tv Charlie Rose Bloomberg April 6, 2017 10:00pm-11:01pm EDT
chemical attack originated from in syria. they are saying there is a high degree of confidence that the a chemical agents against civilians. including a number of children, were killed in that attack from the exposure. motivated the u.s. president's response. alignseeing these images, it been crossed and something would need to be done. we had an inkling that a military response would be on the table because he suggested as much. he was briefed by secretary mathis -- mattis. but there was a surprise over with presidentng
she paying -- xi jinping. republican senator rand paul says trump needs congressional authorization when it comes to action. detailing theial navy launching the tomahawk missile against syria. saying prior interventions have done nothing to make it safer. that coming from president trump saying, syria had repeatedly ignored warnings from the un security council. let's get it over to the markets clearly andave unexpectedly, we did see that reaction when it comes to that market reaction in safe havens. let's take a quick recap. >> it was a slow and brutal death for so many.
even beautiful babies were cruelly burned in this very barbaric attack. no child of god should ever suffer such horror. tonight i ordered a targeted military strike on the airfield -- where theause chemical attack was launched. it is in this vital national security interest of the united states to prevent and deter the spread of deadly chemical weapons. there can be no dispute that ned chemicalan weapons, violated its obligations under the chemical weapons convention, and ignored the urgent -- urging of the un security council.
years of previous attempts at s behavior have alls behavior have all failed and failed [no audio] threatening the united states and its allies. tonight i call on all civilized nations to join us in seeking to bloodshedaughter and in syria. terrorism ofend all kinds and all types. we ask for god's wisdom as we face the challenge of our very troubled world. we pray for the lives of the wounded and for the souls of those who have passed.
and we hope that as long as america stands for justice and peace and harmony, we will in the end, prevail. americaht and god bless and the entire world. thank you. >> that was u.s. president donald trump speaking at his mar-a-lago resort in florida, concerning the u.s. air strike in syria was a reaction to the chemical attack we saw take place from the very airfield that was targeted i the u.s. he said he ordered it in reaction to that because no child of god should ever have to suffer like that children of syria did with the civilian tragedies reported. also saying syria repeatedly ignored security council warnings against. finally, encouraging the rest of the world to join the u.s. in
this effort to end global terrorism. in terms of the market reaction, the mood has taken a somber turn following the u.s. missile strike on the syrian airfields. let's get it over to so feed to take a look at how the safe haven is going and some action when it comes to oil market. >> fairly optimistic start this morning. asian see that turn, stocks looking at the second day of losses. shares tokyo to sydney easing the days events. this is that the 6/10 of 1%. we have the nikkei swinging into the 10, down 1/10 of 1%. when we look at the deepest regional picture, we have singapore stocks on the decline, falling the most since march 9. taking a look at currency reaction we do have the yen continuing to rise. falling after the
days earlier events, falling one half of 1%. others taking a hit after the launch of that missile strike. we have a movement in the commodities space. take a look at the way oil prices are moving, surging 2% higher earlier. new york crude and both fronts jumping in the wake of that news. new york crude up above $52 a barrel. take a look at the way gold has been moving. bullion surging, futures climbing as much as $12.66 an ounce. yen. take a look at the as we were playing the press conference from president trump, we saw them deepen to the 20 level, the dollar-yen shuddering in the wake of that news. let's look at the way u.s. futures are faring. gains pumping as much as 0.7%.
