tv Bloomberg Daybreak Asia Bloomberg March 7, 2018 6:00pm-8:00pm EST
konge: this 7 a.m. in hong and i am yvonne man come about into "daybreak asia". stories this thursday, president trump is expected to sign the order on thursday, steve mnuchin admits there could be retaliation. --porate china is is is assesses that it will defend interests. and from bloomberg headquarters in new york, the latest move shows the type u.s. labor market will help wages and spurs what is described as moderate inflation.
and a health check on japan and expectation for exhilarated growth. we are headed live from tokyo. ♪ ramy: good morning to you, you von, and happy international women's day as well. it wasn'te markets, so happy because of the aftermath of gary cohn's resignation and a lot of investors are looking for some caution in the trade. taking a look at the nasdaq, it was up by a half of a percent. and then paired with losses, let's hop onto the bloomberg #. i want to show the reaction from gary cohn's resignation.
the line had fallen and paired with the 10 year you could see that falling coming to the flat line, and there is a recovery here and the next question is how will the asia-pacific and justice. yvonne: we see how tricky it is to call these markets. one day we are risk on and the next day risk off. exceptionsre will be here like the likes of canada and mexico, and i feel like there is upbeat signals when it came to the end of the close in the u.s. today. steven mnuchin saying on.e, hold and numbered news editor romain bostic joins us now. it was a swing back and offh from risk on and risk and rethink is tied to some development on trade. take a look at the key technical levels today.
ednare at the 2700 mark s&p 500 and we came a point or two of that and we didn't go below. market today was strong, positive mostly because of small mid-cap stocks. 500of stocks in the s&p finished above their 500 day average and that is what analysts say it is important we stay above. and you see a similar trend and the nasdaq with a little bit of flirting at top levels and in one seems happy. there was a little bit of selloff of the names directly affected by trade tariffs. boeing, caterpillar, harley davidson -- and financials taking a hit today because of concerns that this trade could could leadlower -- to slower transactions. not a lot of selling or buying
but we ended up where we started. it is: i think encouraging compared to what we saw in asia. romain, back so much for joining us. and a good setat up before the friday jobs payroll number. one also are seeing it in new zealand as well -- we are seeing it in new zealand as well. trading in australia getting underway and watch out for china we are also treading water at the start of the session in the sx 2000. and we do see yields the got a bit here today. and we are counting down to the open in japan and korea. plenty on tap in asia to look forward to before the boj meeting.
we are expecting a bit of a rebound on the nikkei 225. it will percent gain according to chicago futures. a lot of stuff happening today, like treating from a fire hydrant. let's go to washington dc right now because president trump's economic advisers leave the door open for exacting some countries and downplaying the fallout of a possible trade war. joining us from washington is joe . the latest headline we saw is we are expecting sign-ups on steel and aluminum tariffs at sometime tomorrow afternoon in the u.s. scheduled ae conference at 3:30 p.m. washington time and we'll see what is in order. it is clear the criticism from congress from corporate america
and the threat of retaliation from the eu and elsewhere has had some of fact. today, while keeping up a brave --e that they want flinch they want flinch from -- mexico and canada, the two biggest suppliers of the u.s., and other countries as well. and came from wilbur ross press secretary sarah sanders -- what other countries remains to be seen. i would guess that perhaps the eu might be in their although trump has been talking tough about the eu as well. there is some effect on the white house, but this does really show to haphazard way this was rolled out. typically, and administration changeeach a policy without having its stocks in a row and crossed -- i's
dotted and t's crossed. yvonne: it seems like a back and forth and perhaps there is concern that we have to dial back on these trade tariffs and who is included in all of this. we are expecting thursday of a possible announcement? how is this going to play out? there will be an announcement from the white house but it is unclear how that will be. they haven't announced whether the president himself will come out and outline it or he will send out wilbur ross, the commerce secretary, to do it. these are details that will be set up and ready to go to announced such a major policy change. we may get aer, piece of paper that outlines
what the countries -- will be exempted and the tariffs in place. still an evolving situation in washington. still waiting for news of a replacement for gary cohn as well. thank you joe subject for joining us. the bank of china has addressed the tariffs at the annual convention in beijing. tom mackenzie is now joining us and day for. young been on the ground and talking to a lot of people. what is the level of concern when it comes to trade tariffs at the npc? the official line remains the same that they want to collaborate on trade, that we have been hearing from corporate
leaders, one of china's biggest automator's who has a joint venture with chrysler and also trump xcar branded the i. but the chairman told us he is having to reconsider those plans in the light of what he is hearing from the trump administration. take a listen. trumps trade policy is a challenge. it will surely have an impact on chinese carmakers like us. goal to's entered the u.s. market in 2019 because we believe and globalization instead of trade protectionism. trump insists on imposing tariffs on chinese goods, they cost will be a key measurement to decide whether we want to export cars to the u.s. we also heard from the chairman of costco shipping, when the largest shipping companies in the world, saying
the world will not support protectionism. conglomeratefrom a of a u.s. trex company that prefers acquisitions from the u.s. saying so far these trade policies when not impact his business and he was hopeful that china and u.s. what avoid a trade war. ramy: a very busy week. what else is in focus to expect in beijing? the foreign minister is going to get a press conference in beijing and we're hoping to get answers from him and the reaction of what will hear from north korea. this is happening between the north and the south and the potential meeting later in the year between the two sides. we action from china on that -- asked abouting to the u.s. china trade tensions and we hope to get response from the foreign minister and expect to hear from the private auto company that bought a bigd theio
what we're hearing from washington. ramy: china correspondent, tom mackenzie. in the meantime, first world news. xi met on the sidelines of the national people's congress, saying china must innovate to provide and prosper. the greater bay area project intended to be china's answer to silicon valley. the president said the country must develop tech talent to remain ahead of the pack. >> development is the top priority. the town is the primary resource, and innovation the leading driver. if china does it pursue innovation, the new drivers would be able to replace the old ones, and we need to foster novation and we need talent.
