Skip to main content

tv   Bloomberg Daybreak Asia  Bloomberg  March 12, 2017 7:00pm-9:01pm EDT

7:00 pm
♪ >> signs of stability, china says the economy has improved this year with little danger of a hard landing. leaving to take up the reins and hsbc. >> theresa may faces a revolt ahead of a vote that could see the start of brexit. fall,de after the president park remains defiant, saying the truth will come out.
7:01 pm
we have the world covered here on "daybreak asia". discussed whether things are looking up in china. look ahead towe what is a big week with the fed rate hike looking increasingly 100%y, not just likely, according to fed fund futures. liveis "daybreak asia" from our u.s. and asian headquarters. i am betty liu. >> it is just after 7:00 a.m. in hong kong. . am yvonne man a big week for markets, boj, boe, theresa may may trigger brexit, and elections in the mix. in as well, athat lot of macro events. a big snowstorm hitting the northeast and 24 hours, so that will wreak havoc on flights. it sounds like it will be
7:02 pm
another week or where we have to strap our seat else on and ride it out for the week. >> a blizzard in march. let's kick things off in the asia-pacific this morning. maybe just a calm before the storm litter to me and figuratively. -- literally and figuratively. let's look at the on c open here. very slow going. -- let's look at the opening here. very slow going. everything has been priced in when it comes to the fed. japan, let's see how things are looking over there. dollar-yen of way above the 114 handle. it could be slow going when it comes to stocks in tokyo this to chicagocording nikkei futures. the top story remains in south korea. the ousted korean leader park geun-hye has struck a defiant
7:03 pm
tone. her fall has left the country with the daunting and familiar task of rooting out corruption among political and business figures. from bring in shery ahn seoul, korea. what a fascinating week. what did park have to say regarding all of this? on behalf -- did not speak directly, but had a lawmakers be gone her behalf saying she was sorry she could not fulfill her presidential , but will take full responsibility of the consequences. she did say that it may take time, but believes the truth will be cleared after all. that suggests she will put up a strong legal battle. homeis back at her private , where hundreds of parka supporters gathered sunday evening to receive her.
7:04 pm
now we are hearing some of those supporters are still out there. been a veryis has emotional time for a lot of supporters. protests seem to have died down. it is the place where for the past five months anti-park protesters gathered to demand her ouster. 20,000 police officers gathered here over the weekend as these protesters came out again to celebrate her ouster. we are seeing some police officers guarding the area. >> she has been removed from her office, stripped of her immunity, so what happens to park geun-hye? the ruling allows her to be prosecuted, criminally prosecuted.
7:05 pm
in fact, prosecutors have named their criminal suspect. it alleges that that she colluded with her close friend extorton-sil in order to tens of millions of dollars from businesses in south korea. those allegations have been previously made that because of her immunity they were not able to question her. she has rejected questioning by prosecutors, citing a law that gives a sitting leader immunity from prosecution. now the question is when will they try to question her again. her lawyer called the ruling tragic, saying it was made under public pressure. reaction ofbeen the south korea's neighbors? what has been the reaction to this moment in south korea and what does it mean for their relationship? , right now we are
7:06 pm
hearing there are some beectations that this could a reset for diplomatic relations with china and south korea. remember, south korea has been rolled for nine consecutive years by conservatives, and now the liberals seem to have retaken power. some of the leading candidates have already voiced a softer touch or proposed a softer touch against the north korea. the front runner in paul's has proposed-- polls has reunification with the north. he said the government should review the deployment of the u.s. missile shield, so elections will be held before may 9, so there is optimism this could be a reset for south korea. >> all right, thank you so much.
7:07 pm
let's get to first word news with a rosalind chin. mark tucker is to step down as ceo and president of aia to become group chairman of hsbc. onwill take up his new role october 1, replacing douglas flint. one of his first tasks will be to find a successor to stuart gulliver. lawmakers on both sides of the isles still have not seen evidence to support president trump's claim that his predecessor tapped his phone. however, republicans and democrats expect more details to emerge as soon. byday is the deadline set the house intelligence committee for the department of justice to provide evidence relating to the president's allegations. reports from tokyo say toshiba's laws could reach ¥1 trillion, a $.7 billion. if it's u.s. new unit files
7:08 pm
for bankruptcy, this could occur. toshiba estimates the westinghouse write-down at $6 billion and may allow the unit to file for chapter 11 protection. prime minister narendra modi has won a surrounding -- resounding victory, allowing him to push ahead with his reform agenda. least 216s taken at seats in the 403 member state assembly. it is leading and more than 90 others. the result was priming mr. modi and prime position to campaign for a second term in 2019. the u.k. brexit secretary is trying to avert a rebellion inside the conservative party a head of a vote on monday they could trigger the process of leaving the european union. facing calls from lawmakers from parliament to have a say on what happens if talks in without agreement. prime minister theresa may has indicated she may launch brexit
7:09 pm
on tuesday if she wins monday's vote. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> china says its economy has shown signs of improvement in the first two months of the year. steve schwarzman says donald trump will soften his stance, and it sounds like this hard landing is getting softer in china? it looks that way. some of the statistics we have been getting shows what we have been saying all along, the chinese economy has stabilized. say growth keqiang this year will be 6.5%, and that fromtcheted down somewhat the target they gave a year before, but shows they are stings -- seeing stability. the head of the national
7:10 pm
statistics bureau is saying on the sidelines of the annual meeting of parliament that industrial output in january and february grew 6%. also, the services sector seeing stability, in fact, expanding over 8%. rising combination with retail sales, which is a big part of the rebalancing effort of the chinese officials, and fixed assetin investment data. according to bloomberg intelligence chief economist in asia tom orlik a, these readings would suggest robust growth momentum continued in early 2017. bethis is a much more up to -- upbeat term than we heard thesei keqiang with all great challenges, so what has changed? >> let me taste something about the inner workings of the chinese leadership, especially li keqiang.
