“Bloomberg: The Asia Trade” brings you everything you need to know to get ahead as the trading day begins in Asia. Bloomberg TV is live from Tokyo and Singapore with Shery Ahn and Avril Hong, getting insight and analysis from newsmakers and industry leaders on the biggest stories shaping global markets.
Chapters:
00:00:00 – Bloomberg: The Asia Trade begins
00:03:16 – Nvidia wins Trump’s approval to sell H200 AI chips in China
00:07:02 – Paramount ups Warner battle with hostile bid
00:11:28 – Traders gird for heated Fed meeting
00:15:18 – China Politburo makes boosting domestic demand top goal in 2026
00:24:04 – TD Securities’ Prashant Newnaha on RBA, central bank outlook
00:31:42 – Pimco’s Ivascyn warns of a ‘dangerous’ credit-ratings dynamics
00:32:48 – Dalio: Countries worldwide are having too much debt
00:37:40 – Copper climbs to record as China policy, US imports spur rally
00:42:31 – Australia to ban under-16s from social media beginning Wednesday
00:47:02 – Market opens in Japan and South Korea
00:50:03 – IG’s Fabien Yip on investment strategy
00:58:28 – Trump says he’ll sign executive order curbing state AI rules
01:03:42 – Goldman: China Politburo result ‘somewhat disappointing’
01:11:24 – Chinese brokerages’ gains to extend on policy push
01:15:38 – RBA policy in focus as markets watch for hawkish shift
01:20:26 – AUSTRALIA AHEAD: University of Sydney’s Terry Flew on Australia’s social media ban
01:29:45 – Bloomberg Intelligence: Smart technologies reshaping China’s EV landscape
——–
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This is a major trade, I’m sure.
Rihanna in Tokyo. I’m April Hong in Singapore.
The top stories this hour. Asian stocks set to extend Wall Street
declines as traders look beyond this week’s likely Fed rate cut.
Treasuries joining a global bond slump as anxiety grows about the pace of
future easing. A win for in video as President Trump
approves a sales of their 200 aid ships to China with the US to take 25% cut of
revenue. And Paramount launches a hostile cash
takeover bid for Warner Brothers days after the studio agreed to a deal with
Netflix. We’ll be watching Japanese assets today
after that big earthquake struck at Japan’s northeast coast.
We’re seeing Nikkei futures under pressure.
The Japanese yen headed towards 156 against the US dollar.
We have seen significant pressure for the Korean one as well.
We’re hearing from local media that the authorities are establishing an effect
stabilization task force. So we’ll continue to watch the Korean
currency as well. The offshore.
You want a different picture. We have seen actually strength against
the US dollar holding at that seven level per greenback.
And this, of course, after the Politburo announced a top priority for 2026, will
be boosting domestic demand, although Goldman Sachs calling that somewhat
disappointing. The big news today, of course, will come
from the RBA as well. Not much expected.
No change in the policy rate is the expectation by economists, but ten year
yields already at the highest level since 2023 April.
We’re seeing that expectation of a hawkish shift coming from Australia.
Yeah, and that is I think, part of the concern when it comes to the Fed and the
extent in which it will be a hawkish cut later this week.
And ahead of that we are seeing the US stocks starting the week down, snapping
a four session rally. Maybe some of the upward pressure in
yields is sapping demand for stocks. We are seeing the US ten year hovering
just above the 416 handle now and if you look at swaps, they are pricing a bit
lower the extent in which we will see cuts in 2026.
Now maybe also the upward pressure that we’re seeing in yields is supporting the
greenback. But one of the stocks that we are
watching, Shari, is that of video. This is a company that closed in the
green. We heard from the US president saying he
spoke to sea and in part of that conversation suggested that the US would
approve the H 200 exports to China. But the question still lingering over
the extent in which China will demand or want these chips.
Jerry Yeah, let’s stay with them video and
bring in our Asia tech correspondent Annabelle Jewelers for more details.
Just as April alluded to, of course, the big question is the demand outlook in
China, even if these chips are sent over there.
Right. But how significant is this for Nvidia
itself? It’s significant for Nvidia itself.
And I think, yeah, you’re pointing to maybe not even the million dollar
question. It’s probably the multibillion dollar
question is is what kind of demand are we going to see on that 200 side?
We don’t know that yet, but, but what we do know is that the 200 is a much more
advanced chip than the to 20 that was initially modified for the mainland
market. So the 200 and is one that has already
been sold around the world. But of course, we’re moving to.
Blackwell moving to Rubin architecture. So China is still will be a couple of
iterations behind. But yes, this is a big announcement
that’s just come through in the last couple of hours.
But President Trump giving Nvidia permission to ship these 200 ships to
China. It’s something we’ve been discussing for
weeks. We saw Jensen Huang just back in
Washington even last week continuing his lobbying efforts.
So on this front, it certainly is a win for the business.
As you said, we got this true social post here.
You can see President Trump saying that he had warned or informed President Xi
of this, Xi responding positively. This is something, of course, a lot of
Chinese companies are going to want to see as well.
They’re still sort of hamstrung by these more these access to more advanced
chips. The question, as you said, is whether
China will allow them to purchase. But at the same time, in terms of the
breakdown of the deal. So the Commerce Department says it’s
still finalizing the details on this sort of accord.
But we do know that 25% of each sale is also going to be going toward the U.S.
as well. So it’s an exchange here for a 25%
surcharge. So it’s this potential, maybe two
billions of dollars in the mainland market.
But of course, you think about the latest earnings and China was completely
written out of the picture as well. Well, on top of this, maybe we’re seeing
another win for the community, with Trump also signaling he wants to do away
with state based rules. Exactly.
Yes. This is something else that Jensen Huang
has spent a lot of his time lobbying on. And one of the big concern has been as
these states in the U.S. move to protect consumers in in their
home grounds, it was actually creating a lot of confusion for for big tech
companies who were facing regulations. Lots of different regulations, or at
least that is the comment that big tech has been making.
So what President Trump has just again announced on True Social in the last few
hours is that he wants to approve an executive order this week establishing
one rule for for A.I. instead.
So he wants to do away with state level policies regulating the technology.
And instead he wants one federalized rule in place instead.
So we have seen a draft of a potential order at Bloomberg.
We saw that in the last few weeks. But it would this draft rule, it showed
us that it would allow the DOJ to sue states over regulations it deems
unconstitutional or as well as threaten funding cuts to those states with laws
that are considered too burdensome or restrictive.
But regulation, of course, has been a very hot topic for quite a period now.
President Trump has been more on the less regulation side instead to try and
promote the development of the industry. And it does seem that this is another
continuation of those efforts as well. Matthew Bell, thank you so much for
getting us up to speed and will join us there.
Now on to one of our other top stories. Paramount has launched a hostile cash
takeover bid for Warner Brothers Discovery just days after the Hollywood
studio agreed to a deal with Netflix following his warning that the Netflix
deal may pose an antitrust problem. President Trump says he’ll also be
looking as a paramount bid. I have to see what percentage of market.
We have to see the Netflix percentage of market paramount, the percentage of what
I was bringing. Chris Palmeri, who leads our media and
entertainment coverage in Los Angeles. So, Chris, this is quite a turn of
events following on from the prior bid from Netflix.
Now Paramount with its hostile takeover bid.
What do we know about how successful all this might be?
Are very unclear, as unclear as the President was there.
I think, you know, this is still to be decided,
but. Right.
I mean, the $30 that Paramount came out with publicly today was what was
rejected by the Warner Brothers board last week.
There’s a debate over whether their bid is higher than Netflix because Netflix
involves spinning off some cable networks that have some value to Warner
Brothers shareholders. So there’s a ten days at which Warner
Brothers has to respond. They’ve told shareholders, you know, not
to do anything at this point. Chris, the world is following this deal.
Why is it so consequential for the media industry and just streaming in general
globally and the implications of what this might lead to?
Well, Netflix, the largest, you know, the pioneer in streaming, the largest
player globally, over 300 million subscribers, having them control some of
these outstanding, well-known entertainment brands, Batman, Harry
Potter, Game of Thrones, all of that comes with this deal would be huge.
And so so that’s what they’re fighting for.
Paramount, of course, obviously has a long history.
It would be a merger with another 100 year old Hollywood studio, huge catalog,
a library of TV and movie titles, and would strengthen them by combining HBO
Max their streaming service with a Paramount Plus streaming service.
So, you know, also with global reach. Also begs the question what this is
going to mean for consumers? Maybe higher prices and less choices in
terms of meaty options. But, Chris, there’s been talk about
Sarandos speaking, reaching out personally to Trump.
And then when it comes to Paramount, there’s been talk that touting up of
that personal relationship with the Trump administration as well.
Does this in any way tell us the odds of either side getting a deal?
