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tv   Bloomberg Markets Asia  Bloomberg  June 10, 2018 9:00pm-12:00am EDT

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haslinda: history in the making in singapore and president trump says he would know immediately if the meeting would be a success. must balancen western investment with giving up his nuclear bargaining chip. waiting,watching and optimism in singapore. they expect a list from this week's event. haidi: and the g7 ends in disarray host canada under attack. washington says justin trudeau is dishonest and weak. this is bloomberg markets asia.
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haslinda: just a year ago, trump was talking about fire and fury, calling kim jong-un the little rocket man. now here he is in the lion city on the verge of his summit with the rocket man himself. it's been a bumpy ride to singapore, on again, off again. there has been talk of war from both sides of the planet. now great expectations, but what will come out of it? we'll know tomorrow. haidi? [no audio] here -- david: we are here in front of the capello hotel time me and that's with a summit is going to be
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held tomorrow. there are a lot of unanswered questions. we do know what both sides potentially want. what is the dynamics going to be between the two leaders? the knot states looking for tb id, complete verifiable, irreversible nuclearization. what does that mean to the north koreans? we are going to find out within 24 hours. haidi: we are all over singapore for this historic summit. period intriguing this of a few months or the leader of north korea want from a pariah to a statesman. a big week forto markets in the economy with central banks converging, as well. rishaad: absolutely. we've got that. by this time tomorrow, we should know what's going on area. -- what's going on. donald trump said he will know in the first minute so the
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pressure is on kim jong-un to shine in the first 60 seconds. big week as haidi was mentioning. ecb, bank of japan, so this economic data coming out of europe and the united states. .4%, are opening turnaround for the nikkei 25. machinery orders coming out of tokyo. helping perhaps to be a boost their for japanese stocks. not too much to get excited about at the moment. futures contract for the hans hang s-- hung saying -- eng. straight to the first word news with paul allen. is confirming it has no intention of leaving the eurozone. there has been no discussion
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about dumping the common currency and ministers will do everything possible to maintain normal relations. tolitions says it wants boost growth bite reforms and investment rather than increase spending critics would say break eu rules. switzerland rejected a plan to change the way banks lend money in what is a victory for thomas jordan who's been a critic of proposals that opponents say switzerland would be less attractive for investors. it would've ended the system allowing checking accounts to be backing assets. bitcoin fell the most in three months after calling well admitted it had been hacked. it's forces bigger than it three in. they are reviewing its systems and cryptocurrencies are now being stored in a cold wallet. it is the only content available
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on the homepage. harris tops london as the most attractive european city for investors for the first time in a decade. 37% of companies in the new report put paris at the time. london came second with arlen third. -- with berlin third. global news 24 hours a day on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. haslinda: thanks for that. the eyes it's possible are on the world for the historic summit in singapore between president trump and kim jong-un. nuclear weapons atop the agenda. president trump said if the north agrees to dismantle its
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program and kim will demand the u.s. remove its own weapons from the region. let's go across to seoul. also a director of career good to have you with us. on-again, off-again. both trumps has been and kim. from your perspective, has trump succumbed to the tactics of kim jong-un? >> well, we will see of course. but so far, it's quite clear that both sides really want to present the next meeting as a great success. it's highly unlikely we are going to see a major breakthrough. talk fromal of tough the united states, surprisingly little tough talk from north korea. it's a good idea to remember that less than one month ago, north korean officials openly
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threatened the united states with a war. and the threat was reciprocated by the u.s. president. while s not that nice and warm, but right now both sides want to have something to present as a success. there is a difference. symld trump means success, something that plays well to the domestic audience. audience is not knowledgeable about the situation. and german kim needs -- success. he needs to make sure americans will not strike north korea and will agree to relax some of the economics sanctions. doesn't care much about symbolism. that's why i'm inclined to believe at the end of the day, as has always been the case, north koreans will outsmart americans and get basically not what they want but a lot.
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professor, you say no major break through expected, but is it enough? trump says what's important is that they continue to talk in the future and this sets the scene to know each other better. is that good enough? >> from where i sit, it's very good. because nobody ever expected a major break through that is cbid , complete denuclearization to happen anytime soon. many believed it would never happen because the north korean government needs economic development and understands that the nuclear issue prevents the country from getting high-level economic growth. but they also believe denuclearization of nuclear weapons are vital for security
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and they do not compromise on security. having said that, there is indications from the white house that there is going to be a protest. it's a way to say americans are probably not going to demand the verifiableete irreversible denuclearization, to happen right now. this is good because had they been persistent, no talks would happen. but once again, it means north korea will get a very long-term time,ation trying to, in making concessions and some of the north korean concessions are likely to be quite significant and basically most welcome. but they will try to, in time, try to outwit donald trump, who will sooner or later leave his job, and basically want to keep some nuclear weapons as long as
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possible. give up if they have nuclear weapons, it's impossible to verify such claims of the new position because nobody knows how many nuclear weapons they have because the country is a nightmare for all kinds of spies. it's an ideal count for terrorism country and they have some new places to hide this stuff. the right now their tactics are to give some successions to the americans and it will be the beginning of a long negotiation, which will reduce the level of threat, which will make life better and safer, but will not deliver a kind of miracle many people sort of expect. andrei, that's getting to the issue, if you do come to a deal, how far can you trust pyongyang? how far can you trust can john
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kuhn? and given -- kim jong-un? and given the erratic nature of donald trump, can you trust him to live up to his end of the bargain? >> it's a basic assumption that both sides have reasons to mistrust one another. it's a problem. from the north korean point of view, you can see that americans just cancel the iran deal. they remember that it was only one case where a dictator agreed to surrender nuclear weapons in exchange for promised econo benefits. this dictator ended up being killed or tortured to death by a lynch mob. kadafi, was a toffee -- if you forgot. trail -- ofthe betrayal, broken promises, much longer. so no trust.
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haidi: that ties in with my next question. with talks of incredible legitimization of kim and his treasure mission into the statesman, how much logical traction is he getting from the optics of international leaders leading up to meet him? and how much pressure is he under from the powerful military to not give up a nuclear arsenal? >> i believe he himself has not the slightest intention to give up nuclear arsenal, period. military or not, he doesn't want it, nobody wants it. having said that, if by some reason he forgets kadafi or saddam or other dictators who surrendered nukes or could not develop them, even if it happens, you are right. military will stop at nothing from preventing him from
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denuclearization. but i don't think it will be necessary because he doesn't want it himself. impolite going to be and hurt my feelings of our american listeners, but sometimes it's clear that the west and especially the united states, they tend to overstate the significance of meeting with their leaders in the eyes of the world. i can assure you that for the average north korean, including any north korean, the very fact --meeting president trump it's not like a catholic meeting with the pope. it's very different. it will be a nice idea to see a confirmation that they are talking to the americans, it's not going to change attitudes. it's not as important as americans would like to believe. haidi: professor, always a pleasure. a regular visitor to the north
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who studied in pyongyang. always a full and frank discussion with the professor. stillhead, we will be speaking with an economist about the challenges facing the chinese economy. rishaad: and president trump blind-sided america's traditional allies as he looked for singapore, the growing risk that could affect the global economy. this is bloomberg. ♪
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rishaad: the scene in singapore as donald trump and kim jong-un are prepared to meet in about four hours, a little under 24 hours time if everybody keeps to time. commentators and analyst, a lot to pick over in the summit. plans,s of various game the denuclearization of north korea and the status of the north and south korea and the
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united states still being technically all on the table. , 48 was on the table before hours ago in quebec, ending in a commodity. we have the g7 -- ending in acrimony. we have the g7 ending with president trump and his aide lashing out at canada and the premise or, justin trudeau. >> there's a special place in hell for any foreign leader that engages in -- with donald j. trump and tries to step in on the way out the door. that's what present trudeau did -- premised are trudeau did in the press conference. rishaad: that's one way to look at it. donald said that we had trump threatened to boycott the summit before. is this a worse outcome than even that? what does it mean for global trade tensions? >> it underscores the risk of
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how far the the world have to go to resolve these trade tensions. it's not just u.s. and canada and mexico, but enough to u.s. tariffs and japan and u.s. and china. it all comes at a time when the economy has a slower than expected quarter and these trade tensions become a bigger risk and will linger for some time. three major banks meeting this week and we will find out what this means in terms of global growth. rishaad: it doesn't send a warm and cuddly feeling to beijing, does it? >> it does not and their parallel talks have an ongoing with the u.s. with some signs of progress in some steps backward nonetheless, china seems to be playing a cautious approach and make clear they are willing to make some offers in terms of
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resolving trade tensions. it shows you the global system itself continues to be under stress and is an uncertain period. haidi: i suppose, what does it ultimately signal to china? sense ofe a different positioning when it comes to protectionism and global trade. >> that's right. china has been taking the approach when it comes to the international economy that it something of a protector of the existing status quo of global order. clear itve also made comes to the trade table willing to negotiate a deal with the u.s.. if anything, this behavior by the u.s. might play toward china and we had a shanghai corporation. it might play towards china's role as an emerging defender of the status quo, willing to protect the global order and willing to approach and a common
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sense way. whether or not you agree is a different issue. but it plays to the role china is trying to carve out for itself. curran, certainly start contract between the two meetings. we are going to stay with china in terms of the macro economy, raising for a second straight month in may. rising 4.1% from a year earlier as the price of commodities and coal and crude increased. let's get it over to martin scott for the details. the higher commodity prices remain the driving factor. how long do they last? >> it certainly was the driver. how long it lasts depends on global commodity prices do to forecast that. what our economists are forecasting and what most economists are forecasting is the trends into the second half. we've got a higher base year of
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effects come into play. for the global economy, the tailwind of reflation coming from china, which tends to surpse on the upset for a couple of years should continue tow more calmly into the second half. 4.1% in may, up from what economists were looking for. most expecting it to come back into the threes in the second half. , will it mean a potentially rebound in policymaking? >> i think feflation in china, it's not on the pboc's radar. consumer inflation 1.8%, very containing, higher energy but lower food. that rate is nice and steady. for the whole economy, it's sandwiched tbi together and that will give the whole economy reflation. a bit of reflation in the upstream industries helps
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because that's where the debt is. if you get reflation there, there's more profits and abilities to repay the debt. that's a good thing. what we will probably see this week is the pboc keep one eye on the external environments, the fed certain to raise interest rates. china does not want a repeat of the outflow scares. they need to keep in line with that. we will probably see a tweet at the alamo, maybe 10 basis points of rates and maybe some tweaks of the mls rates and the policy a little bit higher. rishaad: thank you so much, malcolm scott. bloomberg users can interact with the chart shown. you can look at our recent charts and save them for future reference. ♪
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haidi: this is bloomberg markets: asia, i'm haidi lun in sydney.
