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tv   Bloomberg Daybreak Australia  Bloomberg  May 21, 2018 6:00pm-7:00pm EDT

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third on the trade tensions, dollars surrendered earlier gains. code and yen tumbled. and we are higher from the start to finish, with -- intermediate climb into its highest level since november 2014. house saysthe white momentum building in talks with china, further discussions in beijing this week. >> in the u.s. threatens iran with the toughest sections in history with tehran heading back
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with what they call sham diplomacy. haidi: hello from sydney, this is "daybreak australia". i'm haidi lun. betty: just after 6:00 p.m. in new york, i'm betty liu. looking at how the action on wall street will play into the asia-pacific trading day. it was those easing trade tensions that lifted the market overall. speaking about the market, we are closely watching comments coming up from the minneapolis fed president. he is not a voting member, but he continues his dovish stance. saying, we should allow the economy to continue to strengthen. there might still be some slack in the labor market. also noting, that he is watching the yield curve for any signs the economy might falter. so still hinting a little bit more dovish. haidi: yes, talking about the sort of lack of pickup in wage
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growth, saying we could see the inversion on the all caps sometime this year. becoming a common refrain, by thought it was interesting we saw the pickup, that sort of recession when it comes to the haven plays in positive sentiment all on trade, given we have not had a great deal of optimism or details with these deals. betty: we haven't at all, but it was those deals that was the focus of the market. a quick check of the how the u.s. stocks in did today, pretty much green across the board. you mentioned the fall in the safe havens, stocks, that risk on feeling for throughout the dow, s&p and nasdaq. setting asia up for higher open -- for a higher haidi: we are looking narrowly mixed member sentiment is looking to improve -- mixed, but sentiment is looking to improve in asia.
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it is worth pointing out that we do have a holiday, with hong kong closed for the buddha's birthday. new zealand, upside, quarter of a percent. given the optimism. consumer sentiment and the aussie dollar trading at 75.85. now pushing back the call for rate hikes for november this year come all the way through to the middle 2019. again, citing wage inflation or lack thereof, as well as the unemployment rate climbing in april. commodities, we saw the pullback with a safe haven trades. gold has a fallen. yen as well. 70.51 for crude. fresh highs for wti. aei opening talks with major producers about the collapsing
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output situation from venezuela, as well as geopolitical issues over iran, as well as essentially what opec does next in terms of output curves. trading josh i've $80 a barrel. -- trading just shy of $80 a barrel. >> the white house says momentum is building with talks with china as the two sides seek to cut the trade deficit. steven mnuchin says intended afraid mark has been reached as for mark has been reached after the visit of the top financial advisor from china, although china has yet to commit to a specific figure. the two sides may yet impose tariffs, but washington remains optimistic. >> a lot of momentum from this framework. and ross has gone over there just are going to the different commodity purchases and the tariffs. so no, i do not see any positive at all. i would -- pause at all. i would say there is more momentum building bid >> the
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u.s. ramping up pressure on venezuela about an election decried as a sham. debt is owed to the government, including an oil company. debt ground to a hell yesterday as investors digest -- to a halt yesterday as investors digested the order. they are looking to cut potential corruption. italy's borrowing costs are surging as the populist party tries to form a government. the complete being punished with the five-star administration seemingly prepared to boost the spending without regard to european union rules. that means a note maturing of the very 2028, now yields 10 basis points more than a euro sovereign from -- due for months later. democracy protesters in thailand plan to march the government house on the fourth anniversary of the military coup. it is seen as the most direct challenge yet, to the government which has promised elections of
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but remained in power. the growth hit a five-year high as a food output added to gains in private consumption. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. betty: think is so much. closer look at the u.s. market close. easing concerns about tariffs and trade wars, helping commodities in the bond yields to rise, the s&p snapping the today losing strike. the doubt of as much as 370 points at the height of the rally. up as much as three to some reports of ahead of the rally. we knew this would happen. >> as was strategists said it was the tough talk about the sanctions that really had the market concerned, so any sign of an agreement is likely to be positive for the market and that is what we saw. we also saw the stock surge, the dollar gains sort of being given
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back. you notice also that gold is catching a little bit of bid after hours, not quite as in demand. the safe havens, yen and gold are not in favor, but oil rising above $72. we will get to that in a minute. take a look at some of the big stockmarket action. a boeing reasserting its place later last week is one of the top performers, up 22% year to date with a lot of positive news from their subsidiaries. chesapeake energy, huge gain. there was a lot of social media, some of it saying with the oil prices surging, this is a cash cow. others pointing out that others had been betting on lower prices for chesapeake and they had to cover the bets in light of the underlying community. world wrestling entertainment surging as well as fox announces that they will add their smack down show, which
