that all banks are created equally and their share prices should reflect that. haidi: i'm wondering what the charts are telling us. i will put up a quick chart showing the financials or perhaps setting up to outperform the broader u.s. market. even as we get to the end of the growth cycle, is the positive result in a mixed bag for the others enough for optimism? is this on expectations it may be rising yields will be back? rebecca: i think it is more a reflection of positivity around what j.p. morgan reported this last quarter. expenses were more under controlled and expected despite the considerable investment in technology. they can continue to take share which they are doing. from a competitive business perspective, that is what you want to see a company doing.

i love hearing jamie dimon get on the call and talk about optimism with regard to taking positive share in new markets like philadelphia. yes, looking at the potential for more stringent regulation down the line, that would be challenging. however, that is why a name like strong fromis very a capital perspective. it was very straightforward about cleaning up their balance sheet after the financial crisis is very well-positioned. some of the competitors are not and able to take shares as a result. haidi: how much does the broader array of macro risks and uncertainty really weigh on how the banks perform? rebecca: as we have seen year to date, particularly before the reversal in september which you could argue was a little bit of a technical bounce that favored cyclicals like banks, the global tensions and the slow down really were quite painful for the banking sector.

to a certain extent, investor wounds and memories are fickle. you can make an argument there is a certain element of fighting the last battle with regard of where is the next sound going to come? another recession that is very difficult for the banks to come out of. when your trust do not believe that will be the case, we believe our domestic banking system is incredibly strong. in large part due to the increased capital levels. and the strength of the domestic consumer. the imf cutting its growth outlook again today. that did not really have an impact. u.s. markets lost today and that was predicated on strong earnings. we're comfortable being overweight and constructive on the domestic economy predicated on strength within that u.s. consumer. shery: i was going to ask you exactly that because we are getting u.s. retail sales numbers on wednesday morning.

expect to see another increase for the seventh consecutive month. how much is the consumption story helping these banks? rebecca: it really is. een discussing, consumers or 70% of the domestic economy. as long as the consumer remains strong, we have seen wage growth. we have incredibly low unemployment, 59 year low. that means the consumer credit losses have been kept down as a result. this morning, jamie dimon said he is relaxed regarding the consumer and credit quality. largesteader of the bank in the u.s., he would know and have access to that data. i think the consumer would probably continue to spend robustly and retail sales should continue to not be gangbusters, but certainly not disappoint to the downside. haidi: great to have you, rebecca cummins talking through that basket of bank earnings.

you can get a roundup of the earnings kicking off and all the stories you need to in today's edition of daybreak. bloomberg subscribers, go to your terminal. it is also available on the mobile on the bloomberg anywhere app. you can customize the settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: a quick check of the latest business flash headlines. a chinese liquor maker seems immune to the effects of the trade war and global slowdown. profit grew 17% last quarter compared to a year ago as demand for a top line was boosted by mid autumn festival celebrations . haidi: berkshire hathaway is seeking permission from the fed to raise its taken bank of america about 10%, a level of it offers triggers a regulatory review. the company revealed in july the

holding has reached the threshold and has filed an application with a number of insurances it will remain a passive investor in bank of america. if you are away from the screen, you can always find analysis and the day's big newsmakers on bloomberg radio. ♪

haidi: 9:30 a.m. in sydney and the market open is 30 minutes away. here is what it comes to futures. gains on wall street, seeing upside of 4/10 of 1% ahead of the open. it is quite rare we are seeing the trade situation between u.s. and china take a backstage as u.s. earnings drove the majority of gains we saw overnight as well as optimism a brexit deal may finally be in the mix. i'm haidi stroud-watts. shery: i'm shery ahn. let's get the first word news with riddick a coopetika gupta. ritika: sterling jumped as

negotiators seem to be closing in on a new draft brexit deal. officials in brussels said the talks have not concluded and there could still be issues but there are signs the legal text is already being readied. the aim is the present the draft to eu delegation on thursday ahead of the leaders summit. that's at the sterling to the highest in nearly four months. companies estimate weaker earnings in the third quarter. that figure has grown steadily that from the 34% of firms reported a deterioration in the same period years ago. the economy slowed to 4.9 percent growth in the third quarter from 6.3% in the first half. india's trade deficit narrowed to the lowest in seven months in september as a deepening economic downturn stop spending on imports. the gap between outgoing and him going shipments was $10.8

