00:00A very good morning. Welcome to DAYBREAK Australia. I'm Heidi Stroud. What's in Sydney? I'm out of old rulers in Hong Kong. We're counting down to Asia's major market open. Good evening from bloomberg world headquarters in New york, I'm Vonnie Quinn. The top stories this hour. Traders sitting on their hands ahead of US inflation figures. Oil, though, staging a relief rally after three weeks of declines. China's consumption rebound slows with private growth weak and private business confidence losing momentum in the latest signs of a struggling recovery. Plus, Boeing opens the Dubai Airshow with a $52 billion order from Emirates. We hear from the plane maker's commercial chief, Stan Deal. Well, Vonnie, we're counting down to the open sea of Australia, Seoul and also Tokyo. But in the next hour it is those ASX 200 that is coming online and you can see and futures are actually pointing to some gains here ahead of the open. But really when you take a look across the futures landscape, it's really going to still be that wait and see mode, I think mostly. So expect some fairly rangebound trading and trading volumes as well. One to note, once we do see these markets coming online. New Zealand really the first up and running and you can see here treading steady as we await those key economic releases. So the headline inflation number in the U.S. expected to hit down to 3.3% on the year, but also Chinese economic data that's also due tomorrow. The monthly activity data dump will also had yesterday loan data out overnight showing that weakness in demand for loans from Chinese consumers, businesses alike. Not a great signal for the health of the mainland economy changing on because we were really seeing that that move around the US CPI positioning is coming into the Japanese yen because yesterday in the session we actually saw it touching a fresh year to date low. It abruptly or immediately strengthened to all of that, but still net basis really just ending the day flat. What that really is, is is traders perhaps options positioning playing into it. But certainly a lot of speculation as to whether the boj intervened as well. What really vonnie it does come down that yen weakness to the yield gap between the fed, the boj and the real driver of that again is going to be this key us inflation print that is due in the hours ahead. Well, let's take a look at where we are inflation wise, annabel because you said it, we're at 374 September. That's looking to come down to 330 according to economists that we surveyed. But the core figure, so ex food inflation, it's at 4.15 year over year. That's not really expected to change. So if we get a firm reading tomorrow, according to most economists and strategists out there, that will keep another hike at least on the table for the Federal Reserve. And it's interesting to see a couple of the Wall Street banks diverging markedly now for next year. We have UBS and Morgan Stanley looking for deeper interest rate cuts next year and starting earlier for Morgan. It would start in June. For UBS, it would start as early as March. Goldman, though, closer to market and Fed pricing right now, they're not looking for an interest rate cut until the fourth quarter of next year. As I say, we will get a picture of what is to come tomorrow. It won't be the only one. We'll get plenty more data before the December FOMC meeting, but certainly traders are waiting for that data. Today. We saw about two thirds the 20 day average volume in both equity and bond markets. So pretty quiet overall. Yeah, a lot of nerves out there. As we wait for that key print, let's bring in for some viewers. Lila Pens is a president at Penn's Wealth Management. And Leila, you expect that CPI number to come in in the low three is how does that impact how you're positioning? Are you in the camp? We potentially see rate cuts coming in sooner. No, I'm in the camp of rate cuts coming later in the year. Next year? In the fourth quarter, we do think the Fed is going to take the position. We don't think they're going to raise any more. We think they're pretty much done. But I think rates are going to stay higher for longer. Just as an insurance policy, because, remember, their target is 2% and it's not going to get to 2%. So maybe 20, 25. So there's going to be a lot slower to reducing rates. And I think that will be a little bit of a pleasant for the market next year, but I think they'll deal with it. So does that mean you'd still be wary when it comes to rate sensitive stocks and sectors right now? Yes, I think we're positioned more into growth and we're positioned more into companies that that actually have some very good earning power because we do see the economy slowing down, which it needs to do to get inflation a bit under control. We certainly welcome tomorrow a CPI number and in the budget 3.3% range. And that would, you know, it's going to leave the Fed on the sideline in terms of raising rates, which is very good. The market could deal with that and they can deal with rates higher for longer. And I think that Mark is, you know, we're positioned for that. I don't know if the market is, but we're positioned for that. And there's still a lot of growth in a lot of companies. And and we expect to see a nice rally before year end. You see, the biggest risk at the moment is still the ongoing Gaza conflict. How do you see that playing out in the markets? Well, as long as it's contained, as long as you know it doesn't spread. And then I think the risk is minimal. If for some