tv Bloomberg Markets Asia Bloomberg November 14, 2017 8:00pm-10:00pm EST
♪ rishaad: slow but steady exports driving japan to a seventh straight orderly expansion. gdp and consumer spending remains weak. oil under pressure again after reports russia is yet to be convinced about extending output curbs. riyadh says it is the only option. apple's supplier suffered its biggest earnings decline in 10 --rs as a technical hip-hop with a technical hiccup in iphone production. haidi: also coming up, beware a communication breakdown. the fed boss saying listen first and speak later. this is "bloomberg markets asia
." ♪ rishaad: oil prices down by 3% over the last three days. big falls overnight are having repercussions, in particular for australian markets and the aussie dollar. it may be a bit of a brighter prospect if you are an oil bull in the future. it does suggest that if you look at 2021, prices are likely to be breaking to the upside. deliveries in the near future having a higher price of those made later on. you could also argue that rising long-term prices show the market
is going to the view that high prices are perhaps more sustainable. again, the caveat is a longer-term. this is the outlook for prices for four years from now that should give greater encouragement to bulls of oil and commodity markets, generally speaking. action in oil iea talking about the shale revolution, revising down short-term demand prospects for 2018. in the near term, not a lot of positive catalysts to be found. concerns over lack of progress on tax reform. we're looking ahead to u.s. inflation numbers, with the index falling the most in six months.
that report on the japanese gdp not really helping the nikkei 225. sophie: not at all, and not really budging the dollar-yen either. as you pointed out, the nikkei 225 is not being helped along by that data we got out of japan, sliding 4/10 of a percent. asianosses, looks like stocks may be set to wipe out the months advance sp month -- the month's advance. metals continuing to drop, rubber also joining that downturn in shanghai. bonds closelynese watched today after the 10 year yield reached 4% for the first time in three years. now retreating from that level ever so slightly, it is expected to pick up at china's seven-year
auction today. in the currency you see that glaring red for the aussie dollar sliding .5%. this shows you the currency has fallen to the lowest level since july after wage growth was slower than expected, adding to a series of disappointing data. now a check on some potential equity numbers today. apple suppliers in taiwan report the tech giant is developing a rear facing 3-d center -- 3-d sensor for 2019. has struggled to crank out enough of the in demand iphone x. that hurt on high -- that hurt nearly profits, sliding 2%. stagesre in preliminary
for noble group on capital structure. rishaad: let's move to some of the first word news headlines in beijing with tom mackenzie. tom: president trump wound up his marathon tour of asia, saying the rules have changed. he spent most of his trip and the sizing the need to reduce trade deficit and selling u.s. military hardware. the president says he has built new relationships based on respect, which he says would be a change from previous administrations. mr. trump said asian nations would now treat the u.s. and away they haven't for some time. trump: they are treating us much better than they have the past. countries have taken advantage of the united states in the past, those days are over.
we will be reciprocal, meaning if they are doing it, we are doing it. that is how it is going to be. tom: southeast asian leaders and their trade partners ended talks in manila for a renewed push on the so-called asset trade deal. the leaders said negotiations are complex and challenging, but remain committed to a wide ranging usually beneficial partnership. the 16 participating nations comprise almost half the world's population and more than 30% of global output. is u.s. senate tax committee considering a repeal of the individual mandate imposed by obamacare into the revised tax proposal. majority whip john cornyn says including the repeal would allow the bill to be progrowth and in shortcuts are permanent resident temporary. it could cost the gop crucial votes on tax. outgoing fed chair janet yellen
has revealed a frustration with her global central bank audit. speaking at a conference in frankfurt, she said fed rules clearly say officials should avoid forecasting decisions and certainly not make commitments about their votes. forsaid doing that is bad consistency. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm tom mackenzie. this is bloomberg. ♪ haidi: backs so much for that. japan's economy has shrugged off a recent dip in consumer spending on the longest stretch of uninterrupted growth in 14 years. in thenomy expanded third quarter slightly below forecasts of 4%. take us through the results of and some worrying
spots you are seeing. reporter: the exports are feeding into the domestic economy. we are seeing a pickup in business investment, which has risen over the past four quarters. that is positive. spending has shown signs of recovery this past quarter, but economists and the government blame poor weather for that. week,certainly remaining but it -- it has certainly remained weak, but it had been looking up. there are other conditions supporting growth at this time. is their weakness across
consumer inflation? to go with what haidi is saying, how does that all fit this, and what are we looking at ahead? reporter: wage gains are still pretty modest at best. there are some signs they are starting to feed inflation, but the gains in inflation have been driven mostly by oil prices. cpiomists are saying that could peak in the next few months somewhere around 1% before the oil prices start cycling out of there, which means cpi could reverse and start falling again. see a you can kind of pickup when it comes to animal spirits for business investment.
we saw the fourth straight quarter of growth. that has got to be a positive thing. reporter: it is, absolutely. as i say, there are signs this is becoming a self-sustaining recovery. exports are the biggest factor, but they are not the only factor. japan is in a position where a that is needed. haidi: thank you so much for that. japanese gdp extending that uninterrupted streak of gains to a fourth straight quarter despite coming under expectations a little bit. looking ahead, hard rock asia's ceo sharing his recipe for bring more customers to the chain. rishaad: and we will be talking jpmorgan's tai hui.
