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tv   Bloomberg Markets Asia  Bloomberg  March 16, 2017 8:00pm-10:01pm EDT

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♪ betty: rex tillerson takes message to asia. and opec may stem the tide if the global g -- will what persists,- oil glut is just after 8:00 a.m.. happy friday, it looks like markets are taking things in
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stride here after the fed has been risk on risk after we got that session on wall street where stocks did and mixed -- and mixed and slightly lower. with -- check that with 70. we have to keep this in mind that global stocks are set for the best week since january. we have been focused on the g-20 meeting as well as trump's withing section -- session merkel. but look at how the stocks are playing out in the region. we have new zealand shares leading gains in asia. we had the nikkei coming online, lower at .4% here after rising on thursday, and we have this one here gaining for a second straight day, and stocks are up about .2% with i.t. stocks on the rise. and we do have gold continuing belownd roots sticking
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$49 a barrel. it take a look at what is moving over on the nikkei 225. we have all segments in the red today, with the biggest red in energy stocks and health care in .7%, following the drop we saw on wall street following trump's comments on health care. and i want to check out what is going on with some equities and health care -- to him. in japan, and we want to keep an eye on what is going on with that stock. 10 companies are said to be interested in toshiba's chip business. it comes with the innovation network of japan. the stock report says that offers from chinese firms have been declined. it is also been reported that tissue i get public funds for a turnaround after they are the worst performer on the 225 this might get public funds for a turnaround after they are the worst performer on the nikkei 225 this year. japan biggest closing
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retailer was raised to hold at morningstar, and an interview with bloomberg showed that japan's richest person said that allow that speed will this to overtake a zahra. they have led to open up another 100 stores in china and another 100 and southeast asia. this will contribute two thirds of their of you -- their revenue in the next two years. invest $294oking to million to upgrade its u.k. plans, and its units by hot soup su is targeting production of 2.4 million ripples -- vehicle third i want to go look at what is going on in the currency space. we have the one extending its extending its games , -- gains.
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the korean won being favored as well as the taiwan dollar. it was the second-best performer on thursday. -- inys study growth on good for the economy, and the japanese yen is slightly weaker against the dollar, but it is still holding steady, and we are seeing the dollar-yen perhaps dropping below to $1.12 there. this is how markets are playing out in asia. ? yvonne macro yvonne: -- yvonne? yvonne: they, sophie. following so -- thanks, sophie. following tillerson on his tour as he goes to sold here today, and what is his new approach to pyongyang now? trying to finden
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a new approach to this situation in the korean financial of for so many years, and rex tillerson coming and saying they do need a new and different approach, but he was very short on specifics, actually no specifics. we are left at a guess. but his comments were interesting because it points to what has long been the concern for him beijing and the concern from pyongyang that washington kim regime,ple the whichever kim that might be that is sitting in the throne in pyongyang. the commas from tillerson -- comments from tillerson seemed to allay those fears that we do not have to fear the united date, unless, of course, you continue to provoke and threaten seoul, and the united states with an intercontinental nuclear missile. those are the parameters for which the united a -- states are willing to assume.
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that is what rex tillerson had to say. koreaary tillerson: north and his people need not fear the united states or their neighbors in the region who seek only to .ive in peace with north korea with this in mind, the united states calls upon north korea to abandon its nuclear and ballistic missile programs and refrain from any further provocations. so rex tillerson, yesterday meeting with the japanese his position. also the japanese prime minister shinzo abe before this morning. right about now, heading off to ul, where there is a vacuum with the ouster president park. but he is getting his ducks in a row before the high-profile trip to beijing on sunday. yvonne: that is the hard part, right? l today andseou
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beijing tomorrow. what should we be expecting for this weekend? >> i think north korea will dominate, even though the u.s.-china relationship on all quitefronts is complicated and tense on all other fronts, but this is a short trip for rex tillerson. cram in,lot to care -- but north korea is paramount to his portfolio as secretary of state. so it will be picking at china to find perhaps some new approaches that they might have. earlier this month, china did propose a plan for north korea to perhaps abandon its nuclear program in exchange for u.s. and south korea scrapping for -- the wargames, but the u.s. rejected that. rex tillerson had to say about the role that beijing can and should play. secretary tillerson: we look to china to fulfill its obligations and fully him at sanctions called for the yuan resolutions.
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four b u.n. resolutions -- for the u.n. resolutions. helpful to bring north korea around three different attitude about its future need for nuclear weapons. but there isbig role about -- is no specific role about what he would like to have aging play -- beijing play. yvonne: live from tokyo there. let's get to the first word news here with sophie kamaruddin. sophie? president trump's first budget faces little chance of being accepted. the proposal to cut funds for most federal departments to boost defense spending got a lukewarm reaction from republicans. editor john mccain saying it cannot be passed -- senator john mccain saying it cannot be passed. no republican president has ever
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.roposed such austerity and china says the mounting costs of short-term debt may rein in a ball or -- borrowing spree by short-term banks. the short-term commercial paper is now unsustainable for these lenders. pboc in 2013 the in order to up smaller banks compete, this may transfer into a risky refinancing role. and the interest rate unchanged at 4.4%. policymakers remain on guard after the fedges hike in america. of indonesia cut rates six time last year, most recently in october. and the brexit bill has become law. this allowed theresa may's government to trigger the process of taking the u.k. out
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of the european union. told theies have been bill passed its final stage. nowprime minister can invoke article 50 of this treaty, launching at least two years of talks with eu members. by this block is plagued political uncertainty. the chairperson says that victory shows the center can't hold, but more important tests calm in -- are set to in germany and france. played justll be plagued by uncertainty this entire year. there are plenty of political risks that might be in europe, and the mart it does market will
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be reacting with volatility as these risks materialize. sophie: global news, 24 hours a day, bloomberg. sophie, thank you. still ahead, balancing priorities. how china is reaction to pressure on the yen and its rising debt. and the return of inflation has been sticking with the dollar. we are talking martin uncertainty -- market uncertainty. this is bloomberg.
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yvonne: this is "daybreak: asia," let's look at the latest headlines. admitted to sell discounted groupon like products and services.
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baidu has failed to gain traction against rivals, despite the ceo dumping almost a billion dollars in the company in 2016. in this company will employ facial recognition technology for mobile payments. they will also take it vantage of virus detection -- advantage toour of iris the text and -- detection to use google pay. the galaxy note -- the sensory benefited theo sale of the access. ins scent and 85% rally 2016.
