tv Bloomberg Markets Asia Bloomberg March 8, 2017 8:00pm-9:01pm EST
haidi: copper is usually a reliable indicator of productivity, but it is painting contradictory pictures. tohaad: finding china hard swallow. beijing's battle with cold. haidi: and, the fastest-growing economy in asia. rishaad: 30 minutes from the start of the trading day here in hong kong. looking at the all-important inflation number. we are looking at 7.7. perhaps showing an inventory overhang being dealt with annexes capacity as well. -- excess capacity as well. >> less than a week to go to find out whether the fed will put the trigger. -- pull the trigger. the yen dropped accordingly.
leading gains in asia. rising, despite geopolitical risk. gains.nics leading toshiba falling over 4%. reporting it could face more losses. we are seeing a drop in oil overnight, weighing in== ♪ on energy producers -- weighing on energy producers. the aussie dollar dropping today. take a look at the bond space. we have aussie 10 year yield. they have been climbing, catching up with u.s. treasury. we have 2% insight for the 10 year rate. take a look at what else is happening. stocks lower here. this, as the dollar climbed, following the rise in the u.s.
treasury. won, the sharpest rise. we have chinese inflation data out at the bottom of the hour. forecast to rise at the fastest pace since 2008. haidi: that is right. we are keenly awaiting those numbers out of china. first, first word news with paul. paul: south korea's so-called trial of the century begins today on the allegation that samsung to factor chief sent money to win favors. the constitutional court will -- that on friday.
china has called for washington to drop drills with south korea to abandon itsng nuclear program and return. the u.s. investors says kim jong n simply is not normal. >> we are not dealing with a rational person. we have to see some positive action taken by north korea before we can take them seriously. paul: it has been revealed that president trump did meet with russian i am scarlet fu. -- russian ambassador kislyak despite saying he did not. trump has dismissed the allegations as a ruse.
australia's prime minister said political squabbling is troubling the aaa rating. a snap election was called last .ear economict confront our challenges head on, beginning with a frank and honest discussion. australians deserve a mature, responsible, and constructive economic debate. without it, we risk putting our prize aaa credit rating -- hard earned and well-deserved -- under greater pressure. paul: global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am paul allen. this is bloomberg. rishaad: we are looking forward to the number.
again in china, at least according to the people we have been talking to. tom has a preview of the numbers. what are we looking at? >> as you said, a strong uptake. we have a terminal chart that illustrates what has been going on since about 2007. the 2012-2015n on timeframe, you see the inflationary funk in terms of prices. that is replaced at the end of last year with this uptake. we have had now five straight factory prices in china. if the numbers come into force, it would be the strongest uptick since about 2008. there are number of different factors feeding into this. they pick up and demand, the pickup in raw material prices, and the weaker yuan as well.
and, some consolidation in sectors. we also expecting the consumer price number coming in weaker than january. bloomberg intelligence that a lot of that is due to higher food prices around the chinese new year. haidi: calling on the chinese president saying, you are talking the talk, now they want to see action. what were her key points? >> absolutely. joan has been chaffing itself as a champion of free trade. the rhetoric is fine, but let's translated into action. some of her key concerns and concerns of the european union are around the steel sector. they are looking at drawing up a
plan to impose tariffs on chinese steel. she also points to this investment agreement that both sides have been working on, that has basically stalled through a lack of reforms on the chinese side. and, she talked about the challenges. take a listen. >> unfortunately, the reality in china is not so bright. bureaucracy, lack of transparency, and the state enterprise policy that does not create a good level playing field. we hope they pursue the reforms they intended. malcecelia milestone -- mstrom articulating concerns you hear about businesses operating in china. and there is a concern about businesses and the sectors that remain closed off to them in china. ,hings like telecoms, finance
health care. although be sectors that are essentially closed off, and a lack of a level playing field. it is not just washington the complaints about this. it is european as well. the trade chief articulating that. haidi: thank you for that. still ahead, not so sweet. we take a look at how her sheets has been drawn into an intensifying dispute between china and south korea. rishaad: we are heading to myanmar, talking to one of the biggest things. ♪
says theyy my ideas if they are tos become china's number one supplier. of one ofen control the biggest industrial production company. wein the next two years, want to double the number, up to 10,000. today, we are leaving automotive. mored to go into industries, for example, art, laser, the industrial area. bego into more industries to more diversified. battle with a gas supply may be coming to the end. yingde gasgas --
voted to keep the ceo and coo on board. rishaad: foxconn technology report they are close to making a deal. all three companies have declined to comment on the report. it also quote and i'm identified source onentified reaching a joint bid. haidi: softbank has been said to a stake in holdings. they would receive a percentage .f the shares from vision fund the deal is separate from the $25 billion softbank already
plans to contribute. rishaad: myanmar state banks are undergoing a push to modernize the financial system. ahead of the game when it comes to innovation. .he live event theking very much on agenda, i should imagine. the agenda.y on with accessat those to banking. less than 10% of the population. we are tight about a population of 55 million people. a man running one of the biggest banks in the country joins us. you are really passionate about about banking.