let's take a look at the u.s. 10 year yield. we had a falling as much as four basis points to 2.31%. this is the lowest we have seen since before january, if i recall correctly. let's get more on the latest on president trump's decision to take these airstrikes in syria in response to this week's gas attack. we have ramy inocencio in palm beach. thewere there to cover china-u.s. meeting but events of taken a different turn. what you hearing about the airstrikes? aret is interesting, we seeing the lines develop as you are seeing them as well. what we did realize here is that this was obviously something well planned in advance and happening while donald trump was having dinner with president xi jinping of china. while this was happening, this
was happening in the middle east. that is one thing to take note of. hours before donald trump met xi jinping he spoke with reporters and implied that something very well could happen. i want to read this to you. things,he is running talking about bashar al-assad in syria, and said something should happen. this is just a few hours ago before these strikes happened. this was well planned in advance. to recap what we do know now, president donald trump confirming he did order this attack on syria on one syrian airfield. hangars have been targeted and destroyed their. he said syria ignored u.n. security warnings because of the chemical attack they levied against 70 to 80 civilians just
two days ago. we are also getting feedback from congress. most members, especially republicans, have started to rally and coalesce around the president during this time, as is usually the case when things like this happen. that said, the democrats have been saying they think congressional authorization now needs to move ahead if there are further attacks against syria that are attempted against the country. that is where we stand right now. it is a developing story, we will have more information in the next few hours. >> thank you so much for that, ramy inocencio in palm beach. let's get it to bloomberg senior editor on the line in hanoi. great to have you. we have been hearing about how this needs to be a complete strategy. does that mean this singular
attack, what was called a surgical attack, is just beginning? >> it could be just the beginning. will needr strikes more congressional scrutiny. it is interesting to me that senators mccain and others issued a statement praising the president for his action, and those two senators had been sharply critical of trump in the past. the republican leadership that has been critical trump are rallying behind him and that could help him politically, not just on military matters, but domestic matters, as well. they praise the surgical strike that now needs to be an overall strategy for how we deal with syria. that will require the cooperation of the russians, who have said there are consequences to this action and we wait to see what those are.
from tillersond speaking a while earlier, saying russia needs to consider carefully their continue to support for the assad regime. are we expecting a response from russia? suspect there would be some response, there surely will be. the question, what form will it take? is it military response, a diplomatic response? something behind the scenes we do not know about? consult have to internally themselves to figure out what donald trump is all about. even though there is speculation putin and trump know each other, they really do not. they will have to make a calculation on what their aim is in syria. clearly they went in there to expand their scope of influence,
they do not want to give that up. how they negotiate through this escalation will be interesting over the next way for hours. i find this question of exactly what changed his mind, clearly these harrowing images that have emerged have spurred a humanitarian response. but this has been a civil war going on for 60 years with often many civilian tragedies and tragic images. he seems to have really changed his mind. is that this idea that it is beyond moral outrage, that this will feed into what either side wants? is that the realization driving a different approach when it comes to syria? marty: it could very well be. statement that if you close your eyes, it would be fitting for any president in the
last 40 years. it is very presidential, to be the moral compass of the united states, which many people that was lacking. it is a significant part of his administration. whoseve to wonder influence mattered in making this decision and the statement that came out afterwards. ivanka,ussian or, mattis? that wing of the administration had a great influence on this decision tonight and the statement that followed. haidi: do you think there is likely to be bipartisan support? it feels like potentially there are two camps. not the it is methodical approach we have come to know from the obama administration. another says this is not a president that stand idly by. action is being taken as it should be. the one statement i saw
from a democratic senator, was supportive. although it was cautious, it said further actions require congressional oversight. you are not getting into the crazy got from mccain and graham. i suspect democrats will line up in support of the strike. there were the harrowing images of the deaths and the women and children, it would be awkward for democrats to say this was not a necessary action against an inhumane act by assad. haidi: thank you so much for that opinion, government editor marty shanker joining us from the phone with analysis. we will share details as they emerge, the u.s. launching an airstrike in syria as a response to the chemical gas attack earlier this week. ♪ haidi: this is bloomberg
markets: asia, i am haidi lun in sydney. our breaking story, the u.s. launching a cruz missile strike against syria, two days after a chemical attack near idlib killed civilians. launched tomahawk missiles. thats from this air base was targeted that that chemical attack took place earlier this week. president trump saying syria ignored u.n. warnings about chemical weapons. they were supposed to have gotten rid of them in 2014. saying, no child of god should never suffer like those of that attack. you can see the harrowing pictures he was reacting to. let's get some analysis on this from the brookings institute on the line with us in new york.