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let's check back in with the markets now. he is usually based in london, but joins us now in hong kong. mike, great to have you. i think the past 24 hours, we have been focusing on the broad-based monetary policy conditions tightening overall. it came to the fed, then the and are we seriously talk about policy synchronization right now? >> i think we are talking about a global reflection trade. in some of the narrative about what owing on in the u.s. -- going on in the u.s., what we are seeing is a global recovery and inflation is back. what did we learn from the pboc in particular? are they going to have to continue in response to the fed hikes? the continuing targeting as well? >> i think there is a couple of
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things to take away. this is a sensitive time for the chinese exchange rate policy and the interest rate policy that goes with it. at the moment, because they are trying to fight capital outflows, it is pretty likely that they will move up with the fed where they can to try and stem the pace of outflow, just as we have seen the reserves run trying toey are prevent them from moving too much. that is the first part. the second part is interesting. six months ago, nine months ago, if we had had a tightening reactionom china, what would we have had from markets? the markets are showing this resilience here, and it is a reflection that it is a recovery in growth and inflation, so it is good inflation. so yes, i think it is a global thing and so far the market reaction is tolerable. -- palpable.le yvonne: i think they are also
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trying -- we also talked about them moving pressure off the yuan. narrow,when the spreads and differentials pick up, we thishe remedy ball and -- fall. could they avoid blowouts and spreads moving forward? >> one thing that is clear that is that the fed does set monetary policy for the globe to a certain extent, and that is particularly true in china. i think what we will see going forward is that if the fed continues to edge rates higher and now we are on a quarterly tightening cycle -- which we are not on yet but there is plenty of rationale for arguing that, the pboc will have to are -- follow suit. yvonne: so what is that mean for the dollar? the policy diversions will support the dollar,
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kenneth still rally -- can it still rally? >> i think what the fed is trying to signal -- and yellen was quite explicit of this -- they're trying to get the market off of this tightening cycle once the year. this will be more than that. they demonstrated it by bringing the march tightening forward from june. the market is not quite ready yet that the fatty -- fed might be on autopilot and tighten every quarter. the fed is saying that, but the market has not stepped in. and one thing is also clear that with the fed tightening and bringing in the tightening forward, the market would be overly long dollars. we see very little evidence of that and there is lack of conviction in the dollar. everyone thinks it is price. but the market interest rates are not yet price. priced. death --
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we hit that 3% yield, or will we see this rotation? >> badger stinking on the rotation is we have not seen interesting thing on the rotation is we have not seen much movement come out of the six-figure market. when will it,? come?is -- when will it there is plenty of time for to come, and i think it will take more time for us to see the tax cuts come through, which will cause eels to continue to rise. the important thing right now that shields to continue to rise. the important thing right now is not the growth for 2018. even inflation, and look station -- inflation expectations are up. -- the u.s. one for
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was 1.1%. the future of the inflation -- it is now much, much higher. the future of the inflation rate in the u.s. is 0%. yvonne: and wage inflation remains quite slow. if you look at where oil prices are going this week, there are a where questions about does inflation go after that? >> inflation has gone up very quickly and in a very short space of time to read the annual inflation rate has gone up -- time. he annual inflation rate has gone up more than a percentage point. one thing i will say on wages and that the fed will have a forecast during the second half of the year, forecasting are their reaction to the national rate. it will be almost in possible -- impossible for them not to
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forecast the rate, even if we do not have them presently. that will push of the stocks. yvonne: and how quickly to the boe follow the fed? >> i think this is a really interesting sense of it, because isot of her academic work focused on inflation. i'm not surprised she is a dissenter. inflation in the u.k. is a big problem, and if you can look through that, -- you can look through that if you have slow growth. the problem that the u.k. had that we do not if they have slow growth. article 50 might change that, but the bank might soon be targeting. yvonne: the head of global macro strategy. next, the production cuts could be extended beyond june four oil if the glut persists. this is bloomberg.
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saudi arabia's energy minister says oil supply cuts may be extended if necessary. kathleen hays was told that they will need to be sustained if stockpiles remain above the five-year average. he says -- thinks markets are still not confident of the outlook. >> our objective is really fundamental. bringing supply and demand into balance and encouraging investment flows and making sure wereglobal inventories championed in a glut situation, and they are back to where they should be in terms of long-term averages. so that is where i have my eyes focused on, and those factors are not those that can easily be managed. there are too many variables at
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and the fundamentals have significantly improved over the last few months. prices were fluctuating up and down. there are other factors into play, like speculators and financial investors were longs or shorts, currency, but i think looking at the fundamental, i am quite satisfied that we are going in the right direction, and also my colleagues from other producing nations have been cooperating with us quite nicely, and i think we are satisfied that we are on track. daily, weekly fluctuations in do not get my eye off the ball in terms of fundamentals. kathleen: is it true that inventories have not come down as much as saudi arabia has
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expected, and what did the trigger for you and other oil producing nations to cut some more. >> we are looking at global --entories, and though the those inventories, the data is not perfect and it takes time. demand in the first quarter is not the highest, so it has taken time for some of that data to show. we do believe that we are on the right track, and i think that , we will, by midyear look at where we are. it is premature for us, in mid-march, to be making a determination what to do. at the six months, this program course, we are committed to it. my colleagues are committed, and i think late in the second order, we will be looking at what needs to be done to ensure that those fundamental factors that we are after are achieved
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and maintained. kathleen: in terms of maintaining production cuts, at the six month mark, which years sit down with your fellow -- would you sit down with your fellow oil producers and take a test? aref the oil inventories still above the five-year average and the markets are still not confident in the outlook, if we do not see come these -- companies and investors feeling good in the health of their global oil industries, we what signal to them that we are going to do what it takes to -- the industry back to a better situation. was the saudi arabia energy minister speaking to our very own half lee hayes -- kathleen hays. and if you would like to read watch any of the interviews of
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the day, also watch some of the charts we have used, you can watch us live on tv and look at the bloomberg functions we used in ways wins.