I wish certainly the conventional wisdom was that the Clintons have been big
supporters of Trump. They control Paramount.
And but as we as you mentioned, we broke the news
yesterday that that Trump had had a meeting in the White House over an hour
with Netflix co-CEO Ted Sarandos. And and and Sarandos left the meeting
thinking that Trump wouldn’t oppose the deal for them.
We’re also about to report, if we haven’t already, that last night at the
Kennedy Honors in Washington, David Ellison talked to Trump again and
and also hosted some dignitaries in his box there at the event.
So there’s a lot of lobbying going on in Washington and not a lot of clarity,
though, how it’s all going to turn out. Good to have you with us, Chris Palmeri,
who leads our media and entertainment coverage in Los Angeles.
Coming up on the Asia of trade, we look ahead to today’s RBA rate decision with
TD Securities. IG joins us to talk market strategy.
We also discuss Australia’s ban on children having social media accounts.
Much more ahead. This is boom. Anxiety about the pace of Fed easing
next year dragged U.S. stocks lower ahead of this week’s
meeting, where a cut has been priced in. Traders in Asia will be awaiting the
RBA’s outlook after today’s likely hold, as well as assessing China’s politburo
meeting with its focus on boosting domestic demand.
Let’s get more with Bloomberg strategist Mike Pompeo and our chief North Asia
correspondent Stephen Angle. Mark, let’s start with you.
So it looks like in US assets they are pricing this hawkish cut.
You see stocks down, the dollar is bouncing a little.
Treasury yields coming under pressure. What is this going to mean for Asia?
Well, the key thing really is the very long end of the Treasury curve where
that goes and what impact it has really across the balance of the world.
And we’re beginning to see it play out because now the Treasury market is also
responding to what we see from the RBA in Canada, in Europe and even from
Japan, of course. So this upward pressure on the very
longer end of the yield curve is a bit scary for equity markets globally.
If you think back to the middle of the year, the first time the 30 year yields
on America hit 5%, there was a wobble across global equity markets.
They recovered of course, but our colleague mark up more is suggesting
that this time we’re getting close to the 5% yield again.
This time we’re going to go through it. We’re going to go above it.
And for next year the 5% will be more of a floor than a ceiling for 30 years.
That’s a pretty scary scenario for equity markets.
And part of the reason for that is that investors are not sure.
But the Fed is looking at both sides of its mandate.
It has an inflation and a jobs mandate. It’s much more concerned about the soft
jobs data. That’s why they’re lowering interest
rates. But if you look at where the 30 year is
sitting, so lowered rates in September and October, yields are higher at the
long end of the curve. That clearly says that investors are
worried that core inflation is not coming down to compensate for the high
yields in the market. Asian markets will also be reacting to
what’s happening in China. Steve we got the priorities out of the
Politburo meeting, but the expectation right now that perhaps the measures are
a little bit muted at the moment. Yeah, I think the senior leadership in
Beijing feels fairly confident that they’ve weathered the storm coming from
Liberation Day from the United States back in April through to today.
Yes, the economy has lost a little bit of a momentum, but it’s been powered by
that surge in exports, those numbers that we got.
So it’s leaning on that traditional pillar and it wasn’t a disaster.
The Chinese economy this year, despite the tariff barrage coming from the
United States. So there’s there’s this policy tone that
the Politburo behind closed doors in Beijing set and we got the readout
yesterday essentially is mostly a continuation of the current policy
settings. No big surprise they’re going to be
focusing on internal demand, domestic demand, but they didn’t really
specifically mention consumption, household consumption as it relates as
well to policy. And I mean, excuse me, property property
policy going forward. And it really is a sort of hints that
there is going to be a continuation of policy.
They did mention proactive fiscal policies, moderate loose monetary
policy. There’s no change there, but no real big
bang stimulus going forward. So that’s the key readout from what I
can see. Jacqueline Rong, the chief China
economist at BNP Paribas, says it’s going to be stimulate demand but
stabilize supply and they also are going to be strengthening new productive
forces again, the new industries that are going to be the drivers of the
future. But that also indicates as well that
there won’t be any rollback of industrial production manufacturing.
So it won’t necessarily be setting the tone to cut back on that overcapacity
issue in many industries. Now, this Politburo meeting sets the
tone for policy next year. That will be up to the next meeting of
the Central Economic Conference to really put the details and the policy
that will then again essentially be ratified in March at the National
People’s Congress. Yeah, I think, Steve, that markets are
waiting out for the next catalyst when it comes to China assets in general.
Talk to us about what you’re hearing in terms of reactions.
Some have called this Politburo readout somewhat disappointing.
Well, those were the words from Goldman analysts.
Somewhat disappointing is the readout, because, again, it is it’s essentially a
continuation of this current year’s policy.
And a lot of market participants have been looking for greater stimulative
measures from the Chinese policymakers, but they’ve been resistant, as I said
earlier, I think they’re fairly confident that they’ve weathered the
bulk of the storm. They’re going to go ahead with their
longer term planning with the next five year plan and the cross secular
policies, which indicates more of a longer term perspective.
But the Goldman read out from Lijiang Huang, the economists at Goldman, China
economists essentially saying top leadership appears sanguine on China’s
economic growth this year and during the 14th Five-Year Plan and highlighted
continued policy focus on technology, security and people’s livelihoods.
They appear less inclined towards broad based stimulus measures.
And again, the Goldman economists essentially highlighting what I did
earlier, and that is they didn’t have specific comments about consumption and
about the property market. Maybe that’s going to be fleshed out by
the Central Economic Conference in terms of policy.
But in the readout, it was fairly consistent with this year’s policy
priorities. And yet the concerns are real.
Why the economic challenges that China faces?
You alluded to the property sector. We have China, Vanke is ongoing
problems. We do have self PMIs.
Mark when it comes to other economies and markets.
How consequential could what China’s going through be, especially for heavily
dependent economies like Australia for example, where we do have on the RBA
rate decision today. Yeah.
Everybody in Asia is very concerned of which direction China takes and the as
far as Australia is concerned, we’re beginning to see signs that investors
think that the RBA could shift into a territory where they start lifting
interest rates next year because there’s been improvements in the Chinese economy
that Australia is starting to benefit from that and inflation’s a little bit
sticky in Australia as right now. That’s a tremendous change.
It was only a few weeks ago that people still thought the RBA may be on for
lowering interest rates again next year. But the messaging from today from them
could well be it’s a bit of a hawkish hold.
They’re not expected to change interest rates but looking forward into 20.
226 they may well signal that they’re starting to see enough signs of growth
and inflation outlook that they may even need to move to higher rate.
They may not make it clear today, but clearly the market is starting to think
that is the case. And it’s not just Australia.
Just in the past couple of weeks, obviously we’re seeing clarity.
The Bank of Japan almost certain to raise interest rates.
Very strong data in Canada, which is pointing to the next move being an
upward move there. And just yesterday, the European Central
Bank, some pretty hawkish comments from Schauble there suggesting that she’s
comfortable with the idea that markets are pricing for higher rates.
So across the G10 space, we’re seeing the balance really tilt in favor of
slightly higher rates next year, even as the Fed is considering an interest rate
cut this week. On top of that, mark, maybe a bit of a
shift in the market dynamic in Japan given how demand from foreign investors
has been drawn in. That also brings with it volatility.
Yeah, I mean, just because it’s been rising quickly in Japan, we’re getting
close to this 2% threshold on the ten year sector, which has been a target for
a long time. People at one stage were thinking, okay,
once we get to 2%, everything will calm down.
But what’s changed a lot in the past couple of years is more people involved
in the Japanese market. We’ve seen a massive growth in
derivative trading. According to the BIS data, the volume of
derivatives traded in Japanese rates market has gone up something like 700%
over the past couple of years. A lot more senior traders being employed
in Tokyo. We’re seeing more curv trading a basis
trading. There’s an awful lot going on in Japan
which suggests that people will continue to trade, do a lot more activity.
Even if yields reach some kind of a ceiling.
There’ll be a lot of other things going on.
So short term volatility will likely stay high in Japan.
JGBs are back. Mark, thank you so much.
Bloomberg strategist Mark Cranfield and chief North Asia correspondent Stephen
Angle. Thank you to you both.
We have more ahead on the Asia trade. This is Bloomberg. Here are the leaders from the corporate
front. PepsiCo has announced a series of
operational changes backed by activist investor Elliott Management.
The moves include cutting nearly 20% of its U.S.
product lineup. Investing in more affordable products
and plan layoffs in North America. Elliott says the plan will drive greater
revenue and profit growth. Bloomberg has learned that Walt Disney
is bringing Jimmy Kimmel back for at least one more year under a new deal
with ABC. Sources tell us Jimmy Kimmel Live will
continue until at least May 20, 27. We’re told the host and Disney agreed on
the extension months ago but delayed announcing their plans out of respect
for axed fellow late night host Stephen Colbert.