7:11 pm
he sets expectations lower end talks about the grave internal and external challenges. he consistently does that so he can exceed expectations at the end of the year, so set the bar low and beat it every single year. that is why they hit these targets all the time. others are caring li keqiang grave prognosis. , if you will. we had the head of the research center expressing optimism on the economy, saying the economy must zero biga downside risks. we heard from the national statistics head, sing little or low risk for heart landing, so it looks as though the numbers are panning out to have stability for the rest of the year, but there could be extra and all shocks. to cutpaign is going on excess capacity and appears to be bearing fruit, the coal and steel industries reported negative growth. property
7:12 pm
inventory and third and fourth tier susie's also decline. -- front tier -- fourth tier cities also decline. >> thank you. onhave plenty more happening bloomberg television throughout the day. australia's foreign minister julie bishop joins us on bloomberg markets: middle east. plus, later on, the exclusive interview with the nobel prize winning economist at 7:00 p.m. hong kong time, 7:00 a.m. in york. we focus on the fed and the countdown later this week with a special coverage from 1:00 p.m. new york time on wednesday. looking ahead, narendra modi may's beat up his reform drive after a sweeping victory in india's most popular state.
7:13 pm
we will look at what he might be doing now. next, asking if asia is a ready for the dollar shortage if the fed raise rates. this is bloomberg. ♪
7:14 pm
7:15 pm
.> this is "daybreak asia" i'm betty liu in new york. >> i am yvonne man in hong kong. ata has been sued by nissan, ford, and bmw, claiming they held information that caused their backs to rupture. the carmakers are citing consumer suits, alleging they knew about the flawed devices. as partas plug guilty of a $1 billion settlement with u.s. prosecutors. in chilelliton to meet to hold talks since negotiations
7:16 pm
broke down at the mine last month. workers have been on strike for a month. the cut has bolstered prices on the london metal exchange. two former senior j.p. morgan executives may be excluded from the banking industry after being fined in a bribery investigation. they work for the lender and asia. the fed says they hired interns and employs to curry favor with officials and clients in china. j.p. morgan described their conduct as unacceptable and says hiring practices have been improved. fed rate hike this week is certain, so investors are focusing on a hint of change in the number of increases this year. our next guest sees four hikes in 2017. he is the chief asian and pacific economist and joins us now in hong kong. let me pull up our trustee
7:17 pm
wirp , which knows shows no change. 19% expect come as you do, for , so whats this year has changed here? days ago, we0 doe were debating 3-4, and now four seems more likely. why? things areecause moving, growth and inflation are moving up, not only the u.s.. in a way, it is japan. the world is changing. it's not only the fed is realizing. beyond that there is a lot of positive action. it might not be such a positive
7:18 pm
action on inflation, so the fed has to move and move four times this year. the jobsooking back on report that we had on friday, yes, it was better than expected. was in line with what folks are saying, which is we are creating jobs at a healthy pace, but wage growth is still quite small, so where is that inflation? coming as a base effect. we have low commodity prices for a while. we have 52% year on year increase last year after december and we still expect, and it is already happening, percent to 50% increase in commodity prices for 2017. is part of theat story, but then we have base
7:19 pm
affects all over the place. everything has to move up now, like rents, wages. see that this year. i think inflation is back. it is not massive inflation, but we have to realize that a lot has happened with central bank balance sheets all over the place. at some point in time, there has to be inflation coming from that is welcome and that only happens when activity recovers, and we are there already. we are at full employment. that is when prices start adjusting. in inflation at this time. below $50, so there are questions about u.s. shale and how was the and they have been in terms of cost cutting. how much does fed policy depend on oil prices thing at these levels or moving higher?
7:20 pm
prices,'t think higher although we have $60 at the end of the year. nobody is investing. at some point in time, that will reflect on prices. by the way, demand is there big time. emerging is growing, markets in europe responding positively. all that will bring higher demand for oil prices. that it's a baseline scenario and the fed should not be afraid of that. not a big thing. it is simply what it should be in a way. i think that will be something that will bring inflation certainly above 2.5% to 3% in the u.s. that policy normalization has to come for that to remain stable, so the fed is letting us know
7:21 pm
basically, then doing it the whole month, and we should all here and realize that they would as pertinent if they just hike once. i think that's what i call policy normalization finally, and is probably taken too long. >> stay with those. we will take a quick break. we will continue our conversation and look at what the boj may have in store this week. this is bloomberg. ♪
7:22 pm
7:23 pm
.> this is "daybreak asia" i am betty liu in new york. yvonne man in hong kong. let's get back to our conversation. the boj.e onto i thought it would be interesting to throw up a chart and let you see about the bond
7:24 pm
purchase program they announced in march to be more transparent and how much they will buy. scaleds like they have back on bonds when it comes to superlong bonds and cut purchases faster than shorter maturities right now. are on track they to miss of their annual targets for qe comest to do think this is tapering going on? is they don't need to buy so much. the reason is simple. interest rates are moving up everywhere, including japan, but the u.s. isns with increasing for obvious reasons, so that is allowing a weaker yen , given what happened late last year and the response of the market to this intermediate target they introduced. basically, they don't need to do so much. actually that intermediate target they introduced, that 0%
7:25 pm
basically target on the 10-year jgb, is forcing them to buy more than they wanted, so guess, they will miss the target, but i wish they did not have that target, and more importantly, did not have that intermediate target. actually go for a floor. the next member of the board has been arguing for a band. withink that even long-term rates in the u.s., 3.3% at the end of the year. that band would have to so wide that you would still be stuck in lackslly running too monetary policy for japan today.
7:26 pm
you rightly pointed out, they are trying to come to the idea that they don't need to the -- to be. because the fed is going in the opposite direction, so literally they need to move. they need to lift that target. why do we argue for a floor? you just have to say sorry, i say target. to i meant to say floor, because interest rates are moving up everywhere, even europe. and want to bring up brexit get your take on this. i wanted to pull up this chart. i hope you can see it there. interestingly enough, after brexit happened, we saw volatility spike, but that blue line shows you how much that 30 day volatility, the average of that is coming down. in fact, it is coming down to
7:27 pm
pre-brexit levels. now are we kidding ourselves here with this sense of calm? or is this pricing it right? storm,s calm before the maybe. that is how it looks. if you think about what is going come and i finally would say finally because i think it is a great thing for the world, we will have rates moving up. it has been so distortionary, but not only short-term rates. it will be long-term rates. there is no rates that will be as low. 10 yearhinking 3.3% rate and the end of the year. that will not happen without consequence, so that volatility is what we will see for the rest of the year. brexit is one of the reasons. we know lots of things are happening as we speak and the u.k. target lifted the growth
7:28 pm
to 2%, we are seeing housing prices coming down. services are coming down from everything coming down. let's see if they manage to get the target. >> thank you so much. ♪ ♪
7:29 pm
7:30 pm
not a right way to start off the week. 7:30 a.m. in hong kong and we are 30 minutes away from asia's first major market open. evening sunday evening here in new york. look at that. all owing to us pushing our clocks forward. i lost one hour of sleep, yavonne. i am betty liu in new york. yvonne: you have to love and hate the spring forward. you are watching "daybreak asia ." let's get the first word news.