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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. yvonne: a: 30 in singapore, halfway -- half an hour away the market.aking of we are seeing breaking news with an increase of the oil production -- oil exports rising over 20%. take a look at china's imports in dollar terms, that jumped 30 percent in february. south korea as well, exports february.n
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all signs are very positive. this gets the first world news with paul allen in sydney. global trade could be set back decades as president trump in prose his tariffs or tax the wto. he says antagonism between the u.s. and major partners or an assault on multilateral agreements be very bad outcomes that would undo 30 years of globalization. stand chart has been acting out potential disruptions for sometime. the secretary of state, rex tillerson, has called for a new approach on north korea, speaking in tokyo, said years of trying to persuade pyongyang to program haveuclear failed, but the reclusive country should not fear the u.s. or its allies. koreason is in south
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today before flying on to china this weekend. and sources say it has received several bids for its memory business, including from the innovation network corporation, even though it has not been confirmed. 10 suitors have expressed interest, and toshiba is considering selling all assets in its u.s. west nuclear testing house. and authorities are looking at a bunch of -- potential fraud, bribery, and corruption in the civil aviation business relating to third-party consumers -- suspending financing guarantees to be restored. local news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am paul allen, this is a quote bloomberg." -- "bloomberg." yvonne: time to see how the
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markets are shaping up this morning. that friday hangover is not something we enjoy too much. the japanese stocks are leading declines in asia. declines on the japanese yen about $1.13, but about 188 stocks are on the decline in that nikkei 225. we see health care leading drags in tokyo down over 1% there. currency is also little changed on this friday morning, despite the drop of the dollar on thursday morning. is enjoyingy stronger gains at the g-20 meeting. not want to show you this chart that demonstrates the new narrative around japanese equities and the yen. andave the likes of goldman
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others seeing the possibility of a decoupling of stocks, potentially fleeing dependently of the exchange rate if the yen's movements are not too drastic. you can see the debt on this chart here. seen similar decoupling in the late 1990's as well as the early 2000, and goldman's chief japan equity domestict said that demand sectors are starting to pull their weight alongside exports. they can rally then despite a flatter yen. it was also stressed that downside risks for japanese growth, as you can see there is a trend emerging between japanese stocks and -- yvonne? yvonne: with the u.s. leading the rate hike pact, other banks
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are wondering how much longer it will be before they raise their own. first at the bank of england. we talked about the brexit concerns, but suddenly we are seeing a more hawkish tilt from the boe. what happened? like gossipyost central-bank stories, because the central bank of england -- bank of england met and did not change their stories, but people are saying it is a hawkish tilt, and here is why. the minutes of the meeting show that one of the members dissented. be thinks the bank should raising rates because inflation is moving higher. the question is if she is inking that, are others leaning in that direction as well? there are also some questions that other members who are thinking about is that it could go another direction. let's look at this chart to get
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a sense of why this is an issue. a nice, simple chart. i love it. is thee the 2% chart, it white line is the cpi. this is what economist forecasters are suggesting, that over the course of the year, that the cpi could go well above target. one of the recent policymakers might not be so worried because this has as much to do with the falling pound as much as it has to do with higher rice. price. in our bloomberg intelligence team, no one is worried because they keep seeing things that pull in on the british economy. let's look at our #chart, 6094. this one is pretty simple. what you see is the wage line. that is the blue line. it has flattened out. look at the white line, that is inflation. i want you to focus on the right-hand right. if your paycheck is not growing because the blue line is that, but prices are
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rising, your paycheck is worth less adjusted for inflation, and you are getting squeezed. the is one of the reasons team in london does not think there will be any hint of rate hikes until the u.k. is well for brexit -- well through brexit, and that could take a while. yvonne: absolutely. and now it looks like it is up to the fed to relieve the pressure on higher rate hikes to the world central banks. every day we are looking at the data, and we know that janet yellen and other officials are focused on the label market -- labor market and dual mandate. there is a number -- a report called job openings and labor turnover survey, and it looks at what jobs are opening, how any people are quitting, and what we saw in january, jobs openings have dipped, rebounded, and calm back up. -- come back up.
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confident enough to quit? the quick rating has been steadily rising for the past -- well since the recession, it is rising at an expansion high, a postrecession high. that is a sign of strength in the labor market. also, the homebuilding numbers out today, single-family home building is of the most since 2007, another sign of confidence in the economy and jobs, etc.. yvonne: and looking across asia, kathleen, the central bank --ponded to the pboc responded, the pboc, hiking within two hours of the move. greatnow there is some color on this, but it is interesting to see how it looks like diversions is becoming sigrid nation -- synchronization.
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with some of the details coming out after the rate hike. with india, they are well absorbed to lace a rate hike. the economy is going well, the currency is in good shape, said they shrug it off. in the philippines, they said you know, if the fed's hiking rates, it is because their economy is doing well. the u.s. is doing well, they of our exports, so this is good for emerging market. and thailand is saying we are doing fine, we have monetary tools, the tools, currency tools that could control any outflows or capital flows we have to deal with, so they say we can deal with it just fine. yvonne: kathleen, thank you. and the central banks are facing a tough balance, as we have been talking about, as the fed hikes rates, causing downward pressure yen.e end -- now?how big is the problem
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>> it adds a layer of complexity for the pboc, which is facing otherwise, a complex situation, because the markets are stabilized as growth has picked up, but with the fed interest rate hike, interest rate narrowing of the deferential, and that is likely to put pressure on the yuan, pressure on capital outflows, increase those outflows, particularly if we get three, possibly for fed hikes. we are also getting these hikes because the economy in the u.s. is performing better, and that often means that the domestic tumor in america is buying -- consumer in america is buying more chinese exports. thate cannot guarantee given what we have heard from washington and the trumpet ministrations -- trump administration's stance. gdp --have a total jet
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debt gdp of 200%. if they raise the rate, it risked adding a lot of pressure, potentially the straw that breaks the camel's back. bloomberg of intelligence has crunched the numbers on this, and say that a 25 basis point hike here and the benchmark rate couldn't wait to debt servicing costs around 0.65%. not insignificant. yvonne: do they need to stick to these tightening twos then -- tools then? tom: ya. -- yeah. we have a terminal that shows with a have been doing. we have the reversals, the media lending facility rates picked up as well, and if you take those and combine them with the "it operations that took place in is aary, what you get --