Morgan Stanley has lowered its rating on Tesla to the equivalent of a hold.
Analysts say the company’s full valuation, driven by stock price,
already reflects as robotics and AI businesses.
The firm says Tesla is positioned to be a leader in humanoid robots, but even
sales volume in North America may fall 12% next year.
Cherry also watching AMD CEO Lisa Su is pushing back against market worries over
AI exuberance. She tells Bloomberg Television that the
technology has yet to reach its full potential.
I find it kind of interesting that you go from super excitement about a
technology to, oh, wow, you know, big concern.
Look, being a engineer and technologist for a long time, you know, you see
technologies and you see those that are kind of fads and then you see those that
have extreme potential. And, you know, AI is in the realm of
extreme potential. You know, the last two years we’ve been
talking about it. You know, we’ve seen, you know, sort of
the advent of chat now turned into, you know, is there a a bubble?
And I say that we’re just starting to see the real utility of, yes, the
investments are high, but why are we all so, so confident that there’s a payoff
at the end? Because we can see, you know, the way
A.I. has been improving over the last, you
know, let’s call it couple of years has been faster than any other technology
that I’ve seen. The adoption rates have been faster than
any other technology. The potential is faster than any other
technology. But what I’m here to tell you is that
it’s nowhere near. It’s.
Peak capability. AMD’s CEO, Lisa Su, speaking to
Bloomberg. And we’ll be watching Japanese assets
and trading today. The Japanese yen moving towards our 156
level against the greenback. We’re seeing downside pressure on Nikkei
futures. We had a big earthquake off the coast of
Japan’s northeast. We are now hearing from Prime Minister
Takeuchi saying that there are reports of 30 injuries from the quake.
There are some stocks that we’ll also be watching and they, for example, saying
that there is no impact on flights following the earthquake on Monday.
But other stocks like Eneos Holdings, for example, which evacuated their
facilities, will be on watch. We have more ahead on the Asia trade.
This is Bloomberg. Let’s take a look at how global bonds
are faring after Treasury yields rose to the highest in two months ahead of the
FOMC decision, of course. Among bonds hands that have been
underperforming. It also includes Australia and we are
watching out for the RBA decision that’s due today.
Consensus is for a whole question is the extent in which the RBA will sound
hawkish due to these renewed inflation pressures.
Let’s discuss and bring in passion new NAHA senior Asia Pacific rate strategist
at TD Securities. Sean, good to see you.
Yeah, good morning. So we are watching out for what the RBA
says In terms of messaging. You don’t seem to think they’ll be
terribly hawkish y. So I think this meeting is going to be
very closely watched. I mean, we’ve had a significant sell off
in Aussie fixed income over the last seven weeks or so.
So I think three year bonds are sold off roughly around 75 basis points.
So I mean, the data is definitely coming stronger and the markets I think are
going to be looking for validation from the RBA whether that sell off is
justified or not. And I think that the RBA is going to
fall short of that essentially because the RBA is going to tell us that they
think that inflation expectations anchored and if they’re anchored,
there’s no need for them to actually come out and say, you know what, the
next move is going to be a hike. I think what they are going to indicate
is that, yes, price pressures are actually increasing.
They’ve actually come in above our expectations, but we’re trying to figure
out whether these price pressures are temporary or whether they’re more
persistent and permanent. So I think they’re going to require a
couple more months of data to actually determine whether that’s the case.
And for that reason, we don’t think that they’re going to jump the gun and
actually signal a and hawkish bias. So I think there is going to be an
acknowledgement that data is coming out stronger, but they’re still going to be
playing a data dependency approach. So what are we going to likely see?
What might we likely see in the market reaction today given what’s already been
priced in then and what make sense to you in positioning going forward?
So I think, you know, if you if you look at it very simply, three year bonds in
Australia, you know, they lead the cash rate by roughly six months.
So the three year bond yield at around 4% is already got a rate hike or a price
deemed over the next six months. It’s not exactly priced into the market.
But what we are expecting is that if the RBA doesn’t validate the markets recent
sell off, then we’re going to have a relief rally.
So you probably get three year yields falling by around five basis points and
the curve, you know, moderately stable, but it’s not going to be a material
move. I think, you know, the data that we’ve
had over the last couple of weeks has been very strong.
And I think that the market’s bias will really be to sell strength in fixed
income. So that’s why I don’t think any rally is
going to be the zombie that we could also see on
unwind when it comes to the Aussie dollar calls, because I’ve been watching
the Aussie QE very closely because of that divergence in monetary paths.
So yeah, I think there’s probably going to be some
reversal, but I don’t think that the outlook is really going to change too
much on on that Aussie where I think, you know, the RBA is facing stronger
data and the risk is that in the data over the next couple of weeks is going
to be strong as well. I mean we ended up having some data on
consumption come out last week. GDP data was all stronger and I think
that’s the trend that the data will come out and play to
BNZ. It’s just too far to be able to call a
change in policy. They’re going to be at least on hold for
the next year or so. Data is starting to turn up a bit more
positive, but we still think that the position needs to be long.
Aussie versus Kiwi. How about the Aussie against the
greenback? Because of course, we are also pricing
in a potential Fed rate cut this week. That’s right.
I think in terms of the Fed, the expectation is that they’re going to
deliver a hawkish cut. So that should provide some support for
the US dollar. But broadly speaking, I think, you know,
you have a look at the trajectories. The risk is in the US that the
unemployment rate goes higher. In Australia we think that the risk is
that the unemployment rate goes lower. The data has been a lot firmer in
Australia versus the US. So we actually think that having long
Aussie dollar positions versus the US still makes sense in terms of our
forecasts. We have got Aussie trading to around
$0.68 by the middle of this year and towards $0.70 by the end of this year.
What are the risks to the view of a more hawkish RBA in 2026?
How closely are you watching perhaps the spectre of deflation being import from
the likes of China? And then that might also affect the
trajectory for the Australian Central Bank?
Well, that’s it. I think the RBA has made it quite clear
that the economic outlook is very uncertain.
That’s been the thematic that they’ve expressed in the last couple of
meetings. So I think they’re going to contain
that. They’ll they’ll still retain that view
in terms of deflation coming through. I’m not sure whether that plays through
at the moment. If you have a look at the Chinese M1
money supply growth year on year, that has a very good lead on China pie and it
does look like we could actually see China exporting inflation
via PPI. So that that’s the risk over the next
six months. So I think in terms of price pressures
there, we saw that price pressures continue to increase as opposed to
decrease. Okay.
Interesting. Talk to us about yields as well.
The long end concerns. This is a global issue, right,
Especially in DMS. What is your sense of on the Treasury
yields, what it’s going to look like this time next year?
So our House view is that the Fed will probably deliver another three cuts
after the cut that we’ve got this week. So it should take the Fed funds to
around 3%. So our view is that US teens get to 3.5.
So we’re quite aggressive on our call on US treasuries, but we are expecting the
Treasury market to rally. We’ve already had the Fed tell us that
QE Q2 is likely to end and we’re expecting that announcement to come
through. We’ve already had the Fed also tell us
that they’re considering reserve purchases as well.
So that should be supportive. But as we think that the labour market
is likely to weaken in the US, that should provide a tailwind for this US
fixed income rally. So we think that US tends by the end of
next year should be around 3.5. Any upside for Japanese government
bonds. Of course, we have a whole different
dynamic here which gives. So I think what we are seeing across
global fixed income is that yields at the back end are continuing to rise.
We’ve seen it in the US, even though the Fed has delivered two cuts already and a
third one’s on likely yields at the long end of the curve are continuing to rise.
I think there’s just a shortage of savings out there globally and that’s
helping to drive yields higher, particularly in Japan.
So the risk is that, you know, we get above that 2%, 2% level on JGB tens, but
it is a good news story. The data has been coming out more
positive in Japan. You have a look at corporate profits,
for example. They’re up 14% quarter on quarter.
We’re expecting that to filter through into the tank and survey.
You look at consumption in Japan as well, the consumption activity index
from the BOJ, that’s at levels that we saw back in February of 2020.
And consumer sentiment is at levels that we haven’t seen since, I think, April
2024. So overall, it is a good news story in
Japan. It probably means that yields go higher
and the risk is that the rise in GDP yields probably filter through into
other markets as well, such as Australia in the US.
You know, we do watch the tank on sort of a next week as well as a BOJ policy
decision priced on. You know, how good to have you with us.
Senior AP rates strategist, TD Securities.
Now the chief investment officer of one of the world’s biggest bond funds is
warning of dangerous assumptions in the credit market.