>> to review of the u.s. economy shows a tight labor market helps lift which is across the board, calling moderate inflation. the survey shows moderate expansion, many the pickup of inflation is broadly based. thereport is based on expectation of three great hikes this year. in eu has rejected the u.k. banking and it does it make theresa may's goals of making brexit a success. mays pick andted mix of approach. snow and freezing rain have forced the cancellation of thousands of flights in the u.s. and more than 2.5 thousand scheduled services have been canceled with 1800 of them in new york.
canceled 56% of flights while 300 were hit in boston. hundreds have already been canceled on thursday. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. ahead, an exclusive interview with phil mcnabb. and how closely is the west central bank watching the potential economic impact of the trump tariffs? will ask former fed vice chair next. this is bloomberg. ♪
is unsettling the market and the fed is looking closely of the economic impact of tariffs can affect policy. are policy editor kathleen hays is here, and the president of the atlanta fed, what is he saying here? he is saying that he is watching it, and it does seem to be affecting how he is looking at policy. here is one of his key takeaways. sovereign development has introduced uncertainty as to how the economy is going to perform. i am going to take a wait and see attitude. he was asked if you are the painting two or three rate hikes in 2018 or debating three or four. what he said is that everything is on the table. he is waiting to see if this will have an impact and looking at other things in the economy like inflation or growth. what was said last
night -- he was asked the question, so far what is going on, even though uncertainty has no material change to her outlook. the white house is downplaying tariffs on the u.s. economy. fed officials want to steer clear of waters that are political unless forced to wait in. yvonne: it is interesting to hear a tough sound so hawkish -- dove sound so hawkish. and former director vice chair of the federal reserve board, thank you so much for joining us here on the program. how does the fed respond to a possible trade war. we are talking on one hand this will lead to higher inflation but also drag global growth. how does the fed square that?
>> we are ahead of ourselves at the moment because we don't actually have a trade policy. itwe got into a trade war, would surely be bad for the economy. but forall parts of it, most of the economy it would likely slow growth and give a lot of uncertainty to the markets. the fed will have to deal with that. they have been worrying about possible overheating, so a slowdown in growth would throw them in the other direction. kathleen: what does gary cohn's departure made for donald trump's economic policies? there is the talk that he is the moderator of trade talks to peter navarro and wilbur ross, how pivotal was his role in trying to came down the people in the white house? was ani think he
important figure in the trump administration and he h battle e tariff front. i think it is an unfortunate development in the context of an administration in disarray, which has lost a lot of good people. it may be difficult to attract anybody sensible at the moment. you know full well, and the person who started this congress, you know how well it is to run this management. how much can you bet on inflation forecast versus reality? this chart shows that average earnings have jumped year-over-year, and if you pick up supervisors, 80% of supervisors are stuck at 2.4%. threeu inclining towards
or four rate hikes this year? know, clearly, we don't and the fed is not going to tell us. they are dealing with a good economy. low unemployment, tightening of labor markets, and a generally positive outlook. this uncertainty about trade will give them pause. andfed is always cautious, jay powell is a cautious person. they will not telegraph too far in advance of what they expect to do with the three or four until some of the uncertainty comes down. bring us all together here, especially off the brainard, doeil you hear that optimism aside
from what is happening this week with tariffs? isce: i think there justifiable short run optimism. what concerns me is we are not running with the long-run problems that affects the economy and the world. by that i mean rising u.s. debt. -- as we look ahead, faster than the economy can possibly grow, even if you are optimistic. and an aging workforce, we need younger people and we are third inning to close down on immigration, which is the wrong way to go. climate change, which we are not dealing with at all. and rising inequality in income, which can be good in the long run. tore is a lot of big things deal with that aren't being dealt with at all, largely is locked iness
partisan warfare and not dealing with the big issues of our time. you have also been in washington for a long time and have been involved in it. look at the early races were polls are showing this may be the year of women or the next couple of years of women. i always think people are people, by do you have sensed that change is going to involve more women coming to congress and being in elective positions? is it going to help rate this gridlock or is men and women going to be just as pigheaded when it comes to this? alice: we are seeing a real uptick of women interested in politics and women actually running for public office, including a record number of congressional candidates. many of them democrats, but not all, running for seats in 2018.
i think that is very encouraging and doesn't necessarily change the direction of economic policy. yvonne: what will then? alice: what will? need is forerately the two parties to come together and start working on sensible solutions to the big problems. they have got to come to some kind of compromise on the long-term debt. that won't happen quickly. it has to be bipartisan because there is going to be pain no matter what you do. the only thing you can do is reduce the rate of long-run spending or raise taxes, and in my opinion, you have to do both. and the parties have to agree, otherwise the parties will take potshots against one another.