we have been talking in the aftermath about what this complete strategy looks like. this is a concern you have, as well. looking at this tweet from an arab spring activist, he says we want to see foreign fighters out and engagement and a political transition plan, a war crimes tribunal. but what we are seeing is bombs. where does the u.s. go from here to develop a more complete strategy? >> i have called for airstrikes against the assad regime for several years and i was quite radical of obama for not doing so. but i am also concerned about this notion of doing something just for the sake of doing something. trump feels he needs to save the face or show strength and to next?, but what happens
the main problem in syria is not chemical weapons. hundreds of times more people have been killed by conventional weapons. the issue in my view is, how do you address assad's brutality, which is destabilized syria and much of the middle east? it is still too early to tell. we have not heard what the strategy is. but you have to have a plan for the day after. it has to contribute to a larger strategic vision. the question for me would be, how does this contribute to ending the syrian civil war? to negotiate assad in good faith and make compromises with the opposition? does this shift the balance on the battlefield? does this strike the main street rebels -- mainstream rebels? we do not know the answers to
those questions yet. think this moves us closer toward a resolution? assad has been pretty belligerent, and this is something that has been going on for a number of years. --n the humanitarian side where do we go from here? why are we seeing this response now from the u.s. president? hamid: what is striking is that trump has really done -- as recently as a week ago, senior u.s. officials were talking about coming to terms with assad as a reality and withdrawing the demand that he step down. a lot of us were very troubled by that, that the u.s. would essentially legitimize one of the most brutal dictators of our time. for trump to switch this quickly
and do something obama never did over the course of five years of is in some ways unprecedented. people are criticizing trump for being a flip flopper, for not being coherent. i think that is fair, he is not a deep thinker on foreign policy. but what trump said is that he is flexible, able to change his views depending on changing facts on the ground. i think that is in some ways a positive thing. based on the fact he is moved by these images, he felt the need to revise his position and have a different approach. i am confused why there is a lot of criticism of that. whathat -- because that is we would want from any leader, to be adaptable, flexible, and not so stubborn and one particular view, even when that view is failing. obama's approach on syria stayed
very consistent, but it also was not successful. and there was never a real recalibration. haidi: does a big to a less methodical approach when it comes to the willingness to take military action generally? trump definitely seems to have less qualms about military action than obama had. clear because this is a very quick move. you might have expected there would be more days of deliberation or building some kind of international coalition, but the fact that trump has moved very quickly and you could use the word decisively, suggests a greater willingness to deploy u.s. military forces. bad, i that is good or could see it as bad in certain contexts. but it can be constructive and
others if the use of force is used in the service of broader a way that iss in well thought out and plans for the day after. we will have to leave it there, but great to have you there with us from the brookings and the two, coming with more analysis on this breaking news. we will continue to follow it. joining us is the head of asian pacific sovereign ratings, releasing a second quarter aipac outlook. i want to start with breaking news. an airstrike in syria by the u.s., just recounting the breaking news we have had so you are up to date. we heard about half an hour ago from the u.s. president, saying he was doing this as a response to the chemical attack in syria that killed over 70 civilians. let's get a little more on the
markets: asia, i am haidi lun in sydney. let's get you a recap of this breaking story. the u.s. confirming it has launched an airstrike against the assad regime in syria targeting an airfield where that chemical agent attack earlier this week which killed about 80 civilians, where that originated from. is a strike that has resulted in 60 tomahawk missiles being launched to attack this one infield, planes and hangars that area. it is a reaction to the gas attack that killed civilians. joinsd he hopes the world in to stamp out terrorism and
interest of the united states to prevent and deter the spread and use of deadly chemical weapons. there can be no dispute that syria used banned chemical weapons, violated its on -- obligations under the chemical weapons convention, and ignored the urging of the u.n. security council. we are getting a chorus of the voices speaking, including rex tillerson, saying the last three attacks by assad
were chemical attacks. russia has been either complicit or incompetent, very strong words. pentagon officials saying russia was notified before these strikes. we did see that line coming through, russia saying there would be consequences there. we are also hearing from the national security adviser, h.r. mcmaster, saying they tried to avoid the storage that was the target of the u.s. airstrike. he also said we wait out the risks of inaction. rex tillerson summarizing it, the response from the region has been overwhelmingly supportive. we are getting a bit more details of these remarks become available and we get more comments weighing in. tillerson describing the strike as a proportionate reaction to the gas attack that saw civilians, including children, killed this week. partners around the world, including russia -- tillerson