♪ >> for us, almost all guidance should be conditional and related to the outlook for the economy. obviously there is inherent uncertainty about the outlook for the economy, and so the committee's expectations about appropriate policy evolve over time in line with the outlook. is not a matter .f technique it is a matter of policy itself.
we also formulated a framework where the various parts of this guide, with the interest rates on one side and assets on the other, would interact in a synergy so that each would actually amplify the effect of the other one. ♪ it is possible in a speaking with the broader public and getting to the public am a we need different content, but we need to change within the institution. you only get that if you open it up to a broader number of people. rishaad: world's top bankers there discussing forward guidance. uit's discuss this with tai h jpmorgan's hui,
chief asian market strategist. i think there's a balance between how much you should communicate to the market. for example, if you look at how the fed communicated about reductions since the and of last year, it was a very smooth process to tell the markets we are going this way, the market reaction is somewhat muted. contrasting that to ben bernanke back in 2013 when the stock market can sit are in that stock market considered -- stock market considered tapering, that created chaos for the markets. i think in that sense, the bank of england was perhaps doing a
bit too much to lead the market on with that rate hike. waswhile, the negotiation developing in necessarily the most constructive way and there is still a lot of uncertainty. i think it is good to dedicate to help prepare the markets to avoid unnecessary volatility, to be conditional on what is happening in the economy at that point in time so you don't put yourselves in a corner. rishaad: that is what your argument is in regards to the bank of england. but why be raising rates when you perhaps don't need to? you could also argue maybe you do need to keep raising rates to have enough ammunition should anything go wrong with the economy, the point being you could actually send the economy into that condition by doing so. guest: i think there's a valid argument that extremely low rates is penalizing, at the same time it is a very small
magnitude to the overall economy. it is the intention that you are prioritizing inflation rather than the uncertainty of growth going forward. i think that is where personally i think the rate hike could wait a little longer until we get more confirmation on what is happening with brexit. haidi: i want to throw out this chart. $23 trillion when it comes to where the s&p 500 has gone. thereis survey suggesting is a wave of radical exuberance not just in the u.s., but globally. about 50% of saying stocks are overvalued, and others saying they are taking an abnormal amount of risk. where do you think the market is at the moment? do you continue to buy every dip
we are seeing? guest: i think so. when you look at the fundamentals, everything still seems to be in pretty good shape. we were expecting some kind of correction sometime this year, frankly since march, which is perfectly normal, whether it is global markets or asian markets. so far this year has been fantastic in terms of return, but with very low volatility, which is extremely unusual. i do think correction at some stage will be healthy and necessary. to me, this is an opportunity rather than a time to unload equities for the long-term. haidi: toy 17 has been the story of where is the inflation -- 2017 has been the story of where is the volatility and inflation. when you look into next year, do you change your allocation a little bit to reflect the potential possibility for some of these downside factors if tax reform doesn't get through, if
china continues to slow more than expected? guest: i think tax reform is going to be a very long, winding road given there is a lot of politics behind it, rather than republicans just wanted to get it done. it will get done, but i think the journey is going to be long and winding in with a lot of convocations. i am -- a lot of complications. i am not going to be changing allegations simply to the tune of tax reform. at the same time it is important to recognize that was all of this happening, the european and asian and australian economies are all doing relatively well. at the same time, i think there is opportunity in corporate credits where the spread is reasonably tight come which means most of your return will come from interest rather than capital gains. also, emerging market debt is almost forgotten in the past few years. i still think that is a good opportunity.
haidi: what do you find compelling in the equities market? guest: i think at the moment it is still very much in asia where violation is fair and not exceedingly rich. meanwhile, we are still getting good earnings momentum on the back of this. in china, you can see the new economy is still steaming ahead. you see that in the rest of asia , export dependent economies like taiwan, south korea, export performance is still holding up fairly strong. but markets like thailand and indonesia are starting to see investment picking up. i think there are various stories within asia, but it is not by a single market. just pick sectors and even companies visiting from this growth. rishaad: that has been quite an earnings season.
,hen we look at valuations pretty much where we were at the start of the year. many of these stocks have gone up a lot. they have been moving in tandem. guest: i think that is why we have had such a strong year, especially in asia. you've got earnings matching if not beating expectations. iom that perspective, i think would argue that we are still at an early stage of asia equity market upturn, especially combining that with my view of a long-term downtrend in the u.s. dollar. from that perspective in terms of allocation, and the past couple of years u.s. has clearly been the runaway winner, but i think asia emerging markets over the course of next one to two help could potentially investors achieve their objectives. rishaad: i am just looking at apple as an example.
the stock is up 48% this year. that is quite something. that is actually true for quite a number of them. guest: i think a lot of investors or clients come to us and say, the market is up 30%, 40%, 50%. is that too much? not necessarily because these company's earnings are also growing. is if you look at where asian equities are right is stille valuation reasonably cheap compared to the previous in 2007. we are not counting on remaking it valuations.
this is a powerful mix that can drive equities higher. think you so much. you can use our interactive function tv to watch live and delve into any of the bloomberg functions we talk about. you can also become part of the conversation by sending instant messages during our programming. this is for bloomberg subscribers only. --ck it out come a tv out, tv . ♪
yixin will increase retail ipo , shares jumping 30% in the market. trading is expected to start thursday. rishaad: apple said to be working on a rear facing 3-d on thesystem for 2019 road to creating an augmented reality device. we are being told it is evaluating different tech. told apple has started talks with potential suppliers. haidi: softbank investors have been warned they need to be wary of instability and saudi arabia affecting the kingdom's interests in the vision fund. it would be wrong to be optimistic at the moment because the investment is a project involving crown prince mohammed. softbank declined to comment.