billion last month, lower than economist estimates and down from $13.5 billion in august. indonesia posted a surprise trade deficit in september as the trade war and global slowdown continued to weigh on the economy. exports contracted for the 11th consecutive month, falling 5.7% from a year ago but not as much as the 6.5% forecast in a bloomberg survey. million versus60 expectations of more than $100 million surplus. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. australia opens at the top of the hour. here is sophie with what to watch. sophie: it outlines the net capital impact of the regulators proposal to strengthen capital

measures for depositors and rio tinto in view after reporting a 5% increase in third quarter iron ore shipments. the minor did cut targets on lower output. mineralstching auz after it boosted its 2019 gold output guidance after a plan cut back halted in favor of a lower cost. . checking in on the kiwi dollar which has made an about shift. about one third of 1% to rise above 63 after the third quarter inflation beat estimates. at pace of growth was lower 1.5% on a yearly basis which may cause the rbnz to cut rates. an official from the central bank says lower rates may still be needed to of g -- oachieve adjustments with adjustments to be made if the rbnz has got it wrong. quick work on the british pound which topped 128 and hit near

a five-month high. volatility is on the rise with option traders with the biggest pricing swing since july 2015 and prospects of a deal being signed off at the eu summit. strategist ca rally towards 130. if that happens into 140 if the u.k. parliament approves, but the failure to reach a deal could see it move towards 111. haidi: sophie kamaruddin in hong kong. more on what we are watching. we have andreea papuc. we were saying earlier, that has been a while since the trade war has not been the focus but if i like investors were happy to take those bank earnings and run with it. andreea: quite interesting. a part of that is we have seen some positives in the trade negotiations. i think investors are probably more at ease at putting that in the back of their mind. there was this news on brexit overnight that seemed to

embolden investors. more significantly, the u.s. earnings season. j.p. morgan and johnson & johnson in particular are setting the early earnings season to a good start. the s&p 500 briefly topped 3000 on an intraday basis. a four-week high. since june.formance this is a market that really wants to go higher. having said this, it is not really change this narrative around slowing global growth. we saw the international monetary fund coming out overnight, making its fifth straight cut for global growth forecast for 2019. the broad deceleration across the world's largest economy. u.s. and china is the trade tensions undermining the expansion. it is worth noting, it is the weakest forecast since 2009.

stillowth slowdown is concerning to investors. we are seeing japanese stocks rallying, but blackrock telling investors to be cautious. why? andreea: hi. that is right. the benchmark index up about 7% since the end of august. the best-performing major market in asia but blackrock is saying that is probably just a temporary rally and reiterated it is underweight on japanese stocks. the main driver of this rally is not sustainable. it says it is a perceived easing of tension and as well as a rotation into value stocks in japan. it argues japan does remain vulnerable to a slow down, particularly in china and that we are likely to see more

volatility in japanese stocks. having said that, there are those that are little more optimistic. morgan stanley and j.p. morgan seeing valuations in japan and saying stocks are under by investors. shery: thank you so much. our bloomberg cross asset editor. you can find her charts on the dtv go library on the bloomberg. st. louis fed president james bullard is making the case for more rate cuts, citing the trade war and other downside risks. he told us he thinks the fed should consider additional insurance cuts in coming meetings to deal with growing economic concerns. >> i think we have moved a lot in the last year. if we were sitting here a year ago, we would have been talking about the fed raising rates in 2019, not lowering rates. instead, during january and february, we said we were taking the interest rate hikes off the

table. getting into june, july, august and september, we started talking about reducing rates. the shift in the monetary policy in the u.s. has been quite dramatic over the last year. 125, 135 basis points, not just a 50 basis points we have had. one part of what we need to do is take stock of where we are, but i think also, we have to consider additional insurance in the meetings ahead. haidi: should the fed be more aggressive given the risks to the economy? >> if you buy the argument i just made, we have been pretty aggressive. normally you would think with policy, it would take a while for those things to have an impact on actual hard data in the u.s. i would expect those kinds of effects to come online during the second half of 2019 and the first half of 2020. you are seeing some of that and housing markets where, say,

refinancing activity has picked up. >> you favor a half a point cut instead of a quarter-point cut. do you still think we need half a point cut? >> generally speaking, i would like to do more but i don't want to prejudge the meeting. let's get to the meeting and make a decision then. >> can monetary policy assu uage a trade war? >> i got this question earlier today also. obviously, we cannot do anything directly about trade, but we do have our mandate to maintain high employment and low inflation. we are trying to do the best we can to take on board what is going on with the trade war and other risks to the global economy and u.s. economy. and conduct a monetary policy that will help us meet our objectives as best we can.

