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

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♪ mind on a keys campaign promise, trump announces china is not a currency manipulator, it is the dollar that is strong. >> wall street, the declined said to be mirrored in the asian pacific. the yen is at its highest in five months. >> that sinking feeling. relations between russia and the u.s. have fallen dangerously low. no.o does not really mean
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they reject plans for a third time, saying oil was in a good position. we have world coverage here on daybreak asia, we will be live in hong kong and sydney to preview what is ahead for markets in this region. >> here in new york we will talk about trump's plan for fed chair janet yellen and a look ahead to singapore's banks. this is daybreak asia live from our u.s. and asian headquarters. i am ramy inocencio in new york. just after 7:00 here in hong kong, i am shery ahn. we do have central-bank decisions out of korea, singapore, chinese trade data, and the often unpredictable australian jobs numbers. on top of that, we have to digest what happened in the u.s. with president trump's comments. ramy: it is interesting, just as markets were closing, donald trump came out with a that one-two punch, china not labeled
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a currency manipulator. the 10 year yield and treasuries here, we will be looking ahead to see how it has an impact on asian trading. shery: let's take a look at the market and new zealand. is the only one trading at the moment. we see it falling for a second consecutive session, down to 3/10 of 1%. kiwi dollar has not moved much but it is gaining 2/10 of 1%. not surprising given the weakness in the u.s. dollar. in australia it has been gaining all week. futures looking like this. 0.5%.down we see the aussie dollar up 1/10 of 1%. iron ore dropped to the most in a year. we are seeing pressure on the australian dollar. nikkei futures looking like
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this. back after they fell to the lowest level since december, also trading down 2/10 of 1%. the japanese yen gaining momentum. unchanged, but selling below the 110 level. that is an early look on what we can expect in the region. wall street did not look too good. no, the s&p 500 fell to its lowest in two weeks. we will see what happens moving ahead. the volatility could be fairly high because this is a shortened week for various holidays. we will take a look at that over the course of this hour. but first, first word news with courtney collins. >> president trump says the syrian chemical attack was the work of a butcher.
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and that it is unlikely moscow do about it in advance. rex tillerson met with russian foreign minister sergey lavrov and warned that relations between the countries was dangerously low. rex tillerson had a meeting at the kremlin with vladimir putin. >> the current state of u.s.-russia relations is at a low point. there is a low level of trust between our two countries. foremost a two nuclear powers cannot have this kind of relationship. >> chinese companies and governments sold 1.3 trillion march, that is around the same amount as the first two months of the year combined. china's bond issuers stepping on the gas as they face $1.4 trillion of debts this year. they expect financing needs to drive issuance in the coming
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months. cathay pacific has named a new ceo to revive earnings after reporting a first annual loss in eight years. the 55-year-old had been cfo since march 2014. hee his two predecessors, had been ceo for three years. shares fell 30% and that time. suffered a nety loss of $74 million. concluded theiews company's $29 billion unit is still a good work for them miners. proposaled an activist to end the u.s. petroleum operations as part of a company-white overall -- overhaul. >> we have many discussions with investors, many supporters of the strategy. >> global news 24 hours a day
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powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. shery: courtney, thank you. president trump has decided not to label china a currency manipulator, shifting to say it is a strong dollar hindering american companies from competing. stephen engle is here with more on that. this is quite a u-turn. but not a surprise. >> they did not meet the criteria set by the u.s. for being a currency manipulator and no president has named china or any country a currency manipulator since 1994. this is probably a lot of bluster, a campaign promise he is backing off on, maybe a bargaining chip he had played. he said he would label china currency manipulator on day one.
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it is day 80 or 90 now, seems like an eternity. this is what he told the wall street journal, they are not currency manipulators. that is very plain and simple. did not meet the criteria set by the united states. the treasury is expected to release its report soon on global currency practices for the first time under trump. the u.s. has not designated any country currency manipulator since 1994. in october, china and five other fortries were on a list engaging and possible unfair forex practices. currency misalignments, not manipulations, could be a different way of designating china. misalignment means you can still run a massive trade surplus with the united states, but not intentionally alter the currency practices.
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that could come out in the comments report from wilbur ross. and as ramy inocencio talked about, trump focusing on a strong u.s. dollar as perhaps the culprit, why the u.s. cannot compete. ramy: we are looking ahead to china's march trade figures. we are also hearing from washington the donald trump is promising china that are trade deals if beijing helps rein in north korea. stephen: this is the businessman at play. a bargaining chip to say listen, if you come to the table and help rein in north korea, we will give you a better trade deal in bilateral trade. let me paraphrase him. let's hear from him. >> i think he wants to help us with north korea. we talked trade, we talked a lot of things. i said the way you make a good trade deal is to help us with north korea. otherwise, we won't -- we will
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go it alone. but going it alone means with other nations. stephen: he referred to a phone call he and president xi jinping had to discuss north korea. donald also talking about sending a powerful armada to the waters of north korea and perhaps going it alone. i assume that would mean militarily if beijing does not come to their aid. he has tweeted that north korea is looking for trouble. ramy you mentioned trade is a side note to this issue. but trade numbers are out for march. we have seasonal distortions in the lunar new year holiday, late january, early february. edged up inand pmi march. export orders declined. that is the picture, expecting a pickup in u.s. dollar for exports.
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imports, which had been brooding, expected to wane in march. seasonal effects are in play here. ramy: with a that lunar holiday, we will see how that plays out in the next few hours. tumble,.s. stocks skittish investors drive of volatility. we have geopolitical tensions from russia to north korea. and president trump talked about fed chair janet yellen. what is top of mind? >> we talked to the lowest level this year. the question is, is the trump rally over? that has been a looming question. not a big drop, but clearly a pause. we will get to the vix, the spike in volatility in a minute. ak steel was one of the first to take off on the infrastructure expectations for trump.