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a quick check of the business flash headlines. china's hna group tends to make of billions of dollars by selling a stake in an airline. the state fund is part of a wider restructuring. the carrier is selling 20% of cashhares to 10 investors, to be used to buy new planes and boost staff training. u.s. insurer genworth is a step closer to being bought out by a chinese holding company. it's one approval by a security panel for a $2.7 billion buyout. the two companies agreed to use a third-party provider to help protect consumer data, a key sticking point in previous talks. they still need approval from other regulators. amazon under pressure to improve factory conditions in china, who make the echo speaker and of the kindle he reader. they released their investigation of conditions that a factory, owned by on high precision, said employees had to
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work over 100 hours of overtime in violation of chinese law and it lacked fire safety precon. counting down to markets in hong kong, rish taking a look at how it's shaping up. rishaad: it's shaping up indeed. futures comes on the way up. this is what we have in terms of movers. this company, hong kong aircraft -- weering, the pacific do have the 55% lift up. that's why pacific share prices than what we have going on with that one. people liking that deal as they try to take take over that. looking at the labor from end of economics, we will be talking about north korea. she's an expert on what is going on with the chinese economy. this is what it looks like pre-markets.
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han sang up, futures are up. coming up, discussing the north korean issues and what we have on the agenda in china, as well. that and more. this is bloomberg. ♪
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♪ >> >> live from singapore where the trump kim summit will happen tomorrow. not a.m. local time. this is the historic silent. the sitting u.s. president is meeting with a north korean leader. now, trump has expressed optimism of the great success. he decided he would know within the first minute whether or not kim would be interested in denuclearization. there's a huge gap in denuclearization. completewanting universe -- give authorization ofkorea -- denuclearization
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korea. north korea was it safety guaranteed. a lot going on. one of the biggest weekarket wise. here is david inglis. >> you have a massive auction coming out of the treasury. have a look at the open across china's markets right now. a little bit higher on the hang seng. this gets open market operations. have a look at the big movies here. we are starting up with this at the. is the largest maker of electric vehicle batteries. we are up 32%. have a look at that. the other big names will follow
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here, it is hong kong aircraft engineering. are planning to take or buy up all the shares that it doesn't already own. we should be up 55% there on that stock. here's the ticket for that one. this is the big listing we had on friday. let me just get that in for you. there with me. we are up 10% on top of the 44% we saw over on data. 10% up. you're getting crazy amount of volume in that stock. 660%. look at the shares as well. a lot of individual stories across this. trading sideways, -- rishaad: it is such a big week.
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we have the summit in singapore as well. the bank of japan says they have data as well. david: we had the ecb and the doj unexpected do -- to do anything. there is the canadian prime minister. that is part two of that tree. this is fair trading. just have a look at that. that is public information. this dollar.t you can see just a little bit about 110 at the moment. just to add about what which is pointing out. 200 billion in terms of auctions coming out of the treasury. about 68 billion.
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125 billion as well. big week. you can almost understand why investors are using their way into it. just observing some energy. look at markets for us. here's the first word news. : president trump and kim jong-un are in singapore for the summit. they fill in with heavy security. nuclear weapons are top of the agenda. president trump will resist well the north remove this weapons. the trump administration is stepping up its attack on canada. isy say that justin trudeau in hell for crossing president trump.
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president trump left the g7 with a stream of tweets attacking through the and threatening tariffs on automobiles. is a special place in hell for any for later that engages in bad faith diplomacy with president donald j. trump. then tries to step him on the back on the way out the door. that is what justin trudeau did with that first conference. paul: china has reaffirmed being a trade later. speaking at the shanghai cooperation organization, the message was in stark contrast to the disarray. -- present xikh jinping says they need to build an open economy. singaporeexchanges in -- the counsel for the national
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stock exchange -- the hearing began on saturday and will continue through this week. the nsc is trying to stop the singapore exchange from watching derivative products. global news, 24 hours a day on in and on tictoc in twitter. i am paul allen, this is bloomberg. >> we have shared pledging in china that fell through for a four month and may. even though the total of out of those are pledging stock hold earnings, this is a record high. the deleveraging drive left them on these deals. in march, new rules put limits on the amount of shares that can be pledged and accepted. 32%, reaching a higher more than $250 billion in january. rishaad: let's explore what is going on in china.
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tell us a little bit about the indebted situation and how it is fitting into how you are looking at china. >> this new development is another sign that beijing is absolutely determined in the financial sector. they are actually doing it. was thehe key areas explosion and interbank lending. if you look at what happened in 2017, they managed to cartel interbank lending. they earned this for the first time ever. they are doing the right thing but it is a very difficult task.
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is can for question here they make a policy mistake, can they tightening -- tighten the reins and cause financial distress a surf volatility? there l risk of that. >> the economy is about predictions. a lot of this has been obscured by the noise. that is something that can help them also. you are far more skeptical of what was going on by the chinese administration a few years ago. >> absolutely. what i've seen in the last finally, thers is general balancing of china's economy. since 2016, china has been driven by consumer spending. this is one of the very few areas where both chinese and western policymakers will agree on it. china's needs to see consumption
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become a structural wealth driver. it arrive in a rather unusual way. one that i wasn't expecting. the happened was that chinese authorities were able to unleash untapped spending potential in rural areas. is still of using e-commerce. intimately, to bring more efficiently, farm projects to our area. there are other structural changes as well as the cyclical support to the chinese authorities going in the direction of consumer spending. you are right. i have turned more positive just observing this -- that china is doing the right thing. point does the domestic consumption story run out of runway?
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because of demographics? because of an aging population? >> it is china's demographics that have been another extremely positive factor in all of this. we are all sold how china's demographics -- they start deteriorating significantly. i save them that point on, it will get a bit more tricky. happened is that the point labor force has allowed chinese labor to get a larger -- e of national it is on par with the wages in gdp in the u.s.. it is this acquired bargaining power by the shanking labor force that has allowed labor to .edistribute income
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stay with us, a lot more to talk about. that was we will be ing about the an economy and how it could look to benefit from any sort of potential progress in summit.ump-kim has? haslinda: north korea has been a haven of international sanction. for now, but look at the big numbers. this is in the south korean colony -- economy.