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20 basis point hike. just five points away from the fed rate hike. to this does seem to be the press prints -- preference now from the pboc, based on the data points they get here. another problem with the benchmark rate rise is that there are key concerns around the auto sector and the proxy sector. that to badly timed. what the bloomberg intelligence describes as an aggressive, muddling through approach. continuing those open market operations, continuing to pull down the effects reserve, and putting those capital controls in place as well. but the rate hike cannot -- bench rate hike cannot be ruled out forever, especially because we have this factory rates rising over 7% in february, and assume that will feed into the consumer price index. we cannot rule it out completely, but for now it seems unlikely. it seems that they are facing a
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difficult balancing act, and it is likely to increase. yvonne: and of course, they reiterated do not over interpret these moves yesterday. tom mackenzie, live from beijing. up next, central voters through europe, but the u.s. says it will not last. that is up next. ♪
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yvonne: this is "daybreak: a latest check of the business headlines. although it is said to be approaching investors in china to raise an additional $500 million in preferred shares. this follows an additional offer to swedish to investors in december, and we are told that the money will be used to fund growth plans. nation of a potential ipo,
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but volvo says it has no current plans. executive of this company is being investigated over his residency status. this centered on where he was living in previous -- the previous tax year. gulliver has spent significant. the time -- moments of time living in asia. is said to be taking a comeback in london with a takeover of tenure gordon. announce aeparing to deal. diamond stepped down as barclays ceo in 2012, and set out to build a banking empire in sub-saharan africa. thathairman says the rally
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swept the chairman floor after the dutch election will not last . this will continue to be plagued by political uncertainty for the rest of the year. >> political risk is at the top of our risk agenda anyway. we have been very clearly saying that the top risk we face is going to be political risk, and it has migrated from being an emerging market to a mature market phenomenon. what you see in the market is there is a number of goods. the dutch election was the first data point that markets are gathering on a market -- larger trajectory of the european election. the next amalie france, then there is germany. the talks about -- the next one is in france, then germany. there are talks about early elections in italy. what we are seeing in the dutch election is that the standard has been holding, the liberal party has not lost as much vote
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as feared,- votes and that leads to a relief in the market. it will not last, because the next elections are up in april, in france, and there are big concerns there that the center might not hold, and the market is looking at every data point, every speech of political actors to really price that risk of another -- i would say -- setback of european integration. your p and integration is challenged at the moment by integrationropean is challenge of the moment by brexit. there is a lot of uncertainty and volatility in the market, and that will continue. europe is going to be plagued by political uncertainty the entire year, and even greece, that is looking for another nation, might come back as a problem over the summer. so plenty of political risk might materialize in europe. the will react with volatility and caution as these data points
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materialize and the elections happen. 1 > -- >> hints of early elections in greece as you bring that up. and you're talking about 1500 jobs moving from london as a result of brexit. are you making an assumption and ubs that we will see a hard brexit? >> i think we need to manage risk and factors. we have compared for every eventuality. in terms of our planning, we need to look at all these options. the key for us is not to take certain decisions. he pressed his to maintain as much as we can as optionally. we do not want to take decisions that we will regret, but at the same time we cannot afford to wait with our decisions until all the political dust has settled. for us, a key point will be the triggering of article 50, which at that point makes the exit of britain, in my view, and almost
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unmissable trajectory for the next few years, and then we will look at how hopeful we can be that market access from britain to european markets will continue. i think it will not continue on the basis of the old arrangement, britain needs to have a completely or arrangement in the eu. any grandfathering, except for a short decision time, is not in my expectation, so we need to understand with the new arrangement will be. it needs to be a new service and trade agreement with the eu. those things take a long time to negotiate, and what the financial sector is looking for is that financial services make it to the top of the priority list for theresa may's government. so far, from what we read and hear, we do not have the impression that that has yet happened, and i will be an important commitment for the financial industry, to feel more reassured about london that they understand financial services -- access financial services accessing financial services through the eu is a key part of
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the administration. >> so you do not think she will come back with that? we are hoping to see it, but we have not yet. the sooner the market and financial institutions get that reassurance, the city of london is going to be a core priority of theresa may's government, the more -- the longer that takes, the more lingering doubts there will be. chairmanhat was ubs axel weber. you can get your day going with the daily edition of daybreak: asia. "daybreak: asia." on the pound, it lights up bloomberg daybreak. this is "bloomberg."
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yvonne: donald trump's budget proposal has had a frosty reception from wall street analysts and key republicans. cutting the key domestic programs, but a increase in budget spending. my: it is being seen as a reversal of lyndon b. johnson's -- greatiety."
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society." let's look at the biggest boosts and cuts on a dollar basis. these bubbles are what i wanted to show you. they represent u.s. government programs. the ones in blue get a boost in funding, but the ones in orange, all of these back here, get a cut. defense could the biggest boost -- gets the biggest boost by $52 billion. that is a 10% jump. veterans affairs and homeland security get the next biggest for the ba and 10% but a lotnd security, of other programs would lose a lot of money, about 80 in fact. health and human services would you -- lose about $80 billion in fact. on 2016'sut 25% based budget. and the state department back here would lose about $10 billion, but the epa would lose the most. it would lose most about 30% on
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a percentage level, all the way down here at 29.6%. this is solely on the basis of percentages. you can see the winners and losers more clearer. transportation at the top, andrans affairs up next, earlier today, mick mulvaney, the foreign budget director, spoke more on the cuts for the state permit. take a look. >> much of the foreign aid the president talked about, the money that goes to climate research, green energy, actually in the state department budget. we not spending money on that anymore. we consider let's be a waste of your money to go out and do that. ramy: he also claimed that mr. trump still believes in diplomacy and that the budget protects that interest. yvonne: so there is still concern there, so what is the
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probability this budget will stand as is? ramy: it does not look likely. andmccain, mitch mcconnell, -- john mccain and mitch mcconnell saying it looks like it will not pass the senate, and lindsey graham saying the bill -- dead on arrival." arrival." record $603 billion run, and it could be hard for congress to say no, because no one wants to be seen as weak on national security. yvonne: ramy, thank you. time to look at what is coming up in the next few hours on asia.erg markets: i know you are watching rex tillerson's trip to asia in particular. i have to say that the
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nothing --ns that have nothing to worry about from u.s. allies is a curious statement. plusl be looking at that, richard fanning, who will be joining us as well to have a look at what all this means, joining me in beijing this weekend. yvonne: i look forward to that. "bloomberg daybreak: asia." riish and heidi are next.