PIMCO CIO Don Iverson says inflation readings may be giving investors a false
sense of security, just as the Fed faces limits on its ability to step in.
The warning comes as private credit expands rapidly with funds competing
aggressively to write loans once dominated by banks.
It is very, very dangerous to assume something has an investment grade rating
just because of the rating agencies assign a rating to it.
It’s critically important that you do your own credit work.
Today, all too frequently you’ll have an investment grade rating from one entity.
And again, market participants for years have always joked if you could only find
one investment grade rating, it’s pretty fair to assume everyone else is below
investment grade. PIMCO CIO Dan Avastin speaking on
Bloomberg’s All Lots podcast. Meantime, Bridgewater Associates founder
Ray Dalio says investors are not paying enough attention to government debt
levels. Speaking to us at Abu Dhabi Finance
Week, Dalio told us more about what he sees as the biggest market risks in the
coming year. We are having too much debt.
Now, this is not just the United States. You’re seeing this in England, you’re
seeing this in France, you’re seeing this in China.
You’re seeing that dynamic so that they can’t increase the debt the way they did
before. And then related to that is the
politics. But when you have these large wealth gap
differences, who has the money? And when there’s the accumulation of a
lot of wealth that then is untaxed, there’s a tendency to want to tax that
wealth and that creates bubbles. In other words, when wealth is very
different from money, in order to spend money, you have to sell wealth and get
money. And when there’s a lot of wealth that
needs to be sold. So quite often interest rates play that
role, but you could see wealth taxes play that same role, meaning the need to
sell that and that creates a bubble. So we have a debt bubble going on.
We have that other kind of a bubble going on in the economy and related to
politics. And then, of course, geopolitics.
Capital flows and trade flows are different because we have a world in
conflict. And in that world in conflict.
No country can be secure. So that’s why the United States wants to
build self-sufficiency in these areas, or China, which is that model where
China would export to the United States and earn money and then invest in bonds
is no longer a viable path because the Chinese worry that they won’t get paid
on their bonds like the Russians don’t get paid on the bonds.
So that dynamic is is what is behind, not what’s happening.
And it’s becoming more precarious as we go forward.
Like if we go into the 26 elections, 2026 elections, it’s likely that the
Democrats will take the House. Significant
possibility. If that happens, the political conflict
will continue to be more difficult and so on, and that’s creating this risky
environment. Particularly also debts are maturing.
So what you have to roll over your debt and a higher interest rates, this
confluence of factors. Is making the environment more risky as
we’re going ahead. And I want to talk a little bit about
what what sort of concern investors globally are underplaying.
But before that, you know, you talk a lot about I and I wouldn’t be a
financial journalist if I don’t ask you a question specifically targeted,
especially in Abu Dhabi right now. Bloomberg reported a couple of months
ago that a venture that your family office had would g42 did not pan out.
Are there any other partnerships in the city we should be on the lookout for?
Oh, I’m very active in doing air partnerships and and in areas of common
thinking and investing. And in other words, I guess I would say
there we are in this environment where there’s a networking of different
people, of different expertise. And I think as we’re dealing with how to
be the best investor, you have to have the ability through I to do that.
And the partnerships are thought partnerships of how everybody can, you
know, teach each other and do things together.
So yeah, there are a number of things that are interesting and going on and
I’ll keep you posted as things develop. Bridgewater Associates founder Ray Dalio
speaking with Bloomberg of your Abu Omar.
We have more ahead on the Asia trade. This is Bloomberg. Let’s take a look at how commodities are
faring. Copper.
Top of mind After rising to an all time high and partly to do with China setting
these domestic growth priorities for next year.
It is interesting, though, we have been seeing precious metals doing pretty well
so far this year, but a bit of a pullback overnight against the backdrop
of what the Fed might do and how it might signal a bit of a pullback in
terms of tamping down the markets expectations of those rate cuts next
year. For more on the outlook for copper,
let’s bring him to about Asia energy and commodities editor Andrew Jane.
So Andrew, let’s talk about copper for us.
I mean, on the demand side, things look great.
Supply also supportive of prices. What are you seeing in terms of the
drivers and what is this going to look like in 2026?
Hi, everyone. Well, I mean, we used to call copper Dr.
Copper because it was a barometer of global economic health.
That’s certainly no longer the case. It’s surged 30% this year.
While the global economy sort of wallows in a tariff induced funk and a lot of
that is on the demand side, people have been talking for several years now about
how copper being such an important part of the energy transition that the demand
is really going to kick in. And I think that’s what we’re seeing
this year. It’s been fuelled further by the
datacentre boom, which requires a lot of wiring.
Then on the supply side, we’ve had a series of mine outages.
There is a shortage of copper. That’s driven a lot of M&A activity as
big miners try and get access to more copper.
But I would say here, the demand is not going away.
New supply is going to take quite a long time to come on.
So I do think we’re in for a period of sort of prolonged high copper prices.
Andrew, what’s happening with precious metals?
Is it all the monetary easing path that’s factoring into prices or is there
idiosyncratic news around supply and demand as well?
Oh will and precious metals. In recent weeks, the monetary policy has
been the main driver. But I mean, the reasons we’ve seen the
big gains this year aren’t primarily related to monetary policy.
They’re about the debasement trade. That is the fear that
rising debt levels and governments will debase the value of investments in
currencies and government bonds over time.
We’ve also got the huge amount of uncertainty around trade and economics
with all the tariffs. That’s really fueled a flight to safety
in silver, which has been kind of the star for the last month or two taking
over from gold. We had a pretty dramatic short squeeze
in London, and that’s the centre of sort of global precious metals trading.
In October they were flying silver in from other parts of the world.
People couldn’t get enough. So that was partly driven by the fact
that gold had gone up so much that some investors may have sort of rotated into
silver. Silver’s more than doubled in value this
year. Gold’s up around 60%
here. What happens with interest rate moves in
the US? Obviously important, but probably over
the longer term hasn’t been the main thing driving gold and silver.
Fade independence will be really important for precious metals.
If there’s evidence that Trump and his administration are really
eating into the Fed’s independence next year, that could fuel a further sort of
rally in precious metals. As people become even more worried about
investing in US government bonds. Do we have a sense of what sort of
levels we should be watching both on copper and these precious metals?
What are you hearing among traders, for example, oil and copper?
CITIC Securities in China recently talked about a 450,000 tonne shortfall
of refined copper next year. What that means for the price, I’m not
quite sure. I think it means obviously prices are
going to stay high. They also said copper at 12,000 a tonne.
Staying above that on a sustained basis was would be what’s needed to drive a
lot of new investment in mines. Obviously if that happens, it’s still
going to take several years for those mines to come on stream.
So yeah, I think we’re looking for that. We’re looking at high copper prices for
a while. Precious metals, There’s been all sorts
of predictions. Some people are saying gold could go to
5000 next year, which is entirely possible.
Yeah, I buy some major sort of external shocks, I think.
Gold and silver prices are going to stay pretty high.
Hmm. Andrew James, good to have you with us.
Bloomberg, Asia Energy and commodities editor.
We have more ahead on the Asia train. This is Bloomberg. Australia will ban under a 16 year old
from accessing social media platforms from tomorrow, a decision aimed at
reducing the harms of toxic content and cyberbullying.
It’s a move being closely watched around the world as other governments consider
following suit. Bloomberg’s Paul Allen joins us now from
Sydney. Paul, so how will this ban work and how
much support does it have? Well, sure, it’s got tremendous support.
A YouGov poll just a couple of weeks ago found 77% support among Australians for
this ban. There were a whole lot of catalysts that
got us here as well, but one of them was the suicide in 2022 of a 15 year old
girl who had been relentlessly cyber bullied by classmates.
And that led to a sense that look, enough is enough, something has to be
done here. So this is the something as of December
ten, it will be illegal for an under 16 year old to hold a social media account
in Australia. So that includes the likes of Tik Tok,
Instagram, Snapchat, even YouTube as well.
Anthony Albanese, the Prime Minister says other platforms will be added as
necessary. Now the onus importantly is on the
social media companies to block accounts of under 16 year olds and if they fail
to comply, well, there’s fines of up to $32 million.
Given how the onus will be on these firms, how difficult is all this going
to be to enforce, Paul? Yeah, the enforcement question keeps
coming up. And of course, any child under the age
of 16 with even rudimentary knowledge of the Internet is probably going to be
able to find a way around this. And this frequently comes up.
But the example always given is underage drinking laws also easy to get around.
But it’s more about throwing down a marker about what’s socially acceptable
and what isn’t. And it’s also the government saying to
parents, look, we have got your back when it comes to parenting and setting
boundaries for you, for your kids. The social media companies, as you might
expect, are not particularly happy about this matter.