♪ right now in hong kong looking to the start of the session. japan's gdp was pretty much in line, slightly lower than anticipated, and the fourth straight quarter of gains. market participants are looking at u.s. tax reform. no meaningful progress being made, adding to some of the consternation out there. cpi and retail sales out of the u.s. later on. we've got a yield curve the flattest in 10 years as well. haidi: lots of consternation
that. does it portend an economic disaster in the future? or is it just an anomaly? the commodities index driving some of that downward feeling in shanghai. and hong kong, taking a look at the open. nohie: know better here -- that are here -- no better here. we are seeing drops continue after the slide on tuesday led lower by consumer shares, which fell by the most since april. consumer stocks remain top dog when it comes to the csi 300
index. say the surge in chinese consumer stocks, as well as other defensive shares, is evidence of the caution in mainland market as there seems to be more resilience to any economic fallout from deleveraging. the could be some signs of cooling off as we are seeing retreats from the most overbought levels since 2007. no surprise energy stocks are -- the biggest given oil. as the macau gain someseeks to oversight on the industry.
thank you for that, sophie kamaruddin. let's find out more as to what is going on congressionally in this inquiry into moscow's interference possibly in the u.s. election campaign. that is one of our first word news headlines with tom mackenzie in beijing. u.s. attorney general jeff sessions has denied a lying or misleading congress about contacts with russia during the presidential campaign. he says he simply forgot about a meeting revealed by the mueller investigation. he told the house judiciary committee he does now recall the meeting in trump hotel where unpaid advisor george papadopoulos said he could arrange a meeting between trump putin.sident the president's pick to run the
central bank, jerome powell, would not hold an economic doctorate. the white house is considering -- for vice chair, who holds an economic phd from cambridge. bloomberg is being told airbus is nearing a deal with partners for 430 euros bodycheck liners jetliners.owbody almostl would be worth $47 billion before the customary discounts. australians hasn't voted to legalize same-sex marriage after a nationwide postal survey. the yes vote was 61.6%, with almost 80% participation. it was a political compromise the cost around 100 million u.s.
dollars, widely denigrated as a waste of money. it is our job now to get on with it, get on with it and get this done. it is fair. to people have voted yes for marriage equality. now it is our job to deliver it. qantas ceo alan joyce will join us next hour to talk about what comes next. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm tom mackenzie. this is bloomberg. ♪ the apple supplier has posted its biggest decline in nine years related to the production of the latest iphone.
our bloomberg columnist is in taipei. give us an idea of the extent of the impact. reporter: really one way to look at it is you could look at the topline sales. they are a little bit disappointing. we knew that a few weeks ago. we get that report on a monthly basis. the margins were frankly terrible. operating margin was less than half what was expected, the lowest for the third quarter in at least eight years. the impact on the way through the line to the net income level is really very easily seen in on hig -- in hon hai's numbers today. they are not necessarily a simply problems. but when you can't get this or that component -- assembly problems.
but when you can't get this or that component, it all gets lost in the process. they are really suffering from a lot of issues that are not caused by themselves. haidi: the question is, do we see a turnaround if we have the iphone x performing better over the coming quarters? reporter: i think we can only see a turnaround if things got even worse for hon hai -- a turnaround. if things got worse for hon hai that would be bad all around. early numbers are not that encouraging for hon hai. sales only rose a little compared to last year. there has not been a massive rebound in revenue for hon hai yet. the other side of the equation is margins. they may be able to squeeze out some more operating efficiencies
and leverage. they are very good at that. company inthe one the world that can really ramp up and leverage its operational capabilities. there probably won't be enough in the fourth quarter, so they may look at first quarter next year to see if some improvement there will make up for the very bad quarter and maybe an ok fourth quarter. investors are having to decide, will it be enough? you say running a tight ship operation historically is much more important for this company. how is it doing in that regard? reporter: i think they are doing ok. it is really hard to know because in the lead up phase to making an iphone, there is this ramp up. you are getting all the parts together, testing how it works, seeing what needs to be changed and so forth. once everything is in place, you've got the rest you can ramp up really quick.
because of the supply chain problems with various components not coming through quickly enough, we haven't really had a chance to see hon hai ramp at the rate we want to see. they will probably be able to pull it off, but we haven't gotten into that phase yet of seeing them do what they do best because, like we have talked about, the supply chain problems have been a bit of an issue for them. if everything comes together really well, the supply chain issues at sort themselves out, i think they could do very well. we just haven't had a chance to see that yet. rishaad: thank you very much indeed. in's take a look at this chinese sovereign bonds, reaching a fresh milestone after yields reached 4% for the first time in three years. analysts say it is likely to continue. we turn to bloomberg editor emma
o'brien. is this reaching unmanageable levels now? some fear it could spread to the corporate side. reporter: that's right. wh percent was a key ask factor.s a key there is this risk of its spiraling. driven byf has been this concern that things in the economy are starting to gather steam even as we have seen weaker data this week. this concern that it is going to be ramped up after the party congress. haidi: what about foreign investors? do you see this playing into their outlook when it comes to and this bigger
effort of policymakers bringing global funds into that market? reporter: it is not coming at a very good time. we saw china opening up this conduit for foreign investors to invest in the bond market midyear the hong kong -- midyear via hong kong. that was hailed as a big move for china, but not getting off to a good start with this selloff brewing. it should be noted it is coming at not a very good time for the bond market. the losses we saw on monday here in china were really underpinned by the things we saw friday. while china might be leading this, there are signs of nervousness elsewhere. haidi: thank you so much for that. coming up, we get the latest on hard rock's plans for expansion in japan. anwill be live in tokyo for
♪ haidi: taking a look at food and entertainment come our next guest has just taken up the reins of hard rock international in asia as the company reviews its plan to expand across the region. these plans include a theme park and resort. for hisus from tokyo first international media interview is the hard rock asia ceo edward tracy. great to have you with us. tell us about how optimistic it you are when it comes to japan. about theis story consumers still really reluctant to spend. are you optimistic that is going to change? guest: first, thanks for having me. it is great to be with you guys again.