7:31 pm
>> new accusations on both sides, president escondida -- -- president erdogan on has accused the netherlands of acting like a banana republic by tramping on diplomacy. south korean president park geun-hye remaining defiant after being removed from office by the country's highest court. greeted by hundreds of supporters after leaving the presidential palace. she said she was confident the truth would come out. -- is facingg criminal charges for misusing presidential powers for capital gain. iceland is back. it will lift all the remaining restrictions allowing citizens, pension funds and corporations
7:32 pm
access to global markets. iceland spent eight years trying to clean up its collapse. 's largest privately owned bank says it is willing to help a state to its lender. the government is said to be considering letting foreign investors by up to 45% of local companies. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: let's look at how the asian markets are shaping up. david, it could be a huge week for markets. we are not just talking about the fed. and toyou have the boj boe, nothing to spur risk assets.
7:33 pm
you have a new zealand and australia very much mixed. the focus is on what happened in the bond markets. have a look at the yield in australia, down about three basis points. we'll get the early indication when japan and tokyo opens up. u.s. 10 year yields at 2.7%. look at the features ever in tokyo. when you look at futures here, 19.4. trading at samsung is in question. hong kong markets we're looking for hsbc in terms of reaction to the change for him to be named to the new chairman of hsbc. look at dollar-yen, look at the pound, oil, for the first time since november is trading below now 1%istake it is
7:34 pm
lower. we did get some comments coming from opec that this oil prices drop is a temporary. if we stay this way, it will be fixed days straight of decline for will prices -- oil prices. it will take you back to the losing streak all the way at the start of november. 1200, we are flat on both majors. dollar-yen, 1440. have a look at this bloomberg chart. big week for cable. you had the boe and theresa may much in the mix. the reason we are talking about this, as we trade at these levels of 121-122, you are seeing these bearish bets starting to polyp. .he markets really net short
7:35 pm
on pound sterling, we'll get you an update. us trading on these relatively weak levels on sterling. tokyo, i don't think we will be getting a lot of action. toshiba maybe. yvonne: no big trends foreseen for today. thanks a much, david. let's talk about the big trends for this week in the u.s. abigail doolittle has more. put last weekd aside. the fed, will they or will they not raise. probability suggests they will raise but looking back there are we havelysts who say -- the first sitdown week for u.s. stocks in multiple weeks. the first sitdown for the s&p 500 in multiple weeks.
7:36 pm
some are saying we're about to see a bit of a switch. when we hop into the bloomberg btv 677, it look at g # this is a chart of the signals on the s&p 500. we are looking at lots of sell signals rather than by signals. this is not her charge but based on her work she expects to pull back the 2280 level. perhaps the 5% pullback. that would be in a broader pullback. it does seem that this week there could be some volatility, perhaps a bit of a roller coaster after all of those up weeks followed by a bit of a decline. interesting to see what happens on the fed decision. what does this all mean in terms of the reflation trade? >> the reflation trade, the big
7:37 pm
rally out of the election does include oil being a risk assets along with stock. last week oil had its worst down week since before the election. perhaps it is a signal that there is a bit of a reversal in that reflation trade. weekmes that -- that worst before the election comes before that big opec cut a. now we are seeing a reversal. record supply numbers last week. investors are a little bit worried about a supply glut for oil. the technical here may suggest we make the a little bit of a rebound but the reflation trade is in place. #btvve a great chart g 6367 and it is showing that oil is bouncing held by the 200 day moving average. the pink line, the 50 day moving average has acted as resistance
7:38 pm
or selling pressure for oil while the 200 day moving average has acted as support or the buyers are stepping in. it is worth noting if you look back at 2014, oil took out both levels. it is important that oil set up and support its bid for that 200 day moving average. natural gas, natural gas is down on the year but now it is up two weeks in a row. the blizzardcting i just have been told we are about to receive this week. natural gas traders taking advantage of the cold weather hitting us on the coast in the united dates. yvonne: bundle of over in new york. let's talk about the fed. the fact that the first rate rise of the year has become even smoother thanks to that drum liver, it is a little more rocky. let's get to our economics and policy editor.
7:39 pm
let's start off with the pain oral -- payroll numbers. uniformly strong? >> strong enough. as the federal reserve gears up for it today meeting, the day meeting,s two the payroll is up by 235,000. everyone was talking about the big jump in goods producing jobs, construction, manufacturing and mining. jump into this chart with and what it shows you is is the combination of jobs i was just telling you about. kind of work that hands. 95,000 total. the biggest rise if you categorize workers that way in 17 years. we are getting a blizzard now but there was some unseasonably warm weather in february, that's one reason why construction jobs had such a big jump.
7:40 pm
payrolls are growing, fed rate hike of ability is up to 100%. the big question is the ensus innt -- consist november was for three rate hikes. you are seeing measures of wages. it's plateaued and went down. the blue line, average hourly earnings, we got that year-by-year on friday. its peak, it is coming back down. they be that gives the doves more reason to say hey, let's wait before we send a note to the market. everyone is saying among the fed watching community, this is the big question. that is a big question and the other big question is brexit. theresa may and her team is
7:41 pm
trying to reverse this are called in their own party. what is happening here and what does that mean? >> the u.k. supreme court told the government led by theresa may that you cannot trigger brexit on your own. theresa may sent a bill to parliament asking for permission. the house of commons said yes and the house of lords said not exactly. you can trigger brexit but we want to have a hand in it. we want a guaranteed right for eu citizens living in the u.k. and we want a meaningful voice in that outcome. they're concerned if no deal is drug, what is their role -- if no deal is struck, what is their role? he spoke on the bbc and that it is a simple law. don't type theresa may's hands.