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♪ it is 9:00 a.m. in hong kong, midday in sydney, 9:00 p.m. in new york here it i'm haidi lun. rishaad: i am rishaad salamat coming to you from bloomberg's headquarters in hong kong. this is "bloomberg markets: asia." ♪ haidi: rex tillerson takes washington's message to asia, smoothing ruffled feathers and saying north korea has nothing to fear. rishaad: his false faces a struggle, president trump's budget cannot pass. haidi: saudi arabia tells
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bloomberg that opec may extend production curbs. voters deciding. comments out of saudi arabia giving support to the oil price. sterling moving to the upside as well, one dissenting voice is ready tohe doe raise interest rates, but it is the cologneafter after that fed rate hike has dissipated. haidi: that's right. unwound,tement being yields pushed back up again. a bit of aia, catalyst as we go into the end of the week. we are 30 minutes away from the open.
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sophia is taking a look at how the markets are tracking. we are seeing gains in markets such as taiwan, japanese do have stocks and dragging on the region, the nikkei 225 falling by .3%, away to down by automakers as the yen heads for its steepest advance in three weeks and we await the outcome of the g-20 talks today. korea, theocus on kospi up .1%, extending gains for a second day. cosmetics, duty-free store operators, and other china-link consumer stocks are in a relief rally as tensions between south korea and china over the missile issue are seen to have peaked. -- of the climbers today
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profit-taking. region,at the wider energy stocks leading gains in asia. trackingre equities their wall street counterparts lower today. i want to look at china credit default swaps. it has fallen considerably over the course of this year. falling overthem the course of 2017. the spread is at the lowest in over two years. they were at these levels, chinese stocks rose 50% in three months. the environment does remain positive for chinese equities, so we look for the open of chinese stocks at the bottom of the hour. rishaad: right, let's get to
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first word news headlines with paul allen. saudi arabia says opec and its allies are prepared to extend production cuts the on to june if global inventories remain high. the energy minister told bloomberg that it supplies are excessive and markets are confident they will fall, the curbs could be sustained. the cartel meets may 25 to decide whether to continue the restrictions aimed at ending the oil glut. >> my colleagues from other producing nations have been cooperating with us quite nicely, and i think we are satisfied we are on track. daily or weekly fluctuations in price don't take my eye off the ball as far as looking at fundamentals. president trump's first budget faces little chance of being accepted. his proposal to cut funds from most federal departments to
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boost defense spending got a lukewarm reaction come up with senator john mccain saying it cannot be passed. in recent memory has proposed such austerity to non-defense programs. china's second-largest insurer says the mounting costs of short-term debt may naturally rein in a borrowing spree by smaller banks. negotiable certificates of deposit are now more expensive than short-term commercial paper, making them unsustainable for these lenders. ncds were introduced to help smaller banks compete, but have morphed into a risky financing tool. afterys the relief rally the dutch election won't ask. the block is plagued by political uncertainty. the recentn says victory shows the center can hold, but more important tests
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are to come in france and germany. political developments are a top risk for investors following accident and the election of president trump. >> europe is going to be plagued by political uncertainty the entire year, even greece is looking for another mission, it might come back as a problem over the summer, so plenty of political risks that might materialize in europe and the market will reacts with volatility and caution as these data points materialize. paul: global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. thanks. secretary of state rex tillerson says it is time for a new approach to north korea and its nuclear ambitions. our correspondent is following oflerson on his first tour asia. did we get any clues as to what this new approach actually might
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be? clues, but lot of not a lot of answers. on one hand, we got the olive ranch saying you don't have anything to fear from the united states. on the other hand, he is saying 20 years of diplomacy on north korea and its missile program at afailed, so that hints more hawkish tone, and also of course if you consider the more recent deployment of the antique missile system, the thaad, which sophie kamaruddin was talking tillerson goes to seoul, korea today, it is ramping up the tension by him being less committal as to what the plans are. that is why he went to japan first and met with his counterpart in tokyo yesterday to get on the same page before he went to seoul, korea, and in beijing over the weekend.
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this is the message rex tillerson had for pyongyang yesterday. and its people need not fear the united states or their neighbors in the region who seek only to live in piece with north korea. mind, the united states calls on north korea to abandon its nuclear and ballistic missile programs and refrain from any further provocations. again, he was short on details as far as what kind of approach they would like to take in conjunction with beijing, which were obvious who play a pivotal role here. we are getting to the business end, if you like. he should be arriving in seoul in any minute now. he's in beijing on saturday as well. what do they have to do in both of these places? >> again, he is on a fact-finding mission as his
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first major foray into geopolitics. he has been to germany and mexico, but this is his first real foray as secretary of state into the hot spots. beijing, which will be hotter given the issues china and the united states have to resolve. again, the issue of north korea is a hot one, because north korea on one hand made a suggestion, a plan, earlier this month for north korea to abandon its nuclear program in exchange for the u.s. and south korea to abandon their war crimes -- wargames. the u.s. rejected that. they said china came forward with a plan, so rex tillerson will go to the chinese and say we need a new approach. this is what the former u.s. ambassador to beijing had to say about this so-called new or
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different approach from the new trump administration. of the chinese have the most leverage on north korea . nothing has happened, which means we americans have to come up with something a little more creative, stronger, with respect to the chinese, south koreans, and japanese. i have heard this statement many times, but we need more. again, rex tillerson said yesterday in tokyo that beijing will continue to play an important role. we just don't know if that will be an expanded role for how cooperative that role maybe. rishaad: nice one. still ahead, don't bet against the property tycoons. hong kong's richest are staying that way despite government measures to cool the market. plus, pimco calling emerging markets a trade of the decade, so how much upside is there? we talk about that and more with
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the j.p. morgan next. this is bloomberg. ♪
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haidi: i am haidi lun in sydney. this is "bloomberg markets: asia." rishaad: i am rishaad salamat in hong kong. not every investor has given up on valeant pharmaceuticals. valeant stock jumping in the extended session, but it has lost 95% of its value since 2015. bill ackman shed his fake with losses. haidi: toshiba soaring on that it has received several bids for its flash memory business, including i'm the innovation network, although not confirmed. 10 suitors have expressed interest. considering stakes of physical assets in the face of
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multibillion-dollar losses at its westinghouse unit. new galaxymsung's eight will employ facial recognition for mobile payments. it will also make use of fingerprint and irish the texan verify users accessing services -- fingerprint and face to verify users accessing services. will need to be sustained if stockpiles remain above the five-year average. he things markets are still not confident on the outlook. >> well, our objective in doing what we do is really fundamental. saudi arabia is driven by supply-demand enter balance, encouraging investment flows, and making sure that global inventories, which have been in