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♪ rishaad: pyongyang says measures were causing a colossal amount of damage to its people and development. china has squeezed the north's access to hard currency. is therefore the summit. >> behind is the location. a lot of the attention will be on the out this and how the two gentlemen get along. the main issue is the denuclearization of the peninsula and how far kim jong-un is wrote -- willing to commit.
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for the united states, how are they are willing to as well. allowing the release of the crippling economic sanctions, they would have to be approved by the united nations security council. but united states, china, russia power.nce all have veto says he has at least another 300 or more economic sanctions that he could those one on ones will happen with kim jong-un. again, the maximum pressure campaign is what the united states has been imposing. imposed fullates trade and financial sanctions on the north koreans in 2017. they have since exerted this maximum pressure campaign. down from says that if he is
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talking about maximum pressure again, that means those talks did not necessarily go that well. >> thank you stephen engle. should we get to the point where sanctions are used -- let's look at the possibilities. >> three economic belt liking the koreas with china and russia. that is how president moon wants transform his northern neighbor. the upgraded infrastructure could help north korea realize the value of its best minimal reserves. roughly 200 essential resources
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are estimated to be under the ground in the north. of $6er with an excess trillion. among them, gold, oil and the world's single biggest earth deposit. beforeof caution potential investors become giddy with expectation. , outdatedy shortages facilities and other infrastructure obstacles put these nuclear physician rates about 30%. high literacy rates, low wages and is a computer education from elementary school may see north korea become a new asian tiger one day. >> back with the chief economist, i'm just wondering whether the international sanctions export from china.
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was that enough to bring can to with trump? kim to the table >> yes, that is why kim is negotiating with trump. interestingly enough, it is actually china from the major political powers that stands to gain or lose the most out of what comes from the summit. rishaad: i would you get this chart at of gtd. what you'res mentioning. about 600 million or thereabouts in 2017, georgia 55. is that the key driver? >> one of the key drivers. also, the other one has been the fact that america became a lot
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more serious. the threat of u.s. military action has been more palpable than it ever has been. admittedly, china did draw the line there for its support for north korea. that korea was unilaterally attacked by the u.s., it would come to koreas rescue. u.s. is it seems the sort of fed up with the north korean tactics of the past. north korea engineered these crises, bring everyone to the table, get concessions. that trump will not be happy with this dynamic developing again during the summit.
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>> it has been interesting watching the investor reaction or lack of reaction. as a great in more acrimony between the u.s. and north korea. do think the financial markets have really good geopolitics aside as a key concern? >> for market it is very to price north korean risk. it is not easy. what has become crystal clear, after the global financial crisis, if investors want to get markets right, they have to do geopolitical analysis. it is imperative. it is not just north korea. what is going on with respect to north korea has a lot to do with the trade war and how that pans out between china and the u.s..
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>> thank you, diana. just telling us some expectations ahead of the key summit between president trump and kim jong un. youran tune -- turn into bloomberg. there is 20 more to come, this is bloomberg.
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♪ rishaad: you are back with bloomberg markets. here are the business flash headlines. --se oil and national natural gas companies are bleeding money. it is losing funds.
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this drops $150 million by the end of march. the year before that they were nearly standing at 2 billion. >> the former head of our cic i bank has been called out for the code of conduct. the sec has become involved. fm haidi:r -- fmr ci ci -- e rishaad: they were running for about 30 minutes. this is the latest move. the paper says it could affect up to a million diesels. they have declined to comment.
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>> these airlines plan to raise $1 billion by sharon sharon- raising shares from investors. they are offloading 20% of their shares to 10 investors. our report has more on this. what is this money going to be going towards. ? reallye has been this aggressive expansion. obviously, this money they will be raising will definitely help them in buying plans and probably addressing some of their expansion process and going lower. -- forward. >> how does this fit into the overall restructuring plan? hainan has been trying to
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-- all of this with all of this money they raised, it will only not help their -- not only help their expansion plan but it will help with similar assets under the umbrella. it is probably going to help them a lot in that process as well. they have been showing an interest for quite a while right now. thatus what a deal like could look like. this is majority owned by thomas act -- temasek. this acquisition will probably help them achieve some of that
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goal in going to china and into one of the fastest-growing aviation markets. this is definitely good for temasek. they always wanted to go into china. up, more on the summit taking place in singapore. ofll discuss that with brad the economic forum at the u.s. korea institute. on a week where we see the bank of japan and the federal reserve -- the european central bank is deciding on the cost of ireland. we have that on a day when we are saying some gains out there for equity markets. there we have the scene there in singapore.
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we are about 23 minutes into the trading day here. the neck is off today. today.ei is off
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>> history in the making in singapore. president trump knows -- says he knows immediately if it will be a success. is he giving up his nuclear bargaining chip? >> the stage is set for this unprecedented event. no sitting president has ever met with a north korean leader.
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>> trump and kim arrived in singapore just hours apart. air force military aast of the country. trump had said lots of us in the country are excited to be here. a lot of expectations are paving the way for big disappointment. >> we are trying to manage expectations. let's pull up what we are seeing. this is a market that is trading ahead. bank of america calls this the biggest month of the year. stocks, we were expecting a bumper tourism. iss is where president trump staying and getting that left
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when the details were announced late last week. not much of a boost from the summit so far when it comes to regional stocks. >> look at the skepticism as well. >> we have it at four times of 1% higher. 1%. is 3/10 of rishaad: this engineering company is up by 55%. they've got donald trump saying that he will no one minute into the meeting whether kim jong-un intends to do a deal. the pressure is on the north korean leader. let's get the story with the first word news. here is paul allen. paul: president trump and kim jong-un are in singapore for the
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historic summit. nuclear weapons are at the top of the agenda. president trump once north korea to dismantle its program. the trump administration is stepping up its attack on canada, same justin trudeau is hitting -- heading to hell of -- for crossing trump. president trump left of the g7 with a stream of tweets attacking justin trudeau. >> there is a special place in hell for any foreign leader that engages in bad faith the policy with president donald j. trump. and then he tries to step on in the back on the way out the door. justin what bad faith trudeau did with that stung press conference.
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jumpslesale inflation just over 4% in may. the forecast slide 3.3% year-over-year. that is almost at the blasters increase. italy has confirmed that it has no intention of leaving the eurozone. the government said that there had been no discussion about the current currency. ministers will do everything possible to obtain normal relations. global news, 24 hours a day, on air and on tictoc on twitter. powered by more than 120 journalists in more than 70 countries.
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>> this is of the most that it can be. thisworld's biggest maker of electric vehicle batteries. they were betting on rising demands, it makes batteries for the likes of volkswagen. this is due to declining margins. clearly, not impacting demand there. is the really sentiment of the week. we will take a look ahead to tuesday's summit between president trump and the north korean leader kim jong-un. the markets are all bracing for policy decisions from the three major -- major central banks.
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let's talk about this summit first. it is very hard as we spoke with our last guest. is there anything i could be on the spectrum of results? what is at play here? >> we have debated. a lot of people were wondering what the macro message is from summit. we cannot come up with one. there was no big macro message. maybe at the outset you might say that some south korean companies would benefit from a warming between the south and the north construction companies, real companies in south korea. let's call this an outside chance or thinking outside of the possibilities. there is some speculation that if the summit go south, if things don't work out well,
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maybe along the lines of the g7. if things don't work out well, the yen could benefit as a safe haven. rishaad: let's have a look at what is going on all throughout geopolitics. they are dominating headlines. then we move on to central banks. it is back onto the monetary policy. >> regarding the dollar, you are writing about the dollar. in my view, the message from the g7 is just a big model. i did note there was a message. in that case, in my view, the dollar would be the beneficiary. the u.s. as the world's biggest economy. the dollar has some senator hoeven value. there is just all kinds of unknown trade tensions going on. i think that would benefit the dollar. we have the fed meeting coming up.
