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tv   Bloomberg Daybreak Australia  Bloomberg  March 12, 2019 6:00pm-7:00pm EDT

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haidi: welcome to daybreak australia. shery: i'm at bloomberg's royal headquarter -- global headquarters in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down asia's major markets open. ♪ here are the top stories. brexit blues. theresa may's revised deal is rejected again. the comments will now vote on deal or no deal. sterling heads for the eighth decline in nine sessions as may's plan collapses. now mentioning a second referendum.
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boeing sees its worst two-day decline in a decade as the eu joins other regulators in grounding the 737 max. shery: that get you a quick check of the markets close in the u.s.. we had a few headlines dominate investor sentiment. brexit, the u.k. parliament rejecting the revised deal, but at the same time, boeing also falling on repercussions from the eu d.o.b. airlines crash we saw over the weekend. more regulators, including the eu safety regulator coming out grounding the 737 max jetliners. with boeing falling, with the biggest two-day losses since 2009, the dow fell 2/10 of 1%. boeing makes up 11% of the price weighted index. the s&p 500 climbed. technology shares continue to rally. the nasdaq up for tenths of 1% as we saw the likes of apple, amazon and microsoft gaining ground. we also had a stock inflation
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reading in the u.s., reinstating the idea that the fed has more leeway before it needs to hike again. you are seeing u.s. futures unchanged at the moment. perhaps a little bit positive. let's see how we are setting up for the session in asia. sophie: not seeing much positivity this morning. that we haved up from wall street. let's check in on how futures of setting up in asia because we could be looking at a mixed session for the region. this after asia's benchmark climbed the biggest since january. as we can see from wall street, it was a mixed session with what happened with the dow and s&p 500 adding one third of 1%. in japansee the rally with futures notching lower. futures also looking to a softer start as the rebound in korean stocks has pushed to the highest valuation in two years.
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it is not attractive given profit prospects. in australia, keep an eye on financials limit speculation that major banks are considering their operations. living the board to check in on the british pound which is holding losses after may's brexit plan met defeat in the house of commons. we can check on how sterling is faring in asian. we are seeing it holding on to the losses. it did drop as much as 1.1% going into the vote, the biggest drop in almost two months. soon after the vote, as profitability -- probability of a softer brexit vote rises. trading volume almost double the 2019 average to make it the most volatile session for sterling since november. haidi: wild ride continues. let's get you the first word news with jessica summers. jessica: the top u.s. trade negotiators says washington must
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keep the option of raising tariffs on china, making sure that beijing stick to any agreement. robert lighthizer said the u.s. has to have the ability to impose higher duties to encounter any violations of a deal. his comments pushback and speculation that an agreement with see the two sides lift tariffs immediately. indian inflation remains subdued. offers a potential dilemma for the prime minister modi going into the general election. most politicians might cheer the taming of price rises, but india's low-inflation is driven by low food prices. the slowdown raises the possibility of another rate cut which would give modi and the economy a boost. university, coaches and college admission counselors among dozens of people charged in a criminal conspiracy that sought to help applicants when admissions to elite u.s.
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schools, including yale and stanford. wealthy parents are alleged to pay bribes around $200,000 each to help their kids cheat on entrance exams and have coaches designate would be students as athletic recruits. and, new york's iconic chrysler building could be reborn as a hotel, after his latest change of ownership go through. sources say the 77 story tower being bought for $150 million. that's significantly less than the $800 million abu dhabi paid. it would consider renovating the tower into a hotel once the deal is complete. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts. i'm jessica summers. this is bloomberg. haidi: thank you.