i am very optimistic about japan. it is a process you have to go through to allow the government to establish what the criteria is going to be. in difficult fashion, developers are all very anxious for this to happen sooner rather than later. we recognize we are a global that hasglobal company operations in 74 countries. we understand with the process is like, but we do feel all the indicators are very positive. haidi: what are your expectations in terms of timeframe? we are still pretty far from implementation on the legislative side. in addition to that, the idea of having casinos and gaming operators in japan isn't exactly being welcomed by a lot of support by japanese people. that has been an issue, and i think part of the responsibility the operators have is to try and educate the public to the degree it can that integrated resorts are far
different than just big-box casinos, is really the history of gaming in japan with the pachinko parlors. ours is a totally different concept that offers a lot of different entertainment, retail, and is very good for the economy. i think we have to take responsibility for helping to move public opinion in the right direction. in terms of the process, we do see some progress in the preliminary need for a bill that addresses problem gaming, responsible gaming. had to happen first. that might call for an agenda that we see the final piece of legislation passed some time at the end of q2 the beginning of q3. the process is controlled by the government, so as actions that's as anxious as some of the developers are, -- as anxious as , -- of the developers are
step back, taking a as someone who is not a gambler, i was quite surprised to find out that hard rock operates casinos. can you elaborate given that there is maybe not a lot of knowledge about how the and cafet and gaming businesses are really split? prettyit is a extraordinary story probably not told as frequently as it needs to be, driven by the fact that hard rock international is a privately held company. they're really not out there talking about their great success around the globe on a quarterly basis because they are not reporting earnings necessarily. the story is really quite evident. the fact we have partnerships in 74 countries, we have an opportunity to market to more people than any other gaming company run the globe.
we currently have 23 hotels and 13 casinos we operate, brand, and manage, and about 200 restaurants around the world. we serve over 100 million people a year. you can imagine the number of impressions we can create to benefit tourism in japan just based on the current business we have. bringsk hard rock something really extraordinary, because we are not publicly traded, a lot of the detail is not known about the company. the tampa, florida hard rock is the single most successful casino in america. it dries more top and bottom more topit -- drives and bottom line profit than any other, even in las vegas. hard rock camp a is the only casino in the top 10 that is not -- hard rockeaning the only casino in the top 10 that is not asia-based. we have been in business in tokyo for 30 years with our
partner wdi. rishaad: you do have a partner there in japan. you will probably need a partner in japan given the framing of the current legislation. what is your criteria for checking who you partner with? guest: again, we expected there may be some information provided to us either directly in the next piece of legislation or perhaps privately in our conversations with how partner structure might work in japan. we suspect there will be consortiums that will join up with operators to compete for the licenses. you must be somewhere in that process, but what is the criteria of the person you would partner with? that was my question really. guest: i don't know that i into a lot of
detail, but the targets for us our construction companies, big landowners, infrastructure companies that could bring expertise to the table in terms of doing a development. how that guy gets sliced is yet to be seen. pie gets how that sliced is yet to be seen. rishaad: certainly would have to be a lot of non-gaming coming from this as well, as you have indicated so far. a lot of the other people bidding will offer the same sort of things. how do you differentiate yourself from the competition? guest: i think the key issue is our dna is hospitality and entertainment. we are an entertainment company first and a casino company second. i have operated some of these other companies and know what their commitment is. having the opportunity to market globally in 74 countries is
something that no other company can say. --hink it is also important we are not a public company, so it has not been disclosed as wisely as it should have -- we have the strongest balance sheet in the casino and hotel business. the company has been extra nearly successful, and its borrowings have been asked for nearly low compared to the revenue -- have been extraordinarily low compared to the revenue it generates. where the only company in the world that has all three credit ratings. experience globally and bring a very unique perspective on asian business given the fact we have been here for 30 years. rishaad: very quickly, you have been in japan many times. how has the mood involved in the country in recent years with mark -- years? guest: i didn't quite hear the question. rishaad: i am just asking how
the mood has evolved in japan and given how a time to have been there and your experience in recent years? very quickly. guest: it is a little hard to read. there are nuances of a for example, in a there is no little translation in japanese for integrated resort. when the average person hears about these the elements, they think casino, and casino is right out what these developers are about anymore. the success of integrated resorts around asia is based on, of course, there is a casino involved, but they are commoditized. it is the nongame components in theive tourism business. rishaad: wonderful talking to you. think you very much. edward tracy there, ceo of hard rock international. coming up, a tough road ahead in japan. can it break the stranglehold of
♪ tokyo's biggest taxi service is revamping its business as it looks to prevent uber from gaining ground in japan. bloomberg's asia technology editor joins us now with more details. uber hasn't made much of a dent in the japanese market, but tell us about the incumbent they are up against. is japan the incumbent taxi. they are the biggest outfit here. they have a lot of cars, a lot of clout. the interesting story we discovered was that the current chairman of the company is actually the third generation, to try andooking
change this industry. he spends most of his time at a startup he founded which essentially has an app that mimics what uber does, only for taxis. he is very well-connected. he is married to the granddaughter of a former japanese prime minister. has alreadydia started calling him the taxi prints. -- the taxi prince. rishaad: what is it about the regulatory environment that makes it so difficult for ridesharing? reporter: the regulations here are very specific. at all levels you need approval to do certain things, even set fares. the i was looking through regulations i even discovered they were detailed diagrams of where exactly to put the signs inside and outside of the cabs . all of that, as most people and leadsrs to japan know,
to very high quality service. the taxis are clean, the drivers are polite, they get you where you need to go, but it is expensive. the industry has sort of been trapped in this mode where the andlations do keep fares margins relatively high, but passenger volumes have been decreasing. it is kind of clear that something needs to be done to shake this industry up. haidi: uber has got a big partner, softbank. how does that help? reporter: exactly. just this week we learned that softbank is planning to invest in uber, which is potentially the taxi industry's biggest rival here. the founder of softbank has never been a fan of excessive regulation in japan, so you can probably expect that will be one area he will address. softbankearned that
this is "bloomberg markets: asia." ♪ rishaad: later in the hour, the ceo of qantas. that same-sex marriage vote came out in favor of yes. the u.s. session has followed through, deepening losses in the asian session. this is a chart 6541, the s&p 500. $23 trillion, a record high when it comes to the value of the s&p 500. we are seeing this correction play out over uncertainty on tax
inflation and consumer price data out of the u.s.. we saw that selloff mostly propelled by this decline in the commodities complex, concern over oversupply. an oil prices down nearly 3% in the last two days were thereabouts. that is playing out particularly on aussie markets. people are asking is this bull run coming to a grinding halt. here is sophie. sophie: the hangover continues in the equity markets with japan leading the drop and the yen now on a firmer footing. the yen climbing with the most asian forex.