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they will probably raise interest rates. just looking into the inflation gauges and these different countries, we have the bank of england. it is coming down to 2.4% inflation. the yen is being dictated by little or no inflation. it is a different sort of data of all of these different there as here area is real sign that inflation is coming back in any major sense? as far as the u.s. goes, that is a big want to talk about. the fed meeting is just upon us. inflation is the fed target. i think there was a big clue to this.
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after some years of falling below target, it is too early to declare a job done on inflation. i think that it is a similar case for all of these economies. they may progress on inflation. they did not quite enough. that is something, the fed will raise interest rates this week. there are some people raising concerns, the policy is already moving away from accommodative toward neutral. maybe soon toward tightening. that will keep inflation in check. rishaad: follow our markets live blog. you can get commentary and analysis from bloomberg.
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you can find a what is affecting your money by now. we have foreign markets, very much in the frame, we will have more on what these three big central banks will make of what is going on. we have been talking about it. >> next, we will get more on what the truck him summit hopes to achieve from an economic perspective. we will be speaking to brad. this is bloomberg.
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>> the stage is very much set for this historic summit between donald trump and kim jong-un. optimists are imagining the opportunities that might open up. let's take a look at how north korea could plug into the regional economy. three economic belts linking the koreas with china and russia. developing and improving roads and railways is the plan with one. along the east coast, another to the west and a third in the middle of the mental. koreaould help north realize the value of its vast mineral reserves.
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these resources are estimated to north,rground in the worth in excess of $6 trillion. among them, and gold, oil and the world's single biggest rare earth deposit. biggest rare earth deposit. but it word of caution for potential investors before they become giddy with expectation. electricity shortages, outdated facilities and other infrastructure obstacles put these rate at below 30%. the labor force is a bright spot, high literacy rates, low education sourcesmputeducation could see north three become another asian tiger one day. spotlightre is in the with the historic summit between president trump and kim jong-un.
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let's bring in bradley. this is a member of the national the aim is to reduce tensions and promote peace on the korean peasants -- korean peninsula. nothing minimal came out of this . north korea is not just about economics. bradley: they are very interested in their own survival as an independent nation. >> which should the compromises be on both sides? >> what north korea is looking for is a new relationship with the united states. they're looking for a reduction in the hostility of the american relationship with north korea. the united states is looking for reductionrization and
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of north korea, not only for the united states but other countries in the region. this could be a form of encouragement for north korea. to what extent do think the u.s. is preparet in the early stages of these conversations? >> i am nore how much american it is going to be a major factor. i think a reduction in sanctions and the opening up of a deeper relationship with north korea's economy, not only with south korea but also with japan and russia, in addition to rebuilding their relationship with china is north korea's economic future. much less so how the united states plays into that. we were speaking to a guest early on. that kim himself this have any interest or
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intentions of giving up his nuclear arsenal. even if he did, the powerful military and armed forces would prevent them from doing so. do you think that is the cas how much sincerity and good faith do we have going into the summit? >> there are a lot of skeptics about whether or three would give up their nuclear capabilities. i personally believ that kim jong-un is looking toward the future and not the past. he knows he has to make a strategic shift in order to obtain economic development that for his is important future and leadership in the country. not just a military prowess. if you can find an alternative formula for security, i think you may be tempted to make that choice. rishaad: ultimately, what do we actually expect out of the
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summit at the end of that? expectations for what transpires? >> i think both kim and trump are looking for some takeaways that give them the feeling that aey have established different foundation for a relationship. it is sincerity in their relationship. that is the most critical outcome of the summit. as far as the clarity and the objectives and timetable, but everybody means by denuclearization, my expectation is that there will be some statements that are meaningful in terms of the way forward but probably not as detailed as many people would hope. rishaad: we just got some headlines crossing the bloomberg terminal. this concerns what is going on right now.
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if a bridge was built, it would allow north korea huge opportunities. this could go back to the old way of doing things when they were desperate and had a lot of money come in. suddenly find ourselves back at square one. i would in new territory? >> i think we are in new territory. would be a multilaterally funded fund. that would be a very good outcome. other countries would be committed to the process, not just the united states. also, north korea could pursue its own objectives in a more neutral way. rather than just working with a variety of independent and economic relationships. i think that is a potentially very interesting idea.
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they don't produce a thousand payments or national statistics. any kind of future economic relationship with north korea inl have to be grounded their willingness to provide statistics about what their economy actually is. they don't have that right now. is there something unpalatable about incentivizing a country that has such an of abhorrent human rights record? do you think human rights will be addressed? they can be addressed. not necessarily all through the same framework. there are multiple frameworks to deal with, different collections of engagement. i think it would be more productive than trying to throw everything into one pot.
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think north korea is going to be responsive on human rights. it wasn't that long ago that south korea wasn't very good on human rights. we tend to forget that. i think there is a positive future on human rights as long as the political and economic agenda moves forward. >> thank you for joining us. this was the consultant on asian affairs. he spent there -- nearly three decades with the world bank. is tumblinghe coin and taking other cryptocurrencies down with it. we will have a look at what caused this latest selloff. this is bloomberg.
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>> i will only send it -- sign a deal that is good for canada. i know that nafta is a bad deal. we have made that very clear with the president. ♪ >> what a week for investors to contend. bank of america calling this the most important week of the new year. geopolitics are on the agenda.
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the city state prepares to welcome these two leaders for a historic visit. on tap is three of the world's a lot for investors to contend with. let's get you the latest business flash headlines. intimate over a billion dollars. they will offer shares to investors including singapore state affairs. selling 10% of its shares to investors. that cash will go toward plans and staff training. rishaad: they were closer to being bought by a chinese holding company. a $2.7 billion buyout by china oceanwide. the two companies offering to which was aparty
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sticking point in previous discussions. amazon is under pressure to improve factory conditions for workers in china. the china led watch has increased investigations in the factory. it says employees have had to wait more than 100 hours of monthly overtime in violation of chinese law. rishaad: $6,785 for one of them. cornell says there had been a cyber intrusion. some of his digital currency appears to have been stolen by hackers, it doesn't put value on the surface from -- for more of our asian assets.
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tell the what is going on at coin of the moment. >> not surprisingly, the details are being mum about what exactly is happening. they have confirmed that there intrusion cyber which, some i call that a hack. they haven't given us exactly what that means. they have said that at the moment, they have semi-percent of their cryptocurrency holdings the addresseshat or the data around the cryptocurrency holding in the exchange of being held in a computer that stopped the service. this will give the hackers from getting into them again. the other 30% or so, they are saying that the cryptocurrencies that were affected -- of that, two thirds were frozen or recovered. there is 10% left that is stolen. the zacks value of that, we don't know.
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>> this is a serious security issue. >> there is a lot of previous going on here. >> this is not the first time a korean exchange has been hacked. we had a couple of other korean exchanges have that happen. this is not the first one. >> aside from the crypto's themselves, were some of the biggest losers? >> we saw some crypto related stocks moving in south korean japan. there were a couple companies in south korea with it states that were down. we have seen a couple of stocks move in japan as well. >> thank you so much for that. let's take a look at japanese markets as they head up to the
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lunch break. we see a lack of conviction buy around this as we wait for this key summit. is one of the modest scanners. it is up 3/10 of 1%. this is bloomberg.
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♪ >> 10:29 in singapore, i'm haslinda amin, coming to you live from the lion city, were we are bracing for the historic summit at 9:00 a.m. local time. first, the first word news with paul allen in sydney. >> thanks, has. china has reaffirmed its claim to be a free trade leader, criticizing what president xi jingping called selfish, shortsighted policy. his message was in stark contrast to the disarray of the g-7 summit in quebec. xi said the world must maintain the rules of the wto, told multilateral trade, and build an open, global economy. switzerland has rejected a plan
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to change the way banks lend money, seen as a victory for the central bank lender. he has been a critic of the proposals that critics say would make switzerland less attractive for investors. and requireed -- o checking accounts to be backed by assets with a direct claim. singapore and india have begun proceedings to settle a dispute over derivatives that threatened their mining relationship. the national stock exchange says the hearings began saturday and will continue through the week. froms trying to stop sgx launching products that could replace their contracts. london is the most attractive european city for investors for the first time in a decade as worries about brexit implement opinion. a new report put paris at the top for direct investment. london came second.