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means big things for the company. and it hit a record high. to the bloomberg really quickly. bond bull market is a big story. bring on more options is the rallying cry. five-year and seven-year notes the largest since 2010. this chart you can find in our library. onward and upward, treasury issuances. is thee rising curve amount of outstanding treasury notes. so again, bonds stealing the thunder one way or another. [laughter] haidi: they certainly do. commodities also getting some of that, of course, with easing concerns over tariffs, the trade war helping with the demand side of the story and prices surging after venezuela. what is the latest? su: it is a one, two punch. look at oil, year to date better than 20%. look at the today chart, yes,
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venezuela's uncertainty is helping to push prices higher. the trade war on hold, supporting the rally, as does the easing of tensions. let's go into the bloomberg, if we can, and you can find these charts. the big focus on crude going $80, overshadowing the bigger story analysts say, which is the price increase of the outward curve five years out. that has been rising at a faster rate and that is very bullish. again, the concern short-term with the big criticism for the election in venezuela is that the sanctions on the already crippled oil industry could increase, and there is talk from the aea about how to replace diminished output. take a look at the metals moving higher, benefiting not just the weekend dollar, but the easing tensions with china, the may
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consumer of the metals. back to you. haidi: president trump's controversial former strategist steve bannon has taken a hit as steven mnuchin for his role in china and the trade talks. saying, he does away with the president's recent successes with beijing. we go straight to washington. the administration seems to back away from a trade war, but that is attracting criticism as being too soft. >> the steve bannon fashion of people who are still in donald trump's circle have been taking a hard-line on china, wanting to confront and punishing them for their trade practices. he may well be right in blaming secretary mnuchin and the chief economic adviser larry kudlow for this shift in the administration's stands, but at the same time, or on the same token, the president has thus far not indicated that he is
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displeased with any of this. there are other players as well. agricultural interests, corporations, farmers groups, and lawmakers from agricultural areas who have been keeping up a steady drumbeat of pressure on the administration to back away, because the farmers would be on sort of the frontlines of those who would be most affected by it. those are a lot of trump voters. the question is how many votes doesn't steve bannon have, the answer -- does steve bannon have, zero. and the voters will give donald trump latitude in how he goes about thanks. could the office adjusted there is a prospect of opening of china's markets more to financial services, companies like blackrock infidelity international have been eager to get into china and with this equities markets there. so that could be another piece of the puzzle that is he a to be
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fit in. betty: beijing has played a major role in the possible summit upcoming between kim jong-un and president trump, so is that playing into the trade talks? joe: donald trump himself suggested it might well be, because he said that president xi had enough leverage over kim jong-un to, if things were not going his way on trade, he could encourage or influence kim to take a harder line in some of the set of talks for the summit. that is at least the sign about the same time as the u.s. was approaching the idea of tariffs on chinese goods, that the north koreans started a more harsh rhetoric than they had before. now we will see whether or not that softens, now that the china-u.s. tensions have eased. china has a unique
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characteristic offer for north korea to influence behavior, because they provide the bulk of the imports into north korea. that will be the frontline of sort of any easing of sanctions or economic penalties. betty: secretary of state mike pompeo seems to be holding a tough line on iran. what does that mean for the other signers of the iran deal? joe: if there was any hope in europe that the u.s. would ease up and allow european cabeza continued to do business with iran, pompeo seemed to throw cold water on that. more or less, he laid out the choice they will have between access to the radio markets or to the u.s. -- the iranian markets or to the u.s. markets. sill, that was -- still, that was announced by the eu. we have not heard from russia or china. so we will have to see how that
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plays out. but they did not leave much room for the european union to act on its own to give the deal alive. and make demands on iran that they found unacceptable. betty: joe, thank you. coming up, why china holds the key for electric vehicle makers and why tesla faces a run for its money in the world's biggest carmaker. -- biggest car market. haidi: wells fargo and the treasury selloff. weighing in on monetary policy into the occur. that's yield curve. this is bloomberg. ♪
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betty: good morning. i'm betty liu in new york. haidi: i'm haidi lun. fed policymakers sticking to their guns. remain on board with gradual rate hikes. one month some dove still
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questioning if the hikes are needed at all. our global economic policy reporter has the latest. kathleen, starting with the mainstream view. anything new today? athleen: what-- k we're hearing is patrick harker, in philadelphia, he spoke in new york earlier today and he sees two more rate hikes, maybe even three if inflation accelerates. let's take a look at what is on his list. he thinks inflation will rate 2%, even 2.5%. even so, do not need to rush on the hikes. he suggests, let's get to the neutral rate, not too hot or too cold. see how it plays out. the biggest risk in the economy, trade tensions and immigration policy. raphael bostic in atlanta, also speaking on monday. he sees an inflation overshoot. he is fine with it.