And Tik Tok have agreed to follow the ban, but they also say there are better
ways to do this. Snapchat YouTube also just rejects their
classification, that they are social media platforms, but they say they
comply as well. But all platforms also point to measures
that they’ve already undertaken to protect youth.
But this law is coming in regardless, regardless of many weeks and months of
representation of these companies, the government as well.
But to your point at the beginning, this is being really closely watched by other
countries and a variety of countries Indonesia, Malaysia, Spain, Denmark,
Brazil. They’re all looking at this experiment
to see how it goes. And we’re likely to see similar moves in
other regions around the world next year.
All eyes on Australia for the launch of sorts, the enforcement, how this rules
out tomorrow as well. Paul Allen in Sydney.
We have more on the social media ban coming up on Australia ahead at 11:40
a.m.. If you’re watching in Sydney, 8:40 a.m.
in Hong Kong. Meantime, let’s get you a check on what
futures are showing us and following on from that dismal performance on Wall
Street with upward pressure on yields, might that similar dynamic also play out
in the Asia session? It’s worth noting when it comes to
Japanese stocks, this weakness is coming despite the relative weakness you’re
seeing in the Japanese currency will be an interesting day for assets across the
region as we keep an eye out for the FOMC later in the week.
Markets open next in Seoul and Tokyo. This is Bloomberg. This is the Asia trade we’re counting
down to. Asia’s major market opens and is still
on watch for global central banks arrival ahead of the Fed’s expected rate
cut. And today the RBA expected to hold
absolutely the question it found, given how Australian bonds have
been underperforming in the past week. You also have to consider how markets
have already been positioning, so maybe we see that unwinding a little.
Post RBA decision. Cherry
Yeah, the ten year job yield. Australian bond yield in fact, at the
highest level since 2023. But I talk about JGB yields because this
has been a really global story, right? When it comes to long end yields
continuing to rise. We continue to watch the job market here
in Japan because we do have a five year auction as well.
We have been watching Japanese assets under pressure.
Before the session, you can see the Nikkei still barely managing to rise
2/10 of 1% and the yen holding at that 155 level, very close to the 156 level
against the US dollar. We had a big earthquake on Japan’s
northeast coast. So but we’ll be watching today’s further
announcements coming from companies about how that has affected their work.
We heard from Prime Minister Takeuchi that 30 injuries have been reported so
far when it comes to big, significant infrastructure fallouts.
We haven’t seen that as of yet. There have been some companies like
INEOS, for example, that have evacuated some of their facilities.
So do watch out for those names. Take a look at how South Korea is coming
online. We, of course, have been using the
overnight session about NVIDIA potentially allowed being allowed to
export those 200 ships to China. So we are watching the tech sector for
some potential upside. But you can see the cost, the at the
open or the down 7/10 of 1% and even SK Hynix, which of course has tripled this
year, down half a percent. It just got a second investment.
Caution, a warning from the Korea exchange, given the incredible rally
that we’ve seen in this market, the Korean one holding about 1468 level.
We have also heard from local media that Korean authorities are now setting up
this stabilization fund. Given the volatility that we’re seeing
in the Korean currency. I’ll
show you what’s also been rallying gold prices this year.
You’re seeing just under the 4195 handle.
But of course, it’s about where we go from here on the Fed and the rate
trajectory. So looking at what Treasuries are
telling us, you’re quite unchanged on the two year, the ten year continue
seeing the upward pressure. It’s really the long end given the
inflation concerns, this send perhaps that the cut that is coming in a couple
of days from now might be coming in too soon given the trajectory of price
pressures. On top of that, consider as well might
be upward pressure we’re seeing in yields be finally providing some support
for the dollar because you did see it pick up a little bit.
We are also tracking, as you said earlier, the ten year yield in Australia
as we keep an eye out for that decision in the signals coming from the RBA, QE3.
Yeah, let’s discuss all of this. And joining us now is Fabian Yip, market
analyst at IG International. Fabian, good to have you with us.
And as April mentioned, of course, we continue to expect that Fed rate cut and
at the same time a potential pivot to a more hawkish RBA.
Of course we already have expectations of a rate hike in December here at the
Bank of Japan. Is more monetary policy divergence going
to be the theme in 2026? Yes, this is what we’re watching at
right now because central bank policies will be dominating market sentiments in
the next two weeks. So today with the RBA, I think it’s
almost certain that the RBA will be keeping rates unchanged.
The bigger question is what the trajectory would be next year as we saw
inflation numbers coming in pretty hot in the October CPI print, the headline
inflation hit 3.8%, which is about what the peak the RBA has projected for next
year. So if this trajectory continues and if
the projection of RBA is correct, where inflation will not see its peak until
perhaps late in first quarter of next year, then we’re pretty much set for
potential review of a potential rate hike in 2026.
While this is not our base case, we’re keeping a very close eye on those
numbers as well as our RBA’s tone today, because if they believe the recent hike
in inflation rates is temporary and could be subdued in early next year,
then there is not so much of a concern of a hike next year, which would be our
base case. Fabian How does the narrative play into
the markets in 2026? We do have videos, headlines, for
example, today about those 200 ship exports to China.
Yeah, that’s right. So it’s a good news for and video for
sure that they got the approval to export these chips.
The bigger question is whether China is going to take it because we did see
earlier this year where the Chinese government has been encouraging local
tech companies to be adopting their local chips instead of Nvidia’s chip.
So if this narrative doesn’t change, I guess it’s quite hard for in video to
realize that profit. The good news, though, is in the recent
earnings discussions from NVIDIA, we did see that Jensen Huang said their
projection on revenue growth as well as earnings growth has not been including
the growth in China yet. So anything that could be shipped to
China is actually an upside for the company.
To what extent are you expecting that to benefit the Asia suppliers?
Mm. I think the Asia suppliers will
definitely play a very important role in the overall chain.
Obviously, Japan, Korea, Taiwan have actually been dominating the upstream of
the supply chain. So the ongoing improvement in margins as
well as the growth in demand will continue to drive a pretty prosperous
outlook for these companies. The bigger question here perhaps, is
whether the valuations of these respective companies are justified.
When you look at Chinese tech and the idea that maybe they don’t need these H
two hundredths, given how their domestic options look to be making a lot of
progress, how do you position how would you advocate as an investor when it
comes to Chinese tech stocks? I think the Chinese tech companies are
at a slightly different stage. I would be saying if you look at the AI
chat bots that are happening in China, for instance, obviously we know that
they are making a lot of progress, but at the same time, the monetization model
looks quite different from the US tech companies.
I think the Chinese companies are trying to gain market share as they are doing
similar moves in other sectors such as food delivery.
The the margins that are happening in the front end of the expansion cycle
looks very different from what we’re seeing in the US.
But I think it’s going to be a leaders take all type of market where we expect
to see the leaders in tech continue to grow in the AI capabilities.
CapEx spend obviously is another concern that we’re watching very closely as
margins have already been compressed. If CapEx increases significantly, it
could put further pressure on the balance sheet of these Chinese tech
companies when it comes up. Fabian, what about the Chinese economy
itself? I mean, we saw from the Politburo read
out that they want to prioritize boosting domestic demand, but Goldman
Sachs calling this somewhat disappointing.
Oh, I think it’s not surprising to see that they have a shift towards domestic
demand. If you look at the trade data, yes,
yesterday is actually a bittersweet moment, I would call it, because if you
look at the exports, the growth is actually pretty strong, recovered quite
nicely right after the deal with us has been struck.
However, import growth rate is still slow, reflecting low domestic demand.
The other problem we’re having here is it seems like the dependence on export
growth is still pretty strong and domestic demand, which is largely driven
by consumer sentiments and that has been impacted by China’s property sector
crisis, is still pretty low. So a shift towards a consumer sector,
domestic consumer domestic consumer sentiment is pretty pretty clear
direction that the Chinese government is adopting.
How well can they execute that, whether by continuing the consumer stimulus
program, by handing out cash where people can replace their old home
appliances, etc., can still continue to propel the momentum is a question that
we have. I think it needs to be a more structural
change in the entire economy and we need to see an improvement in the property
sector for the entire sentiment to improve.
Good to have you with us. Market analysts and IG International.
These are some of the stories that we’re following in the South Korean session
today. SK Hynix under pressure after receiving
its second warning this year, investment caution after the stock tripled.
Given the AI boom that we’re seeing in 2025.
LG Energy solution also down, despite the fact that these two stocks could
benefit from local media reports saying that authorities could be announcing as
early as this week easing of regulations for holding companies they could
structurally benefit. But right now it’s a down day for the
Korean equity markets. We’re also following some Japanese
stocks that could move given what we experienced overnight.
The yen has recovered after weakening with that powerful magnitude seven and a
half earthquake that struck last night off Japan’s northeast coast.