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they pointed to the looming split with europe and the election of president macron. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. allen.l this is bloomberg. ♪ we will be concentrating on what's happening with this summit in singapore. the weakly dominated by central banks, as they make in politics decisions. they are expected to raise rates for a second time this year and it's really about this measure of inflation. the green line is the target, very much near it in the fed wants to stay above it but makes sure it is sustainable. the central bank is holding its first formal discussion on ending bond
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purchases. their target is 1.9 and percent -- 1.99% of inflation. let's not forget, with its own inflation target, way off, there's no change expected from the bank of japan. --s a question of how close we have a look at not just the economy, but where we are with that bond buying program. that may well be tweaked. we will look at that more at the letter ended the week, haidi. investors, key for the singapore summit. they will set the stage. let's bring out our policy under. assuming a hike is a done deal, what's actually going to move the market? >> the fed's dot plot, hiking
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three times in 2018 or four, that's the question. every three months, every other meeting, the federal reserve updates its summary of economic projection, and that is where we get each individual forecast. bloomberg.ok in the what you are going to see is that on the far left hand corner, those are evenly divided. -- seebers c three, three, six see four. bloomberg economics thinks the even split will remain. they don't see any more of the centrist members looking for three hikes ready to change their forecast just yet. >> returning to the ecb,
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eurozone inflation has reached its target. are we expecting a conversation, at least, two and qe? -- to end qe? >> that was the story we broke last week. the chief economist of the ecb a couple days later -- the ecb hawks are the issue, the markets on purchases by the end of the year and they want a public announcement this meeting , but mario draghi who was more cautious, maybe inflation won't stay near that target, he is expected to signal that it has been discussed. this, a storm in an espresso cup. the euro breakup index is nowhere near the highs we saw during the greek financial
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crisis. it will probably have a lot to do with mario draghi wanting to take more time. >> thank you very much. kathleen hays in new york. joining us, credit agricole strategist. for a huge week, isn't it, ?he central banks there a list of goods that could face tariffs. the banks willn, be in the highlight. there's a risk we think there could be a dovish hike from the fed, in the ecb has already discussed -- you could see
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indications they will end qe. we think that's good news for the euro-dollar. >> but even as we see the dollar stronger, will that continue? a lot have been been used by how long it has been stronger for. >> the interesting thing about the dollar is that, previously, earlier in the year, the flattening in the u.s. treasury curve rate the fed. was thatning for that the dollar was beginning to wane in terms of its reserve status. donald trump was attacking the very institutions. free trade, independent said, things that make the dollar a good reserve currency. we think this week, with the trade tensions, the fed undertaking the dovish hike and it could lose ground against the majors. -- alsoll oh current
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smaller currencies. >> you are not talking about the fundamentals of the dollar, not having changed since we started seeing its recovery rally, rate? -- right? >> we did see every couple with u.s. rates. that kicks off with higher oil prices, higher inflation expectations. i think part of the key thing about the said this week will be reading how much further they will hike rates. we expect the plots to be raised this week, for rate hikes in total this year and three next year. that takes the fed funds rate above what we see and the fed sees as neutral next year. the market will have to start to think what that means for the u.s. economy long-term. are we going to see the classic boom bust cycle, when donald trump first entered the white house? >> david, i want to throughout this quick chart, mostly missing
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the inflation target. it is always evergreen when it comes to japan, clearly nowhere near that target. i want to ask about the ecb and the euro because we are exiting that conversation to begin this week. given that wey, have just gotten past the volatility spurred by italy? >> that's a very good question. the ecb actually reduce its purchases. the ecb is not going to support governments. if italyof politics, started getting in trouble, the main concern was in order for the populistep in government would have to sign up
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for a bailout program. we think that is more in the cards, and for that reason we think the ecb will not be deterred from raisin reducing its asset purchases. so that will push bond yields ander in the euro area particularly when investors will be looking to reallocate resources out of the dollar, they are going to be looking at positive yields in the european bond market and that will make euro more attractive. >> that is a huge reversal and it really did squeeze out the short position how does that affect things? >> it takes into account peripheral bond markets, and last week it even took into -- euro is still looking
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undervalued. ist of the reason for that that we have seen decent inflation data. reasonse some temporary such as bad weather in germany and a flu outbreak so we expect the european economy -- in thewe get any change pattern of the bond buying program? >> we think we will get some reduction this week, but i would like to emphasize, japan is targeting the cost of money, not the quantity of money advised. this is a natural process moving away from the previous quantitative credit easing and leaning toward yield curve control. >> ok. david forrester from credit agricole. there we have it. haslinda? we will talk more about trump
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and the much-anticipated summit later, but first, let's look at the big numbers behind north and south korea's military line. ♪
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♪ >> we are back. this is "bloomberg markets," looking at the business flash headlines. india's oil natural gas
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company bleeding money over the past year. it was ordered to by the administration's stake in had to pay a record dividend to boot. their reserves are dropping to $150 millit the end of march. a year ago it was nearly $2 billion. >> the former head of -- bank is facing an investigation in america. he was caught in a whistleblower complaint about the code of conduct and potential conflict of interest. u.s.,nk is listed in the and they say they retain complete confidence but she eventually stepped down. >> the german auto regulators reported they found illegal software in daimler diesel engines, saying the motor switch to a higher mode after running for 30 minutes. the paper says it could affect
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up to one million vehicles. daimler declined to comment. tighter regulations in china, as well as spreading emerging-market concerns have forced asia's bond bankers to dial back sales projectio the year. let's take a look at this at the credit report. carrie, what has changed for the market? >> well, a lot of the sectors that will have an influence on the dynamics have changed this year. and theng dollar yields general culture of the emerging markets. but one key sector that has changed is china, the chinese buying power, which is it essential to support the emerging dollar issues. so there are two reasons why they have in weekend. deleveragingg campaign and the breakdown of
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the shadow banking. a lot of money has gone back to the balance sheet and the positions widening. the other reason is the offshore public money to buyin more because of the risingyielde market. it's not helping to recover sentiment in the market. in terms of the hit issuance, what are we talking about? >> so according to bloomberg surveys, 16 out of 26 bankers and analysts we surveyed are forecasting a $16 billion to $24 billion buyout this month. it brings the first half of billion, so we
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have citibank seeing at least 5% to 10% issuance down for the third quarter, and we have others -- it doesn't look very optimistic of the issuance. need of these chinese companies, what does that suggest about issuance, and how far it is likely to fall behind? still have a lot of chinese companies refinancing needs, especially for the higher property sector. leman,ording to do they will be more flexible and adaptable. >> you're talking about adapting to these new conditions. >> right. so they will probably face a shorter issuance, and face more intraday volatilities. maybe they will have an impact
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on nations in the future. >> i get your point. thank you. carrie hong there with a look at some changes taking place in regulation. i want to show you a feature on the bloomberg terminal. it's tv . you can watch live and get a look at interviews. you can have a look at the securities and bloomberg functions, or be a part of the conversation by sending us instant messages. this is for bloomberg subscribers only. bloomberg and that is singapore. ♪
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♪ >> battle of the charts. stephen and haidi putting their best against one another, and viewers can access their charts on the bloomberg terminal, right at the bottom of your screen. let's have a look at what's going on. haidi is up first with her offering. offering, optimistic given that we had so much skepticism going into the summit. will they get an agreement, or
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is this a relationship building goodwill type first meeting that begins? i want to take a look at this chart. if we do have the removal of sanctions, if we have the potential opening of the north korean economy, trade and investment, this is what the future could continue to look like in south korea. construction, utilities, steelmakers. they are considered fairly mature in south korea with not great prospects for growth looking forward. but you can see them really fly when we have this relationship holding with the u.s. and the meetings between north and south. that really came after the second meeting with the south, when moon jae-in admitted that they desperately need overhaul. you can see this corresponding gain i that, in the hypothetical world, would look to gain from a better relationship.