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two more 2018 rate hikes. he think it will head above the target of 2% for some time. yield curve president and all -- is present on all of our minds. he will be voting this year. the others will not. betty: and the minneapolis fed president. haidi: he is wary of more hikes. kathleen: he is one of the doves. he did speak in a moderated q & a. his take is, wage growth has not picked up, number one. he thinks there could be more labor market slack, it may still be persisting. here is what he said today. levels,eturn to normal we should shift to a neutral stance." do not move to a tightening stance, and do not move too quickly into we see wages climbing and we are at maximum employment. chart, so a look at a
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we can illustrate this. you can see the of the line going down. 3.9%, that is the left-hand access for unemployment. year-over-year, earnings around 2.6%. so you do not see what you would call it celebration, do you -- c all acceleration, do you? bullard,echoing jim what he said last week and in a couple of speeches, the look of could flatten by the end of this year if the fed keeps raising rates. do the math, 50 basis points more, you are going and versus the 10-year note. much ofounding like not an alarm bell, but a little bit of an alarm bell. kathleen, thank you so much. we will stay on that, because investors have been cheering the easing of trade tensions between washington and beijing, that
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sense the stock market higher and the dollar lower. at the same time, treasuries studied while the safe havens tumbled with the yen and the dollar. brian jacobson is here, from wells fargo. so brian, let's take the headlines first, where he is against the tone of wait and see, we need to see more data. there is still slack in the labor market and perhaps the fed, if they raise rates too quickly, could jeopardize field curve. what do you make of that? >> it is a minority view, but i think it is a reasons view. it is interesting the diversity of opinions you have from the fed officials. you have master, he was there last week talking about not just a little bit of inflation overshoot, but allowing the federal funds rate to overshoot the long-term, or what they view as being neutral. yet you have bullard and kashkari who are saying, let's wait a little bit and see the
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data confirm that inflation is going to sustainably get towards their target. i tend to be more sympathetic with a slightly, you would call them the dovish views, because the unemployment rate, even though it is 3.9%, wages are only going to .6% year on year % year on year, the labor force participation rate has an opportunity to move up. so i think that there is a lot to be said for the fed to take it a little bit cautiously as they hike. betty: absolutely, but there are other market forces that tend to be trending otherwise, i am really talking about the treasury yields. i want to pull up a chart that shows how the 10 year yields continue to rise and have been steepening their increase over the last several weeks. this is coming as we are seeing more and more treasury options. it,ave $99 billion worth of
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just this week, so that will be adding upward pressure on the yields. how disruptive might that be? brian: i do not think it will be that disruptive. you have still a strong appetite for treasury securities, whether it is from insurance companies, or banks for regulatory reasons. central banks still gobbling up the treasury securities to hold as reserve assets. with yields where they are, i think it is fairly attractive as an investment for those types of investors. for our investors, it is not necessarily offer a lot of value because i think you can do better by taking on a little bit more credit risk, so you can get better yields with less of the interest rate sensitivity, but a lot of the moves up we have seen in the 10 year treasuries were somewhat triggered by the chatter out of central bankers littleaving rates rise a bit sooner than may be what people were penciling in. the fed is still talking about
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three rate hikes this year, if not, maybe four, but the market is only pricing in may be an additional two hikes. i think that central bankers are trying to talk of the central yield curve to get it steeper, which in my mind is why we have positioned our portfolios to short the 10 year treasury, as we have gone to 3.10% on the 10 year, taking that off, because we are close to about fair value right here. haidi: one of your convictions is still leaning into -- but are they different this time? brian: it is dangerous to say it is different this time, but it is actually more dangerous to not recognize when things are different this time. because conditions are very different today than what they were the last time we had this tantrum back in 2012 or 2013, sorry, where it affected the
