tv Bloomberg Markets Asia Bloomberg June 28, 2017 9:30pm-10:01pm EDT
i am haidi lun in sydney. we are seeing financials carry on from that extended rally in wall street. what -- parsing what the central banks had to say, the boe there. we are taking a look at the shanghai and hong kong markets just kicking over to the open. shery: a pretty good start for the markets in china. the hang seng index gaining .7%, and you mentioned tech shares leading the gains, up 1.4%. the only sector losing ground is energy, although oil prices are gaining for a fifth consecutive session. regulators will start looking into that sell off of some small s we saw earlier in the week, 17 companies losing 40% of their stock price in the last few hours.
gainingghai composite .2%. in the green, continuing that momentum we are seeing across asian markets. we are seeing materials lead gains in asia. take a look at the chinese 10 year. this is not updated. a survey of fixed income traders, they all expect the bond market in china to end its losing streak, the longest in six years, and may see gains in the latter half of this year by about the third quarter of this year, that sovereign debt rise and weekly see yields falling to lower levels than right now. they are predicting that 10 year yield will drop to three point 4%, the deleveraging efforts beoing in china might
reversed by the fact that traders are getting used to ander rate in china, talking about materials leading the gains across the asian session, metals continuing in their rally, the subindex gaining or a fifth consecutive session, copper at the highest level in more than two months, a bit of a diversions since the e gold hast year whil stagnated. there was a correlation analysis by bloomberg that said if you want a hedge for inflation, copper might be a better bet than gold. increase, copper jumped 18%, more than three times the jump in gold which was around 5.2%, so if you are hedging for inflation, you may want to go with copper. rishaad: thank you for that.
let's get over to singapore and join haslinda amin haslinda:. haslinda: capital one was the banks acedut is 33 the stress test. it has been asked to resubmit plans by the end of december. the banks are expected to pay out close to 100% of earnings over the next four quarters them up much higher than the 65% last year. to global cyber attack seems be abating, but leaving big victims in its wake. it could suffer material damage worldwidebug hit operations of its tnt unit. shares closed up more than 1%. it shutdown systems in india and the u.s. east coast, and it is
carrying out a full assessment after damage. china may block coal imports as beijing tries to exert stricter control of the prices of supply. the government is trying to balance keeping prices high have to support domestic miners while keeping them below levels that harm power producers. the impact of the band may be minimal given china's overcapacity. macau is installing facial recognition at atm's to verify identity and crack down on money laundering. union pay is installing the customers having to stare into a camera in order to withdraw money. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.
haidi: president xi jinping arise as the city march 20 years since the handover. jinping, this is his first trip since becoming china's top leader, what are we expecting? president xi jinping will be arriving with extremely tight security of. will bea is where he staying and where the flag raising ceremony will happen on july 1. it isn't locked down, hundreds of police, about a third of hong kong's 29,000 will be deployed around the clock during his trip. the city he is visiting feels when the last chinese president visited in 2012, and
it is largely because of the spirit of pro-democracy protests. this is an issue that has raised eyes brows and alarm and created more concerns among leaders. during his time, president xi jinping will speak. he is expected to try to push for the fact that hong kong should not try to resist beijing and highlight the benefits of closer ties with beijing, especially the younger people of hong kong who may not identify them's cells with main land the china. after the handover, who was commented that hong kong was per matt and got on with things. in the years since the 2014 protests, it does seem that the outcry in 2014 has somewhat" in the face of rival to some and getting on with it, choosing the
economy over democracy, but that is not to say it has in stamped out. arrested at as protests, something he did on tuesday as well. we expect to see more protests in coming days, especially july everych has seen protests year since the handover. rishaad: what about the authorities here? face somedoes stark economic problems, but to what end have they try to address them? paul: the issues have been around for a while. rosalind: we have seen the wealth gap increasing, high property prices, quality of jobs for young people, can't get better jobs and social mobility is not as good as hoped, these are the issues pressing on the young people. the elite of hong kong, many of