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u.k. prime minister theresa may's latest brexit plan has been rejected by the comments. it opens the door to further political crisis and paving the way for a chaotic exit. may took a last-minute renegotiated deal to mp's, hoping the new language on the irish backstop would be the motor. >> but, let me be clear. voting against leaving without a deal and for an extension does not solve the problem we face. the eu will want to know about making such an extension. this house will have to answer that action. haidi: our reporter sebastian is watching developments out of london. what happens now? sebastian: this deal is now dead in the water. the attention now focuses on later this week. the first one is on a no deal and ruling it out. it will be a free vote which
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means lawmakers it to have their own say. they will not be pushed either way by the respective party. if it is ruled out, we look at delaying brexit later in the week. mp's will probably back in extension period -- extension. of course, you permission is required for this. donald tusk has been saying he needs to know how long this will be for and what the reason is. if theresa may says this is a short-term solution, it does not solve any of the overarching problems of brexit and there is a chance that it brexit is delayed, we could reach another cliff edge where there is no progress. shery: prime minister may talked about a second referendum being one of the choices parliament has to face in the coming months. instead of a brexit delay, is there a chance brexit may not happen at all? sebastian: it is still a more
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extreme scenario.lawmakers agree with theresa may that the people voted back in 2016 and it is a vote that has to be honored. notably, theresa may included a second referendum among the choices that she said parliament have to focus on in the coming months. >> this house will have to answer that question. does it wish to revoke article 50? doesn't want to hold a second referendum -- does it want to hold a second referendum? leave with ant to deal, but not this deal? these are on in the people choices -- unenviable choices. the decisions the house has made this evening are choices that must now be faced. sebastian: that mention of a second referendum no doubt will boost the borders of the so-called people's vote. brexit was always something
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theresa may used as a threat to hardliner. it is this brexit or possibly no brexit at all. that was not enough. it seems the fear of this deal is even more than the fear of another vote. indeed, theresa may sees no evidence people have changed their minds. it could be we get a second referendum, but even then, the people who vote for brexit what more and that takes us no closer to solving this issue. shery: sebastian, thank you so much for that on the latest on brexit. sterling weakened against the dollar. it became evident may's revised agreement was heading for defeat. catherine rifle joining us in new york. theaw volatility on sterling dollar surge, the highest level since 2016. this chart showing that clearly. against the euro-dollar volatility, it remains unchanged. the spread of the highest level since 2016. walk us through what happened
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with sterling in the past 24 hours because it was really a seesawing movement. >> the charts tell the whole story. it will do the 24 hours. asian-based traders woke up yesterday to news that theresa may was headed to meet with the eu. and then we got news that they reached some sort of deal. we saw the pound rally massively on the back of that news. u.k. attorney general really took the steam off of that rally with comments that there is still significant legal issues as it relates to the backstop. so in a lot of ways, this outcome was expected that the deal would be defeated in parliament, but given the events of the last 24 hours, i think sterling traders are in wait and see mode to see what transpires with amendments. how the no deal vote goes tomorrow. haidi: what do we see with regard to volume? more or less activity than
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usual? >> volume has definitely picked up. an explosion in the options space. on tuesday alone, the trading volume in sterling was more than double their 2019 trading volume so far this year. greifeldat is kathy with those volatile pound movement. let's bring in richard whitman, a professor of politics and international relationship at the diversity of kent in the u.k. it feels like we are in this terribly endless, circulars adventured type television show. what are the next steps? it was interesting that theresa may brought up the idea of a second referendum which we have not really heard her say before. richard: short-term, it is clear we have more parliamentary action of the next few days. haidi: the vote to extent. richard: no deal is clear.