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it is down from 35% your today, a big drop today. that had to do with questions about, is the trump administration going to be able to get these initiatives passed? qualcomm, a big winner with an arbitration of -- agreement. big-money coming their way. the stock on the rise as big investors take interest. volatility is the story of the day. it did not take much to bring it back up. the what we have is a long streak of low volatility and it is now up 20% -- 23% midday from friday. why? concernsea, syria, about the trump administration getting things done, and the new contender in the european elections in france. shery: let's look at the declining industrial stocks. we talked about geopolitical uncertainty. stocks disappointed on earnings,
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tell us about that. this make some of the core components for many industries. how they go, the industry goes. they came out with a disappointing come a weaker than expected quarterly profit -- ge washey make down. concerns about trump initiatives and infrastructure. it knocked the oil industry down. railroad stocks down at least 3%. bloomberg, the analysts are usually busy trimming overly optimistic corporate forecasts. this time they are doing the opposite, which is unusual. msci earnings rising here according to latest estimates. underscoring how the
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corporate earnings season is overshadowed by global events. shery: it looks like profits have been led by japan and europe in the chart you showed us. thank you so much. looking ahead, more turmoil at toshiba. why joint venture partners say the potential chip unit sale may violate their contract. ramy: plus, looking for clues. will singapore stick or twist? this is bloomberg. ♪
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♪ shery: this is "daybreak asia," i am shery ahn in hong kong. ramy: i am ramy inocencio in new york. united airlines will compensate all passengers for the cost of the flight in which a manned -- a man was forcibly removed from the security. david dao was dragged from the
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aircraft after refusing to leave. it with they compounded botched public responses. he will be treated for injuries he suffered. has halfo oscar munoz $1 million worth of annual bonuses tied to customer satisfaction. the chicago incident will not help his prospects. united collects 8000 passenger surveys each day and they revealed many people were already unhappy. last year, jb power was last among north american carriers. ramy: jpmorgan delaying a plan to move wealth clients. they wait to see if the trump administration will up old higher standards for brokers. they will let clients manage their own retirement accounts. they forced regulators to look at new labor department rules to ensure they pitch prod --
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projects that are in client's best interest. let's turn to singapore, the central bank is -- analysts are saying improving global decisions mean easing is hopeless for now. no change expected, but are investors looking for anything in particular? signsy are looking for come out ominous, but anything that would suggest the monetary authority of singapore will keep zero appreciation, or widen the ban. also any language suggesting it may start targeting in october. yes, the global economy is picking up, consumer prices have started to rise after falling for almost two years.
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analysts are less bearish, predicting it will goanalysts a, predicting it will go up to 142. [no audio] authority of singapore has done since 2015, it unexpectedly eased in may that year, an unscheduled meeting. and then cut twice, more after that. but as you know, there are caveats to decision. it depends on the global policies,trade geopolitics. a fine line, indeed. shery: what about when it comes to gdp data? singapore is expected to release its first order, of growth data. any reason there to be upbeat? haslinda: not really.
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it probably launched momentum in q1, a contraction expected of 1.8% annualized versus an expansion of 12.3% of the quarter before. it probablygdp data in the lion, trading volatile. it is an open economy, highly dependent on trade and exports. singapore's economy is showing signs of improvement. but challenges remain. see the u.s.on to will impose barriers to china. the lion city highly dependent on exports. singapore is not creating jobs fast enough. one analyst said of the underlying growth still remains weak, especially for the domestic economy. so there you go. there are reasons to be concerned. shery: we will get the details and about 40 minutes time. trump changesdent
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his mind, china is not a currency manipulator. we will look at what this means. this is bloomberg. ♪
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ramy: this is daybreak asia, i am ramy inocencio in new york. shery: i am shery ahn in hong kong. preaccident -- reaction to trump's statement about china not being a currency manipulator. our currency editor joins us now. not really a surprise, given make the not in fact three criteria in the treasury department report. give us some background on what we should expect. >> nobody has expected in the past couple of months for the treasury department the label china a currency manipulator. if you look at what has been
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happening this year, china has allowed the yuan to strengthen. trumpbout-face from saying this will not happen, is not a huge surprise. it is a climbed down from what he said earlier. however, if you look at what is going on in the currency market, the trend in the chinese yuan could be slightly misleading because the yuan has lost your .8% against the dollar this year. that is compared to more than 7% for the japanese yen. the yuan has not strengthened as much as other currencies. ramy: i want to bring in our next guest, she believes china is motivated to depreciate the yuan. i bring in our chief asian-pacific economist. and you are sticking with us to talk about this. let's go into why you say china is motivated to depreciate the
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the. it is that 6.9 to dollar. simple, chinais is still losing competitiveness. wages are still increasing. the fact that the dollar is weak or only helps china compete against other currencies. it is a switching regime we have since it was introduced. weaker, the dollar is they switch trading partners. that will be the mode this time around, as well. is thathe thinking here the currency somehow dictates trade relationships. let's take a look at the bloomberg. what i want to show our viewers is that the year on your change
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in the u.s. bilateral trade deficit with china, compare that to the evolution of the bilateral trade rate, the blue line. this model is against the two-year change in the yuan against the dollar. from 2005 to 2012 it was good. the evolution of the exchange rate led the changes in the trade balance. but not so much over the past five years. when it comes to this trade relationship between the two countries, why are we seeing this divergence with of the yuan , and what is having more of an impact when it comes to the trade deficit? it is not only about their own bilateral deficits, it is also that china is becoming a major competitor for the u.s. elsewhere. that is why the relationship should only be focusing -- i
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acknowledge that is what trump is looking for. i would be more worried if i was the u.s. administration, have china is gaining today global market exports. and they are substituting , andts from europe increasingly u.s. exports and the rest of the world. think the exchange rate matters, not bilaterally, but for exports. ramy: let me look ahead to april 15, this saturday in the u.s. ae u.s. treasury will issue report on forex and currency manipulators. we know china is not on the list anymore. of all the countries, which is most at risk for being labeled a manipulator? fortunately, because i am european, i think europe and in particular, germany has probably the highest probability of getting a warning. i would not think a full red
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relations have deteriorated massively. there is no gain to be made, as in china's case. north korea is obviously a tough. situation --y need some time for china a tough situation. they need some time for china. germany has a weak position in terms of the nato, how much they should be contributing. south korea, another huge trade surplus against the u.s. i would imagine that germany would be in the spotlight. shery: thank you so much for joining us, head chief asian economist.