said that russia's involvement was eitheroscow complicit in three known gas attacks, or simply incompetent. tillerson also said the response from the middle east has been overwhelmingly positive. with the news of the strike coming as the president met his chinese counterpart in florida, trade and the threat of north korea are on the agenda. clearly events have taken a different turn. they are meeting at the president's mar-a-lago report in palm beach. he did say earlier that he and xi jinping have already formed a friendship. let's get the latest from bloomberg news with kevin cirilli, who joins us from palm beach, florida. press wereost of the down to cover this china-u.s. a
visit but events have taken a very dramatic and different development. what has been the reaction? we are steadily getting comments from both sides of the aisle. what are the comments you are hearing? kevin: several prominent republicans are voicing their support for president trump's actions tonight, taking ballistic missiles against the same syrian field in which president bashar al-assad launched that chemical weapon. officials saying that the last three attacks have been chemical weapons. senator john mccain and senator lindsey graham are voicing praise for president trump tonight. -- trump tonight. this is the first military action president trump has taken. this was supposed to be a two day summit in winch
he would meeting chinese president xi jinping. but syria has cast a shadow over these two day summit. president trump removing himself from the meeting and noted to meet with members of his team, security council, to get an update and ultimately make that decision. haidi: one of the comments that came through, we were talking about the decisiveness, where the gas attack on april 4, the president acting emotionally and with some degree of outrage. he said lines have been crossed and foreshadowed action by saying something needs to be done. the fact that it has happened so quickly, is there a sense this is going beyond just this issue? he is sending a message to other conflicted countries in the world, north korea, iran, other
potential adversaries that this administration and president is very willing to take action? just yesterday when i was at the white house covering insident trump's conference which he spoke in the rose garden and said many red lines have been crossed as a result of chemicalassad's use of weapons in syria against women and children. it is no doubt president trump was emotionally moved by these images and viewed the video that was released out of syria, that it had a change on him. this on that campaign trail, candidate trump was not sure in his statements that there should be a regime change in syria. just the other week it was a united nations ambassador, nikki
haley, that said a regime change in syria was not a top priority for the u.s. officials at this current time. but clearly, the release earlier this week of this video, this horrific, horrendous video, that he has called heinous, has absolutely impacted his decision-making process. and intelligence community officials saying publicly they believe it is just one of several chemical weapon usages by assad's regime. given that the domestic response so far seems to be on the positive side, there has been the support for the first step in the reaction or response there a sense that this helps president trump
politically to hit the reset button given that his first couple of months in office were troubled with a lot of resistance? tough to is always talk about politics in the aftermath of a missile launch. talkels too soon to begin about the politics of it. earlier today they were progressive groups raising beating military drums. the politics will work themselves out. but tonight we have to know the magnitude of this moment in which the leaders of the world's two largest economies are huddled together at a private country club compound in florida, and this is the first time president trump has taken military action, significant military action, in his presidency, in his 78 days in office.
it also comes at a time when there have been questions about the inner workings of his administration and those that have national security clearance. it was only monday in which steve bannon, his chief strategist, was removed from the national security council. and h.r. mcmaster gained prominence within the administration. there have been a lot of moving parts behind the scenes. made in thesion was folks he was consulting with even earlier today, he started the morning at a wounded warrior event in washington and then huddled with his national security team, including people like general mcmaster, is national security adviser. rex tillerson was also down ase, the secretary of state
well as commerce secretary wilbur ross, steve mnuchin, reince priebus, and the band and -- steve bannon. his top advisers are down here in florida as he made that decision to use missiles in a missile launch, a targeted missile launch, against syria. haidi: thank you for that. are getting a few more developing lines crossing the bloomberg. thisvin was saying, position has gained prominence given that reshuffle of the national security council. h.r. mcmaster saying the strike is aimed at capacity to commit mass murder. elaborating on the fact that this was targeting shayrat storage. the risksey did wiegh of inaction. a response across the region has
been overwhelmingly supportive. time to get a quick market check. a down day in asia, we see a move toward haven assets. they are highlighting this is reflected in the way aussie and en one-month reversals are playing. we did see a strike. after that missile attack we are seeing that once more in focus. the implied volatility is about 13%. at novembera look and that -- and last june. we are seeing swings in chinese equities today. it is marginally higher but this one is on the decline. the hang seng falling over 1.1%. and a drop for a second day.