7:42 pm
if she can get it down the house of commons and the house of lords, she may start this exit process. however, the dutch have an election. that is very important to the eu and the eu is celebrating their founding treaty march 26. going toe celebration look when you have a brexit and the u.k. getting ready to leave. maybe it is apropos. you mentioned big political events, big central-bank meetings, what do you think is going to's account -- stick out? >> the bank of england's meetings on thursday, they are not going to make any changes. we are watching the chinese economy closer now that they have softened to their gdp target. wednesday, u.s. retail sales and
7:43 pm
in sumer prices, china wrapping up the national people's party congress, the dutch election and the g-20 meeting on friday. secretary steve mnuchin speaking. how tough will he talk on trade? that is another big event at a week's end. have fullwill coverage of the fed decision and special programming from 1 p.m. wednesday new york time. if you are1:00 a.m. and i expect you to be watching in hong kong, yavonne. yvonne: i have to bring my alarm clock. one of the donald trump divisors predict a change in the white house view on china. this is bloomberg. ♪
7:44 pm
7:45 pm
is "daybreak asia."
7:46 pm
yvonne: i am a yvonne man in hong kong. betty: i betty liu in new york. he will focus on internal affairs. 's is a left to handle the rest. standard.cquired gilbert says the firm is key to its future. >> it is about creating size as well. size matters in our business because we are talking about funds wanted to give their money to the big global giant. clarifiedirman has comments he made about white men in corporate boardrooms being an endangered species. made the comments
7:47 pm
during a panel appearance at a conference on monday. he says the remarks are supposed to be funny. " kingr -- warner bros. kong: skull island" opened at the theaters and the top of the box office. it is a number of monster movies from warner bros. following its godzilla reboot. it not 20th's superhero film "logan" from the number one spot. you can't get rid of king kong. ceo steve taurus and says toexpects the white house soften on china. steve schwarzman saying we might be friends? >> a softening on the rhetoric.
7:48 pm
donald trump on the campaign trail talked about labeling china a currency manipulator on day one. he did not do that. we are also talking about taking china to task on that trade imbalance. he was talking- in depth little bit. i can tell you what they are talking about. basically that regarding china thatcurrency manipulator they are not going to be looking at that anymore. it is interesting to think why they are thinking about that but a couple of things could be at the forefront. one could just be a matter of time. donald trump is been in the white house for many days. he now knows of the power and the limit of the office here and mr. schwarzman has always said on the side of aging they have a calm outlook. they have aeijing
7:49 pm
calm outlook. president xi jinping has said that after three years of doing his own job he now knows much more than he did on his first today. that is president xi jinping talking about the u.s. china ties. numbers, gok at the #btv 4374, take a look at this, this is china's foreign currency reserves a dipping below $3 trillion. these are all blue lines here. the last time this hit was in march of 2011. now below $3 trillion. the fact that that is a dipping, they're using their foreign currency serves -- reserves. china is not a currency manipulator. that is where we stand in terms of u.s.-china ties. betty: meanwhile, lawmakers are expecting more details to emerge on president trump's claim that
7:50 pm
his predecessor tattoos funds. >> they are looking to a deadline that the department of justice have to give evidence. the -- that his predecessor tapped his phones. the top democrat on the house intelligence panel came out and said the president quite deliberately made up the charge or he disturbingly really believes it. and saidin came out the president has one of two choices, he should retract. looking ahead to monday, if that doesn't happen, march 20, the fbi director james comey is going to testify on the house intelligence committee. yvonne: thank you so much. breaking news out of japan. machine orders in the month of january, quite a sizable miss here. following 3.2%.
7:51 pm
economists at bloomberg had estimated a fall of 0.1%. saw inamatic fall we advance of machine orders. holiday, itw year could have affected this. they are now forecasting capital spending to increase. hopefully we could see another strong demand from manufacturers. look at ppi numbers, they are being in line with estimates. ppi rising 1%. month by month rising 0.2%. that would be a pretty positive thing in terms of how inflation goes because i think this is the second straight month we see ppi numbers in positive territory. yvonne: you might call this a mixed bag of numbers. nikkei 225 teachers not really
7:52 pm
budging -- futures not really budging based on these numbers. still showing a lower open going into the tokyo trade but as you mentioned a pretty sizable miss here on machinery orders both month on month and year on year. you can get a roundup of all the stories you need to know to get your day going with today's edition of daybreak. go onpers can go to davie their terminal. it is available on multiple devices on the bloomberg anywhere app. you can customize your setting so you only get news you care about. this is bloomberg. ♪
7:53 pm
7:54 pm
."tty: this is "daybreak asia indian prime minister narendra modi has won a
7:55 pm
resounding victory in the election. a result that will allow him to push ahead with his reform agenda. it also puts them in a prime position for a second term in 2019. let's bring in haslinda amin. in a strongodi position to campaign for another term? haslinda: modi is in a sweet spot. he can take credit. party'seen key to his campaign, it's election strategy and he is won the hearts of the people because of the promise to bring that growth, bring back corruption as well. take a look at this party chart and his partydi have won the majority in the most populous state. modi has already rolled out managers -- measures like a demonetization where he banned large notes to keep corruption
7:56 pm
at today. for a state like guitar pro --, uttar a state like is an endorsement. he has done pretty well. yvonne: we will hear more from you in the coming hours. haslinda almond there on modi and the possibility of a second term. still plenty to come. >> let's bring in david to tell is what we should be watching at the open in tokyo. david: we are watching out to the reaction to machine orders, ppi. the last close for these four names, hitachi construction , ahinery getting a downgrade
7:57 pm
negative on the company's credit ratings, toshiba, we are getting a lot of headlines. let me mention that as well that it is not continuing -- considering to sell its qtc. that being said they are reportingthat fox co. a joint bid for the company's chip business. conn reporting a joint bid for the company's chip business. south korean airline stocks very much in focus because of the -- i wouldn't say damage relations but the tension between china and the tourist the flow. seeing low-cost carriers have suspended some flights.
7:58 pm
lots of to talk about. all this company news and we're counting down to the open. two minutes away from being, being,
7:59 pm
8:00 pm
♪ >> signs of stability, china says the economy has improved this year with little danger of a hard landing. japan reports weakening activity on the factory floor with machine orders missing expectations. fall, korea'se ousted leader remains a defiant, saying the truth will eventually come out. this is the second hour of "daybreak asia" live from bloomberg's asian headquarters. i am yvonne man in hong kong, a
8:01 pm
huge week for markets. strong, a fedt rate hike this week, boj, boe, dutch elections as well, and let's talk about that japan data and machine orders, the worst print since may 2016. we also have producer prices. we are back into this reflation story. not only china, but japan. this chart takes you back to 2011. that is a year on year gauge when it comes to producer prices in japan. have a look at the open, a mixed bag. there we go, australia down .4%, session low for that market.