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and our currency editor, thank you so much. the u.s. backs away from enabling china. >> it is 7:30 here in hong kong,
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happy thursday. it is easter weekend. we are 30 minutes away from asia's first major market open. friday, 7:30our p.m. wednesday here in new york where markets closed down, the s&p 500 down about 1/3 of a percentage. i am ramy inocencio in new york. shery: i am shery ahn in hong kong, you're watching "daybreak asia." let's get first word news with courtney collins. >> president trump says he will not brand china currency manipulator. he is changing a core campaign
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promise and blames a strong u.s. dollar for changing competitiveness. u.s. 10 year bond yields and the dollar fell after the report saying the currency is too strong, while other countries are devaluing their currencies. won a payout has from a british tabloid over her dignity. they ran in article that a untruecourt created comments that question her work as a model before she met her husband. the $3st lady won million, she was seeking as much as $150 million. china overtaking the u.s. as the largest foreign investor in pakistan. china has been revamping railways and roads and pushed $55 billion to the so-called
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china-pakistan economic corridor. investment in pakistan from 2013 to january was less than china s $1.8 billion. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. shery: thank you. we are counting down to major market opened in the asian-pacific. in more, here is our editor sydney. the focus will be on job data out of australia. it is supposed to have improved in march, but it is often unpredictable. what you watching out for? like you said, it is just a headline number, it will probably have an effect on the dollar. the other thing we are watching his high oil prices, which fell the most in a year overnight, almost back down to before donald trump was elected.
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watchingthing we are is if the selloff in shares continues. shares fell 7% yesterday after t definitive plans to enter the telecom market here in australia. ramy: it looks like president trump's comments about the dollar will ripple through asian markets today. what are you looking ahead to? strengthened, that is going to show up in japanese equities. futures are foreshadowing a drop their, and really across the region. later in the day we will be looking for trade data from china. the later in the day, earnings seen will kick off in india, starting the earning
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season. ramy: we will be looking ahead to that. thanks very much. it has been a day of trump policy reversals a surprise and moved the market to the downside in the u.s. his endorsement of low interest rates, to his decision not to brand china a currency manipulator. kathleen hays has more. it is one thing to criticize the fed, it is another from the oval office. a tale of two sides of the presidency? kathleen: we've talked about this before, perhaps once a donald trump became the president, wanted to drive the economy forward, with the janet yellen as an ally, being more cautious on rate, rather than being in a rush to raise them. the markets should be careful because janet yellen is a dovish chair because of donald trump. she wanted three rate hikes.
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today, donald trump told the wall street journal that no, she is not toast, he was asked if she was. he likes her and respects her and likes the low interest-rate policy. and gary cohn is now at donald trump's right arm, perhaps he is helping him see how this could work out. bond goals, let's look at the bloomberg one of our famous g charts. is blue line at the bottom 2.3%, the red line at the top barely reached a couple times. had a gone above, we would be in bear markets. now we are wondering where we are heading next. this is an important move. it is not just donald trump. in northo tensions korea, concerns over syria and where the trump administration goes next. the geopolitical tensions are
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tough right now. that factor maybe negative globally, but for the bond market, there is time to put their money in a safe place, u.s. treasury securities. shery: we are hearing a different comment about china being labeled a currency manipulator, not only from president trump but his treasury secretary. now we have the head of the imf, christine lagarde, saying it would not make sense. tell us your reasoning. kathleen: let's put this in perspective. the treasury has a process to determine this. their next report comes out by april 15, this weekend. we will find out officially with the treasury department has decided. steve mnuchin said in february there is a process in place and his team would follow it. really looking at the criteria. let's see what they are for being labeled a currency manipulator. first of all, you have to have a
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material global trade surplus. what is the outlook overall for china? a significant surplus with the u.s. it is true china has a pretty big surplus with the u.s., the trade deficit is a $47 billion. persistent intervention to weaken the yuan, that is what makes him a manipulator. but actually, they have been trying to hold the yuan steady. christine lagarde said this does not make sense to single out one single currency. you have to look at a system of currencies. she spoke broadly about protectionism and what she is concerned about. >> protectionism is clearly a threat, and one that if it was to be realized, would really be a break on growth, a break on productivity, a break on investment. bothse we are seeing
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innovation and trade are conducive to productivity. productivity is for growth. see,of the risk that we clearly protectionism is one. the political uncertainty that we see around the world, particularly in the european region, is also high on our agenda. the potential for capital flows moving from emerging market as a result of the reinforcement of the dollar and the rise of interest rates, is a third one. that applyhree risks to a situation which is quite positive at the moment. >> do you believe the trump administration could be less protectionist? we feared that at the beginning
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of january. economynot think any would actually prescribe limited growth, limited productivity, limited investment, limited innovation. policymakers, including the u.s. policymakers, if they want better growth and more investment, innovation, productivity, trade is part of the solution. what kind of trade? otherwith restriction, measures? i hope everyone would agree we do not want distortion or restrictions, we want to trade that is open, that is fair and inclusive to facilitate opportunities. ramy: that was imf managing director christine lagarde.