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>> i like that idea, having a look at this peace dividend. but is it already in the price? i like the fact that it is liftless. david is looking listless, we will get to him now. he'll sell this next chart for us. >> this>> is a broader look at the economy is and how they stack up head-to-head. what i have done for this chart is put the north korean situation in the context of south korea. in other words, the size of the north korean economy, gdp per capita, it's inconsistent. potentially south korea back into 1977 or 1978, which roughly translates to just over $1000 usd. for the north to get to where
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south korea is today, it would need to grow, on average, at abo ut its .5% over the next 40 years. obviously, when it does get to that point, i imagine south korea would be bigger, as well. it's a long road ahead. and we should also mention that there's not a lot of data on the north korean track. the last time north korea released an official gdp was back in 1965, which also happened to be the year that singapore got its independence from malaysia. it comes. go. -- it comes full circle. now what did you think of his chart, haidi? >> [laughter] i feel like you are trying to stir some acrimony. look, i think it's a lovely
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chart, but it is clearly based on possibly dodgy data. even the cia questions north korea's growth numbers. i don't know. it feels unreliable. >> ok, let's have david's criticism of what haidi has. >> it was ok. [laughter] i'm actually going to give it to david. economythe north korean will have to grow at speeds -- inconceivable, it will probably never catch up with the south for a hundred years or something. but we can also use the example of what happened in germany, with the east and west getting together. >> i think that was about $2 trillion. >> right. thank you very much, you guys.
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you can find the charts we have been using at tv . terminal.owse on the we have some of the analysis, and you can save the charts for a future date. well, david is coming up next, as well as haslinda at the summit venue. not far away from the summit. and we have the rest of the big data. busy, busy day ahead. the summit coming up in less than 24 hours. we heard from the finance industry official of south korea suggesting now that it should be billed between the now fans have, -- the north and south, the optimism surrounding the historic summit, happening for the first time ever between a sitting u.s. president and a
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north korean leader. summit be taking on that thers,wo professors and o talking about the impact of the markets. what's more to come. it's historic. many people are asking why singapore. well, it's an unusual country when it comes to foreign policy. singapore hosting thic mmit. this is bloomberg. ♪
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♪ >> it is 11:00 a.m. in singapore. less than 24 hours away from the historic summit between u.s. president donald trump and north korean leader kim jong-il and. -- kim jong-un. trump says he will know the outcome within the first two seconds. for kim, the challenges balancing. we'll have all the breaking news and analysis on this historic development. i'm haslinda on the in singapore. >> i'm david ingles in hong kong. you are watching "bloomberg markets: asia." the top stories we are watching. ♪
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>> history in the making here in the lion city. president trump says he will know immediately if the meeting will be a success. must balance the potential of western investment with giving up his nuclear arsenal. >> elsewhere, investors assessing the acrimonious g7 summit over the weekend. washington is threatened paris on imported cars. the bank of america says it's the most important meeting of the year. all the central bank decisions ahead,. and on top of that, a lot of debt coming into the market, a
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lot of u.s. treasuries. have a look at asia. this is how we are looking across the benchmarks at the moment. you put everything together in the asia-pacific, data coming out of china, looking ahead to trade and retail sales. have a look at the bond space, potentially pushing higher in tn u.s. treasury's. -- u.s. treasuries. we are on hold given the fact that we have very important central-bank decisions. it's really the updated forecast that they have. the ecb, will they come up with the timing, when they plan to stop by, not expected to do anything, but it is a comment on the doj. let's flip this around and have a look at where we are in the other majors. 2.5%, dollar looming on the back of this
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fair from president trump, trade is not really fair trade with canada. dollar-yen pushing a little weher, which indicates that must get back into the market. we are looking at this chart which tracks for you the mood across south korean assets. equity, this the is a level below. credit,at south korean the price of south korea debt trading will below your multiyear average and you can -- youels of this kind are also looking at the below average on the index. we are expecting this to move forward but if we don't get what
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we want it does show significant risk to the outside. lots of people watching over the course of the next 24 hours, and as we push ahead into later this week. here's paul allen with your first word news. >> thanks, david. the trump administration is stepping up to take on canada, saying justin trudeau is "heading to hell" for crossing president trump. white house trade advisers said the deal could have been agreed by now is canada had spent less time lobbying congress. president trump left the g7 a tracking trudeau. >> there's a special place in hell for any foreign leader that engages in that faith diplomacy with president donald j. trump and then tries to stab him in the back on the way out the door. that is what bad faith justin trudeau did with that stunt press conference. its china has reaffirmed
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claim to be a free-trade leade . called sshortsighted policy. 's message was in stark contrast to the disarray of the g7's on the in quebec. xi says they must maintain the rules of the wto and build an open, global economy. italy has confirmed it has no intention of leaving the eurozone. says thereernment has been no discussion about the common currency and it will be impossible to maintain normal relations. the coalition says it wants to boost growth by structural reform and investment rather than increased spending the critics said would break eu rules. inflation accelerated more than expected last month, driven by higher prices for crude oil in the middle. may and is% in
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forecast to slide to 3.3% overall this year, almost half of last year. china's consumer price index also climbed nearly 2% last month. global news, 24 hoa day, powered by over 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ♪ paul, thank you. now want to our top story, the historic summit between trump and kim jong-un. it is paul, thank you. now want to our top unprecedento sitting american presidentever . our correspondent is on location. set the scene for us. what can we expect today? >> is this the calm before the storm? that has been an absolutely beautiful day down at the beach, and on the mountain behind me,
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the capello hotel is where the summit will be held where the leaders will meet face-to-face and after that it is anyone's guess what is going to happen. when kim jong-un that moon jae-in a couple months ago, he called it a warm spring. and they were all hugging. they met again and were quite chummy. what is going to be the dynamic between kim jong-un and donald trump? we simply don't know. we are getting a few headlines from other media, particularly south korea. kbs is reporting that the north koreans are demanding that the united states set up a liaison perhapsn north korea. it is a request or demand but that would be a very interesting development, considering the united states and north korea do not have diplomatic relations. it would be an interesting step. we are also hearing that the south koreans are considering a similar step, having a liaison
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office in pyongyang. so where do we go from here? right now, the u.s. ambassador to the philippines and a key negotiator for donald trump with the north koreans, is at this hour meeting with the north korean delegation to get ducks in a row before the talks tomorrow, and the north koreans, we don't know much about their movement. there has been no stated agenda, state have heard from the broadcaster or news organization of pyongyang is that his sister is also here. she was of course the starlet the pyeongchang olympics diplomatically, and it has been a very interesting move the last few days coming out of pyongyang, with kim jong on relieving of duty three top generals. engagee a move to really
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with the west and take a different, less hard-line approach? we will find out within 24 hours when they meet ace to face with donald trump. denuclearization is key to the summit, but north korea's nuclear arsenal remains a mystery. what do we know, and how do you even begin negotiating when it is so unclear? absolutely, they have different definitions of what denuclearization is. kim jong-un has said at the meeting with moon jae-in at the dmz that he supports complete denuclearization, but what does that mean? he has not mentioned how many warheads he has or how many missiles he has, and what would constitute a denuclearization. he has not given a timetable either. theid a show of dismantling test site up in the northeast
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but most analysts say that was pretty much already complete, rendered useless. what concrete steps can kim jong-un deliver, to say that they are on a path to denuclearization? we heard again from the secretary of state, mike pompeo, in a tweet this morning, saying they want cbiz, complete, verifiable, irreversible disarmament. we have to see. >> yeah. not sure we can a cop was all of that over the next 24 hours. stephen engle, live for us where that historic summit is scheduled to take place. let's talk geopolitics. the chairman and ceo of capital international is with us. great to see you. if someone had told me a few months ago that donald trump would be turning his back on the
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canadian prime minister in would be about to hug the north korean leader, and call that person crazy. >> i will not use the same word on tv, but if you look at the last couple days, this makes for perfect tv. much of the a lose things have played out in's trump took office. leading into a multilateral decision-making weekend, something trump stands against. it is not very surprising that there is drama. neither you nor i were in the room, so we don't know what happened between trump and trudeau, but it doesn't seem like the plan has legs. but if you think about how trump wants to go into this -- this is one of the biggest events that is ever going to happen. he's going to go in with his chest out, and he has this perfect stage of g7 into it, standing against the crowd,
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finds a consensus, has this ability to step up, look for some leverage and come into this historical battle. it seems pretty well scripted. when it comes to geopolitics, the market seems to have factored that in. reaction so far has been muted, it doesn't matter where it goes. is that a fair assumption? >> when you talk about pricing things and, there is normally muted price to the upside and always potential for the downside. i would say the real fear is that you get a nasty headline tonight or tomorrow going into the meeting, and says navarro is pushing for a libyan type plan which is a no go for the north koreans. we must be careful how we talk about being priced in because there's always a very negative
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downside to people thinking they understand. the markets don't like uncertainty. trump is the modern-day uncertainty in any market so who knows where he goes from here? i think he's sitting on an historic moment that he seems to and seems to be willing to give something up to give something and that is him playing the reunification type trade and making a major event for the first year and a half. >> and he is gearing up for the midterms, should we look at it through that prism? >> absolutely. he actually has an interest in clay to it because there is no doubt that xi played a vital role in getting this summit to happen, in getting the two sides to put on the table what they wanted. with trump still jawboning
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about trade, xi doesn't get to be the guy that got the victory. i think there's a little bit of uncertainty with how this plays out and what the real takeaway is, that this is exactly what ,he midterm elections are for he's a hardliner on all these issues, he is not giving up and everyone will have to deal with it and that doesn't play out internationally. but domestically, that is what he wants, and it is a huge boost for him. >> should we look at this completely divorced of the economic reality? can they also say -- >> i think right now there is one play, and that play is the uncertainty of trump and his cabinets geopolitical future. what we have seen is that it has pushed huge volatility into the asset class.