similar, ande is in the newer term have to reach a bipartisan agreement on immigration. and take an easy one. we can get a bipartisan agreement on infrastructure if the parties can come together and allow their moderates to communicate. back to they, tariffs and trade wars. how bad does it have to get for the rate hike outlook to change? what will be the scenario in head? alice: i think the fed would certainly slow the rate of increases if the growth head? rate flow depreciated. i do think that is likely to happen in the near term. to get war takes a while going, but if it did get going it would be very bad. ramy: we will leave it there, alice, thank you so much for
yvonne: a quick check of business flash headlines. u.s. leveragehe market, and approaching one investors direct the rhetoric going through the banks and have scheduled a friday meeting to discuss financing. overlast cap the market at $8 billion. the: in talks to bite french automaker -- talks to buy
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yvonne: is sown a clock in the morning and hong kong and temperatures are cooling down a bit and we are minutes away from asia's first major market open. is a lot of snow falling here in new york and were expecting up to eight inches, and there is 30 centimeters, i hope i got that right. march? isn't it the gosh. [laughter] let's get to selina wang for orld news.e new >> statement says that shares
were for legitimate investment reasons i have nothing to do cahn sold millions of shares in february. ill police say a critically russian spy and daughter were poisoned by a nerve agent, increasing the possibility that a foreign state was behind the attack. the man and his daughter were found unconscious on a park bench in london. in 2006 of passing russian secrets to the u.k. britain and saudi arabia have a great to a rule of $90 billion worth of trading investment of the u.k. calling it a vote of confidence. began an prince three-day visit, and a memo of understanding will be signed during his trip but british
officials are expecting a decision of who will host the international part of the remco ipo. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am selina wang. this is bloomberg. thanks.selena, -- in latest with sophie asia we are worried about these trade tensions and announcement coming this week. sophie: we are assessing the impact and in the very least they are preparing for that potential fallout given concerns that trade war could impact global growth. that in turn could hurt the demand for commodities. pulling up this chart on the terminal, base metal has fallen to the lowest levels of the year with this backdrop. the ubs warning that metal prices could be hurt by a trade commodities the
index has got the most, saying the tariffs could hurt economic growth. eyebrows ofaised uncertainty, and we'll hear from the boj on friday to hear what they have to say regarding this instability. officials say they have not been shy when it comes to expressing concerns and we have the prime minister saying history teaches us there is no winners in a trade war. australia is seeking exemptions given they are a major iran -- a major iron exporter. that could perhaps be some countries who may be exempt, and some history has taught us, that tariffs can add more risk to the dollar. and this risk coming when the a worsening trade
competitiveness so retaliation is in focus here. we are going to hear from major economies in the region regarding how their economies are faring. and we have china's potential export growth coming at 11% last month and we have japan gdp as well to keep an eye on. this on the back of the u.s. reported a widening of trade deficits, and what might be trouble holding onto. much, andk you very we will continue with a tariff talk because president trump is ready to sign up the tariffs on thursday afternoon washington time and they will assess country by country based on u.s. national security. treasury secretary steven mnuchin told kevin cirilli that the president wants a better deal with all trading partners. >> nafta is in old agreement and we have important trade relationships with canada and mexico. a betterdent wants
deal for american workers and american companies. that is what this is about, a more fair and balanced trade. , china, it isar no sigrid that china has been taking advantage of the aluminum and still markets in the united states for some time. they call this policy a stupid idea to some extent. for the relationship they have called for a point person in the administration to be the trade person with regards to the u.s.-china policy. >> i want to put this in context, president and president xi have the best relationship any two presidents the history of the two countries. president trump, from the first time we met, he was very direct. and president xi acknowledged that and set it is in our mutual interest to have a more balanced trading relationship.
from a high level, we have agreements. i have had many dialogues with my counterparts when i was in davos. we met over a two-day. and had direct discussions with them about how to deal with these issues. inhink we have been clear what our objectives are we have to figure out if there is a way to work together to meet these objectives. yvonne: and that was u.s. treasury secretary steven mnuchin speaking with kevin cirilli in washington. volatility is017, back. for more with tariffs and the white house. heidi, take it away. there is a lot of
question marks and nerves when it comes to -- at the moment. a great deal of uncertainty of the global trade, and i want to bring in the chairman of vanguard group, great to have you here. steven mnuchin mentioned talking about correcting these unfair trade practices that potentially -- what is your view on this as an investor? concerning? the advent of nationalism -- protectionism contributed, and if you look at history, the removal of protection from the to australia's
growth to be more dynamic. when you see is being reversed. the idea of more protectionism -- whether you can carve out unfair trade practices that exist, i think the big concern andhe investment community trump has thrown a snowball. haidi: does this make you further cautious? we give up on those decades ago, it is extremely hard to sense -- we think longer-term in the last couple of years were looking at for the next 10, and that is raised on high valuation. run,ld say on the short
when you have a richly valued the main thing that disrupts the exhibition around earnings volatility. to what am curious as your playbook will look like. bill: i think from an economic growth standpoint, the developed world is a good place. our economists feel the idea of protectionism in the u.s. is very low. point,that, at some there will be a pullback. to havethey tend components outcome of but we have had for some time.
u.s. andowth in the is developed world -- it obvious he a huge contributor to global growth and we are cautiously optimistic. haidi: there is a sound situation with people gathered around this form in sydney. will take a short break now. this is bloomberg. yvonne: haidi, thank you. will fix audio issues and come back. this is bloomberg. ♪
mcnabb. picking up our conversation on global growth -- you were talking about emerging markets in asia perhaps being better bill: there is so much focus on china and china slowing down, we don't see any evidence of that and the chinese economy continues to move on. 5% or 6%ntains that growth we experienced the last couple of years. that is a good omen for the world. the haidi: the devil is in the details when it comes to reform, thewhen it comes to financial market opening up, are you laying the groundwork in particular when it comes to this robust retail investment market? us is anna for
incredibly important market. we are fortunate to be granted a tope quota of investment on of our investors in the world. staying close to china is important just for all of our investors. only talk about the potential of the market opened up the broader competition, it is exciting. andave an office in beijing we are looking at the possible things we can do. -- reforms they talked about a step process to have a small presence that can become bigger overtime. we spent time with reg latest talking about it and it is exciting to contemplate -- we andt time talking about it
is excited to contemplate. it can attract capital from broader areas and retail markets can be much more robust. haidi: is there a timeline being rolled out? bill: almost every six months you wait and see what develops from a regulatory standpoint. establishing portfolios or foreign entities -- force shanghai was a big step. is an indication of what we could do. investors,a lot of it may have gotten carried away, volatility has made a return as we get closer to normality. where does that leave you? bill: it is a change it at all, we think the broad performance story is tied to the cost of differential between indexing
and asset management, and adding volatility added some downturn, but the data suggest it doesn't have to do with relative performance. one thing, just from a cautionary standpoint -- the selloffs were not a logical. we see interest rates go up, when of the things i colleagues strong intimate is the future earnings if it is higher makes the present value smaller. it is a discounted flow of future earnings, so an uptick is anticipated in inflation and interest rates and often suggest the market needs to pull back on a valuation standpoint. andre not bothered by it, getting investors to understand equity more. haidi: is there opportunity for etf's? or is it a tiny part of the overall market? the: on the active side,
opportunities is going to be for a manager to have strong convictions that is narrowly defined with the kinds of portfolios. we are broad based and h diversx funds is the way to go. is a certain level of vanguard being dragged into the global debate about the pressure on vanguard to apply pressure on gun companies to start? activismre is social on that issue and the hard part about that, haidi, if we were to sell out of our index funds and our position in companies in the be violating our fiduciary duties to our investors. it wouldn't have an impact on the manufacturers because the
cells happen if there is a buyer, so you are exchanging owners. we are engaging with all of our companies, whether they are in a controversial are not controversial sector. we want to talk to our portfolio companies about issues that could impact their future earning and could change the valuation of those companies. we risk disclosure element are highly engaged on. low can it go before you see an erosion on margins? bill: i think on the index site we are going low, we are down to single digits and five basis points. -- not nearlyent enough in our opinion, we think active management will need to be low-cost active, so anticipate more there.