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there was a majority in parliament that says it does not want to go into a no deal brexit. the question is this extension possibility, but for how long? that is the eu's decision. in the short-term, a great deal of political turbulence in the u.k. haidi: tusk's spokesman saying there has to be clear justification. how do you put a duration on how much time they need to sort this mess out? richard: it is a real issue because kicking it down the road, you'll still face the problem in parliament. can theresa may put the squeeze on more in her party to get the deal through? it does not look like that at the moment. even labor mps have not on her way. even from her constituencies. so far, she is really stuck in a place that it is not easy for her to think about a way forward, on the basis of the current deal. shery: she lost by 149 votes which is smaller loss than what she faced back in january. where does that put this revised
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deal which she worked on for the last two years? government's approach has been to basically pilaf members of her own party by making it appear she has a better deal. that didn't work. the attorney general's advice really did fall. the approach was to peel off some labor mp's. that also has not worked. what we have seen is a clear sense of where parliament is at which is not liking the deal that she's got. which isis predicated, why you need the backstop, having ruled out coming out of single markets. do we see a softening of what the u.k. seeks to get? that would be a justification for the eu to maybe thinking about going back into renegotiation with the u.k. but not in the short-term. they will want to see much
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greater clarity from the british government. shery: it would be interesting to see the reaction from the european union, which has had a coordinated response every time something happens with brexit. france talking about a delay of brexit on alternative strategy from the united kingdom, which is something donald tusk has said. how united have they been in the response to brexit? richard: this is one of the most remarkable things, that the eu 27 have had a common purpose and managed to hold a lot in terms of negotiations. i think in the short-term, their interest will be to mitigate the damage for themselves. i think their interest is probably going to the in an extension of the article 50 period, not necessarily for the u.k., but so they can do more no deal prep. that is where they are at the moment, seeing a british government that is fatally wounded but cannot identify a clear way forward for the u.k. they were probably want some
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time as well to get their affairs in order, but this is not good for both sides. haidi: in a most of like theresa may came back from strasburg with a little more leverage because we heard jean-claude juncker say this is the final the. we know with economic growth being weaker in europe. do they have more room to get? richard: i think the problem is what the british government's redlines are. the eu feels like they had gone to the limit to what they can offer. i think most commentators did not expect that everything would hang on this issue, the so-called irish backstop issue. the only way to soften that, the only way for the eu to come back with something different is for the british government to shift on its relationship to a single market post-brexit. then, you have different kinds of options for northern island. this government does not want to do that so the question arises. haidi: may's position has been in peril for white sometime but
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do you expect her to fill out a job in three months, a second referendum to be a realistic option? richard: a second referendum is something that cannot be ruled out. a general election is a more likely proposition. a general election is likely to lead to a coalition or inconclusive type scenario which means the prospects of a coalition government for the u.k. if you have a general election, the parties can offer the option of a second referendum. parliament will not vote for a second referendum. you got to have a general election before you can get a second referendum. haidi: the wide array of that flowchart, the options are laid out. thank you for joining us, richard whitman from the university of kent. still ahead, the fed sees more evidence for a rate hike patience. shery: up next, boeing shares have the biggest two-day drop in nearly 10 years as more airlines around the 737 max.
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we just heard from the faa that they find no basis to ground boeing 737 max aircraft thus far. the u.s. aviation authority has stood firm and in support of the company, after eu regulators and other countries have already grounded their 737s. we will have plenty more coming up. this is bloomberg. ♪
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haidi: we are counting down to the sydney open. futures on the back foot a little bit at the start of the session. the s&p edged higher. the dow seeing declines, dragged down by another day of declines for boeing. shery: you are watching daybreak australia. just as heidi mentioned, boeing shares put another 6% as more countries ban the 737 max from
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flying. shares have not not to single day of gains in the past seven sessions, the longest streak since late december. ramy has the latest. we just heard from the faa that it sees no basis to round the jet buspar. the u.s. aviation administration standing firm behind boeing. ramy: people up there would be a groundswell against boeing, especially with all these countries and carriers saying we are going to ground these lights until we fly more. this is perhaps a little bit surprising they are really standing their ground. let's take a look at this map. the red countries and the territories are nations, governments that have stopped 737 max flight. for our purposes, asia-pacific viewers as they wake up, australia, china, india all in focus, as well as singapore and malaysia. in terms of some of the airlines being affected, air china, china
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eastern, china southern. australia coming up they will not introduce a new aircraft unless they find it safe. singapore silk air and fiji airlines. lion air, that having been in the news over the past five months. in yellow, one or more carriers themselves, the companies themselves are grounding 737 max. in particular, mongolia. south korea, east star being affected. , also in the past hour, icelandair coming out saying they will also halt their 737 max 8 flights for now. the european aviation authority across the entire region saying they will be banning boeing 737 flights. france, germany in particular there. this is going against what
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boeing has been saying over the past 24 hours, that there is full confidence in the 737 max safety. jeffries coming out saying that they are seeing a rebellion against the faa with regards to what is happening around the world. the faa standing their ground. one interesting thing was the share price fall. over the past seven days, you really see where that drop happened. down 13%. $24 billion lost in market cap just this week alone and we are only three days in. over the past seven days on your screen, a loss of $37 billion off of the market cap. the worst streak since december 26. we will see what is happening over the next 24 hours when shares start trading in the next a.m. haidi: where do we go from here in terms of policies and the investigation? ramy: a lot of questions still