we have been meeting -- we certainly have a great labor market but the inflation side has been somewhat weak. we have been below target. i would like to re-center inflation and inflation expectations back at the 2% target. i think that would be a great outcome. haidi: that was our exclusive conversation with james bullard. coming up on daybreak australia, we will be speaking to a career diplomat and current asia society institute vice president about trade tensions and the chances now of a deal. this is bloomberg. ♪

shery: the u.s. house has given its support to pro-democracy protesters in hong kong. lawmakers unanimously passed the hong kong human rights and democracy act and three other measures. anna edgerton joins us from washington.

are any of these measures anything other than symbolic? anna: two resolutions that were mostly symbolic, expressing support for the protesters in hong kong. there were two bills that actually would have an impact if they go to the senate and go to president trump to become law. one of those would prohibit the sale of some crowd control instruments like rubber bullets and tear gas that u.s. lawmakers don't want u.s. companies to provide to the government in hong kong. the other one you mentioned, the hong kong human rights and democracy act would sanction chinese officials that are seen as oppressing the protesters in hong kong. they would also call for a reevaluation of hong kong special traits that is every so often to make sure hong kong is still sufficiently autonomous to have a special traits that is supported by u.s. law. haidi: as you mentioned, there is a similar bill to the senate but the timing is uncertain.

what comes next procedurally? anna: what is interesting is the broad bipartisan support at a time where there is so much partisan bickering over impeachment and disagreements over the president's policies. there is strong bipartisan support for these measures. so much so, the past the house of representatives without holding a formal vote. they were unanimous. similar support in the senate where you have a few republican senators like josh holly and marco rubio of florida who has spoken very strongly in support of the protesters in hong kong and against what they describe as a police state imposed by the chinese mainland. it is interesting to see how you have republicans and democrats coming together on these measures and they can't seem to come together on very much else. haidi: a rare moment of bipartisan support for an issue. anna edgerton with the latest on the bill being passed. the protests in hong kong have

the potential to be a real factor in the ongoing trade talks. president trump has threatened to play that card already. let's take a look at the latest negotiations with former korea diplomat wendy cutler who served as trade negotiation with the reagan admin attrition through obama. she joins us now from washington. great to see you again. at this critical juncture for this deal -- we keep hearing greater conditional elements on even reaching the phase one mini deal which is really the lower hanging fruit. does the political side of what's going on in hong kong on a bill that has been passed with bipartisan support really complicate how things go at the negotiating table? wendy: these negotiations have faced some any challenges over the past two years. if things were to heat up considerably in hong kong, it would be difficult for the president to ignore it, ignore those developments. i think there would be enormous pressure from congress for him

to reevaluate the wisdom of going forward with a trade deal with china if things were to heat up. impression youhe are fairly managed in your expectation of how much of a big deal this latest incremental amount of progress being made actually is. if we assume a mini deal is done, as you point out, the structural issues, really tough issues like ip enforcement and structural change in the economy, do you think they will be dealt with or is it a kicking of the can down the road once we have a symbolic deal for both washington and beijing? wendy: we are told this is a significant deal. however, we don't know the details. we know both sides will spend the next five weeks hammering out the details. the only details that have really been provided is a dollar amount on the amount of agricultural purchases china is going to make but really nothing on intellectual property or

technology transfer state subsidies have been shared. i'm a bit skeptical that when we see this deal, if it is successfully negotiated which will have the kind of structural changes that really let the u.s. to the negotiating table at the outset. shery: which even when it comes to those agricultural purchases, now we are hearing from sources in beijing that they want a rollback of tariffs in order to purchase more farm goods. so, really the position don't seem to have changed that must from when these negotiations actually started months ago. went back to last april, right before the talks broke down over a difference on the negotiating text, i think we were farther along last april than the type of the yield the president is talking about achieving now. you are correct. even with respect to the agricultural purchases, once you

put pen to paper, what does this commitment mean? will china put other conditions on the purchases? what is the timeframe for these purchases? will china insist on certain prices for the u.s. commodities to be sold? we have a big number but i think once the two side sit down and really hammer out language around this purchasing number, there will be some complications and difficulty. shery: both threats on additional tariffs come december still in place. which are the key dates we need to keep our eyes on? wendy: you are right, it is december 15. those are the next tariff hikes that will have enormous impact on u.s. consumers about tariffs and $160 billion of chinese imports. my sense is if there is a deal signed in april, both sides will agree to defer those tariffs.