a country where infrastructure is not yet established. 20% have a temper sent to bank population. i think the real opportunity here is using syntec to leapfrog brick-and-mortar approaches into the banking market. 50% of the population is under the age of 45. we have a huge population for millennial. >> what projections are you making? >> i expect to see figure present growth on mobile users. withur arrival has tied up telenor to give
mobile service. jv?you looking into >> we have to look at financial inclusion. it is the top priority. we offered more money services. how the model works is we can allow agents to basically offer simple banking services, .ncluding money transfer at the moment we have 6000 agents across myanmar. open -- athly definitely open. >> uber may be involved in some of the stocks. >> we are looking into ridesharing. >> uber? cheeseave met the uber in miramar, but we want to explore other teams.
, i amterms of syntec curious. when you look at the skills level in the country, it is low. where did you find the talent? >> we have to look at the appetite of our population. literacy is poor. people in miramar have a huge appetite for technology. you can definitely see, back in cost over acard thousand dollars. five dollars.s we have to take a cautious approach. it is important that we scale. digital literacy, and then make sure we have the right infrastructure and technology before we start thinking about more aggressive. >> for a long time, give parents were on the u.s. sections lists, and they were removed only recently, beat last year.
has that impacted business and i -- y you deal with the? eigt it? >> in terms of opportunities, i am excited to partner with companies from the u.s. and other countries on how we can develop myanmar. >> have you had to instill confidence in two potential partners? rebuild the image? >> of course. when i first joined the bank, we restructured the bank. >> you must be one of the inngest mds in a bank miramar. what are some of the challenges you have faced? the country is associated with the past. >> i think the biggest challenge
, going back to my previous point, would be financial literacy. another challenge that we have is the digital literacy. a lot of people still go to mobile stores to simply open and even all caps -- am enough account. account.il >> is the reform process fast enough? >> i do not think it is a question of pace, but direction. with the bank focused on syntec, i would like to see more reforms in that sector, more reforms targeted at the credit rating system. although we have a credit bureau -- >> i have to jump in. any plans for an ipo? >> not yet. we think the market is still premature, but it is within our plans for the future. >> pleased to have you here.
rishaad: you are back with bloomberg market asia. i am in hong kong. haidi: i am haidi lun in sydney. the price of copper is widely agreed to be an indicator of market activity, but recently, all sorts of conflicting signals. david is here to try to make sense of this. what are we looking at here? david: we had a surge in to where we are.
talking about inventory, the buildup and drawdown down from inventory. what you have here are conflicting signals. the blue line, or bars, essentially measure the amount of copper. it is measured in millions of tons. we are currently just under 290,000. this other line you see if the number of drawdowns from the supply. there is a lot of copper, but also not a lot of it. you're getting a lot coming, but not record, basically back to levels from last january in terms of amount being taken out. this recent surge comes down to the fact that -- it is the result of years of oversupply. there may be copper sitting elsewhere, making us wait and come up the third you see, -- is thege see here
reaction of the market this year. that might come next month in a row. generally you can, the expectation is as copper enters the supply shortage of 2017. together?his tie this is where we are. we are expected to go to levels where we were five years ago. that means everything. very important number coming out in the next few minutes or so. with lots of just the yearbillion before. billion.s to over 150 partially upset by the earlier prices.