the won is the best-performing currency, and continues to gain .2%. been a sourceve of consternation as anxieties over demand, oil, metals stocks, copper and steel continuing to nosedive, copper sliding 2% and steel and shanghai. gold higher .2% amid the risk off mood. several headwinds converging on demonstratesea doubt, so falling. first up, petrochina beating losses in hong kong, following cnooc and sinopec. that as for them quadrupled for that stock. sayingas rising after
its profit may search 90%. afterai pharma climbing agreeing to buy the cardinal health china business for $557 million. 843her laggard, this is zero, the aussie slumping after wage growth softer than forecast , adding to a basket of disappointing data. the commodities carnage is not helping. the currency falling the most since july. the first time since july had little support before we hit $.74. haidi: thank you so much for that. i resoundingly down day for markets. let's get you caught up with first word news. thank you. explosions reported after factions of the army horse said to have split him robert moog of a.
- robert yougov a at least three blasts are said to have hit the north of the the u.s. embassy says it will operate only a skeleton staff for the time being. rulesent trump said the have changed. he spent most of his trip emphasizing the need to reduce trade deficit and hawking u.s. military hardware. he said he is building relationships based on respect. mr. trump said asian nations would not treat the u.s. in a way they have not for some time. andheast asian leaders trade partners enter talks in manila, calling for a push on the so-called rcep. negotiations are complex and challenging, but committed to a wide ranging come mutually beneficial partnership. the participating nations
comprise half of the world's population and 30% of global output. the u.s. senate tax-writing committee is considering the repeal of the individual mandate imposed by obamacare and the tax proposal. it wouldity whip says allow the bill to the pro growth and ensure cuts are permanent instead of temporary. opening the obamacare debate could cost the gop crucial both on tax. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. -- crucial votes on tax. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. we have more transparency and communication according to four of the world's most powerful central bankers, janet yellen, mario draghi, mark carney, and governor kuroda. they discussed this subject at length in frankfurt. .ith me now is enda curran >> there was a point where
people criticize central banks transparency and not enough of the key medication. from there we ended up with the world's biggest bankers guidance comeard essentially signaling to the market where they think interest and where theg, economy might be going. even though that has dramatically increased signaling from central banks, investors think that has contributed to confusion. rishaad: every day there seems to be of fed official talking. in the timese this of ben bernanke, alan greenspan, at all. it has changed considerably and it does not seem people are speaking from the same hymn sheet. recent study from the swiss national bank appointed to too much communication leading to policy confusion.
this is a relatively recent phenomenon in the world of central banking. last night, the message was this guidance concept is effective, so they are doubling down, even though some people say it's only causing more confusion. rishaad: let's look at governor kuroda of the boj. what was his view on this? >> he wasn't quite singing from the same hymn sheet. he's coming from a backdrop where inflation expectations are entrenched. he said actions are louder and words. they are still so far off from heieving the 2% target, so is caught between a rock and hard place. he likes the idea projections, but at the same time knows he has to be cautious. haidi: on this issue of communication and guidance on
inflation, you have governor kuroda in one camp. there has been some criticism saying mark carney probably gave a bit too much guidance when it came to inflationary expect a shenzhen's -- inflationary expectations. a quick chartw up to set the scene, 6077. we are looking into u.s. consumer prices this week is the latest reading, but nowhere near levels of that target, in particular that yellow showing the boj. or is think it is healthy there a disconnect when it comes to this fixation when it comes to inflation targeting? >> there is certainly disconnect. the markets are not all together convinced the central banks can achieve their policy targets. japan is a case in point. plenty of other banks are struggling to get inflation off the ground. we are seeing that in market
pricing itself. economists are thinking it is dangerous to rollout the concept that inflation and the supply of money in the world, and that inflation will not return any time soon. at the same time, the markets are well off ace in terms of where the fed and other central banks are projecting interest rates to go. we have seen the yield curve flattening the u.s., said the disconnect between what central banks are signaling, what analysts are analyzing, and what marks delivering, there is to versions there. -- markets are delivering, there is diversion's there. how would you rate pboc communications? we heard yesterday from the government that they are looking for inflation and wage growth and this fixation over the labor market, but in china, price
stability and price pressures are exactly where they need to be at the moment. do they do a better job when it comes to communication? >> they described inflation yesterday as i add deal. the pboc is a case of must try harder. moreare one of the transparent ones, but still have a long way to go. they are improved how communicating, but in the last few weeks, they have been on a tear with those interviews and speech in washington and comments at the party congress and with another follow-up speech last week. he isare expectations heading out the door. if he is, he's going out with a bank. he has spoken more in the last few weeks than all this year. how crucial and helpful is it for financial markets and for some of the asian central bank peers, this kind of level of communication to continue from the major central banks?