another element, everyone is focused on the product side. the bigger structure is on the more compelling area for fever reduction in the area of distribution and advice. that is where we think there's going to be pressure in the marketplace. australia for example, when you add up what it cost from an advice and this edition standpoint, there is far more value than there is in the product cost. that is where i think you will see a compression of margins. joining me on international women's day in have thisyou still conversation, what is the hold up when it comes to pay parity when it comes to representation on the board? bill: i am not sure what the holdup is, there are many highly qualified women and more
companies to address this. studied studies we at bali todiversity the board, and the data is compelling, which is one of the reasons why peter brower of bloomberg talk to us about toning us, and we were able do so and we made it a point in all of our engagement with our portfolio companies that we will be watching this. we expect progress to be made. haidi: you think it should go further and the penalties for companies? a zerohe companies with or one rule is you see consequences, and i think will make progress if the large investors and most of whom have pledged to continue to put pressure on the company -- we see companies respond. -- if you gorea
back a decade ago and the restructuring of compensation arrangement. progress there because of the engagement between investors and companies in the united states. i think the market actually works. this debate, i think will make progress. haidi: a lot of progress has been made and a lot more to come. a pleasure to have you here on bloomberg. we continue this discussion that we need to have on the international women's day. yvonne: we look forward to it, haidi. japan,g news coming from numbers from the gdp. numbers coming at 1.6% for the fourth quarter, much higher than the 0.5% limitary numbers we saw weeks ago. and much higher than the 1% estimate we got from economists,
so this is well ahead of potential growth we see and japan. is is because of capital investment numbers last week that showed a bullish corporate japan when it came to raising investment? perhaps we will see if this can stick and the to inflation. but the yen is going to be a big headache. highest evert its since the second quarter reading from march 2017. there joined from tokyo, university professor and former bank of japan policy board member. let's get your reaction to this 1.6% versus the expected consensus survey of 1%. hello? ramy: can we get your initial reaction in terms of the reading we are getting. 1.6% for the fourth quarter. >> that was much higher than i
thought. i think it may be because of the sector, so private it has something to do with the business and public investment increase. it was better than i thought. ramy: definitely. looking at a seasonal basis, it ofdown from the 1.8% december of 2016, any thoughts that are you optimistic in terms of this number? are you talking about 2018? from the end of 2016, year on year, 1.8% from the fourth quarter. thes a little bit lower, are you optimistic about this? >> i think so.
i paid more attention to the court or two quarter growth rather than year on year, i think it is good. the economy continues to grow moderately. yvonne: you mentioned that numbers that shows they are bullish when it comes to japanese companies and their willingness to spend more. we also see the gdp deflator -- is this enough to squeeze inflation back to japan and continue the path we have seen that is far the 2% goal? weak. deflator is very just by looking at the gdp deflator, i don't see strong inflationary pressure, and when you look at cpi once you exclude oil, food come and energy, inflation is growing at 0.4%, so i don't see a strong cup of
pressure coming from domestic demand. it is difficult for the boj to achieve percent anytime soon. yvonne: can we say there is at least some evidence that the deflationary mindset to be fading away now? -- noty necessarily because investment will not continue forever. actually, if you look at the there is some weakness with regards to the production of capital goods, and also some weakness and japan's exports to the united states. i think we have to look carefully of what happens in 2018 data with us cutting into weakness and if it will continue. yvonne: and we heard testimony coming from kuroda this week and
he mentioned the date, april 2019 is the date that the boj can start thinking about exiting its stimulus. is that a sign of a hawkish boj, that kuroda has to backtrack -- what you think he meant by that? acknowledgment of a date. he shall confidence of achieving that in 2019, but just as i said, there is no strong inflationary pressure coming from domestic demand. 2%is confident in achieving -- and many people think eventually he will have to postpone the timing and 2019. is confident as puzzling, but at the same time i feel that maybe the boj is thinking about the timing to normalize the
monetary policy. to deduce purchase fees and some possibility of doing that -- i think maybe showing some confidence about inflation, even though they are far away from the boj to achieve 2%, maybe they will be able to signal to the market that they might start to unwind their policy. there certainly is a lot of guesses but maybe we'll get clarity on the boj meeting on friday. thank you for joining us there from tokyo. coming up, continuing our international women's day coverage. and we are with rachel farrell joins us and 50 minutes to discuss the investment strategies in australia. respectedpeak to the
♪ kong,0 a.m. here in hong live from bloomberg's asia headquarters. welcome to daybreak asia. paris top the headline -- tariffs copy headlines. president trump promising to sign an order wednesday. steve mnuchin says there could be retaliation. beijing always said it will defend its interests. i'm in new york where it is just past 7:00 p.m. on wednesday. much-needed good news for abenomics. japan smashes forecast for growth's in the past quarter. a tight u.s. labor market helping to lift wages and spur
what is described as modern inflation. ♪ yvonne: that gdp print for japan is certainly big. looking ahead to the china trade numbers coming through in the 9:00 hour. this is what we are seeing. of course we'll was talk about how the u.s. has a massive trade deficit with china, but there are subtle signs. perhaps this trade surplus that china has with the u.s. is seeing signs of cooling. if you look at a five-year picture of the overall trade surplus and deficit, seasonable fluctuations, take into account those. there are seeing some cooling from the peaks we saw in 2014 and 2015. is that still enough to appease
the trump administration? probably not. seems to be marginal at this point given we are still hearing about trade sanctions in just about thursday your time. ramy: interesting stuff. we will take a look at that. also interesting to see what has been happening in terms of here in the u.s. with the markets, a bit of a mixed picture. little recovery in regards to the trade war which could be brewing. we have wilbur ross and steve mnuchin saying weight, -- wait. we will see how that knocks on in terms of the asia-pacific trade. yvonne: perhaps we have moved on from gary cohn already. let's check on the market. we have all this data coming through in asia, a lot more is ahead. sophie: a lot going on. conduct a he would trade war in a lovingly way. that is not winning any fans what stock investors must be --
the white house indicated there might be some carveouts in no stairs. take a look at what is happening. -- car bouts in those tariffs. stocks in seoul and sydney also edging higher. we are seeing some slight losses are s&p mini futures. plan, keepthe tariff an eye on the yen keeping steady. not moving too much after the latest gdp data. revised figures for the fourth quarter coming in better than forecast, given increase in investment. indicating the boj has a way to go before hitting its target. the stronger yen is posing a risk to the inflation goals. japanese money managers are betting the doj will seek to spend again even if it pushes the 10 year yield below zero. on this chart you can see the 10 year yield tracking the moves in
the dollar-yen. the market is in this weird position of having the yield target while the yen is reflecting changing valuation of the dollar. to temporarilyed a now negative eels depending on external factors. trump is chief among those factors. if the plan is disappointing, he sees the yen testing bid 105 levels again. ramy: taking a quick look at jp why, when a 618 on the numbers coming up from japan. is growingar debate louder as president trump's advisers defend tariffs on steel and aluminum. the order is expected to be signed thursday afternoon in washington, one drake -- one day after gary trade -- walk us to the arguments the trump team is making. kathleen: it is interesting.