we are told that the company does not feel the need to be cautious about the copper price. >> we are confident about the copper price. long-term, and also short-term. we see more more disruptions. in particular, those disruptions twoened to be with the major copper producers. mmg got back into the black this year. >> we increased our copper tonsction to 500,000 last year. that enabled us to be the number one copper producing firm in the market. among those, 300,000 tons produced last year. >> you have had your own shares
ba in peru. are the protests something that are a concern to you? >> those are real issues. i have disabled issues are in normalcy in peru. and, in other countries, similar. not necessarily social, but unions, and some other political issues. >> do you think all those situations are going to be manageable? >> i think so. people sitting in the local region. they work very closely with the local community. also we have our expertise. mmg chief executive there. what do we have coming up?
rishaad: 9:29 here in hong kong. picture.he we're counting down to the china. in we have producer prices as well. 7%.cted to come in at what does that mean for the economy? we will be looking at that and more. haidi: that's right. we're looking at also the impact on monetary policy, of course, given the lack of transmission on consumer prices. will it tighten sooner than
expected? i am haidi lun. the jump expected would be the since augustgrowth 2008. of course, comes on the back of, let's call it, some very unusual numbers. the first trade deficit since february 2014 out yesterday. we do have the numbers. let's get straight to tom in beijing. tom: the number is 7.8%, the increase for the month of february. that was above survey estimates. it is now six months of street price rises. that is the ppi number. we have the cpi number as well. that is coming in below 8%.imates at 0. a drop of from prices in january.
number will be seen as something of a positive for china. profit showing the now have prices to be able to pay down some dead, and hopefully improve some profits. it also indicates accommodation of factors. one is the increase in the cost of raw materials, one is the pickup and demand, one is the cheaper yuan, and cutting of excess capacity that the government has been trying to push. that .8% increase for the month of february will be seen as a positive. in terms of consumer prices, we will have to break it down when we get those details. that will certainly not be of great concern for china central bank. ok.aad: on the one side, consumer prices, of course, we have now perhaps concerns about
disinflation. we could be saying, we might have to look -- listen further. tom: i would suggest that is unlikely, but certainly the number has surprised to the downside in terms of consumer price increase. bloomberg intelligence will at some point feet into the consumer price number. the think is unlikely that pboc would increase rates. it is possible that they look at this as a single number -- sanguine number. overlyt think they are concerned about this. moreob off may be
reflective of the seasonal affects. that's right. as with the trade numbers yesterday, we are looking at these analogy with chinese new year following at different times. let's get a look at how markets are reacting. let's go over to sophie. sophie: even though we saw ppi coming in a touch higher than expected, we have energy stocks weighing in on the index, giving us the broadest picture on crude overnight. take a look at how this is playing out, we have hong kong stocks halting, energy, inrochina and sinopec all the red today. let's take a look at the current sps based -- currency ace.
the weaker yen has been supportive of reflation, signaling better tolerance for depreciation. we did have the pboc weaker at the six spot. take a look at the offshore rate. we are seeing an extended drop after the disappointed -- disappointing figures yesterday. we did see some volatility near a four-month low. a quick note. the pboc skipped operations to date because of increased liquidity. now, look at the chinese bought space -- bond space. there is an interesting conversation happening. the cpi expected to come and at the highest since 2008. at the time, we saw the 10 year
bond yield at about 4%. that is compared to the 3.4% we see some movement here? we have to keep in mind that february price gains are significantly lower. rishaad: thank you for that. let's get to the first word news headlines. we will get you back to sydney with paul allen. paul: the european union says chinese president must back up his support for free trade and globalization with concrete action. commissioner has told bloomberg, the whole world hopes beijing will adopt a stronger leadership role on such issues. >> unfortunate cover the reality in china today is not so bright. it is difficult for european and other countries to make business there including lack of
transparency and behold state owned enterprises politics which does not create a good, level playing field. we hope very much they pursue the reforms they have attended. -- intended. paul: samsung has confirmed it is in early talks to expand manufacturing in the u.s. with a new facility for home appliances. the wall street journal says samsung plans to spend at least $3 million on the project and is in distant -- discussion with at least five states. in may include shifting some production from mexico. agreederve bank of india to resolve a two-year dispute over the sale of its stake in a joint wireless venture. does not like to deal and will explain next week.