Authorities have now lifted all so now me warnings for all morning.
Hokkaido and the Japanese prime minister tonight.
Takeuchi, though, says 30 people have been reported injured.
We’ve had no reports so far of significant impact on infrastructure or
nuclear power stations. We have more ahead on the Asia train.
This is Bloomberg. We’re watching Asia trip related names
After President Trump granted and Virginia permission to ship its H 200
semiconductors to China. That’s in exchange for the US getting a
25% cut of the sales. For more, let’s bring in our asia tech
correspondent Annabelle Jewelers in a pretty mixed picture.
When it comes to chip names across Asia, there seems to be some skepticism that
this will actually make a difference. Yeah, I think that’s really the big
question. Multibillion dollar question, in fact,
because we know that NVIDIA has completely taken China out of any sort
of financial projections for the company.
But now that Trump has given the green light for them to start sales of H 200,
that is the key unknown. Will Chinese companies want to actually
buy them or will they be allowed to buy them?
Because what we’ve seen with the H-20, for instance, and after the flip
flopping from the Trump administration on whether they could or couldn’t, even
with sales of H. 20 allowed to go ahead, still companies
in China were being essentially told, please don’t purchases or don’t purchase
these. But h 200 is sort of a quite a different
ball game here because it’s the chip that was being sold also to other
international customers, US customers as well.
It was the first chip, for instance, to integrate HBM 3D memory chips as well.
So it has significantly more compute power, more bandwidth as well.
So this is a much more advanced chip that Chinese companies, of course, would
like to use if they are allowed to, in fact.
But I mean, it is something that’s been questioned, of course, And we’ve just
seen a response, for instance, from Democrats in the last half hour or so.
And they’re saying that that this is significantly more advanced than
anything that mainland China has access to right now.
It’s going to allow them to continue making advancements in AI and to erode
the leadership that China, the US, rather, has in this space as well.
So a lot of unknowns, including as we go back to the key one, which is whether
actually we do see Chinese companies buying these H2 chips.
But as we said, President Trump has given approval for NVIDIA to start
shipping and also to other companies like AMD and Intel.
They’re also eligible for similar chips as well.
And now we’re also hearing how President Trump is looking for regulatory clarity
for players. One rule he said on social media,
they are one rule instead of having multiple dozens of different state based
rules. And this is Big Bane again.
I mean, it’s another win, I guess you could say, for Nvidia.
They’ve been wanting the companies that have really been pushing back against
the way that this this regulation was shaping up because the situation that we
were seeing was that lots of different states were choosing to regulate in
potentially different ways, and that was creating confusion for companies as
well. Now, President Trump has gone on on
social media, on true social, saying that there is going to be only one rule
book if the country will continue again. It’s all about that leadership.
But he is planning to issue a one rule executive order this week.
So essentially, again, just making it a rule, cutting the red tape essentially
for big tech and and making it easier for them to conduct their business.
So, again, it comes down to that competition you see, between the U.S.
and China, other countries as well. Bell, thank you so much for running us
through the nuances on all of these developments and about all this tech
correspondent. Meantime, China’s senior leadership has
said boosting domestic demand as the top economic priority for next year.
For more, let’s bring in our chief North Asia correspondent Stephen Angle in Hong
Kong. So, Steve, what is the Politburo saying
and how should we be reading the policy adjustments that might come?
Right. So the Politburo meets every December
essentially to set the tone for policy and priorities going for the next year.
Then subsequently and likely at the end of this week or possibly into next week,
we’re going to get the central economic work conference where they will take
those directives from the all powerful politburo and put it into policy
formation, which will then again be discussed and ratified essentially at
the National People’s Congress, the annual session of Parliament in March.
So this is a step by step process. And again, given the the slowing
momentum in the Chinese economy, given the uncertainties of the external
situation with the trade war with the United States, albeit it is in a truce
right now that should last a year. There were some expectations that there
would be more forceful tone set by the Politburo as far as stimulus, as far as
stimulating domestic demand, slash consumption, and maybe something as well
on the property market. The readout, though, was fairly muted on
those fronts, and that’s why there was a little bit of disappointment in the
markets. Essentially, you’re seeing the Politburo
with the face of Xi Jinping at the top of that pyramid, essentially saying we
must adhere to domestic demand as the main driver and build a strong domestic
market. But again, the details are not there yet
that have to be fleshed out by the Central Economic Conference and then
again voted on by the National People’s Congress in March.
But again, it’s likely a continuation from the current policy stance because
essentially proactive fiscal policy will not change.
Moderately loose monetary policy will not change new productive forces, new
technologies, emphasis in, and all that will be boosted.
So that kind of takes us not a step back, but it does not necessarily
address the overcapacity in industrial manufacturing as vigorously as some had
hoped. So, again, similar policy from this
current year, given the challenges that you’re
mentioning, I guess not surprising that Goldman Sachs is calling this
disappointing. Yes, somewhat disappointing.
Again, I think they were likely a lot of people wanted to see a little clearer
picture on what kind of a stimulus, fiscal or monetarily would be in the
cards for 2026. But again, there were also, according to
the analysts in this report from Li Xiang Wang, there was no specifics about
consumption side of domestic demand. Domestic demand is fine with more roads,
railways and bridges being built and all that fiscal outlays.
But what about the household consumption as part of GDP contribution?
Right now it’s about 40% of GDP. Some say there needs to be a specific
target set of around 50%. See, you know, when China sets a target,
they usually go all out to meet that target.
But there was no target set. Essentially, from the tone of the
Politburo, maybe the Central Economic Conference will flesh that out a little
bit. There was also no specifics coming from
about policy, putting a floor on the property market.
So again, it’s a step by step process. But Goldman, according to the analysts,
they’re saying although policymakers maintain their easing bias, they
appeared less inclined towards broad based stimulus measures at this point.
Steve, thanks so much. Stephen Engle our chief north Asia
correspondent with the latest on the politburo, reached out onto some of
other top global headlines we’re following.
President Trump has signaled he could impose fresh tariffs on agricultural
products, including Canadian fertilizer and indian rice is the latest sign that
protracted negotiations with two US trading partners could drag on even
longer. Two separate US allegations are in New
Delhi this week for talks, but officials say they don’t expect any immediate
announcement of a trade deal. The U.S.
Congress is poised to enact bipartisan legislation targeting Chinese biotech
and investments. The BIO Secure Act and the China Act
would block certain Chinese biotech firms from government funded contracts.
It also authorizes the Trump administration to bar U.S.
investment in Chinese AI and advanced computing.
Ukraine and its European allies say they’re increasingly confident of
reaching a deal to use frozen Russian assets.
Following talks in London, the U.K. prime minister’s office says the
discussions made positive progress on funding as the US winds back aid to
Ukraine. But Ukrainian President Volodymyr
Zelensky told Bloomberg before the London meeting that territorial and
security issues require further discussion.
CHERRY Take a look at how European futures are
signing up. We saw some downside pressuring the
previous session, especially given that we’re ahead of that Fed rate decision.
Not to mention that we got the first senior official of the ECB suggesting
that potentially the move next year could be higher.
In fact, traders are now pricing in a 30% chance of a 2026 ECB rate hike.
We have more ahead on the Asia trade. This is Bloomberg. Paramount has launched a hostile cash
takeover bid for Warner Brothers Discovery just days after the Hollywood
studio agreed to a deal with Netflix following his warning that the Netflix
deal may pose an antitrust problem. President Trump says he’ll also be
looking at the paramount bid to see what percentage of market share we have to
see. The Netflix percentage of market
paramount. The percentage of.
Let’s bring in Chris Palmeri, who leads our media and entertainment coverage in
Los Angeles. So, Chris, this hostile takeover raised
some eyebrows or the beard for one. Talk to us, though, about when it comes
to the antitrust bar. Does Paramount face a lower one compared
to Netflix? Well, Netflix is such a large player in
streaming, the largest globally, over 300 million subscribers.
And Paramount Plus and Warner, HBO, Max, are both smaller.
So even putting them together, they wouldn’t be Netflix’s size.
So that’s something regulators, I think, around the world are going to take a
look at. And it’s it’s still not clear, though,
which way things will go. Netflix executives had spoke at a
conference today and and said that they were still very confident that their
deal is going to get approved. What makes sense for Warner Brothers,
because we know Paramount’s offer is for all of the company, Netflix only for the
Hollywood studios, HBO and their streaming business.
Well, part of this comes down to how you value the cable channels that Warner
Brothers wants to spin off. That’s CNN and TNT, Discovery, Home and
Garden. Those are big names, but it’s a
declining business. And so Comcast and Warner Brothers both
announced plans to spin off those channels to shareholders.
Netflix doesn’t want to buy them. And Paramount’s offer includes all of
the companies. So depending on how you value that spin
off, that’s the difference between a Netflix and the Paramount business.