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emerging markets, because commodity prices have risen, improving the financial position of a lot of the emerging markets governments, and there is an important distinction between investing in the emerging-market companies, or the emerging-market countries. i think that it does pay to be a little bit cautious when it comes to getting exposure to the currencies, because i think that the dollar strength could trend a little bit here. momentum is on your side to say that the dollar is going to strengthen at least in the near term, but perhaps weaken over the longer-term. so we are careful where we pick our spots in the emerging markets. talking to our emerging markets team, they were talking about the opportunities in china and perhaps even in russia, in some of the under owned areas of the emerging markets, where perhaps the dollar strength is not necessarily going to affect the finances of the businesses that much. selectivey could be
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in this environment. brian jacobsen, we appreciate your time. for breaking noise -- news, we have teamed up with a twitter to offer live video coverage and hourly updated talk news reports verified by us on twitter. so make sure you are following tictoc on twitter. this is bloomberg. ♪
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haidi: click check of the latest business flash headlines. starbucks revamping customer policy following outrage at the arrest of two black men at a philadelphia cafe last month. anybody can now sit in a starbucks store or patio, or use the bathroom without purchasing anything. betty: although, sleeping is not allowed. next week, starbucks will be closing 8000 cafes for staff training in response to the incident in philadelphia. haidi: tesla's hopes of bringing
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electric cars to the mass market has been hit by an unfavorable review. consumer reports one not recommend the model 3 because of the poor braking distances. this is bloomberg.
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>> here in sydney, markets looking softer going into the open. features showing a lower open, a quarter of 1%. despite a rally that we saw in the u.s., markets getting more comfortable with the idea of traded tensions just taken off the table for now. betty: for now. i'm betty liu in new york. 6:30 p.m. and you are watching "daybreak australia". now a alisa parenti. >> thank you, the secretary of state has told iran to halt uranium enhancement and give inspectors access to the entire country, or face the toughest
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u.s. sanctions in history. he gave a list of basic requirements that toronto must me if it wants to avoid punishment. mike pompeo was making his first address as a secretary of state, following the decision to abandon the 2015 iran deal. >> the stations will be painful if the regime does not change course from the unacceptable path it has chosen to one that rejoins the league of nations. these will indeed end up being the strongest sanctions in history when they are complete. >> mike pompeo's comments drew swift response. the president of iran saying it is unacceptable for the u.s. to dictate to the world and scoffed at the idea of a man who spent years in this bike them operating as the tablet to matt. -- diplomat. he said washington has reverted to its old habits dictated by corrupt a special interests. the white house chief of staff is going to set up a meeting
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with congressional leaders, the fbi and justice department, to review classified information related to the russian investigation. it is not yet clear what documents will be made available. the decision comes a day after president trump demanded that the doj look into claims that his election campaign was infiltrated by political opponents. and bloomberg has been told that china is planning to scrap all limits on the number of children a family can have, possibly as soon as this year. it would be a historic end to a policy that spurred human right abuses and left the second largest economy in the world short of workers. with a rapidly aging population and 30 more million men then women, they shifted to a chu child policy -- to china policy in 2010. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm alyssaparenti -- parenti. this is bloomberg. haidi: now a quick update on
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markets in new zealand, where early trading is seeing positivity. we are watching some of the milk powder manufacturers add of new zealand and australia, some of the domestically listed names in china, a little bit later on given that we have this report suggesting that the one child policy will be opened up without any regulations. the kiwi dollar trading at 59.56, giving back gains we saw after a pretty poor sales report for the first quarter. the aussie dollar at 75.8 if, pushing back expectations for a rate hike for november of this year, through to the middle of next year now. at we saw that pullback with a safe haven trade, the treasuries, yen, gold all paring the gains. yen at almost 1.11.