the r.b.i. former governor really a lashing out around the time of the taper tantrum, saying the fed needs to do better to communicate more. that seems to have started this practice of communicating almost too much. >> it did. there was an interesting turning point last year with the g20 in shanghai. on the one hand, china had made tweaksrongly .n how its currency trades on the other hand, the fed were getting blamed for not communicating the rate hike, so post-g20 where they tell the markets what they are doing and things have improved. the fed has signaled the balance sheet tightening is going smoothly, and the pboc is signaling that policy is neutral and prudent. there is criticism that there is confusion, but in terms of take
market shocks, there is a feeling things have improved and certainly since the days of the taper tantrum. you so much. always great insights from enda curran in hong kong. australia votes in favor of same-sex marriage, that ceo of qantas and yes campaign takes a look at what comes next and what it means for businesses. commoditiesssure on prices. we search for bright spots. that is on the way. ♪
emerging.shaky demand we have a look at slower china feeling demand outlook that may be ultimately too optimistic am a but what are people saying? lint is some of that g coming off the bloomberg this is for 187. this shows you a gauge of raw materials is headed for a drop. that is the line in white. the tumble continuing after the 2017 gains. nickel is the line in blue leading the drop in metals. at cost the most since march 2016 after the date to miss from china tuesday. slowing china seen as prompting a turnaround for commodity markets. recall that commodities fell for five straight years or 2015 on glut concerns. iea saying have the
this oil glut is set to continue, but how is trade looking at this? sophie: there is evidence of that glut returning. we have the bullishness in the marketss or cfd evaporating, and that bullishness has been supported by global demand, particularly from asia. shows oilt assessment prices falling further today, brent dropping. chart,u look at this 8264 here it you could argue 264.-- a you could argue that long-term prices could shove the market is coming around to the view that higher prices are more sustainable. the outlook from four years from now could give encouragement to bulls. is comingis optimism from demand for refined products
, but overall bearishness in the commodities space come in selling not only commodities but resource related stocks. foraad: thank you so much that. staying in the oil patch. china added 40 million barrels of oil and its inventories in the first nine days of this month. that is quite the rebound from september and october. insights.om orbital let's get an explanation from dan murtagh. wild swings. what is going on? has beenl insights tracking this for the last couple of years. china hasevery year been increasing oil inventories as it tries to become less reliant on foreign oil suppliers. there is a little seasonality to it. they tend to peak inventories
in septembert, and and october they see a seasonal lessne as china imports oil and burns through what it has to make the economy run. dropw a 120 million barrel withiding and october china's lowest month of oil imports for a year, but that is good news if you are an oil bull because china stock levels are really low, and typically from november to december, they have seen an average increase of 22 million barrels during that time, so setting up its nuts for the cold winter, so to speak. rishaad: we may be or we may not. they don't regularly report inventories. unlike other major oil consumers who do, how does one get if view as to what they are doing? how does orbital insight
develop that data? >> this is the most interesting part of the data. china does not report its oil inventory volumes. in the u.s., every wednesday morning and traders watch it like clockwork. black locks, of a so orbital insights take and take pictures of these oil storage tanks all over china. it can measure how high the roof's of the storage tanks are, so it can tell how much oil is in them and uses that to develop and givestorage data traders more insight into a hidden corner of the market. a quick word on that iea report and reaction from it with us shale seemingly having
much more capacity than had been thought. take from thethe trading and investment community and market participants? iea is what we think of as a lagging indicator. they put out, a lot of other people have been seeing this. opec last month increased his prediction for shale. traders have come around to the fact that shale will be here and around for a while. we have had a big run-up in prices since june. i think a lot of people have been looking at shale as the ultimate cap on that. now that we are in the high 50's and low 60's where shale can be profitable, i think people are ready to see the rig count in america climb and see more supply coming on the market.
rishaad: great stuff. we will keep the oil theme going and china's role within the industry. it has been on the agenda at the petroleum congress in abu dhabi. attending.es one iea executive is concentrating on the united states. >> in the next 10 years, more than 80% of the global oil production growth comes from the united states only. as such, we believe that there will be are a lot of oil in the markets and will put downward pressure on the prices. rishaad: haidi: clearly divisions remain whether rebalancing measures are working. here is another take. >> it is probably about 200 plus million barrels.
i think that's one of the prime reasons for the price increase. the balance of the markets is successful so four. they might -- so far. they might need to do a bit more, but it is all to the benefit of consumers and producers. rishaad: the country is open to more deals with national players, but remained tightlipped about forthcoming agreements. >> for the time being, no, but we are not stopping from trying to attract more newcomers to c's.t and new o we want to have our plate full of big and important players. you can catch up all our interviews by using our interactive function tv . part of theme
♪ you are back with bloomberg markets. openedupplier hon hai lower in taipei after its biggest earnings decline in nine years down to technical hiccups plaguing production of the latest iphone. to justll in net income , well belowmillion the expected $1.2 billion. largest profits falls since 2008, apple accounting for more than half of the company's business. bedi: apple is said to working on a rear facing 3-d
sensor system for the 2019 ifo to my another step to creating an augmented reality device. it is evaluating different technology used in the system on the front of the iphone x. apple has started talks with prospective suppliers like sony, panasonic, and others working on that technology. raising the number of retail shares in its hong kong wasby 220 million after it 561 times oversubscribed. shares despite also being over subscribed, it is set to raise 833 million , sharesin this ipo jumping 30% in the gray market and trading set to begin on thursday. we will be going live to the .ingapore fintech festival
♪ haidi: 10:29 in hong kong. janet yellen has revealed frustration with fed colleagues for staking out policy is issued other views.ng avoidid rules should forecasting decisions and not make commitments about votes. bad for thethat is collective view. steven mnuchin says president trump is not necessarily seeking a phd economist for fed vice chair. jerome powell would be the first chair not to hold an economic doctorate. the white house is considering
mohamed el-erian for vice chair. he halted and economics phd from cambridge. withbus is kneeling a deal indigo partners for 430 narrow body jetliners. -- thends action transaction is set to be announced wednesday at a dubai airshow. based on a list price of the a32 be worthe deal would $47 billion before discount. china has accelerate approvals for offshore bond deals, easing access to financing in the cooling property market. the top economic planning agency ndrc is willing to approve larger quarters that quotas. a developers have received quotas in the range of $.5 billion to $2 billion.