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we were sitting here three or four weeks ago about 10 year yields and two weeks later it is to 75. much money can continue to go into that when it is so volatile? that is what keeps money in the equity market barring some massive negative headline from and continues to allow valuations to be pushed up higher in the equity market because i don't think there's another play right now and i think the ecb is in a tough position because they need to stop the asset purchase. consensus that doesn't want to support the italian bonds which has been a large part of it and now you will have to pull back harder from the asset purchase to appease the consensus at a time when things are slowing down. i would say that pushes equity capital into the u.s. and china.
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>> he will be coming back on the show. more on tomorrow's historic summit. our guest tells us what he thinks. >> and days later, we look at inflation and industrial production figures, that is all coming up. this is bloomberg. ♪
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♪ >> welcome back. you are watching "bloomberg markets: asia." i'm david ingles. >> and i'm haslinda amin in the lion city. back to our top story, the summit in singapore.all sides
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are watching closely , none more than south korean president moon. let's look at the events with the associate professor at the graduate school of international studies. good to have you with us. moon has been really aggressive in getting these together. >> yes. president moon doesn't get the attention that donald trump or kim jong-un have but he has been a catalyst in this process. the moon government was doing a lot to make this happen and then it came out with the olympics, that was the beginnihat opened up the space and the president has always been committed. puppetmastersecret but his role is very crucial. for him to carry on the peace process, should the summit fall through? >> i don't know.
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if this. , they will have to go back to the drawing board and it is premature. there would be some very serious rethinking of how to move ahead but they are hopeful that will not happen. they talked about the official signing for the end of the korean war, that is beneficial for both sides. right. and is is a discussion that is more advanced because south koreans are thinking about how to end this war and there is a whole rich discussion that gets pretty detailed about a peace declaration about a peace treaty that would be official and go through a legislative body that the u.s. senate would have to ratify and they talk about a peace regime to replace the current armistice regime and that involves a lot,
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the status of u.s. forces, and of course the north koreans. the discussion is pretty detailed and pretty far along in the question is making it happen. they need a positive development to move that forward. there's a huge gap in the definition of denuclearization. the u.s. wanting a complete, your reversible dismantling of north korea's nuclear capabilities. unrealisticretty but some have suggested that complete denuclearization would take 10 years. from one ofa study the nuclear experts in the united states who says we are looking at a 15 year timeline to know where everything is in verifiable he dismantle it. you use words like your reversible -- nothing is your
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reversible. north korea cannot be irreversibly denuclearize in the sense that t done it, they have the ability. couldkorea, japan, taiwan be powers in nuclear -- in a few years. the best case scenario is new north korea could be in that territory. we have to be careful getting --g up on these acronyms there are some common sense principles of what it means to have an icbm and to be testing it and to have an arsenal of whatever size versus getting rid of this stuff. there needs to be a more pragmatic approach to this going forward. >> what would you be satisfied with from this summit? >> it is hard to say.
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we just saw donald trump coming out of a very strange g7 in canada and one pattern i think we see is they will have an ok meeting in person and then he tweets and it all seems to unravel or and and acrimony. -- or end in acrimony. the two leaders can size each other up and there could be a statement of principle that comes out of it, something pretty big that they are committed to doing in the next couple weeks. but we will have to wait and see because he could have a good day in singapore and then it starts to unravel. it is not just north korea, it's a pattern in the relationship haveany of us t who watched the pattern are worried it could be a breakthrough or a repetition. >> thank you so much.
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from theiate professor graduate school of international studies. watching very closely the summit tomorrow. >> absolutely, this time tomorrow. if you are a client you can catch up on the interviews you may have missed. positions, you can scroll back on all of those things and you can join the conversation and send us messages here on our show. we will get you those questions. check that out. this is bloomberg. ♪
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♪ >> a quick check of your business flash headlines. -- being bought by a chinese holding company. it has won approval for a $2.7
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billion buyout. the two companies have agreed to use a third-party provider to check consumer data, which was a sticking point. we still need to win the vote from the other regulators. -- making moreok than $1 billion by selling a stake. they will be offering shares to investors as part of this wider restructuring effort. they are selling about 5% to 10 investors, which will be used to buy new planes and boots. we are going into the lunch break on the chinese mainland. we will look at the picture, down for the third straight session. we are a little higher. let's have a look at the big heres, a lot to talk about
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, let's start off with a big ipo , the world's biggest maker of electric vehicles. more coming up, this is bloomberg. ♪
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♪ welcome back to "bloomberg markets: asia." we are counting down to the historic summit between donald trump and north korean leader kim jong-un. for now, let's get to paul allen with the first word news in sydney. >> thanks. london is theed most attractive european city for the first time in a decade as worries about brexit begin to influence opinion. 37% of companies in a new report say paris is at the top, london in second. respondents pointed to the
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looming split with europe and the election of president macron. in threeell the most months after the south korean crypto exchange admitted it had been hacked. , fourat is the losses times bigger than ethereal. they say they are reviewing their systems and cryptocurrencies being stored in a cold wallet. president trump and kim jong-un are in singapore for their historic summit. they flew in among heavy security at the capello hotel. nuclear weapons are at the top of the agenda and president trump will insist that the north dismantles its program, while camera wh -- well kim demands removing their weapons. -- changing the way banks lend money while seeing it as a victory for thomas jordan, who has been a prominent critic.
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load --on would have a what have required checking accounts to be backed by assets. the stock exchanges of singapore and india have the gun proceedings to settle a dispute on derivatives that threaten their long-running relationship. council for the national stock exchange says the hearings began saturday and will continue through the week. trying to stop the singapore exchange from launching derivative products. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ♪ >> and of course, we are all over the world for that historic summit. a quick recap of your markets as we speak. just in case you missed it, ppi is out.
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you can have a look at the 4.1% on theart, world's most important macro leading indicator. texture to affect the of data that comes out. and what is the first quarter? we will see. this is a good chart to follow. let's have a look -- markets right now, gmm is the function. we are looking at more momentum as we speak. in the greater scheme, we are toing off the best week write after the fellow we saw in february. a big week for central banks,
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you have a lot of supply also coming online the next the eight hours from the u.s. treasury and we will see if they do demand higher yields. a lot of that is shorter-term debt, pushing a little higher ahead of the fed, which for all intents and purposes guaranteed to move. let's have a look at this other chart, obviously the conversation is a longer-term story, how much behind that when you compare it to its neighbor? we should caveat that the estimates from the north korean economy are guesstimates at best. you have a look at what we have so far, and it does seem people are putting the gdp per capita u.s. up. if you look at this chart, that
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was back in the late 1970's. we can extrapolate from what has happened from that time to where it is right now. that is already a tall order. then you have to imagine three years would be much bigger. for thege is set historic summit between president trump and kim jong-un. we have talked about this already, and we are already imagining the opportunities it and we are already imagining the opportunities it could open up just in case the sanctions are used. here's a look at how north korea can plug in. ♪ >> three economic belts licking the korea with china and russia. that is how president moon wants to transform his northern neighbor, developing and improving roads and railways is the plan, with one belt along the east coast, another to the west, and the third in the middle of the peninsula. the upgraded infrastructure could help north korea realize
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the value of its vast mineral reserves. 200 of central resources are estimated to be under the ground of the north, together worth in excess of $6 trillion. among them, gold, foil, and possibly the world's biggest big rare earth deposit. but a word of caution before potential investors become giddy pmg says electricity shortages, outdated facilities, and other infrastructure obstacles put utilization rate at below 30%. still, the labor force is a bright spot. high literacy rates, no wages, and basic computer education from elementary school may see north korea become a new asia tiger one day. it is difficult to quantify the impact of sanctions on north is said thath it
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they were causing an "colossal amount of damage." has increased the access to currency -- let's get to our chief north asian correspondent. we know there is very little known about north korea's economy, but we talked about china's role, 90% of x boards to north korea. 60% of those exports have been kept. do we know the impact on the economy? absolutely, the north korean economy is burning through a little reserves they have. they probably burn through them to discuss what was likely his request that eight use the sanctions. that will leave the un security
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council breaking on those sections. there are five countries do have veto power if donald trump somehow -- if the u.s. embargo they placed on trade and finances to north korea -- but you are right. guest said if talks iffail tomorrow, negotiations and talks do not go well, the united states has about 300 more economic sanctions that they could impose and are ready to impose. they can also go after the forese banks if they will various violations that the united states could find in helping alleviate some of the hardship on the economy. numbers on the
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state of the north korean economy even before the latest round of u.n. sanctions. gross national income per capita, the difference between south korea and north korea is staggering. per capita, it is $27,000 usd in usd in north$1258 korea. the key caveat is they have twice as many economically eligible, working age population in the north and the south. there is a lot of potential, and perhaps kim jong-un sees the potential. and you are right, estimates have shown that in terms of what the north korean worker costs, it's about a 10th of what the south korean worker costs. correct me if i'm wrong, is it true that unlike his grandfather and his father, kim jong-un has made economic development a priority. >> well, yes.