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outstanding. in terms of the probe, investigators are looking for the flight recorder to see what happened. a lot of questions are flying around on whether the ethiopian air crash is related or linked or any evidence related to one and the other with regard to the anti-stall software that malfunction with the indonesian line air crash by month ago. the faa is saying there is no evidence found so far linking them together. in particular too, with the faa, while we are seeing these groundings around the world, it is up know that southwest and american airlines are still maxng the boeing 737 8 jets. there is pressure outside as well within politically. to your question, donald trump himself weighing in on boating safety. coming up with these tweets saying airline to becoming far
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too complex to fly. also saying he would rather see a pilot fly this versus albert einstein, a scientist. he was on a call with boeing ceo. that ceo saying the aircraft was safe in a call. looking ahead, we will see what comes out from the flight recorders when they are found. the faa has ordered boeing to take a look and try to upgrade the anti-stall software that is presumably malfunctioned five months ago in the indonesian airline crash. haidi: the very latest from the faa, standing by boeing, saying there has been no systemic performance issues found and no grounds to ground the fleet thus far. lots more to come on daybreak australia. this is bloomberg. ♪
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shery: let's get a quick check
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of the latest business flash headlines. nissan terminating production of its infiniti models to focus on north america and china. the mitsubishi alliance is moving on from the carlos ghosn era. the three partners are streamlining operational decision-making with one single board. haidi: former goldman sachs bankers have been banned from the industry from the federal reserve for their roles in malaysia's missing billion scandal. the pair were donated bond offerings that allowed cash to be stolen. he's pleaded guilty to u.s. charges, including conspiracy to money laundering. shery: coming up next, volkswagen ceo tells bloomberg he is optimistic about the u.s. and china reaching a trade deal. hear that interview next. this is bloomberg. ♪
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haidi: 10:30 a.m. in sydney. markets open in 30 minutes. getting wednesday started on the back foot with weakness in sydney stocks trading. lookingful view there at the sydney opera house. i'm haidi stroud-watts. shery: i'm shery ahn in new york. let's get the first word news with jessica summers. jessica: thanks. the u.k.'s departure from the eu faces more uncertainty as theresa may's revised brexit proposal fell to a heavy defeat in the comments. sterling was under pressure for an eighth decline in nine sessions. mp's perspective to vote against a no deal scenario on wednesday.
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the attorney general says an extension beyond march 29 is inevitable. may told parliament a second referendum may be one of the options left with u.k. with a deal now dead. jeffrey dunlap has attacked president trump for what he calls the shopping growth of the u.s. debt burden. he noted "the incredible increase in corporate and government borrowing with federal deficit only expected to grow." the treasury department says total debt has risen to a record above $22 trillion. australiaerve bank of is assessing the impact of climate change and the implications for the economy. the deputy governor says it is looking at the effects on inflation. politics have become polarizing in australia, propping the central bank to carry out its own research. australia is one of the leading
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per capita polluters and the world's driest inhabited continent. boeing slumped again as regulators around the world grounded the 737 max plan on safety concerns. the stock saw the biggest two-day decline in the decade is the european union and india suspended flight following the second fatal crash of the model in five months. growing doubts about the plane leaves the faa suddenly -- isolated. it says it remains airworthy and has no intention of rounding the jets. global news 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. shery: we are expecting a few data points out of asia this morning. let's go to sophie kamaruddin for a check on what to expect in today's action. sophie: we may be stuck in limbo. we might find it difficult in asia to shake off that risk we saw on wall street with futures
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nudging lower after asian shares jumped the most since january. this morning, the advanced in tokyo looks set to positive for a two-day gain. in australia, financial stocks which may continue to be a drag on the asx 200 which we saw on tuesday. we will be gauging speculation that major banks in australia are considering, due to new roles from the rba. flipping the board to check in on action on the bond. aussie and kiwi notes tracking the rally we saw overnight in treasury with all the u.s. treasury yield going to 2.6%. this morning, the aussie tenured deal is falling below consumer confidence data. time now for a quick check on the trading for what to watch in asia for the rest of the week. japan expected to report a pickup in producer prices in february after slowing for three
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months. this update comes ahead of the boj decision due on friday. the central bank will have a string of weaks readings on growth, inflation during this two day meeting. we are getting closer to getting a full or picture of the health of china's economy with retail sales due thursday expected to remain steady, while a slowdown is expected in industrial average growth, haidi. haidi: sophie kamaruddin with a check on what we are watching. in chinese stocks has opened up interesting valuation premium relative to shares traded in hong kong. >> in many ways, it shows you the extent of the rally. chinese shares were terrible last year. then, we have is really amazing started 2019. what that has done from a valuation perspective is it has created an interesting dynamic with the hong kong traded shares. we are basically back to where we were in october on the
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relative valuation. part of that is why you might want to think about allocating a little bit more to those hong kong listed shares. there is still a long-term, bullish argument behind the stocks even after this huge rally. you have a country and an economy that has become more important in the world. the msci and global indexes that are continuing to allocate more of the chinese share of that global economy with an the main indexes. clearly, the long-term allocations story is there, but on a short-term basis, this valuation premium discount to hong kong, it will give you a little bit of a reason to maybe edge back allocations. we had the warning at the back end of last week, what we thought was coming from the authorities. they may be want to slow down this rally a little bit in domestic shares in china. a couple of things stacking up against domestic shares in china.