global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: thank you so much for that. we have been wondering when this pullback was going to come, but still every single analyst saying buy on these dips. tips andeing these asia, and the u.s. station dominated by concern over tax cuts come a but we are really looking at the selloff when it comes to commodities, concerns over oil oversupply, the iea lowering its demand and the pullback from metals as well, not helped by disappointing china numbers this week. rishaad: to looking at gdp from japan, pretty decent, shy of estimates, one .4% annualized, but seven straight quarters of growth for the japanese economy,
the longest since 2001. about theo worried yield curve the flattest we have seen in 10 years. with is a lot of movement the bond market in recent years qt asperation twist and well, which is not suggesting the bond market is giving an accurate reflection of where the economy is. let's have a look at the japanese market at lunchtime. here is sophie kamaruddin. sophie: a relief for japanese traders as they had to lunch, the nikkei 225 falling 1%, growth not helping the mood and disappointing data with gdp lower than forecast. solar yen is trading at 15, traders are able to shrug off a disappointing gdp print so far. themberg intelligence says
slowdown could dampen inflationary pressures for the near term, so that might be concerned for the boj. afterssie dollar slumping disappointing wage growth data this morning, but the korean won on the way up and a surprise drop in unemployment for south korea this morning. commodities in focus. the kleins continue for copper, aluminum -- declines continue for copper, aluminum, and rubber. dropping almost 6% in shanghai. joining that of trend following the selloff on tuesday. a stock i want to highlight, this is semiconductor manufacturing, hong kong's hottest stock now hitting a rough patch, plunging after earnings miss testaments, so this stock set for its biggest two-day loss, but remains the best performer on the msci index. today is the final day at
singapore's fintech festival, attracting 25,000 delegates from 100 countries. we have been there with the highlights today. it is all about collaboration and how financial institutions and regulators can come together and where startups who drive innovation. we have block chain, cybersecurity, how to find investors. ,et's meet with taavet hinrikus chairman and cofounder of transferwise. you're looking at asia and the big way, why? it is natural for us to be everywhere where consumers are. we launched in london, and recently launched and singapore.
we are live in australia and japan and excited to open up in india next year. how are you undercutting banks and competitors? a huge field.e it is between $5 trillion and $10 trillion annually, so it is a big market. we are finding success by offering an easy-to-use to use solution for a low price. haslinda: how much cheaper are you? >> transferwise will pay you five times to 10 times a bank. haslinda: who would be your biggest competitors here come the big banks, alipay, not just a chinese player now? ,> has we look at consumers asre saying local banks being a competition globally.
bankser we go globally, are under serving customers and overcharging them for a simple service. haslinda: that is why they are rich. raised $280 million recently, and today $400 million. where will the money go ? is above 100se million revenue and will double business in the next 12 months. we are really happy about the last funding round to continue our expansion. we are looking at continuing our expansion all around the world. today we are in singapore. we are looking at launching in kong, ande in hong continuing what we have today in australia and japan, but similarly, we have a strong business in the u.s. and are looking at latin america. we are in brazil already. we are solving a global problem.
haslinda: you are already the biggest player in europe. are you planning to ipo? the number out there is $1.6 billion. >> that is probably a fair valuation. haslinda: what challenges going forward? >> to continuing to serve our customers and offer a market-leading solution. it will be a public company, but for now we are in a position to continue growing the company as private. we have a great investor base with a long-term view. ipo,nda: if you were to the next 24 months perhaps? 3-4 years from now. haslinda: i wonder how brexit
plays into your strategy. is that making you rethink your position in europe? >> there are two things which , and thealent passporting of our license in europe. if you think about a fast-growing company like transferwise come the challenge is to continue growing the business. if london becomes harder, that's going to hurt the company in london. passporting is critical for us. today we are licensed by the world leading regulator in fintech, that u.k. regulator, and we can use that license all over europe. now we have a business in all european countries and need to make sure we can keep doing business. we are looking at opening a european headquarters somewhere in europe to service our european customers. the u.k. headquarters will stay u.k. headquarters. haslinda: having said that,
given brexit would make london a less attractive fintech hub, maybe singapore. >> it is still uncertain what will happen and how it will happen. uncertainty never helps business, so i think brexit will , andthe u.k. less exciting other countries will win, singapore, maybe paris becoming a fintech up. we will see more hubs globally. in the end it is better for consumers. haslinda: one of the challenges facing startups is seed investment. one of the concerns expressed to us is perhaps bigger financial institutions may take over the intellectual property. is that something you have gone through? >> the challenge in fintech specifically is how do you go about building your brand and building trust. transferwise has 2 million
people using it worldwide. if you're starting off as a small company, you will be fighting hard for the first hundred users. it is a legitimate way of going to market, going together with the bank. not every startup can raise the money to build the brand. market way of going to is working with the banks and using them as the go to market channel. haslinda: what do you make of copycat platforms? more such a big market, and more companies are trying to do exactly what you are doing. is the sincerest form of flattery. actually had you bring that to your part of the world, and you would do it locally and may be in a better way. when it comes to us, we feel really good about the position
we are in today. online moneyggest move her and the world decides the banks, so we think we are in a great position to continue doubling down on our strengths, offer very low costs. i think we are in the strong position to continue being the leader. haslinda: some say fintech will change more in the next five years compared to the last 30 years. what changes, what trends come are you anticipating? >> we are a consumer-centered company, so the most important is to look at it from a consumer point of view. i think fintech will thrive if it offers people cheaper, faster, and better tools. how do the fan tech solutions savepeople's lives better, them money, and help them do things quicker? haslinda: we have to leave it there. taavet hinrikus of transferwise from the fintech festival in singapore.