we also see volatility for shares in hong kong, tokyo and sydney on the rise. topix 2/10 of 1% higher. but the nikkei raising gains to end the morning session down a 1/10 of 1%. this as the yen is rallying. let's take a look at the dollar-yen share, hitting 110 .13. there is clear risk for the yen and tenure treasury yields, as they are closer to breaking the lower band of their regions. this is the lowest since november. also saying this heightened risk aversion is for the aussie. shares stayg energy afloat at 1.2%.
thanks to a jump in oil prices, gaining almost 2% today. syria, while not a big oil producer, could see the risk of escalation in the middle east. theill take a look at laggers today. on the and tencent decline to the. -- today. are seeing the market reaction from the airstrike. let's get analysis. great to have you, stephen. it feels like event are developing quickly. can i get a reaction about how much this military action from the u.s. might impact, depending on how extensive it is, how does it impact credit ratings? it is far too early to assess
how it might affect credit ratings. clearly, the price action in the market has been, as you might predict, heightened risk aversion. i can think of two angles that might be relevant. all digest the policy stance of this new administration in the u.s., there has been a feeling i detected many countries that the america first policy of the administration might lead to a more isolation policy. it might actually be positive for some of the country's policies around the region in that the u.s. might have let countries do it they want internally. clearly with this kind of action, policymakers and market watchers will question the degree of u.s. influence outside the u.s.
the second, it will refocus already high market attention on policies in north korea and the south china sea and the reaction of the u.s. going forward. we were talking earlier, president trump it is a direct response to the humanitarian outreach that is ricocheted throughout the world after that gas attack. some commentators saying it is sending a warning signal to potential u.s. adversaries, north korea, etc. is there a more hawkish tone when it comes to u.s. policy and the way you view these things in a credit-oriented way? >> it does in an indirect way. in february we put a note out about the sovereign implications for credit ratings. the uncertainties coming out of the trump administration's policies and the policies around
trade protectionism, the stance on immigration flow and remittances. we viewed a potentially negative credit driver for the u.s.' trading and economic partners. the worst fears of not developed on that front but it remains to be seen in the ongoing meeting between president xi and trump in florida. it will certainly focus on the implications for sovereigns. these are trends that take a long time to develop. i would not expect an event like this to have a direct impact on our sovereign ratings. let's leave that developing story for now. you bring up china, that is one of the things i wanted to ask you, this debt implosion we see building up. there is clearly a good sentiment from beijing that they recognize the tightening
trajectory and recognition of excessive leverage. is it too little too late? how big is the risk of the structural shock within the chinese economy? that is a good question and we are putting out today our second quarter asia-pacific credit outlook. we have a stable outlook for most regions, including china. but we did see pressures on china's rating from that buildup in corporate debt you just mentioned. possible growth has stabilized to the degree it has in china. it is good domestically and for the region. policy targets-- that came out of the national people's congress show a focus in the near term on remaining high focused targets, 6.5% this year. by a furthernied buildup in the leverage, credit growth at a faster pace,
phenomenal gdp. in the near term it means financial imbalances will continue to grow. the authorities are mindful of those risks and it started tightening shadow bank finances and monetary policy and market rates. but in theouraging, meantime we believe fragility's will rise in this framework. 2017 getting underway with a tightening story across major economies. rbocfed is well documented, has targeted tightening, that surprise movement from india and the bank of england this year as well. how does that feed into what happens to emerging asian? taper tantrum.e have they gotten their financial
houses in order this time around? is better equipped to withstand external pressures from global tightening that it was during the taper tantrum of 2013. economies such as india and indonesia have taken corrective measures to strengthen their external finances and resilience. central banks in both countries have kept a steady hand on interest rates. it has short up market confidence that banks will do the right thing when external conditions change. it is a key risk factor to an otherwise stable and positive outlook for credit ratings in the region. is the u.s. fed tightening? we think it will occur at a faster pace than markets have currently priced in. that would be one of the key factors in sovereigns and the rest of the year. haidi: there's been a lot of talk about what is driving this
reflation trade and hard growth policies in the u.s.? arguably, some of these things are a hope and a prayer. in asia, is that growth and reflation story different? could argue for better fundamentals in this part of the world. >> the other risk i ought to mention is the risk of protectionism. so far, that has not materialized. but the asian region, china in particular, is dependent on trade with the u.s. if these talks go in a certain direction and markets become focused on trade protection out of the u.s., it could take the form of the border adjustment tax, that would dampen sentiment. for the time being we are seeing a synchronized increase in global gdp growth, which is positive for the region.