reason Iran wants to get in or becomes a much bigger war, then that could disrupt the markets. And then, of course, you still have the shutdown, the potential shutdown of the government. And so those are really some of the biggest risks right now. You do lack short term fixed income at the moment though, with with that assessment of the where the Fed is at in the cycle. I do. I do. I think short term interest rates are very attractive and we're actually going a little bit more to mid-term and maybe even for some trying to look a little bit longer because we do if if we're right and that and the Fed is basically almost done, if not done already, then we want to lock in some rates because these are attractive rates and we haven't seen them in 15 years. And and that really allows the 6040 cap of 40 of the 72. Pretty tough for you to to have a good head start by having that fixed rate much higher than it used to be. So we do like some bonds exposure here and the short to mid-term. Let's talk about some of the thematics that have really been gaining prominence and we can start off with, are you still kind of looking for companies that have actually found a way to to monetize this theme going forward? Because there's still a lot of CapEx going into I-4 for a lot of these businesses. Yes, I think this is a major change. We haven't even seen the beginning of of the effect of AIG and the companies. And we think that is an area that I know it's up a lot, but we do think it hasn't even seen their potential. And it's something that is driven by actual technology and not necessarily interest rates and so forth. So we really like the area and there's many companies that are getting into it. As you know, any company that talks on their earnings about artificial intelligence and whether the Sox do well, and we think that's going to continue because it is they're going to be monetizing that and their earnings should reflect the benefit of I. The weight loss. Drugs are something else that you've been looking at very closely. How does a potential price war, not just within developed markets but also developing markets, play into how you trade that same. Out of anything, I think. Last time I was on with you, I talked about it as well. I really think that this is a game changer. These. This weight loss. I see claws coming in all the time. Now losing £25. £30. And they're feeling great. The effect on our health care, the effect on GDP. If we can reduce the cost of health care, which so much of our GDP goes to, it's going to be a game game changer and eventually Medicare, because it's going to save the costs of heart conditions and diabetes and all the other complications of weight loss and weight gain. The fact that you can reduce all that is going to eventually allow Medicare and insurance companies to start paying for these drugs and the usage of it is going to be tremendous. We only have almost less than 5 million people using these drugs right now. One of the problem is they can't make them fast enough. And if you go outside the U.S., it hasn't even started. So the growth potential, if there's one idea that I'm very, very bullish about, is the weight loss drugs. I think it's a game changer everywhere. And individuals, people feeling are so much better and healthier to these companies looking to just make these drugs fast enough and start mass distributions and also having paid for by some of the insurance companies. I think the upside is I want high. Leila, always great to chat with you. Leila Pence, President at Pence Wealth Management. Still ahead, Boeing commercial Airline CEO Stan Deal explains why he's optimistic about the aviation industry as the playmaker opens the Dubai Airshow with a flurry of orders. But first, China's recovery in focus ahead of President Xi Jinping's meeting with President Biden. We get more on the APEC gathering in San Francisco next. This is Bloomberg. New surveys and data on the Chinese economy show both the consumption rebound and private business confidence continuing to lose momentum. Let's bring in our chief North Asia correspondent, Stephen Engle in Shanghai. So, Steve, what exactly are these alternative indicators telling us? Well, I've covered a lot of up and down cycles in China over the many decades I've been covering this country. And when the economy is slowing down, we oftentimes have to look at these alternative indicators, whether it's satellite imagery or, you know, electricity use or transportation figures, aside from the official data, which, by the way, also points to a, you know, an economy losing momentum. But again, we look at these other surveys to really find out what the private sector is doing doing and what the consumers are doing. And that's what we're getting for the latest numbers for October, we knew October was going to be a bit weak. We already knew that CPI in October slipped into deflation and the consumer did not necessarily come back in full force in the Singles Day holiday or shopping extravaganza over the weekend, which is now stretched over a month. And the numbers sort of well, you know, the company said they were doing well. But again, the overall indicators show that the big ticket items are not flying out the virtual shelves. So, again, here's a couple of samples that Bloomberg News has found. Quite cute technology. It's a French based Paris based firm that uses alternative data sources, sources such as web search queries, also transportation figures, reflecting people's movements about the cities, as