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a a lot situation, are back to where they should be in terms of long-term averages, so that is where i have my eyes focused on, and of course those factors are not ones that can easily be managed. we have to monitor them. there are too many variables at .lay here, and we are on course i think the fundamentals have significantly in proved over the last few months. prices will fluctuate up and down. there are other factors like speculators and financial investors who are long or short, lookinges, but i think at the fundamentals, i am quite satisfied we are in the right direction, and also my colleagues from other producing nations have then cooperating with us quite nicely, and i think we are satisfied we are on
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daily or weekly fluctuations in price don't take my eye off the ball as far as looking at the fundamentals. >> is it true that inventories have not come down as much as saudi arabia expected? and what would be the trigger for you and fellow oil-producing nations to say we need to cut some more? >> we are looking at global inventories, and those inventories, the data transparency is not perfect, and it also takes time for inventories to correct. demand in the first quarter is it is takingst, so time for some of that data to show, but we believe we are on the fried track. i think sometime by midyear that we will look at where we are. it is premature for us in mid-march to be making a determination of what to do, but
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program willnth take its course, and we are committed to it and my colleagues are committed to it, then i think late in the second quarter we will be looking at when these to be done to ensure that those fundamental factors that we are after are achieved and maintained. >> in terms of extending production cuts or not, you want to look at the first six months or it after the six-month mark is it possible you would sit down with the low producers and extend the cuts? >> if it is needed, yes. if inventories are still above the five-year average, for example, the markets are still not confident in the outlook, if we don't see companies and investors feeling good about the health of the global oil themtry, then we signal to that we are going to do what it takes to bring the industry back
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to a healthy situation. we are 10:17 in seoul, rex tillerson arriving to meet counterpart and discussed north korea's nuclear and missile threats. a three-country trip that began a week after pyongyang tested four ballistic missiles, expected to provide clues as how u.s. policy will be shaped towards north korea under donald trump. .his coming from seoul this is all down to cooperation which donald trump's top diplomat said is critical between japan and south korea. a double edged all of branch, if i can mix my
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metaphors, saying pyongyang has nothing to worry about from u.s. allies in the region. this is what he was saying after meeting the japanese foreign minister, saying it is important to recognize diplomatic and other efforts over the past 20 years have essentially failed. he has called for a different approach to deal with pyongyang's ever-escalating threat as well. we have him meeting with the acting president and the prime minister a week after a court upheld that impeachment of president park geun-hye. there we go, rex tillerson discuss in seoul to north korea's nuclear and editions and its missile ambitions as well come all part of this three-country asia trip that began in tokyo a couple of days ago. is how we will be getting clues as to how u.s. policy is morphing when it comes to north korea, which president donald
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trump has bowed to deal with forcefully. going on to say of course that this is critical cooperation between japan and south korea, no mention of china. he will be going to china saturday as well as part of that three-country tour. we do have tensions being exacerbated after your washington deployed the thaad system to south korea, the united states claiming the system is strictly defensive, something that will be discussed in beijing on saturday after this recent missile tests by the north from a of an exercise pyongyang targeted military bases in japan as well. here we go, rex tillerson disembarking from the aircraft. we've the view with those images
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and will going back in a couple of minutes. ♪
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haidi: janet yellen's cautious outlook is fueling an emerging market rally. on msci index jumping thursday to the highest level since july 2015. jp morgan took profits in its emerging market position, but now says it is time to be buying again. researchof equities joining us now from singapore. great to have you. all of a sudden there is a corazon forces getting bullish when it comes to emerging markets. investors have been traumatized by emerging markets the last several years or so, #6866 shows you shares compared to what we
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etf,n the emerging market and that would seem to suggest quite a bit of scope for upside lift. how much are do think this market goes? having me onfor the show. we are still bullish on the emerging markets. there are to bring critical components. we believe emerging markets are driven by the earnings growth differential relative to develop markets. there has been a lot of pain over the course of the last couple of years. you have seen 16 years of relative earnings growth disappear. earnings have been revised down over 23% since 2011. now however, we are seeing positive earning revisions with the sole exception of turkey and india. you are seeing strong revision cycles across china, korea, taiwan, which makes us very bullish. we also have to take into
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account what janet yellen and the fed are saying. despite the preconception that a rising rate cycle is negative for emerging markets, emerging markets have out performed in the last three out of four rate cycles. predicated ons rates rising far faster than people expected, and emerging markets had outperformed in advance of that, so you put the earnings outlook together with the rate cycle and the view of emerging markets as a reflation play and we are positive on emerging markets from here. on the base case, the markets have priced in three year. this if the fed is more dovish, and you have a selloff in the dollar , that's not really how it played out with the taper tantrum. >> so very different this time
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around here it we have seen far better forecasting, far better highlighting of the rate hike cycle from the fed this time around. markets are clearly more prepared. we did see emerging-market underperformance as the market priced in higher odds of a march rate hike. we think we are past that and the markets have fully priced in three rate hike this year and three rate hikes next year. we are looking for weakness in the u.s. dollar in the second half of this year. historically that has been positive for emerging markets. the argument behind the dollar is that the dollar is sitting at a 14 year high from a valuation perspective. speculative long positions are also at an all-time high. year highking at a 30 and terms of the interest rate differential between the u.s. and europe. stick with us. lots more to talk about. we are also looking at trump's
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budget proposal facing resistance. we will tell you why next year it the market open in hong kong and shanghai as well, and opening numbers right after this very short break. ♪
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rishaad: 9:29 a.m., the scene on victoria harbour. we are counting you down to the start of the trading day. i am rishaad salamat coming to you from bloomberg's asia headquarters. sydney. am haidi lun in we have seen an unwinding when it comes to these post-fed trades. some increasingly hawkish tones from the boe and ecb, and the pboc hiking money market rates as well. the shanghai and hong kong open, rish. hang seng up by
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job cuts to come, 30% of staff being reduced that cathay pacific. we are looking at the shanghai open. also, looking at how cathay pacific opens in the broader hang seng as well. here is sophie kamaruddin. chinese shares advancing, the shanghai composite having its first weekly advance in three weeks. hong kong stocks rising for a second straight day, of .25%, and that is led light telco and i.t. segments. only energy shares and utilities on the decline. , the bti below $40. some laggards, cathay pacific not moving yet.