8:02 pm
japan, 19,000 500, and korea, an interesting story shaping up week, massive week at last , sentiment starting to turn positive when it comes to markets. when you look across the fx markets, a big week ahead, big pop in the south korean won. the focus is on bond markets, a decline there come rally in the bond space. australia is negative two .5% on the two-year, negative three on the 30 year. u.s. yields flat at the moment, a little higher, 2.58%. the focus is on oil prices. below $48 a few minutes ago, trading roughly at that level. thisard from opec saying drop, which is the longest streak of decline since november, is temporary. they met with u.s. shale counterparts. the meeting was in their words
8:03 pm
fairly constructive and continued dialogue. the broad agreement we all know is that an oversupply is not positive for both parties. the question is when it comes to whole tangle between opec, non-opec, and u.s. shale, who blinks first. oil $48 is the most active contract. let me wrap things up with a look at south korea. this tracks inflows and outflows net on a weekly basis and goes back to march last year. first time since the summer that we saw these inflows last week, topping $1 billion. perhaps now the uncertainty as far as the former president is concerned, does this mean foreign funds come in and a big way and start to play? a few weekshappen before that, $1 billion, the
8:04 pm
biggest inflows into south korean stocks going back to the summer, july 20 16, reason perhaps also the south korean won is the best-performing currency across asia year to date, so very interesting as we get into what is certainly a big week. >> thank you. let's get first word news with min from a singapore. is to step down to become the cochairman of hsbc. the executive will take up his new role on october 1, replacing douglas flint. one of his first tasks will be to find a successor to stuart gulliver. is being replaced at aia. lawmakers on both sides of the i'll say they have not seen evidence to support president trump's claim that his tapped his phone. however, republicans and democrats expect more details to
8:05 pm
emerge soon. monday is the deadline set by the house intelligence committee for the doj to provide any theence relating to allegation. reports from tokyo say toshiba's loss could reach ¥1 trillion, a $.7 billion come if the u.s. nuclear unit files for bankruptcy. the claim comes from a news organization that does not say where it found the information. toshiba estimates that westinghouse write-down at six alien dollars and may allow the billion and may allow the unit to file for chapter 11 protection. won ara modi has resounding victory, allowing him to push ahead with his reform agenda. the election commission says the seeds. taken 216 -- seats. ins puts prime minister modi a position to campaign for his
8:06 pm
second term. secretary trying to avert a rebellion ahead of a vote on monday that could trigger the process of leaving the european union. from facing calls lawmakers for parliament to have a say on what happens if brexit talks ended without agreement. sheesa may has indicated may launch brexit on tuesday if she wins monday. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. ousted korean leader park geun-hye has struck a defiant tone. her fall has left the country with the daunting get familiar task, rooting out corruption among political and business figures. let's bring in shery ahn from seoul. hear from the impeach
8:07 pm
president over the weekend. what did she have to say? a lawmaker for her party spoke on her behalf saying she was sorry that she could not finish our presidential duties, and she would embrace the consequences. she did say it would take time but that the truth would come out. that suggested she would put up a strong legal battle. as you can see, protests in seoul have died down. this was the epicenter of all the protests for the past few months. over the weekend, the protests took her friend meaning when opponents of park geun-hye came out to celebrate the court's ruling. hundreds of parks supporters headed towards her private home in southern seoul to receive her as she moved into her private
8:08 pm
home from the presidential blue house behind me. just a few blocks from here also we saw these park supporters rallying again, and over the weekend some of those rallies .id turned very heated and on friday after the courts ruling we did see three of parks and of dying in the protests. police were deployed to monitor the rallies. we are seeing a few police officers here as well this morning. a very unfortunate event over the weekend. what happens to park geun-hye now? this she have to defend herself on criminal charges she may be facing in this corruption scandal? shery: the ruling allows now possible criminal proceedings against park geun-hye.
8:09 pm
prosecutors have named her a criminal suspect, allegations made before she refused to grant an interview, signing that law giving her immunity as a sitting president. now that she has been ousted, this could be different. on whenfocus is prosecutors will try to interview her again. againstthe allegations her with the constitutional court accusing her of working with choi soon-sil to extort tens of millions of dollars from businesses, also giving classified information to a private citizen and allowing her to metal in state affairs. her lawyers have called the ruling tragic and this was because of popular pressure. they are calling this one of the most stunning political events in the nation's history.
8:10 pm
what can the new president and isth korea to overcome what left now and regional relations moving forward? where do we start? first of all, we have to talk about the south korean economy, expected to grow at the slowest pace since 2012 this year am a but yes, you mentioned regional tensions. that would be key. some people are optimistic that a new president could also signal a preset for relations between south korea and china, as well as north korea. hasmber that south korea been ruled for the past nine consecutive years by the conservative liberals -- conservatives. liberals and now have a shot at the top post. some leading candidates have expressed a softer touch towards north korea. the person leading the polls the deployment of
8:11 pm
the u.s. missile shield. angered beijing and led to china and posing some retaliation on south korean businesses. industry key session will be south korea's relation with japan, because the previous government signed a deal that would move past the issue of japan sex slaves during world war ii. allowed legitimacy and tokyo officially needs to apologize. either way, a elections need to be set by may 9, and the acting president is expected to announce a date within the week. yvonne: great work. shery on joining us live from seoul. the australian treasurer scott morrison joins us from our sydney studio at 10:30 a.m. hong kong time, one 30 p.m. in
8:12 pm
sydney. -- 1:30 p.m. in sydney. that is just after midday and hong kong. later on, exclusive interview with nobel prize-winning spence, 7:00rew p.m. hong kong time, 10:00 a.m. in new york. well, still ahead, a resounding victory, elections give narendra modi a mandate for his reform agenda. that is next. stronger for longer, our next guest has big expectations for the u.s. dollar. this is bloomberg. ♪
8:13 pm
8:14 pm
is "daybreak asia". takata hasrbag maker been sued.