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as president trump attempts talks of trade with china in a bid to deal with north korea, a former treasury secretary warns of the danger of linking foreign and economic policy. this is bloomberg. ♪
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shery: we are counting down to asia's first major market open this morning. nikkei futures pointing down, 3/10 of 1%. as a be a further fall from its lowest level since december. that is surprising given the strength we have seen in the japanese yen all week. 108.95.lding steady at quick check of latest business flash headlines. the outgoing chairman of rio to.o -- tin
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in guinea.gotiations a $3.5 million charge. rio has not admitted bribery or corruption. shery: cbs wants to expand its indonesian business after tax amnesty uncovered billions of dollars now being targeted. the largest lender says the acquisition of some businesses will boost its indonesian customer base about six times. 365 billionsome a dollars of previously undeclared assets. most of it, offshore. ramy: he reports may move japanese retailers thursday. focused on $3.8 billion jump. outlooke was a lowered
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for $23 million. inson flagging a 7% drop operating profits for fiscal 2017. shery: let's return to one of our top stories. president trump's comments to ease friction over u.s.-china trade in exchange for help in dealing with north korea. our former treasury secretary larry summers questions the wisdom of linking foreign and economic policy. >> i think it is unusual and we will only know with the passage of time what its wisdom is. i tend to be nervous when people start conflating a major nuclear proliferation issue and a bit of commercial action. ofm not sure if the wisdom threatening china on trade, and i am not sure that threatening
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china on trade is likely to be terribly availing with respect to north korea policies. we saw a version of this movie before. the president-elect put up for in anthe one china policy attempt to get leverage on trade. he just ended up having to back off that move completely. enough onure we have north korea that we can link that to steel exports. so i am surprised by that development. i think we will have to be very the north managing korean situation. one of the major risks of is that you -- precipitate an uncontrolled
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collapse in north korea. while some may regard that as victory, others would regard kest as a major loose nu problem. the challenge of managing north korea is a very, very complex one. i am not sure that president xi a few months before his party's congress is likely to be responsive to anything that has the character or suggestion that he is being publicly levered by threats from the united states. particular,sed in by the explicit, public character of the language. it is important in these things to be fair. one of the things i learned when i was in government was, there
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are things we knew that people did not see on the outside that we could not share, and that led them to be very critical of what we were doing in ways that would not have been if they had been seeing the same information we were seeing. i want to be very careful to say that while i did find it surprising, i do think north korea is risky enough on its own without linkage. i think trying to create the appearance of public linkage is problematic in terms of crating a dynamic where president xi can move without familiarity of what is going on on the inside. it is very difficult to judge negotiating tactics. >> one problem is it might not work. from president xi's point of you, these are different issues. it could almost be existential for president xi.
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what can it mean for economic policy? economye second-largest in the world, trying to get along with each other. we are enough difficulty without geopolitics. >> we have to get some perspective here. american economic growth is disappointing. it is important that we accelerate growth and make this benefit us more equally. that is not dominantly about policies involving trade with china. that was former u.s. treasury secretary larry summers talking to bloomberg. you can get a roundup of the stories you need to know to get your day going in today's edition of the daybreak. bloomberg subscribers go to dayb on their terminal. it is also available on mobile in the bloomberg anywhere app to be you can customize your
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settings to only get news on industries and assets you care about. this is bloomberg. ♪
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♪ isy: welcome back, this "daybreak asia," i am ramy inocencio in new york. shery: i am shery ahn in hong kong. toshiba narrowed the amount of bidders in the field for their memory chip business. we will get you more on that story, now we know they are narrowing the number of bidders they want for the toshiba chip business. that has been a key issue for the company as it struggles to survive. a big struggle today and overnight has been what president trump has said. he has talked about the dollar being too strong and also his comments about maybe reappointing again chair janet
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yellen, re-nominating her and saying he likes the fed's low interest rates. that has had an impact on the 10 year treasury yield. if you look at the bloomberg you can see volatility in 10 year treasury yield, have jumped. given president trump's comments we saw a yield trump overnight. this is the 10 year treasury note, you see the blue line, that is the one your average. average. past andee it is now above that one year average. this is something to watch out for. of the asian currencies such as the japanese yen are impacted by what happens with treasury yields and what happens in the u.s. and the u.s. dollar. ramy: we are seeing the japanese
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yen moving even stronger today, mark, it was 110 and the day before, 111. hop into my bloomberg terminal. white to show you the line -- no, let's go to the blue line first. that is the yen, you can see it strengthening year to date. gold is at a high not seen since five months ago, since mid-november after the election of donald trump. oil, a different story. we see that fall on a drawdown. safety havens and treasuries all moving in the risk off fashion. surprising, given it is a shorter trading week. we are headed for easter weekend, great news there. let's talk about toshiba now. it has not narrowed the number
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of bidders in the field for it memory chip business. bloomberg's editor joining us now from tokyo. who was on that short list? toshiba has gone through the first round of bidding for their chips unit, their most valuable asset. they have narrowed it down from an original group of 10 bidders. has put innd hanoi the highest bid so far. they may able to pay as much as ¥3 trillion. there is opposition from the japanese government and perhaps u.s. government, as our reporters said yesterday. mix, andne is in the broadcom, the u.s. chipmaker, has put in an offer. those are the three leading
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contenders. a partner with, toshiba in the chips business has said, they think any kind of they'll would violate their terms of partnership. so they are disputing this whole sales process and that could create problems down the line here. what is western digital's objection here? peter: western digital and toshiba are joint owners of an important plant here in japan. western digital says under the terms of that agreement, toshiba cannot proceed and sell this trip business without their approval, without negotiating with them. they sent a letter to toshiba making that objection clear. toshiba executives say they think that is not the case. they do a majority control of those plans, they think they can sell the business, but it would not be surprising if you see this legal dispute escalate from here. ramy: looking ahead, how will this play out? needs this
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anis clear they have enormous black: their balance sheet because of losses from the westinghouse nuclear business in the u.s. they are selling the chips business not because they want to but because they desperately need this money. they put out a statement that they may not continue, these are serious issues for them. they need to be able to raise the money. western digital may stomp its feet here, but if they do not allow the company to proceed, it means deeper cuts for toshiba and the chips business that western digital owns part of. plenty more still to come with asia's first major market open minutes away. shery: let's bring in sophie kamaruddin to tell us what we should be watching for at the open in tokyo, australia, korea. alongside toshiba at of tokyo we are watching fast retailing
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due to announce earnings this afternoon. this retailer has been committed to leading shoppers. aeon and others reported yesterday out of seoul. watch for central electronic shares, they have worst round by back that should take place over three to four stages this year. also, jay y. lee's trial is to continue in seoul today. watch miners in sydney, iron ore following the most overnight. take a look at the open in asia, after trump talks and treasuries rallying. the nikkei two at a third day of losses as the yen is at the strongest in a five-month. with its first win in seven sessions on wednesday.