global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. this is bloomberg. rishaad: there have been problems with the earnings report and the -- in the past. i just got a new report coming out of reuters saying that toshiba is calling in u.s. bankruptcy lawyers at the moment for its westinghouse facility, the troubled nuclear facilities here. this, according to reuters. the company stock extending a decline .6% after the reuters report on the westinghouse unit. we have this u.s. company being drawn into a chinese dispute. unit to the hershey's
be suspended. what is going on? toalind: it all goes back territory. there are defense, and all kinds of other issues as well. hershey's, the first u.s. company, to be drawn into this geopolitical issue. said production was suspended to perform what they call maintenance activities. of representatives that that actually authorities ordered to close for a month due to a legend safety violations. the same representatives that lotte in lostcost sales. this is not the latest move. lot it is largely becausete --
it is largely because lotte offered a piece of land, and china expressed its views to stop the deployment of it. of course, there are a lot of units, but not the only company to be affected. if you take a look at this chart, you see there are 20 companies on the index. the top 10 here, which action have -- actually have sales of more than 10% in china. lg display co. at the top of the list. 69% exposure in china. 56% of sales to china. particularly a company that can be supplied by a chinese company, they could see a fairly sticky situation for them. haidi: we heard some of those
strong words coming from the chinese foreign minister yesterday on the matter. on the political front, there seems to be very little consensus on how to deal with north korea right now. rosalind: that is the problem. sanctions seem to be working. a really difficult situation all around. we have seen the security council say that strongly condemned the missile. that was earlier this week. friends say they are seeking additional -- france says they are seeking additional u.n. sanctions. u.n.,s. ambassador to the nikki haley, said some kind of action and the u.s. is evaluating all options. china has asked north korea to halt nuclear activities. , they haves said
engage in meaningful negotiations that have fallen short. haidi: thank you for monitoring that situation for us. back to the fed. betting on a rate hike next week is now unanimous. traders with 100% certainty. editorbal economic kathleen hays is here. we got here so quickly, but why is everyone so certain? kathleen: a jobs report, but not thebig monthly job report, adp service jobs report, which comes two days before a blowout. in fact, it is the biggest number they have posted in three years. jump into the bloomberg with me. you will see a white light. that is the adp jobs. the blue line is the government jobs report. you can see how they have been
tracking each other pretty closely. not exactly on the number, but in the direction. when we get the jobs report on friday, the idea is it could be as well.than forecast in fact, goldman sachs now has a forecast of 215,000 compared to the bloomberg forecast for 200,000, which was 190,000 before this adp report. morgan stanley raised their forecast to 250,000. what is interesting is -- let's take a look -- interest rate projections. look at march, now up to 100%. if you go to the middle column, go down three, it is 47.9, almost 50% probability that in june we get the next rate hike. that is why we saw the bond market in the u.s. push prices down. as 2.8%.ar got as high
2.6%, a warning that you face bonds. on market continues trading in asia. rishaad: a very different story for the european central bank. we have mario draghi talking later. no movement on rates there. inflation pretty much at its target. what gives?kathleen thet's go back to bloomberg. you're looking at a blue line up to 2%. that is the ecb target. the white line, core inflation. mario draghi says the headline jump has so much to do with energy, the ecb cannot afford to wait. will he sound a
little more hawkish. the german officials have already signaled, maybe giving some forward guidance on bond buying. not expected yet, but these are some of the nuances. bottom line, expecting to hold the line and resist the german call to raise rates now and key policy study was he wake for the next meeting, i suppose. rishaad: kathleen hays there in new york. up next, backing the latest inflation numbers from china. factory gate prices jumping the most in eight years. that is aiming -- grabbing headlines. this is bloomberg. ♪