Bloomberg’s Chris Palmeri, who leads our media and entertainment coverage, is in
Los Angeles following that very big potential deal when it comes to
Warner Brothers Discovery. And in related news, Bloomberg has
learned that Walt Disney is bringing Jimmy Kimmel back for at least one more
year under a new deal with ABC. Sources tell us Jimmy Kimmel Live will
continue until at least May 20, 27. We’re told the host and Disney agreed on
the extension months ago but delayed announcing their plans out of respect
for axed fellow late night host Stephen Colbert.
Sherry. In the meantime, let’s take a look at
how US assets are faring across the board.
We are seeing that bit of anxiety ahead of the FOMC decision and what we get
from the dots could inform 2026. Traders seem to be pulling back some of
those expectations for cuts next year. We are seeing some futures bouncing back
a little from the Monday selling and the dollar still looking soft as yields
continue pushing higher on treasuries. We have more ahead on the Asia trade.
This is Bloomberg. Take a look at how we’re setting up for
the market opens across China. We have seen, of course, that politburo
readout making it a priority to boost domestic demand for next year.
We also had export numbers out of China rebounding in November after an
unexpected drop the previous month. We’ll be digesting all of these numbers
as we head towards a market open. The yuan has been relatively strong
against the greenback. Not a lot happened in the future
session, but let’s bring in our Asia equities reporters.
Hang me chop sung me. I mean, Goldman Sachs called the
Politburo results somewhat disappointing.
Is that why we’re not necessarily seeing that big reaction in the pre-market
session? That’s correct.
And it seems like immediately after tweet out yesterday, we have seen the
moves actually pare some of those gains and actually it closed down a bit lower.
And we’re seeing those moves earlier before the market opened as well.
And just like Goldman Sachs said, the results were a little bit disappointing
because they did not mention about the consumption drive that they want or they
didn’t mention about boosting the property sector.
So these were some of the main roadblocks that everybody wants to get
rid of. And this is something that investors
were hoping to hear more. But of course, stimulus is not something
that is mainly discussed at the Politburo meeting.
And of course, all eyes are going to be on the sea, the US or, you know, the
central economic word conference where they’re going to lay out all the
policies, especially the economic policies, for the next five years.
Some me, even as the Politburo read out for the moment, might have been somewhat
disappointing to some. We are watching out for perhaps some
easing when it comes to regulation surrounding the brokerage industry.
What are you seeing there? That’s correct.
We’ve seen the brokerage gauge on shore that already rallied 3% this month and
it’s snapping that three months of losing streak.
And we see that the seesaw sees. Chairman Utting actually came up with
very strong comment where he said that China wants to create large and powerful
investment banks by the likes of Jp morgan and Goldman Sachs that can really
compete globally through an M&A process. So that means consolidation in this
market is unavoidable and so smaller firms are going to be absorbed.
So what happens here is exactly to actually tap those untapped household
wealth. We’re talking about some of 15% of
securities and funds in Chinese residents household asset.
But to put you to put that into a little bit of context, that’s about just 30
years ago for US level. So that means that there’s a lot of
wealth that could be tapped. And this is saucy and just.
Regulators in general are thinking that through these many processes they would
be able to have those inflows of capital.
Sunny, thank you so much. Our Asia equities reporter song
Mitchell. And as she was just outlining there
really about the stimulus signals or lack thereof coming from these Chinese
policy makers. So we are seeing that domestic demand
priorities, priorities for the economy somehow pushing copper prices, nudging
higher. Following on from them, reaching their
record highs. We are also seeing how the US imports
are helping to spur on this rally. Of course, it’s also the sense you get
that when it comes to supply, the commodities market, copper specifically
is dealing with these shortages when it comes to gold and silver.
We are seeing prices standing as bond yields climb ahead of the Fed meeting.
So really watching central bank action as well Sheri.
Yeah, the RBA especially today expected to hold take a look at how Australian
assets are setting up because the ten year bond yield continues to climb and
this already at the highest level since November 2023.
We just got the latest survey from NAB, Australia’s business confidence falling
to one in November, which is the lowest level since April of this year.
Still, the other parts of the economy, we have continued to see some strength
home prices, extending gains in November, business investment also
stronger than expected, at least for the last few months.
So today’s rate decision will be key. Won’t we see a hawkish turn?
Let’s cross to Sydney and Bloomberg economist Jean McIntyre.
James, could this be one of the shortest and shallowest easing cycles in the
developed world when it comes to the RBA?
Well, if if this is what it is for the RBA, if that’s it and there’s no more
hikes, no more cuts from here, then we go hinting at that that move that
markets are making, thinking that there could be a hike then yeah it would be
one of the the shortest. We’ve done a bit of work looking at all
of the inflation, all of the rate cut cycles that the RBA’s been through over
the last 30 years or so since they adopted inflation targeting.
And and right about you know, the average has them cutting by 150 or 160
basis points. So they have the you know, they halfway
through we think this is going to be a mid-cycle pause.
But today it’s it’s likely that they’re going to sound a little more hawkish
given some of the data that’s come through since that November meeting.
What are some of the other more high frequency economic indicators telling us
about the inflationary pulse in the country?
Yeah. So what we’ve seen come through, we’ve
we’ve started to see Australia increasingly moving towards a monthly
inflation measure. So we were one of the advanced economies
that didn’t have a monthly inflation measure.
A lot of work’s gone into it and we’ve got the first set of proper monthly
inflation data out and it was much hotter than expected coming in at 3.8%
year on year. And that’s really been the catalyst for
this big reassessment that’s happened over the last couple of weeks.
It’s really given fuel to this view that the RBA might be done.
And what that inflation was showing was that there was perhaps a bit more upside
or persistent inflation pressure there in the economy.
When we look at things like the NAB survey, some of the purchase costs that
was a little bit higher. The price of final products though, that
wasn’t coming there. So that NAB survey is showing that
there’s a few signs of maybe margins copping a little bit of some any
lingering product or wholesale price pressure coming through the economy.
But nonetheless, it’s something that with it, with the headline inflation in
that new monthly being a little bit high, we think that the RBA is going to
do what any central bank that’s inflation targeting does and jawbone
against that sound quite hawkish today and no moves coming from them.
On the policy front, any time soon is going to be the signal we think the
statement will deliver. James, are we seeing the same level of
strength both on the business side as households?
Because of course we know that, for example, home prices have a deeper
impact when it comes to people’s consumption trends as well.
Yeah, So the home price store side of the economy is actually really bubbling
away quite strongly. We saw that move last week from the
prudential regulator to try and rein in or get ahead of any potential build up
from investors piling into the property market as those price gains continue.
We we have the consumer spending looking okay, pretty strong coming through their
business investment was was fairly good as well.
We’ve got some very strong CapEx data coming in over the last week and the GDP
data reinforce that. It does, though, look like we are having
one of the same features of the Australian business investment or
business demand story that we’re seeing globally, which is data centres coming
through and being a big support, a big tailwind for that business investment
growth. Whether the boom continues on or whether
it has a stumble could be one of the factors about how durable that business
investment pick up might be. But and whether it’s a business
investment, those data centers deliver much jobs growth going ahead.
So that’s going to be one of the issues we think the RBA will be contending
about when they think about where’s demand now, but where’s demand heading
and is it going to be strong enough next year?
And so taking some time to assess that and extend this pause that they’ve been
on since August is is why is what we think they’re likely to do over the
coming months. And also in the first to start off the
first couple of months of next year. So nothing really, we think, from the
RBA on the policy front until the middle of 2026.
All right, James, that’s regroup at that stage then.
James, thank you so much for getting us set up for the RBA decision later today.
Bloomberg economist James MacIntyre. Now coming up, the University of Sydney
weighs in on Australia’s ban on children having social media accounts.
More details ahead. This is Bloomberg. Australia is set to enact policy that
required social media companies, including TikTok and Instagram, to block
under sixteens from holding accounts or face fines of up to $33 million.
Joining us now is Terry Floo, professor of Digital Communication and culture at
the University of Sydney. Professor, good to see you.
So we are going to unpack, I guess, for and against arguments for such a social
media ban. But talk to us first how we got here
after, what, three decades of mostly an unregulated Internet.
I think that the pressure for policies along these lines has been building for
about a decade. There’s a lot of dissatisfaction with
industry self-regulation and also a growing sense that a lot of the promises
of social media have had significant downsides.
So in Australia, the conversation essentially begins about 18 months ago
and gave the various proposals around how to
address issues around young people and adverse mental health consequences.
And the social media ban was agreed upon by government, opposition and the state
premiers as the best way in which to proceed along these lines.
And legislation was passed 12 months ago.