i think that is probably something that is in the works. frankly, de-escalation and eliminating these tariff hikes is a step forward and a welcome step. haidi: wendy, we just emerged and looking at the incredible turmoil that engulfed the nba, brands like the gaming company lizard as a result of individual comments regarding the situation in hong kong. how difficult is it for companies to be able to toe the line or should they? i'm wondering in your experience as a trade negotiator, is it possible to bring sensitive political issues where there is probably no middle ground for something like -- for countries like the u.s. and china, and move on with trade negotiations? wendy: with respect to the nba issue, i think it just demonstrates each company, each association, they are going to

have to make their own decisions as they try and balance their desire for increased sales in china and pressure from china to say or not to say certain things. that is a decision that needs to be made in the board rooms of the government -- the government does not have a role. it can help lower the temperature, it can have private conversations but i think this is something all companies are going to have to prepare for and really give thought to how they are going to respond if and when something similar comes their way. shery: we had trade ministers meeting in thailand over the weekend to get the regional trade bloc going which is china-led. that has not gone anywhere in the past seven years. how much progress has china made in building its influence in asia after the u.s. withdrew from the tpp? wendy: first, the negotiations you refer to are really not china-led. they are led by the aussie

in the 10 southeast asian countries. my understanding is they are making significant progress and there is a good chance they get announced an agreement in principle come november. that would be one more agreement where the u.s. is sitting on the sidelines and not benefiting from the concessions that other countries make to themselves. progress forme someone who favors trade liberalization, i'm worried that the u.s. trade deal by deal is losing its competitive stance and the growing and dynamic asian region. shery: wendy cutler, thank you so much. vice president for the asia society policy institute. if you missed any part of that conversation, tv is your function. you can watch past interviews and watch us live. dive into any of the securities or bloomberg functions we talk about and become part of the conversation by sending us

instant messages. this is for bloomberg subscribers only. check it out. this is bloomberg. ♪

shery: the democratic candidates are set for the next presidential debate outside columbus, ohio. let's head over there and join our chief washington correspondent kevin cirilli. how crucial will this debate be for vice president biden because he seemed to have given a lot of ground to senator warren? kevin: this is a crucial debate for former vice president joe biden as he has faced a barrage of criticism from president trump and republicans over hunter biden, his son, who gave an interview to abc news earlier today which he vowed not to serve on international boards should his father become president. the biden campaign has put out to the other democratic challengers that they hope they will not bring this up because

they feel it will be playing right into president trump's political playbook. it is not just joe biden who has high stakes tonight. as does senator elizabeth warren, the democrat from massachusetts, who has emerged as another potential front runner for democrats. how will she continue to make her economic populist pitch and how will she look to unify the party? there is a poll that shows she is the second choice for both bernie sanders and joe biden supporters. let's not forget about the sanders campaign. i spoke with nina turner, the national cochair woman of bernie sanders presidential campaign. she says her candidate is the original democratic-socialist. take a look to what she told me. >> there is not one candidate who has been all the records in terms of the number of donors coming from grassroots people, walmart workers, teachers, amazon workers. only one, and that is bernie sanders.

anybody else in that stage is adjusting themselves to the gospel according to bernard sanders. kevin: if you are looking beyond that, it is a lower tier candidates,, let harris, pete buttigieg, and tom's buyers will make his debate debuted. they will need a motivational moment that their campaign can continue. haidi: great to have you with us, kevin cirilli, our chief washington correspondent as the 2020 election campaign ramps up. a quick check of the latest business flash headlines. saudi aramco may have to pay as much as $450 million in fees to advisors working in its upcoming share offering. a group of 20 banks involved in the preparations and the fees will represent about 1% of the $14 billion aramco was hoping to raise in the ipo. jp morgan and morgan stanley are excited to earn the most from the much-anticipated sale.

shery: activision blizzard is keeping a low profile amid backlash for its punishment of a tournament winner for supporting the protests in hong kong. it canceled a launch event in new york for a new switch version of its popular overwatch game. activision banned the winning gamer from competing and withheld the prize-winning but later stopped the ban and restored the winnings after criticism. haidi: grounding all the airbus a-220's after an incident forced a geneva flight to divert to paris. it is the biggest operator of the single aircraft and suspended all services while inspections are being carried out. they airline suffered a string of issues recently and now facing an investigation from u.s. regulators. that is just about it from daybreak australia. we will stick around for the next two hours. daybreak asia and the market open is almost upon us.

this is bloomberg. ♪

away are under one hour from market open in japan and south korea. shery: in bloomberg's new york headquarters, i'm shery ahn. --nne: sophie: welcome to "bloomberg daybreak asia."