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that might put a little bit of a pause on the rally we have seen so far. shery: we have seen a lot of volatility on sterling on the brexit saga. that turmoil, easing debt a limited at this hour, but where we headed on these huge price swings? adam: yeah, it is all about where it has come from. if we look at one week on sterling-dollar, it is still pretty elevated. pretty much at levels we have not seen since going back to 2016. you see that redline track some of the peaks which have coincided with peak anxiety and brexit. ultimately now, the market is agreeing to some extent with what the attorney general is saying. the delay to that end of march date on britain leaving the european union is inevitably going to be delayed at this point. spot,ve that move in sterling, continuing to see the
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heightened levels of volatility and people who would be unwinding some of those hedges in the first couple of months of this year are on the idea that things might be moving in a positive direction continue to be faced with a very difficult and uncertain climate, even if you believe you got an extension for a few months or of her long it will be -- however long it will be. it is it did very difficult trade for many people and many people are taking the choice to drop out of that one. haidi: adam in sydney. you can check out our library for some of those charts that adam referred to on the bloomberg terminal. volkswagen says the car market is increasingly tough, but aiming to keep 2019 profitability of the same level of last year. the ceo told bloomberg he is optimistic about a u.s.-china trade deal and a brexit resolution that would stabilize the u.k. market. >> it is not a easy year.
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we have the same outlook for this year to keep profitability at this level. it will be harder this year. car markets are really difficult. optimisticstill because it can change with the deal between china and the u.s. if brexit was clear on what is going to happen, i think this is going to be another good year. we are investing a lot in new technology. keeping the profitability level would be in achievement. >> allegory is it to you -- how important is it for you to get a good brexit deal and how optimistic are you? herbert: brexit is important to us. it is an important market. depending on the export from the island. this is a critical situation for us. brands have axury
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big market share in the you get -- u.k. orontrollable brexit whatever decision to be introduced would be very important to stabilize. >> can you quantify that and can you tell us what you expect? herbert: there are different scenarios. if it is really an uncontrolled brexit, we would see a decline in the markets on both sides. exports would be difficult. it would not ruin the company, but would -- we would notice it. >> on the china-u.s. trade deal, do you have optimism and can you quantify that in a dollar figure? herbert: china is very important. we have about 18% market share last year under difficult conditions. china is really important for
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our worldwide presence. also for our profitability. markets are really down. starting last year, january, february, declined 10% market. on the other hand, we carry a lot of new product. i'm optimistic there will be a solution between both economies because it's in the interest of both parties. toee a lot of eagerness really find a compromise, because it is so important for both economies. china probably more. i hope westic and have a better second half. >> you have held your forecast for 5% sales growth this year. does that assume a neutral or positive outcome between the u.s. and china, the u.s. and the eu? herbert: that would assume the
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second half of the year would be better. we hope we can slightly growth, whether it is 5%, the upper end. shery: herbert diess speaking to matt miller. at another -- add another to the pile of negative surprises for the global economy. u.s. inflation fated in february, supporting the case for the fed's rate hike cause.we have two more reports in asia coming up. south korea and japan expected to show weakness. kathleen hays is here. is this u.s. inflation weakness that we are seeing a continued trend or a one-off? kathleen: that is what we have to wait and see because of you look at the numbers that came out today -- not a big drop you consider holding steady, the main numbers in the consumer price index actually eased back a bit. on the headline number, 1.5% year-over-year in february from
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1.6% in january. food and energy fell to 2.1% in february. jump in the bloomberg and look at a chart that shows you some perspective because true pressure has been building on the inflation numbers, strictly as oil prices rise. as the oil falls, you have the headline coming down. that is not so concerning. the core may be easing back of it because it is not just oil prices. that is what that signals. if you look at the report, you find out one of the reasons we saw that core cpi cooling-off is because of auto and truck prices , because of prescription drugs. let's move on to another chart and i will show you what is happening. the overall line, the yellow line is the cpi core, down to 2.1%. car sales have been ebbing as well. those trend downwards as well to prescription drug prices have