♪ australia's prime minister says he wants same-sex marriage legalized by christmas after a nationwide vote in favor of changing the law. was a supporter of the yes campaign and advocate for lgbt rights. he is the qantas group ceo and managing director. great results. what does that mean for you and other australians? >> an amazing day. votes, and theic
vote of 62% in favor. if this was a general election, it would be the biggest landslide in australia electoral history. it sends a great message to the general community and the rest of the world what a great accepting place australia is. birth and was proud of arlington when they had the first vote in favor of marriage equality. mym now amazingly proud of adopted country australia. this is an amazing place, great country, and great message. haidi: what do you want to see from here? >> we should not have gone through this process, but we have because politicians could not decide and get this through parliament. it was great to hear the prime minister saying this will happen before christmas. dean smith who has legislation put to the parliament before
this boat and had something ready to go, i hope that goes in the next day or two and is the full support of parliament. we had every state and territory vote in favor of this come massive support across the country, a real message to the politicians to get on and do your job. haidi: are you concerned that legislation will go down into these exemptions because of religious rights? >> everyone knew upfront what this bill has in it. it does have protections and religious rights, similar to ireland, the u.k., and new zealand. we are the 24th country in the world to do this. there are some exemptions that some people would like to see in introducing further discriminations, which i don't think anybody supports, so you can't eliminate one is from an nation and then introduce another one. and bizarrely some people are suggesting a gay man can go into a cake shop and ask for a cake
and it would be illegal to discriminate with me, but if i go with my partner and ask for a wedding, they can. does that make sense? so we have to make sure appropriate legislation is putting in place. rishaad: attitudes have to change, don't they? i'm referring to people criticizing do as being the boss of a very big australian company advocating same-sex marriage as well. you have comments such as from the immigration minister who said a public company should "stick to their knitting." how do you change hearts and minds, the next challenge for the 39% who did not vote for this cause? >> it is, but i have to say that businesses are part of our community. in a democracy. it is important everyone has a voice. today at the celebration when it was announced, we had a big film
, so ind a sports star think business leaders should be talking about these things. a lot of investors are looking for companies that have good social corporate responsibilities. that is part of how they rank companies. we believe there is a strong business case as well as a moral case to support social causes. we know it attracts customers, engages employees, and attracts shareholders, so we believe it is the right thing to do. the politicians can't have it both ways. supporter of changes to the corporation tax in .ustralia at the same time, they can't not encourage us to have a view on social issues as well, which has big impact on all businesses in australia. rishaad: you are saying legislation like this in general , acceptance of equal rights,
are beneficial for your company. have you seen material benefit at qantas? becausei have come up qantas has been out there promoting the social causes, gender equality, indigenous rights. we are one of the leading companies people want to work for. young people, 80% want to work for a company that has a social responsibility. in the last year alone, we are seeing 500,000 frequent flyers joining. we are seeing clearly that it will be a big stimulus to the australian economy. there is a lot of pent-up demand for gay couples to go out and get married. it will be phenomenal for the economy, and great for travel.
i think it would be good for our economy as well. is it sustainable to keep to these levels of close to record profits we have been seeing? weeks ago we gave an outlook for the first half of this financial year, and that was for profitability to be between 900 and 950. we are at the top end of that for the first half. that is despite oil prices going up and more competition internationally. we have fundamentally change the basis of our business. we have consistent earnings from domestic business, loyalty business, and we have transformed our international business. that is why the share price has been the best performing airline the the last three years, best-performing stock in the asx, because people are looking at qantas in the different way
and investors are looking at the company as a change company. haidi: you restarted sydney to beijing. next year, what are you looking at within the asian region? >> we will start sydney oh -osaka. we will add a lot more capacity to singapore. london will beto reintroduced. thxt year, we start the per and to london direct service. i'm very excited to have 787 operations to the u.s. is ben have favorite chicago-dallas or seattle service starting sometime in 2018, the first time we have had direct service. haidi: how close are we to
getting new york-london? spaceis a bit like being race. they both have to do it. this ceo of bowling told me in told me inboeing seattle they will get specs by 2022. direct to london, new york, direct into rio, cape town. it changes our worldwide network. i am am excited for our customers and employees. haidi: always a pleasure. enjoy the day and enjoy the result. coming up, still more to come. this is bloomberg. ♪
♪ rishaad: tencent had a stellar and with its stock doubling its de-book spinoff soaring. driving future growth, compressing profitability, investors scrutinizing its gross margins when it is out with results later. we are having a look now at what we expect out of tencent. investors will be looking for a continuation of the theme of past quarters. we want to see advertising grow as a bigger slice of the revenue pie. tencent has mostly a gaming
company despite essentially operating one of the world's largest social networks. it has a way to go before it gets to the level of alibaba, facebook, or google. haidi: what about the overseas investments recently. we had that $2 billion stake in snap. are strategicse investments. tencent is a long-term player. this snapped deal, the 12%, i ofnk something on the order $2 billion for that investment, one of their largest overseas acquisitions come but it is hard to tell what tencent plans with that investment. we know they were once keen on before markapp zuckerberg swooped in, so that is one of the key questions investors will be asking later tonight, what is the long-term play here. rishaad: absolutely, what do we
have longer-term, high temperature.com, a huge ipo. what else could be coming up? >> if i were tencent i would be encouraged to look at my empire and see what other pieces can be sliced off to investors. the closest one on the horizon , whiche the music arm our colleagues have reported is considering a 2018 ipo that , but raise $1 billion plus there are other pieces of the company as well that could go. rishaad: thank you so much. bloomberg markets continues. this is bloomberg. ♪ is this a phone?
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♪ announcer: from our studios in new york city, this is "charlie rose." charlie: the nsa has been grappling with a massive cyber security breach over the past 15 months. the new york times reports today that some the agency's most sensitive information has been stolen by a group of expert hackers known as the shadow brokers. the paper describes the damage as an earthquake that has shaken the nsa to its core. david sanger is the new york times national security correspondent. he's one of the reporters who broke this story. he joins me now from boston. welcome, david. david: great to be back with you, charlie. charlie: here is the new york times today. deep security breach cripples nsa. mysterious