i think in some ways they are talking about the economic impact. first of all, the u.s. being the loser. things from all over the world but the rest of the world is benefiting in the u.s. is not. they are trying to make the argument it is in the interest of the rest of the world to make this imbalance be fairer or to correct it. here is what trump advisor peter navarro, who some say is the most hawkish on trade, what he said earlier. countries now who trade with us are getting the better part of the deal and therefore they have no incentive at all to get into any conflict with us. our allies hope that in particular would understand if they want america to come to their defense, we will not be able to do that without an aluminum and steel industry. kathleen: that is why the administration said the aluminum and steel industries are
disappearing in the u.s. and we have to maintain this. important industry. -- very important industry. you white house press secretary said earlier maybe even -- let's look at a chart come it is interesting. you are looking at reliance on steel imports for consumption. china is way down here. this is mexico. this is canada. i want to move on to this question of gary cohn leaving the white house. some people were waiting for him to leave ever since he did not get the job. but he has been the moderate, the registered democrat arguing to be careful. maybe you need trade tariffs on china but that these other countries. -- but not these other countries. he is saying the hawks are going to be more ascendant. it remains to be seen just how this plays out. i myself think in a week or two we are going to say if gary cohn is here. who is replacing them? this is important in terms of
the nec, in terms of setting policy on the economic front. a monthly trade deficit report with the west, -- the u.s., widest since 2008. i think that will be more ammo in their job -- their vocal war on this front. yvonne: we heard from the atlanta fed president. seems to be more dovish than we have heard from others. kathleen: a relatively new president of the alleged the fed has been somewhat more dovish for a while. at the end of last year said maybe only two rate hikes in 2018. he was asked what it meant to him. you could tell he is watching it. he said some developments of trade policies have introduced uncertainty as to how the economy will perform. i am taking a wait and see attitude.
he was also asked in the same context, what about rate hikes? two or three in 2018 or are you in the three or four cap? he said everything is on the table. the certain extent, when fed board governor spoke last night in new york she said so the the trade debate, tariffs have not had any material change on her outlook for the economy, although of course she is running more hawkish as she talks about headwinds for the economy in the u.s. turning to tailwinds. doesn't want to weighted it is because there is certain politics they want to avoid. if the trade war wants to get going and it has an economic impact is a safe bet that this discussed more openly and could very well have an impact on the fed this year. yvonne: kathleen, thank you. corporate china has issued a damaging assessment --
beijing.ss over to you mentioned before there is a level of concern where you are. what are you hearing on the ground? certainly there is mounting concern now here in china, particularly as you said amongst the country's corporate leaders who are of course gathering in the capital over the two weeks as part of this annual parliamentary event that takes place. we have been talking to a number of those senior corporate leaders, including the head of sand power who we set down with an interview. this is a company that used -- recently bought a u.s. drugmaker. they have about $800 billion set aside it might be focused on u.s. markets. clearly he is focused on keeping and i there. he hopes that china and the u.s. will avoid a trade war. we also heard from costco's chairman. this is one of the world's largest shipping company's.
theaid he was watching developments out of washington very closely and he believed the world simply would not support trade protectionism. we also heard from the chairman of guangzhou auto, one of china's largest automakers 11 a joint venture with fiat chrysler. they had been opening -- hoping to be one of the first automakers here in china to sell to the u.s. in 2019. is happening what in washington with these tariffs you might have to reassess that plan. take a listen. >> trump's trade policy really is a challenge. he will surely have an impact on chinese carmakers like us. enter the goal to u.s. market in 2018 because we believe in globalization instead of trade protectionism. what if trump insists on imposing tariffs on chinese keys, the cost will be the
measurement for us to decided we still want to export cars to the u.s.. tariffs and where we go from here are clearly part of the conversation here in china. to some degree they are overshadowing this annual parliamentary event. ramy: no surprise for that. but what else is in focus in beijing today? journalists gathering behind me for a press conference with the foreign minister of china. about 10:00 local time. we expect potentially to hear from him and get his reaction on the u.s. china trade tensions. but also on north korea and the chinese take on what we have between seoulties and pyongyang, with the implications are. been a supporter of talks rather than the threat of military action so we are likely to hear a confirmation that they support what has been going on. he will be pressed on that.