well as consumer reviews. It found that Chinese consumer demand for recreation in particular, as well as public and other transport means, fell in October from September. Another survey from U.S. based Morning Consult also showed that consumer sentiment was weaker. And then there was this also a poll of private business confidence from the Chung Kong business or Graduate School of Business also declined in October. This is what Quant Q Vonnie had to say in its report. Despite the government's latest fiscal stimulus during October, our data indicates a persistent deceleration across all sectors, in particular transportation. So again, we use official data and then also have to use these other alternative measures. Steve, when it comes to credit demand, we know that they've loosened borrowing costs and conditions. Is the demand and the lack of confidence there. It doesn't seem to be. Obviously, the loan growth decelerated a bit or missed estimates. In October. The PBOC was out with its aggregate finance and loan numbers yesterday, and it shows that really government borrowing is taking up the majority of those loans. And again, that indicates that private sentiment is fairly weak. Private sector borrowing remains weak. Aggregate financing came in at ¥1.85 trillion in October. That missed the estimate of ¥1.95 trillion. So, again, government borrowing, making up really a record share of new financing. And that suggests that this fiscal stimulus package that we did get of about a trillion in special bonds from the government is is the main economic support right now. Bloomberg's chief North Asia correspondent Stephen Engle there in Shanghai. US Treasury Secretary Janet Yellen says her meetings with APEC finance ministers will focus on the global and regional outlook as well as financial conditions. The officials will also discuss modern supply side economics, sustainable finance and digital assets. Yellen was speaking in San Francisco ahead of the APEC Leaders Summit. Today, I look forward to hearing your perspectives on the long term world to digital assets and blockchain technologies can play in their respective financial systems, as well as how your authorities plan to approach regulatory oversight of their development and use. Well, San Francisco Mayor London Breed is calling on Chinese President Xi Jinping to help stop the flow of the opioid fentanyl. She says the drug has fueled a record surge of overdose deaths in the city and across the U.S.. Part of it is just to work with the US and to ensure that the resources that are being sent out of China that come in to either the US or Mexico are cut off to the fullest extent possible that we work together in order to ensure that this deadly poison that is killing people in San Francisco in significant numbers and all over the country, that we're able to combat this, to stop it so that we can continue the relationship, the good relationship that always existed between China and the US, around trade, around business growth and development. Because right now this is a big part of what I think is also having an impact on our relationship because it has been so deadly to the people of the United States. Mayberry Who will you be meeting with this week, and what are you hoping to achieve when the weekends? Well, I'm hoping to meet with a number of the leaders who are coming to San Francisco from the various economies. I'll be saying hi. They'll be very brief hellos and meetings and just welcomes to San Francisco and hopefully an opportunity, you know, not just to talk about the challenges, but to talk about the business opportunities and how San Francisco can be an important part of the economies of these various countries, because many of the growth and development around AI and new technologies are being developed right here going into this week may be due to announced jointly with Marc Benioff that Dreamforce will return next year. Has Mr. Benioff given you any guarantees that Dreamforce will stay in San Francisco beyond 2024? Well, right now, next year, Salesforce is committed to hosting Dreamforce in San Francisco. Mark is a San Franciscan. He loves this city and will continue to work very closely with him to ensure next year success as well as hopefully future Dreamforce success in San Francisco. I it's clearly top of mind for everyone, not just this week, but throughout 2023 here in this city. You know, we've talked about all of the square foot of office space that has been filled by a I. I know dozens of startups have been founded in this city. What action will you take this week to continue that? What initiatives are you trying to put in place to continue the growth that I seems to be centering in our city? Well, part of it is San Francisco has never had to work hard for business, for tourism and conventions. And what that means is, you know, we need to change a lot of our codes and things that limit people's ability to do business. In San Francisco, we were always you can only be bank in the financial district or you can only have a retail establishment here. And many of the policies that I've already proposed allow for diversifying places like the building we are in now today so that it's used for more than just office space. San Francisco Mayor London breed there with Bloomberg's Ed Ludlow. Some other top political stories we're tracking. Former UK Prime Minister David Cameron has made a surprise political comeback after being appointed foreign secretary. He's replacing James Cleverly, who became home