8:15 pm
the airbag maker is accused of withholding information. maker is fighting suits that say they knew about the devices. they played guilty to charges as part of a $1 billion settlement prosecutors. bhp billiton has sent a formal request to meet union leaders in chile, the first attempt to hold talks. workers have been on strike over pay and conditions for a month now. the cut in production has cut world supplies and bolstered prices on the london metals exchange. two former senior j.p. morgan executives may be permanently excluded from the banking industry after being hind -- find in a bribery investigation. they work for the lender and asia. the fed says they hired interns and other employees to curry favor with officials and clients in china. describes their
8:16 pm
conduct as unacceptable and says hiring practices have been improved. our next guest is bullish on the dollar and says the currency will likely be stronger for longer, perhaps a few more years. he joins us here on set. great to see you. it is interesting, we got the u.s. jobs report, beat expectations, more than 200,000, looks like a beat, but a dollar drop, yields falling and pulling back as well. why do you think there was that kind of reaction? our markets already selling on the news? of the dollar positive news in the short-term is priced in. we know the fed is likely to raise rates this week. they will probably adjust their higher, perhaps not too high, but likely to do that, and we have a much better picture out of the european
8:17 pm
economies. it is a reversal basically of the move we saw after the u.s. election, that the bigger assumingand that is himself with the new republican led administration in the u.s. will on the at least in part economic plans, and we should have stronger growth in the u.s. going forward. i'm talking the next couple of years or so. then we will have higher rates and a strong dollar environment would be perfectly logical. yvonne: what could trigger the second wind in the dollar? do we have to hear the fed forecasting four hikes this year, changing of the dots? >> that would be if you just go with signaling rate hikes or a positive pace of rate hikes or
8:18 pm
s too much,ot plot that would be counterproductive. counterproductive for the economy, but what i would expect to see or hope to see over the that nominaltwo is gdp or gdp in general and the u.s. picks up significantly from the level it has been in the past decade or so. if you look at the bloomberg consensus number, it is roughly 2.5% for the next couple of years on average, but the expectation for real gdp is really mediocre. news is that of course we can improve from that level, and that's not so difficult to do if you have a reasonably pro-growth government after solving your i hope to break policy execution issues and getting used to having so much havingithout necessarily the perfect coordination, at least as it looks now, so these
8:19 pm
things will fall into place and the u.s. has the potential for stronger growth. yvonne: you are bullish for a stronger dollar, price of book at 3.1, our valuation still frothy to you? you have to look outside the u.s.? >> yes and no. directionality the valuation concern for the u.s. is not a big issue as we have more growth coming in. for looking, as i said likely to happen. in relative terms, i would expect u.s. markets to continue to do well. however, yes, there is a valuation gap, but other markets, we have had a bull market seven years old or so, depending on when you start counting the beginning, but asia and europe have catch-up potential. reflation seems to be working in both regions, japan, asia and the very much the japanese
8:20 pm
policy-setting environment, but as the economy globally improves, other asian economies should have an easier time adapting to our stronger dollar, high interest rates, and in europe, we have good numbers.
8:21 pm
+++ on a strategic level, we don't hedge -- the single political events are difficult to hedge. on a strategic level, we have a high allocation of assets which in a way ask kind of like an insurance come if you will, so you do pay a premium that produces the volatility in your portfolio over time, but it makes sure big negative surprises that need to longer lasting trend reversals can be mitigated significantly, so that's how we deal with it. the day to day business is hard to time as we have seen many many times over the past year, well, with brexit and trump. yvonne: we were talking about how important this week's for markets, not just the fed, which is a done deal, but the dutch elections, boj, boe, what eu focusing on the most in terms of what could move markets? >> the most important thing is what the fed will communicate, not so much what it will do going forward. i hope they will keep their balanced approach. we will stay on a modest tightening path, but continue to keep it conditional, because the u.s. economy is strong, but not as strong yet. , thethe european events brexit potentially to trigger dutch elections come at that is a major concern for me at the moment. i think we will see a big concern in europe potentially with italy further down the road. you.e: always good to have
8:22 pm
thank you for kicking off the week with us. a newmoment, taking on role, mark tucker's next position next. this is bloomberg. ♪
8:23 pm
8:24 pm
8:25 pm
8:26 pm
8:27 pm
tens of thousands of jobs since 2011. also, cutting down on its businesses. partly due to regulation, and partly due to laws in the u.k.. markt of challenges facing tucker as he comes into chairman at hsbc later this year. yvonne: quite a task ahead.
8:28 pm
thank you. one feature on the bloomberg is our interactive tv function. andcan find it at tv check out the latest use unmarked talker and hsbc. more to come on "daybreak asia". stay with us. ♪
8:29 pm
8:30 pm
pretty gloomy picture out of singapore this morning. 8:30 in the lion city, half an hour away on the open. propertynment did cut stamp duties on friday. that is one to watch out of there. i am in yvonne man in hong kong. you are watching "daybreak asia" . let's get to first word news with haslinda amin. haslinda: turkeys were of four with the netherlands worsens. president erdogan has called for sanctions against the dutch after one of his ministers was denied entry to the turkish
8:31 pm
embassy and rotterdam. president erdogan is accusing the netherlands of acting like a banana republic. south korea's president park geun-hye remaining defiant after being removed. by hundreds of supporters and her first public statement. she said she was confident the truth would come out. park is facing criminal charges for abusing presidential powers for personal gain. capitalis back, exiting controls eight years after its banking crash. the government said that effect of from tuesday that he would almost all the remaining restrictions, allowing citizens, corporations, and pension funds access to global markets. iceland has spent eight years trying to clean up the 2008 collapse, which triggered the country's worst recession in more than six decades.