also likely hear from the chairman of the chinese automaker that has an causing waves in the car industry by buying a big stake. hopefully talking to them about their strategy and get his take on this. here and theout of views from the policymakers hear about the trade tensions. ramy: a very busy day ahead, as always. let's get the first word news with selina wang. latest reviewd's of the u.s. economy shows a tight labor market helping to lift wages across the board, contributing to what the beige book describes as moderate inflation. regional fedhe 12 banks shows moderate to moderate expansion showing it is more broadly based. raises expectations for more than three rate hikes this year. the european union rejected u.k.'s bid to keep access to part of the single market,
particularly in banking, saying the block does not keep theresa may's goal as making brexit -- brussels dismissed may's so-called pick and mix approach to regulation. the sector could only be included in a future deal with restrictions. carl icahn insists he has no knowledge of president trump's tariff plans when he offloaded a major position in a company that would be hit. a statement on his website said the sale of shares was quote, for legitimate investment reasons and had nothing to do with potential tariffs. he sold about $30 million worth inshares over 10 days february. bitcoins so-called tokyo whale is becoming a force in the cryptocurrency world. an attorney and bankruptcy -- he has not disclosed the sale of about $400 million with the bitcoin in september.
he is also sitting on a most $2 billion of the tokens and may offload them as well to raise cash for creditors. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm selina wang and this is bloomberg. we're goingl ahead to talk big data ai and more one of the most prospective capital investors in china. six companies acquired in 2016 alone. ramy: next, more on the trump tariff implications for markets. this is bloomberg. ♪
you are just a human being. >> getting to a field where you have passion. don't be afraid to speak up. >> women need to have confidence in themselves. >> it's a good thing to be proud of what you achieve. >> my advice is to think big. >> [indiscernible] >> when you think about what really holds you back, the number one source of that is yourself. >> don't you deserve whatever you want? >> go forward with that confidence. thene: some comments on challenges women network as we celebrate international women's day right here at bloomberg. we are going to continue our coverage right now and had to australia, home to the world's fourth-largest pension market.
bank'sn is using the global reach to lower aussie investors looking to diversify abroad. joining us from sydney is rachel pharrell. thank you so much for coming back to the program once again. before we talk about international women's day i want to talk more about what we see in the markets, this degree of volatility we haven't seen. first there was concerns about rising rates and now there is the threat of a trade war. how defensively positioned should investors be at the moment? rachel: if you look at the global economic backdrop, the world still looks relatively good. i know you are referencing the brings to light some geopolitical issues that we have a geopolitical issues are not due to the markets. we had north korea, we had brexit, we had populist movements in europe.
things will take place and they do impact markets in the short-term. reallythe long-term we look at fundamentals and the fundamentals across the world are still quite strong. yvonne: can you still have a 6040 model when it comes to asset allocation? know, with the large resources we have a jpmorgan asset management, we look to create so this -- specific solutions for clients. it is not one-size-fits-all. we help a large number. we are working with 60% of the world's largest pension funds and central banks across the world and they'll have very different needs and different solutions for them. ramy: it -- thate: you are telling us your current footprint in australia was still not keeping up with where it should be.
how would think things are progressing now where you are on? rachel: definitely progressing. i learned a lot in the past year. a very interesting market here. we continued to feel strongly that the global breath and resources of jpmorgan asset management can be of service, as you said, the fourth largest pool of pension assets in the world. we continue to look at how we can help the institutions here leverage our expertise and tap into our resources in order to meet their needs and solve their problems. yearinly in this type of where we are definitely going to see more volatility, it is that much more important to really be able to have well-diversified portfolios that can withstand some of this volatility. inwe are very active discussions with people about how to build those resilient portfolios. ramy: rachel, how well along are you guys now? this time last year you had a name of $10 billion over five
years. at what level are you at in that $10 billion mark? don't quote specific assets so i will not give you specific assets right now. but we definitely had a strong year last year. we continue to develop our different -- businesses. we also have a real estate team on the ground participating in buying property for our pan asian real estate capability. and we continue to be focused on all three of those areas. ramy: and with your focus in australian pension funds, more than 50% is actually domestic-orientated. any change over the past year that you have seen? rachel: no, no no. there are plenty of providers in net space. they do an excellent job. some of the largest funds are in sourcing some of that's where
they can invest some of those assets on their own. that's not what we are looking to focus. we are really looking to focus where our own expertise and our own specialties across the world can be helpful to these clients here. is australia still a strategic market for the firm? are you thinking about adding more staff now? rachel: it is extremely strategic. if you look at the context of the asia-pacific markets and where those are two service andnts, japan, australia china which will obviously dwarf everything as it continues to open up. it's a very important market for us. we have a very long history in asia-pacific. we will be first firms to offer mutual funds in hong kong. we have a large presence in hong kong and across asia. we are present in 23 markets across the world. australia makes absolutely strategic sense for us and we are here to stay. yvonne: because it is international women's day we have to ask, these think the
glass ceiling in asset management has been broken yet? and what else would you like to see? rachel: it's a journey. i don't think the glass ceiling has been broken. it is women that are involved, we would of course like to see more women on the investment side. as portfolio managers. in the asset management business we and i think there are more and more role models. she's a wonderful role model for the industry. we need to see more role models and more portfolio managers. jpmorgan is very committed to diversity. diversity makes sense and it means that you have the best and brightest ideas brought to the table. and we have to continue to have those conversations around diversity in order to continue to push forward and see more gender balance. but it is not only about gender balance, it is about diversity
in the broadest sense. ramy: we will have to leave it there. rachel farrell, happy international women's day to you. don't forget our international tv function, tv . you can watch us live and catch up on past interviews as well as dive into any of the securities or bloomberg functions we talk about. this is for bloomberg subscribers only. this is bloomberg. ♪
♪ is "daybreak asia." ramy: a quick check of the latest business flash headlines. further trumps trade tariffs could puncture expansion plans. the chairman says the company will be careful exporting cars and investing in the u.s. if the white house puts tariffs on more chinese goods. trump's trade policy really