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wharf holdings rising for a for the day, the stock was cut to neutral by j.p. morgan with a kong target to 63.20 hong dollars. wharf is leading hong kong real estate stocks, outperform the hang seng property index with a 35% return year today, followed by china resources. later, we will find out why a kong'sinst hong billionaire property tycoons may not be the savviest way to go. rishaad: let's get back to our guest. we were talking about emerging markets. you are in favor of them at the moment. valuations as you have been alluding to are rather compelling, but when a stock is cheap, it is cheap for a reason, so you have to tread carefully, haven't you? at thee are looking cheapest price-to-book violations in emerging markets
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since 2003. there have been reasons for that. we have seen 23% absolute ebs reductions since 2011. aw we are looking at rock-bottom price to book by ua she combined with the resurgence of economic growth, a resurgence of corporate pricing power, ppi, translating to stronger earnings growth, so i think it changes the outlook from here. absolutely, but what are the likely headwinds and what are we likely to encounter in this rising rate environment? and again, from a rising rate perspective, emerging markets outperform in a rising rate environment. three out of the last four rate cycles, you have seen a performance of 50% or more in two of those instances, so we are leveraged into a reflation trade, so that is positive for emerging markets.
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the key risks would either be a significant slowdown in growth in china, which is not with the macro numbers are telling us, 300% increase in excavator sales, significant increases in power output, and economic indicators are looking at stability rather than collapse. the other risk would be a significantly faster rate hike cycle in the united states. that's what caused emerging markets to underperform before. that is not the case now. china is one of your big emerging-market picks. what do you like in particular? true.olutely from an overall china perspective, china is the most under held emerging-market in so investororld, positioning is coming into this conversation like an almost solely due to this worry about
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an economic slowdown. clearly we are not seeing that in the numbers. we continue to like chinese i.t. space, internet names, leveraged into the cyclicals and out of the defensive sectors in china right now. haidi: thank you so much for that. let's get you caught up with the first word news with paul allen here in sydney. rex tillerson has called for a new approach to north korea. speaking in tokyo, he said years of trying to persuade pyongyang had failed. he insists the reclusive country should not fear the u.s. or its allies. tillerson is on a three nation tour of asia. korea and its people need not fear the united states or their neighbors in the region who seek only to live in peace with north korea.
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with that this in mind, the united states calls on north korea to abandon its nuclear and ballistic missile programs and refrain from any further provocations. indonesia's central bank kept its benchmark interest rate unchanged at 4.75%. policy makers remain on guard following the fed hike. the deputy governor signaled the easing cycle is over, saying the key rate is low enough and supportive of economic growth. the bank cut rates six times last year. law,rexit bill has become allowing theresa may's government to trigger the process of taking the u.k. out of the european union. the lords and commons have been told the bill passes final stage after receiving royal assent. the prime minister can now invoke article 50, launching two years of talks with eu members.
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she is aiming to do that this month. bob diamond is said to be making a comeback in london. we are told his atlas merchant capital and a qatari investment bank are prepared to announce a deal to privatize the brokerage. dimon stepped down as barclays ceo in 2012 and set out to build a banking empire across sub-saharan africa. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: donald trump's budget proposal has had a frosty reception from wall street analysts and key republicans. programs,to domestic a major increase in defense spending. ramy inocencio has the details for us. ramy: it is being seen as a reversal of lyndon johnson's great society half a century ago. now it is donald trump great
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again society and titled the blueprint to make america great again. take a look at these bubbles. they represent u.s. government programs. coming get aside boost, the ones in orange get a cut. ,efense gets the biggest boost $52 billion, a 10% jump. and homeland security are the next biggest jumps at 10% respectively. to the left, there are many programs that would lose money. all told, 80 in fact. health in charge of obamacare would lose $20 billion there. state department and education lose $10 billion. on the left-hand side, that is the epa. that would lose the most on a percentage basis by about 30%. around and look
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at it on a percentage total. you can see the winners and yellow and the losers in orange, defense near the top, epa to the bottom, and state right behind at 28.5%, down from the 2016 budget. mick mulvaney, the u.s. budget director, spoke on those cuts and tied it all in. take a listen. theuch of the foreign aid president talked about, much of the money that goes to climate research, green energy, those types of things are in the state department budget. we are not spending money on that anymore. we consider that a waste of your money. he also said donald trump still believes in diplomacy and the budget does protect the core interests. haidi: this is just a proposal, right? what is the likelihood it will all get through in tact? ramy: people are saying it's likely not to happen. reason, key
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republicans are pushing back on those massive cuts. three key senate republicans, including mitch mcconnell, said it would probably not pass the senate. mccain also said the same. lindsey graham said the budget is doa. these are republicans here. this is a proposal, and not a certainty. trumps out donald priorities, and clearly defense is the key issue. destructiond on the of isis and wants $574 billion as a base i just. including operations, $603 billion. that is a record. it can be hard for congress to say no because no one wants to be seen as weak on national security. donald trump said as much. he said to keep americans safe, we have made tough choices that have been put off for too long. is up the cause
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of so many other programs that also make america great. you for wrapping that up for us. ramy inocencio in new york where it coming up, hong kong's incoming chief executive may have to take a stuff tans -- a tough stance when it comes to property prices. we have more on that story, next. this is bloomberg. ♪
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haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. biggestippines companies saying profit has surged 80% last year. rising to $1 billion thanks to earnings. brewer,a 100-year-old also in a fitting from the sale of its telecom assets.
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11% so farn the up this year, extending and 85% rally that began last year. volvo said to be approaching investors in china inraise $500 million preferred shares. this follows a similar offering to swedish investors in december, which raised $555 million you'd the money will be used to fund growth plans. in 2010 andught there has been speculation about a particular ipo, but volvo says it has no current plans. gulliver isart being investigated by a u.k. tax official over his residency status he lost a london court bid to end an inquiry that centered on where he was living, the ruling saying the government is not making allegations of impropriety. gulliver spent significant amounts of time living in asia.