secretary to fill the post vacated by ousted Suella Braverman. Prime Minister Rishi Sunak fired Braverman after she defied his authority over the handling of a pro-Palestinian march and was accused of emboldening a far right counter-protest. US House Speaker Mike Johnson's new short term government funding plan could run aground in the next 24 hours, raising the risk of a shutdown. Hardline conservatives have two opportunities to torpedo Johnson's proposal, even before a House vote planned for Tuesday. President Biden has indicated that he's against issuing a veto threat, noting ongoing negotiations with Senate leaders from both parties. Inflation in Argentina accelerated last month to its highest in more than three decades. Consumer prices rose 8.3% on a monthly basis, with annual inflation hitting 143%. Argentina votes for its next president on Sunday in a runoff between Economy Minister Sergio Garcia and libertarian outsider Javier Melaye, who wants to shut down the central bank and adopt the US dollar as Argentina's currency. And you can get a roundup of the stories you need to know to get your day going. In today's edition of DAYBREAK, Terminal subscribers can go to be go. You can also customize your settings so you only get news on the industries and assets you care about. This is Bloomberg. Well, Boeing has opened the Dubai Airshow with a flurry of orders led by a whopping $52 billion commitment from Emirates, The Planemakers commercial chief Stan Diehl, told us while the aviation industry is still recovering. He's optimistic about this week's meeting between President Biden and China's Xi Jinping. Already 800 gross orders for the year. The likes of Air India starting the year Ryanair Southwest United to add into the water basin this year has been more of a pivot to some of the Widebody orders. So we saw a strong narrowbody order. No doubt the world is on fire in terms of travels back then, so it's natural, this wide body order. Okay, you talk about the world being on fire, so let's talk about that. You've got huge demand at the moment, but you've got huge uncertainty. You've got the geopolitics. We're in this region right now. You've got huge economic headwinds also beginning to gather as well. We've got industrial headwinds. Are you surprised that this industry is sending such a positive message at the moment given all of those headwinds? Well, it's a resilient industry and remember, it's an industry still recovering. So we're not surprised from that context because we're at 97% of 2019 levels still have bounce back left and we're still seeing steady signals of growth in the GDP around the globe. So in that context, no, we're not surprised. Are there forces that are potentially destabilizing? Those are out there. We think the resilience of this long term demand is there, and that's explaining this need for airlines to get ahead and get their order book in place. Okay. That placing the orders, can you build the planes? We can build now, Are there going to be some bumps along the road? Sure. We've seen those. This industry really was destabilized from the pandemic. We're starting to see signs building back. But we are we and Airbus are still a long way from total output of where we'd like to see it. I think things are going to emerge each step of the way. We'll learn and we'll get them out of the way and will become predictable. And I was just talking about what was happening with with the Apex Summit, as I say, a huge week for Boeing. What do you need to come out of that meeting between Xi and Biden? What needs to come out of that improved relationship for Boeing? Because at the moment you are still struggling with that China relationship. Does it improve as a result of what we're about to see in San Francisco? Well, any time there's dialogue, direct dialogue, that's a good thing. But, you know, we've been in China for 50 years now. We've been with our customers. Interestingly, last week, the 95th airplane, the max that was on the ground, came back. So they have all 95 airplanes flying. We're in the middle of preparing deliveries for the new Maxs, and I'm optimistic about the discussions that are going to occur in six. It results in orders indicating results and orders. Too early to predict that our job is going to be deliver airplanes one at a time and express to the Chinese the need to replace their fleets and provide growth for the future. Boeing Commercial Airplane CEO Stan deal with Bloomberg's Guy Johnson other day, my air show there. And we have more CEO interviews coming up later on DAYBREAK, Asia. Well, we're speaking with Kayne Anderson's rival about the current investment environment. I'll also ask him about commercial real estate globally. Plus, an exclusive with DHL, two Miles Meyer on the company's expansion plans in Asia. Plenty more to come on DAYBREAK, Australia. This is Bloomberg. President Biden has called on Israel to take less intrusive action at a hospital in Gaza, adding pressure to reduce civilian casualties. Joining us from Washington is Bloomberg's Nick Wadhams, who leads our US national security coverage. And Nick, as we've seen the humanitarian toll unfold over the past over a month now. Are we seeing the US government and the president becoming more vocal and perhaps as complicates the US's previously unwavering support of Israel's right to self-defense? Right. So what you saw early in the conflict was the Biden administration, in the president's case, literally embracing Benjamin Netanyahu, the strategy being, okay, we