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attending a live debate for the first time it was announced. that is what we are watching. this is bloomberg. ♪
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changes track and says china is not a currency manipulator, it is the dollar that is too strong. and tellsmarch race more political uncertainty. cathay pacific new boss
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checks in. ramy: staying in the skies, united promises to compensate passengers on the overbooked flight. this is the second hour of "daybreak: asia." i am shery ahn in hong kong, where it is just past 8:00 a.m.. ramy: it is just past 8:00 p.m. in new york. let's get to the chief international correspondent haslinda amin. fell short of expectations. coming in at 1.9% quarter on quarter. economist looking at a contraction of 1.8%. expansion.saw an year on year, 2% expansion.
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the estimate was 2.6. on both counts, they fell short of expectations. manufacturing slumped. represents 25% of gdp. it is a key factor when you talk about singapore's economy. singapore's growth, as we have said before, is a roller coaster ride. you see massive swings because of exports, trade dependence. these markets are very important. challenges remain. bad news for the lion city. we are all eyes on relations between the two. thelso have this morning central bank coming out with its decision. depreciation of the currency. as you may know, singapore going through some difficulties despite signs that the economy
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is progressing. if you take a look at unemployment levels, they are the highest in six years. that is worrying some people because singapore is not creating jobs as quickly as some want. inflation is also on the rise. shery: as you mentioned, below trend would be the right way to describe what is happening in singapore, both when it comes to inflation, growth. dot is singapore trying to for the risk? has linda: it is dependent on the global economy. we will have to wait and see. what they are trying to do is prepare themselves for any risk that may come through. risk from the tpp getting scratched -- scrapped. limit inputsmp may
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from the likes of china. it is pretty much adopting a cautious approach in terms of policy. fory: thank you so much getting us up to date with what is happening in singapore. take a look at the singapore dollar right now. it had a big reaction after the move. it is now once again changed. we had the growth figures coming out. let's get the details on what is happening across markets here in asia. sophie kamaruddin has more. have anthe dollar did initial reaction of falling 30% following the outlook we had there. now, paring that with about a 10th of a percent. we are looking at the weakness
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across the board. upeign funds seen snapping equities. it will not take much to raise the gains that we have seen for stocks this week, especially for trump, given his rhetoric here. with the yen at a five-month high, we do have japanese stocks falling 1% once more. the 10 year yield for japan is the lowest since december. the bank of japan unlikely to tolerate that. it is at one and a quarter percent. that has not put off foreign investors. we do have the aussie up about 2/10 of 1% here, ahead of the jobs report that we are watching for today. generally have been
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shaky. copper drops to a three-month low. let's take a look at how the dollar has been faring so far. check out this chart. we got the sharp plunge theowing trump saying dollar is too strong. tillersoned, with cautioning that relations are fragile. i want to show you what is going on with offshore yuan. it did jump with trump backing -- afterina saying calling get the grand champion of manipulation, china has been intervening. check this out. we are seeing treasuries rallied here saying he likes the low
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interest rate policy. year --lows the hundred hundred day moving average. essentially we are seeing volatility pick up here. that is not helping matters, preparing for a big event. volatility at the lowest in the first quarter in a decade. today,se, on the agenda china trade to look out for. ramy: thank you. now we get a check on the headlines. david: let's get started with president trump. he says the syrian chemical attack was the work of a butcher and unlikely that moscow did not know about it in advance. and sergey lavrov
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there. they just held a two hour meeting at the kremlin. >> i expressed my view that my current view of russia-u.s. relations is that a low point. it is a low level of trust between the two countries. nuclear powerst cannot have this kind of relationship. companies sold 1.3 trillion revenue of onshore notes last month. that is the equivalent of roughly 190 billion u.s. dollars. china stepping on the gas as jet face 1.4 trillion of this year alone. expect refinancing in the coming months. seen product has
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report its lowest profits and's listing six years ago. says 2016ia bertelli was a turning point. product gets have of its revenue asia and solid double-digit first quarter. cathay pacific has named rupert hogg as ceo. the 55-year-old had been chief operating officer since march 2014. shares fell around 30% during the time. he suffered a net loss of 74 million u.s. dollars. global news 24 hours a day powered by more than 120
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analysts. shery: looking ahead, the outlook for singapore. we will discuss later in the show. ramy: president donald trump changes his mind and says china is not a currency manipulator. details next. this is bloomberg. ♪
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asia."his is "daybreak: i am remy innocence you in new york. shery: president trump has acided to not labeled china currency manipulator, shifting to say it is a strong dollar injuring companies from competing. he sort of spoiled the surprise. too muchhould not be
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of a surprise. the criteria is set forth by the u.s. in determining who is a currency manipulator. they did not meet the criteria. they would have to be right the rulebook. they have not named a country a manipulator since backtracking on the core campaign promised that he would designate china a currency minute later on day one. he is not going to do that. notays that they are quote currency minute bidders. china expected to release the first report after trump currency practices report on other nations. watchlist as on a potential he engaging in crushable practices. it is suggested that currency misalignments, instead of