So we’ve now had quite a long lead time to put in place the implementation of
the ban, which will be commencing tomorrow.
What about the potential, I guess, initial challenges for social media
companies and enforcement, because that seems to be something like a lingering
concern for them. Most, but not all social media companies
named in the the ban have chosen to cooperate.
Most notably major Snapchat Tik Tok YouTube.
Reluctantly, there’s an argument there about whether YouTube actually is social
media that they have chosen to comply with the legislation.
It’s important to note that the legislation gives the Office of the
Safety Commissioner the capacity to designate platforms as coming under the
legislation. It’s also important to note that the
onus is not on parents to implement this ban, but upon platforms to make the best
measures to ensure that those who hold accounts on their platforms are aged 16
or older. You we know that kids, especially
teenagers, really get around rules, right?
They always find a way. What are the risks that we’re pushing
under 16 users to potentially more harmful parts in the online space?
That’s a possibility, although I would note that the Safety commissioner has
the capacity to designate new platforms to come under the legislation.
So there’s been quite a debate about gaming platforms, for instance, and
perhaps say odd arrangement where some platforms are subject to the ban such as
Twitch and Kik, but not Roblox, perhaps because Roblox had themselves
implemented age verification scheme. I think over time that the principal
question about whether the legislation works will be seen around the rate of
growth in the number of young people using social media platforms.
If that begins to decline. And it could because while there are a
lot of online options, network effects mean that people tend to go onto the
platforms that they know other people are on, if there’s a decline in the
number of young people’s PS who are on particular platforms, then they may be
moving off those platforms as well. And I think that would be taken to be a
measure of success for the legislation. And when it comes to the legislation,
has the potential of positive impact perhaps on marginalized youth and how
social media can play into that being taken into account.
There are certainly debates about that, just as there are debates about whether
a ban is too blunt instrument through which to address some of these issues.
I think there is a strong case for saying that if there’s a reduction in
online social resources, then there should be a commitment to other
resources for young people. I should say it’s not actually a ban on
using the Internet. That would be ridiculous.
But it is it is a ban on accounts on particular platforms because the view
has been taken that holders of accounts can be subject to algorithmic
manipulation and also what made 16 the right age for
these restrictions. Well, I think that’s that’s a debate.
I mean, one challenge is that, of course in the US, the threshold age tends to be
13. And I would say that given that many of
these platforms have had a rule for a long time that only those age 13 or
older can hold accounts on the had those laws actually been implemented at the
time they were created, or had those rules been implemented by the platforms,
we may not be having this conversation, but the fact is for 20 years or more,
they for the most part haven’t. So we did find ourselves with an
arrangement around under 16. But there is there is certainly a debate
around developmental stages of childhood in that regard about whether those aged
1415 have a greater degree of maturity than those age 12 or 13.
But I would say at least in Australia, there’s been less conversation about the
age at which it’s been set. But around the principal itself,
as you alluded to earlier, there is a debate still about the extent in which
this maybe constitutes a bit of overreach on the part of authorities.
And there are other countries, developed economies included, that are looking at
Australia as a sort of example of what they can bring on to the regulatory
environment. How do you think they will be watching
all this as it unfolds? Well, I think that the principal
question will be in the first time. Since where we see mass civil
disobedience against the legislation. I don’t think that will happen.
But there’s certainly a lot of talk around young people using various
measures to circumvent the rules such as VPNs, such as fake IDs and so on.
Actually, the the laws themselves are very difficult to implement without some
level of parental support. So I think the measures are in part
about empowering parents who’ve felt very disempowered in their dealings with
young people’s use of social media. And I think that has attracted attention
internationally, whether the age is going to be the age at which other
countries land on will remain to be seen in some countries such as Malaysia and
New Zealand. That is the talk in others such as
Denmark and France, they perhaps are looking at a lower age such as 14.
But the general principle that a largely unregulated Internet where children
basically have access to the same content as adults, a sort of 30 year
experiment that we’ve had in this, has been deemed to have a significant number
of downsides in the number of people making the case that nothing should be
done in this area, I think has been diminishing over time.
Terry Flue, professor of Digital Communication and Culture at the
University of Sydney. With this fascinating development in
Australia, the first of its kind ban on social media accounts for children in
the democratic world. We have more on Australia ahead every
Tuesday, 11:40 a.m.. If you’re watching in Sydney, a 40 AM in
Hong Kong. Also, you can tune into the Bloomberg
Australia podcast. It delves into the biggest stories
shaping the country’s role in global business.
Find it on Apple, Spotify or Bloomberg.com.
More ahead on the Asia trade. The top horror stories that we’re
tracking. PepsiCo has announced a series of
operational changes backed by activist investor Elliott Management.
The moves include cutting nearly 20% of its US product lineup.
Investing in more affordable products and planning layoffs in North America.
Elliott says the plan will drive greater revenue and profit growth.
Morgan Stanley has lowered its rating on Tesla to the equivalent of a hold.
Analysts say the company’s full valuation, driven by stock price,
already reflects as robotics and A.I. businesses.
The firm says Tesla is positioned to be a leader in humanoid robots.
But even sales volume in North America may fall 12% next year.
Nick Sherry Staying with Otto as a new Bloomberg Intelligence survey, say it’s
almost half of Chinese first time car buyers want a battery powered electric
vehicle, and that’s up from 25% from a previous poll in February.
Let’s bring in China auto analyst Joanna Chen.
Joanna, where is this momentum coming from despite the global slowdown?
Yes, hi. So according to our latest API survey,
we’re definitely seeing that Chinese consumers are increasingly favoring
battery electric cars. I mean, like over half of them say that
prospective car buyers, that they’re they’re tending to go fully electric in
their next purchase. And I mean, if we break down the
numbers, like look at the demographics. Basically, customer interests are higher
across the board. But specifically this time around, for
first time car buyers, they are really saying that they want you over half of
them want to go fully electric because first you have this massive model
supplies where bevs are really affordable and there is no budget
issues. And second, all those buyers, I mean,
especially first time car buyers, they are younger, they are really attracted
to all those cool, smart tech features where you have autonomous driving, you
have connectivity, you do all of like karaoke and all those fun stuff in the
cars. So that’s where really the momentum is
coming from, even though we’re seeing some slowdown in other regions like
Europe and the US. Will there be implications, though,
given that the government is phasing out subsidies now?
Yes, indeed. So we are seeing like 2026 sector growth
is going to be slower. Mostly two reasons is first is subsidy
card. The second is that the higher base
effects. I mean, you cannot always grow at, you
know, 50, 40 or like really high double digits for forever.
Right. So but in terms of adoption rates, we
can see that the electric vehicles are still eating the market share of
traditional gasoline cars. And if we look at how China plays, it’s
really smart, actually. The government are pulling back on
subsidies, on purchases so that those underperforming brands, those are less
competitive and overly reliant on government grants, those kind of brands,
they are going to gradually exit from the market.
And then all those resources that used to be in those purchase subsidies, they
can flow to a charging infrastructure to further support the long term and
sustainable growth of the overall EV sector.
So that’s where we think the sector is still healthy and the adoption rates are
still going to rise over the longer term.
Bloomberg Intelligence China auto analyst John Chen there.
Great to have you with us. Of course, those are some of us also
will be watching how the market opens in mainland China and Hong Kong.
But these are some of the other stocks, especially chip related stocks, after
President Trump branded Nvidia permission to ship its H2O air ship to
China in exchange for a 25% cut of the sales.
Trump saying that the US will apply the same approach to other chip makers,
including AMD and Intel overall. Let’s take a look at some of the
benchmarks across the region, as well as Japanese equities facing slight
pressure. And this is of course ahead of the Fed.
We have some DOJ caution in the mix as well.
It’s worth noting that among stocks, chips, as you alluded to a short while
ago, looking pretty solid. But there is that bit of risk off in the
region tracking those declines on Wall Street.
That’s it from our Asia trade coverage on the markets.
We look ahead to the markets open on the China show next.
This is Bloomberg.
9 Comments
你觉得我们会感谢特朗普么？
ROTFLOL. It's full of back doors, kill switches and jew spy ware. Nobody wants to buy.
Why is this silly woman speaking like a yank?
If I led China. I'd decisively ban any Nvidia AI chips selling in China.
This , Very Dangerous ,; Everything available ,to Chinese Buisiness ,is Availiable to China Gov. And ,To , China Military !
This means they know that China will be able to make high-performance GPUs on its own and soon
US H.R.3447 – Chip Security Act of 2022: remote off switch, tracking, monitoring of all US made Chips.
Can you see Chinese OEM buying US gov control device chips.
The US can lift the export ban. But does it really matter should China decide to ban the import of H200 chips ?
Given that Trump went to Xi saying that we're offering you our chips… what is Xi going to say?