are going to support you with this embrace OUTFRONT, show our unwavering support for Israel, and then that's going to turn around and allow us to have those sort of difficult private conversations as the civilian toll in the Gaza Strip has mounted, you've seen those private conversations become more public. Today, we had President Biden and National security adviser Jake Sullivan both saying, listen, yes, Hamas uses human shields. We know that Israel still has an obligation to protect civilians and try to avoid civilian casualties. That's particularly acute today as Israel focuses on a hospital in the Gaza Strip where Hamas is believed to have a major headquarters of operations. Nick Netanyahu is under fierce pressure as well. There'll be a march tomorrow. That's the Tuesday in Washington, D.C. I mean, he wants the hostages freed as well in order to agree to some kind of a at least a humanitarian pause. But the window, as he says himself, is closing. Will Hamas agree to that? That's right. I mean, you know, that is the big question whether Hamas will agree. I mean, obviously, the window they believe is closing for for negotiations. But there's another issue of even Israel has begun to realize, we've been hearing from sources that the public pressure is just getting so great on Israel, whether it can sustain this, the intensity of this bombing campaign and the ground invasion over several more weeks is just something that, you know, there's a big question about whether the public appetite, the pressure will just go so large that they're going to have to curtail that and he's going to come under so much pressure. So there really is seemed to be a fairly narrow window where you can have Neguse and Hamas at the table on one side, but then also be able to resist that public pressure for a cease fire. Nick, are we seeing much ability to get humanitarian aid through at all? Well, we know that the Rafah border crossing has been open. However, on the other hand, there's a lot of concern about dwindling fuel supplies. So in some cases, trucks are not able to extend very far north. So but the other thing that is also become clear is that while there are trucks that have been able to get into the Gaza Strip, the flow of aid is so much less than the actual need that there's a real mismatch between the dozens of trucks that are getting in every day and really the hundreds that would be required to sustain the needs in the Gaza Strip. Nick, thank you. That's Bloomberg's Nick Wadhams there in Washington. Opec+ is arguing against what it calls an excessively negative sentiment in the oil market. The cartel issued its latest analysis of the market as it prepares to meet bloomberg. Su Keenan joins us so soon. The cartel has already said they're keeping their supplies at that level until at least the end of the year. Might there be some kind of change? Well, there's a bit of a disconnect between what they're saying now, which is that demand remains strong, that the market fundamentals are strong. And what they're really concerned about is the recent pullback in oil prices, the voices of various bears. And so OPEC is arguing that overblown negative sentiment is dominating global oil markets. And they're coming out with this report just as they prepare to meet about. Yes. What they're going to do about output curbs that they've already agreed to extend. They're saying the outlook for the oil market is positive. They're disputing these bearish voices that are out there. And even though they insist demand is strong, Saudi Arabia and Russia are extending their cuts at least another month forward, as they've already said, they've indicated they'll do it to the end of the year. And analysts are now saying they're likely to extend it into 2024. So the analysis in this unusually lengthy OPEC report is echoing the comments made by the Saudi oil minister last week, which has been blaming the retreat on oil, which you see right there in that IMAX chart on a, quote, ploy by speculators. In other words, they're really waging war against the bears here. Prices last week, Brent crude, for instance, fell below 80 and that was a significant pullback. Are they fallen below 78 in New York before this latest session? And so there's some concern as to the direction of oil, and it is in opec+ interests to support the price of oil. In fact, this unusually lengthy commentary in the report says that China's crude imports are, quote, very healthy. They talk about the Asia refining market's margins as strong. And again, there is a bit of a disconnect in the way they're describing the supply and tightness in the oil market and the extreme deficit they had previously predicted for the oil market. That has yet to be reconciled. So meanwhile, it looks like we're seeing a rebound after three straight weekly declines. Yeah, as I mentioned, the decline was pretty significant in in the New York trading session. We're still waiting for West Texas Intermediate to begin trading in Asia. We saw a jump of almost one and a half percent, and that's after a decline of about 13% in the past few weeks, where West Texas Intermediate had, you know, fallen significantly. Brent also pulled back in a very big way. So this is really snapping that three weeks of declines. Again, the demand outlook is what has been of concern to traders that it is weakening and that this is happening as there's been rising U.S. supplies. The technicals have suggested that the recent three week sell off was overdone. RBC Markets saying the