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Five Things You Need to Know to Start Your Day

(Bloomberg) --

A security expert offers new evidence of manipulated hardware from Super Micro, and Taiwan’s president takes aim at Beijing in her national day speech. Here are some of the things people in markets are talking about.

Fresh Evidence of China Hardware Hack

A major U.S. telecommunications company discovered manipulated hardware from Super Micro Computer Inc. in its network and removed it in August, fresh evidence of tampering in China of critical technology components bound for the U.S., according to a security expert working for the telecom company. The security expert, Yossi Appleboum, provided documents, analysis and other evidence of the discovery following the publication of an investigative report in Bloomberg Businessweek that detailed how China’s intelligence services had ordered subcontractors to plant malicious chips in Supermicro server motherboards over a two-year period ending in 2015.

Tough Talk From Taiwan

Taiwan’s president, Tsai Ing-wen, will highlight the threat China poses to Asia and beyond in her national day speech Wednesday, echoing U.S. Vice President Mike Pence’s harshly worded criticism of Beijing. She will seek to emphasize the destabilizing impact China is having on the world, contrasting Beijing’s behavior with her administration’s efforts to be part of a stable world order, according to a Chinese-language excerpt of her speech provided by her office Tuesday. That comes after Chinese Foreign Minister Wang Yi accused the U.S. on Monday of escalating trade disputes, interfering on Taiwan and meddling in the country’s domestic affairs.

Crypto Implosion?

Echoing sentiments of mainstream economists, Juniper Research is warning that many of the metrics in the cryptocurrency world are pointing to a market implosion. Industry bellwether Bitcoin had seen its daily transaction volumes fall from an average of around 360,000 a day in late 2017 to just 230,000 in September 2018. Meanwhile, daily transaction values were down from more than $3.7 billion to less than $670 million in the same period, Juniper said in a study. Separately, Tiberius Group AG delayed the sale of its commodity-backed cryptocurrency until December, blaming the move on credit-card companies.

Good and Bad News for the Fed

The good: Federal Reserve Chairman Jerome Powell’s guiding light -- inflation expectations -- look like they are still well anchored. Expectations for inflation one and three years in the future were steady in September at 3 percent, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. That will help monetary policy makers, who have said that they’re willing to tolerate some overshoot of their 2 percent inflation goal. The bad: President Donald Trump said the Fed is moving too fast with interest-rate increases. “I don’t like” what the Fed is doing, Trump said Tuesday at the White House. “I think we don’t have to go as fast” on rate hikes.

Coming Up…

Asia traders will be looking for a low-key start to Wednesday after Chinese assets seemingly settled down Tuesday. Their day will feature Australian consumer confidence, which is on the verge of slipping under 100 after dropping in September by the most since 2016 amid political turmoil and mortgage-rate increases. There's also Japan core machine orders, along with Philippine trade figures (yes, another massive deficit is expected). And many are waiting eagerly for China FDI and lending data that could be out between now and Monday.

What we’ve been reading

This is what caught our eye over the last 24 hours.

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