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come down. very good for people who have to buy them but those two things made a difference. one more thing in this report that was pointed out by the bloomberg economics team. a big price that was going up was car insurance. it looks like people are driving more safely. it is an outside impact. i'm not sure if i am driving any more safely. jay powell will drive policy safely. this reinforces what we talked about, subdued inflation. one more reason for the fed to pause. haidi: on to the asia data, we've got unemployment numbers from south korea. they are expected to remain elevated. a huge, long-term issue for policymakers there. kathleen: it certainly is. there is always political ramifications with every jobs and wages in the next. we know unemployment is supposed to stay at a relatively high number, 4.4%. of that is -- that is a nine-year high if that is where it is.
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what is going on? there has been corporate restructuring. it is hitting the semiconductor industry. double-digit increase to the minimum wage. it has hurt workers to a certain extent, that is what economists say. also, the jobless rate staying high in january because it looks like people are coming back to the workforce. bloomberg economics saying this will allow the government to argue more strongly for supplementary budget on top of their record 2020 budget. let's move on to japan biggest event in focus now, as we look hadachine tool orders, they their biggest drop since 2007 in the last reading. down 3.3%. that is quite a drop. when you look at it, you think maybe it is the trade war. although, it looks like foreign orders have gotten a little bit smaller. domestic orders filling in the
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gap. let's look at a couple of the numbers that are coming out. 0.7%, againrising because of oil. machine orders, we saw that 3.3%. going down 2%. it is all about the services industry. it is supposed a down on the month. maybe demand in the retail sector not as strong. some big numbers for japan, especially had of the bank of japan meeting this week. no change is expected but it can help bring in their outlook about inflation. shery: we cannot wait to hear what the governor has to say. coming up next, the u.k.'s political crisis deepens as theresa may's revised brexit deal falls to another heavy defeat. we will assess the applications next -- implications next. this is bloomberg. ♪
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haidi: the u.k. political crisis is deepening with parliament rejecting the brexit deal theresa may struck with the european union. our next guest says brussels must do maybe even more than britain. before we get to how much leverage the u.k. has over -- where do we go from here? it gets extended but how long? how long is a piece of string? >> that is the question we are all asking and everyone in the markets are asking. i think from the eu side of it, they are looking for a much longer piece of string. from the u.k., maybe three to six months. where we go from there, that is probably the next trading opportunity or the next variant in the market moving forward. we need to get to that stage. many to hear there will be an extension.
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sideed to hear that you yoeu's of things and plethora of opinions in the u k on where we go next. haidi: it does not make volatility returns -- taking a look at just cable but the euro side of things that really spiked. is it less untradable now? what is difficult long-term scenario now with an extension, now talking about a second referendum which we have not heard before? nick: i think we will start to see -- even yesterday, we saw excessive volatility across the pound. we are back where we started from the the moves from cable were not actually that dramatic. we are well bid against the dollar and the euro, to be honest. i think we are in familiar territory for traders. maybe it does get more tradable in the short-term. where we go over a longer term is probably up to politicians at
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the moment. shery: not just the volatility was not as bad as expected, but also the forecast for sterling dollar seems to be pretty good. the chart showing you the current level of sterling-dollar right now. at the same time, when you look at forecast for the fourth quarter, that seems pretty optimistic. why? nick: i think over the last three and probably six months, we have seen a massive change in the dynamic between the u.k. and eu. european numbers have been terrible for that period. even last night, we got strong gdp numbers from the u.k. it backs up the way the currency markets are trading at the moment. it does seem sterling against the dollar and the euro is a bit on this story than a cell on rallies. probably for the last two years. the downside has been greatly favored. i think that dynamic has changed and that is why we are seeing these trends in the market.