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pretty steadyng overnight. and a reminder, kind of measured optimism across the u.s. stocks, as we get more good news, the headlines coming to another round of trade talks in beijing with the u.s. and china this week, as well is getting a boost from the oil prices in the energy sector as well. now we will get more as trading gets underway. the pimcoeard from cio about his outlook. what are we looking at? >> prepare for more volatility. pimco global economies will have to be a lot more independent and less reliance on central banks to intervene. and even a reasonable chance of a u.s. recession in the next 2-3 years, so that is dire. on the bonds and equities front, take a look at the chart on u.s.
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treasury yields. we can see that they have risen from 2.4% at the start of the year, to 3.1% this month. the message from pimco is there is bound to be a lot more volatility, but it is unlikely to go higher significantly. pimco topping out at 3.5% by the end of this year. betty: on the currency front, brandywine management predicting a further 5% drop in the u.s. dollar by the end of the year, so why? why do they think this? they gainot expect buster run to continue, is the message from brandywine, warning investors in the u.s. saying a slowdown in the rise of treasury yields will put a pause to the greenback's strength. not to a chart looking at the dollar versus the u.s. budget balance. we can see the currency tends to weaken when the budget balance
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has worsened. the dollar index has risen 6% from the february low, and for the u.s. government, a weaker dollar is not necessarily a bad thing when they are trying to revive their manufacturing sector. betty: ok, thank you so much. ruth, our rates reporter. check our library online for some of the charts you just saw, gtv on the bloomberg terminal. giveew sony ceo will details on a three-year plan to pivot away from hardware and into other areas of entertainment and videogame subscription. he took of a in april and will monitor the transition out of what was once sony's core business. to our editor, what are some of the details we might here today? -- hear today? >> today is his first public debut as ceo.
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he started on april 1. it so happens that sony is due to announce another three-year plan. really, this is his opportunity to lay out his vision plan and a strategy for sony. if you recall, the past five years under his predecessor has been all about turnaround, getting away from the hardware businesses that were not making any money in a solid footing. now the new ceo will lay out for consumers and investors. haidi: no question that they are having to look for new areas of growth. betty: that the hardware department is cycling down. thinking about playstation consoles for instance. what kind of new company are we talking about? is it playing into content or what? exactly.,
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so essentially, where will the growth come from? sony has a robust entertainment arm, with music as well. the playstation business has actually, even though it has aged, we are really supposed to be due for a new console, it has aged really well and still producing a a lot of cash. so the question is, how is sony going to essentially bring those together, create compelling content, as well as services? and really fuel growth, while managing what remains of the hardware business. and really that is where all of the margins are from. investorss what the are going to be expecting of the company. haidi: the company's hollywood division has pretty mixed track record when it comes to content, right? is inherently a
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volatile business. movie studios struggled to come up with hits every year. and sometimes against expectations, they're going to be flops. even disney, which has probably one of the best moviemaking machines on earth, produces the occasional flop. so you know, you have to really have some other kind of content service the balance that out. major state thing to note is sony will be getting into subscription type services to compete with netflix, amazon prime video, and other services that charge a monthly fee f r access to a body of content. the question is, will sony try to look at the same thing? haidi: a lot of question marks there. enter aany expected to
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tectonic shift in the global auto industry, changing the future of driving with the electrification. by 2040, 50 5% of all new cars -- 55% of all new car sales will be battery-powered and china will be in the driver seat. we have our reporter in new york for more on the findings. remy: this is exciting and if you will forgive the pun, very electrifying. i'm a huge fan of sustainability. the top headline you want to note is basically by the year 2025, several years from now, china's consumers will be buying up the lion's share of all the electric vehicles. the number, 49%. hop into the terminal, i want to show you my first of three terminals. you can find this online if you are a subscriber.