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manipulation could be addressed. meaning, a country is not deliver the mishandling currency while still handling a trade surplus with the united states, as china does. remy mentioned, he turned attention to the u.s. dollars saying the u.s. dollar is to blame for the u.s. not being able to compete. we are hearing some interesting stuff out of washington, d.c. from donald trump saying he may have some sweeteners to push ahead. what are we hearing? >> this is donald trump, the businessman tried to put forward a bargaining chip, if you will. saying, we will give favorable treatment in any trade deal we may be negotiating. trump and she spoke again on the
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phone about the escalating risks on the peninsula. trump saying, beijing, if you do not help out, we could go it alone. this as the pentagon sending strongump called a very armada to the peninsula. let's hear from the president. president trump: i think he wants to help us with north korea. we talked trade, a lot of things, and the way you make a good trade deal is with north korea. otherwise, you go it alone. going alone means with a lot of other nations. >> i guess it is both. this afternoon, we will get trade numbers. keep in mind, china trade numbers coming out. imports expected.
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the growth there that we have been seeing. reflation, if you will, of china as they have been importing more commodities. import growth expected to have waned debate in march. exports slightly picking up. seasonal-ish news -- seasonal issues with the lunar holiday. to businesset's get flash headlines. united will compensate all passengers for the competent -- for the price of the flight that you saw in the video where a man was dragged away. say he needed hospital treatment for the injuries he
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suffered. united flight is concerned at the bus. about halfunoz has $1 million tied to customer satisfaction. this may not help his prospects. they reveal many people were already unhappy last year. amongst north american carriers. dbs wants to expand their business. it would boost their indonesian customer base by about seven times. it was revealed that they had of dollars of undeclared assets. mostly parked onshore. shery: coming up next, chinese imports may have slowed in march, pushing the trade balance
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to a surplus. a preview coming up. this is bloomberg. ♪
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asia." is is "daybreak: i am ramy inocencio in new york. shery: breaking news out of japan. lawson dropping. aon also dropping. on year. almost flat profit belowfor estimates. the forecast for aon, at least, yen. 50 million again -- estimatesourse, after that they come in at ¥20
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billion. ¥8.3ales forecast also at trillion against the estimate of more than ¥8.5 billion. we do have the two earnings reports out of japan and the impact on the stocks. ramy: interesting. i'm looking at analyst recommendations for lawson. it has zero buys, according to bloomberg. .t does have 12 holds the net income forecast, ¥33 billion versus 47.2. down by about ¥2 billion in terms of what they were expecting. asian stocks are now down slightly after president trump's comments about the dollar of china. also, u.s.-russian relations now hitting a low point. we spoke about how markets are coping. period of if this
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uncertainty work too long, it would impact the global economy. you would expect there is some sort of stabilization. we will see. theepends very much on relationship between the u.s. and russia. the idea that in any case isis should be the first enemy of both countries. it is also something that seems to me very much in the cards. we will see. in any case, it is important that we have some kind of appeasement of these tensions. of course, markets and the economy very much feeling uncertainty. >> do you believe it is less scary than a few months ago? about tradeseard
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dragging yet. seewe could seize -- specification of the agreement, which, in my opinion, was a big mistake. we are waiting to see the crystallization of the new 's strategy.on i continue to fear, of course, erratic behavior. we know global prosperity is based on global trade. ofcourse rules, possibility solving difficulties here and there. .ll of these exist already could be improved, certainly. rocking the boat would really be a catastrophe. again, we will see. we're waiting to see exactly how the new administration will crystallize its position.
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bes the hope that it would reasonable. >> do you believe we are expecting too much of central banks? that the markets need central bank support still because the world is uncertain. stability andd ,lways to decide independently i would say, of the government, but also independently of the short-term reaction of the market. produceligation is to these medium-term inker of stability. i expect it would be done by the fed and the ecb. i have confidence in the institutions. that was the former ecb president speaking to francine lacqua. we are looking ahead, of course,
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to what will happen with china trade data at 10:00 hong kong time. i want to go through the numbers in terms of what is happening here. we're looking at a trade surplus come again. interestingly, the last time we got numbers was in the deficit. a trade surplus is what we are expecting here, looking ahead to 10:00 a.m. now, let's get a look at the latest business flash headlines. a waiting to see if the trumpet mr. should uphold higher standards for brokers. regulatorsrdered create new rules. shery: the outgoing chairman of tinto int -- rio
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talks. u.s. regulators are investing a $3 billion impairment charge on the mozambique cold deal. or has not admitted bribery corruption. ramy:ramy: we are watching japanese retailers after some mixed earnings reports. not liking a warning from a convenience store of the drop in profits for 2016. shares are now falling. and, a drop in profit, asking for a buy back. central bank, singapore was out, now we are waiting for korea.