futures market appears oversold and so traders are now waiting for a number of data reports out this week. They're waiting for monthly data from the International Energy Agency on Tuesday and two weeks worth of U.S. inventory data here in the U.S. on Wednesday. So right now, they're getting a lot of mixed signals on crude inventories. Meanwhile, do appear ample supplies from the Middle East. That's the source of about a third of the world's crude. And there was big concern because of the war taking place in that region. They've remained unaffected by the conflict between Israel and Hamas. Shipments from Russia and the U.S., meanwhile, are increasing. And then to layer on a minute other mixed signal, a move that could add further barrels to the market, Iraqi oil. There minister is visiting the Kurdistan region to discuss the resumption of their exports in Turkey. So, again, a lot of different factors weighing on the market and traders looking at these reports later in the week to clear things up. Back to you. By Su Keenan that we're going to stick with oil. And Jp morgan is recommending investors ditch bonds and stocks for commodities. Let's discuss this for morning calls and bells in Hong Kong. Taking a look at this and this is coming from the bank's chief global markets strategist, macroeconomic manager. Yeah, and someone we know has been pretty optimistic on the energy space over the course of this year, Heidi. But Magliano continuing that preference for oil as a geopolitical hedge. And he's also keeping on overweight, on cash and also commodities as quite a defensive tilt that he's taking in the bank's model portfolio. He's recommending that investors ditch stocks and bonds in turn. Why exactly he's saying this Let's change on now Mahou climate, which is really making a view on where the US stock market is going over the course of this year. Yes, we're higher to the tune of around 15% year to date for the S & P 500. But it's this latest bounce here that he's really looking at in particular, and he says that's been driven largely by momentum strategies, short covering. That's really what's behind the move. And so he's saying that investors should be looking to see this rally. Also, as I said, he's avoiding debt at this point in time. Yeah. And yet Morgan Stanley recommending government debt spell explain. Yeah, well, Bonnie, Morgan Stanley is actually taking profits on its long duration exposure in government bonds and broadly their outlook for rates going into 2024. It's quite a different strategy that they're taking because they're really injecting or looking to inject a lot of doubt into the into the minds of investors who really thought this narrative of higher rates for longer is here to stay so that they're recommending an overweight stance on government bond duration as many central banks kick off their easing cycles into 2024. And so the outlook that they're saying for Treasuries in particular, you can change on here. They're suggesting buying 30 year treasuries outright, less change on. And then also in terms of the ten year, what they're expecting. They're saying by the midpoint of the first half, rather, of 2024, it should be at 4.2% the ten year. And then by the end of the year, they're actually seeing it sub 4%, Heidi. Coming up next, we're going to explore the opportunities in emerging equity markets with Global X. Why they think it's an underpriced asset class. That's right. Now for outperformance. This is Bloomberg. Well, and borrowers are piling back into global bond markets, selling about $20 billion notes in just a few days. Governments and companies rushed to lock in low borrowing costs amid signals that the Fed may be close to one of its rate hikes. Let's bring in our emerging markets senior reporter currently. Wilson so. Carolina why conditions in so unfavorable for M issuers and what's really changed just in the past week. Sure. So, I mean, for several months we had seen this relentless move higher in U.S. Treasury yields, right. At one point reaching that six year high. And effectively, that's going to deter emerging market countries and corporates from issuance because it just means very high borrowing costs. But then this window of opportunity opened last week where we saw Treasury yields come down a bit with many citing that ten year yield moved from the 5% level to the four and a half percent mark. And then really, truly, the floodgates opened. And after months of very poor issuance last week, we saw, as Heidi mentioned, over 30 issuers come to market totaling about $20 billion worth of deals. That makes for the busiest week of deals for me since February. So, Carolina, why is right now such an important time for borrowers to consider coming to the market? You know, so from the issuer's perspective, we have to remember that these emerging market governments and corporates, they're taking advantage of this opportunity because they have these needs needs to complete budget plans for the year to fundraise for 2024, as well as to refinance existing debt or invest extra cash like in the case of Turkey. It was one of the issuers that sold some of the most debt with a $2.5 billion deal, and that helped complete its $10 billion borrowing program planned for the year. And for an investor, from the investor standpoint, that pickup in issuance activity is also good news for them, right? Because they've been sitting on the money they get from coupon payments for a while with very little primary market activity going on. And now they really