8:32 pm
myanmar is privately owned bank says it may be willing to sell a stake to a foreign lender. an executive director of kbz said any sale would be subject to banking laws to allow foreign partnerships. the government is said to be considering letting foreign investors by up to 35% of local companies. myanmar is one of asia's most under bank countries. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you. let's see how the asian markets are shaping up on this monday morning. .ere is david ingles offered up, brent below 51 dollars come west texas at $48, the lowest level back to november. we are not seeing a lot of action with the exception of the south korean won, which
8:33 pm
continues to gain today. i showed you the inflows coming back. it has picked up last week. foreign investors piling into the south korean equity market. $1 billion in net inflows last week. across the region, .5% on the asx, south korea on the way up. that supports that story. nikkei two to five down .1%. i will break that down for you in a moment. a lot of central-bank decisions. when you run the function mliv , you get this, fast-moving commentary on the markets. when you look at the singapore and dollar, we are looking at property stocks. this is the pear to watch when it comes to forex markets, dollar-dollar saying -- singaporean dollar. here is your average. it has failed to breach that late january. that is something to watch,
8:34 pm
perhaps representative of the demand for u.s. dollars against asian forex. very interesting commentary on mliv . have a look at the nikkei 225, .1%. to going to run mliv see what is moving up and down when it comes to individual stocks. , 100-1 a perfect split hundred eight, up and down, the rest unchanged. we will not see a lot of falla him at the moment. there is little to trade as far as additional risks of the moment. a few movers we are following. have a look at this, three names we are following in tokyo, hitachi construction machinery. it had its credit rating cut at moody's. toshiba, a lot coming out of that, still trading way below peak. it opened a little bit below that. foxconn now confirming a strong forfor the chip business
8:35 pm
toshiba. toshiba also said it is not unit.g its tec .ut to sell south korean airlines flat at the moment. the low-cost carrier over in south korea suspending some flights on worsening ties with china. it comesalk about when to the markets. those are your individual movers for the day. a lot of risk appetite -- not a lot of risk appetite out there. yvonne: thank you. senior officials in beijing say the economy has shown improvement in the first two months of the year, striking a more optimistic town than that of the premier li keqiang. tom mackenzie joins us live from beijing, so less risk of a hard landing then? it seems like a more far off and distant prospect. economic officials have a spring in their step over this npc when it comes to the economy.
8:36 pm
theeard from the head of national bureau of statistics over the weekend. to two areas, industrial output he said had risen by 6% in january and february, and the services sector they want to grow in china, up 8%, or than 8% in january and february. if you tied those data points and with higher retail sales and fixed asset investment, you see robust growth momentum, according to bloomberg intelligence and their economists here. we note the gdp target has been year, and sothis far at these come early days, so far, it looks like they are on track to hit that. there is a long way to go. we also heard from the head of research at the state council effectively the cap been in china. he said there was practically zero big risks to the downside
8:37 pm
for china's economy, so striking a very up the tone. just talkingre about that over the last hour, about how this is a more upbeat tone than the one adopted at the inpc. what has challenged in the last week to see this change in language? tom: probably not a great deal. premier li hedging his bets and talking about areas and challenges that policy have articulated for some time. we heard from the finance minister as well about the challenges around that, restructuring, supply-side painful, but promising. that is on the domestic front. externally of course, there is growing protectionist sentiment, anti-globalization sentiment that could have an outsized impact on china's economy, but there are other data points that
8:38 pm
point to a positivity for china's economy that were pointed out by the head of the national bureau of statistics and including industrial activity, electricity generation, power consumption, railroad volumes. those have all picked up as well. then there is the question of overcapacity that policymakers have been trained cut back on, particular the coal and steel sectors, and we have seen negative growth in those areas in the first few months, so there are additional data points that underlined this bullish case. we also have in the property , third, fourth, fifth tear cities, excess capacity. that has been eaten up as these curbs are putting into place in the first and second tier cities and money flows to smaller cities. we will get a clear picture fixedow, retail sales, asset investments, and industrial output numbers all out tomorrow as well. yvonne: tom mackenzie, joining
8:39 pm
us live from beijing. plenty more news out of china this week. the fed first rate hike of the year, the path smoother thanks to a strong jobs report on friday. the path to a smooth brexit is more rocky. let's bring in kathleen hays. she joins us live from new york. let's start off with the u.s. payroll numbers, you could say the cherry on the cake there? >> at least that cake is sweet enough for the fed to say yes, it is time to move that interest rate higher for the first time since december. it will be the first hike if the fed takes that path. the jobs report on friday you could characterize it as strong enough to justify a move. it isd has advertised ready to take a move through cap a speakers from the federal reserve lang that path out for us. pay rolls up 235,000 in february, unemployment at 4.7%.
8:40 pm
in goodsteresting jump producing jobs because of warm weather. , butweek in the northeast definitely across the country in , construction manufacturing and mining jobs, jobs you do with your hands and strong back, 95,000 the total, 68,000 because the weather was warm and people got out and build houses. it did add to the jobs one way or another. a fed rate hike probability of 100% for several days now. economists are saying will be , when its dot plot moved from a consensus of three to four bank? here is one reason why the dovish members on the fed chair may be reluctant to move that far, 56 87 in your bloomberg. wages, paychecks, white line,
8:41 pm
cost index, seems to have plateaued, moving down, blue line, 2.8% gain year-over-year. it is also on a plateau. the yellow line closely watched from the federal bank reserve of atlanta there age growth tracker, look at that. butas been going up, suddenly turning down. if you're not getting wages going up in a tight labor market, you don't have to worry about falling behind on the curve on inflation, and that may be part of the debate this week. let's talk about brexit. that is looming large again. we are expecting prime minister theresa may trigger article 50, but she has to avoid this revolt in her own party. >> the u.k. supreme court said she could not trigger brexit on her own. she has to involve parliament and they have to give their go ahead. the house of commons voted on the bill, but when the house of lords voted, they said we want guaranteed rights to use citizens living in the k and a meaningful voice in the vote.
8:42 pm
living in the u.k. and a meaningful voice in the vote. theresa may ask the house of commons to turn her -- it down and give her that clear brexit bill. philip hammond saying let her make this move. she could theoretically if things get moving start to trigger brexit by tuesday. she might look at the dutch elections on wednesday, a big deal for the eu, so maybe that quite not such a deadline self-imposed. i think it is ironic that the eu is somebody its founding 20 -- treaty just as questions are raised over the strength of the eu, and who knows about other populist movements that could be pushing other leaders towards that door. yvonne: the irony for sure. we have been talking about this week, big political
8:43 pm
events, and central-bank meetings. what is on your radar? >> the bank of japan meeting come and not expected to do anything, but maybe that will have some implication. the key of e e thursday, but they give us more signals? thursday will they give us more signals. the fed meeting on wednesday, probably the big one for the world come i have to say, u.s. retail sales, consumer prices, china wrapping up its national party congress, the dutch going to the polls, but on friday, the g-20 meeting and germany, secretary mnuchin, will he tempered the tough talk on currencies toward china from the trump administration? what about the debate in the g-20 about protectionism and free trade? this will be a big week, and that will cap it off. yvonne: thank you so much for that full coverage. we will have special programming that starts at 1:00 p.m. wednesday new york time, and early 1:00 a.m. in hong kong.