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this is broken down by region. the biggest or the loudest color is the blue. this represents china. in the year 2020, the market share for new ev sales will be 52%. compare that relative to europe, 20% in 2020. and 22% for the united states. the green is the rest of the world and it will still take a long time out to 2040 to get anything close to what china, .s. and europe are doing. china will be taking up half of the sales. only after that will is he a gradual decline. but with that said, it will hold about 28% and still on a country basis is going to be the biggest contributor to all of those new electric vehicles. there are reasons for this. rolling out new
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regulations for a new ev credit system. we are not even seeing the beginning of that because it will be heading the second half of this year. free license plates for electric vehicles in the megacities. and also the fact that lithium-ion batteries have been getting cheaper and will continue to get cheaper even more. go back into the bloomberg terminal, because i want to show you what the battery prices are for lithium-ion right now. we see in 2017, that is 209 kilowatts per hour. a kilowatt is about 1000 kilometers, for $209. in 2010, that was $1000. looking at the curve through 2030, we see this fall, $70 for going when thousand kilowatts, 1000 kilometers by the year
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2030.all of these things pushing more electric vehicles onto the road and we will see a lot more, as you said with china in the drivers seat. betty: when it comes to investments, which companies are most involved? ramy: looking at the, where the growth is really, it is coming out of china. if you pull up the bar graph i prepared, you can see that it is chinese companies that are actually the ones doing the group, $80 from vw billion from now through 2025. 5, thoseumber 3, 4, are chinese companies, all putting in $30 billion-$40 billion over the next several years. i want to call out those at the bottom. not shaming, but naming. toyota putting in a a lot of money, $10 billion.
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daimler, also $10 billion. these are commitments to electric vehicles. a lot of money, because this is where the future is. finally, looking ahead to the future, one last bloomberg terminal chart before i send it back to you. 2033 is the tipping point for electric cars. that is where the white line and blue line intersect. the white line is for internal combustion engines, the blue line rather is for internal combustion engines, the white line is for electric vehicles, and it is rising be on that. by 2040, plug-ins will make up one third of the global auto fleet. we put that in terms of a savings, that is saving 8 million barrels of oil each day. and for saudi arabia, that is actually more than they pump out, about 7 million barrels a day. you can see the savings in terms of oil, as well as the pollution
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that would be held back. betty: thank you so much. the member, bloomberg users can interact with the charts he just showed you, as well as other charts in the program, using g tv go. catch up on key analysis and save the charts for future reference. boost autoe plan to lending as wells fargo tries to move past a series of scandals. we hear from the ceo, straight ahead. this is bloomberg. ♪
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haidi: i'm haidi lun. betty: i'm betty liu. you are watching "daybreak australia". wells fargo will boost lending for auto sales as it seeks to move past controversies. in an interview, the ceo told
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bloomberg that there are markets that concern him, including housing. the bank faces important challenges. tim: we do not have one hand tied behind our backs, because when you think about the impact some of these regulatory challenges have on our business, it is not impacting most of our team members in terms of how they are interacting with our customers. having said that, we are in a competitive business. and we have always been in an .ompetitive business my exposition is that will not change. >> it is getting late in the credit cycle, was people would agree. wells fargo has over a pullback and some of the higher yield markets, like autos for example. how conservative would you say your approach is to extending credit right now? tim: i would say it has not changed a lot. i have been at the company for 30 years plus, 31 in august. i have been through a number of cycles. and i think that is one of the
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hallmarks of wells fargo's success, how we manage credit. we tend to be more conservative than many of our competitors. i think that is one of the reasons we are here, as you mentioned during the financial crisis we were not one of the banks that created the concerns that occurred in the industry. there are some markets we are concerned about, auto like you mentioned, we pull back. we have pulled back enough, now we will be growing the business again. we have thousands of people -- >> where else? tim: we are concerned about some commercial real estate activity. where the largest commercial real estate lender in the country and we love that business, but some transactions are being done today that seem a little bit, a little bit of traffic. again -- frothic. again, i am not smart enough to pick the point that the credit terrence, but you have to be -- turns, but you have to be