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shery: let me turn to the u.s. because we have another self inflation reading this morning. does this give more confident to the fed assessment earlier that we don't have to worry about inflation? was the fed right in turning more dovish earlier? is it a smart move now that we see inflation not accelerating as fast as we expected? nick: i think it doesn't. it backs of what we have seen from the fed. it has been a sharp turnaround in the past couple of months. i think they still got room in the longer term if we do see a change in data that there could be one more rate hike. at the moment, they've got it spot on. we saw better wage numbers on friday but worse employment numbers. we have slightly worse cpi numbers overnight. i think they are in exactly the right place of where they want to be but i think they will be reactive through 2019. they could jump either way.
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it is still more likely there could be a hike further down the track but that would need much more improved numbers over the long -- medium-term. haidi: do you think they are overpricing this idea of another year of the goldilocks scenario? robust stable growth but very low inflation? nick: the has to be a give on one side of that equation. i still possibly feel that inflation could come through. we've had such great job numbers on the u.s. of the last year. i think that has to translate through to inflation. whether it is measured or whether we get this slow grind, that is not in the fed's favor but we might see a spike in some point in that could change the rhetoric. haidi: we were talking earlier, everything is wait and see. we are waiting to see what this trade deal looks like. it will be interesting to see if the markets will fade. nick: we are wait and see on far too many issues at the moment.
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that is why a lot of people are standing on the sidelines. we literally need clarity on so many issues. now.-u.s., brexit we got so excited yesterday that we thought we would have a resolution. the fed, various central banks. sterling -- the bank of england is probably the only central bank that is mentioned as possible rate hikes and that is possibly retrace now because of what happened in brexit overnight. there is all this wait and see across a variety of markets. shery: when it is not held by brexit -- hostage. we are seeing jobs numbers out of south korea. machinery orders out of japan, ppi. they don't look that great. are we seeing a fundamental pivot when it comes to global economic data following the last three weeks? the oecd downgrading growth as well. nick: i think so. we are seeing a pullback on numbers and hard data across the board.
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i think that will lead to possibly topping up across those global stock markets. i don't think we are going to see a dramatic downturn, but once again, we do see the numbers start to come down and maybe that will see a real change in the dynamics and there could be an extended move further to the south. haidi: nick, always read to have you. lots more to come on daybreak australia. this is bloomberg. ♪
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shery: i am shery in in new york. haidi: i'm haidi stroud-watts in sydney. let's take a look at the market open almost upon us in sydney. sophie kamaruddin in hong kong. sophie: we are bracing for losses in sydney with the asx 200 potentially shaving off six points after the benchmark fell for the first straight session on tuesday. looking for some stocks, gold
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stocks on the radar after macquarie said more m&a is coming to the second with consolidation seen as a driving force. among the top global picks is northern star which is trading dividends today. keeping an eye on coca-cola on reports it may not be the only candidate bidding. china is working to submitting a final binding bid for the march 29 deadline. corporate travel management, unsolicited offer to a british firm for its travel businesses. that may not result in a sale, but could get up to twitter to the $2 million per capita. shery: plenty more to come in the next hour on daybreak asia. we will talk trade when we are joined by export now ceo and former ambassador to singapore frank lavin. haidi: that is almost it for daybreak australia this morning.
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we are few minutes from the opening in australia. looking pretty flat at the moment. the aussie dollar holding above the $70 70 sent panel. this is bloomberg. ♪ this isn't just any moving day.
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haidi: a very good morning. i am haidi stroud-watts in sydney, where australian markets have just opened for trade. shery: i am shery ahn. sophie: i am sophie kamaruddin and hong kong. welcome to "daybreak asia." haidi: our top stories this wednesday, brexit blues. theresa amazed revised deal is rejected -- theresa may's revised deal is rejected again. sterling held losses. she said


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