which build their fortunes due to close ties to the chinese government, so here in lies the problem. if you look at the hsi, it has increased in the last 20 years 70%, but property prices have gone up by more than 50%. the is one of the things government has been trying to work on him at to make more land available and property available , but has been very slow and property prices have not done much in that time. although the government does want to emphasize hong kong's importance to china, we have gdp4, the share of chinese is decreasing and has been tiny as china's economy has ordered ahead. 3%, but was 19% in 1997, and the steps taken by
the chinese government towards to amend this problem have not been seen as they cannot, and all the while still rumblings of pro-democracy protesters in hong kong. rishaad: thank you. on friday, we will have an 20thpth look at the anniversary and will be joined by emily lau. later, we will hear from fred ma. and here on bloomberg markets, the chairman of the holdings company that controls hong kong's biggest entertainment and restaurant district. moving on and having a look at washington, the south korean president moon jae-in says he expects the alliance with the united states to become stronger under donald trump. he was speaking ahead of his
first meeting with trump on friday. off withick things trade first of all. what is he hoping to achieve? >> not discussing trade. of thes to keep trade agenda and would prefer to talk about strategic issues such as north korea. he doesn't like that 2012 free-trade pact. >> he has called it a horrible deal, one-way street, a job killer. rishaad: he doesn't like any deal. his leasts is one of favorite, negotiated by the obama administration. rishaad: that will do it, won't it? >> he has said that korea's trade surplus with the u.s. has increased over the years since the trade guilt took effect, and so it is unfair to the u.s., according to him, so he would like to renegotiate and revisit this agreement. rishaad: how does he view it
though when you look at it through his eyes, moon? >> the weight moon and other koreans look at it is just looking at the trade surplus is not looking at the whole picture. you need to look at the amount of investment koreans have made into the u.s., and that is at a gone upso it has considerably since the trade deal took effect. they could point to samsung electronics announcing they are investing in a factory in south carolina, over $300 million, will create 950 new jobs, those are the sorts of deals that the korean say look, this shows the free-trade deal is working. haidi: what are the chances of moon being successful and persuasive? his chances of keeping trade off the agenda completely are probably not great given the forrtance that trade plays
president trump and his supporters. it is likely that they will be discussing it. they were not be up to just talk about north korea, i think. haidi: leaving it there, but certainly a highly anticipated visit and huge challenge in particular for the new south korean leader. coming up, is the market too complacent about the possibility of an upside inflation surprise? that is up next. this is bloomberg. ♪
for two straight quarterly gains. that is what we have at the moment. haidi: all right, rish, watching story.an let's get back to what central banks are doing. felt like a strong signal shipped overnight from the likes of the boe, a decade of easy money and now investors bracing for borrowing costs to head higher. our next guest belize markets are being too complacent about the possibility of an upside inflation surprise. he is the head of dynamic np capital.a banks, #9283, central
the boe is not on there, but what did you make of the commentary coming through overnight? i thought the weirdest one was from mark carney. >> that's right. if you look at the inflation dynamics, it was a miss on the inflation print, yet mark carney coming out and signaling a rate hike, and that is a message we are getting across the board, ,he ecb obviously, so it inflation is still below target, but that shows the change. about 300 billion dollars a month and asset purchases, and at some point this will have to in. we don't need that extreme monetary policy we needed 5-6 isrs ago, so the question
how quickly and how much volatility will it create. of your investment themes has been an upside surprise in inflation. i want to bring up this chart #9012, the top segment is weighted annual global cpi, almost wondered 100%. inflation linked bonds rolling over as well. you see what the bond market is doing, second guessing what the fed will do. where does that surprise come from? is it transitory, china, trump coming through? all, it is the role of expectations, so market expectations for inflation is so depressed now that it does not take much improvement in growth to see that expectation being disappointed. runaway need to get
inflation because expectations are ready so depressed and pessimistic, so a little uptick in activity or inflation, and the u.s., we have had full employment. so a little bit of upside surprises enough to catch the market off guard. when we look at china as well, china and the case for stimulus to be on and off, so they put the brakes on and slowdown commodity prices, but now they are starting to take their foot off the brake again. when you look at headline inflation, it is not a central-bank target, but inflation always lags growth. picks up, real inflation comes through. i think the market is caught up in the oil impact of inflation and ignoring the underlying trend in growth which is on the positive side. rishaad: i want to move on to the markets themselves.