we are seeing that feeding through to imports and pmi. forectionism comes to the if faster than they think. that shift is something we are mindful of. haidi: great for having you. a thank you for rolling with it, a day of extraordinary unrolling political events. displays, chips and helping samsung beat estimates last quarter on corruption allegations. note 7 exploding phone tobacco no longer such a pressing issue. ♪ haidi: samsung reported higher
these negative headlines are not having any impact. negativeare a lot of headlines about jay y. lee being indicted. at the end of the day they have a deep bench of management and the company will continue on. what is important to look at is the profitability of the company. all-time high profits the first quarter of the year, up meaningfully year on year. there is the strength in the memory chips. that is one of the most important things of the stocks. they are surprising everyone to the upside at the moment. how much anticipation or pressure is there on the new phone, the s8 to sustain this pace of growth, when it comes to that remarkable trajectory for the stock price? the expectation remains to be seen.
given the company has not officially announced its target shipment, the rumor could be as high as 60 million this year. the average selling price is higher than note 7. what thes to be seen company is guiding in terms of the shipment. i would say the current stock price surges because of the prices and those component price surges. in terms of what we're seeing play out in china, you have the story of xiaomi falling from the top. how much pressure do you expect to come from these domestic chinese producers? that has long been a worry for samsung. share away at samsung's
in china substantially over the past few years, but now the share in china is very small. they are not in the top three or four in china anymore. i do not think it is so much of a threat now. 2013, -- back in 2013, 2/ 3 of profits were coming from smartphones. now it is just 1/3. they are more focused on components. andre worried about xiaomi smartphone companies taking share, but that is mostly behind us. now it is about how much profit and how sustainable the profits they are getting from components. haidi: i have a broader question with these entrenched reliance ofu see
the south korean on markets for samsung is 20% when it comes to the overall market. will these reform and come through whoever the new president will be, will have a negative impact on samsung? it is really hard to say. the governance has to improve. before this presidential scandal, last year, samsung promised to return more cash to shareholders, buy share buybacks. it is a symbol they are doing more to improve their balance giving more to investors. they still that, hold lots of companies under the
group. it is not going to be a one-year thing for them to revamp the whole business. if anything, they need to speed up the restructuring. much. thank you so we will have to get back to our top story, breaking news from the u.s., having launched a cruz missile strike against syria, two days after the chemical attack in idlib killed civilians. missiles launched 60 tomahawk missiles. plenty more to come. ♪ >> it is almost 11:00 here in
hong kong. >> we are in the middle of this asian trading session. welcome to bloomberg markets: asia. ♪ >> striking syria, the u.s. launches cruise missile after the gas attack president trump said it was an affront to humanity. othersee gold, oil and oil havens surge. russia said another attack would have consequences. >> samsung shows it is surviving
a string of scandals. governorhawkish tone, patel increasingly concerned over inflation. the big story we have been following is the market reaction launches.issile we talked about seoul, the yen. >> the market was in a holding pattern and then you see these attacks and we are getting sharper market reactions. let's take you through that. this is reflecting uncertainty on president trump's policies. this is only two days after the gas attack in syria. before that there was excepted by president trump that bashar al-assad's rule would continue. gold reversing two days of , thes, spiking at 1264