have a good place to put some of that money to use. How long is this expected to last? You know, I think there are mixed feelings about that, where we're nearing the holiday season, where we tend to see all this sort of trading activity go down. We also saw people gaining confidence that maybe the Fed had reached peak rates. The truth is that we'll have to watch how U.S. Treasury yields do for that. But we are hearing of some more deals in the pipeline. We hear that the Philippines and Thailand may still tap the market. Actually, just this morning, we had a big very long awaited deal out of Brazil, its first ever sustainable bond. So there's clearly a lot of attention and people are keeping their eyes peeled to see what sort of activity we'll see through the year end. Carolina, thank you. That's our emerging markets senior reporter Carolina Wilson joining us there. And we're going to continue this conversation now. We're going to bring in Malcolm Dawson, senior portfolio manager at Global X. Malcolm, we were just talking with Carolina Wilson about the amount of appetite from emerging markets for debt right now and how it's being really well received. I know it's equities that you cover broadly, but will this spell good news for corporate emerging markets everywhere? Absolutely. And thanks for having me back that vonnie it's great to be here. But debt markets generally do lead the equity markets. I think if we're seeing flows going into emerging markets that that should be supportive of currencies and it should make international allocators, especially from the u.s. and europe become more optimistic about what they see from an equity perspective as well. Now we can go through every emerging market, but I know some of your favorites include the likes of India and some of the major, major markets in India. They're up this year by about maybe six or 7%. What makes you bullish that there is more to go? Sure. So as you mentioned, there's a lot to unpack within emerging markets, but we think India is probably the best structural opportunity with any if not the world really. I mean, this is a country that's not only the largest population in the world, but it's a very educated population and it's benefiting from a very supportive government right now going into re-election into next year, which we think should signal continuity of market friendly economic policies and broadly supportive of the demographic dividend being received by the country. I mean, the rupee is weakening. It's weakened one and a half percent since June and has been on a weakening trend. I guess you could say that could be good for some, you know, exporters and so on, importers. But there's also the idea that we don't have maybe complete stability in India. Does that play into your thinking at all? Well, 1% weakness, one and a half percent weakness isn't too much in the world of emerging markets. I can sleep at night with with that type of volatility. In terms of lack of stability, I think it's the question is, are we going to see a modi re-election in the first quarter of next year? Now, if we see a market surprise and basically seeing the opposition come forward with more momentum, I think that could open the window for a drawdown, which would be pretty negative. But overall, that could create also a window of opportunity to step into India because the structural tailwinds are so powerful that it would create a nice gap for valuation in terms of valuation to get back involved. Brazil was another one that Carolyn just mentioned, talked about a sustainable deal coming to market just today. And in Brazil I know is another of your picks that Brazil is possibly even more geopolitically fragile than India at the moment. Yeah, Surprisingly, despite a stronger dollar this year, Brazil has maintained the rails, maintained a lot of strength, and it's actually flat year to date. And that's because the central bank has been doing such a fantastic job in terms of containing inflation. They brought interest rates last year from 2% to 13 and three quarter percent in about 18 months. They contained inflation, brought it down to about 3 to 4% and translating into the most highest positive real rates in the world. And right now, Brazil is benefiting from a central bank and a very advanced monetary policy cycle. So we've already cut rates three times in a row. Speaking of central banks, I do have to ask you a little bit about China. Mm hmm. Is a contrarian pick for you. So you're not all in on China, but you are interested. At what point would you get involved? Well, China is huge. I don't think you can ignore it completely. Second biggest economy in the world. And I'm not saying go all in on the entire country, but there are pockets that are very interesting, such as consumer discretionary within the country. Consumer discretionary names in China are trading at a 50% discount to their historical averages. And right now you mentioned contrarian, but I think we've reached peak pessimism. Nobody's really talking about China, but stimulus that has been implemented since the middle of this year is starting to seep into the real economy. We're seeing positive earnings revisions. And in terms of geopolitical tension, it seems to be de-escalating leading up into the summit between Biden and she later this week. But what will give global investors the appetite to go back in? Because we've seen this several times since the reopening post-pandemic, that investors have nibbled and then have just run away again as soon as