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in the meantime, the nikkei down 9/10 of 1%. of course we have a stronger japanese yen being felt after it fell to the lowest level since december. is down. we are seeing the korean you on strengthening -- yuan strengthening for the first time in seven days. thusber, we do have trillion jobs numbers coming out. we are expecting that data to have improved in march. of course, after jumping to the highest level in the year. job data is unpredictable. that is something we have to keep our eye on. the aussie dollar at the moment gaining. of course, do keep an eye on iron ore as it jobs the most in a year. it could pressure the aussie
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dollar. coming up next, the imf chief warns the u.s. as the trump administration backs away from branding china a currency manipulator. we will get you the details next. this is bloomberg. ♪
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shery: 8:30 a.m. in singapore. we have the central bank decision, staying neutral on its policy. no change there. slowing a bitth in the first quarter. we are half an hour from the beginning of trading. ramy: you are watching "daybreak: asia." let's get the first word news. david: president trump says he will not brand china a currency
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a keylator retreating on campaign promise. he told the wall street journal that they are not currency manipulators. news.llar fell on that president trump telling sayingent xi article -- that negotiations are the only way to approach north korea. xi reiterated his commitment to removing weapons from the peninsula of north korea. bhp concludes that unit is still a good fit for mining.
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they can see -- mckenzie says he has the support of many investors. >> we have many discussions with them and many supporters of the strategy. rio tinto is closer to quitting cold. investment foreign ok'd the the deal still needs the io.roval of r global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. david this is bloomberg. shery: it looks like a mixed picture in early trading from asia. let's get the details from
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sophie kamaruddin. sophie: let's focus on the currency markets and in particular the japanese yen. it is on the up and has been soaring the most this year when it comes to the g10 basket. when it comes to what is next for the currency, analysts not on the same page. we do have won 30 on the cards, according to bnp. some divergence here. the yen up 7.4%. pesoollar joining the and google when it comes to returns. move thismes to thursday, we have the korean yuan up. we are waiting for the bank of korea to announce it policy decision.
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the canadian dollar also on the up. we did have the doc signing on its rates. not looking to trumps trade policy on growth. the same dollar spiting today about 1/10 of a percent after the economy shrank in the first quarter. the central bank sticking to their policy to support growth. we do have earnings season kicking off, of course. s to reducer analyst their overly optimistic forecast. we are not seeing that this time around. them upgrade the 2017 estimates. you can see it from the green line there, compared to read in previous years. global earnings pushing upwards. .hat is an irregularity bank of america says the number
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thepgrades is outpacing downgrades for the first time in six years. ramy: thank you very much there. release its trading data later in the morning, about one hour from now. a chiefus now, economist. good to see you. i need to get your reaction on what president donald trump has been saying about not labeling china a currency manipulative. when you first heard that, what we thinking for china's economy? >> i think that is very good news, to remove a very important risk facing chinese economies. by thise war triggered currency manipulation charge. of course, all of the economists have a consensus that china is not a currency manipulator. stabilize.ying to
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actually, the u.s. treasury secretary also said he does not think it is hard to level that. i think this all comes to the reality that china is trying to prevent currency from depreciation. ramy: hop into the bloomberg these the white line is china's exports to the u.s. the yellow, imports to the u.s. the trade balance is the blue here. what are you thinking in terms of what we will see. in february, there was of rare trade deficit. we will not see that for sure. >> i think definitely we will see more of a trade deficit from china. you can see, it puts growing growing verys
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fast. exports almost flat. in a way, we're seeing the trend of chinese imports beating export growth. in a way, this is very clear, chinese domestic demand is very strong. globalse, we know that demand is not as strong as china's demand. the are going to see more and more of this occasional trade deficit from china. shery: still, we have to bear in mind, the data has been distorted. not only because of the lunar new year holidays but because of these effects. numbersrate are these in assessing the state of the
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economy? not januaryok at and february separately, but january and february combined, it can eliminate the chinese new year affect. that trend very clear. it is consistent with what we halfseen from the second last year. the two month, something around 20%. exportse, chinese growing 4% is much better than last year with the exports fell by 7%. that is quiet clear trend that we are seeing. upestic demand picking because of the housing boom -- a lot of people call it a housing bubble. maybe it is true for some part of the country. also the infrastructure boom.
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tremendoussulted in pickup in chinese demand for all kinds of boosts. for coal, steel. increase, we will chinese exports a lot. that is quiet clear. to maintainrying export march -- markets for sure. as you said, it is either a boom or a bubble, that is debatable. the fact is the pboc is tightening monetary policy. expecting data anytime now. what do expect on that front? >> i think, as you said, chinese government has been talking
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deflate.sing bubble to monetary policy is tightening. i think the pboc has height several times already. that is why i believe in march we will see a quiet reduced long gross. i think will also be very subdued, about 11%. that is clear, the chinese prevent a will financial crisis. crisis borrows from a bubble. the parity is to prevent the bubble from growing bigger. my terry tightening is actually pretty good policy right now in trying to prevent this kind of overheating of the economy from developing further.
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i want to bring in the issue of the u.s. dollar movement especially today after it is tooent says strong. my question for you is if we see this as a possible new normal, if it is consistently weaker through the long-term, how will this affect u.s. china trade with a weaker dollar trying to pull in chinese products? atactually, if you look chinese currency, very stable against the dollar. a weak dollar is actually very positive for chinese currency. mostly they will still follow the dollar trend. piercing a very strong dollar at this moment. that is by it is very bad for china.