is a challenge. it will surely have an impact on chinese carmakers like us. our goal to enter the u.s. market in 2018 because we believe in globalization instead of trade protectionism. but if trump insists on imposing tariffs on chinese goods than cost will be the key measurement for us to decide if we want to still export cars to the u.s. yvonne: nissan and renault are denying talks -- a spokesman for the alliance said any talk about a deal is pure speculation. renault spike as much as 13% on the story. any merger would require the approval of the french and japanese governments. ramy: hse be -- they expect to more than double in the next four years in the expectations of continuing growth attracting growth on the mainland. it was launched last year to
♪ ramy: we are getting breaking news off of the aussie trade balances across the bloomberg terminal. the actual number has come in much higher than anticipated. 1.05 billion dollars. this is in comparison to the down.$1.35 billion when it cameso saw to the december numbers they were revised slightly lower. certainly see a spike in the aussie dollar right now. sophie: earlier we had the
aussie paring ahead of that data now we're seeing it climbed towards the 79. this week kind of a mixed bag of australian data to consider. growth very much remaining on track. the momentum is among the best. the currency looks cheap on a few different metrics. mccormick saying positive data that persists, upward growth will follow. taking a look at how aussie stocks are following -- faring, up. being led higher by tech and utilities. a potential protection from trump's tariffs may be a factor. japanese stocks recovering from thursday's drop. securities pointing out with
having tested its 200 day moving average, that signals a buy on the dip opportunity for long-term investors. this also providing impetus to buy. with this we have the yen softer by a touch. tariff planrump's disappoint, we could see it move again. korean yuan gaining for a third day. aussie up about a 10th of 1% on the back of that data. ramy: let's get the first word news with selina wang. selina: president trump is said to be ready to sign steel and aluminum tariffs thursday afternoon in washington. the white house says they will be assessed country by country
based on u.s. national security. told bloomberg he recognizes the risk of retaliation but still believes tariffs will benefit american workers. he says the ministration wants to ensure fair treatment. >> nafta is an old agreement. we had very important trading relationships with canada and mexico. but the president wants to look at this agreement and wants a better deal for american workers and american companies. that is what this is all about, more fair and balanced trade. selina: u.k. police say critically ill russian spy and his daughter work poisoned, increasing the possibility russia was behind the attack. he was convicted in 2006 of passing russian secrets to the u.k. but was freed in a swap deal eight years ago. arabia havesaudi
agreed to a goal of $90 billion worth of trade and investment with the u.k. calling a vote of confidence ahead of brexit. the target came as the crown prince started a three-day visit. things will be signed during his trip but british officials are not expecting a decision on who will host the international part. president xi jinping medallions -- met delegates on the sidelines of the national people's congress saying china must innovate to prosper. it is home to the greater bay area project intended to be china's answer to silicon valley. the president told him the company must remain ahead of the pack. >> development is the top priority. innovation the leading driver. if china does not pursue innovation driven development, the new growth drivers will not be able to replace the old ones and the country will not be truly strong. to be strong we need to foster
innovation. selina: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm selina wang. this is bloomberg. trump'spresident advisors are defending plans to impose tariffs while leaving the door open to exemptions for some countries and downplaying the chance of a trade war. the administration is also considering imposing tariffs on a broad range of imports to punish beijing for alleged theft of intellectual property. thank you so much for joining us. we are expecting to hear some kind of the -- announcement from the u.s. possibly thursday on these tariffs. now that we have seen gary cohn leaving is there a higher chance we could see a trade war? there: we are still seeing
chances of a full-scale trade war very low. but the chance maybe double. however, it is still very low at the moment. yvonne: how do you think china might fight back on this? do you expect retaliation? we have already heard europe chime in on this. claire: if i am clear how this trigger retaliatory moves from china or the eu. promised to use more concessions or reforms to respond to this event, like opening up the markets more. so we don't know how they are going to respond to this plan and it is unclear how the u.s. will eventually implement the tariffs. yvonne: it's interesting because there is still a lot of
uncertainty about who is exploited, who is not. target -- china will certainly be targeted. given the fact we have seen this growth, china being a part, is there a risk here in at least derailing or speeding the slowing of global growth we have seen this year? claire: given the current rate aluminum,r steel and it has accounted for a very small share in china and also india. we do not feel this move is going to derail the positive momentum in global trade this year. if we look at the 2017, a breakdown of global trade, we see it was mainly driven by capital groups exports and that is barely related to a rebound of --
still expanding the economy. we will continue to see strong momentum. well-positioned in this rebound because their trade is very concentrated in capital goods compared to the rest of the world. ramy: i want to get your thoughts on donald trump's tweets. he said something about china's trade deficit. hop into the bloomberg terminal. 5279. the trade deficit is about $35 billion so far year to date. donald trump had been saying he wants a $1 billion takedown from china. that's not a lot. what do you think about this deficit as well as his words? china can import more
utiesmer goods and reduce d on maybe cars or luxury goods, it could easily reduce deficits away from the u.s. of we do not see a reduction bilateral trade balance as imposable. a lot china and the u.s. can do. ramy: one interesting thing that our bloomberg people call them is that beijing may actually have the upper hand if they choose to fight back. about a quarter of u.s. chip exports go to china, but that does not account for much in terms of total imports there. do you agree? does china have the upper hand here? claire: i wish i knew. it's interesting, we are
expecting a trade deficit of $5.7 billion. we haven't seen it was this until maybe 2013. is that a concern for china? claire: to china it is a trade surplus. yvonne: a trade deficit for this month. claire: oh, for this month. it is not a concern because we think it might be temporary. yvonne: due to seasonal distortion? claire: yes. chinese new year. yvonne: we saw a sizable drop or the month. is the reason to believe this is more than seasonable? claire: we have to be a little more careful because of the -- it's better to look at it pboc number to see the reserve. it's largely stable over the
year. yvonne: claire, thank you. jetties conglomerate dan tower group is not concerned by trade tensions between the u.s. and china. said he will continue to look for assets in the u.s. concerned.ot two big powers like china and the u.s. should be partners in a trade war will not take place. the two countries need each other, i think. >> do you expect to face more hurdles in the u.s. market? does it make the u.s. market less attractive to you? >> so far i have not felt so. >> they are looking at giving and thatore power could potentially impact companies like yours looking to make acquisitions in the u.s. you reconfiguring your strategy in light of those changes that might be on the cards? >> these are also imaginary so far.