they can take profit? Yeah, I think sustainable momentum. I think expectations coming out of the reopening were probably a bit too high. People are extrapolating the strength that we saw out of Europe in the U.S. coming out of our own lockdown periods. But within China, the lockdown period was longer. People within China didn't receive the same type of stimulus that we did. So expectations were too high. Numbers were still pretty strong, but they missed in terms of expectations from analysts. And now we're only just starting to gain that momentum in terms of economic growth and earnings growth. And we have to see one or two quarters of consecutive strength before I think the market truly buys into it. For someone like you who deals exclusively really with emerging markets, how important is it that the Fed should be done? It's pretty important. And not only from an interest rate perspective, I think interest rates and more of a means to an end. The biggest, most important driver for emerging markets has to be the strength of the US dollar. And unfortunately we've been on a ten year run of a strong dollar. But right now, looking into 2024, we're optimistic not only because it seems like the Fed has plateaued and we might start hearing conversations about potential cuts into the middle of next year, but also because we have a polarizing election in the United States into next year, we have potential government shutdowns and it seems like US growth might be slowing down a bit. Not the whole country, but pockets are still doing pretty well. But overall, relative to emerging markets, growth is coming down and even growth is picking up. So, Malcolm, how does one get involved if you want to get into a market like India or Brazil or some others that maybe you're not even bullish on? Sure. Are ETFs the best way? How how does an investor go about it? I think active ETFs are probably the most efficient and least expensive way to to get into these markets. We launched two funds earlier this year. BRC is the ticker for our Brazil Fund. It's a concentrated bottom up, fundamental based active ETF focusing on domestic consumption trends in Brazil. And we have one similar for India as well, or the ticker is India. All right, Malcolm, thank you so much for joining us in studio. That's Malcolm Dawson, senior portfolio manager at Global XT. And subscribers can check out more on emerging markets on the terminal at p m go. Plenty more ahead on. A break. This is Bloomberg. You're watching DAYBREAK. Australia taking a look at some of the developments across strike and labor related stories this morning. Hyundai is giving workers in the U.S. a 25% increase in the next four years. That's following Toyota and Honda in increasing pay to ward off possible inroads by the United Auto Workers Union. The move will affect around 4000 employees at its assembly plant in Alabama and at a new plant being built near Savannah, Georgia, where production is set to begin in 2025. Stellantis is offering buyouts to more than 6000 non-union workers as it continues to cut jobs amid an expensive transition to EVs. The automaker says it's taking steps necessary to protect its operations. Stellantis says it remains committed to its so-called Dare Forward 2030 strategy, which includes the launch of eight new electric vehicles. Unionized Starbucks baristas are planning to hold their biggest strike yet this week. Thousands of employees at hundreds of sites will mount one day work stoppages on Thursday, accusing the coffee giant of refusing to fairly negotiate at cafes who voted to organize. The move will coincide with an annual promotional event, and workers say staffing and scheduling issues are particularly onerous money. Well, let's have a look at where we stand currencies wise. It was a quieter day in currencies trading as well. Obviously, the market waiting for that CPI data on Tuesday. We had a weaker greenback ahead of that and a firmer offshore yuan. As you can see, the yen trading at one 5169. We're going to be keeping our eye on that. It traded as weak as one 5190. Earlier on, we're going to be speaking with some guest about whether there may have been intervention or not and at what point there would be again. And then the Australian dollar will, as you can see, really unchanged right now. But at 63, 76, the New Zealand dollar at 5879. It really is all about that CPI data. Tomorrow we have economists looking for a drop in the headline, but really no change in core. And if that's what happens, then we'll have to see how the Federal Reserve will stack that up versus some of the employment data we get. We did get Michigan expectations today that were a little more benign than we might have been anticipating. They came in a little bit weaker than economists were looking for, and that would have cheered the Fed because the Fed doesn't want those expectations to get on anchored, as I say, at 105 65 today, ahead of that data tomorrow morning in the United States. And then just a quick look at Bitcoin as well. We're seeing Bitcoin trade just a little weaker. 36,005 59 So it did come off a couple of percentage points off its most recent highs. Well, coming up later on DAYBREAK, we'll be speaking with Kayne Anderson, CEO arrival about the current investment environment and particularly the real estate situation globally. Plus, an exclusive interview with a DHL CEO, Tobias Meyer, on the company's expansion plans in Asia. That's it for DAYBREAK Australia. Stay with us. DAYBREAK Asia is next. This is Bloomberg.