rishaad: getting back to the inflation numbers, the cpi and ppi out of china. got prices surging. vincentoined now by chan. i should say, when it came to the ppi. then you look at cpi, and you say to yourself, hang on a minute, they are heading in opposite directions. having said that, into disinflation territory now. how does the people's bank of china look at this? > >> we have to be careful about the cpi number. the main reason for the low cpi is because almost -- over 4% of
declining food prices year over year. i think this has to do largely with the chinese new year. in 2017 in year january. i think for the pboc, the general english that -- general angle is that at the consumer very likely if i'm sitting in the position of pboc, most likely do what they are doing now. on the one hand, they are tightening rue, reducing activity in the bond market, which effectively pushes of the cost of copper, but does not touch the benchmark interest rate. rishaad: there could be several more months of this, and they this.look to reduce
>> because we did some analysis, i do not agree with the position pi will drop fast. when you look at the month on , they ares of ppi still declining. for the three quarters of this year, ppi is still quiet low. that is by actually think that ppi will not drop much this year. i think that ppi could be quiet high this year. you could easily average over 5% for the full year. we are assuming some slowdown in the second half. slightlyhink will be over 2% for the full year. most important, we have seen
signs of pickup in inflation yet. in china, you never get a strong cpi in china. haidi: those trade numbers out yesterday were pretty unusual, even for the time of year. do you put it all down to seasonality. a lot of people are saying export growth is meant to be strong for china. it is the trade deficit expected to continue or you don't think that reflects chewed trade data when it comes to china this year? >> i would like to combine two for analysis. the chinese new year can be quite disruptive. i would expect china to be a single digit type of exporter for the full year. i think the whole region's exports are picking up.
market share, questionable. for the most part, it is interesting. lowhe one hand, double-digit growth for the first two months. then, lost because of commodity prices. you definitely will see a deterioration in terms of trade in china. whether china is already getting the trade deficit territory, it may be a little too early to say. when you take away the seasonal a smallstill have service for trade in china. this year, china, i think, has a small trade surplus. more aboutnt to talk this, in terms -- particularly the tensions with u.s.
haidi: staying with us for more analysis on china is vincent chan, of credit suisse. thank you for sticking around. i want to focus on the yuan. interesting commentary coming on the yuan, moving away from the stability language of last year. how much of a downside to see thishe yuan given we have stability. you look at the treasury market, , andthe fed is going to do you would seek white a bit of downside to the chinese currency. the u.s. dollar will be
relatively stable. because of that, we do not see a very large depreciation for the .hinese yen a small depreciation, but not too much. i have how do feel -- heard others report to as -- refer to it as a threat in making. >> i can only say that a trade war would hurt both the u.s. and china pretty badly. in the u.s., it was the two it wouldnflation -- lead to higher inflation. rishaad: certainly china is a loser here, given how much they export to the u.s.
having said that, do consumers want to pay $2000 for the iphone? >> i seem to agree. rishaad: the winner is? >> neighboring countries of china. vietnam, bangladesh, those types of countries. rishaad: obviously we have seen a lot of this already happened. it is the lower end as well, textile, walmart, that sort of thing. that could affect sentiment quick badly. >> yes. in turn, the u.s. interest-rate cycle affected. rishaad: vincent, just one of the many speakers at the conference taking place in hong kong from the 27th to the 30th
♪ > what is does not intimidate you a bit? you came from modest circumstances. with a started me campaign that was called what is an opera. that is a sign when weight watcher says let's help you. >> have you ever thought you could run for president? ? oh >> i am thinking, would you fix your time please. >> people wouldn't recognize me if my tie was fixed.