growth stocks have been a particular favorite, helped to propel markets higher has of late, technology in particular. is this trait done in your view? >> i think so. croke to me looks like one crowded momentum trade. to me looks like one crowded momentum trade. people are just on it and rationalizing their earnings as the case for it, but the growth sector is price for perfection, so it doesn't take much downside surprise to disappoint those long crowds, but if you look at the ratio of growth overvalued and plot that against 10 year bond yields in the u.s., there is a strong correlation. the bond yields have been coming down since 2007 and the value has been under performing growth all the way down. central bankst
are telling us, we have seen the low end bond yields. it is unlikely bond yields will go to a new low. should quite durable values at the growth. rishaad: if bond yields are up, that will help the banks. you switch to financials? absolutely. financials have been one of the areas of the market that has bondhurt life falling yields and quantitative easing in negative interest rates. from here as the yield kirstie can's -- yield stevens and margins improve, banks and financials are a great place to be. so the rest of the market coming cleaning energy and materials as opposed to just chasing yield are chasing the quality earnings. haidi: we will have to leave it
there, but it will be very interesting to see and the coming weeks as we lead up to the next round of central-bank meetings if things change substantially for that trajectory to change. thank you so much for that. breaking news crossing the toomberg, vietnam january june gdp numbers coming through, 5.7%. we were looking for five point 5%, building on the previous growth of 5.1%. --are waiting on see quite cpi inflation, a miss, 2.54%, 2.3%, and that slowing from the month of may. getting more on that as it becomes available. coming up, a quick look back at the evolution of the iphone. it has been 10 years since it first hit the shelves. this is bloomberg. ♪
rishaad: june 29 marks the iphone's 10th birthday. it jumped far beyond the confrontatio competition. emily chang has a look back at the decade of the iphone. ♪ >> today, apple is going to reinvent the phone. 29, 2007, consumers got their hands on the very first iphone. a decade later, the smart phone has proven to be the undisputed king of apple products, and in turn, revolutionized an entire ecosystem, destroying heavyweights in spurring new rivals across the globe. opened doors to what has become a large chunk of the company's revenue, apps.
sales have generated $100 billion in gross revenue for apple, with more than 16 million developers worldwide producing apps ranging from uber to snapchat. the launch of the iphone did not just change the way people work and socialize. it also transform the company itself. apple group by every dimension, going from a company with staff of 18,000 pre-iphone, to a workforce of 116000 and 2016, and sales from apple went from $19 billion in 2006 two over $215 billion a decade later. it does not stop there. apple has sold 1.3 billion iphones, generating more than 800 dollars in revenue. that blows other iconic devices out of the water, including nintendo's game boy, which sold over 118 million units in its lifetime, and sony walkman which sold a little over 200 million
in 38 years. with that astronomical growth rate comes heavy dependence. up 63% of makes revenue for apple, making it the company's most crucial product. some tech heavyweights are sounding the alarm about the future of smarts owns -- smartphones with peter thiel tsonga won't be any more innovation here. it is clear tim cook sees it differently. we are just getting started. i am incredibly excited, and clearly virtually anybody would say something is going to replace a smartphone anytime soon. to the nextlooks decade and competition is red hot, how long can the iphone remain at apple's core? ago.: one decade coming up, live in beijing speaking to anz about china's
♪ >> from our studios in new york city, this is "charlie rose." charlie: we begin this evening with health care. today, senate republican leaders postponed a vote on legislation to overhaul the affordable care act. senator mitch mcconnell had been pushing for a vote by the end of the week. the delay comes after five senate republicans that they would not vote on the bill. now they would not support a procedural vote to start a debate on the bill, on monday the congressional office said the bill would leave 22 million americans uninsured by the end of the decade. while reducing federal spending