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he is perhaps seeing what the thehbors to the west, chinese have done over the last 30 years, the economic miracle there. not to mention to the south, the south koreans. if you look back at the history of these countries, north korea was pretty much on par if not higher economically than south soea at the time of the war, there is definitely an , 40, 50,ty to play 30 60 years of ketchup, >> it's a longer-term story. thank you. right behind him is where the summit will be taking place this time tomorrow. let's bring our guest back into the conversation, the chairman and ceo of capital inc. international. -- arms of donald trump
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lot of what he does now will in some way be connected to the midterms. what is the spin to his base on what he wants to take away from the summit? i would imagine not a lot of people like kim jong-un leading up to this. but the thing people forget is the american voter has the shortest memory in the world. there is a play that goes into midterm elections and general elections, where a lot of things that people think of being focal points are not. the economic realities are important, political parties are important, religion is important. these are things that are pretty easy to focus on and he needs to do it. the simple fact is if you look at the construct of what has created a bunch of problems, russia coming back into the g7, china and russia have a great relationship, this could be one
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of these things where i don't want to say he is a peacemaker but he plays unification guy in all of this. position andough that benefits him because they that is not the guy who created the deal. the chinese will benefit from the friction. this all plays into the election and trump doing what he needs to do to gain the upper hand. hopefully once the upper hand is gained we step back and get some sort of -- maybe more normal mediums where people can be predictable with russia, the ..s., cooperating more together that would have a huge impact on middle east tensions. the way it opens up is if trump gets what he wants, then he is
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happy. as happy as he is going to be in e political climate he is today. that would make him the happiest, because he has proven to everybody, i can get stuff look at where a.m.. >> and perhaps he is going to stop playing the role. you have talked a little bit about this already, is it in china's interest for the friction to go away? >> it's the biggest. i think of all the different touch points, the most important is that china wants a more predictable trump in general. manage,much easier to politically the chinese have come such an amazing way in the past five years about their articulation to the global pbocmy, whether it be from
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or see irc -- they have embraced communication with the public, they are telling people the narrative. the only way the narrative becomes foggy is when you have something completely predictable that keeps coming in the way of it. the noise will be taken down because there is a satisfied feeling on the victory which makes them much easier to deal with. double whammy where you have someone who is happy and thatto deal with has stopped all the nonsense that has been going on with the fits and starts and the unpredictability, and the chinese have set a plan that is very pragmatic based upon steps happening and clearly articulated. what upsets that is something that is completely the opposite, at any minute it can change, and
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it has pulled away from the success of that mark to the end goal. point, we are getting thise out of malaysia, will be improving relations. a lot of markets go, people have pointed to this risk premium building in the structure. we have a chart that shows us. at what point to do we start pricing this out? even whenre bad but earnings were good it was still cheap. >> yeah. i'm not a south korean market expert. but what i will tell you is that there is something that is very important in the genetic makeup stock markets move, and it is called sentiment. sentiment drive stock markets. i think people who don't have a context to what's going on in korea right now have completely underestimated how important
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family is coming back together is on the korean peninsula. you getthink unification but you can get something close to it and if you talk to the elder generation in south korea their families were ripped apart by this divide. putting that back together would probably create a pretty decent groundswell in that sentiment factor, which i think brings the tide higher in any market. it is fairly esoteric to think that way but if you think you get this satisfied nature of this some unification, families being able to see each other, it's a very powerful thing that the market doesn't have any way in and i do think it raises the tide. >> and we have a feeling that lots of the motions will be passed in and i do think it raises the around. thank you. chairman and ceo of capital
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link. coming up, the stocks to watch in singapore as kim and trump's gear up for their historic meeting this time tomorrow. check that one out. this is bloomberg. ♪
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♪ monday, opening numbers out of india. they have been up and running for two minutes -- a slight upside across both benchmarks and we are -- there we go. 10,800, dollar rupee slightly stronger on the indian currency and indian tenure. we are still flirting on that level.
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story, the north korean this is the stock you want to watch for the next 24 hours. some ofe mpanies related to inter-korea if you're interested to see which way you want to a lot of this really comes back to if we do get better relations than those two onomie there will be a lot of infrastructure put in place to get more parallels. a fairly historic story we are following. >> a lot of ifs. if you are wondering how to play it, zero in on the city itself.
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the meeting could be a boon for local companies. what sectors do you think would gain the most? >> hig. i think for the most part, it will be consumer stock. traders were already getting excited last week, when more details were emerging about the summit happening tomorrow. shangri-la is one, where the stock jumped quite a bit. outlets, a lotod of iconic food people will be , singaporetry airlines, the large fleet of taxis in singapore, some of the better ways to get around the island. summit, mayne-day be to.
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will there be any material impact on these companies? >> that's a really good point. analysts who a few have come out saying they expect some of these stocks to get a good list. a lot of these companies will get a nice bump in revenues and potentially even profit as people flock to all these places and stay in these various hotels but on the flipside, they are saying it is just a one-day event. just said she's not really sure if this will impact stocks very much in singapore. not leavepside it may the best with so much security and things getting shut down. she is more on the other side of things where she doesn't think it will have that big of an impact. >> but still, it could still provide something even when all
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this is over. >> yeah. at the end of the day, this is an historical event. it is huge, it is in singapore. it's not just the media, its history junkies as well. the consequences, the impact of this for future events is also pretty big for the country. companies, stocks could also be impacted because of this. >> all right. thank you so much. just in case you were wondering, this singapore barbecue pork index, and we are not making this up, have a look at this. the number you are looking at is singapore dollars per kilogram. thats one of the things might be on the menu after all this is over.
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we are also looking at some live pictures, president trump we believe is on his way to meet the singapore prime minister. that should be a little off orchard road as far as the meeting is concerned. the rest of the day's agenda, there's not a lot we know. president trump is scheduled to meet at the u.s. embassy and we will give you lines and pictures over what has been happening in singapore. stay tuned. this is bloomberg. ♪
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♪ markets:s "bloomberg
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asia." i'm david ingles. >> i'm haslinda amin in singapore. i want to show you live pictures of president trump making his way to meet the prime minister of singapore, singapore is hosting this historic summit. the road to singapore, though, has been pretty bumpy, on again, off again. thep has noted that this is one time kim has to strike a deal with the u.s. of course there has been a gap in the definition of denuclearization, the u.s. wanting complete denuclearization, north korea wanting face. it also wants its security to be guaranteed on the back of that. some concessions will have to be made during the summit tomorrow. it is going to be a tough one for both sides. >> certainly well. in a few minutes, president
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trump is expected to meet the prime minister of singapore. in two hours, he leaves the palace and will be arriving at the shangri-la. lots more coming up on bloomberg television. ♪ retail.
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