8:44 pm
next, with the election meetings for india's wider political landscape. we will discuss that, ahead. this is bloomberg. ♪
8:45 pm
8:46 pm
.vonne: this is "daybreak asia" i am yvonne man in hong kong. indian prime minister narendra modi modi has won a resounding victory, a result that will let him push ahead with his reform agenda. it will put them and a prime position for a second term in 2019. let's bring in our bloomberg view editor live from our singapore studio. crucial win for prime minister modi after this chaos from this cash ban last year. is it a sign, the selection, that prime minister modi's de-monetization policy was in
8:47 pm
fact a success? can gon't know if you quite that far. it caused a lot of pain. there was chaos and confusion and say on, but voters were persuaded that for minister modi had their best interests at heart, not doing this to political power or for corrupt reasons, that he had the right goals in mind and they felt that people who had been -- would suffer more pain. now?e: what does this mean how strong of a position is prime minister modi and now? can he push through these big reforms that investors have been clamoring for? hope.t is clearly the there are two reasons to be cautious about that. does of all, this election not change the math in the upper house of parliament, and that is where the opposition is to these larger reforms. not clear that
8:48 pm
temperamentally that prime minister modi is interested in those kinds of reforms. a lot of outside observers per tray him as a ronald reagan or margaret thatcher figure. there are certain things like privatizing state banks, which he does not seem interested in, so even though he does have power, he does not have long-term opposition. it is not clear he will use that to put forward free market reforms that a lot of outside observers hoped he would. i guess youave seen could say the worst is over for this cash ban. what are the longer-term implications for the country? >> two things. side, severale years, as many as seven, policy stability. normally midway through one's administration, you think about the next election, making
8:49 pm
compromises, being more cautious about your policymaking, but he does not have to worry about that. he has no real opposition secondlly, and i think a term is highly likely at this point. on the flip side, the problem with that is that it reads hubris. if you don't have real opposition, there are elements within prime minister modi's party that are pushing different parts of his agenda, some divisive trends, and these people may feel empowered and may provide distractions to what should be the main goal for him going forward still, which is promoting development and meeting the aspirations of these voters who come out for him. yvonne: great to get your perspective on this, joining us live from singapore. you can get a roundup of stories you need to know with today's edition of daybreak. daybberg subscribers,
8:50 pm
. you can customize settings. this is bloomberg. ♪
8:51 pm
.vonne: this is "daybreak asia" i am yvonne man in hong kong.
8:52 pm
of aberdeenion asset management set to create the uk's largest active money manager. martin gilbert is set to handle affairs in the new into me -- entity. the genuine merger of two independent asset managers to create what we hope will be a global investment company. no, i regard this as staying independent. >> let's talk about the responsibilities. to work? going two ceos. people have questioned this. affairs and extra keith will run the fabric of the business. i think that place to both our strengths. we will both be doing the bits of the business we enjoyed. i think it will work very well. co-ceos are very common in the financial services business. case, it was necessary to
8:53 pm
do this to bring together to equal sized asset managers to create this hopefully global investment champion. walk me through the reasoning behind it being necessary. is this a defensive or offensive move? >> it is both actually. it gives us a chance of creating something that can grow, but it .s also defensive as well the industry is consolidating globally, and if you're going to try to compete with the black no point being $200 billion, so this create 660 -- six under 60 billion dollars. it is about creating size as well. size matters and our business
8:54 pm
because the sovereign wealth funds want to give their money to be global giants, and even when we do combine, we will still only be number 19 or 18 in the world. the others will be all american, so we need to compete with these global giants. is the ambition to compete? you want tohere take the scale of this combination? would like to take our product set to america rather than compete with them. regard as the battleground of passive, which is the u.s. large gap, and that is where we are seeing the pain. ,f you ask u.s. fund managers ceos, how life is is, he is pessimistic. at an all-time high, so there is something not
8:55 pm
right in the u.s. fund management industry. will the trend change? passive is here, big, time,ntial for quite some dampening volatility, having of facts that we did not think it would. how do you as an active manager go to the u.s., compete, and try to set up shop? >> we will not try to compete with the u.s. large cap, but compete among emerging-market equities, global debt, global credit, so one of the great advantages we have is being headquartered in scotland, which to runideal time zone -- bear in mind that we will be unlike any asset manager and the world. we will have 90% of assets outside the u.s., where as u.s. large fund managers have the bulk of assets within the u.s. we will be totally unlike the
8:56 pm
other big american houses. dilbertthat was martin from aberdeen asset management speaking on bloomberg markets. it is a time for a look on what's coming up on bloomberg markets: asia. the big news is mark tucker. rishaad: not unfamiliar to us here. a comes up every quarter when aia comes out with numbers. he will become chairman of hsbc, and one of the first jobs will be the replacement for the current chief executive of hsbc, stuart gulliver. 59 years old, a former footballer as well. yvonne: the first outsider to come into hsbc. there we go. that is what is going on. it is start trading on this news in about half an hour. scott morrison, coming up about our and a half, the austrian treasurer, under pressure politically speaking.
8:57 pm
we will talk to him about that because there has been talk of him being sidelined by prime minister malcolm turnbull we will ask him about that, the austrian economy and where we are headed come and looking at aipacn sachs achieved strategists, the region, and strategy as well. we will talk about ethiopia. the prime minister is coming up in 45 minutes from now. yvonne: looks like a busy show. thank you so much. that leaves it for us here on "daybreak asia". "bloomberg markets: asia" is coming up next. this is bloomberg. ♪
8:58 pm
8:59 pm
9:00 pm
9:00 a.m. in hong kong and singapore, 9:00 in the evening in york city. i am rishaad salamat. haidi: i am haidi lun in sydney. this is "bloomberg markets: asia" ♪ rishaad: summons of stability, china saying the economy has improved with little danger of a hard landing. haidi: a different story in japan, data showing weakening activity on the factory floor with machine orders not ex

38 Views

info Stream Only

Uploaded by TV Archive on