it is not happened yet. i am not a politician, just a businessman. from my perspective we will cross that bridge when it comes. >> it is fair to say you are actively looking for additional acquisitions in the u.s. and in europe. >> you could say so. we are having some talks. >> have you set aside a particular amount of money spending on acquisitions in the next 12 to 24 months? we don't have a very specific target amount of funds, but we think over the next two years approximately we will have $500 million dated -- million to $800 million for medical technology around the globe. we have interest in gene therapy technologies. >> have you been surprised at the pressure that regulators put on companies like hna? is that surprised you? >> private companies play a
significant role in china's economy. they are big employers. therefore i think in terms of current policy, private companies like mine are still being supported and i have benefited from such policies. ramy: and that was the chairman of sand power speaking exclusively with bloomberg in beijing. next, we are live with jenny lee, one of the most respected venture capital people in china. this is bloomberg. ♪
let's discuss the investment opportunities in this big space with jenny lee. also joining our conversation in france and cisco -- in san francisco is selina wang. you lead thatnt, and it could be introducing smartphones to the u.s. earlier this year. i want to get your take on what you think of this move here. been progressing over the years. i think the product is competitive. it is up there in terms of performance and price. i feel they have a good chance of penetrating and adopting new users in the u.s. market. ramy: how does it -- yvonne: how does it avoid the fate like what happened with at&t? jenny: i do feel there are
different carriers they can work with. it is an ongoing process to find the right partners in different countries. shifting gears to for investments in the u.s. which we have seen tighten the kinds of deals they would accept from china, how are you seeing that impact the investment landscape, especially in areas like artificial intelligence and drones? this is an area that is highly scrutinizedy regulators on both sides and investors on both sides, and companies on both sides. particularly areas like semiconductor areas, areas that involve payments. we do believe areas like cybersecurity and ai where you're dealing with huge processing of data in many times personalized data. specific areas would be highly
scrutinized. i think there will be a lot of attention here. i also think individually, companies will be thinking about how they can and are already investigating -- investing in r&d to build up their own capabilities domestically while acquisition and mergers of global companies can help to shorten the r&d timeline. i feel it is almost a wake-up call for companies to say hey, that might be limited going forward and it is crucial especially in the new ai areas to start investing in court r&d in their markets. --y: we also heard is there any indication that perhaps a hard-line stance could go beyond national security considerations when it comes to emanate from china? jenny: yeah.
that's a interesting and highly watched sector. both china and the u.s. need each other. it's not going to be a one-way trip. many u.s. companies have over 50% of sales generated from their products in china. we would like to see more collaboration, less one-sided policies. if there is more collaboration , both both markets companies will do better overall. is an enormousre online user base as well as tons of data. our disease advantages eventually going to push china ahead of the u.s. when it comes to ai especially when china has such strong state support for the tech sector? jenny: yeah. i am a strong believer in the ai trend, also in how china over
the last 10 years has moved very fast up their innovation skills. whether it is computer vision, theral language processing, availability of database within that scenario. because of the huge number of users, particularly mobile users and mobile user data in china. many chinese startups -- in terms of accumulating tetra bites of data. they have an advantage in terms of shaping the product based on the database they have. i think the u.s. has similar advantages as well but from a sheer number in database perspective, i would believe that china is very capable to do a lot of the processing than coming up with new products within the ai area very soon as well. teche you seeing more
talent in artificial intelligence stay in china versus coming to the u.s. for opportunities? jenny: oh yes, definitely. i see a lot of companies everyday and there are different kinds of talent from software processing, data processing. now we are starting to see talent in semi conductor spaces as well. not only are talents choosing to stay in china, i think china with his regulation policy is also encouraging overseas chinese to come back to china, set up new startups. supported with coming home subsidies and support. so, you know, they are staying in and i think more will be coming back to china over the coming years as well. >> it is international women's day and here in silicon valley there have been a wave of discrimination and sexual harassment allegations over the past year. how would you compare the culture in silicon valley to the tech community in china?
jenny: i get asked this quite a bit. for all a special day the women. happy women's day. i think that in china the technology scene has been pretty supportive of women entrepreneurs, women investors. anyou look across from investor pool perspective as well, there is a higher percentage of women in the venture capital business from initial ranks like associate all the way up to partner level. it's inin the 10%, -- the 10%, 15%, i would say double the number of women in the venture capital level compared to the u.s. we also see a number of startups entrepreneurs trying to innovate with education.
in those areas we actually see a higher percentage, sometimes around 50%, are led by women entrepreneurs. in the areas of commerce where it is making -- we also see a lot more women founders in the founding ranks. it has been pretty supportive here. perhaps from a cultural perspective, women have always been the center of the family unit. that probably helps. >> always great to hear there is progress being made. wango want to thank selina joining us from san francisco. you can always find in-depth analysis on bloomberg radio. tune into daybreak asia from 7:00 a.m. hong kong time. you can also download the app. this is bloomberg. ♪
let's look at the challenges facing the industry right now as we look ahead and the opportunities in china. regarded you can only as being in its infancy. later on we hear from pimco. also catherine. we are going to concentrate on the headwinds women face in getting up the corporate ladder. but what do they do about -- taking a step back. markets as well, of course. ramy: where going to look ahead to that shortly. let's go to check on how the markets are trading in the asia-pacific region. earlier we saw they were green across the board and they still continue to be. up by about 7/10 of a percent. better-than-expected gdp number
came out. s&p up by about half a percent. singapore, kuala lumpur in mixed picture. -- a mixed picture. other futures are also down. like we have eased off of some of these trade war concerns despite the fact we are going to be hearing from steve mnuchin on what point they will start slapping these tariffs on aluminum and steel. hong kong markets could be seeing upside. plenty more to come. this is bloomberg. ♪ mom, dad, can we talk?
sure. what's up, son? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the othretail. round. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> we are talking tariffs. a president trump expected to sign the order later thursday. steve mnuchin admits there could be retaliation. a full-blown trade war could affect things. in hong kong, i'm her shot salama -- rishaad salama. aidi: and will take a look at the strategy, this is bloo