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consistent in how you manage credit and you have to be looking for signals. >> what are you keeping an eye on to know when the cycle has turned? is whatst and foremost is the economic health of this country. most of our business is in the u.s., so are we growing from a gdp standpoint, are we creating jobs? even in that environment, there is a lot of dislocation that is occurring because of technology and for other reasons, that can impact our customers. >> to that point, there is a lot of concern that the unit curve may invert if the fade raises -- fed raising short-term interest rates. because in the past that has led to recession. is that a concern? tim: it could invert. i do not think if inverted over the next year or so would be because there is concern of the recession, i think it has more to do with the fact that if you look around the world long-term
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rates in europe and japan in particular, are much lower than they are in the u.s. you could argue whether or not that makes sense from a return standpoint. that is what is keeping a ceiling on the longer-term rates. you see the yield curve flattening out a little bit. treasury is atar 3.1% today, what do you figure - - >> i am not smart enough to know that. >> you are managing the balance sheet with that in my bed -- in mind. tim: could i imagine us seeing a 10 year at 3.5% or 4% in the next 10 months, absolutely. we have had a significant back above 50 basis points in the last few months, and if you believe economic activity, not only in the u.s. but around the world, is going to continue to increase then you can imagine the rates getting in that range. >> as rates go higher and the
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own curve slopes more positively, it is better for the bank? tim: it can be as long as the underlying economy is performing well. so from our perspective, a positively slow yield curve and a slightly higher rates are good for the company, they are good for the industry, as well as underlying economic activity is still strong. haidi: that was our exclusive interview with tim sloan. watch bloomberg live using the interactive tv function, or you can dive into any other functions we have talked about, plus doing in on the conversation during the show. subscribers only, check it out at tv . this is bloomberg. ♪
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haidi: i'm haidi lun. betty: i'm betty liu paid you were -- betty liu. you are watching "daybreak australia". cef see has defaulted on more than three and million dollars of bonds that were due on monday. shanghai international group toward a week ago it may not be able to repay after the founder and chairman stepped down amid an investigation into financial troubles at the company. this is the fourth default in the offshore bond markets in china. haidi: ge shares gaining on their plans to merge their automotive business in a deal that is valued over $11 billion. the ceo's efforts to streamline the company, refocusing on key markets such as aviation and energy. foxbusiness reported that ge may further cut dividends. betty: amazon says it has
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reached the point of exponential growth for the sales of shoes and products in japan. online apparel sales have been climbing, even as the broader market shrinks. amazon japan has stepped up their fashion operations, opening a photo studio and hosting amazon fashion week tokyo. fori: that is just about it daybreak this morning, but up next is "daybreak asia." yvonne: yes, we are talking more about the u.s. and china. there has been a break i guess you could say protect superiority. who has the most unicorns, we've asked that question. robert hillard joining us in a couple minutes time, he has been excited about the private tech companies coming into the public markets. tencent music is one of them. and what excites investors at this stage, because you take a
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look at the performance of the tech companies in hong kong and bit ago, good doctor, china lit, they have all been well offered. they have had the initial buzz since their listing. is it a sign of exhaustion or what? betty: that is a lot of ipos committed the market, becoming a more credit market. the private banking chief investment strategist has a rasco will be joining us. yvonne: he said his first and favorite place to invest is in asia. quite bullish. inflation there is watching, that is a trend he continues to monitor very closely, as i am sure the fed officials are as well, as we have heard from neel kashkari. haidi: and we will get more analysis on the three-year plan from sony, the development plan, that outlook and where the new growth drivers will follow. -- fall. we will go to -- in singapore
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for his view. he said that the company will rely on entertainment. we are talking about a shift away from hardware as well. that is all for "daybreak australia." this is bloomberg. ♪
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>> 7:00 a.m. in hong kong. i'm yvonne man. "daybreak: asia." we are looking mixed ahead of the open. yen and gold are tumbling. the dollar is on the retreat. west texas crude climb into its highest since 2014. betty: i'm betty liu in new york, just after 7 p.m. the white house sees momentum building in talks with china this week. any plotting a new strategy, three-year move away from hardware and into more lucrative areas. ♪


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