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weakendollar started to against the euro or the yen, chinese currency can follow along with the dollar. a weak dollar is action in china's interest. hand, a weak dollar is clear. you cannot have a very strong exports,nd very strong all of the manufacturing sector returning back to the usa. of course there is some trade-off. you cannot have everything here. ramy: two enough. we will get those china trade numbers to you and about one hour in 50 minutes time. meantime, donald trump poured trading policies. larry summers ways in on the
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risks. kathleen hays has more. one of the big assumptions is present trouble not reappoint janet yellen when her term expires. has he changed his mind on this? >> he has given us a hint that he is open to the possibility, as opposed to the campaign trail. janet yellen, stanley fischer, their terms are up. changesuld be some big at the fed. it looks like donald trump has ande thought this over steve mnuchin saying that maybe though interest rates are a good deal for moving carefully toause i want the economy pick up. too early to know exactly what he will do. that seems like a wise thing to a. he also said he likes the low interest rates in place right
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now. let's jump into the bloomberg and look at this chart. i love this chart because it tells a story. the blue line was the resistance risedrop in bond yields, a in price. 2.6%ed line, that is if you break through that level, you are in a real there -- bear market. cell of happen and everybody stopped believing in the reflation trade. donald trump has poured fuel on this fire by saying, maybe janet yellen could be the next fed chair. of course, he also said the dollar being too strong. you were just talking about that. shery: also, president trump making headlines because he has commented on china being a
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or noty manipulator, being a currency minute later. now we have the currency secretary. what are they saying? >> they are saying they are in agreement, inadvertently, in a sense. christine lagarde said it doesn't make sense single out one nation. donald trump looking at his own department and list of criteria saying maybe it doesn't make sense if we follow the old rules establish, china not looking like a currency many plater at this point. again, on this current -- question of north korea questions, pointing out that it would be unwise to cooperate them with a trade deal.
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a lot going on. a lot of reasons for people to say the easiest thing to do, the safest is to buy u.s. treasury's for a while. kathleen hays in new york. thank you so much. coming up, we will take a look at what is happening with the bank of singapore next. this is number. -- bloomberg. ♪
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asia."his is "daybreak: i am ramy inocencio in new york. economyingapore's retracted in the first quarter. the central bank says that a neutral stance is appropriate for an extended period of time. our next guest is want to no action.
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forard, thank you so much talking to us. pretty much expected, but was the right call -- was this the right call? >> i think it was. growth seems to for talking to us. pretty much expected, but was the right be picking up. the risk of deflation has faded. i think it would have been premature to move back to a tightening policy. it looks like a pretty easy call. risks one of the biggest here for think of four, we are , below trend, what can we expect for the economy in 2017? >> domestically, i think they have been it should quite well, preventing the housing bubble from exploding. projects.rnment
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domestically, the economy is stable. maybe a year or year and a half ago you were worried about growth, trade outlook, worried how much it would slow, but those looks to be less of a risk now. i think they are now comfortable and can fairly confidently expect growth to be in the 2%-two .5% range this year and for inflation to pick up at a moderate pace behind that. ramy: you speak about some of the risks saying that have been minimized. in singapore able to do anything to minimize those risks? >> it is a tough thing. you are a small, very open economy. you will always the affordable. there is not much you can do about that. they will focus on trying to
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lift productivity levels. investment centers, all of these things that make the domestic more brazilian. so far, i think they would have to say that has not been wildly successful. realistically, it is a slow burn policy. i think they have the right policies in place domestically, it will just take some time to work. during that time, you hope that the economy remains the nine -- benign. earlier, made the said manufacturing slumping. is that a concern? should they move off to that -- off of that to another sector? >> i don't think it is a big
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concern. they have certainly been moving up in terms of manufacturing, pushing the lower valued stuff out to cheaper locations. in general, you don't want to read too much into a month. it is very volatile data. if you look to prove a trend, it seems fairly clear there is a moderate recovery in the economy taking place. i think it picked up a little bit over the past year or is oh. structurally, they are making some progress. i don't think it is a big concern for them. shery: let's talk about the bank of korea. we expect them to announce a decision. the consensus is no change. if our viewers look at the bloomberg, they can see the rate has been kept steady. inflation has soared past 2%. what is your call on the decision and what would be the right way to proceed for
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policymakers at a time when household that is also soaring? >> it is a tough call. inflation has picked up just as it has picked up everywhere. there has been a clear rise in inflation. core inflation is still low, below 2%. there's not much pressure for them to tighten in that view. in terms of growth outlook, maybe they are a little more comfortable. they have really benefited from both the technology cycle and the broader pick up in regional trade. at the same time there are a lot of structural problems in the domestic economy. i think they will have to proceed very carefully. you want to see how the geopolitical things play out, the direction of the next president. doing nothing looks like an easy call for the bank of korea.
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of thechief economist bank of singapore. thank you for joining us. plenty more coming up on bloomberg television. you are watching daybreak asia. ♪
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ramy: welcome back. u.s. bank start reporting earnings before thursday's opening bell. we will get releases from j.p. morgan, citigroup as well and
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wells fargo. trading revenue, braids, -- be followed closely by investors. jpmorgan citigroup the largest next income firms. we are expecting to see a surge. that j.p.casted morgan increased revenue by more than one third in the first quarter. growth in fixed income here is outpacing earnings. you see how this trend has of lifted -- uplifted nearly $20 billion. acta levels of the have not seen since 2009. banksts expect biggest
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$30 billion. you see here how things have been slowed to pass on any of the recent rate hike favors. rewarday be reason to the depositors soon. we will have all of the results right here on bloomberg asia. shery: we will be looking forward to that. that is almost it from us. time for a quick look at what is coming up next. : looking at the boj rate and the latest out of north korea over the next two hours.
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♪ david: what was it like when you came here? did people make crocodile dundee jokes? >> i would say not all of them. david: people throw things at the walls, scream and yell. james: you don't want to be the r.rower appeared david: ar david: are you in favor of repealing dodd-frank? james: what will replace it? david: you have been a ceo for seven years. james: what are you telling me? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪


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