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haidi: despite years of government attempts to cool hong tycoonsroperty market, are proving resilient, but could there fortunes fade under the next chief executive? for more insight, let's get over to our asia real estate reporter . the wealthen driving of hong kong's property billionaires in recent years? we have had measures trying to cool this market. >> hong kong's property begin errors have been unstoppable. this is a city upset with property ownership. any attempts to cool the market have not really ended up dampening rices. home prices have steadily been climbing despite what have been bouts of property measures to try and rein in prices. that has been a very big factor
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in driving up stocks of these property billionaires, companies owned by these property billionaires and their wealth. in terms of the impact of these new elections or new policies are expected to have, clearly housing affordability is a hot button topic going into these elections. are expected to be several property-related measures that as you point out, housing affordability is taking center stage in the selection. any guide, we have seen these policy shocks and these measures cause a short-lived dip in the stocks that these are you nara's manage or own, and after a short lived bid, they seem to go higher and
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higher because the fundamentals of the whole market in hong kong are such that price is just keep going up. hal have the billionaires managed to stay so resilient? thene of the things is supply. even though officials say supply is something they want to increase down the road, there is a constricted supply, and that is one thing that keeps driving prices up. you arether hand, seeing mainland chinese investors looking at hong kong as an attractive destination where they can put their money. as you are seeing the yuan decline and china and home prices in beijing and shanghai going higher and higher, it becomes a very attractive destination, so you are looking at a lot of demand from several quarters. much forthank you very that. joining us there with a look at the property market and hong
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kong and attempts to cool it down. let's have a word about this. we have peter church here. let's start off with the basics. she said, but there are so many fallacies and myths surrounding why hong kong property has gotten so expensive. >> it is simple really. it is a supply and demand equation. we have had a shortfall of supply -- rishaad: i'm asking for the fallacies. fallacies is key that chinese buyers are driving the market. that is not the case. than has never been more 10% or 11% of the total market, so they have not been driving the market. secondly is this myth that there is collusion between the government and the private developers. i don't think that is really the case. the developers certainly compete aggressively amongst themselves for buyers, land, and everything
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they do in the marketplace. this is not a cartel as such, but not a lot of operators. they do act in a very competitive way for the most part. rishaad: now to the real reasons in your view. basically we've had years of negative real interest rates. and that is the key for hong kong. over 35 years, whenever we have had negative or low real interest rates, meaning inflation is higher than the rate of interest, we have had a buoyant property market. the the last 10 years, production of housing in the market has collapsed. he used to be 24,000 to 28,000 units per year. in the last decade, that has dropped to 10,000 and below. the supply is coming up, 15,000 or 16,000 units per year come a but still below the long-term average could you have demand field by lower interest rates and no supply, so prices go up.
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simple. haidi: we are going into this election, housing affordability is a sensitive issue. there has been a variety of different measures, curbs put in place to different of fact. what expect the campaign rhetoric to be? and whoever wins this election, what do you think the policies will be? i see a continuation of the expansion of the land supply. the current government has been doing that for a number of years, and done it quite successfully. we are seeing housing starts andleted have risen completions rising also, but not fast enough. we are not back at the levels we used to be. we could easily see further continuation of duty charges and that kind of thing. i would not be surprised to see the government put pressure on the private developers to stop
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or limit the amount of incentives they are giving for new buyers of their properties. they are giving top of mortgages, cheap financing, and so on. we could see the government put a limit on that to some extent. rishaad: peter, stick with this. about thee our chat election and the housing market in hong kong as well. ♪
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rishaad: this is "bloomberg markets: asia." i am rishaad salamat in hong kong. i am haidi lun in sydney. let's get back to the discussion on hong kong home prices. is with us now. thank you first taking around. i want to talk about the fed. we see the pboc tracking the feds tightening trajectory higher. mainland china already had its
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own focus when it comes to tightening policy. onyou see this squeeze liquidity and rising borrowing costs having an impact on the hong kong property market? >> in theory, we should expect that, but as you are suggesting the real interest rate that affects property prices, not so much the nominal rate, and if we get a 75 basis point rise in rates in 2017, we will still see enters rates in hong kong for mortgages only in real terms onut .2%, which is very low a long-term trajectory, so rising rates should be negative, but they were not lead to a 30% to 40% decline in property prices in this part of the world on their own. other forces could lead to that, but certainly not interest rates. haidi: as you point out, you've seen few retail investors or
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buyers going into the market, but do you see a continuation of chinese companies buying up these high profile business assets offshore, particularly as you get the impact of capital controls? there have been complaints that it is hard to do deals at the moment because of the issue of getting money out of china. ofwe are still seeing a flow capital out of china in two major markets around the world, u.k., australia, new zealand, germany, portugal, but i expect that flowed to diminish somewhat as we go forward because there are capital controls coming in. we have also seen here and hong kong very substantial acquisitions of the land by chinese property developers. ago, thele, 6-8 years big six developers in hong kong to 65% of land5% sales. today, they are only getting 25%
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of the market. the brothers from across the border are eating their lunch when it comes to land sales right now. rishaad: what would you do if you were chief executive officer hong kong? >> i would accelerate supply as fats as i could and accelerate a supply of public housing for sale or for rental. affordable housing for both types come rental and for sale, and that can be done. there is no shortage of land in hong kong, but we have seen a reluctance to go in on a planning basis and get hold of this land and do stuff with it. there are thousands of acres out there. rishaad: public housing has not been built for a couple of decades now. >> they slow down. it used to be a very big program in the 1980's and 1990's, and that program was slowed dramatically in the last decade, so i am suspecting any chief
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executive should exonerate the public housing program. i'm editorializing, but they should have more of an 7000nation to use that hong kong dollars they get back every year and use that for social housing. >> you would have thought so, rather than just a cash handout, a provision of facilities like housing, education, and so on would have been a bigger priority. see either of to these chief executive candidates having that on the agenda. one of them is suggesting 60% to 65% into public housing. i don't think that is achievable, but we can expect to see a pickup in the public housing provision over the next 3-4 years. rishaad: great talking to you as ever. ,ight, what we have coming up talking about rex tillerson's trip to asia and the biggest
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geopolitical issues in this part of the world. we will be doing that with a man who knows. he will be along in 10 minutes time from now. this is bloomberg. ♪
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♪ >> from our studios in new york city, this is "charlie rose." jeff: good evening, i'm jeff greenfield, filling in for charlie rose. donald trump was not exactly the consensus choice of the republican party, roughly one in five g.o.p. senators refused to endorse him. so did four of the last five republican presidential nominees. but with his election and with the party controlling both houses of congress, republicans of almost all stripes saw a chance to finally enact some of their most significant goals, from tax cuts to the environment to regulation. now the first big test, repealing and replacing obamacare, has set something of a wall o


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